What is Brand Architecture? How to build an effective brand architecture? These are key questions that any business needs to answer if it wants to develop sustainably in today’s competitive market. Discover 5 popular brand architecture models and detailed implementation processes through the article below!
What is Brand Architecture?
Brand Architecture is the overall structure of the relationship between the parent brand and sub-brands within an organization. It acts as a blueprint, outlining how the different brands within a company relate to each other.
This strategy helps businesses optimize the value of each individual brand, while creating cohesion and consistency across the entire product portfolio. Building the right brand architecture not only helps customers easily identify and differentiate products, but also facilitates market expansion and the development of new product lines.
The Importance of Brand Architecture
Optimizing Resources and Management Costs
A scientifically designed brand architecture helps businesses allocate marketing budgets effectively to each brand in the portfolio. It allows the company to focus on investing in key brands, while maintaining the harmonious development of the remaining brands. By clearly defining the role and goals of each brand, the organization can make the right decisions about allocating human, financial and technological resources.
A reasonable brand structure also helps to streamline the management apparatus and reduce operating costs. When each brand is clearly positioned in the system, it becomes easier to monitor performance and evaluate success. Businesses can quickly detect and overcome weaknesses, and replicate successful models, thereby optimizing investment efficiency and increasing profitability.
Enhance Brand Recognition and Positioning
A coherent brand structure makes it easy for customers to recognize and remember the company’s products and services. By establishing logical links between the parent brand and its sub-brands, the company can convey its marketing message consistently. This not only increases brand value but also creates a sustainable competitive advantage in the market.
Brand Architecture also plays an important role in building a professional image for the business. A scientifically organized brand system reflects the management capacity and strategic vision of the company. Customers and partners will have a more positive view of the organization, thereby increasing trust and commitment to the brand.
Creating a Foundation for Growth and Expansion
A strong Brand Architecture facilitates the development of new products and the entry into new markets. With a clear brand architecture, a company can easily make decisions about whether to develop a new brand or expand an existing one. It helps to minimize risks and optimize the chances of success when implementing growth strategies.
A well-designed brand architecture also creates positive synergy between brands in the portfolio. When one brand is successful, it can drive the growth of other brands in the system. Closely linked brands also help businesses take advantage of scale, thereby enhancing competitiveness and expanding market share effectively.
Popular Brand Architecture Models
Below are the 5 most popular Brand Architecture models today:
1. Branded House Structure Model
1.1 Characteristics of the Branded House Model
Branded House is a brand architecture model in which a master brand plays a guiding role, leading the entire product and service portfolio of the enterprise. In this structure, the parent brand plays a leading role and is used throughout all products and services of the company. Sub-brands are developed based on the DNA and core values of the parent brand, creating a consistent brand ecosystem.
Regarding identity organization, Branded House architectural model company can deploy in 2 flexible directions: Same identity and Different identity.
- The first direction is to build a consistent identity system from the parent brand to the sub-brands, creating a close connection.
- The second direction allows sub-brands to have their own unique identity but still be differentiated by prefixes associated with the parent brand.
1.2 Advantages and Disadvantages of the Branded House Model
The outstanding advantage of this model is the ability to maximize the prestige of the main brand, helping to save marketing costs and build brands for new products. Consistency in communication also helps businesses easily capture the minds of customers and create sustainable competitive advantages in the market.
However, a sub-brand that has quality problems or a media crisis can directly affect the reputation of the entire brand system. Expanding into new market segments or other industries also faces many challenges due to being limited by the positioning and value of the main brand.
2. House Of Brands Structural Model
2.1 Characteristics of the House Of Brands Model
The House of Brands model represents a unique brand management strategy in which the architectural model company allows sub-brands to operate as independent entities with their own identities and positioning in the market. The parent brand often plays a behind-the-scenes role, operating and managing the portfolio, while the sub-brands are given a high degree of autonomy in building their image and reaching customers.
This structure is often applied in 2 forms:
- Hidden Sponsorship – when the parent brand quietly supports behind the scenes.
- Independent Brands – when sub-brands operate as separate units with no clear connection to the parent company.
2.2 Advantages and Disadvantages of the House Of Brands Model
The House of Brands model offers significant advantages in penetrating a wide range of market segments and target customer groups. Sub-brands can develop their own distinct positioning, avoiding image conflicts even when operating in the same product category.
However, the biggest challenge of this model is the high marketing cost due to separate investments for each brand, along with the complexity in managing and maintaining consistency of the overall strategy.
3. Hybrid Structure Model
3.1 Characteristics of the Hybrid Model
The Hybrid model represents a subtle blend of two traditional approaches to brand management. This is the solution that many architectural model companies choose when they want to take advantage of both Branded House and House of Brands. The company maintains a strong core brand while allowing several sub-brands to develop their own identities. This creates a balance between exploiting the strength of the parent brand and the flexibility to penetrate new market segments through independent brands.
