Brands are a set of associations of meanings. They add value to products or services and organizations by connecting emotionally and rationally with citizens. Brands can distinguish one product from another, even when they are the same from a functional point of view. However, management is complicated by the breadth of the brand portfolio, which must compete in fragmented media in which it is very difficult to reach each consumer segment.

See previous article Brand architecture I: key to brand strategy

Brand Architecture Models

In the late 80’s W. Olins presented his theory on branding models, highlighting the monolithic model, the endorsement model, and the independent brand model.

In the monolithic model (branded house) a single brand is used at the corporate and commercial level for each of the products and services. The result is that a powerful and unique brand is built, but it is sometimes complex to extend it to other areas. PHILIPS is an example of a brand present in sectors such as healthcare, consumer, lifestyle, and lighting; it aims to offer a wide range of products, which may seem unconnected, but share the same values and personality.

In the endorsed brand model, the corporate brand supports the product/service brands to transmit and reinforce its equity, facilitating the feedback of meanings and communicating group strength, if it is a corporate brand. Depending on the visual solution chosen, this association is more or less evident. Nabisco supports the famous OREO, the delicious CHIPS AHOY, or the irresistible RITZ.

En el modelo de marcas independientes (house of brands) conviven distintas marcas que actúan de modo independiente en base a las distintas líneas de negocio. This model makes it possible to attack different market segments with specialist brands in each of them, but the great freedom it provides means that minimal synergies between brands are exploited. For example, LVMH, the world leader in luxury goods, has in its portfolio brands such as MOËT&CHANDON, DIOR, AG HEUER, or SEPHORA, among others, that operate without any link to the corporate brand.

Finally, there is also the hybrid brands model, which combines different architectural models based on different business strategies under the same corporate brand. It is a complex solution in its management, where it is important to identify the roles of each of the brands. In many cases, it is the result of the growth process of a monolithic brand based on acquisitions of other brands. SONY maintains a complex system that combines Master Brands, Sub-brands, ingredient brands, and independent brands.

arquitecturamarcasonybranderstand

The concept of brand architecture remains one of the fundamental challenges of contemporary branding, and well into the 21st century, it is necessary to complete its alignment with the strategic management of the brand portfolio.

In the early 2000s Aaker and Joachimsthaler evolved to a broader view they called “The brand relationship spectrum“. They devised a system that provides a global vision that can be used to argue or advise on the best solution for each case.

the-brand-relationship-spectrum

Every time a company launches a new product, it must ask itself “under what brand”. The digital revolution has brought about a new paradigm: AMAZON sells fresh food products, TELEFONICA is questioning its entry into the financial market, VIRGIN has entered the health sector, MICROSOFT has taken over LINKEDIN, etc. And how are the brands going to put up with all this?

Brand Portfolio vs Brand Architecture

For the brand portfolio to contribute positively to the Company’s development, it is first necessary to analyze what the main determinants are, and this is something that requires broad commitment and consensus.

But the terms should not be confused: managing the brand portfolio is not the same as managing the brand architecture. In the former, decisions are made at an organizational level, while in the latter they correspond to an operational level.

Brand Portfolio

Es el conjunto total de etiquetas (marcas, sub-marcas, nombres de producto, variantes de los nombres y descriptores) que describen las proposiciones de todas las entidades de una Organización, así como sus inter-relaciones. At this level, questions arise such as:

What combinations of elements are necessary and what should be their prominence?

What level of prominence should the corporate brand have?

Is a sub-brand necessary, etc?

Brand Architecture

It is the combination and prominence of verbal and visual elements that represent a specific proposition. At this level, the creative disciplines of naming and design play an important role, since it is here where the visible aspects of the Brand Portfolio directly influence the association of ideas that the structure takes in people’s minds.

portfoliovsarquitecturabranderstand-1

Brand architecture influences the degree to which an organization’s products/services relate to each other and to the corporate brand. This has direct consequences in terms of citizens’ reactions to brands. If people know that two brands have some relationship, the transfer of values between them is spontaneous in their brains. For example, TOYOTA perfectly leverages the positive values of LEXUS as its high-segment brand. The higher the association between two elements of a brand architecture, the stronger the transfer between them. If associative networks resemble each other, they are easily placed in the same mental category and portfolio management has a lot to do with this situation.

It is a process that has a lot to do with human psychology. The brain prefers familiar situations to unfamiliar ones. Brand recognition implies an initial acceptance of the brand, it implies that many people believe that it may be a good brand, even if they do not buy it.

To simplify the complexity of choosing one type of portfolio management over another, it is first necessary to investigate the relevant arguments that lead to the choice of one or the other solution. Is it necessary to have a different brand for each distribution channel? Is it easy to convey a unique value proposition internationally? Are consumer needs the same across business segments? Are sub-brands necessary to facilitate the understanding of the offer?

Secondly, the quantitative data resulting from these arguments must be found. In practice, many of these arguments work simultaneously: management, distribution, clarity of supply, culture, etc. However, not all of them have the same relevance based on the initial objective, which implies that they must be weighted to obtain an acceptable final result. The secret lies in identifying which ones have priority over others and this is something that must be agreed upon.

The challenges that arise in portfolio management often lead to the conclusion that the number of brands should be rationalized. But changes in this regard are probably the ones that arouse the greatest internal sensitivities within the Company, making it difficult to make the right decisions.

It is not a matter of choosing one model or another, it is a matter of facilitating the decision-making process that will help the organization to achieve its challenges. Some of those decisions may be simple, some will be complex. However, focusing on the key questions will help you find the answers faster and better while achieving a brand portfolio that supports your strategic objectives and leads to measurable success.

There is no universal solution, except the KISS (Keep It Short and Simple) principle. Building strong brands is much easier the fewer brands there are to manage.

And let’s not forget that when a brand thinks the way people think, it is much easier to consolidate a personal relationship with it.

CTA 2

 

Carlos Puig Falcó

President of Branward®

Photos: Shutterstock