Launch your business with confidence.
Launching a new brand without having a strategic growth plan in place is like launching a kayak into a river without a paddle (might seem fun at first but certainly can’t end up well). Having a strategic plan for a brand architecture structure can help successfully guide the growth of your company as it scales and expands.
Knowing which structure your business will utilize will help you plan a brand and marketing strategy without wasting time, energy, and resources.
Do you want your business to grow and manage other brands? Do you want to produce products/ services but overall, utilize the same brand throughout all products and services you may offer?
Brand architecture is basically a strategic growth plan for your business. The structure in which you choose for your business will guide its growth (or hinder it). By putting a brand architecture structure in place early on, you’ll be able to avoid a narrow branding focus, misbranding, or having overlap (in products or service). These things can all work against your business and be a giant pain in the tush later on. (see example down below of what not to do).
There are two main architecture structures to consider: A house of brands and a branded house.
A house of Brands
Think Proctor & Gamble or Kraft foods – these are examples of “houses of brands” where the parent brand has multiple sub-brands that each have their own unique brand positioning, marketing budgets, and target audiences. Did you know Covergirl was owned by Proctor & Gamble? If not, now you do. There’s no clear link between the two brands, other than if you go on Covergirl’s website, there may be some tiny text somewhere saying it’s owned by Proctor & Gamble. Covergirl acts independently of the parent brand.
Want another example? Kraft owns over 100 other brands – Jell-O, Capri Sun, Maxwell House, Kool-Aid, Lunchables, and Planters. Sure, they’re all food products, but as far as branding goes, they all have a very distinct target audience and brand positioning. They all have separate marketing strategies as well. There is no way that all of these brands would effectively reach their target market or succeed if they all had to co-exist under the same brand umbrella (so to speak).
Pros of using a “house of brands”: it allows for marketing diversification and messaging to each brand’s specific audience. If you want your brand to buy up other, smaller brands, this is the route to go.
Cons: It’s a ton of work for each sub-brand. They can’t ride the coattails of the parent brand and must build their own reputation. That takes time, consistency, and effort. It also requires each brand to come up with its own marketing strategy and budget. You also have to worry about trademarking more brands, which in itself can be a hassle.
When to use: When your brands are so dissimilar that they require different marketing strategies, parent brand legacy is secondary, products/services are too similar and having them under the same brand would cannibalize sales.
Think Apple, FedEx, or Intel. These are examples that carry their branding throughout all their sub-brands so that there is a recognizable relationship between the sub-brand and parent brand.
Pros: Over time, this builds a very strong brand loyalty and can make new product launches more cost-effective in terms of marketing efforts because they can piggyback off the success of the parent brand. Look at Apple, they can literally launch anything and they have an immediate fanbase.
Cons: Any negative PR for the parent brand or one of the sub-brands could impact the other brands in the portfolio. If something goes wrong with the iphone, Apple, not just the iphone brand, is targeted. There is the potential for your business to become pigeon-holed, which isn’t great if you know you want to do various things with your business.
When to use: The products/services in your business can share the same overall brand promise. Your parent brand has a strong legacy and you want to use that to build the sub-brands.
Example of Shooting Yourself in the Foot
A company, YouSendIt, started off as a web-based file exchange service. They wanted to expand and buy another business that was in an unrelated industry. They realized their current brand name wasn’t going to work with this new venture and had to undergo a rather costly rebrand. Beyond it costing a lot of actual money, they had to spend time and resources educating their current customer base on the changes as well as target new customers for the new venture.
Understanding how you want your business to function will help you narrow down the type of name you want to use, establish the type of messaging that is utilized throughout your brand and between products/services, and determine how many brands will be in your “portfolio”. This last point is important because the more brands you acquire, the more likely your brand messaging can become diluted, so it may be necessary to separate those sub-brands so that they can stand on their own.
This then naturally allows you to implement a marketing strategy that will help you forge ahead and not end up rebranding way down the road when you have 1000 employees and a dozen offices. Sometimes that needs to be done, but doing the homework ahead of time drastically decreases the chances of this happening and lessening the impact if you do end up needing a rebrand.
Corporate structures and relationships among brands can become increasingly complex over time. A strategic brand architecture will help you navigate the growth of a business and allow you to plan so that you end up with a strong branded house or house of brands.
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