Today on Branding Strategy Insider, we’re taking another question from the BSI Emailbag. John, a Chief Marketing Officer in New York, New York asks…

“My company has acquired another organization, which has its own family of brands. What implications will this have on my brand and my brand management efforts?”

There are product and branding implications, both of which you should have considered before the acquisition. (There are also organization-alignment issues, which are beyond the scope of this response.)

For instance, there might be product overlap. What do you intend to do about that? Is the acquired organization in unrelated product/service categories, complementary product/service categories or the same product/service categories? If the latter, how much product/service overlap is there and will you rationalize the offerings to reduce or eliminate the overlap?

The next set of questions are branding related. For the brands that your organization purchased, do you intend to maintain them as separate brands, brands endorsed by one or more of your brands or sub-brands of one or more of your brands or do you intend to rebrand them with your brand names? The relative strength of all of the brands in question should at least inform this decision. Do the brands have high awareness and positive associations among their target markets? If they do and you are purchasing them, part of the price you paid is likely to be for the value of the brands themselves. In this instance, it would unwise to eliminate these brands, at least in the short-term.

If your intent is to eventually rebrand everything with your brands’ names, then you might consider a transition period in which the acquired brands are linked to the acquiring brands before they are eliminated.

Brand architecture decisions, especially related to mergers and acquisitions, can be complicated. We would be happy to guide you through this process. Thanks again for your question John, we wish you much success with your brand architecture strategy.

For brand marketers interested in more on brand architecture start here.

Have a question related to branding? Just Ask The Blake Project

Sponsored by: The Brand Architecture Workshop

Join us at The Un-Conference: 360° of Brand Strategy for a Changing World
Featuring John Sculley May 16-17, 2013 in San Diego, California
A unique, competitive-learning workshop limited to 100 participants
As in the marketplace — some will win, some will lose, All will learn

Branding Strategy Insider helps marketing oriented leaders and professionals like you build strong brands. To that end we’re happy to answer your marketing questions. Today we hear from Kakha, a global brand manager in Tibilisi, Georgia who writes:

“I read with great interest your thoughts regarding brand architecture strategy. What do you think motivates Procter and Gamble to choose the house of brands strategy? What can be done to reduce risk in the event one of its brands fails?”

Thanks for your brand architecture (The logical, strategic and relational structure of multiple brands) question Kakha. P&G, Unilever and other consumer packaged goods companies began as houses of brands. Their classical approach to brand management required a brand management team, marketing budgets and financial management for each brand. Each brand targeted its own market with its own brand position and marketing mix. This pre-dates the widespread emergence of branded houses in the 1990s. Some time in the mid-to-late 1990s, companies across the USA and beyond began to understand the value of the corporate brand as a financial asset and became much more serious about managing the brand at a senior level in the organization. This is when my senior level brand management and marketing position was created at Hallmark Cards. One of the earliest books focused on brand management was David Aaker’s “Managing Brand Equity,” first published in 1991.

It’s important to note, branded houses are much more cost effective than houses of brands as there are far fewer brands to manage and support. Some consumer packaged goods companies have explored more closely linking the parent company brand to what were always individual unrelated product brands managed by separate brand teams. Brand/sub-brand relationships and brands endorsed by parent brands can provide higher brand recognition and the parent brand’s stamp of quality assurance on individual product or product line brands. However, in the case of traditional consumer packaged goods companies, the brands that traditionally had the most equity due to years of support were the individual product brands, not the corporate or parent brands.

Thanks again for your question, we wish you much success with your brand architecture strategy.

For brand marketers interested in more on brand architecture start here.

Have a question related to branding? Just Ask The Blake Project

Sponsored by: The Brand Architecture Workshop

Join us at The Un-Conference: 360° of Brand Strategy for a Changing World
Featuring John Sculley May 16-17, 2013 in San Diego, California
A unique, competitive-learning workshop limited to 100 participants
As in the marketplace — some will win, some will lose, All will learn