3.2 Advantages and Disadvantages of the Hybrid Model
The Hybrid model offers significant competitive advantages. Businesses can leverage the prestige of their core brand to support new products, while still maintaining the ability to develop independent brands to meet the specific needs of each market segment.
However, the disadvantage of this model is the complexity in managing and maintaining the balance between brands, requiring resources and effective communication strategies.
4. Endorsed Brand Structure Model
4.1 Characteristics of the Endorsed Brand Model
Endorsed Brand represents a sophisticated way of organizing brands, in which the parent brand acts as a guarantee for the development of sub-brands. The model is divided into three different levels:
- Token Endorsement: The parent brand is subtly mentioned in the sub-brand’s product.
- Linked Name: The parent brand name is used as part of the sub-brand name, creating a link in terms of recognition.
- Strong Endorsement: The parent brand is not only mentioned but also strongly supports the sub-brand name. Furthermore, the parent brand name can be placed under the sub-brand in a parallel form to enhance recognition.
This model is especially suitable for sub-brands in the early stages of development, needing to leverage the reputation and strength of the parent brand to build a position in the market.
4.2 Advantages and Disadvantages of the Endorsed Brand Model
The Endorsed Brand model offers many strategic advantages to businesses. Sub-brands benefit from the prestige of the parent brand, while still having the space to develop their own identity and effectively reach the target customer segment.
The limitation of this model lies in maintaining a balance between the level of sponsorship, the independence of the sub-brand, as well as ensuring consistency in communication and brand positioning.
5. Mixed Structure Model
5.1 Characteristics of the Mixed Model
The hybrid structure model reflects flexibility in organizing and managing brand portfolios, allowing businesses to simultaneously apply many different architectural methods.
Some subsidiaries are allowed to develop independently, while others maintain close ties to the parent brand. This model often appears in the process of organizational restructuring, mergers and acquisitions, or when businesses want to penetrate new market segments with high specificity.
5.2 Advantages and Disadvantages of the Mixed Model
The outstanding advantage of this model is its high flexibility, allowing optimization of the advantages of each brand management method suitable for each specific business unit.
However, this model requires a complex operating system, excellent coordination capabilities and large investment costs to maintain consistency across the entire diverse brand system.
Factors to Consider When Building Brand Architecture
Building a brand architecture is a complex process that requires careful consideration of many different factors such as:
Business Objectives
Business objectives play a fundamental role in shaping the brand architecture of an enterprise. Brand Architecture needs to accurately reflect the long-term vision and development strategy of the organization, from market expansion plans to penetrating new segments.
A business with ambitions to expand into multiple business segments may need a more flexible structure than one focused on a single core business. The brand architecture must support financial objectives, from optimizing marketing spend to creating new revenue streams through the development of sub-brands.
Customer Target
Understanding and analyzing your target audience is crucial to designing an effective brand architecture. Each customer segment has its own demographic characteristics, consumer behavior, and unique needs that need to be met. Brand architecture must ensure that each brand in the portfolio can effectively reach and serve its target customer group, avoiding the situation where brands compete with each other in the same market segment.
Organizational Structure
The organizational structure of the business needs to be appropriately reflected in the brand architecture. This requires a close connection between the way the organization is managed, the way resources are allocated, and the decision-making processes, and the way the brands are organized and operated. A decentralized organizational structure may be more suitable for the House of Brands model, while a centralized organization may work better with the Branded House model.
Other Factors
In addition to the fundamentals, businesses must consider many other important aspects in the process of building a brand architecture. These include market trends, technological developments, legal regulations, and the ability to adapt to future changes.
In particular, assessing financial resources, brand management capabilities and the ability to maintain consistency in communication also play an important role in ensuring the long-term success of brand architecture.
Brand Architecture Building Process
The process of building Brand Architecture requires close coordination between many departments and needs to be implemented systematically. Below are 5 important steps that businesses need to take:
Step 1: Review the Brand Portfolio
The initial stage requires an in-depth analysis of the development potential of each proposed product and service category. Businesses need to conduct a comprehensive survey of consumer behavior, market trends, and target customer needs through qualitative and quantitative research methods. Most importantly, it is necessary to determine the core value that each category can bring, thereby forming the foundation for an effective communication strategy.
Step 2: Orientation of Brand Architecture
Establishing a brand architecture framework is a strategic step that requires a long-term vision and a deep understanding of the business. This process includes establishing brand management principles, designing an organizational model, and planning a development roadmap for each sub-brand. Every decision must be consistent with the organization’s mission and strategic goals.
Step 3: Balance Existing Brand Resources
Resource allocation and optimization play a key role in maintaining brand harmony. Businesses need to carefully assess the operational capabilities and suitability of each portfolio with the core brand. Avoid over-expansion into areas that lack logical connections, which can cause confusion in consumer perception and weaken the overall strength of the brand system.
