The Blake Project, the brand consultancy behind Branding Strategy Insider, delivers interactive brand education workshops and keynote speeches designed to align marketers on essential concepts in brand management and empower them to release the full potential of the brands they manage.
Brand architecture is the logical, strategic and relational structure for your brands or put another way, it is the entity’s “family tree” of brands, sub-brands and named products. As organizations grow through mergers and acquisitions they are faced with many important decisions regarding brand architecture, including how many brands should be managed. Here are the reasons a company might want to maintain different brands or sub-brands:
1. If there are channel conflict issues, especially if key customers who resell to the end consumer want to offer something different from competitors
2. If the same (or very similar) products are sold at different price points – separate brands or sub-brands create more distance between the offerings
3. If one set of products are upscale or premium, while the other are standard or value products
4. If one brand appeals to a very different market segment with different needs from the other brand (making the messaging different)
Regarding linking brands, usually, there is no significant danger, especially if one is endorsed by the other. (The exception to this is if one brand’s associations somehow detract from the other brand.) Brand endorsement indicates the linkage but also creates some distance between the two brands. Endorsed brands make the parent brand relevant (or at least increases its awareness) to the market served by the endorsed brand.
The advantage of using fewer brands or a singular brand is marketing efficiency in brand building and customer communication.
Brand architecture strategy and the issues that arise from growth can be quite complex, for that we have developed this comprehensive guide to brand architecture. For those brands that need one-on-one help The Blake Project developed The Brand Architecture Workshop.
Sponsored By: The Brand Architecture Workshop
Branding Strategy Insider is a service of The Blake Project: A strategic brand consultancy specializing in Brand Research, Brand Strategy, Brand Licensing and Brand Education
Inequality is in the spotlight. Not since Teddy Roosevelt set about busting trusts has this issue gotten people so exercised. But the hullabaloo around inequality is more than just an Occupy rallying cry for the 99%. It’s about whether the consumer marketplace can rally. A newly released report from ratings agency Standard and Poor’s (S&P) made headlines with its conclusion that rising income inequality is a significant drag on the economy, both today and over the next decade.
The S&P analysis is not an indiscriminate censure of inequality. Unequal outcomes are expected and necessary in a thriving market economy, says the report, but when inequality becomes “extreme,” strong growth is unsustainable. Several factors are cited as reasons why, chief among them that middle incomes stagnate when income skews top heavy, thus forcing middle-class consumers to borrow to keep up. This leads inevitably to over-leveraging and economic downturns. The resulting damage to household balance sheets from these boom and bust cycles takes a long time to repair, keeping growth in check.
The bigger issue with inequality mentioned in the report, though, is the well-documented phenomenon of a declining marginal propensity to consume. This is to say that people with lots of money spend less of their next dollar of income than people with less money. It’s the intuitive idea that if you have a lot already, you don’t need more, so you save the next dollar you earn. By contrast, if you don’t have a lot already, you spend the next dollar instead of saving it. Inequality diverts income from middle- and lower-class consumers who would spend it, channeling it instead to the rich who just sock it away. Growth slows because demand is weakened. Princeton economist Alan Krueger estimates that the shift in income gains from the middle to the top since 1979 have reduced annual consumer spending today by $400 billion to $500 billion, or about 3.5 percent of GDP.Read More
If your goal is to get people talking and you deliver thought-provoking advertising and that happens, then you have succeeded. Controversy often works if you’re a challenger brand trying to upset a rival; if you’re a NGO trying to incite action; if you share opinions with your customers and you choose to share those opinions with the world; if you want to poke fun at something that runs contrary to your brand’s values and purpose. There are times, and subjects, where that approach works just fine. You may shock some. But you will reach and appeal to the people who believe in your brand, what it stands for and what it challenges.
But if your marketing plan was to entice customers to think about you in a new way, to charm, to persuade, to engage – and people end up talking about how angry your advertising makes them feel and how it belittles them and seems hateful or that it sends a message that is damaging or dangerous, then your strategy has failed.
