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April 22, 2016

Brand Architecture

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One of the biggest challenges every corporation or organization faces is presenting a clear brand to the public, otherwise known as brand architecture. There are four major approaches to creating a brand architecture: umbrella, product, endorsed, and monolithic brands. Many channels can be used to show these branding choices off to consumers, but social media is increasingly the most talked about these days.

What Does a Brand Architecture Do?

At its base, your brand architecture is a promise to the consumer. If you’re an American traveler in Africa, seeing a brand like Kentucky Fried Chicken or Coca-Cola carries a specific promise that whatever you’re about to purchase approximates a specific expectation of quality. KFC is KFC whether you buy it in Fort Wayne or Guangzhou. If you own an Apple iPhone and then elect to purchase an Apple Watch, you do so with the expectation that Apple’s clean and straightforward iOS interface will be there to reduce your learning curve. Buy the brand and get the quality you expect—that’s the underlying social contract proposed by any successful brand architecture. 

The Umbrella Brand

The logic behind the umbrella brand  is to foster a good name that can be readily transferred to other products and services. The goal is almost always to create brand extension, allowing customers to buy into an entire lifestyle. The net effect, when done well, is to transfer good will and trust gained from a single successful purchase into a desire to buy other products and services within the branding family. 

The Axe brand of men’s products from Unilever represents a strong example of this type of strategy. Axe is not thought of by consumers as a Unilever product. In fact, consumers rarely think about Unilever when purchasing the products from any of the company’s brands. Axe’s brand architecture creates an umbrella over an entire family of colognes, body sprays, shampoos and other products. It’s such a thoroughly developed name that if you’re familiar with the products, there’s a good chance you have a mental picture of the type of customer who purchases those products too. 

A few companies take the umbrella approach to a grander scale. Virgin might represent the most extreme example. The company is an umbrella brand attached to everything from musical acts to commercial space flight. The name is plastered on airliners and soda cans. The brand is strongly attached to the lifestyle fostered by Richard Branson, Virgin’s founder. Consumers are expected to identify with his somewhat outsider and eccentric persona. By extension, purchasing the Virgin brand is a way for those consumers to tell themselves and others that they, too, are mavericks. 

The Product Brand

The product brand architecture stands strongly by itself. If you think about a product such as Pampers diapers, there’s a good chance that you cannot recall the actual parent company’s name. (Pampers are made by Proctor and Gamble.) The logic is that the brand itself becomes insulated from the parent company. 

This can be beneficial for a number of reasons. If a company wants to offload the branded property, it’s wise to not have it too strongly attached to a specific parent brand. For example, it’s hard to imagine any company except Sony ever selling a Playstation. 

Another benefit is that a company can easily come into the market at a lower price point with a weaker product without creating brand confusion or convincing consumers to purchase the cheaper item. For example, car brands sometimes suffer if consumers conclude that they can obtain a similar product at a better price point. Chrysler once sold the New Yorker while also selling the Dodge Dynasty. The two cars were very similar and both had a good reputation among consumers. Ultimately, though, the parent company was forced to kill the cheaper Dynasty line. 

The Endorsed Brand

The endorsed brand architecture is a bit of a hybrid of the umbrella brand and the product brand. The previously mentioned Sony Playstation is a strong example of this approach. It’s difficult to picture one without the other. Especially in the Playstation’s early days, the endorsement from Sony’s trusted and long-established name gave the gaming console credibility and helped consumers take the leap to purchase the company’s first foray into the video game market. 

Using an endorsed brand architecture helps lead the consumer gently toward a strong, positive conclusion about a product. In the ideal scenario, a parent company will transfer good will from one successful product up the chain to the umbrella brand and then back down the chain to another product. Unfortunately, this approach has a poor track record. For example, Apple has worked hard to turn the goodwill it has with consumers after the success of the iPhone into successful launches for everything from home media centers like the Apple TV to the Apple Watch. In several of those cases, though, these products have largely failed to gain the traction that Apple hoped to achieve. 

