|Architecture and Hierarchy|
Brand architecture is the structure of brands within an organizational entity. It is the way in which the brands within a company’s portfolio are related to, and differentiated from, one another. The architecture should define the different leagues of branding within the organization; how the corporate brand and sub-brands relate to and support each other; and how the sub-brands reflect or reinforce the core purpose of the corporate brand to which they belong. Often, decisions about brand architecture are concerned with how to manage a parent brand, and a family of sub-brands – managing brand architecture to maximize shareholder value can often include using brand valuation model techniques.
Brand architecture may be defined as an integrated process of brand building through establishing brand relationships among branding options in the competitive environment. The brand architecture of an organization at any time is, in large measure, a legacy of past management decisions as well as the competitive realities it faces in the marketplace.
There are three key levels of branding:
- Corporate brand, umbrella brand, and family brand – Examples include Virgin Group and Heinz. These are consumer-facing brands used across all the firm's activities, and this name is how they are known to all their stakeholders – consumers, employees, shareholders, partners, suppliers and other parties. These brands may also be used in conjunction with product descriptions or sub-brands: for example Heinz Cream of Tomato Soup, or Virgin Trains.
- Endorsed brands, and sub-brands – For example, Nestle KitKat, Cadbury Dairy Milk, Sony PlayStation or Polo by Ralph Lauren. These brands include a parent brand – which may be a corporate brand, an umbrella brand, or a family brand – as an endorsement to a sub-brand or an individual, product brand. The endorsement should add credibility to the endorsed sub-brand in the eyes of consumers.
- Individual product brand – For example, Procter & Gamble’s Pampers or Unilever's Dove. The individual brands are presented to consumers, and the parent company name is given little or no prominence. Other stakeholders, like shareholders or partners, will know the producer by its company name.
Procter & Gamble is quoted by many authors as the antithesis of a corporate brand (Asberg and Uggla, Muzellec and Lambkin, Olins). "However, this situation changed in 2012. After more than 150 years of invisibility of the organization for consumer, the brand developed corporate brand promise during the 2012 Olympic games. Commercials are aired on television around a message thanking all the "moms". In addition, each of their products is associated with the brand "PG" in advertisements for products.
A recent example of brand architecture in action  is the reorganization of the General Motors brand portfolio to reflect its new strategy. Prior to bankruptcy, the company pursued a corporate-endorsed hybrid brand architecture structure, where GM underpinned every brand. The practice of putting the "GM Mark of Excellence" on every car, no matter what the brand, was discontinued in August, 2009. In the run-up to the IPO, the company adopted a multiple brand corporate invisible brand architecture structure. The company's familiar square blue "badge" has been removed from the Web site and advertising, in favor of a new, subtle all-text logo treatment.
Types of brands
Ambassador Brands Those brand that reflect the image of the company are Ambassador Brands. Success or Failure of these brands affect the favorable or unfavorable opinion respectively, of the company. E.g.: Colgate toothpaste, the market leader in toothpaste segment in India, can be rightly called Ambassador brand.
Piggyback Brands The nature of these brands is to live on other brands. They are not profit generators but build their image and gain mileage by riding on the back of these brands. E.g.: Colgate toothbrush is a piggyback brand which survives on the back of Colgate Toothpaste.
Budget Brands These brands signify that are welcomed in every home. They do not lower the status of the upper-middle-class families as well as are affordable by the lower-class homes too. E.g.: Cibaca toothpaste can be described as budget brand which is mainly targeted in rural areas of India.
Structuring a company brand portfolio can involve choosing a strategy based upon a number of variables, including the business strategy, market trends, competitive tactics, and sources of growth and profit. Often marketing mix modeling is used to help understand the role of brands in a portfolio, and how they support or cannibalize one another. A strong parent brand can be leveraged across multiple sub-brands to help maximize Return on Marketing Investment. Managing brand architecture to maximize shareholder value can often include using brand valuation model techniques.
- Rajagopal; Romulo Sanchez (2004). "Conceptual analysis of brand architecture and relationships within product categories". Journal of Brand Management: 233–247.
- Asberg & Uggla (2009) The Brand Relationship Cycle: Incorporating Co-Branding into Brand Architecture
- L.Muzellec, M.Lambkin (2009). Corporate Branding And Brand Architecture: A Conceptual Framework. Marketing Theory
- GM Reorganized Brand Architecture
- Woodyard, Chris (26 August 2009). "General Motors to remove its 'Mark of Excellence' logos from new cars". USA Today.
- Brand Architecture Structure Choices