The importance of having a strategic vision and a clearly defined management process for brand architecture has increased significantly over the years. International expansion, mergers and acquisitions, diversification, product and range extensions are all factors that directly influence brand portfolios, and all of them have a direct impact on business results.

 

What is Brand Architecture?

Brand architecture is a critical component of brand portfolio strategy. It focuses on how the company can structure and communicate its portfolio so that it is easily understood, establishing a set of specific relationships between its different brands. It is shaped by the combination of verbal and visual elements that represent each of the specific propositions. In other words, it’s the way a company organizes and names its products to show customers the differences and similarities between them.

It is a strategic tool that facilitates the organization of the business to make your offer easily understandable by people, simplifying their choice. Internally, it defines the relationships between different brands, products and services. Externally it culminates in the way customers organize those products and services in their minds.

 

Brand Architecture as an Enabler of Strategic Processes

Architecture as a discipline is the art of projecting, designing, building, modifying and adapting an environment to a specific need. The concept is still valid for brand architecture, which can reach both the corporate level (mergers or acquisitions), the segment level (incorporation of new categories) or the product level (launches and extensions).

Architecture analysis is important to ensure the “hygiene” of the company’s portfolio. It will certainly help maintain consistency and facilitate the set of strategic decisions derived from brand management, such as:

  • What is the general relational approach – main brand, brand/sub-brand, endorsement, separate brand or even combinations of them.
  • How many brand levels should exist.
  • What types of brands exist at each level.
  • How brands relate to each other at different levels.
  • What are the decision rules for the creation of new brands.
  • Which brand identities are dominant and which are secondary.
  • What types of names should be used for new trademarks and under what circumstances (usually guided by decision rules).
  • Which are the brands that should be implemented in each of the media (media, vehicles, corporate material, product catalogs, uniforms, etc.).

 

Benefits of a Brand Architecture Strategy

Regardless of the size of the company, an effective brand architecture:

  1. Clarifies positioning. Nothing increases the effectiveness of a brand’s positioning like simplicity. Clearly articulating positioning and messaging is the first step to architecture development.
  2. It facilitates segmentation and connection with specific targets. It provides a greater understanding of the offer and allows you to segment the communication to each of the different target audiences.
  3. It significantly reduces marketing costs. The right size avoids duplication, making the management of the different brands more efficient. In addition, with cross-promotion opportunities between brands, resources are multiplied.
  4. Facilitates growth. The modular nature of an intuitive brand architecture makes it easy to onboard brands, products, or services as the business grows.
  5. Improves customer and investor confidence. Well-managed, forward-thinking brands are a reassuring signal to investors, employees alike, and customers alike.
  6. It adds value to the brand. The result of the above benefits is an increase in brand equity.

 

Brand Architecture Models

Basically, we find three types of brand architectures (monolithic, standalone, and endorsed model), although they are then multiplied by a wide variety of hybrids that can be adapted to the unique circumstances of each company. We talked about all this here at the time.

Today, new forces have emerged that have changed the way citizens connect with brands. Undoubtedly, the main one is the technology that has allowed us to know much more about them and streamline the decision-making and purchasing processes. The big consequence is that brands need to communicate more simply, so that their audiences better understand what value they bring.

This scenario would lead us to think that a brand architecture that is capable of enhancing the role of the corporate brand in all its product categories could benefit. But the truth is that there is no ideal model, and the architecture model that best suits the business will be the best.

It is clear that it is not a question of choosing one model or another, it is about facilitating decision-making that will help the organization to achieve its challenges. Some of those decisions may be simple, some will be complex. There is no one-size-fits-all solution, but in any case the principles of ‘simplicity’ and ‘comprehensiveness’ must prevail.

 

Brand Architecture Strategy

Determining the brand architecture for a company is complex. To begin with, it requires extensive information that allows you to take into account:

  • Identify the stakeholder map, as they are likely to have different needs.
  • Evaluate how the brand adds value to the corporate/segment/product relationship. To do this, we will need to consider the perceived value at each of the levels.
  • Determine the economic implications that we can achieve. A monolithic system is much more efficient since each euro has an impact on a single brand.
  • Consider the legal implications. Some structures may involve legal moves and higher taxes.

 

With this information, we can start the process of developing the architecture strategy, structured in different correlative phases:

  1. Brand Architecture Audit

The audit is a necessary starting point to define the current state of the situation and the typology of relationships between each of the brands. To begin with, it is worth focusing on two key areas: business performance (internal view of business results) and brand structure (external view of how each brand adds value).

  1. Principles of Brand Architecture

Before considering whether one model or another will be the most appropriate approach, it is necessary to establish a set of criteria, specific to each case, to guide the development of the strategy to be developed. This exercise provides a number of key factors that cannot be ignored. There are numerous factors that can influence the way in which the company’s brand portfolio is structured: market development, competition, risks, economies of scale, distribution, budget, etc.

  1. Brand Architecture Framework and Models

Before applying the final architecture, multiple frameworks need to be developed, examined, and reviewed. What alternatives exist to determine the strategic and relational structure of all the brands and sub-brands in the portfolio? Depending on the size and complexity of the company, there can be an almost unlimited number of options. The key elements that influence the design of frames are:

  • The organization’s brand strategy
  • Number of levels required in the architecture hierarchy
  • Global, Regional, and Local Brand Portfolios: Similarities and Differences
  • Number of sub-brands
  • Number of formats or extensions
  1. Naming Architecture Guidelines

The naming architecture makes it easy to order the names of all brands in such a way that the appropriate relationships are established between all of them in order to provide clarity and value. It acts as a set of principles for the naming of new brands or sub-brands.

  1. Decision Tree for Brand Architecture

A formalized decision tree is a tool that takes the guesswork out of any future decisions you have to face to solve brand issues arising from acquisitions, internal product/brand development, internal realignments, etc.

  1. Migration and implementation of brand architecture

Achieving the objective starting from the current situation may make it necessary to establish a progression that minimizes the risks derived from the change. Developing a migration strategy is the best way to ensure this transition. In this process, dissemination will also be essential for the new architectural framework to be successfully understood by all stakeholders.

 

Moments to Develop Brand Architecture

It’s never too late for a company to reconsider how its brand architecture should evolve as the business itself has evolved. There are several situations that impact the organization of brands:

  • Organic growth: Businesses grow, creating divisions, business units, product lines, and anything else that adds complexity and confusion, both internally and externally.
  • Mergers and acquisitions: Increase business capabilities based on combination and acquisition models of other companies, as well as other assets.
  • Market segmentation: When the brand needs diversification into specific niches that require specific value propositions.
  • International expansion: The business is developed towards other geographies with different market characteristics.

Conclusion

There is no single solution for developing brand architectures. But the most effective models are strategic in nature and are always developed with a forward-looking and evolving perspective. It is important for organizations to treat the process of developing brand architecture as a core element of the strategic toolkit for managing their main intangible asset: their brand.

 

Carlos Puig Falcó

CEO of Branward