Step 4: Empower Brand Teams
Building a decentralized mechanism and transparent responsibility helps increase the effectiveness of brand architecture management. Each unit is given autonomy within a clearly defined scope, while ensuring compliance with the general principles of development orientation and quality standards of the organization.
Step 5: Plan Your Brand Architecture Introduction
The final stage focuses on building and implementing a unified brand identity system. This includes designing visual elements, usage standards, and detailed application guidelines for each brand in the system. Consistency in communication and identity will contribute to creating synergy between brands, strengthening the organization’s position in the market.
Case Study of Successful Businesses in Building Brand Architecture
Below are some case studies of businesses that have successfully applied the Brand Architecture model:
P&G
P&G (Procter & Gamble) is one of the prime examples of the successful application of the House of Brands model. The company has built a diverse brand empire with more than 65 globally recognized brands. Their strategy focuses on developing each brand as an independent entity, with its own distinct positioning and values.
Tide has become an icon in laundry detergent, Pampers leads the diaper market, and Gillette dominates the razor segment. Each brand has invested heavily in developing its own segment, creating a strong connection with its target consumers without relying on P&G’s reputation.
Google has built a comprehensive digital ecosystem with a series of products and services bearing its name. This “technology giant” has succeeded in building a brand ecosystem thanks to the Branded House model. From the initial search engine, the company has expanded into areas such as cloud storage (Google Drive), Email (Gmail), calendar (Google Calendar), maps (Google Maps) and many other applications.
The strategy of attaching the Google name to every product not only creates strong recognition but also fully exploits the prestige and trust that the brand has built in the technology field. This makes it easy for new Google products to be accepted and trusted by users right from the launch.
Apple
Apple demonstrates a unique approach to the Branded House model. Instead of using the brand name as a prefix for products, they create unique names such as iPhone, iPad, MacBook but always maintain the presence of the Apple brand through the iconic apple logo. This strategy allows each product line to develop its own identity within the framework of Apple’s design philosophy and core values, while creating a unique product ecosystem.
Coca Cola
Coca-Cola is one of the typical brands that successfully applied the unique Hybrid model. This brand maintains a strong presence of the main Coca-Cola brand in the carbonated beverage industry, while developing independent brands such as Sprite, Fanta, Dasani to serve different market segments. Thanks to that, the company dominates the global beverage market by providing a variety of choices for consumers, from carbonated soft drinks, mineral water to energy drinks, tea. Each brand in the portfolio is positioned separately but still maintains a connection with the Coca-Cola ecosystem, creating a perfect balance between independence and collective strength.
Nestle
By applying the Endorsed Brand model, Nestlé has optimized its product portfolio, increased its competitiveness and enhanced its market position. From heavily endorsed brands such as Nestle Milo, Nestle Cerelac to less heavily endorsed brands such as KitKat by Nestle, the company has created a rich product portfolio that serves different market segments. This strategy allows Nestlé to leverage the prestige of its parent brand in the food and beverage industry, while allowing its sub-brands to develop their own characteristics that are relevant to their target customers.
Distinguishing Brand Architecture from Brand Strategy, Brand Identity
To build a strong brand, businesses need to clearly understand and distinguish three important concepts in brand management: Brand Architecture, Brand Strategy and Brand Identity.
| Criteria | Brand Architecture | Brand Strategy | Brand Identity |
| Define | Organizational structure and relationships between brands in a company’s portfolio. | A comprehensive plan for how to develop, position and manage a brand. | Tangible and intangible elements make up a brand’s unique identity. |
| Purpose |
|
|
|
| Time | Long term and little change | Medium and long term, adjustable | Long term but renewable |
| Impact |
|
|
|
| For example | P&G with the House of Brands model | Apple with premium, innovative positioning | Coca-Cola Red |
In short, understanding ” What is Brand Architecture? ” will help businesses optimize resources, enhance overall strength and create synergy between brands, thereby enhancing competitive position in the market.
Frequently Asked Questions
What is Branded?
Branded refers to products or services that have been associated with a specific brand, thereby creating a distinct identity and value in the minds of consumers.
What is Architecture Design?
Architecture design is the process of planning the structure, form and function of a building, to ensure aesthetics and sustainability.
What is Hierarchy?
Hierarchy is a hierarchical system of organizational structure in which members or elements are arranged in order of rank, from highest to lowest.
How to Choose the Right Brand Architecture Model for Your Business?
Businesses need to carefully evaluate internal factors, then consider choosing a model based on its suitability to the target market and management capabilities.
When Should Businesses Consider Changing Their Brand Architecture Model?
When there is a major change in business strategy, expanding to new markets or after M&A deals.
What Does the Cost of Building and Maintaining Brand Architecture Include?
The main costs include market research, strategic consulting, identity system design and staff training.
How to Measure the Effectiveness of a Brand Architecture Model?
Businesses need to track quantitative metrics like brand awareness, conversions, and sales.
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