Welcome to week four. This week we are introducing brand architcture. This is less exciting previous sessions as the primarily focus of this one is on the economics of brand management. So why do we need a brand architecture?
Creating a clear brand architecture is to help structure a brand's position (both now and for the future) and support management the task of developing that brand and ensuring that everyone within an organization (from ad agencies to field mkt folks) is working to a common and clearly understood goal. When do you need one? Consider GM has 32 brand names, P&G has hundreds, BMW has 3 or 4, IBM has 5 and Starbucks has 1. Obviously the more brands you have, the more you'll need one. It gets more and more complicated as companies have multi-brands as a result of merger and acquisitions, aggressive brand extensions due to pressure for quick profits and increasing complex structures involving sub-brands, endorsed brands and co-brands.
Brand architecture is not an one-off effort. Often the task includes periodic regrouping multiple product groups, brand families, reposition them to reflect their role in the market and to create a structure for immediate successful marketing. The establishment of a clearly understood and coherent brand architecture creates the structure within which the vital day-to-day tactical decisions can be made. Without this brand architecture in place, these tactical decisions become strategic and long-winded in nature.
Brand Architecture is the logical, strategic and relational structure for all of the brands in the organization’s brand portfolio. The objective is to maximize clarity, synergy and leverage to maximize customer value and internal efficiencies. The main advantages of developing a brand architecture:
1. It helps everyone in the organization see and understand all the connections between corporate brands, sub-brands and master brands.
2. It makes decision making easier when it comes to allocating and sharing marketing resources such as advertising and promotions.
3. Protect brands by being over-leveraged and being diluted by over-stretching communications messaging and graphic design options.
P&G’s brand architecture effectively manage the relationships between product, brands and market segments. Head and Shoulders dominates the dandruff control shampoo category and Pert Plus targets the market for combined shampoo and conditioner. Pantene is positioned as a brand with a technological heritage and the benefit of enhancing hair vitality. The three brands basically optimizes their brand coverage instead all products under a P&G product brand names. One additional major benefit is to avoid a brand association that would be incompatible with another offering and adversely affect the other brand’s performance.
The most important strategic decision is to decide whether a company should adapt a "Branded Hosue" or "House of Brand" strategy. I have seen hundred of heated debates in the boardrooms on this and it is never an easy one. Because it involves corporate strategy as well as many long term views. Questions for deabte:
1/ Should Google employ a "Braned House" vs. a "House of Brand" strategy when it expands into new areas even ourside the internet seach and ad space?
2/ Should Yahoo gradully replace those brands that they acquired (Flickr etc) and putting them under a Yahoo umbrella or let those companies continue to operate under their own brands? If not, should there be any assoication with Yahoo? If yes, what kind?
3/ Should Virgin consider moving away from a Branded House and start creating new extensions or co-brands preparing the brand for the next decade as there will be certainties over succession issues as well as maintaining relevance beyond certain categories?
Pls share your thoughts.
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