Have you ever looked at how your brands are structured in detail and decided if they fit in with your current company structure, purpose and goals? How do you know where acquisitions or subsidiaries fit in relation to your corporate brand? It may be time to look!

Your brand may have originally started anywhere, even possibly as a team of two in your backroom at home. However you started, you will have no doubt been on a growth journey or have been established for a reasonable period of time, without fully assessing your brand’s structure. Your structure may clearly show where you are today, but may not allow you to make an informed decision if you were to make any changes tomorrow. In the current climate, where acquisitions are recurring, you may be unaware and unsure of how they would fit into your current brand’s architecture and how this could impact your parent brand and subsidiary brands both internally and externally.

This is where the brand architecture model fits in. It’s a clear tool that allows you to identify where you think your brand sits and what you would do if you developed into different markets, different sectors, if you acquired a company or even if you created a new service. The brand architecture model allows you to decide whether acquisitions would adopt the parent brand name, whether they have enough credibility without this brand name and whether they fit within your current structure and culture.

The model is a tool for analysis taken at a snapshot in time that allows you to make key decisions moving forward. It provides clarity and relieves confusion and conflict internally. This model should be considered at any point that a change is being discussed.

Looking at the basics, the model is built on a spectrum. At one end of the spectrum is a house of brands and the other side is a branded house. Both sound very similar but have totally different meanings!

  • The basic principle of a House of Brands is that all subsidiaries are underneath the corporate or parent brand and are seen as individual, independent brands. They have their own advertising, values and identity. 
  • A Branded House is one where all brands typically have the same naming structure and follow the parent company name. All subsidiaries are clearly linked and associated with the parent brand, with centralised values and norms.

Breaking this down even further, you have four different categories of brand architecture that fit into this spectrum. 

Portfolio 

This category is typical of a house of brands. This is where the subsidiary brands all have their own identity and do not connect or associate themselves with the corporate or parent brand. To help to make this more understandable, a working example is Procter & Gamble. P&G is a corporate/parent brand with multiple subsidiary brands underneath it, such as Head & Shoulders and Pantene. Unless you were extremely observant and knew of the parent brand, you wouldn’t otherwise know that these brands are owned by Procter & Gamble as they are somewhat hidden.

Why would the parent brand be hidden? Well, a simple explanation is that this structure ensures that with low synergy, there is low risk. For example, if one particular brand within the structure has some bad press and publicity, this is unlikely to impact the image of any other subsidiary brands within the portfolio. It is likely that brands within the portfolio will portray different market benefits and associations, and an example of this could be a premium product versus a budget product. You would be less likely to spend a lot of money on a premium product that is produced by a budget company, as they hold the wrong perception intended for a premium product. By ensuring that these brands are seen as individual, it means that these associations and perceptions are tailored accordingly and not tarnished by reputations from others within the portfolio. A benefit of this structure is that if you were to introduce a new product or service to the portfolio and the market responds negatively, you can test this without having any link to the brand — reducing the effect on brand equity or subsidiary brands.

Endorsed

The next category on the spectrum is the Endorsed structure. This type of architecture is slightly different in terms of association. The corporate/parent brand acts as a supporter of the subsidiary brand. This adds a level of credibility and authenticity as the parent brand is seen as established and reputable and may have a stronger stance within the marketplace. Consumers are more likely to trust the product if it is endorsed by a well-established and recognised company — it adds a sense of security. There is an association between the parent brand and the subsidiary brand and so perceptions will be grouped around a common focus and/or shared knowledge, but it is still unlikely that other subsidiary brands within the portfolio will impact any others. 

An example of this brand is Unilever. Unilever place their logo onto their subsidiary brands’ products. You can take a look at some of their brands on their website.

Endorsed Brand Structure

Family

Next up is the family structure which begins to take us towards the Branded House structure. Family is one in which the corporate or parent brand name is used throughout all subsidiaries. This is typically across a wide span of sectors allowing the corporate/parent brand to establish themselves in multiple markets — allowing them to take advantage of cross-selling. The brand name, logo and colours are generally transferred to the subsidiary. They do, though, have some flexibility on how they advertise their products and services due to dependencies on the target audience, perceptions and qualities related to the product or service. An example of this type of structure is Virgin. Virgin span across multiple sectors which include trains, banking and mobile. Here, you always see the Virgin logo and name, and their companies are often branded with the distinctive red colours.

The key distinction between endorsed and family is the positioning of the brand name. With an endorsed brand, the parent brand will take a secondary position whereas with a family brand, the parent brand takes primary position. 

Family brand structure

Monolithic

The final category is the monolithic structure which is the definition of the branded house. The parent or corporate brand is dominant here, where all subsidiary brands use their name and follow the same principles, rules and culture. Consumers who are likely to use their products or services buy into a single idea which can be marketed as a group rather than individually. An obvious example of this is Apple, with their iPads, iPhones and iPods, etc. Monoliths typically have an offering in closely aligned sectors and markets. In this example, Apple is technology-focused so can maintain the monolithic approach. 

Monolithic brand structure

The Hybrid

When looking at the structure of your brand, it may be apparent that you cross over multiple structures, resulting in a Hybrid. This is common in established organisations that have become enterprises, especially with acquisitions, as there are larger decisions to be made over the placement of a new subsidiary within the portfolio. To bring this to life, an interesting example is Disney. Disney alone is a strong, well-established brand which actually stretches across sectors and markets. In 2006, Disney acquired Pixar and chose to follow a hybrid of endorsed and family models to change its name to Disney Pixar whereas in 1996 when Disney acquired ABC, it was appropriate for ABC to maintain their name and avoid any relation to children’s television.

A hybrid approach is a common structure, typically amongst established corporate brands, as the appropriate architecture is chosen dependent on the decision that needs to be made. The goal is growth and clarity, ensuring the subsidiary makes sense to all stakeholders. If you want to grow your brand, how do you do this? What do you do with the brands that you’ve acquired? What do you do with a potential acquisition? How visible do you want the corporate brand to be?  But you also need to consider how you communicate. Do you need to target a separate market? Do you want all of your communications to align?

We appreciate that there are so many questions to answer when looking at your architecture. It's a snapshot in time and a tool that will help you to analyse where you are and how you align your brands to prepare for future growth. 

Do you think it’s time for a brand audit? Contact us to see how we can help.

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