Thought Leadership

 

A New Look At Brand Architecture...

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Useful tools for a more complete approach

By: Michael Million

A more expansive view of brand architecture is needed

Authors, such as David Aaker and Kevin Lane Keller, put the topic of brand architecture on the map and gave us useful language and frameworks for organizing brands. The most widely used of these terms include “house of brands” (e.g. P&G with its many product brands that have little to no linkage to the corporate brand) and “branded house” (e.g. GE with its diversified businesses all falling under the GE master brand). While helpful in establishing approaches toward architecting portfolios of brands, these early definitions fall short of addressing the issues today’s organizations face. In my work for over a decade in this area for companies including GE, IBM, Textron, Boeing, Maytag, and others, I have found that as soon as brand architecture issues are raised, the dialogue quickly moves into directions ranging from extremely strategic (how do I organize my go-to-market businesses?) to extremely tactical (what should I name product/service X?). If brand architecture is a structure for organizing brands in a portfolio to achieve some benefit for a company, then both the very strategic and very tactical elements should be considered.

Extending to more strategic decisions

What to brand vs. what not to brand is a key question all organizations must ask before defining their brand architecture, as the answer has significant implications relative to resources and go-to-market endeavors. Often, companies confuse “named offers” with brands that can sub-optimize efforts. Key considerations to determine if an entity or offer is a brand or not include: Does entity/offer directly or indirectly contribute significant revenues? Does entity/offer have a particularly important strategic role relative to positioning the company for the future?

Is entity/offer invested in or managed year over year to build intangible equity that can drive customer preference? Often, it is helpful to establish a decision tree composed of clear criteria to assess entities/offers in question relative to if they should be branded or not, and if so, what type of brand they should be (see below). Tools like these can be used to evaluate current entities and offers as well as potential future ones that come from new product development and acquisitions.

Brand portfolio strategy is a long-term approach toward creating, managing, and assessing the usefulness and purpose of brands in a portfolio on an ongoing basis in order to optimally grow the business by maximizing relevance and competitiveness across a broad spectrum of chosen markets. The key questions to address in brand portfolio strategy include: Which markets should we participate in? Which customer segments should we target? How many brands do we need to sufficiently participate in those markets/with those target segments? What is the right scale of those brands for the size of our business and industries within which we operate? Which markets do we have too many brands to effectively compete? Which markets do we have deficiencies in our portfolio?

Organizing principle is an over-arching approach toward structuring a brand portfolio. It answers the ultimate strategic question, how to organize brands in a portfolio relative to each other in order to maximize growth, distinguish brands from each other, and ensure the markets we participate in are optimally covered by an efficient number of brands. Organizing principles can vary from being more internally driven or product-centric to more externally driven or customer-segment-centric.

Caterpillar structures its portfolio around very functional lines of products that together, describe the totality of its offer. While the Cat brand, itself, has an extensive portfolio of product lines including bull dozers, back hoe loaders, and compactors, the company also retains endorsed and standalone brands, such as Anchor hydraulic hoses and Perkins gas and diesel engines for acquired companies with products that augment Cat’s core of earth-moving equipment.

On the other end, Toyota structures its brand portfolio by consumer segment including Prius, for the “environmentally conscious early adopters,” Scion, for the “hip at heart drivers on a budget,” and Camry, for “practical families who desire performance.” Determining the right organizing principle can be the most strategic issue to address early on in brand architecture developments, as it lays the groundwork for all other decision making and actually begins to form a go-to-market strategy that guides marketing and sales.

Brand hierarchy is an approach toward defining different types of brands in a portfolio, starting with the broadest level corporate brand and moving down with increasing granularity including ingredient brands and branded features or technologies. Examples of different levels of brand hierarchy include: corporate or enterprise level (Chrysler Group), product line level (Ram Commercial), model level (Ram Promaster), variant level (Ram 250, Ram 350), ingredient level (Hemi engines), and technology level (uconnect, businesslink). A critical question to answer is at which level(s) within a hierarchy should one brand vs. simply call out in descriptive terms. If a stringent definition of brand is followed (as stated above), one can see that selectivity is important here, as scarce resources will be required to build equity and manage those assets to drive business performance.

