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.
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