Brand Architecture is – together with Brand Positioning and Brand Design – one of the three critical pillars of strategic branding. Of the three, it is the more static, tends to evolve less in time, and changes more drastically, less linearly. So what is Brand Architecture, and why is it important?
What is Brand Architecture?
Given a company that offers products and services in one or more marketplaces, brand architecture is the set of rules which describe the brand and trademark relationships between the corporate name, the products and services, and their potential trademarks. So, for example, french food giant Danone is a global, very notorious player in the food & beverage sector. Some of their products trade as Danone (or Dannon in the Americas), whereas others have their brand names like Evian, Alpro, Actimel, and FontVella. Some of their products are trademarked as Danio and Danette, which showcase an apparent reference to the mother company’s trademark. The brand architecture is the rules and expected relationships between those product categories and their respective trademarks.
Why is Brand Architecture important?
The approach is vital because it defines:
1) the type of risks between distant categories: for example, Altria emerged from the rebranding of Philips Morris International. The corporate decided to distance the rest of its business interests from its tobacco investments, with Philips Morris being both a tobacco consumer brand and the brand of the subsidiary owning Marlboro.
2) the potential endorsement of newer brands/products/technologies within the portfolio of businesses: Danone naturally chooses to endorse some of their dairy brands named Danio and Danette to put their weight behind those brands by elevating them and giving them credibility. But, on the other end, they decide not to have the same approach with their water business. In contrast, consumer brands like Evian, FontVella, and Volvic have no relationship with their dairy business.
3) the consumer relevance equation: a leader in consumer electronics brands does not necessarily benefit the operation of consumer lighting. On the other end, fashion brands tend to be very relevant in the fragrance and cosmetics industry
4) the way the corporation treats acquisitions/ divestiture: when Philips decided to acquire the Saeco company in certain countries and for specific models chose to keep the brand independent from Philips, almost as a distribution brand. At the same time, when Philips spun off its lighting business or consumer electronics business, it signed licensing agreement with the new owners of the companies.
Brand Architecture Archetypes
For simplicity, we consider four archetypes in brand architecture, which help understand all possible routes. However, these models should not be interpreted as mutually exclusive ones from the others because they tend to be very intertwined in the reality of things.
1) Branded House or Monolithic Approach
Branded Houses are one-brand architectures. All aspects of the corporate and all categories of products and services operate under one shared brand. The trade-off between risk and rewards skews towards more significant dilution risks but the highest support effectiveness among the categories. Truth to the matter, most Branded House tend to evolve – as they get bigger – towards the following archetype by becoming Umbrella Brands. Many brands tend to develop towards Umbrella, especially for consumer relevance reasons because they realize that they need different positioning across categories, industries, targets. Philips is mostly a monolithic brand. Coca-Cola instead evolved towards an umbrella model, as did Starbucks.
Of course, this approach brings the most synergies in the brand building because all the efforts and spending are towards one brand.
2) Umbrella Brand
It is a model where the central solid brand declines towards different categories and consumers. For example, Coca-Cola becomes Coca-Cola Light or Coca-Cola Zero to focus on specific targets and signal slightly different products.
From a risk and reward point of view, there is not much difference between a Branded House and an Umbrella Brand. In contrast, relevance is higher on the latter because it allows a more tailor-made approach for a category or target storytelling. It is essential to highlight that flavors and scents in categories like fabric softeners or soft drinks are often confused as Umbrella brands, but they are not. So Danone Fruit Strawberry and Danone Fruit Banana flavors are different products of the same category, and they do not imply an Umbrella brand relationship. Likewise, Lenor Exotic Bloom and Lenor Burst of Sunshine are different flavors of the same Lenor. At the same time, Lenor had evolved into an Umbrella brand architecture when it launched Outdorable and the Scent Boosters, which target new consumers and new occasions, sometimes through new forms (Scent Boosters are flake-like, not liquid).
There are potent synergies in brand-building because awareness is shared between Umbrella and labels.
3) Endorser Brand
While in the first two archetypes, there is always a core brand and its declinations, in the case of Endorser’s architecture, the brands are always at least two. In the endorsement, a stronger brand puts the weight of its history and notoriety behind the endorsed trademark. For example, KitKat’s logo has Nestlé’s logo in the top left corner. Likewise, in many of Henkel’s products, Henkel’s logo is placed on the front label/ packaging to draw a clear endorsing line between the corporation and the brand.
One exciting example of endorsement is Giorgio Arman’s Portfolio, including Giorgio Armani Privé, Giorgio Armani, Armani Collezioni, Emporio Armani, EA7, Armani Jeans, Armani Junior, and Armani Exchange. The reference to Armani’s last name is the endorsement and a strong credibility vector, but each one of the brands has its targets and focus. Some of them are more exclusive or concentrate on a premium target. Others are more mass-market. Some have a casualwear approach, whereas others focus on technical sports garments.
Because of the duality of brands, the risks are much lower but still existent, yet both relevance and rewards are extreme. On the other end, the duality of brands suggests no synergies at the brand-building level.
4) House of Brands
This approach refers to the case where many brands coexist in the portfolio but share no synergies at the marketing and branding level. This is the case of Unilevers and Procter&Gambles of this world, as they have large portfolios of brands that are entirely independent. For example, both Dove and Ben & Jerry’s belong to Unilever, but there is no apparent brand link. Likewise, Lenor and Pantene belong to P&G, but there is no brand link between them.
This archetype minimizes the risk of contamination between brands and requires the highest level of investment for each brand, as there are no marketing synergies. However, it is true that the larger the House of Brands, the lower the fixed costs of GRPs, media, and advertising or market research.
A final remark on the archetypes
In this presentation, I have avoided referring to the notion of sub-brands because the concept is misleading at many levels. First and foremost, sub-brands feel like “sub-standard” execution, which are not to be considered (yet) as brands. On the other end, in many cases, sub-brands refer to Umbrella and, in others, to Endorser’s architecture. This ambiguity, of course, generates confusion per se.
Brand Architecture Examples
Many examples showcase how intertwined the brand architecture model is, and we usually refer to the case of Microsoft, which is both a consumer electronics and a software company:
- Microsoft is nowadays the corporate brand, and the critical brand architecture is the House of Brands
- However, Xbox is evolving towards an Umbrella model to allow for the emergence of online / cloud-based services that complement the hardware sales
- At the same time, Office is becoming an Umbrella brand, including both applications and online Services
- Instead, Windows is developing as an Endorser brand that supports the emerging development of mobile and browsing
In conclusion: why is Brand Architecture now so important?
Brand Architecture is becoming hot again because of two intertwined trends: the emergence of the Metaverse and the blurrification of categories boundaries.
The emergence of the Metaverse is imposing brands to develop a mindset beyond their traditional physical reality. The best cases include the definition of Metaverse specific actions, presence, and platforms, which do not replicate only what is present in the material reality.
On the other hand, the traditional lines separating categories in many sectors are disappearing from offices at home and entertainment and relaxation rooms in the office to alcoholic seltzers and non-alcoholic distilled spirits.
These trends put pressure on brands to evolve and for brand architectures to deal with categories and digital dimensions they were not built for. Will your brand have the same name in the Metaverse, or will its meta-dimension be an Umbrella declination? How helpful will be your current brand architecture in tapping the convergence of mobility and the leisure sectors?