The Monolithic Brand

The monolithic brand architecture stands above the individual products themselves. BMW buyers have for years been purchasing cars with model names that most consumers can barely remember. People who buy a BMW X5 don’t tell people they bought an X5 in the way that someone who purchases a Ford Mustang says they bought a Mustang. The buyer simply tells their friends that they purchased a BMW. Model doesn’t matter because the BMW make is monolithic. 

The major pro of a monolithic approach is its simplicity. This is great for companies like BMW because, in the popular imagination, the firm only does one thing. BMW doesn’t need to spend a ton of money launching new products because the monolithic brand does all the heavy lifting. 

In comparison, look at the trouble that Ford had launching its Five Hundred series while killing off the Taurus. The Ford brand wasn’t strong enough to sustain the 500, and many consumers were angered by the death of the trust they had invested in the Ford Taurus. Ultimately, Ford was forced to abandon the Five Hundred and revive the Taurus.

The pro can quickly become a con for a more diversified company, since it can be hard for consumers to understand what’s going on when they see a narrowly defined brand attached to something else. This is especially hazardous if consumers decide this represents a cheapening of the brand when they see its name being slapped on everything with no regard to the original promise of a single product with a high standard for quality. Think of every designer fashion brand that ever went south by introducing a line of perfumes and handbags that found its way into a Walmart or Target store. 

Brand Architecture in a Social Media World

Social media has rapidly become one of the most popular methods for companies to showcase their brands where consumers can interact with them. The huge number of social media channels, covering everything from Facebook and Twitter to the next cool thing tweens will be swiping their thumbs across in six months, makes this a uniquely challenging branding environment. The speed, low cost and ease of use of social media, however, more than make up for some of the potential headaches that can accompany its use. On social media, your customer service and sales teams are directly connected to your customer base, and those customers have willingly opted in to this connection. If your sales teams have been trained in effective sales techniques like those taught by Shapiro Negotiations, these connections can lead to trusted relationships, increased sales, and a positive reputation.

With social media, you can speak directly to the most engaged consumers of your brand. A Twitter user who follows Beyonce has bought into the brand that she’s selling. This means there is none of the waste and inefficiency that comes with spending millions of dollars pushing an advertisement over the heads of millions of people who will hear and immediately discard it.

A Twitter follower isn’t just a buyer. They’re often a believer in the brand itself and can be quickly converted to an ambassador for the brand. The right tweet from Michael Kors doesn’t stop at the follower who reads it. Often, that follower will retweet and blog about the tweet, spreading the message to yet another subset of consumers. 

The brand’s message quickly gets blasted at more eyeballs, and along the way the follower is attaching his or her own good faith to the brand. Every individual is, to some extent, a miniature brand. The guy who’s waiting to see an announcement from Ford about the next model of the Raptor isn’t just a guy who wants to buy a truck so he can drive to work. He’s a person who has invested a lot of personal effort into telling other people that he’s an off-road enthusiast. The net effect is that his retweet lends additional credibility to the brand for any reader who trusts him. 

Social media channels take many shapes. A company needs a presence on sites like LinkedIn too. While it’s easy to think of LinkedIn as a hiring channel, it also ties together many people who are enthusiastic about brands. They may have worked as employees, or they may be attached to other companies in the same sector. 

Which Brand Architecture Fits Your Company?

Some big companies can be differentiated according to their respective brand architecture. Probably, the branding structure each of them has been implementing simply works well based on many factors.

On the other hand, a strategy alone is not enough to make it work. Before you implement any brand architecture, you need to know which one fits your company. It is better to consider a lot of factors that determine, which type of brand architecture you should adopt.

