Business Brand Architecture planning and execution

Brand Architecture

1. Brand Architecture
Optimizing the ‘Face’ of Your Business
Jan’10
BrandAmplitude, LLC
All Rights Reserved

2. BackgroundWhyBrand Architecture?
Brand architecture is the external
‘face’of your business strategy;
consumers and customers know you
through your brands and your brands
support your business strategy.
Brand Architecture
Internal Organization
Corporate/Center/Region
Capabilities/Value Chain Management
External Marketplace
BU BU BU
OffersOffersOffers OffersOffersOffersOffersOffers
Channels
Customer
Segment 1
Customer
Segment 2Customer
Segment 3
Customer
Segment 4
Customer
Segment 5
CompetitorsCompetitorsCompetitorsCompetitors
“Where much of an organisation’sbrand-
building efforts once focused on acquiring,
launching or aggressively extending
brands….today’s focus is on trying to get the
most from existing brands through better
organisingand managing brands and brand
inter-relationships within the existing portfolio.

3. 3
Architecture is Strategic
To be effective, each brand needs its
own strategy. Brand architecture
establishes the optimal
interrelationshipsof brands within a
single company.
Corporate
Business
Unit
Business
Unit
ProductsProducts
It also describes the roleof each
brand in the corporate portfolio and
specifies the linkagesbetween
brands.
Brand architecture may or may not
line up with internal organization
structures.
Corporate
Brand
and Driver
Product Brand
Subbrand
Niche
brand

4. A brand’s role is
determined by its
ability to confer
equity to an offer.
Understanding
brand roles and
linkages helps
with brand
naming decisions.
4
Brand Roles
Brand Role Description Example
Driver
(Master)
Drives purchase decision and defines user
experience. Most represents the
differentiation inherent to the offer.
Office
Co-driver
Contributes equally to brand equity in a
multi-brand offer.
None
Endorser
Provides approval, credibility or guarantee
to a range of products, but is usually not
the driver.
Microsoft
Ingredient
Materials, components or parts that are
contained within other branded products.
Clipart
Sub-brand
Equity is driven by another brand, usually
driver.
Word
PowerPoint

5. A brand’s strategic
purpose reflects the
intentionof the
company for
maintaining the
brand in the
portfolio.
Understanding
strategic purpose
helps prioritize
marketing
investments.
5
Strategic Purpose
Brand Purpose Description Example
Flagship
Company’s most visible and most valuable
brand. Account for high proportion of
revenue, and is foundational to company’s
mission. High category awareness.
Windows
Office
Strategic
Of strategic importance to company’s
future sales or market position. Has
potential of positive impact on overall
perception of the corporation.
Vista
XBox
Distinguisher
Enhances the differentiation of another
brand. Also referred to as ‘branded
energizer’, differentiators, or silver bullets.
One Care
Live
Cash Cow
Money making brand that does not
represent future significant growth.
MSN
XP
Corporate
Low visibility to customers, but important
to corporate constituents such as
regulatory bodies, investors, employees,
trade groups, partners.
Microsoft
Fighter
Response to competitive threat. Protects
share of other brands in the portfolio.
Hotmail

6. BackgroundWhere Architecture Fits
Brand Architectureis part of
corporate strategy. It should be
established prior to creating a brand
strategy
Produces better long-term strategy
that is customer-insight driven and
encompasses brand platforms with
long-term growth potential
Minimizes waste and inefficiency by
building fewer stronger brands with
less overlap
Actively manages the linkages
between brands to leverage
credibility in support of new
opportunities
I.Corporate Objectives &
Brand Architecture
II. Brand Strategy
III. Marketing Strategy
Communications
Offer Design
Relationship & Experience
IV. Marketing Execution & Metrics
Strategic Marketing Process

7. 7
Architecture is Dynamic
Architecture is more than the corporate or visual identity system of a
company. It is grounded in market dynamics and changes over time.
Growth Gap
Strengths &
Weaknesses
Target
Markets
Desired
Identity
Needs &
Wants
Competitive
Set
Business
Strategy
Architecture

8. 8
When To Revisit?
Brand architecture is revisited
when companies changestrategic
direction, or reach key turning
points in the business
Time
Growth
Inflection Points
Sizable business unit is acquired or sold
Existing portfolio or structure hindersthe
effective pursuit of future growth
opportunities.
Brands are losing relevancein the
marketplace
Brands have been stretchedbeyond their
credibility and effectiveness
Too many or too few brands in the portfolio
to achieve business objectives
Co-branding opportunity presents itself.
Acquire
Maytag
Entry of
foreign
competition

9. BackgroundKey Principles
•Maximize profitabilityby fulfilling as many
customer needs as possible at minimum brand
development and management cost.
•Sufficiently cover the market and target customer
segments, but do so with the fewest brands
possible.
•Provide customers with the solution they seek
by creating clear separation –“daylight”–
between the company’s portfolio of offerings.
Parsimony
Profit
Partitions

10. •Most companies build their businesses through multiple brands.
Architecture solutions range on a spectrum from ‘branded house’
to ‘house of brands’.
10
Houseof
Brands
Branded
House
Spectrum of Solutions
Build equity in multiple brands
Build brand equity in master brand
Maximize synergiesamong business units
Target multiple customer segments
Reinforce a global organization mindset
Minimize risk of bad publicity
Single parent brand
spans a set of
offerings.
Independent brands,
each maximizing its
impact on the market.
Linked
Brands

