Brand Architecture

October 30, 2017 In Brand Architecture By @MarshallStrategy

Brand Architecture Models: Modern and Traditional

At Marshall, we define Brand Architecture as the degree of relationship that should exist between brands within a company’s portfolio. A brand is typically thought of as a promise to a customer – therefore many brands mean many promises. It’s important that those promises align, otherwise they could create confusion. In more complex brand portfolios, defining the relationships of product or service brands to the company brand, and to each other can help create brand coherence. While there are many different approaches, brand architecture can be thought of as having two general models: segmentation and community.

Segmentation Model

The traditional approach to brand architecture is what we call ‘segmentation”: Find a market segment, create a product or service that meets its needs, and create a brand that appeals to the segment. If you have multiple segments, you have multiple brands, none of which relates to the others. This creates complexity and can result in high marketing costs, because the more brands you have, the more brands you have to pay to support. Proctor and Gamble and GM are historic examples of this segmentation approach.

Community Model

At Marshall Strategy, we increasingly support the “community” brand architecture model. This model assumes that when you have a brand that appeals to one audience, you may have other brands that also might appeal to that audience. Similarly, you may be able to attract multiple audiences to one or more related brand promises. The clearer the relationships between those brands are, the more likely you are to build a community of customers who value your brands. Think of how Google, Apple, and Facebook have built thriving communities around their related, complementary brands.

Key Brand Architecture Questions

How well do existing brands support our strategic positioning, name and identity?

What conflicts exist between our offering brands and our strategic position, and how can those conflicts be addressed?

How do we efficiently manage the different offerings within our portfolio or ecosystem?

How should we manage individual offerings to maximize our brand coherence?

A graphic showing both brand architecture models, conventional (segmentation) and new (community).

See how we solved a brand architecture challenge and created brand coherence for a global hospitality provider: Hilton Grand Vacations Case Study

Ask Marshall About Brand Architecture for Your Business

May 28, 2014 In Audits, Brand Architecture, Brand Research, Branding, Higher Education By Ken Pasternak

Managing Brand Complexity: Staying Ahead of the Curve

Large companies—like GE, Google, Samsung and others—know this law of branding firsthand: As you grow in size, you will grow in complexity. Acquisitions, organic growth, market segmentation and product and service extensions all add complexity to brand portfolios. How should large successful brands such as these manage brand complexity?

Growing companies realize they need to support the strength and cohesiveness of their corporate identities, while also accommodating the needs of their individual brands and sub-brands. We call this “brand balance.” This balance gets harder to control as you grow; there is a very real complexity curve that gets steeper with a company’s size. To remain successful as you grow, it is important to learn how to stay ahead of this complexity curve.

May 14, 2014 In Acquisitions, Brand Architecture, Branding, Identity and Brand Strategy By Ken Pasternak

Brand Diversification: When Is it a Good Idea?

In April I posted a SlideShare presentation (below) about tech startups and key brand considerations as they grow. In it I described Facebook’s decision to retain the WhatsApp and Instagram brands as part of a brand diversification strategy. Retaining acquired brands (rather than renaming and assimilating them into the parent brand) can be useful if they appeal to audiences, or deliver services that are not aligned with your core brand. While Facebook has 1.2 billion users, both Instagram and WhatsApp have hundreds of millions of loyal users. Since many of these users prefer these acquired apps over Facebook, it may make sense to keep those brands separate.

I also remarked that Facebook could continue to grow by following this type of diversification strategy, although it risks cannibalizing some of the popularity of its flagship brand. Now Facebook has publicly committed to this diversification strategy, which has been dubbed by some as “unbundling.”

February 21, 2014 In Acquisitions, Brand Architecture, Technology By Ken Pasternak

4 Questions to Ask When Developing a Brand Architecture Strategy

4 Questions to Ask About Your Brand Architecture as Your Organization Grows Let’s imagine you are Facebook. When you first started, you had a clear idea. You created messaging, a user experience and an identity platform to guide it as it grew. You made the hard decisions to whittle your brand’s message down into one clear, coherent thought.

But now, you’re acquiring additional brands at a very high cost, adding complexity to your brand. Now you’ve got Instagram and WhatsApp. You say you are committed to preserving their independence. We say it’s time to revisit those hard decisions, to keep your brand architecture intact and your brand strong.

We see organizations—especially those in the technology and digital fields—take a “ready, fire, aim” approach to acquiring brands and working them into their brand architecture. As a result, any of the following situations may occur, creating a complex and unwieldy environment:

You’ve brought in a little monster that’s unlike the rest of the monsters in your zoo, but you love it anyway.
You decided to preserve the equity of an acquired brand because you don’t want to “mess it up.”
You are developing a new brand in response to a short-term market need or competitive threat.

So how does a growing company develop a brand architecture strategy?

