Setting the foundation for brand architecture
Build Mode™ Issue 02.2024
There’s been some chatter in the architecture industry lately (or maybe it’s always been there and continually resurfacing) about how the terms ‘architect’ and ‘architecture’ have been co-opted, or rather hijacked, by lots of different industries, especially the tech industry. We now have data architects, information architects, enterprise architects, solutions architects, and many more.
I get it. And it makes sense. Architecture, beyond the practice of designing and constructing buildings, is a really useful term to describe the intentional planning and structuring of, well, anything. And that includes brand architecture, the topic for today.
Just as architecture is the combination and integration of forms and materials, establishing the foundation for occupants to inhabit, so too does brand architecture establish the setting for a brand through its intentional relationships.
What is brand architecture?
At its most basic level, brand architecture is the organizational structure and perceptual relationships between a parent brand and its sub-brands, products, and services.
Brands are complex things. They serve different markets. They have different products. They have different value segments. They have partnerships, affiliations, and endorsements. And there’s a lot of messiness and complexity within their business. Brand architecture is the process that organizes the chaos into a structure that makes it easy to understand. Whether the brand is a real estate developer, or an international design agency, or a car manufacturer, organizing the brand portfolio for clarity and leverage of the parent brand is paramount.
Let’s look at an example of how a customer navigates through brand architecture and understanding of structural relationships in a real world scenario.
Say you’re in the market for a new vehicle. You were initially researching differences between Kia, Honda, and Toyota and you decided on a Kia. That’s the top level of the structure: the brand.
Now you’re walking around the dealership, avoiding the sales associate because “you’re just looking” and you’re figuring out whether you prefer a crossover, an SUV, or an MPV (apparently that’s the new nickname for minivans now), because you know a sedan will be too small for you. Oh, there’s also a whole range of EVs too, but you decide on a standard SUV. These are examples of product types and the next level of your structure. It’s one way to create classification through brand groupings.
Now that you know you want an SUV, you’ve got size options with different models at each scale. On the larger end is the Telluride, and on the compact side is the Seltos, with Sportage and Sorento in the middle. Let’s go with the Telluride. All of these vehicle models are product brands, or sub-brands.
Think we’re done going down the rabbit hole of brand architecture hierarchy yet? Think again. Within the Telluride brand, there are even more options. Each of the trims are indicators of quality, from a basic model LX starting at $36,190 through all the options in between, S, EX, EX X-Line, SX, SX X-Line, SX X-Pro, SX Prestige, EX Prestige X-Line, and at the highest tier, the SX Prestige X-Pro starting at $53,385 (by the way, who named these?). The trim options create a vertical pricing structure that gives you the option to choose on level of quality.
Through the buying process illustrated above, you can see how a car manufacturer has structured their offering in a clear way (despite the trim names), so customers know exactly what options are offered.
The four basic models of brand architecture
There are four types of brand architecture models: branded house, sub-branded, endorsed, and house of brands.
Branded house
The first brand architectural model is a branded house. Brands in this model go to market with a single name, single brand mark, and generally, operate within a single category. They are incredibly focused. All of the products and services drive value to the parent brand.
UPS operates as a single brand name and brand mark with one primary service of delivering items worldwide. All of the products and services fit the same category, whether they are shipping goods by ground or air or freight, or helping customers ship their goods through physical retail locations.
In the design field, there are companies like Gensler, one name, one brand mark, yet working across dozens of markets through the service offering of architecture, design, and planning. Even upon acquisition of firms, targeted firms integrate swiftly within the branded house model to leverage Gensler’s international reputation. For example, when Gensler acquired Boston-based brand agency Korn Design in 2018, their strategy was to consolidate and integrate their team into Gensler’s Boston office and expand their capabilities as a lifestyle branding studio.
Sub-branded
Our next brand architecture model is sub-branded. The Kia example from above fits here. The Telluride is a sub-brand to Kia, just as the Wrangler is a sub-brand to Jeep, and the Mustang is a sub-brand to Ford. This is true for most car manufacturers. Sub-brands are brands that sit a level below the parent brand and retain association with the parent for enhanced benefit and leveraged equity.
