Branding Strategy Insider helps marketing oriented leaders and professionals like you build strong brands. BSI readers know, we regularly answer questions from marketers. Today we hear from Robert, a Chief Marketing Officer in Dallas, Texas who has this question about brand architecture strategy.
“We have just made another major acquisition, one of several over the past two years. The senior leadership team is now realizing that we need to turn our attention to our brand portfolio and ensure the strategy we put in place from a brand strategy perspective yields brand-building synergies, aligns us with a vision of having a single platform in the future, focuses on customer needs, and strategically prepares us for making the right decisions about future growth. What should we be considering? The fundamentals will be helpful.”
Thanks for your question Robert. We have written extensively about brand architecture strategy and have prepared a comprehensive guide that I encourage you to read in conjunction with my response below. In recent years The Blake Project, the brand consultancy behind Branding Strategy Insider has been busy helping global B2C and B2B brands think through the complexities of mergers and acquisitions and the wider impacts that result. In that work we’ve found that successful outcomes are determined by three things; (1) the caliber of the strategist(s), (2) the approach to the work and (3) the commitment of the leadership to live by the decisions.
To your question Robert, let’s look at key considerations, starting with the fundamentals.
What Is Brand Architecture?
Simply put, brand architecture strategy, also known as brand portfolio strategy, is a system of structuring brand offerings to ensure optimal value over time:
- From an external perspective, it ensures that target audiences understand the breadth and depth of the value you offer them.
- From an internal perspective, it assigns relative values to different divisions and offerings based on customer associations.
What Are The Benefits Of A Sound Brand Architecture Strategy?
Brand architecture strategy will help you:
- Manage the strategic aims of your brand to more effectively support business objectives.
- Be designed from the outside in, organizing what you do in a way that your stakeholders will understand.
- Work within your organizational structure, not necessarily mirror your structure.
- Extend and transfer equity appropriately between the brands in your portfolio.
- Decide in adding or eliminating brands based on their level of value.
- Generate efficiencies in marketing and sales.
- Communicate the relationships between what you do, how you do it and your value propositions.
It’s important to remember that leading global brands have a strong brand strategy founded on the uniqueness of each product or service and a well-defined brand architecture that provides clarity, leveraged brand equity and makes a meaningful connection with customers and stakeholders.
What Brand Architecture Questions Need To Be Answered?
1. What differentiates each of your products or services – what are its unique value propositions and the evidence to support your claims?
2. Are the different brands and sub-brands in your portfolio sufficiently differentiated from one another?
3. Do your customers understand the differentiation?
4. How does each of your products or services relate to and support each other?
5. How does each product or service relate to the corporate brand?
6. How does each product or service support the company’s goals?
7. How well do the existing brands support the corporate positioning and company name?
8. Is your brand portfolio greater than the sum of its parts?
9. What strategic direction/structure will be most advantageous for your brand portfolio? (Master Brand / Branded House, Sub-brand, Endorsed Brand etc.)
Additional Strategic Questions:
1. What are the branding risks of implementing the strategy to current customer loyalty and key revenue streams?
2. What is the current brand perception? What is the current awareness? How might this be affected/altered with a name change?
3. What are the risks to the parent brand?
4. Do the brand and corporate names accurately reflect the current and future product or service strategy?
5. Does the logic of the hypothesized structure provide clarity to the customer rather than complexity and confusion?
6. Does the logic promote synergy and leverage?
7. Does it provide a sense of order, purpose and direction to the organization?
When Should You Revisit Your Brand Architecture?
The following should trigger a review of your brand architecture strategy:
- There is a significant merger or acquisition.
- There are too many brands and offerings are competing for attention and investment dollars.
- A brand in the portfolio has negative perceptions.
- Your corporate brand and product brands have the same name and are hard to distinguish.
- Your brands are losing relevance with customers.
- Your brand meaning has been diluted or stretched beyond credibility and effectiveness.
- Your corporate programs, elements, features or sponsorships are asking to be treated as brands.
What Is The Difference Between Brand Architecture And Nomenclature Systems?
They are distinctive, but highly interrelated and interdependent systems.
- Brand Architecture establishes the organization of your offerings, while your Nomenclature System determines the verbal representation of the Brand Architecture.
- An effective Nomenclature System cannot exist without Brand Architecture.
Nomenclature systems bring your brand architecture to life.
The Importance Of Knowing What Customers Associate With Your Brands.
In order to understand how you will compete – and win – in the market, it is important to understand which associations you do have. And which you do not.
- A brand links a set of associations to a product or service through its name, mark or symbols that provide a compelling promise of value to customers and other stakeholders.
- Brands create strong associations in the minds of customers. The strongest brands are those with the strongest positive associations.
In light of this, brand architecture initiatives should be informed by a deep understanding of those most important to your future.
I hope this is helpful Robert.
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