Brand architecture: how to manage a brand portfolio

While a company has one product, it doesn't need an architecture. The problems start when a second line, a new segment or an acquired brand appears. Without rules, every new name is invented from scratch, the promotion budget gets spread thin, and the buyer stops understanding what is connected to what. I have managed brand portfolios for years, and most portfolio problems I have come across start precisely with the lack of an architecture.

Three basic architecture models

1. Branded house. All products come out under one name and differ only by descriptors. Example: Yandex, with Yandex Market, Yandex Music and Yandex Go. Every new service immediately gets the trust and recognition of the parent brand.

• Pros: one brand means one promotion budget, quick launches of new products, strong recognition.
• Cons: a problem with one product hurts the reputation of all the others; it is hard to enter a segment that contradicts the image of the main brand.

2. House of brands. Each product is a standalone brand with its own name and positioning, and the parent company stays in the background. The classic example is Procter & Gamble: Tide, Gillette, Pampers. Buyers know the brands but rarely connect them with the owner.

• Pros: you can cover different segments and price levels, even ones that compete with each other; a crisis at one brand doesn't touch the others; a brand is easier to sell.
• Cons: each brand is built and promoted separately, which is expensive and needs a strong team of brand managers.

3. Endorsed brand. The product has its own name, but the parent brand stands next to it as a guarantee of quality. Example: Courtyard by Marriott hotels. The chain has its own positioning, and the Marriott name adds trust.

• Pros: the new brand gets the parent's trust and keeps its freedom of positioning.
• Cons: the balance needs careful handling: if the sub-brand lets a customer down, the shadow still falls on the parent.

In practice many companies use a hybrid: the main line lives under the main brand, and a standalone brand is created for a separate segment, such as budget or professional.

How to choose a model: 5 questions

1. Is the audience the same? If the new product is for the same people, it makes sense to use the main brand. If it is for completely different people, you most likely need a separate one.
2. Is the price level the same? Launching a cheap line under a premium name is a sure way to dilute the premium image.
3. Does the brand promise carry over? If the main brand promises "coffee expertise", coffee machines under it make sense, cosmetics do not.
4. What is the promotion budget? A standalone brand needs its own investment in awareness. If there is no money for that, a branded house or endorsement by the parent brand is safer.
5. What are the plans for the business? If you plan to sell or spin off a product or division, a separate brand makes the deal simpler.

Signs that the architecture is broken

• Customers, and even employees, can't explain how the company's lines differ.
• Products look different even though they are sold under one brand.
• Sub-brand names were made up at different times by different people and follow no shared logic.
• The company's brands compete with each other for the same buyer on the same shelf.
• The promotion budget is split between too many brands, and none of them builds awareness.

How to bring order

It all starts with an inventory: list every brand, sub-brand, line and product, with its audience, price and share of revenue. Then decide which brands carry the main value and which model to organise them into. Some sub-brands are usually worth merging or withdrawing, and for the rest you write naming rules and rules for the visual link with the parent brand. These rules go into the brand book and the guidelines so the next product isn't launched on a hunch.

FAQ

How is brand architecture different from brand strategy?
Strategy answers where the brand is going and how. Architecture describes how several brands of one company relate to each other. Once there is more than one brand, architecture is part of the strategy.

Does a small business need a brand architecture?
As soon as a second line or a second business area appears, yes. Settling the question at the start is cheaper than renaming products that customers already know.

Bottom line: brand architecture is useful well beyond corporations. It keeps you from spending money promoting brands that get in each other's way. The sooner a company agrees on the rules, the cheaper each following launch will be.