Brand Architecture: Your blueprint for better business performance
The art and science of brand management has shifted in today’s digital economy, driven by changing preferences and behaviors by the significantly important and growing digital-native millennials and Gen Z consumer groups. As digital disrupts more marketplaces, brands that are winning today have the following traits in common:
They deliver personalized solutions that meet exacting needs
They make life not only easier, but better
They stand for something meaningful to people and have real actions in place to support
They are always innovating (both product/service and brand platform) at the speed of life
What continues to be highly important for brand leaders today is how they manage their brand portfolio, a very effective tool for driving revenue, profitability, and market share growth. This is relevant for organizations that have only one corporate brand, as well as organizations with a full range of brands. I use the term “brand architecture” to capture the art and science of optimizing a portfolio of brands into a framework (blueprint) that will drive better business performance.
The traditional definition of brand architecture is an organizing structure that identifies how brands within a company’s portfolio are related to, and differentiated from, one another to intended target customers. Often the first level of strategy is to determine how the corporate brand and sub-brands relate to each other. We have used terms like “Branded House” and “House of Brands” in the past to define macro brand architecture frameworks.
In today’s ever-changing world of new market disruptors, constant changes within the target audience and brand relationships, and increasing M&A consolidation across all markets, brand architecture management is now being used as a future-oriented business strategy tool for driving accelerated business growth in revenue, profit, and market share.
Brand Architecture Principles
1. Keep it Simple
The #1 principle of brand architecture management, both in days past and today, is to keep it simple. If the architecture is so complex that employees are challenged to describe it clearly, you can’t expect your target customers to understand it. A good brand architecture enables your customers to navigate through the company's offer intuitively, to understand the relationships of products and services to each other and to the corporate brand.
2. Identify the Optimum Brand Model
The optimum brand model aligns with your customer needs and future business goals. Brand Architecture models can span along a spectrum, from a “House of Brands” (multitude of independent brands) to a “Unitary Brand” (single corporate brand), built to work best given a company’s business strategy. Here are four brand model options representing this spectrum with selected examples of organizations following respective models:
The following are considerations when selecting the optimum Brand Model:
Strength of Corporate brand versus individual businesses and products/services brands
Diversity of customer segments – their needs, their relationships with products/services.
Competitive advantage of individual businesses and products/services brands
Impact on brand value and ability to drive future profitability.
Budget parameters – affordability of marketing multiple brands
3. Create a Clear Organizing Structure
Your optimum brand model will only serve your business with the correct organizing structure that provides clarity on how the individual brands, products and services are connected with the corporate brand and helps customers navigate across the varied experiences.
Identifying the optimal organizing structure within the selected brand model will help drive the deployment of existing brands, products, and services and the branding of future ones. Here is a sample of six strategies for organizing structure (this will vary by industry):
The following are considerations when selecting the optimum Organizing Structure:
Well-established industry organizing principles that must be followed
Core customer segments and their related needs and desires
Overall company structure and its impact on brand architecture (i.e. business units, by product categories)
Geography parameters for core products and services.
Corporate brand elasticity across different industries/ businesses and consumer groups.
It is at this stage where Brand Architecture can facilitate major re-organizations for optimal business growth.
Alphabet – in 2015, the original branded house brand Google was re-organized into a house of brands under the Alphabet corporate (investor) brand to give freedom to the individual business units to lead respective industries and invest in growth initiatives. (Google, Waymo, Ventures, Verify and others)
Microsoft – Satya Nadella, CEO since 2014, has brought business productivity as a focus back to the Microsoft master brand, and selected hero sub-brands to support this focus and deliver services aligned with market needs (Office, Windows, Azure).
Not all brand architectures will be as simple as this two-stage framework. The intent is to get as close to this framework as possible to provide strategic direction and alignment plus stakeholder support.
In summary, the benefits of an effective brand architecture framework are as follows:
Accelerates revenue growth - the whole offering can be more compellingly presented to customers, at a higher level, leading to stronger relationships
Facilitates sales of solutions and services - bundles of different products can easily be created, if they carry the same brand
Encourages collaboration across business units - embodies a common aspiration, communicated in a consistent manner
Leads to greater employee engagement - creates a unified brand story the whole organization can rally around
Generates cost savings – system for identifying the brands offering best investment ROI
Creates clarity for financial markets - easier to explain the company’s offering and strategy to business and financial analysts
We know brands still matter in today’s digital economy. How you organize your portfolio of brands into a blueprint, using the art and science of Brand Architecture, can have a significant impact on future business performance.
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