FLASH SALE! - "FINANCIAL MODELING COURSE BUNDLE AT 60% OFF" Enroll Now

Brand Architecture

Updated on March 19, 2024
Article byAnkush Jain
Edited byAnkush Jain
Reviewed byDheeraj Vaidya, CFA, FRM

What Is Brand Architecture?

Brand architecture is a subset of brand management where the relationship between the master brand and sub-brands is established to make them accessible and relatable to customers. Establishing this relationship helps build a portfolio of brands with which customers can tell who is associated and to what extent. This exercise is the foundation to brand identity.

Brand Architecture

You are free to use this image on your website, templates, etc, Please provide us with an attribution linkHow to Provide Attribution?Article Link to be Hyperlinked
For eg:
Source: Brand Architecture (wallstreetmojo.com)

An effective branch architecture design comprises names, colors, symbols, and visual vocabulary formulated keeping the customer’s thought process in mind. It is an inside-out approach through which the brand identity or image is built. Creating a brand image involves analyzing each product or service, determining their importance in the market, and ranking them accordingly.

Key Takeaways

  • Brand architecture is the system of organizing brands, services, and products to form a structure that makes it easier for the consumers to relate to and the management to manage.
  • This system comprises a master brand or a parent brand, under which different sub-brands are allocated so that they can easily correlate with each other.
  • The name and, thus, the logo and sub-brand designs may or may not be similar to the parent brand depending on the type of architecture.
  • Branded house, sub-brands, endorsed house of brands, and hybrid architecture is types of brand architecture.

Brand Architecture Explained

Brand architecture is the structure of the organization’s portfolio of brands, sub-brands, products, and services structured so that it is easier for customers to relate to and remember the brand and its sub-brands. Moreover, brand architecture not only helps the customers to understand the relationship between brands and the extent of their association but also helps the brand to build an internal framework and structure.

The brand architecture framework is made in such a way that it defines the brand’s identity and helps develop and design the product or service’s future expansion. Since the brand’s identity is based on its customer base – both existing and potential customers, positioning the brand in a way that best appeals to the target audience is the foremost step toward designing an efficient brand placement.

Financial Modeling & Valuation Courses Bundle (25+ Hours Video Series)

–>> If you want to learn Financial Modeling & Valuation professionally , then do check this ​Financial Modeling & Valuation Course Bundle​ (25+ hours of video tutorials with step by step McDonald’s Financial Model). Unlock the art of financial modeling and valuation with a comprehensive course covering McDonald’s forecast methodologies, advanced valuation techniques, and financial statements.

Components

A brand architecture design comprises a master brand, several extensions, and sub-extensions. It is also important to remember that there might be sub-sub-brands as well, depending on the structure of the company. Let us discuss these components through the points below:

  • Master Brand: A master brand is a corporate brand that envelopes all the benefaction of the company. Typically, the master brand’s name is formed by the parent company’s brand name.
  • Sub-Brand: A sub-brand or an affiliate brand is related to the master brand. However, these affiliate brand have their name, identity, and set of products or services.
  • Brand Extensions: Using existing brand names to introduce new products or services into the market is a brand extension. These are incorporated to facilitate an increase in sales.

Types

There are five types of architecting a brand depending on the nature of their product or services. The design of these brands is curated after closely considering brand architecture principles. Let us discuss them briefly in the following section –

#1 – Branded House

Under the branded house structure, the master brand strongly influences the entire brand or company. This is one of the most robust ways to architect a system of the brand to create a brand identity. Major brands like information technology (IT) company Google and electronics company Apple follow this structure. It is noticeable through the different products and services they offer. Each product can keep consumers constantly reminded about the parent brand.

Creating such a structure makes it easy for the company to manage its brands, as its target audience across brands is usually the same. Therefore, it is easier to market their products. However, it is also important to note that the risk of the whole brand’s image getting tampered with due to a fall in one of the sub-brands’ images is also highly likely.

#2 – Sub Brands

Sub-brand is the closest structure to the branded house. However, there are a few differences in the fundamentals. One of the most noticeable differences is that even though the affiliate brands have similar visuals to the master brand, their products, services, and customer bases are entirely different. This structure allows the brand to build familiarity amongst its audiences and simplify its design. Therefore, it is considered one of the most flexible forms of brand architecture.