Brand relationship types are at the heart of how brand architecture has historically been conceived. They define the type of relationship or linkage a brand has with its parent or corporate brand. Examples of brand relationship types include: co-brands – typically between two corporate brands, sub-brands – where the corporate brand leads but a sub-brand is in a subordinate, but still significant position (Electrolux Icon); endorsed brands – where the corporate brand is subordinate to another brand that is in the lead position but needs some level of corporate support for credibility (Courtyard by Marriott); stand-alone brands – where the corporate brand is invisible in the brand’s identify, but may be mentioned in some communications for certain audiences, like investors or employees (Ugg Australia, a division of Deckers Outdoor Corporation).

Brand rationalization is an effort made to assess the strengths/weaknesses of brands in a portfolio to ultimately determine if they should continue to exist or not, be repositioned in any way, or sold off to re-allocate resources into other brands that show more promise or are better aligned with the corporation’s overall growth strategy. P&G’s recent announcement to divest as many as 100 brands to concentrate on the most profitable 70 or 80, is a prime example. Brand rationalization efforts should be undertaken with forethought and objectivity. Assessment criteria should be applied against brands that balance current performance with future potential growth, economic contribution with strategy role, customer affinity with operational realities, and brand equity with scale and scope.

Extending to more tactical decisions

Visual identity linkage, or “signature lock-ups,” is an approach toward connecting two brand identities, logos, or names together in a way that communicates the intended relationship type. While co-brands might show equal weighting to each brand identity, the more typical visual relationships show either the parent brand identity more prevalent than its sub-brand, such as Colgate Total, or the sub-brand more prevalent than its parent, such as Xiameter from Dow Corning, which can be classified as an endorsement. Although an important element of brand architecture, all too often, decisions about brand relationships are too heavily based on how the visual identities are related to each other (the end), rather than the more strategic aspects as described above (the beginning).

Design language is a comprehensive approach toward an entire system of brand expression including color palette, typography, photography, and other graphic imagery. Depending on whether the corporate brand or sub-brand is in the lead position, the design language can express the relationship of brands in ways that are much richer and robust than the signatures can alone. For example, rather than simply adopting the system of the corporate brand, a sub-brand might modify it to convey something different, but related to the corporate identity. BMW i is a series of electric and hybrid vehicles. Picking up on classic BMW design features allows BMW i design to maintain a clear connection to its parent brand, however, BMW i also has stylistic elements giving the sub-brand’s vehicles a distinctive identity including a glowing blue ring around the BMW badge and the use of contrasting colors call out the car’s lightweight design.

Naming convention is a systematic approach toward naming or describing brands and their offers. While determining the brand relationship can guide the first portion of a name (e.g. corporate name + sub-brand name), other elements of the offer must be described to express their full identities (e.g. product/service descriptor, model number, variant, series, special features, etc.). Often companies, especially those with heavy reliance on technology, tend to create coding systems for their offer name that can confuse customers (IBM System x3755 M3). Another misstep in product/service naming comes when companies name offers in isolation without the greater portfolio or system in mind. This creates several “one-off” names with little relationship to the greater whole, and thus, complicating a portfolio and expressing disorganization. To establish a systematic approach that clarifies offers for customers and takes the guessing out of product naming for internal teams, worst case/most complex examples should be used as pilots in order to accommodate the entire portfolio.

Messaging (architecture) is a structured way to communicate a brand’s most important benefits. Often, brand hierarchy can enhance messaging by having certain messages tied to different levels. A good example of this would be attributes like “service,” “integrity,” or “re-assurance” to be conveyed at the corporate brand level, “product performance” type attributes might be conveyed at the sub-brand level, and “innovation” type attributes might be conveyed at a technology brand level – all part of the full identity, but together packing a communicative punch in a systematic way. For example, Toyota uses its corporate name to brand most of its products and conveys the reliability of its vehicles; Camry designates a price point and quality level at the high end of the full-size family car; and XLE identifies the top-of-the-line version including special features, such as wood interior trim, a power driver’s seat, a power sunroof, and dual-zone automatic climate control.

In Conclusion

Included in this article have been some key terms companies might consider in an expanded view of brand architecture. When developing a future-oriented architecture, it is important to know which of these areas are most critical and urgent to address, and which ones will, invariably, be guided by other, more strategic decisions. Brand architecture is an evolving discipline, and growing in complexity. It contains both strategic and tactical areas that should be considered as it is developed for full portfolios.

E12 FullSurge Brand Architecture

 

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Michael Million (mmillion@fullsurge.com) is a partner at FullSurge, a strategic consulting firm that helps clients grow through brand-building and marketing.