Let’s talk for a few minutes about brand and brand architecture. Brand, as we know, is a term which refers to all the externally and internally focused language, position, and imagery for a given company. At its core, a company’s brand is its reputation. How much leverage a company gets from their brand is largely dependent upon the Brand Architecture they utilize. There are two primary types of Brand Architecture: Umbrella Brand Architecture and Product Brand Architecture Systems.
Umbrella Brand Architecture
Umbrella Brand Architecture is the most identifiable. It is one brand that creates a single powerful image, often paired with descriptive names for products, services, divisions, or locations. In this architecture, marketing is most efficient, offering economies of scale linked to the variety of products and markets that the brand covers. Put another way it allows “increase[d] advertising efficiency by providing an umbrella for several brands that reduces the need for separate brand budgets.”[i] One brand, one unified effort, all money and energy expended strengthen the whole brand. In this type of architecture, reputation is linked inextricably with size and power. “Masterbrands are a company-wide brand force, composed of a central set of associated meanings and benefits, whose scope stretches from the company’s strategic core, throughout its people and partners, enveloping its customers, and beyond to its outer perimeter of influence.”[ii]
Product Brand Architecture
Product Brand Architecture is favored by decentralized companies targeting diverse markets. This architecture makes sense when the sub-brands have distinct markets that are not directly related to each other. This style of brand architecture is the most costly, in both time and money, to execute for the parent brand. In a limited resources situation, it is also the least effective. These brands are separately run, ideologically disparate, and often compete against each other for internal and external visibility as well as market share.
The Best Brand Architecture?
Which is right for your company? The answer is … it depends. It depends on your goals, on your market, and on your business itself. But it should be a choice, not an accident. So consider your options and make your choice.
[i] Smith, D.C., and Park, C.W. (1992): The Effects of Brand Extensions on Market Share and Advertising Efficiency, Journal of Marketing Research, 29, 296-313.
[ii] Upshaw, Lynn B. and Earl L. Taylor, Ph.D. (2000): The Masterbrand Mandate: The Management Strategy that Unifies Companies and Multiplies Value, page 2.