How Brand Architecture Can Benefit Your Business

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The words brand architecture surrounded by symbols representing what goes into a brand.

Growing your business to a level where you offer more products and services, enter new markets, or even buy other companies is something to be celebrated. But how you manage that growth can make or break your business. As your product or service range keeps growing, so does the complexity of your brand. Customers may find it hard to recognize your brand or figure out exactly what you offer, which can affect your brand equity and sales. That’s why adopting the right brand architecture is critical.

Even as a small business owner, you should understand what brand architecture is and how to use it to your advantage. That way, you can prepare for future growth! 

What Is Brand Architecture?

A brand architecture template with a corporate brand on top and smaller sub-brands beneath.

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Brand architecture is a framework outlining your business’s brands, sub-brands, and individual offerings. Typically represented by a flowchart diagram, it helps organize all the different parts of your overall brand. With this architectural framework, you can see how the various subsections relate to one another.

Internally, your brand’s architecture defines the role of each brand and sub-brand in achieving your business’s goals. Your marketing team can use it to organize more effective marketing campaigns by, for instance, identifying cross-selling opportunities. Plus, it can highlight potential opportunities for additional brand extension

Externally, it helps shape the way customers view your business. It reduces brand complexity and makes it easier for them to understand your business’s setup. As a result, they have a better idea of how a particular sub-brand and product or service can solve their problem. 

“Brand architecture is the overarching vision for how your company relates to your customer and often crosses a variety of markets to meet their needs. The order that comes from aligning your brands within this hierarchy is the defining piece a company needs as it works to scale each brand identity.”

What Does Brand Architecture Include?

Brand architecture includes a master brand name that applies to the overall group of your brands, followed by sub-brands and individual offerings. 

The model may also include…

  • Logos
  • Symbols
  • Color palettes

…and more.

The idea is to highlight components that differentiate the different subsections. These elements ensure consistency in brand identity

“Brand identities help set you apart from other organizations. They are visual elements that connect the consumer to the items & services that your company provides.”

Why Is Brand Architecture Important?

Ultimately, brand architecture is important for keeping your business organized for both internal and external purposes. Even if your organization is relatively small, there’s probably room for improvement in how you structure and present your offerings. In that case, establishing a solid architecture can bring clarity to your team and customer base. 

Here are some specific benefits you can look forward to…

  1. Marketplace Clarity

Having a bunch of sub-brands or even offerings that look drastically different can cause confusion about your brand. A brand architecture shows how they’re connected. That way, your customers, team members, partners, and investors will have a clear picture of your position in the marketplace. 

  1. Cohesive Brand Story

When you are offering multiple products with no clear relationships, you end up with fundamentally different stories. This can give the impression of competing brands. But consolidating your brand combines all your brand stories into one uniting story that defines your brand’s unique value proposition.

  1. Higher Return on Marketing

A good brand structure can also lead to a higher return on marketing. It provides much-needed clarity to your marketing team. Plus, it can help them identify and prioritize offerings with a high ROI. For instance, identifying product links between sub-brands can lead to cross-selling opportunities for increased sales and profitability. 

  1. Increased Brand Equity

Developing a clear brand structure can also lead to increased brand equity. Brand consolidation results in better brand recognition through consistent themes and messaging, which can drive brand loyalty. This can give your business a huge competitive advantage!

  1. Brand Consistency

Having a well-defined brand architecture will also help you maintain a consistent brand strategy. It ensures your entire team understands where each part fits into your business. Even as your business grows, you can be sure the appropriate messaging and identity will be applied. That’s because the best brand structure aligns with your long-term business goals, mission, and values.

Remember that brand consistency matters. In fact, it can increase your revenue by 20%!

What Are the Different Types of Brand Architecture?

The four most popular types of brand architecture include the following:

  • Branded house
  • House of brands
  • Hybrid brand
  • Endorsed brand

The model you adopt will depend on your business goals and other factors. So, it’s important to understand how each model is organized. 