In the building industry, many firms create sub-brands by categorizing their services. See Gilbane as an example. Since the late 1990s, Gilbane, Inc. has been the holding company for two sub-brands: Gilbane Building Company, their construction and facilities brand, and Gilbane Development Company, their real estate development, investment, and management brand. Since they offer an entirely different set of services, they adopted this sub-branded model. Through both entity’s association with Gilbane, both strengthen the name.
In real estate, Millcreek Residential has given names to their asset categories to create sub-brands. Within their portfolio is Amavi, single-family rental communities; Beckett, well-crafted apartment homes; Modera for a ‘new standard’ in apartment living, and Alister, apartment homes at great value. Their product brands, one level deeper, are modified with locations, so their local assets become Alister Quincy, Alister Oak Hill, Alister Baco Raton, which adds consistency and efficiency with brand management and setting customer expectations across the category.
A word of caution with sub-brands in real estate – if the property changes ownership or management, yet the building name remains the same, it’s possible that it becomes mistakenly associated with the original ownership and management firm, thus leaving a former owner susceptible to negative impacts on their brand equity.
Endorsed
The third example for a brand architecture model is endorsed. Endorsed brands are independent brands with a noticeable but minor affiliation with a parent brand or holding company. In practice, an endorsement might appear as a tagline added to the name and logo. An endorsement from a brand with greater brand equity gives the customer more assurance on the quality of the product.
3M has many products within its portfolio, including popular brands like Scotch tape, Post-It notes, and Command strips. Each of the brands are strong on their own but with the backing of 3M (and a logo on the packaging) they receive a brand equity boost because of their affiliation with a higher level, reputable parent brand.
When global firm PA Consulting acquired Boston-based innovation design studio Essential Design in 2018, they adopted for an endorsed approach with “part of PA Consulting” as a tagline in their name. The endorsement started a transitional phase. While Essential’s clients began to recognize the resources available through their association with PA Consulting, Essential Design brought new expertise in-house and expanded PA’s service offering and geographic reach across the globe. They have since fully integrated and become a branded house.
House of brands
The fourth type of brand architecture is a house of brands. House of brands are brands that exist across multiple categories and across multiple value propositions. They are independently branded with little to no connection to the parent brand. Sometimes, there’s an intentional disassociation from the parent brand.
Does Boston Beer Company make beer? Technically, yes, but it’s not a beer brand. They’re a holding company for many brands, or in other words, a house of brands. In their brand portfolio are drink brands across multiple categories: Samuel Adams, Truly Hard Seltzer, Twisted Tea, Angry Orchard, Dogfish Head, and new innovations like Teapot, the cannabis-infused tea. Each of their portfolio brands has strong brand equity and doesn’t leverage the parent brand.
Just as there are holding companies for consumer brands, there are also holding companies for design agencies. Look to kyu, a collective of creative organizations that form partnerships to move the needle on the economy and society. You may recognize some of the names in their portfolio like IDEO, Sid Lee, SYPartners, Godfrey Dadich, and Upstatement, the digital design studio founded in Boston. Within kyu’s brand portfolio, they each maintain their own identity while leveraging the resources of the collective and work together toward one mission.
So these are the four main models of brand architecture: branded house, sub-branded, endorsed, and house of brands. In reality, most firms use a hybrid model with two of these structures to better support the firm’s business objectives.
What’s most important to understand is how each of the brands in the portfolio all play a part in reinforcing the growth of the parent brand or holding company.
Here’s what you can do next
If you’re leading a company or managing its brand reputation (yes, even if you’re an employee, you’re part of that brand’s reputation), it’s essential to see the big picture of how an entire portfolio of brands work together. It’s also a good idea to take an audit of how your business is positioned today to identify any gaps or inefficiencies in how the portfolio is structured.
With the insights above, you now know how to break down the components of a brand architecture, from the top-level holding company and flagship brand, into groups of categories with sub-brands, and tiered quality levels. You also know the four different models of brand architecture and the benefits of each.
