How to Use Brand Architecture Models

Have you ever bought something, checked the label, and realized that the company that made it is part of a much larger brand? Or have you even seen that the brand of that product is a sub-brand of the major one? When you look at a list of the world’s top 100 brands – with a combined value of over $5 trillion – you may not necessarily recognize the names of some of their products. 

Major brands often launch subsidiaries, add new product lines, or acquire other businesses as they grow. How they present themselves to the public is known as brand architecture. What is brand architecture, and how can businesses use its models to create a recognizable digital identity?

What Is Brand Architecture?

Brand architecture is the framework that structures an organization’s sub-brands, defines their roles, and guides their relationships with the parent brand. When adding a new product line or brand, the parent brand needs to determine its place within the overall structure.

Larger organizations have to consider multiple factors affecting different brands and subsidiaries, such as business architecture value streams and inter-brand relationships. When managing a portfolio of brands, it’s essential to choose a brand architecture model that fits your structure.

When choosing a brand architecture model, it may help to consider the following questions:

• Where will you position the different brands or sub-brands?
• What role will each brand play within your organization?
• What is the relationship between brands?  If so, what form will those relationships take? 

Why Is Brand Architecture Important?

You may wonder why brand architecture is important, why you should implement it, and what benefits it will bring. 

1. Increased Brand Clarity 

In the digital age, a compelling brand story is crucial. Brand architecture ensures consumers understand your organization and its sub-brands. It also helps employees understand company culture and direction, boosting engagement and a sense of belonging.

2. Boosted Revenue

Customers value trust-based relationships. If they have grown to trust one brand in your model, they are more likely to trust the other brands, fostering brand loyalty and offering cross-selling opportunities that will increase your revenue overall.

3. Enhanced Brand Equity

Your brand equity may be boosted when your architecture includes multiple brands serving various markets. These brands drive revenue, increase awareness, and expand your customer base, enhancing overall brand value.

4. Straightforward Reputation Management

With the right brand architecture model, any damage control can be contained within one brand, minimizing the impact on others.

5. Streamlined Change

Brands need to evolve with new products, automation, and market trends. A solid brand architecture can make change and adapting to new processes easier. 

Brand Architecture Models to Consider

You like the idea of brand architecture, but the big question is which model will suit you best. You can look at three main brand architecture models and see how they would fit with your current business model and your future plans. 

1. The Branded House Model

This is probably the most common brand architecture model. Within a house of brands, the organization acts as the master brand and may have several sub-brands or subsidiaries. The best example of the branded house model is Apple, which has a market value of just under $3.5 trillion. All its sub-brands feature the Apple logo, so consumers instantly recognize any product. 

While all the brands can market themselves and grow, they are still interlinked and part of the master brand’s identity and follow its values, guidelines, and mission statement.

Advantages 

• Provides a symbiotic relationship where the success of the sub-brands means constant visibility of the parent brand. Success means more exposure for the sub-brands and the master brand.
• Reduces consumer confusion as they immediately identify any sub-brand and its products with the parent company. A customer’s relationship with any of the sub-brands will be extended to others within the model.
• Very cost-effective as there is usually a uniform marketing strategy that covers all the brands. 

Disadvantages 

• In some cases, a uniform market and digital identity can cause dilution and confusion about what the master brand actually does. 
• When you have that uniform identity, if something goes wrong with one sub-brand, it could adversely affect other sub-brands and the master brand. 
• If you adopt the branded house model, you will find that it can be inflexible. Your reputation may be compromised if the parent brand fails to deliver or if the sub-brands fall short of expected performance levels. 

2. The House of Brands Model

With this model, the parent company owns a collection of recognizable brands. The main difference between this model and the branded house model is that customers may not know of the various relationships. Each sub-brand will market itself individually, have a high degree of autonomy, and be recognizable in its own right. 

The parent brand’s role in this model is often one of administration or investment. It may become involved in activities like appointing board members or approving an injection of cash for new machinery. These sub-brands will have distinct identities, operate in their own market segment(s), and have their own message.

Advantages

• The parent brand can have a diverse portfolio with brands operating in different market segments and territories. They can adjust pricing strategies to suit different audiences and countries. 
• The parent company’s reputation will be secure even if one of its sub-brands experiences any sort of issue. The brand image will always be isolated and will not be affected by any backlash.
• The parent brand can enter new markets or acquire other brands without affecting any sub-brands. 

Disadvantages 

• As sub-brands usually have their own identity, they must spend money on marketing strategies, digital presence, and logos, making this a costly approach
• As independent brands are often separate from the parent brand, there isn’t that same trust by association you get with the branded house model. That can mean that each brand has to spread awareness and build trust with consumers. 
• Even when consumers know of the relationship, they can be confused about what the sub-brand stands for. Does the sub-brand have a unique message, or does it just reflect the values of the parent brand? 

3. The Hybrid Brand Architecture Model

It may be that you like elements of the two other models. If so, you may want to consider a hybrid model (also known as blended house). This model is often the result of mergers and acquisitions. The sub-brands will be semi-autonomous, with individual identities and brand messages, but will also draw on elements from the parent brand to benefit from its reputation. 

Advantages 

• Can offer both parent and sub-brand a ‘best of both worlds’ scenario. 
• New brands and products can be added to the portfolio without affecting the overall reputation of the parent brand.
• A new product or brand can draw on some of the parent brand’s reputation and benefit from association with it. 

Disadvantages

• Susceptible to the disadvantages of the other two models, such as reputation risk and expense levels. 
• Risk of consumer confusion when some sub-brands are openly associated with the parent brand while others are not. 
• Can be challenging to ensure unified top-level messaging across disparate brands and identities. 

How to Create a Model That Builds a Robust Digital Identity

Creating a model that gives your brand a distinct digital identity involves several steps:

• Look at brand positioning. Review your entire portfolio to understand each sub-brand’s purpose, digital presence, customer perception, and target audience. This overview will help you see connections between brands, from logos and images to messaging and style guides, allowing you to guide your marketing teams effectively.
• Decide on a model. Map out your portfolio and select a suitable model. You can customize existing brand architecture frameworks to fit your business needs.
• Make changes. If needed, modify your portfolio to align with the chosen model. This could involve rebranding or even selling off a sub-brand. It could also involve solution architects if business goals and current technology are misaligned. 
• Identity. List each sub-brand with its corresponding identity, which may include market category, target audience, or operating territory.
• Create resources. Depending on the size of your portfolio, you may decide to create a resource that outlines your architecture and gives access to resources such as logos for your marketing teams. 
• Presence. Assess each brand’s presence, especially digital channels and social media platforms, ensuring a uniform and recognizable online identity.
• Action. Implement your brand architecture model and make any necessary changes. Consider a campaign or PR material to announce the new model with an in-depth brand story. 

The Takeaway 

Adopting one of the above brand architecture models can be a great way to manage your portfolio, giving each sub-brand its own identity while relating it to the parent brand. Each model has advantages and disadvantages, and you need to look closely at your portfolio and decide which best suits you. 

Your brand portfolio may contain very diverse businesses operating in distinct markets. This means you need to consider how your chosen model will impact both the parent brand’s reputation and that of its sub-brands. When properly implemented, the right brand architecture model can positively influence reputation and revenue.