Brand Architecture

Brand Architecture: “How long is a piece of string?”

I wonder if, like me, you find Brand Architecture fascinating? The theory is simple but the practice elastic, nuanced and customized.

Theory

Brand Architecture is an organizing structure that helps a company cater to different segments in a category through multiple brands or, alternately, stretch a single brand across categories.

A well-defined brand has multiple assets: a mission, target consumer, positioning, innovation strategy, brand idea, creative assets (such as a tag-line, visual identity, communication territory) and so on. These give a brand distinct character and “equity”. But how does a brand in a company’s portfolio relate to other brands the company owns?

Companies need a system to manage multiple brands that helps maximize business opportunity while minimizing chaos and cannibalization. Multi-category FMCG Unilever has, according to one estimate, 22 brands in Hair Care alone. Sunsilk, Suave, Timotei, Tresemme and Clear are some brands on that list. This gives Unilever a powerful position in Hair Care but also brings the need for organization and discipline. Brand Architecture helps Unilever do that through the House of Brands Model. This model is one of four brand architecture "buckets".

Another use of Brand Architecture is brand extension. This is when a brand stretches its core equity across multiple categories. There’s a Borrow-Build aspect – the extension borrows equity from the original category and builds new equity into the brand from the extension category. Brand Extension tends to be more complex and throws up two of the remaining three buckets – Branded House and Endorsed House models. Apple – present in computers, tablets, mobile handsets etc– is an example of the former and the TATA group of the latter. 

The last and final bucket is the Hybrid House, which as the name suggests is an approach that doesn't fit into the other buckets and uses principles of all three. Marriott – with standalone brands such as the Ritz Carlton in the House of Brands model and Courtyard by Marriott in the Endorsed House model - is an example of this.

Practice

The theory is almost deceptively simple, the practice considerably complex. You have to be precise about the brand’s equity as it is perceived by consumers.

The Unilever male deodorant brand Axe originates in a House of Brands model but also stretches across categories. Its core equity lies in body odor control and its main “enemy” is sweat. It promises men that women will find them nice to be close to – even irresistible – enhancing their success in the mating game.

This obvious but nevertheless motivating positioning for a deodorant has helped Axe take a large share of the Deodorants market. When it comes to extending Axe into other categories, how well does the brand’s core equity travel? Odor removal as a benefit and sweat as an enemy travel easily into the Body Cleansing market, but how relevant is it in Hair Care? “Hair washed with Axe doesn’t smell of sweat” is an insufficient functional position in shampoos where consumers look for specific hair-related benefits.

Arguably the equity Axe borrows from deodorants does not stretch credibly into shampoos. It is likely Axe shampoos do less well than Axe deodorants. To succeed Axe shampoos will have to lay claim to one or more of the benefits that drive the shampoo category and in the process build back into the Axe master-brand equity.

Reliance, the iconic Indian business house, uses a Branded House model. Reliance enjoys widespread admiration and respect based on the owners’ business acumen and financial mega-success.  They brand their businesses Reliance - from petrochemicals and telecom to supermarkets, electronics retail and jewelry. This demands a lot from the Reliance brand by asking it to stretch across a wide range of very diverse businesses, each with different drivers of success.

It also exposes the brand name to greater risk – if Reliance’s brand equity creating factors become vulnerable for any reason, the entire Branded House will be affected. This is a common issue for any Branded House architecture. It is more than likely that Reliance's decision makers have looked at this closely and feel the benefits of a Reliance Branded House outweigh its risks.

In Brand Architecture there is no “one size fits all”.

Every brand’s situation is unique and there is almost infinite room for variety and customization.
That’s why, when I’m asked, “Bharat, what are your thoughts on Brand Architecture?” I smile and start my reply with, “How long is a piece of string?”