Exploring Brand Architecture: Understanding Different Brand Hierarchy Setups

Category

Branding

Read Time

16 min

Published

24 January, 2024

As a brand grows and develops, establishing a brand architecture becomes increasingly important.

With the introduction of more brands, products, and services, companies need to work out how these all fit together within the top-level brand or it can become very confusing.

The need for a clear brand architecture is important for both employees and customers, as everyone needs to understand the relationship between the different brands and how they relate to one another.

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By taking time to establish this from the outset, you can manage people’s perception and understanding of your business, effectively grow your company, and reduce the likelihood of any confusion or blurred lines between your different offerings.

In this blog, we’re going to explore what brand architecture is, why it’s important, and the different types of brand architecture so you can find a model that suits your business best.

The concept can be confusing, but we’re kicking off with a simple definition so let’s get started.

What is Brand Architecture?

Brand architecture refers to the way a brand organises and manages the different brands within its organisation.

This is often illustrated as a diagram to show how the main brand breaks down into sub-brands, and the products/ services housed within each of those.

It can be helpful to think of a team structure chart in a typical business. You might have the Directors or CEO’ at the top, Management below, then Junior’s below them. Within each team you would list the responsibilities of that particular area and how this contributes to the overall business.

The same goes for brand architecture but instead of showing the hierarchy of people, it details the hierarchy of different brands.

Without this, it can be difficult for companies to successfully expand as there is a lack of clarity around their brand relationships and the interconnections among brands within their portfolio.
cartoon drawn hands holding two jigsaw pieces

Why is Brand Architecture Important?

Brand architecture is important as it allows brands to manage their portfolio effectively.

Instead of everything becoming muddy and confusing, brand architecture clearly defines how the various brands relate to each other and the role they play within the wider organisation.

It removes the guesswork for employees and customers alike, as it clearly states:

  • The role of each brand
  • The brand’s position in the market
  • It’s visual and verbal identity
  • The specific target audience for each brand
  • The value each brand brings to the market

Essentially a robust brand architecture helps build a well integrated brand portfolio to keep everyone aligned.

See below for further benefits of an effective brand architecture:

Improved clarity

Effective brand architecture established the distinct roles and relationships between various brands within a company’s portfolio. By providing a structured framework, it eliminates confusion among consumers, allowing them to easily understand the purpose, positioning, and unique value proposition of each brand.

Reduced brand damage

The chosen brand architecture plays a key role in containing and mitigating reputational damage, preventing the negative repercussions from permeating throughout the whole business. This protects the overarching brand identity, allowing the parent company to deal with the problem without compromising its broader reputation.

Consistent customer experience

For customers, brand architecture helps them navigate through a company’s offerings with confidence, understanding the unique value each brand brings. This consistency in messaging and positioning creates a deeper level of trust, as customers know they can rely across its entire brand portfolio.

Strategic decision-making

Without a robust brand architecture, decision-making can be fragmented and irrational. However, a defined structure leads to more strategic decision-making as company’s can allocate the right resources, invest in brand development where it matters most, and adapt to market changes with a clear understanding of the overall brand landscape.

Building brand equity

When customers can easily recognise and associate positive attributes with each brand within the hierarchy, it strengthens the overall reputation of the business. This, in turn, contributes to long-term brand loyalty and market success.
a rubik's cube on its side

What Are the Key Elements of Brand Architecture?

There are various elements that make up effective brand architecture as discussed below.

We’re also providing an example of each to help you understand how these elements fit into the overall model.

Master brand

A master brand, also known as a flagship brand or corporate brand, is a brand that represents the entire business.

It is often the primary brand associated with the company and may be used interchangeably with the corporate identity. The master brand can be closely tied to the core product or service of the company. You’ll usually see it as the logo on everything the company sells, and it’s often the company’s name.

Master brand examples

  • Apple is an example of a well-known master brand. The company’s name is synonymous with its products, such as the iPhone, MacBook, and iPad. The Apple brand represents the entire company and its wide range of technology products.
  • Google is a master brand that represents the entire organisation known for its search engine, but it also extends to a wide range of products and services such as Google Maps, Gmail, and YouTube. The Google brand is synonymous with innovation in technology and information services.
  • McDonald’s is a master brand that covers a globally recognised chain of fast-food restaurants. While each restaurant has its own menu items, the McDonald’s brand is universally associated with fast, convenient, and familiar food options.