Developing a Brand Architecture

There are four questions you can ask of your company that will guide your brand alignment through this transition:

“How many promises do we want to make to our audiences?”
“How elastic is our current brand in making these promises to these audiences?”
“How many brands do we eventually want to have, and need to support?”
“How does the introduction, or cancellation of a brand, affect the rest of our portfolio?”

These questions must not be thought of in a vacuum; rather, they should be thought of as a connected part of the organization. While some organizations are disciplined about this, others could stand to use some help. Even the most disciplined companies have to revisit this over time.

IBM, for example, is a technology giant and appears to be a master-branded company, but if you look at IBM over time, they have struggled with supporting the master brand in exchange for some autonomy at the sub-brand level. IBM acquired a number of sub-brands over time, such as Lotus, Rational Software and Tivoli. Progressively each company began using more and more of IBM’s resources until the organization made a decision to rein these brands in. Lesson learned: when they acquired PwC Consulting, it rather quickly became IBM Global Business Services.

On the other hand, GE has done a remarkable job of maintaining the GE brand. It’s very simple; it covers everything from light bulbs and toasters to aircraft engines and nuclear reactor services. How did they manage that? GE focused its brand promise on excellent management and ceaseless innovation. Anytime you see that GE brand, that’s what it means. That’s a pretty powerful model. If I were Facebook, I would take note.

Learn more about our brand architecture services.

February 21, 2014 In Blog, Brand Architecture, Branding, Identity and Brand Strategy, Technology By Ken Pasternak

What Is Brand Architecture?

What Is Brand Architecture? One of the corporate branding disciplines that we receive the highest number of inquiries about is brand architecture. We find that for many clients however, it’s hard to grasp what brand architecture really means. Some organizations think of it as market segmentation, others think of it in terms of rationalizing portfolios or acquisition strategy. These are all important concerns, but we think about it at a higher level. Brand architecture explains the degree of relationship that should exist between the corporate brand and its various product and service brands. Should they go with a monolithic Master Brand strategy, corral multiple brands into a “house of brands,” or some combination of the two? What is the strategic rationale for an approach? Without clarity on these issues, your brand promise can become unclear, which creates confusion and can even reflect a lack of confidence.

What is Brand Architecture?

Let’s First Understand The Root of Brand Complexity

Anything that is ever created, whether it’s an app, a product or a service, wants a brand. And why not? Every creator wants to draw attention to his or her creation. By this philosophy, however, one company could easily have numerous brands. Companies often revert to micro-market segmentation as a surrogate for brand architecture. Google, for instance, has set an unusual precedent. The tech giant has many independently moving parts (read: brands) within its organization, but the sum total of those parts doesn’t necessarily create a comprehensive sense of what is “Google.” This is the most common problem we see with brand architecture.

The 3 Questions That Lead to a Strong Brand Architecture

What you call your product and how you identify it is only a tiny percent of the brand experience. Brand meaning and value is based on the promise each product fulfills and how it delivers that promise. Creating a strong and sustainable brand architecture requires answering these three questions:

Do your various different offerings add up to fulfill a promise?
What does each offer say about you as a provider?
How does each one of those offerings help you build your audience, or deliver on your promise?

In our experience, when a new brand is created, there’s not much consideration for the greater whole until it’s too late. A number of tech companies have spent years and millions of dollars cleaning up their brand messes. For example, we saw Sony lose its position as a premium brand partly because its many sub-brands fragmented product teams and distracted consumers from Sony’s core promise. We look at Amazon’s recent purchase of WholeFoods and wonder how strongly Amazon will want to associate their technology and commerce brand with a brick and mortar grocer. Any obvious association is likely to change perceptions of both brands.

Relatively few companies make the hard decisions that we think are necessary to grow their brands responsibly. By doing so, companies can avoid wasted investments and confusion among their audiences.

October 4, 2013 In Brand Architecture, Branding, Positioning Strategy By @noblestudios

The Brand Impact of Mergers

Last year saw a n ear-record high in M&A activity, which at $3.5 Trillion was the highest activity recorded in seven years, according to the New York Times. Tiny startups (WhatsApp: $19 Billion) and major blue chip companies (DirecTV: $49 Billion) were swallowed up by larger acquirers for astronomical sums.

The conventional wisdom fueling these buying sprees goes like this: once a company gets to a certain size, organic growth becomes very difficult to sustain. Acquiring into new areas or capabilities is a much faster route to growth in revenues, capabilities, and ideally profitability.

But what happens to brand value in these transactions? How should brands be managed to retain or augment their combined value? Which company gets to keep its brand name and promise, and what happens to the other? In our experience, too few companies invest in the upfront strategic thinking and decisions required to get full brand value, and hence business value, out of their mergers.

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Brand Architecture