Brand Architecture What is it and Why Does it Matter for Marketing?
What Are The Types of Brand Architecture And Why is it More Than a Marketing Buzzword? Find out in this post.
Branding can make or break a business. Take marmite for example. Some people love it; others hate it. But everyone has heard of it.
Done well, branding tells customers a story about your business values and culture. It raises awareness of your products and can even make them iconic.
But what about when you have more than one brand? As your business grows, your story can get cluttered and confusing.
If that happens, it might be time to revamp your brand architecture. Clearly defined brand architecture shapes how you communicate with customers. It helps you organize your company so all your brands tell a unified story and a cohesive brand identity. This, in turn, builds consumer confidence and trust.
There are several types of brand architecture to choose from, each with its own pros and cons. But before we dive in, let’s look in more detail at what brand architecture is – and why it’s important.
What is brand architecture?
If your brands are leaves, your brand architecture is the branches that connect them. It’s your logos, fonts, colors, templates, and anything else that connects – or defines – your brands.
Let’s look at templates as an example. According to Lucidpress, over 80% of businesses use templates. They’re a great way to ensure consistency across different brands or sub-brands. The types of templates you can create include:
- Purchase order example forms and other sales templates.
- Example emails and social media posts.
- Digital and printed templates.
Like other brand architecture, templates ensure each brand tells your company’s story. Brand architecture can also help you target different brands with different audiences. After all, your reciprocity marketing campaign for teenagers probably wouldn’t appeal to pensioners! So you’d need different logos, colors, and messages for each campaign. But… they still need to be true to your company. And if you’re wondering about the budget that you will use in rebranding, you can depend on cash flow planning software that will help you track your cash flow.
Why is brand architecture important?
Consumers are more likely to trust brands they recognize and that are consistent.
In fact, 68% of companies found that brand consistency grew their revenue by 10% to 20%. If companies aren’t consistent with how they present their brands, it can be confusing. And this can harm consumer confidence in your brand.
As an example, let’s pretend you’re a software company called Chat. You own two brands: Video Chat and Mobile Chat. If their logos are similar, customers know they can ask Chat how to set up a conference call or what roaming charges are. If the logos are too different, customers may not realize Chat owns both brands.
Having clearly defined brand architecture isn’t only helpful to customers, though. It also ensures your design and marketing teams know how to stay true to your brand and appeal to customers.
Types of brand architecture
Now, let’s look at the types of brand architecture you can choose from. There are five main types of brand architecture:
- Branded house
- Endorsed brands
- Hybrid brands
- House of brands
The main difference between them is how dominant the parent company is:
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1. Branded house
Google is a prime example of the branded house model. It has lots of sub-brands, like Gmail and Google Maps, but each sub-brand is clearly part of Google.
The branded house model is a bit like omnichannel marketing. Sub-brands are closely connected and tell the same story about your business. They tend to have similar logos, colors, and marketing as the parent brand. But they can still appeal to different sections of your audience.
The main pros and cons of the branded house model are:
- You can focus all your money and time on a unified branding strategy.
- Sub-brands automatically enjoy the parent company’s reputation.
- Customers can easily identify which sub-brands are part of the parent company.
- If one sub-brand loses consumer confidence, the other brands will too.
- It’s harder to make individual brands unique.
- After a merger, a brand could lose consumer trust if its branding changes to match its new parent company.
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This model is like the branded house model in that sub-brands are clearly part of the parent brand. For instance, Samsung Galaxy clearly belongs to Samsung. But each sub-brand has its own identity too. Because of this, it’s easier for sub-brands to appeal to different audiences.
The pros and cons of sub-brands are:
- Each sub-brand has its own identity.
- Sub-brands can build on the reputation of the parent brand.
- Consumers are more likely to trust new products if they’ve connected with an existing brand.
- It can be costly to create and market new sub-brands.
- You’ll have to track metrics for each sub-brand, AOV, and the cost of goods sold.
- Customers may confuse the sub-brands and the parent brand.