So, which model is right for your own brand portfolio? Every brand has a brand portfolio and a brand architecture, even if you don’t have any sub-brands. You still have a set of products, services, or affiliations that need to be intentionally positioned for clarity and leverage.
When considering the brand architecture of your company, ask yourself these questions. This is by no means an exhaustive list of questions you need answered, but it’s a start to get your foundation right.
Current structure
What are all the brands, sub-brands, products, and services that compose your brand portfolio?
How is the portfolio organized and categorized?
What brand architecture model are you currently utilizing?
Is this model clear to everyone – internal, customers, future prospects – in the same way?
Is this model best for the strength of the parent brand and all sub-brands?
Is this model intentional and purposeful?
Portfolio performance
Which areas of the portfolio are driving the strongest growth right now?
Which areas of the portfolio might drive the strongest growth in the future?
How connected and related are the portfolio brands, if at all?
Might there be any associations to create stronger leverage across all segments of the portfolio? (for branded house)
Might there be any disassociation to create separation from conflicting areas of business? (for house of brands)
Future structures
Is the brand architecture adaptable to change?
Are there any new partnerships, affiliations, or services in the pipeline?
What’s the process for adapting the brand architecture with new brand extensions?
How will the brand architecture be represented and updated?
The objectives of an effective brand architecture
Ultimately, the goals for crafting a brand architecture come down to this:
To increase brand value
The composition of the brand portfolio, sub-brands, products, services, and extensions should all be positioned to increase the value of the brand. While your own biases may lead you to focus on a particular sector, your ultimate goal is to drive increased value for the entire portfolio.
To create synergy
Like neuron connections and communications through synapses in our brains, the individual nodes of the brand portfolio should connect and collaborate with one another. Through reinforced association and collaborative efficiencies, each of them become elevated and work harder than on their own.
To clarify the offer
There should be no doubt of what you can offer. Both customers and internal stakeholders should easily understand the structure of the business, navigate it intuitively, and ease into the buying process without friction. Intuitive structure. Clear naming. Easy selling.
To enable future growth
Brand architecture is more about looking ahead than looking back. and creating a framework that allows growth opportunities to occur within the established framework, for new products, new strategic acquisitions, or new markets or categories.
With an effective brand architecture, you’ll set the foundation for a brand to inhabit and for the entire portfolio to propel forward and thrive.
Thanks for reading the inaugural issue of Build Mode!
If you have any feedback on this update, or ideas to share, or questions to ask, reach out. I’m open to hearing your thoughts and making this most useful message for you this week.
Wishing you a wonderful month of February and hope to talk soon!
Best.
Kenny Isidoro
Work zone
Some other things I’ve been up to this past monthReading:
Key Person of Influence by Daniel Priestley. I’ve taken a different approach to reading lately. Rather than read written word (which I still enjoy), I’ve been listening to audiobooks and taking notes in the process. Spotify has tons of books available on their premium plan. I find it helps me remember more and take action on the things I’ve learned.
Learning:
I just wrapped up a course from Section called Proving Business Value with Nicole Alexander, former global head of marketing at Meta. It focused on how to write a business case from end-to-end, while also diving into the most critical financial metrics used to demonstrate financial impact.
Adventuring:
Will I have to update my passport? Not sure yet, but I recently nominated myself to speak at The Design Conference in Brisbane, Australia with a keynote that encourages designers to experiment, learn, and master multiple skills through their career roles. By doing so, they’re stacking a unique combination of skill sets to create a unicorn version of themselves in the market. Fingers crossed!
Experimenting:
I’m considering putting together a subscription service model. On-demand branding and marketing services for business leaders in build mode. Interested? If your organization would like to take part in a pilot program (aka be a guinea pig), give me a ring!
If you build it, they will come.
Subscribe to Build Mode™
a monthly update with brand insights and how they can apply to your practice and your projects. Issues drop on the first of each month. Feel free to unsubscribe if the updates aren't valuable for you. No hard feelings.