[Brand Management] Develop Your Brand: Getting to Know Brand Architecture Strategies

 

“A brand for a company is like a reputation for a person. You can earn reputation by trying to do hard things well.” 

— Jeff Bezos, Amazon[1]

 

A brand may not be able to be as strong if it stands alone. Just like a corporation, brand develops itself buy building making expansions, creating new brands, and building relationships with others. Unlike companies, relationships tied by brands are more complex. A brand can expand towards different organization and industries while being operated by different companies, and others might be operated by the same company but have several brands which dominates the industry. Brand relationships knows no boundaries, and for that reason, the study conducted on it are quite complex, constantly crossing between different product types and industries. To cope with the rising business challenges, these strategic practices of brand management is considered common to be practiced by brand managers. This strategic planning system then labeled as brand architecture, depicting the structures and relationships of brand with their manager as of an architect planning the structure of a building and it’s components—complicated, yet if managed can bring a wonderful success.

Brand architecture refers to an organizing structure of the brand portfolio, which includes the components of a brand and it’s companies, that specifies brand roles and the nature of relationships between brands.[2] It analyzes the relationships between a corporation and it’s subsidiary companies and creates a structure to fully understands it. A brand architecture provides general guidelines about the firm’s branding strategy and which brand elements to apply across the different products produced by it.[3] The practice of brand architecture becomes crucial as the brand is becoming more complex with brand extensions, varies product offerings, and wider use of endorsed brands and sub-brands. The practice of brand architecture strategy helps brand managers to determine which products to introduce and the brand it’s going to use. Brand architecture helps to clarify brand awareness by improving consumer understanding of similar products and to improve brand image by maximizing equity between the brand and individual products.[4]

Brand architecture combines two key concepts of branding—brand portfolios and brand hierarchy. The brand portfolio is the set of different brands sold by a particular company in particular category. It includes all the brands and sub-brands attached to  the company’s products offerings. [5] The brand portfolio can be used to value whether brand expansions are needed. To easier analyze brand portfolio, various structures are proposed, such as brand groupings, brand hierarchical trees, and brand range. The brand hierarchy displays the number and nature of common and distinctive brand components across the firm’s set of brands.[6]

According to it’s brand architecture, a brand may have complicated brand portfolio or rather a simple one. Companies can choose whether they want to expand their business in the category or outside the current industry, and if they chose to do so, whether they will be using the same brand or not. A company can have only a small number of brand even if they have a wide range of product, and there is also a possibility for a company to have only the same kind of segmented products with a wide range of brands.

Kenny Lane Keller outlined the process of developing an effective brand architecture strategy into a three step process—defining the potential of a brand in terms of it’s track records, identifying the product extensions that will allow the brand to reach it’s potential, and specifying the brand elements and positioning associated with the specific product for the brand.[7] However, before planning company’s brand architecture strategies, brand managers must understand the company’s current brand portfolio and brand hierarchies. These two are the foundations for brand managers to characterize and formulate the company’s brand architecture strategies. Corporate branding strategies also must be considered to build an integrated company’s image dimensions by these three specific issues: corporate social responsibility, corporate image campaigns, and corporate name changes.[8]

Brand hierarchy, also called brand structure, is formed by several brand elements. In a company using branded house as it’s architecture strategy, the elements are consisted of the company, an umbrella brand, a portfolio of products, a sub-brand, and an individual item. The most essential brand element in a company is it’s umbrella brand. An umbrella brand hosts the company’s main products, which is usually considered to be the company’s most established brand. These ‘experienced’ brand can hosts many kinds of products at the same time by going through the process of brand extensions. Brand extension can be defined as a branding strategy in which the company put on it’s brand name on a product of introduction in another company.[9] The umbrella brand, which originally only hosts company’s most established product, is used to introduce new products, which can differ in category as the main products.[10] This branding strategy enables consumers to familiarize themselves with the products introduced better by skipping through the brand’s introduction phase.[11] It is considered beneficial for brand managers to use this extension strategy as it is able to introduce new products without having to spend much money for it’s introduction phase.

An umbrella brand can be formed by various product categories. The various products in an umbrella brand then grouped into several portfolios with the same brand categories and characters. Inside a portfolio, a company may have several brands in the same categories, which are consisted of parent brand and sub-brands. Sub-brands are brands which are the modified version of company’s parent brand in a category. The sub-brands serves as a way to widen company’s market range by providing different features than it’s parent brand.

