Week 2: Knowing how to communicate your offering: Brand Architecture & naming.

Week 2: Knowing how to communicate your offering: Brand Architecture & naming.

“What Brand Architecture is and why you need it…Brand equity and its relevance in your business…Which are the different models of brand architecture?…What a branded house is and when to use it…What a house of brands is and when to use it…What a hybrid model is and when to use it…How to develop a brand architecture…Top 5 indicators of a brand architecture issue or opportunity…Things to consider when naming your brand…”
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Summaries

  • 3.0 What Brand Architecture is and why you need it.
  • 3.1 Brand equity and its relevance in your business
  • 3.2 Which are the different models of brand architecture?
  • 3.3 What a branded house is and when to use it.
  • 3.4 What a house of brands is and when to use it.
  • 3.5 What a hybrid model is and when to use it.
  • 3.6 How to develop a brand architecture.
  • 3.7 Top 5 indicators of a brand architecture issue or opportunity.
  • 3.8 Things to consider when naming your brand.

3.0 What Brand Architecture is and why you need it.

  • The focus of this module is to learn how you can name your brand and develop a system to incorporate future products and brands into your portfolio.
  • How would you name it? Is it your brand anti-virus? Is it anti-virus by your brand? Or is it new brand anti-virus? How do you decide? That is why brand architecture was born.
  • The objective of brand architecture is to achieve clarity, synergy, and leverage by optimizing the hierarchy linkages and identity systems or brands in a portfolio.
  • Brand architecture is neither how the organization is structured, nor a corporate naming system, nor the web pane navigation architecture.
  • Research Hammer & Prahalad presented the concept of how to organize brands strategically and the use of a master brand.
  • You might be asking yourself, but what happened before? Organizations were less complex, selling less brands or brand extensions.
  • We wrap the module with two very practical lectures, the top indicators of brand architecture issues and opportunities, and things to consider when naming your brand.

3.1 Brand equity and its relevance in your business

  • In the last lecture after I presented the concept of brand architecture.
  • The focus of this lecture, is to introduce you to another concept, which we’ll be using throughout the module, and that is brand equity.
  • What is brand equity? Dave Acker, that brand guru, defined it as a set of assets and liabilities linked to a brand’s name and symbol.
  • Acker in his book, Managing Brand Equity, describes that brand equity generates value to the customers by helping them process information.
  • For the company, brand equity generates value by enhancing the efficiency of their marketing programs, brand loyalty, prices and margins, brand extensions, trade leverage, and ultimately, by providing a competitive advantage.
  • So how do organizations generate brand equity? With a clear, relevant, and differentiated identity.
  • By the way, there also exists negative brand equity.
  • Most likely, if you try to sell your Volkswagen after that scandal, you would’ve gotten a lower sales price than before the scandal, because of the negative brand and equity built around it.
  • So why do we need to talk about this? Because our goal is to generate positive, measurable brand equity, that we can tag along to build our offering.
  • A critical situation for brand equity, is when the organization wants to expand into new markets and businesses.
  • Another important topic with brand equity, is that for some organizations, the interrelationship between brands in a portfolio, is so dynamic that it’s advisable to track the overall brand equity flow.
  • Equity flow means the brand share and or transfer equities between them.
  • How much equity is being shared or transferred? And which brand received the balance of the share of transferred equity? For example, between the Coca-Cola Company and each of its commercial brands, such as Coke, Minute Maid or Fresco, etcetera.

3.2 Which are the different models of brand architecture?

  • In the last lecture we discussed the brand equity concept.
  • The focus of this lecture is to introduce you to the components of brand architecture and the models that exist.
  • Let’s begin by looking at a brand portfolio so you know what you could be facing.
  • On the lower part of the slide you will see what’s called an ingredient brand which is nothing more than a name which adds additional credibility to the commercial brand or product.
  • If you’re a Windows user you’re PC had one ingredient brand sticker looking at you every day.
  • Now let’s move up and center to talk about Sub Brands.
  • In theory, a successful brand extension should be easy.
  • The brand should be a logical fit with a parent brand.
  • Now, let’s talk about commercial brands, the name under which a product with customer-facing visibility is sold.
  • Any product or service that doesn’t have a last name and doesn’t use the parent’s company brand is a commercial brand.
  • Lastly we have the chord per brand, the under which the organization operates which can be used for commercializing it’s products.
  • The corporate brand sometimes also referred as in master brand, defines the organization and is used as an umbrella brand under which customers find products and services.
  • So what is the role of the corporate brand? On the one side it might be of leadership and visibility.
  • What is another potential word for the corporate brand? One of endorsement and shadow.
  • Yes, in this role the corporate brand acts as differentiator, and provides a warranty that individual brands will actually fulfill their own promise.
  • Unilever uses the individual brands to target specific segments with their own needs and it allows them to be differentiated in a relevant way versus the offering of competitors.
  • Why use a corporate brand? Strong corporate brands can help organizations grow and improve their performance, among other benefits.
  • They’re the actual manufacturer of the iPod. It also improve the shield or spillover from negative events which could impact the brand.
  • In the Volkswagen scandal with diesel emission tampering, if this were have been done by a lesser known brand, Probably the company would have gone broke.
  • Despite of damage in the reputation, the fact that Volkswagen is behind this provides a warranty that the brand will make it right by customers.
  • The reason to have provided you with all of these is to explain the brand architecture models.
  • The spectrum of potential brand relationships, moved from a branded house which is as corporate master brand to span a set of offerings operating with only descriptive sell brands.
  • This is a mix of both systems, the commercial brands can be linked to a corporate brand by a visual endorser.
  • Let’s look at the chart from the beginning of our lesson today and see if you can identify which type of brand is each of the brands in it.