Here’s a brief overview of each one…

Branded House

An example of the branded house architecture type.

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In a branded house architecture, there’s a parent brand with sub-brands underneath. The sub-brands share a name with a qualifier that explains what that sub-brand does.

For example, FedEx uses its name across its various sub-brands: 

  • FedEx Express
  • FedEx Ground
  • FedEx Freight
  • FedEx Office

A branded house architecture also increases the brand equity of sub-brands.

House of Brands

An example of the house of brands architecture type.

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In a house of brands, the name of the parent brand isn’t reflected in the sub-brands. This structure is common among companies that acquire subsidiaries. It also allows sub-brands to stand on their own, as they aren’t tied to the main brand’s messaging, appearance, or positioning.

A house of brands structure increases brand complexity and is best suited to large, global brands with established equity. An example is PepsiCo, which has various sub-brands like Pepsi, Lays, Quaker Oats, Gatorade, Aquafina, and Tropicana.

Hybrid Brand

An example of the hybrid architecture type.

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Hybrid brands are a mix of the branded house and the house of brands models. Here, sub-brands copy master brand styles but maintain unique brand identities. This helps brands cater to different target audiences with a diverse portfolio of brands.

An example is Amazon with several sub-brands, including AmazonBasics, Presto!, Mama Bear, AmazonFresh, and Zappos.

Endorsed Brands

An example of the endorsed brand architecture type.

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The endorsed brand model features a master brand and sub-brands that rely on their association with the master brand. An endorsed brand often contains the colors and logos of the master brand to leverage the master brand’s reputation for better brand equity. Brands that use a hybrid approach can also enforce an endorsed approach to help link products to the master brand while maintaining each product’s identity.

Endorsed brands can look and feel different from the masters. Examples are Nescafe by Nestle and Polo by Ralph Lauren.

How Do You Build Your Brand’s Architecture?

Building your own brand architecture may seem overwhelming, but it isn’t as complicated as you may think. The whole point is to organize your brand and offerings, so simplicity is key. In general, the process involves the following steps:

  1. Perform a Brand Architecture Audit

The first step is to review the current state of your organization’s brand structure by performing an audit. During this audit, there are several things you should analyze, including your existing structure, offerings, and performance. Some questions to ask are as follows:

  • How is your overall brand structured?
  • What are your most popular offerings?
  • Which brands/sub-brands contribute the most to your revenue?
  • What collateral do you have for each section of your brand?
  • Is there consistency in visuals and messaging?
  • Does your team understand how your brand is organized?
  • Is your existing architecture in line with your business’s goals?

Ultimately, you want to take a deep dive into how your brand is organized now and where improvements could be made. 

  1. Conduct Customer Research

You also need to do proper market research to define your target audience(s) for each brand, the way they interact with your brands, and their expectations. Research helps you compile information about customer avatars, market segmentation, product/service use, pricing, and customer satisfaction. It can also give you insight into how your brand stacks up against competitors. 

  1. Develop Your Brand Architecture Strategy

The last step before implementation is to develop your brand architecture strategy. You’ll want to choose the model that fits your business’s structure and goals best. So, test out each architectural model and list the pros and cons before you settle.

Here are some factors to consider when choosing a model to adopt:

  • How close should the relationship between your master and sub-brands be?
  • Could you leverage the equity of one brand to lift up another?
  • Do all sub-brands have the same values, mission, and culture?
  • Do you have any mergers, acquisitions, or product line extensions in the works?
  • Are you in a position to rebrand if you adopt a new architecture?

Tip: Keep in mind that your architecture should also continue to change as your company grows.

Takeaway

Brand architecture may seem like something only big companies should worry about, but that just isn’t true. For small businesses, it can be an effective way of organizing the different subjections of your wider brand and offerings to bring clarity. The most suitable approach for your company will depend on the results of an audit and customer research.

Want to ensure brand consistency? Download a free copy of How to Build a Customer-Centric Brand Style Guide today!

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