 

One common role of a sub-brand is to extend a master brand into a meaningful new segment—as, for example. Ocean Spray Craisins stretches Ocean Spray from juice to snack foods. The link between sub-brands and their master brand is closer than the like between endorsers and the endorsed brands. Because of this closeness, a sub-brand has considerable potential to affect the associations of the master brand, which in turn can be both a risk and an opportunity. In addition, the master brand, unlike an endorser brand, will usually have a major driver role.[12]

 

In contrast with the branded house, the house of brands architecture strategy positions the company as an institution consisted of individual brands, also known as multi brands, which each acts as a stand-alone brand, each maximizing it’s impact in it’s own market.[13] This strategy sacrifices the economies of scale and synergies that come by expanding their brands through multiple business thast eventually leads to unsupported investments conducted by each brands. However, it allows company to clearly position brands on functional benefits to dominate niche segments.[14]

In building brand architecture strategies, brand managers must understand company’s brand elements. The branded house and house of brands strategy each has it’s own character. In deciding which brand architecture strategies to use, various aspects are being considered to create an integrated branding strategy for the company’s brands.[*]

Lintang Cahyaningsih

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References

Aaker, D. A., & Joachimstaler, E. (2000). The Brand Relationship Spectrum: The Key to The Brand Architecture Challenge. California Management Review, Vol. 42, No. 4, 8-23.

Aaker, D. A., & Joachimsthaler, E. (2000). Brand Leadership. New York: The Free Press.

Keller, K. L. (2013). Strategic Brand Management: Building, Measuring, and Managing Brand Equity. Essex: Pearson Education Limited.

Kotler, P., & Kotler, M. (2013). Market Your Way to Growth: 8 Ways to Win. New Jersey: John Wiley & Sons, Inc.

Muzellec, L., & Lambkin, M. C. (2009). Corporate Branding and Brand Architecture: A Conceptual Framework. Marketing Theory, Vol. 9, No. 39, 39-54.

Rajagopal, & Sanchez, R. (2004). Conceptual Analysis of Brand Architecture and Relationships Within Product Categories. Brand Management, Vol.11, No. 3, 233-247.

Schroeder, J. E., & Salzer-Mörling, M. (2006). Brand Culture. New York: Routledge.

Völckner, F., & Sattler, H. (2006). Drivers of Brand Extension Success. Jounal of Marketing, Vol. 7, 18-34.

Wernerfelt, B. (1988). Umbrella Branding as a Signal of New Product Quality: An Example of Signalling by Posting a Bond. The RAND Journal of Economics, Vol. 19, No. 3, 458-466.

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Footnotes

[1] In Philip Kotler and Milton Kotler, Market Your Way to Growth: 8 Ways to Win, (New Jersey: John Wiley & Sons, Inc., 2013), pg. 49.

[2] David A. Aaker and Erwin Joachimstaler, “The Brand Relationship Spectrum: The Key to The Brand Architecture Challenge”, California Management Review, Vol. 42, pg. 8.

[3] Kenny Lane Keller, Strategic Brand Management: Building, Measuring, and Managing Brand Equity, (Essex: Pearsn Education Limited, 2013), pg. 60.

[4] Ibid, pg. 386.

[5] David A. Aaker and Erwin Johachimstaler, Brand Leadership, (New York: The Free Press, 2000), pg. 73.

[6] Kenny Lane Keller. Op.Cit. pg. 61..

[7] Ibid, pg. 386.

[8] Ibid, pg. 387.

[9] Philip Kotler and Milton Kotler, Op.Cit., pg. 66.

[10] Birger Wernerfelt, “Umbrella Branding as a Signal of New Product Quality: An Example of Signalling by Posting a Bond”, The RAND Journal of Economics, Vol. 19, No. 3, pg. 458.

[11] Franziska Volckner and Henrik Sattler, “Drivers of Brand Extensions Success”, Journal of Marketing, Vol. 7, pg. 18.

[12] David A. Aaker and Erwin Johachimstaler, “The Brand Relationship Spectrum: The Key to The Brand Architecture Challenge”, California Management Review, Vol. 42, No. 4, pg. 14.

[13] Ibid, pg. 10.

[14] Ibid, pg. 11.

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