#3 – Endorsed

As the name suggests, an endorsed architecture is a culmination of different brands but with an endorsement of the parent or master brand. These endorsed brands have their own brand identity and a market segment they appeal to the most. However, the endorsement of the master brand gives them added emphasis and credibility. An endorsed form of architecture can be seen in some of the leading hospitality brands.

#4 – House Of Brands

The house of brands is a pluralistic architecture of brands similar to branded house architecture. However, these brands have different names and identities and are sometimes listed in various industries.

These brands are positioned differently from one another and are managed by a single-parent company. Most fast-moving consumer goods (FMCG) companies have a house of brand architecture.

#5- Hybrid Architecture

A brand is said to follow hybrid architecture when it adopts two or more types of brand architecture structures. This form of architecture is considered the most flexible architecture. It allows the organization to take aspects of different designs and keep what works for its brand and identity. Some of the leading e-commerce websites follow a hybrid form of architecture.

Examples

Let us understand this concept better with the help of a couple of examples:

Example #1

Gordon runs a ready-to-eat food business. The canned beans are his best-selling product. They go by the name ‘Ramsey Breakfast Beans”. To expand his business, he purchased a new unit that would be run by his mother and is known among the locals for making healthy drinks to accompany breakfast.

Sensing a great opportunity, Gordon introduced the brand ‘Mom Ramsey,’ which acts as an extension of the Ramsey brand while being a completely different unit and management, which comes under the parent brand.

Example #2

Technology company Facebook has become a household name for all the right reasons, with the younger generation and everything infamous among the older ones. However, the management of the social media giant had decided to rebrand or revamp the brand’s architecture to call it ‘Meta’ to signify its entry into the metaverse space. Therefore, the parent company (Meta) will use Instagram, Facebook, Whatsapp, and Messenger as sub-brands. They followed a hybrid form of architecture which can be better understood through the flowchart below:

Meta

You are free to use this image on your website, templates, etc, Please provide us with an attribution linkHow to Provide Attribution?Article Link to be Hyperlinked
For eg:
Source: Brand Architecture (wallstreetmojo.com)

Importance

Irrespective of the number of brands or products within the scope of the parent brand, the architecture helps the brand build an image and appeal to its target audiences with more clarity. Let us understand the key aspects that make brand architecture design an essential step toward the brand image.

#1 – Reduced Costs of Marketing

Since the brands are interconnected and related, the costs of branding and marketing them reduce significantly. In addition, the marketing efforts for one brand might automatically increase the visibility of other brands as their association is made known to the customers.

#2 – Wider Customer Base

Since different brands have their own independent identity and a unique customer base, the other brands stand to get exposure to different target groups in various market segments through their affiliate brands. Otherwise, a particular brand has a limited scope of reaching out to new leads.

#3 – Greater Brand Authority

For several brands to be associated with a master brand shows an immense sense of credibility and trustworthiness among consumers. Trust and credibility help the brand to create a space with higher authority and equity in the market.

#4 – Simplified Management:

Following brand architecture principles, the internal and external management of the company is made simpler. The relationship between brands and their extent is clear to customers and the employees within the company; this makes it easier to manage the brands and the activities relating to them.

#5 – Stronger Presence

An efficient architecture of brands allows the organization to elevate the brand messaging and positioning in the market, appeal to a broader range of audiences, and create a more substantial presence in the market through uniform tonality and creating more excellent value for its consumers.

Frequently Asked Questions (FAQs)

What is a brand architecture model?

A brand architecture model is a culmination of sub-brands within the scope of a parent brand where each of these brands is related to each other to different extents. This model is curated to develop a clear structure that helps the organization build a brand image and identity.

How to develop a brand architecture?

The ideal way to develop a branch architecture is to understand each product or service in detail. Their target audiences and the value they bring to the table will define the next step, which is the benefits derived from them. These data points will make the place to review their benefits and features and understand their importance in the market. Then, according to the significance of the market, brands are ranked.

What is included in brand architecture?

An efficient architecture of brands has names, colors, vocabulary- both written and graphical, symbols, and tonality. These factors are reiterations for consumers who shall remember the brand and its products through the marketing or purchasing of other products of the master brand.

This has been a guide to what is Brand Architecture. We explain it in detail with its importance, components, examples, and types. You can learn more about finance from the following articles –