Factors to Consider When Determining Your Brand Architecture

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1. The Size of Your Company

For the sake of simplicity, let’s assume your company isn’t huge. You have a few good products to showcase, and you’re still creating brand awareness with the public. Would you consider the Umbrella brand architecture? Unless your company compares with giants like Google (now under the umbrella of Alphabet) or Procter and Gamble, it might be a bit unrealistic.

Meanwhile, a Monolithic brand architecture, though perhaps ironically named in this case, may do well for your company because you have a few strong brands within your portfolio. Large companies are not the only ones that find success in the Monolithic architecture. Some companies that are  just new in the market can utilize it properly. Still, while it is not necessarily limiting in all cases, when it comes to choosing a brand architecture, size does matter.

2. Long Term Objectives

Building a brand architecture takes time. Even if there are major events happening within your companies, you can’t simply change your strategic goals without evolving your long-term goals at the same time. If your objective is to launch more sub-brands in the near future, an Endorsed brand architecture may encourage your ambassador brand to boost your sub-brands, leveraging itself at the same time.

3. Market Profile

What are your products? For whom are they made? How strong is the competition? Take this questions into account as you profile your market. Many companies invest heavily in market study such as surveys in order to have a complete view of target markets. Figure out where your client demographic fits in, then use that to develop your own plan as you build your brand.

4. Mergers and Acquisition

Mergers and acquisition are generally instigated by one of two events: bankruptcy or expansion. When one company is about to go bankrupt, they will often merge with or be acquired by a stable company to avoid losing everything. On the other hand, two competing companies may merge in order to strengthen their positions or to expand.

How do these changes impact brand architecture? When two companies merge, competing brands will become consolidated under a single family brand. The inferior brands from one company will no longer have to compete with the superior ones from the other. Instead, one will often become part of an Endorsed or Umbrella brand architecture, becoming part of a broader suite of products.

5. Market Changes

In consumer markets, nothing is permanent. Even giants that were once thought to be invincible can fall. Economic upswings and downturns often impact markets, causing consumer spending to rise and fall on all brands. Such dynamic movement often reduces the a company’s ability to stick to with a particular branding strategy. Remember, the market is ultimately what dictates which strategy is works for individual companies and in given situations. Choose the architecture that works best for your company, but realize that you may be forced to adapt in the future.

6. Management

Your company’s management infrastructure also has an impact on your brand structure. The size of your sales force and the efficiency of your customer support may become factors that can have a strong influence on how you shape your brand architecture. If it is reasonably within your company’s budget, it may be wise to conduct a consultative study to find out how best to structure your brand. On the other hand, the brand structure itself may prove to be important or complex enough that you are required to adapt your management structure to match.

Conclusion

Building a brand architecture requires the ability to commit to the long-term vision of a company. It’s important to be able to imagine where your company is going. Will it dip its toe into a number of industries, the way Virgin has? Will it monolithically sell one product from now until the end of time, like BMW? Your brand architecture is a specific contract that you make with the consumer, and it’s important that whatever approach you take allows you deliver on the implied contract that underpins the entire arrangement.

COMMENTS (3)
  • […] important side note: P & G also does a great job in using brand architecture systems. These systems involve business owners representing an entire family of brands under their one, […]

  • In this modern day and age its been a blast to watch major corporations adapt to the social media atmosphere. I remember when I was 1st on Facebook and the only way to have a “college” version of Facebook was to have a college email ending in .edu. Now every mom and pop business has a Facebook business page. It seems like if you have a bad experience with a large corporation you can post your complaint on twitter and within 5 minutes you have someone from the company approved social media team reaching out to protect their brand. Companies spend millions developing as well as protecting their brand and now its pretty cool to learn how they do so.

  • I’ve never really thought too much about the different types of brand architecture but after reading your descriptions I’m going to be categorizing things everywhere! Its so interesting how something like BMW can just be known by its manufacturer whereas most people have no idea who makes Pampers. I guess its really important to think long term about your product before you start marketing it choosing the wrong kind of architecture could prove problematic later on.

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