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3. Endorsed brands
Like sub-brands, endorsed brands have their own identity, but the parent company is still visible. For example, Betamax has its own identity and market but is clearly part of Sony. The main pros and cons of endorsed brands are:
- Endorsed brands are more independent but still enjoy the parent brand’s reputation.
- It’s easier to promote cross-selling between endorsed brands.
- You can tailor marketing campaigns to advertise an endorsed brand and the parent brand at the same time.
- You’ll have to create content like Instagram stories and Twitter posts for each brand.
- If one endorsed brand fails, it reflects badly on them all.
- Endorsed brands still have to be in keeping with the main brand.
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4. Hybrid brands
The hybrid brand model can be the best of both worlds. For instance, Meta (formerly Facebook) contains hybrid brands like Instagram and WhatsApp. Although Meta bought those brands, they’ve kept most of their identity from before.
The parent company might take on an endorser role or take a back seat like in the house of brands model.
Pros and cons of the hybrid model include:
- If a brand is struggling, gaining a parent brand can revamp its image.
- It’s easier for consumers to make the transition after a merger or acquisition.
- Hybrid brands help the parent company reach new customers.
- There may be a backlash if the parent company tries to rebrand or doesn’t get rebranding right.
- There are extra costs involved.
- An acquisition may confuse or upset consumers if it’s not properly communicated.
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5. House of brands
In the house of brands model, the parent company takes a back seat. For example, many brands owned by Nestlé appear to have no association with it. They all have their own identities, audiences, and marketing strategies. People may not even know Nestlé owns the brand!
The pros and cons of the house of brands model are:
- If one brand suffers a backlash, the other brands are less affected.
- It’s easier for brands to stay unique.
- The parent company can enjoy a diverse consumer base.
- It’s harder for the parent company to manage each sub-brand – for instance, each brand might have its own sales call report template.
- Sub-brands can’t rely on the reputation of the parent brand.
- Each brand needs its own branding and marketing strategy.
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How to build brand architecture for your business
There are four main steps to building brand architecture for your business:
- Evaluate your portfolio
- Choose your framework
- Develop naming and image guidelines
- Distribute your guidelines
1. Evaluate your portfolio
First, you need to conduct an audit.
- What is your current brand architecture?
- How do your current brands, products, or services fit within your company?
Next, you need to decide what you want your company to look like. This is especially important if you’ve recently acquired a brand – how can you integrate it? You can use analytics to assess which brands engage customers the most and rank their performance.
At this stage, you need to be ruthless. If a brand no longer fits into your company story, sell it.
2. Choose your framework
Once you’ve decided which brands to move forward with, you need to choose your framework. Which type of brand architecture suits your company the most depends on factors like:
- How many sub-brands, products, and services do you currently have.
- How prominent do you want your parent brand to be.
- How similar or different your sub-brands are.
- Which framework is closest to your current architecture.
Whichever framework you choose, it needs to be something you can apply to your entire company.
3. Develop naming and image guidelines
Now you’ve chosen your framework, it’s time to create guidelines for naming new sub-brands and the kind of color palettes, logos, fonts, and any other branding elements to use.
Your framework determines your guidelines. A branded house is much stricter than a house of brands.
It’s important your guidelines focus on your consumers.
- What do you want them to feel when they see your logos?
- What message are you trying to convey?
- What does your brand stand for?
These are the kinds of questions you should ask.
4. Distribute your guidelines
Finally, you need to distribute your guidelines to everyone in your company. Everyone should know what your company stands for, how your sub-brands fit together, and who your audience is. And once everything is final, it is also important to forecast sales for your products and you could easily do that with inventory forecasting software.
Don’t just hand out a complicated document, though. If you want your new guidelines to stick, you should schedule workshops and training sessions.
Brand architecture: more than a buzzword
Brand architecture is far more than a buzzword or fleeting trend. It’s an important part of your business. Without clear brand architecture, your company can appear muddled and confusing. But, done well, it can bring together – or define – your brands.
There are five main types of brand architecture to choose from, each with its own pros and cons. Which one you choose depends on your business and the story you’re trying to tell your customers.