Brand architecture

For businesses that aren’t prepared for it, growth can be a double-edged sword. While it offers valuable rewards like soaring sales and higher share prices, unanticipated and unplanned-for growth could cause real trouble in the form of oversaturation, limits on distribution, customer service failures and other common roadblocks.

Today’s best-known companies are the ones that have successfully anticipated those challenges with a comprehensive brand architecture strategy, incorporating brand intelligence. But a business doesn’t need to be a household name like Apple or Nestlé to benefit from a clear roadmap of what lies ahead — and to make sure they’re prepared well in advance.

Here’s what business leaders should know about brand architecture, and why it matters just as much to small-to-medium enterprises (SMEs) as it does to corporations and multinationals.

What is brand architecture?

Brand architecture is the process of managing multiple brands and their components within a larger framework. Usually built around a core or parent brand, a brand architecture lays out a comprehensive strategy for all components, including sub/subsidiary brands and brand extensions, and all products, services and commodities sold by the larger organization.

Usually depicted as a diagram or flowchart, brand architecture establishes and codifies the hierarchy and goals of each separate branding component, as well as its relationships with the others. By clearly defining each of a portfolio’s individual assets and larger, interrelated role, brand architecture seeks to maximize the value of each in a way that exceeds the sum of its parts.

Sometimes, brand architecture is dominated by a single brand, like Coca-Cola’s central position in a portfolio that also manages other brands like Minute Maid and sub brands like Diet Coke. Other times, it’s a more equitable mix of established brands, each targeting a specific audience — for example, the many brands under the Hilton umbrella, “from the Waldorf Astoria’s luxury to the DoubleTree’s famous cookies” (via NerdWallet).

Why is brand architecture important?

Brand architecture provides the benefits of branding — driving positive customer perception, growing awareness, clearly defining a business against the competition — on a larger scale. In doing so, it helps businesses maximize their reach with different target audiences, without cannibalizing their foundational brand, product or service.

When done with expertise, brand architecture makes each component stronger, helping organizations realize their full potential. By ensuring consistency within a larger brand, brand architecture can help marketers tell a brand story that’s more powerful and compelling, helping build equity and improve positioning not just for individual brands but the organization as a whole.

Brand architecture also gives businesses more value from their investments in market research by providing a plan to pursue the new target markets revealed by that research. That, in turn, can lead to new product launches, new distribution areas, or new revenue opportunities through cross-selling or multi-branding campaigns.

What businesses can benefit from having a brand architecture?

Brand architecture is key to future expansion plans, not just for multinationals but businesses of any size, including startups and SMEs. An effective strategy is designed to leverage opportunities discovered during market research phase, enabling businesses to plan well ahead for expansion into new markets to help boost their chances of success.

Over the course of any company’s life, a need may arise to target a different kind of customer, whether expectedly (the result of planned growth) or unexpectedly (like shifts in the market). Having a brand architecture plan in place improves a company’s ability to cope with these shifts, no matter what its size.

How can businesses implement a successful brand architecture?

How can businesses build a successful brand architecture — one that not only meets their needs today, but that’s also designed to accommodate change and growth in the years to come? While every organization will have its own specific roadmap, most strategies involve following a four-step process of research, planning, execution and ongoing assessment.

Research includes data on target customers, competitors, and the market itself. An early priority for research is establishing the target markets and target audiences around which all later decisions on branding and marketing (and even product development) should be based.

Pro tip: In addition to customer surveys and targeted research, companies must keep a close watch over their own business performance, and make sure they’re allowing an honest appraisal. For established businesses that haven’t yet conducted a brand audit, this should be the first step.

Planning is the process of leveraging the data and insights discovered in the research stage to build out an action plan — one that realistically makes the best use of available and anticipated resources. This usually includes articulating each component’s role based on its unique selling proposition (USP) and target market, and then integrating them all in a comprehensive diagram, complete with action items and due dates.