Parent brand

A parent brand refers to a brand that manages a range of individual products or services.

It may be a corporate brand, but its focus is on managing and providing identity to the different sub-brands or products that sit in its portfolio. The parent brand may or may not be directly associated with a specific product.

Parent brand examples

  • Unilever is a huge parent brand that oversees a range of consumer goods and food items. Under the Unilever brand, there are products including Ben & Jerry’s, Dove, and Lipton. Unilever manages a diverse portfolio of brands spanning various product categories.
  • Nestlé is another recognised parent brand with a global presence in the food and beverage sector. Nestlé oversees multiple brands including Nescafé, Kit Kat, and Purina.
  • Procter & Gamble (P&G) is a well-known parent brand that oversees a range of consumer goods, each with its own distinct brand identity. This includes Tide, Pampers, and Gillette. While P&G is the parent brand, it doesn’t have its own product. Instead, it’s the leader for lots of different brands which seat underneath it.

Umbrella brand

An umbrella brand is a type of brand under which multiple related products or services are marketed.

Usually, it is synonymous with the parent brand and serves as a unifying element for various offerings. The individual products or services may have their own brand identities but are clearly associated with the umbrella brand. This is down to the fact that despite having their own identities, an umbrella brand does share the type of product theme.

Umbrella brand examples

  • The Walt Disney Company is an example of an umbrella brand as Disney covers a diverse range of products and services, from theme parks to movies, and merchandise. The Disney brand serves as the overarching umbrella that ties together various entertainment experiences.
  • The Estée Lauder Companies serve as an umbrella brand, managing a portfolio of beauty and skincare brands (which is the shared theme). Esteé Lauder, Clinique, MAC Cosmetics, and Origins are some of the individual brands that operate under the Estée Lauder Companies umbrella.
  • Under the Coca-Cola umbrella, you’ll find a variety of brands like Sprite, Fanta, Schweppes, and more. Furthermore, there are sub-brands like Coca-Cola, Coke Zero, and Diet Coke. All these brands under the Coca-Cola umbrella are different kinds of beverages.

Sub-brands

Sub-brands are those that are positioned under and associated with a parent or master brand in the brand architecture.

They may have their own distinct identities and target specific market segments or product categories. Sub-brands benefit from the credibility and recognition of the parent or master brand.

Sub-brand examples

  • Microsoft contains sub-brands within its portfolio as Windows, Office, and Xbox are sub-brands that operate under the overarching Microsoft brand. Each sub-brand represents a specific product category while leveraging the strength of the Microsoft name.
  • Samsung, as the parent brand, encompasses various product lines, including the Galaxy sub-brand. Galaxy represents a range of smartphones, tablets, and other mobile devices produced by Samsung.
  • Amazon serves as the parent brand for a diverse array of products and services. Within this, the Kindle brand is a sub-brand associated specifically with Amazon’s line of e-readers and tablets for digital reading.

What Are the Different Types of Brand Architecture

Brand architecture models involve a strategic approach to structuring brands and their products within an overarching brand. These top-tier brands are often known as corporate, umbrella, family, parent, or master brands.

Ultimately, it refers to a top-level, parent company overseeing numerous brands that offer multiple products to a range of consumers at varying price points.

Below we’re exploring 3 brand architecture models along with examples, and the advantages and disadvantages of each system.
illustration showing Google at the top and sub brands below

Branded house

The most popular brand architecture model is the branded house, where the business serves as the master brand.

Under this model, the master brand includes different sub-brands, incorporating the master brand name or logo along with variations that highlight the product name or service description.

In turn, this provides flexibility for individual brands to expand and promote themselves. Despite their autonomy, these brands operate cohesively, following the overarching guidelines and strategy set by the corporate brand.

In a brand house, the master brand’s reputation and values act as a unifying force, fostering synergy among its diverse sub-brands. This approach creates a consistent brand identity across the whole brand portfolio.

Example of a branded house

An example of a branded house is Google.

Google’s brand is consistently applied across its range of products and services, such as Google Search, Gmail, Google Maps, and Google Drive.

