What is brand architecture, and what is it suitable for?
Brand architecture is an organisation’s strategic structure of offerings, products and labels. It shows their points of contact and demarcation.
Imagine you throw a stone into a lake. If the rock falls into the water, concentric circles are formed. But what happens if you throw several rocks at the same time? Right, you don’t know exactly. So many circles will begin, but you do not understand how they relate.
It is similarly difficult to determine how offers, products and labels operate when they appear side by side without a strategy. Where do their messages and target groups overlap? What business models do they have, and how are they structured? Yet, that’s exactly what brand architecture is for. It defines in advance what happens when several stones are thrown.
What are the types of brand architecture?
Corporate Brands or Umbrella Brands
Corporate brands are consumer-oriented brands. They use a brand identity, a branding for all activities, products and services. Consumers, employees, sponsors, and suppliers know a brand name and logo. A corporate brand is a bit like China. An extensive, infallible, centralised system with all the associated advantages and disadvantages
pros
- reduced costs through centralisation
- uniform communication
- uniform organisational culture
- leverage
cons
- reduced agility
- complex in creation and maintenance
- strong hierarchical culture
- slow pace of innovation
Endorsed Brands and Sub Brands
Endorsed or subbrands are corporate umbrella or family brands that aim to transfer an established brand image to several subbrands or product groups. This transfer seeks to increase the credibility and appeal of the sub-brands. Sound technical? In this case, think of the European Union. One label – many nation-states. The advantages and disadvantages of a more extensive system with feudalistic structures.
pros
- agile Strukturen
- semi-independent pace of innovation
- caters to specific target groups
- cultural individuality
cons
- higher costs due to diversification
- complex resource management
- possible confrontations between sub-brands
- no real independence
Individual product brands
Individual product brands have autonomous brand structures, although they belong to one owner. Stakeholders hardly perceive the aura of the parent company. The customer’s counterpart is always the product brand, which has its brand image. In this case, think of the nation-states on the African continent. Although the African Union exists, the states act almost exclusively independently.
pros
- focuses directly on consumers
- independent communication
- lean corporate structures
- flexible growth opportunities
cons
- high individual costs
- low leverage
- lower security
- little knowledge exchange
Which form of brand architecture is better, and which is worse?
All three types of brand architecture have their advantages and disadvantages. Viable brand architecture is always built from multiple perspectives as it impacts different levels of the organisation. As a result, there is no simple solution. Choosing the exemplary brand architecture requires insight into a company’s structures. It must take into account human and financial resources. And it must take into account the relationships that exist between supply and demand. In short, it’s complex.
Changing the structure of brands and sub-brands is a tricky business. If you go about it the wrong way, disruptions can occur. But new offerings and business ideas are emerging and demanding their place. Those who keep pace and are willing to redefine themselves survive in our world. At least until today.