11. 11
House of Brands
Description: Each brand stands on its own with no linkages to any other brand
Example: Ford Motor Company has chosen to maximize the value of its brand portfolio by
maintaining a portfolio of brands that serves different customers and market segments
Brand 1 Brand 2 Brand 3
House of Brands

12. 12
Master Brand
Description: One flagship/driver brand, applicable to all customer segments,
serves as the umbrella and primary point of reference for all product and service
offerings
Example: Virgin Group successfully extended the brand into multiple, disparate
markets and categories based on the lifestyle brand that Richard Branson has built
Consumer Business
Product 1
Product 2
Etc.
Product 1
Product 2
Etc.
Business and FinanceTravel and TransportationEntertainment House and Home
Use generic descriptors, rather
than brand names at this level
Branded House

13. 13
One Master Brand Linked to Company Brands
Description: Strong co-driver brands are linked to a flagship/driver brand that
unifies and provides additional credibility and substance
Example: Sony has chosen to maintain multiple brands, which each have significant equity,
while building a flagship brand that communicates global, financial strength.
Driver
Brand 3
Handheld/
PDA
TVs
Portable
Music Player
Computers Gaming
Linked Brands
Brand 2Brand 1

14. •Coca-Cola is a
good example of a
hybrid brand
architecture.
•Some brands
benefit from
association with
the Coca-cola
brands, while
others are driver
brands on their
own.
14
Coca-Cola Architecture
Brand Role Strategic Purpose
Coca-Cola® Driver Flagship, Strategic
Diet Coke Sub-brand Strategic
Coke Zero Sub-brand Strategic
Coke Classic Co-drivers Strategic
Sprite® Driver Flagship
Fanta® Driver Flagship
Dasani Driver Flagship
My Coke RewardsIngredient Distinguisher
Powerade Driver Flagship
Minute Maid Driver Flagship
House of Brands

15. David F. D’Allesandro,
Brand Warfare: 10 Rules for Building the Killer Brand, 2001PrK
15
Process
Step 2: Brand Architecture
Mapping
•Compare current go-to-
market architecture vs.
consumer perceptions
of architecture
•Identify gaps, overlaps,
inefficiencies and
synergies
Step 3: Architecture
Alternative Development
•Develop architecture
options
•Understand
corresponding
business, consumer,
brand and channel
implications for each
option
Step 4: Alternatives
Screening
•Develop screening
filters based on
learnings from Step 1
•Filter options to
determine most likely
architecture
alternatives
•Identify gaps,
tradeoffs and key
decision points
Issue
•How aligned are external
and internal perceptions
of number of brands and
their roles?
•Identify hidden “gems”
that could be leveraged
in the future.
•What are the various
ways the portfolio
could be configured
going forward?
•Understand the
opportunities and risks
of each approach.
•Which architecture
alternative best fits the
short and long-term
business and brand
objectives?
•Maximize the internal
capabilities of the
organization.
Step 1: Strategic Business
Analysis
•Understand strategic
business and brand
goals
•Understand customer
segments and brand
perceptual
boundaries/limits
•Outline relevant
trends and
competitive dynamics
Process
•How closely aligned
are the brand and
business strategies?
Actionability
•Identify key drivers
going forward.

16. Fit with Strategy
•Help achieve and support
strategic priorities?
•Strengthen and leverage the core
business?
Business Management
•Support different business units
and/or market segments?
Flexibility
•Enable the organization to react
to changing market conditions?
Implementation
•Ability to execute with a high
degree of success?
Financial
•Do expected benefits outweigh
the estimated costs?
Brand
Brand Equity
•Fit with and protect existing
equities?
•Create desired new
associations?
Brand Positioning and
Associations
•Fit with the positioning and
associations we want our
brands to have?
•Enhance uniqueness?
Brand Synergies
•Create synergies across the
portfolio?
Brand Management
•Enable marketing and brand-
building efficiencies?
Customer Confusion
•Maximize clarity and
minimize confusion to current
and potential customers?
Customer Expectations
•Meet category customer
needs?
Market Applicability
•Address the needs of a
changing and dynamic
marketplace?
Multiple Stakeholders
•Meet the needs of multiple
stakeholders, e.g., B2B as well
as B2C markets and other
constituents such as
investors?
Brand Architecture Evaluation Criteria
Business Customer/ Stakeholder
16
Brand, 2001PrK
Evaluation Criteria

17. Architecture Benefits
Provides competitive advantage via
optimal market coverage
Clarifies strategy by identifying gaps and
overlaps
Provides leveragethrough marketing
efficienciesfor existing brands and line
extensions
Eases planning by prioritizing investments
and showing what to do with acquired
brands
Facilitates development of visual identity
systems 17
17
Growth
Gap
2008 Revenues 2012 Revenues
Brand’s contribution to
Growth Gap and role in
supporting strategic
objectives
Current
Business
New Products/
Services
Acquisitions/
Partnerships
Other Growth
Contributors
Current Business

18. 18
How much does this
option allow for future
growth?
What equity exists the
product brands? How
extendable are these?
What equity exists?
How extendable is it?
Leverage Synergy Clarity
What are the
relationships between
the company’s
brands?
How much does this
option leverage the
equity and
relationships between
the brands?
What benefits do the
possible strategic
brands offer the other
company brands?
How much clarity does
each option provide
for the end user?
Which brands are
most important to
consumers/
customers?
Which combination of
brands provides the
most clarity?
The optimal brand architecture affords Leverage, Synergy and Clarity.
Key Questions Addressed