Each of these products is closely associated with the overarching Google brand, showcasing a consistent use of the brand name, logo, and different design elements. The unified brand identity helps create a strong and recognisable presence in the market, with the master brand unifying all of its offerings.

Advantages of a branded house

  • The sub-brands improve the visibility of the master brand, leading to a broadened exposure that contributes to an overall boost in brand equity.
  • Visual and clarity significantly minimise confusion for the consumer, as sub-brands are automatically linked to the qualities of the master brand.
  • The branded house is a cost-effective and efficient brand architecture model. The parent company only needs a marketing and brand strategy, simplifying management and ensuring uniformity across all offerings.
  • The streamlined approach of the branded house facilitates faster decision-making and a consistent brand message.

Disadvantages of a branded house

  • Issues with one of the sub-brands may have a detrimental impact on the master brand and its reputation, creating a risk through association.
  • There’s a potential for dilution of the master brand, especially when a brand spans across various categories.
  • Building overall brand equity becomes costly if the sub-brands underperform.
  • The branded house model may face difficulties in accommodating different target audiences and evolving market changes.

illustration showing p&g at the top with sub brands below

House of brands

Within the house of brands brand architecture model, an entity possesses a portfolio of unique brands beneath a parent brand, which may or may not be known by the public.

Individual brands operate autonomously, managing their own marketing activities using separate brand names, logos, and slogans.

The parent brand in this case, mostly serves administrative or investment purposes and plays more of a background role in consumer-facing activities.

To help clear up the difference between a branded House and a house of brands architecture: In a branded house model, customers are aware of the parent company on every touchpoint with any sub-brand, whereas in a house of brands framework, each brand voices its own message and positions itself as a distinct brand within a defined market segment.

Example of the house of brands model

Procter & Gamble (P&G) owns a range of individual brands, each with its own identity and target audience. Some of these include Pampers, Ariel, Oral B, and Vicks.

While P&G is the overarching parent company, its brands are prominent in their respective markets, and consumers may not necessarily associate them directly with the P&G corporate name.

In turn, this allows P&G to target different groups of consumers with different needs, thereby expanding their product offering.

Advantages of the house of brands model

  • The company reputation remains protected, limiting the potential negative impact on the organisation’s image should any of the sub-brands underperform.
  • The house of brands model allows for business portfolio diversification and expanded market reach. Companies can target different audience groups and experiment with various pricing strategies.
  • Entering new markets is easier without impacting other brands, providing the flexibility to take more risks.
  • The house of brands model fosters innovation as each individual brand within the portfolio can focus on distinct market niches, tailoring their strategies to meet specific consumer needs.

Disadvantages of the house of brands model

  • Establishing a house of brands architecture can be expensive as the company must invest significantly in developing each brand independently, necessitating distinct branding and marketing strategies for each.
  • In the absence of the influential reputation of a well-known branded House, individual brands lack the support of the parent brand’s performance and recognition, potentially leading to the perception of ordinary commodities offered by standalone entities.
  • There exists the potential for consumer confusion regarding the representation of the company. Consider Procter & Gamble: Is P&G the representative of the brands, or do the brands represent P&G?
  • Furthermore, managing diverse brands can result in challenges of maintaining consistent quality standards and cohesive brand messaging across the entire portfolio.

illustration at the top showing unilever with sub-brands beneath

Hybrid brand architecture

The hybrid brand architecture combines features from both the branded house and house of brands models, finding a middle ground between the two systems.

In this model, each sub-brand under the hybrid architecture enjoys maximum advantage through a blend of endorsement and independence.

Unlike complete brand independence, the endorsement strategy includes a parent brand and associated sub-brands. While sub-brands maintain their unique identity, they discreetly leverage elements from the parent company to benefit from its established reputation.

The adoption of a hybrid brand architecture is generally a result of mergers and acquisitions, providing a balanced approach to capitalise on the strengths of both branding models.

Example of the hybrid brand architecture model

An example of a hybrid brand architecture is the Unilever company which owns a range of brands in various categories, including personal care, food and beverages, and home care.

Whilst each brand operates with a distinct identity and specific brand promises, Unilever employs elements of the branded house model by featuring the Unilever name on its products and incorporating shared corporate values across its brands.

