Branding Strategy Insider readers know, we regularly answer questions from marketers. Today we hear from Sylvia, a VP of Brand Strategy in New York, New York who writes…
“We have multiple brands (12) across the organization with varying identities. What are the best practices for deciding when to add or eliminate a brand?”
Thanks for your question Sylvia. In general, fewer brands are better. Having fewer brands reduces the required marketing resources and makes it easier to build brand awareness more quickly.
Each brand should have its own promise and positioning. Given that, each brand should have customer segments or customer need segments to which it most appeals. Brands that have similar or the same brand promises or positionings are candidates for rationalization. Further, if the products or services sold under those different brands are similar or the same, you should consider consolidating those products or services under one brand.
Is Apple Music a brand? And, from a brand point of view, is Apple Music the same or different from Yahoo! Music? What about iTunes or the F150?
To answer these questions, I want to take you on a journey to the middle part of the brand architecture spectrum (the part that falls between Branded House as represented by Accenture with just the one brand and House of Brands, as represented by P&G with its many different brands). This middle part of the spectrum is where companies try to find the right balance between their company brands and sub/product brands. It can be a murky place where the lines between what is and is not a brand are not crystal clear.
In the world of cars, you can see the architecture progression from Mercedes which distinguishes its model ranges as B-Class, C-Class etc keeping the focus on the Mercedes brand to General Motors which has distinct brands like Cadillac and Chevrolet which, in turn, have another set of distinctive brands below them (Escalade, Camaro). Then there are companies who mix it up like Ford with its F150 trucks on one side and its Mustangs on the other.
Mercedes gets the advantage of only having one brand to support. It’s simple and efficient but it has to compromise on specificity and has to find aspects of its brand that are true for price points that range in its case from $35,000 to $250,000. Whereas the Chevrolet Camaro can be very specifically positioned and targeted but GM has to spread its marketing dollars to support its entire brand portfolio.
Although there’s no right or wrong place to be on the spectrum, the bias these days is towards fewer brands, less complexity and less cost. The question companies ask or should ask themselves is what is the simplest solution that works? Where can superfluous branding that adds both marketing and administrative cost without adding back enough value be eliminated? This kind of thinking drives companies towards the Mercedes end of the spectrum. But, however much companies embrace the need for simplicity and efficiency, the pure Company brand + pure descriptor model can be too limiting. Companies often want to keep a touch of branded distinctiveness between products.
The shock announcement this week that Google is about to rename itself Alphabet sent business and marketing magazines into tailspins of confusion. It’s entirely typical of the marketing cognoscenti to have no clue what the move means. A tiny company changes its font or updates a logo and an army of so-called opinion leaders climb over themselves to offer half-assed commentary and dodgy analysis, but when the fifth-largest company in the world embarks on the biggest brand change in its history, the move is met with stunned silence and the odd question mark.
So let’s break it all down step by step.
This is a brand architecture play. That’s huge because when a company the size of Google alters its architecture its always big news – on a par with the announcements of HSBC (1998), Unilever (2004), Procter & Gamble (2011) and Coca-Cola (2015), all of which also introduced new architectures for their organizations. What makes this particular move so fascinating is that unlike all the brands mentioned above, Google is moving in the opposite architectural direction. The theme of the past decade has been brand consolidation and the move towards a single ‘branded house’ approach to brand architecture. Google is doing the exact opposite by creating a pure ‘house of brands’ with Alphabet as the silent holding company.
Ignore the marketing critics claiming that the name is too generic or mumbling about not owning the web rights or Twitter handles. The whole point of a house of brands structure is that the corporate brand becomes essentially invisible to the outside world, only relevant to senior employees and investors.
The move makes strategic sense on a number of levels. First there is the simple issue of scale. When you start a business (and usually until you pass $100M in revenues) the advantages of a single brand far outweigh the impediments: a single marketing budget, one organizational culture, one employer brand and one senior leadership team all make the branded house the de facto approach for brand consultants like me when we advise clients. But with success comes growth and with growth comes complexity and scale. As Google has grown and diversified the sheer size and scope of its mission demands a more efficient and structured approach.
In our over-communicated society the collective opinion is very much against ALL CAPS. It’s the written equivalent of shouting and tells us that the author is trying to demand too much of our attention. So disliked is the all cap style that many online publications ban comments that are typed in all caps. An anti all caps group even launched a “Caps Off” campaign to pressure hardware manufacturers to eliminate the Caps Lock key, to make it harder for all cap writers to operate.
In the world of brand architecture, the equivalent of ALL CAPS is ALL BRANDED FEATURES. Primarily an affliction of technology companies, branded features are often found in the nurturing environment of trade show product brochures. At their worst, these brochures become a blizzard of trademarks as companies brand and then try and protect every single one of the features that’s built into their products.
It’s an affliction often fueled by the worthy intention of giving credit to all the different product teams that have put in countless hours to build and complete these individual features. But the net result is TOO MUCH NOISE. If the volume is “11” for everything, the important things, the things that are really better, different and valuable to customers gets lost.
In this fast-changing world, companies cannot afford the luxury of a brand positioning that ties them down to a narrow set of features and benefits. What they need is the ability to quickly take advantage of new opportunities when they emerge and shift away from old business models when they are no longer relevant. They need branding to support their need for speed.
To accommodate this business imperative, brand positioning has to offer a broader perspective with fewer constraints. Narrow positioning won’t work for companies that have to reinvent themselves over and over again.
That’s why you see companies taking a broader perspective, associating themselves with higher-order values rather than what-we-do detail. One approach is to talk about brand purpose, a more general and flexible concept that seeks to establish differentiation by identifying the unique benefit that the company brings to the world. This approach doesn’t just work for companies like Patagonia or Ben & Jerry’s —it works for companies like LinkedIn too, which is guided by its true north vision “To create economic opportunity for every member of the global workforce.”
But whether companies choose to focus on their purpose or simply develop a more general brand statement, there’s still a branding gap—the focus and clarity and fact-based differentiation that would be covered by a: “In a market characterized by (consumer need), only (brand) can (meet that need) by (how it meets the need) giving consumers (the benefit)” type statement.
One way to bring back specificity is to inject branding into the products and services that the company offers. By developing a brand architecture where products and services are positioned against tangible features and benefits, companies can bring back brand focus and detail as they talk about how they serve particular market needs.