Your brand architecture should support and enable successful growth by providing strategic latitude for each brand.
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The right approach will allow you to identify underperforming brands and avoid the exposure that comes with a single-brand strategy. Perhaps the most important factor is the market or markets in which your company operates. If your business targets a single market, a branded house can boost brand awareness, optimize marketing spend and bolster reputation. If you have products or services aimed at significantly different markets, multiple brands can help to protect each market from the other, mitigating risk and ensuring differentiated messaging.
By acquiring natural foods brand Odwalla, Coca-Cola was able to participate in a fast-growing market segment that would have been otherwise unavailable because its association with junk food. Distinctiveness is the driving force behind branding diversity. Unable to compete in the luxury car market, Toyota launched Lexus. The Ritz Carlton is able to retain its luxury status by keeping a branded distance from its parent company, Marriott, and other, more budget-conscious sub-brands in the Marriott family.
Introducing the Matrix
Every rebranding initiative entails a certain amount of risk. The important thing is to measure that risk against the long-term gain you stand to realize. Realigning lesser known products under a well-known brand is relatively risk-free.
Last but certainly not least among factors to consider when creating your brand architecture is cost. Maintaining a slew of separate brands is always going to be costlier than organizing all of your offerings under a single brand. Intangible costs like brand equity need to be considered as well. For B2B companies, these costs are more manageable, because your existing customer base is finite and better understood. B2C companies face higher risks and steeper costs, but when architected effectively, the long-term benefits of a superior brand will always outweigh the short-term costs.
By carefully considering each of the important factors listed above, you can mitigate the risk associated with any revised brand architecture. We're an award-winning branding agency specializing in brand psychology. Our team of industry experts have a knack for building authentic, irresistable brand experiences. As a general rule, chaos is not the best business strategy.
What is Brand Architecture? The Benefits of a Strong Brand Architecture A common misconception is that brand architecture is only for large, complex national organizations.
Significantly reduce marketing costs. When brands and sub-brands are architected in a logical, intuitive way, your marketing efforts are exponentially more efficient. With opportunities for cross-promotion between sub-brands, marketing is more effective as well.
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Clarify brand positioning, naming, and messaging. Nothing increases the efficacy of your brand positioning like clarity. Clearly articulating the names of your sub-brands and the messaging they convey to your customers is like giving your brand a high-performance tune-up. Increase flexibility for future product and service expansion. By establishing an intuitive brand architecture, you set the stage to easily add products or services as your brand grows.
Your brand becomes a modular entity primed for the addition of new sub-brands. Bolster confidence among stakeholders in the strategic direction of your brand. And future-minded brands are a reassuring sign for investors and employees alike.
Ensure clarity and synergy between companies, divisions, products, and services. Even the smallest brand is a complex entity. Not until the various components that make up that entity are clearly defined and understood, can they work together, efficiently and effectively, toward a common goal. Enhance customer awareness of your offerings while facilitating cross-selling. Brand architecture gives a parent brand the power of diversification by highlighting the unique strengths of its distinct sub-brands.
Maximize visibility and diversification in the marketplace. Often times, this is simply too much to ask of a single brand. Brand architecture enables the unique strengths of distinct sub-brands to be highlighted, further diversifying the parent brand itself. Build and protect brand equity. The upshot of all of the benefits above is the ultimate competitive advantage for any company: brand equity.
Growing your brand equity gives you compound returns as industry authority and marketplace valuation grow with it. Brand Architecture Types In its most common iterations, brand architecture falls into one of four categories: branded house, house of brands, endorsed, or hybrid. House of Brands A house of brands architecture features a collection of distinct, familiar brands under a parent brand that customers may or may not be aware of.
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Endorsed In an endorsed architecture, there is a parent brand and associated sub-brands, all of which have unique market presences. Hybrid Finally, a hybrid brand architecture comprises some combination of the above iterations. How to a Create Strong Brand Architecture How do you create a brand architecture that benefits both your company and your customers? Research The best brand architecture starts with research into brand awareness, loyalty , and associations. Culture Internal factors like values and company culture are just as important as external ones when structuring your brand architecture.
Growth Strategy Growth strategy should be front of mind when determining brand architecture. Market Perhaps the most important factor is the market or markets in which your company operates. Cost Last but certainly not least among factors to consider when creating your brand architecture is cost.
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The Definitive Guide to Rebranding Everything you need to know about rebranding your business-and avoiding costly mistakes. Read more by Brian Lischer A prolific blogger, speaker, and columnist, Brian has more than a decade of experience in design and branding. Think You're Ready to Rebrand? Find out for sure with our rebranding checklist.