You can dress it up however you like – call it humorous, explain that it has “started conversations”, point to the traffic that has made its way to your site, highlight the media attention, say your attention was to achieve cut-through, whatever … the fact is, you’ve turned off the very people you were trying to turn on. And no amount of jingoistic justification of what you intended or the ‘real’ meaning of the approach will change the fact that you have disenfranchised your brand from the very people you were looking to reach and appeal to.
It’s easy for brands in this situation to tell themselves that they’re being edgy and clever when in fact they’re being rude. It’s easy to convince yourselves that your advertising is brave and has chutzpah when in fact it’s dumb and sad and plays to a whole lot of stereotypes. It’s too easy to say that what you’re doing is challenging social attitudes when in fact it’s the customers who have moved on. And it’s far too easy to say that any negativity will blow over, that it was all part of the plan and that any publicity is good … Because it’s not.Read More
Branding Strategy Insider helps marketing oriented leaders and professionals like you build strong brands. BSI readers know, we regularly answer questions from marketers everywhere. Today we hear from Sandra, a VP of Marketing in Atlanta, Georgia who writes…
“Who in a company should have leadership responsibility for the brand and how should a company be organized to best manage and grow its brand?”
Thanks for your question Sandra. For most companies, the brand exists at the organizational level. Therefore, the person who is ultimately responsibility for maintaining, growing and leveraging the brand asset is the organization’s leader – CEO, executive director, president, etc. That person should know what the brand stands for, how it aligns with the organization’s mission, vision and values and what makes it unique and compelling in the marketplace. Further, that person should model brand-supporting behaviors.
Practically, that person will likely assign the day-to-day responsibilities for managing the brand to a senior level chief brand advocate, who will likely have at least a small staff to help him or her monitor, manage, build and leverage the brand. This might include a brand identity manager, who is responsible for maintaining brand identity accuracy and consistency throughout the enterprise.
Often the brand function, while senior in level, has little direct authority across all of the functions in the organization that impact the brand. This is why the chief brand advocate needs to be a highly skilled influencer who is also highly respected. The brand managers will often work through interdisciplinary groups. For instance, the brand identity manager might chair a brand identity council comprised of people throughout the organization who use the brand in communications. The role of that council would be to insure brand identity accuracy and consistency. It is essentially a self-policing organization.Read More
Some thoughtful work by John Hagel in this article in which he suggests that economies are increasingly divided by two dynamics – those sectors that are scaling, and those that are shattering. As those dynamics become more radical, the pressures they exert on businesses are also becoming more extreme.
“If you’re in a part of the economy that’s fragmenting, growth will become increasingly challenging. Ultimately you’ll find yourself trapped in a spiral of shrinking share and eroding economics” he observes. “On the other hand, if you’re in a part of the economy that’s concentrating, growth can be amplified and sustained by riding the waves that are driving concentration.”
Hagel’s observations reinforce findings from McKinsey about large-company growth that I referenced here:
- Top-line growth is vital for survival. A company whose revenue increased more slowly than GDP was five times more likely to succumb to acquisition than a company that expanded more rapidly.
- Company growth is driven largely by market growth in the industry segments where it competes and by the revenues gained through mergers and acquisitions. Together, they account for nearly 80 percent of the growth differences among large companies.
- Market share fluctuations by contrast account for only around 20 percent of growth differences among large companies.
Scaled players will find themselves locked in competitions where the stakes are shifting more and more quickly towards winner-takes-all. The brands that will triumph in these circumstances are those who not only edge other big players out but who, at the same time, can draw into their eco-system more and more of the fragmented players at the other end of the marketplace spectrum.
That will happen because small players in these fragmenting sectors are looking to leverage the big brand’s presence and market strength. Their contributions add not only to the offerings of the large brands but also to its critical mass. They are in effect the new supply chain.Read More