This approach allows Unilever to benefit from the collective strength of its diverse portfolio while enabling each brand to maintain its unique market position and appeal.

Advantages of the hybrid brand architecture model

  • This approach gives brands the flexibility of a house of brands architecture where new, experimental offerings can be added to a company’s portfolio whilst protecting the organisation’s wider reputation.
  • This approach also gives brands the awareness of the parent brand and the brand associations that come with a branded house model. Both greatly facilitate launching a new sub-brand in a new market.
  • Essentially, this approach allows the brand to enjoy the best of both worlds by blending two different models together.

Disadvantages of the hybrid brand architecture model

  • The hybrid brand architecture model incorporates drawbacks from both the branded house (such as potential inflexibility and reputation risks for the parent company) and the house of brands (including added expenses.
  • Consumer confusion may arise as some sub-brands are linked, while others maintain a distinct separation from the parent brand.
  • Maintaining brand consistency might be a challenge for the marketing team, requiring careful attention to update brand books and navigate through the different brand identities within the company’s portfolio.

two cartoon people talking and holding magnifying glass

How to Choose the Right Brand Architecture for Your Brand

To choose the right brand architecture model, you need to weigh up the pros and cons of each model outlined above.

However, the first step involves getting inside of your business so that you can work out which of the brand architecture models are most suitable.

As part of this, you need to:

  • Evaluate the product/services you offer.
  • Explore potential new opportunities and extensions.
  • Keep up to date with industry trends.
  • Assess your current communication channels.
  • Examine your market share and ROI.

Whichever model you choose, it should add value to your existing products and services offering.

It’s important to note that brand architecture is dynamic and is influenced by changes such as mergers, acquisitions, and new product offerings.

By monitoring and reviewing your brand architecture, you can make changes as and when needed to make sure your brand has the right structure for success.

How to Develop Brand Architecture

Now we’re exploring how to develop and communicate your chosen brand architecture in 3 steps.

Research

In the research phase, you need to gather insights into your industry, target audience, competitors, and market trends. It’s a good idea to look at your competitors’ brand architectures to identify any gaps and opportunities.

Understand the values and preferences of your target audience through surveys, interviews, and market research. Additionally, assess the current perception of your brand in the market and among your customers.

Strategy

Once you’ve gathered your data, you can create a clear brand strategy. This involves defining your brand’ values, mission, and vision.

You also need to establish a unique value proposition that resonates with your target audience and differentiates your brand from the rest.

Creating a roadmap for brand development is also key to outline both short-term and long-term goals. This may include plans for brand extensions, partnerships, and collaborations.

Application

With a solid strategy in place, it’s time to bring your brand architecture to life. Develop a comprehensive brand identity system, including logos, colours, typography, and imagery, that reflects your brand’s personality and values.

Establish guidelines for brand communication, ensuring a consistent tone of voice and messaging strategy. This includes crafting compelling brand stories that resonate with your audience and reinforce your brand’s positioning.

Extend your brand architecture to digital platforms, including your website, social media, and other digital assets. Consistency is key, whether your audience comes into contact with your brand through a product, a digital ad, or a social media post.

Exploring Brand Architecture: Understanding Different Brand Hierarchy Setups

Understanding different brand architecture setups allows you to choose one that best suits your brand. Having this brand hierarchy in place has many advantages from capturing customers, to building brand equity, to simplifying the buying experience.

It can soon become confusing when companies expand into selling multiple products and services, so choosing one of the systems outlined in this post, helps keep everyone aligned.

Choosing the right model all depends on your business needs, so it’s important to analyse your existing product mix and how you see your portfolio expanding in the future. This lets you choose a brand architecture hierarchy that has room for growth and flexibility, whilst protecting the reputation of your overall brand.

At Canny, we help businesses achieve success through their branding and website. We’ve partnered with lots of clients around the world to help them grow their offering, and we can do the same for you. Get in touch with our team for an informal chat about how we can help!

Hi, I'm Amy, Content Strategist at Canny. In my day-to-day role, I'm responsible for creating content that gets you noticed and makes you stand out from the competition. Naturally, I love writing and creating engaging copy that brings your brand to life.

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