An often overlooked, or underestimated, component of a brand strategy is brand architecture. Many companies manage their brand portfolio flawlessly, while plenty of leading corporations mismanage their brand architecture to the detriment of the bottom line.
No need to be dramatic, though. Brand architecture does not make or break a company. BUT… brand architecture, designed and implemented well, makes running a company, allocating budgets, and target marketing more effective and economical. Most simply, it helps your customers understand your offerings and your internal teams know where they stand in relation to each other.
What defines good brand architecture?
- The necessary criterion to even have a brand architecture is that your organization manages more than one brand (corporate, product, service, etc.).
- You have an agreed upon and articulated relationship between brands.
- This reflects the organization’s business strategy.
- “Agreed upon” means buy-in from all C-level leadership so there’s no question among directors and rank-and-file employees.
- An intentional hierarchy of brands is clear to all audiences, internally and externally (and, yes, a “flat” hierarchy is an acceptable option).
- Your brand architecture framework allows (and sets rules) for the addition of brands, the elimination of brands, as well as the evolution of brands within the portfolio.
It’s popular among business people to identify brand architecture as being one of two frameworks: house of brands and branded house. Proctor & Gamble is a house of brands. BMW is a branded house. There are other frameworks, as well, by the way. But declaring the brand architecture model, before specifying “why”, would be a backward approach. Your brand architecture must be thoughtfully rooted in your business strategy. It’s all about aligning your organization with your customers’ needs, and then maximizing the potential to expand your business (and thus, brand) portfolio.
Your business strategy will dictate financial leaders in your brand portfolio, the businesses that are in growth mode, categories of business that are changing, acquisitions in the works, and so on. Those business realities and forecasts are what will drive the design of your brand architecture.
Brand strategists like to use metaphors. Above, you read the architectural metaphor with a “house”. Other brand metaphors come from financial language. “Brand equity” is a common term to identify the value (financial, qualitative, etc.) of a brand and whether a brand is spending equity or building equity. In other words, it’s important to identify if the placement of one brand, in your brand architecture framework, affects the value of another brand. Or should a particular brand be isolated?
When BMW acquired the Mini Cooper brand, it purposely chose to avoid “co-branding” the car. In other words, BMW does not look for its Mini brand to bolster the BMW brand or vice versa, when the car owner is experiencing Mini. But the BMW brand is the dominant brand at the Mini dealership – the one place you’ll see the brands together. That was a conscious brand architecture decision to show that a relatively new exceptional brand (to BMW, that is) has the master’s endorsement, but that Mini will build its own identity over time. It also points to a likely business efficiency that one car lot is more practical than investing in separate sales lots for Mini Cooper.
Brand architecture will be as simple or as complex as your business strategy. It’s imperative that all employees are trained, at some level, on the reasoning behind and use of your brand architecture – just like you’d make them aware of plans for the business. And just like your business, employees and customers will provide continual feedback that helps you improve your brand strategy and the architecture that guides it. So listen to those inputs and strive for a logical brand architecture that is both responsive and guiding.