Pro tip: Some questions to ask here include, what brands should be associated closely together, and which may perform better as independent entities? How closely should sub-brands associate with one another? Does research show enough crossover to warrant cross-promotion campaigns?

Execution involves implementing the plan — in other words, transforming strategy into action. Ideally, this coincides with the launch of the brand or product, but it may also be a process of rebranding, or of adding an improved infrastructure plan to an existing brand.

Pro tip: Care should be taken to ensure that each department clearly understands its role and expectations. Build in regular meetings or check-ins with team leaders. Some experts recommend boosting buy-in by adding incentives to encourage competition among key stakeholders.

Ongoing assessment is the process of continuously reviewing the performance of the brand architecture plan, and making any necessary course corrections. Nobody can really predict where the market will go, so it’s essential to plan for the need for unanticipated growth or adaptation.

Pro tip: Some common questions to ask: Is each brand, sub-brand and commodity performing as expected? If not, why not — is it the fault of the campaign, or a failure to understand or reach the target market? Is it a misunderstanding of the research? If these questions prove difficult to answer over an extended period, it’s probably time to call in the help of a third-party expert.

Types of brand architecture frameworks

When creating a brand architecture strategy, it can help to follow an existing template or framework, as established by decades of trial and error from the many branding pioneers. Although some experts define them differently, there are a few different types of brand architecture frameworks to choose from.

The “branded house” or “masterbrand” framework is centered on a primary brand, around which the rest of a company’s products, services, and other commodities is based. The idea is to extend the equity and influence of a single brand across all available service lines — for instance, how all of Apple’s products share an architecture that’s explicitly built to support the primary brand.

The “house of brands” or “portfolio” framework is a collection of brands that all have separate USPs and identities to reach a greater audience without emphasizing the greater brand. For example, Tide, Gillette, Pampers and the many other products sold by Procter & Gamble each sell a separate product under a distinct identity. The Procter & Gamble brand appears on the packaging, but not prominently.

The “endorsed” framework combines elements of the above approaches for a strategy that emphasizes a primary brand, but also manages supporting or associated sub-brands that are distinct but still closely associated. For example, Kellogg’s cereals have their own distinctive brand identity, complete with logo, mascot and target market. Yet each is also clearly presented as part of the Kellogg’s family.

A “hybrid” or “blended house” framework combines elements of the above frameworks to best suit a company’s unique branding goals or available resources. For instance, Google is a parent brand to core products like Gmail, Google Maps and Google Drive. But the company is owned by Alphabet, and owns YouTube, which isn’t even associated with Google in the minds of its many enthusiastic consumers.

Examples of brand architecture

In addition to those listed above, Marriott is a classic example of brand architecture. One of a few major hotel chains that successfully operates several different hotels in the same metro area around the world, it does so without cannibalizing its own interests through smart brand architecture.

For instance, the Courtyard may appeal more to budget-minded work travelers, offering large desks and an emphasis on economy rather than the type of luxury emphasized by The Ritz-Carlton, while Residence Inn hotels offer kitchen facilities for those staying for an extended period.

Customers largely understand the difference among all of these identities, and those who also like Marriott in general are more likely to stick with them, rather than try a different brand. And it’s all held together all the more effectively with Marriott Bonvoy, the company’s rewards program that offers shrewd upgrade incentives and a signature credit card that’s been highly praised by savvy travelers.

Design a better brand architecture with NIQ

Building a brand architecture that actually works takes skill, expertise, and the collaboration of multiple stakeholders. It’s a tough, complex job, touching on a wide range of subject areas that includes industry-specific trends to advanced demographic research — and the strategic capabilities to put it all together successfully.

At NIQ, we understand what it takes to envision and achieve essential brand architecture goals. Offering essential tools like NIQ Brand Architect is just one component of our commitment to helping today’s businesses succeed in the present term, and best position themselves for long-term growth.

Learn more about Brand Architect from NIQ