Having a great mentor is critical for personal skill development, especially early in your career, and so I wanted to share the guidelines that my mentor provided me to follow in 2019 to become a better consultant / strategist.
As a brief introduction, my mentor spent two summers at Bain & Co. as an Associate Consultant Intern, started his full-time career at a TMT (Technology, Media & Telecom) focused boutique consulting firm, and is now the youngest VP running the strategy and analytics practice at one of the most prominent advertising and marketing services companies. He was able to achieve all of this in a span of 4.5 years so I hope the series of posts I write in 2019 will also help aspiring consultant readers to build valuable skills / knowledge to succeed in your respective fields.
In today’s article, I would like to talk about brand architecture, one of the four moving pillars in creating an effective business strategy.
Brand Architecture
Brand architecture refers to the structure of brands within an organisation. It should serve three purposes:
- Defining the different leagues of branding within the organisation
- Defining how the corporate brand and sub-brands relate to and support each other
- Defining how the sub-brands reflect or reinforce the core purpose of the corporate brand
This way of thinking about brands is not limited in its application to large corporations and for-profit companies, and has six key benefits:
- Ensuring the smooth running of the organisation
- Allowing the organisation to balance the main brand and its sub-brands
- Ensuring synergy between brands, products, and services
- Clarifying how to position new products and services
- Maximising visibility in the market
- Making it possible to protect brand equity
Types of Brand Architecture
There are three main ways to organise brands within a company:
- Monolithic (Branded House)
- Pluralistic (House of Brands)
- Hybrid
1. Monolithic (Branded House)
This approach is characterised by a single strong master brand that covers a portfolio of products and services that are bundled in different configurations to serve different needs. A company that organises itself as a Branded House is expressing its value proposition with a single, unified voice.
- Benefits:
- Efficiency: one marketing strategy and one brand covers every offering
- Ease: confusion and competition are avoided by keeping every offering under the same brand
- Evolution: a strong brand can lead to greater success for future offerings, as consumers are more willing to accept new products and services from brands they already trust
- Disadvantages:
- Reputation: products and services are tied to the brand’s public perception, leading some consumers to take an “all or nothing” approach
- Limitations: a great product may not succeed if the brand is weak or underperforming
- Corporate Examples: Mercedes and BMW
2. Pluralistic (House of Brands)
Another approach is known as a House of Brands, where organisations market two or more different brands. The House of Brands model typically applies the core strengths and infrastructure of the parent corporation to a variety of markets through one or more house brands. This strategy allows each brand to establish distinct value in the minds of prospects and customers.
- Benefits:
- Distinctive: a greater ability to define unique target audiences and create products that are tailored to each brand’s demographic
- Safety net: companies can take more risks with new offerings, knowing they have a portfolio of strong, tested brands to fall back on
- Shield: in the case of bad press, an individual brand can take the heat while keeping the company’s reputation and other sub-brands intact
- Disadvantages:
- Overwhelming: creating and implementing multiple marketing strategies and operating many individual product lines is more difficult and costly
- Isolation: the parent company may have less brand power, so it cannot be relied upon to bolster the reputation of individual brands
- Image: significant confusion over the parent company can occur due to complex organisation structure, as well as the subsidiaries holding more recognition and visibility to the general consumers. For example, YouTube is under the umbrella of Google but Google is the subsidiary of Alphabet Inc.
- Corporate Examples: Procter & Gamble (Gillette, Pampers, Tide), Unilever (Dove, Axe)
3. Hybrid
As the name suggests, a hybrid structure combines the characteristics and features of multiple brand architectures. Microsoft is a great example that uses the hybrid strategy because it has hundreds of products in numerous markets. Microsoft Windows, Word, Excel, PowerPoint, and Microsoft Surface are brands that fuel the reputation of the parent brand. On the other hand, Nokia, Skype, Xbox, Visual Studio, and Zune are freestanding brands.
Brand Architecture Consideration
While many acknowledge the significance of brand architecture, there seems to be a business strategy aspect that is being ignored because branding is perceived to be a marketing function. However, brand architecture is a great framework for thinking through business strategy, and a tool to unlock value in complex businesses, particularly those which are expanding into previously unchartered territory or which are changing the markets in which they compete.
Unlocking the value in organisations can done in various ways but the use of brand architecture to articulate group strategy will become more prevalent as business managers better understand how it can change paradigms, shift thinking within organisations, and create clarity for external audiences.
Jason Oh is a management consultant at Novantas with expertise in scaling profitability for retail banks (consumer / commercial finance) and diversified financial service firms (credit card / wealth management / direct bank).
Image: Pexels
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