If you are a human and are seeing this field, please leave it blank. About Ignyte We're an award-winning branding agency specializing in brand psychology. Subscribe to Brand Thinking Get our latest posts delivered straight to your inbox. Get a Competitive Brand Audit Pinpoint your weak spots and find new opportunities for growth. Each axis illuminates a different kind of organizational capability: The diagonal one that begins in the bottom left corner highlights capabilities related to strategy; the diagonal one that begins in the top left corner, competition; the horizontal one, communications; and the vertical one, interaction.
If your corporate brand identity is clear, the elements on each axis will harmonize. One way to gauge the strength of connections is to use the answers to the questions in a short presentation describing your corporate brand identity. For an exercise that helps you craft one, download the PDF.
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Ask yourself, Does that outline hang together? In rare cases a team emerges from the analysis with a perfectly aligned and stable matrix, integrated along and across all four axes. But more often it finds gaps and inconsistencies among the elements of identity. The next job, then, is to examine the weak links and explore how to strengthen them. Creating a fully stable matrix is an ongoing and iterative process.
Ultimately, the leadership team needs to converge on a shared narrative about the corporate brand identity, so the stories the company tells will be unified and consistent throughout the organization and beyond. The Finnish industrial group Cargotec, which is in the cargo-handling business, has three well-known international daughter brands: Hiab the market leader in on-road solutions , Kalmar the leader in port and terminal products and services , and MacGregor the leader in the marine segment.
A decade ago the mother brand was eclipsed by these high-profile daughters. Then everyone gathered in a plenary session to develop an aggregated framework for the corporate brand identity.
From Brand Vision to Brand Evaluation: The strategic process of growing and strengthening brands
To confirm the legitimacy of the new identity and get buy-in, Cargotec involved employees, sending out an internal survey completed by more than 3, workers that tested the validity of the proposed elements of the redefined corporate brand. Did they fit with the vision of aligned corporate and daughter brand identities?
The new frameworks from the workshops were shared with everyone on the corporate intranet, soliciting input. An external survey of customers and other stakeholders provided additional input and led to further adjustments to the proposed Cargotec identity.
The company has also strengthened its focus on the corporate brand in its marketing and communications—for instance, by developing a new logo and visual language. Bona is a century-old company that has long specialized in products and services for installing and maintaining wood floors. Based in Sweden, it operates in more than 90 countries. In recent years Bona expanded its offerings to include stone- and tile-cleaning products and developed a new system for renovating vinyl-type floors. These moves opened significant growth markets for the company but also raised a question about its positioning: How should a corporate brand that was known worldwide for wood-floor expertise change to accommodate the new businesses?
On the surface the answer seemed simple: In its messaging Bona could just shift from its historical emphasis on wood floors to include other kinds of floors. But the executive team saw an opportunity to formally clarify the corporate brand identity, recommitting to its heritage while embracing a new positioning—inside and out. Led by marketing executives from headquarters and America, the company conducted a series of workshops in both Europe and the United States that brought together managers from across functions and around the globe.
Extensive discussion revealed a surprisingly broad variety of perspectives and answers to key questions in the matrix. To bring the revamped identity to life inside the company, Bona held dialogues about it with employees, encouraging discussion, and created a welcome program for new staffers that emphasized the values in the revised matrix.
Translating a revised brand narrative into internal and external initiatives takes time, however; at Bona the process began 21 months ago and is still under way, with progress being benchmarked against the new aspirational matrix. The European company Intrum provides debt collection services to businesses and helps them with invoicing, receivables and debt management, and credit monitoring.
By the company had grown rapidly through acquisitions, and management considered it essential to have a common view across the organization about what Intrum stood for. Its leadership was also concerned that the company had a negative image—and self-image—as a collection agency and wanted to give it a more positive identity as a provider of financial services.
What does the company aspire to now? With solutions that generate growth while helping people become debt-free, we build value for individuals, companies and society. But when I hear how you describe your job, our company, and what we actually do, I am proud to work here.
Greyser Journal of Brand Management, January The Cargotec, Bona, and Intrum cases illustrate three ways the corporate brand identity matrix can be used. But these are by no means its only applications. The chairman of a private equity firm has used it to gauge the strategic value of candidates for acquisition and investment. And Trelleborg, a polymer-technology maker, used the matrix to enhance its corporate identity so that acquired firms, which had initially rejected the parent brand name, actively embraced it. But developing a comprehensive understanding of a corporate brand identity usually takes much longer, involving many sessions and leadership and teams throughout a global organization.
The process can happen faster, though, if the company already has strong core values and other essential elements of identity. Examining and refining your corporate brand is a true leadership task that requires far-reaching input and commitment, passion, and grit.