Brand Architecture: It's the system, what counts.
Enterprises are growing. They integrate smaller (or bigger) different companies and expand to other markets, segments and even cultures.
A well structured brand architecture brings transparency not only for external views but also for employees and potentials.
Strength of brand becomes more important than size of company. Industrial age and its brand life cycles demand flexibility from brand strategy and architecture. Some decades ago an enterprise could be sure that product portfolio and brand aura are two sides of a medal and remain in their statuses for longer periods. Today fast reaction in changing markets, target group behavior and technological developments is required.
Exemplary brand architectures are rare; one can find them only in literature. Mergers and acquisitions led to market- and history driven mixed brand architectures, which do not fit to academic models.
Brand System Changes: a tightrope walk
Driven by pressure for innovation the danger of brand erosion is increasing; danger of disuse of synergetic effects is shrinking dramatically instead. Line extensions even in the field of corporate brands are first steps to a powerful future. Luenstroth Brand Consultants see brand architecture as a dynamic process: The architecture should be flexible to make best use of the brand dominance but avoid erosion of brand assets.
A rough Scheme of Brand Systems
In practice, there are no longer any “pure” brand architectures. The economic structures of the brand-leading companies are too different, as are the international markets.
The overview is therefore only categorical. An ideal brand architecture for companies must be finely composed.
Monolithic (Branded House) Architecture
In a monolithic brand architecture, the company uses a single brand name across all its products and services.
The parent brand is the main identity, and all offerings fall under this umbrella.
Advantages
- Brand Equity: The strength and recognition of the parent brand extend to all products, making it easier to introduce new products.
- Cost Efficiency: Marketing and branding efforts are streamlined, reducing overall costs.
- Consistency: A unified brand message and identity create a strong, cohesive brand image.
Disadvantages
- Risk Exposure: Any negative impact on the parent brand can affect all products and services under its umbrella.
- Limited Flexibility: It’s challenging to diversify or enter new markets where the parent brand may not have established equity.
Endorsed Brand Architecture
In this model, individual brands are distinct but are supported by the parent brand.
The endorsement from the parent brand lends credibility to the sub-brands.
Advantages
- Brand Credibility: The endorsement from a well-known parent brand adds trust and recognition to the sub-brands.
- Flexibility: Sub-brands can have their own identities and target specific markets while benefiting from the parent brand’s reputation.
- Risk Management: Issues with a sub-brand may not directly affect the parent brand or other sub-brands.
Disadvantages
- Complexity: Managing multiple brands with distinct identities can complicate branding efforts.
- Cost: Creating and maintaining separate identities for sub-brands can be more expensive.
Pluralistic (House of Brands) Architecture
This architecture involves a collection of individual brands, each with its own identity, under a single corporate umbrella.
The parent brand may not be prominent or visible.
Advantages
- Flexibility: Each brand can operate independently, targeting specific audiences and markets.
- Risk Containment: If one brand encounters issues, other brands in the portfolio are usually unaffected.
- Market Segmentation: Allows for precise targeting of diverse market segments with different brands.
Disadvantages
- High Costs: Developing and maintaining multiple distinct brands is resource-intensive.
- Lack of Synergy: Brands may not benefit from shared equity or recognition, and there can be missed opportunities for cross-promotion.
Lünstroth’s Approach to Brand Architecture
As a globally active brand consultancy, Lünstroth Brand Consultancy uses a tailored approach to help organizations select and implement the ideal brand architecture.
Here’s how Lünstroth integrates these concepts into a practical brand system.
1. Strategic Assessment
Market Analysis: Lünstroth begins with a thorough analysis of the market landscape, competitors, and target audiences to determine the most effective brand architecture.
Business Goals Alignment: The consultancy ensures that the chosen brand architecture aligns with the company’s long-term business objectives, whether it’s growth, diversification, or market penetration.
2. Customization and Flexibility
Tailored Solutions: Recognizing that no one-size-fits-all solution exists, Lünstroth customizes the brand architecture to the specific needs of the business. For instance, a company looking to enter diverse markets may benefit from a pluralistic architecture, while a startup may find a monolithic structure more cost-effective.
Dynamic Models: Lünstroth often develops hybrid models, combining elements of different architectures to create a flexible system that can evolve with the brand’s growth and market changes.
3. Implementation and Integration
Comprehensive Planning: Lünstroth collaborates with clients to map out the implementation process, ensuring smooth integration of the chosen brand architecture across all touchpoints.
Employee Training: To maintain brand consistency, Lünstroth provides training for employees to ensure they understand and adhere to the new brand structure.
Monitoring and Adaptation: Post-implementation, Lünstroth continues to monitor the brand’s performance, offering recommendations for adjustments as market conditions change.
4. Risk Mitigation
Contingency Planning: Lünstroth anticipates potential risks associated with each brand architecture, particularly in a monolithic structure, and develops contingency plans to protect the brand’s reputation.
Scenario Analysis: They conduct scenario analyses to evaluate how different brand architectures would perform under various market conditions, ensuring that the chosen model is resilient and adaptable.
5. Global Considerations
Cultural Sensitivity: For multinational companies, Lünstroth ensures that the brand architecture accommodates cultural differences, adapting the branding strategy to resonate with local markets while maintaining global consistency.
Legal Compliance: Lünstroth also guides clients through international trademark laws and regulations, ensuring that the brand architecture is legally sound across all regions of operation.
Conclusion
By offering a blend of strategic insight, customized solutions, and practical implementation, Lünstroth Brand Consultancy helps organizations select and execute the optimal brand architecture, enabling them to achieve their business goals while maintaining a strong, cohesive brand identity on a global scale.
Additional Support
- Explanation of possible barriers (outsider’s view) and options for expansions of the existing architecture
- Possibilities of alternative architectures and transpositions
- Development of a matrix for alternative brand architectures
- Development of transfer roadmaps for the enforcement of brand architectural modifications (internal/external)
- Deduction of the grown task of Corporate Identity, Design, Behavior
- Implementation of a Brand Management System with following modifications in the field of identity