3.3 What a branded house is and when to use it.

  • By definition, a Branded House means that all of your products are commercialized under one single powerful brand that spans a broader breadth of offerings that you have.
  • Dell decided to shift its focus from its service channel of brands to a single master brand, by positioning master brand as a unified platform of product and services.
  • Dell strengthened the equity of the master brand and clarified its offering for customers.
  • Dell’s change in brand architecture, where all of their products and services became aligned under a corporate brand, caused that the master brand Dell, is the one playing the driver role for customers purchase decisions.
  • Something which doesn’t apply to all brands, but targeting unique customer segments can be challenging if a brand’s dependability is limited.
  • Are the target customers of your product the same, or similar enough, that you can target them with one encompassing brand? For example, from a pricing perspective, are some of them cost oriented and others willing to pay for a premium? If this is the case, you might want to use a different brand architecture model.
  • Remember, in a Branded House, you should maintain a consistent brand meaning and messaging across your categories.

3.4 What a house of brands is and when to use it.

  • In the last lecture, we discussed a branded house model.
  • The focus of this lecture is to deep dive into the house of brand model and when to use it.
  • By definition, in a house of brands, all of your products are commercialized under different brands.
  • They are a set of independent, stand-alone brands, with little connection to the parent.
  • To be able to enter new markets with our brands lack the credibility to do it.
  • If Louboutin wanted to launch a construction business, it should probably do it under a different brand.
  • It is a strategy to distance the brand products or orphans from the master brand’s association, to reduce the risks of the master branding.
  • Where by brands, most survive on their own or they’re not worthwhile having.
  • Since P&G gets rid of brands that are not in growth markets, or that don’t have at least one billion dollar revenues.
  • On the other hand, the disadvantages of having a house of brands are that we sacrifice the economies of scale that come with leveraging a brand across multiple businesses.
  • Each brand requires a brand building investment and the segment-specific brands are unable to support investment and themselves, risk stagnation and decline.
  • So how do you decide whether to use a branded house model when growing your offering.
  • Do you have the resource to invest and support multiple brands? Do you have brand match making capabilities like a team, operating procedures and governments to actually manage several brands.

3.5 What a hybrid model is and when to use it.

  • In the last lecture, we discussed the house of brand architectural model.
  • By definition, in the hybrid model, company’s use their master brand as a driver or endorser role in some of its offering.
  • In the 1990s, Sony was the brand to have in consumer electronics.
  • This strategy allowed sub-brands to infuse Sony master brand with associations such as innovative, creative, entertaining, high quality.
  • This is a typical case where Sony’s business strategy and product breath may have outgrown its brand architecture.
  • What is happening is that some of the sub-brands like PlayStation are now actually revitalizing the Sony brand by transferring some of their equity.
  • Some like PlayStation have even contributed to energize and expand the master brand Sony.
  • As a disadvantage each one of the sub brands has required a large investment across more than one category.
  • The Sony case highlights the fact that brand architecture models are not static.
  • Under their old brand architecture, the master brand kept more distance among the brands in the portfolio, with only a light endorsement for some brands.
  • In their current brand architecture, they have a more explicit linkage of its Marriott family of brands.
  • So which brand architecture model is the one on your screen.
  • What about these other group of brands? If you said a house of brands, then you’re right.

3.6 How to develop a brand architecture.

  • I’ve seen many companies develop a brand architecture logic sitting down in a meeting marketing, sales, and R and D. This is a very dangerous outcome because they all think that they are either a target customer or they understand the target customers.
  • I will share with you a force that process that is simple and effective to develop brand architecture for your organization.
  • Examples of the key question that you should ask yourself in this step are, how are brand decisions about new products or acquisitions made? Are there any organizing or guiding principles? What future plans or strategic business directions will impact the architecture? For example, will we focus more on solution selling versus product selling.
  • How do customers view the architecture, how they link the brands together versus how do they view it internally in our organization? Understand how competitors are doing and what are the best practices from the customer point of view.
  • How do they group and link brands together in the portfolio? Example of questions might be please indicate which of the following brands are the ones that you know that XYZ company offers? Or how strongly, if at all, do you feel each of the following brands is connected to XYZ? Or, if XYZ were to move explicitly promote the idea that it offers each of the following brands, how would it impact your desire to want to purchase each of these specific brands? At the end of this phase, you should be able to literally generate a map of the current state of your brand architecture from both an internal and an external perspective.
  • Step 2 is to develop brand architectural alternatives.
  • Excedrin brand has been a leader in headache pain relief for decades.
  • Another crucial component is to determine the appropriate levels, or hierarchy of branding and naming elements to provide clarity and a logical structure for customers.
  • If you are the brand manager at McDonald’s, you have to consider that you might have Premium Mac Wrap, but it comes in three variations.
  • Imagine if brand architecture didn’t exist, how complicated it would be to order.
  • I suggest to use a combination of brand, business, and customer screening criteria.
  • A brand criteria might be, it protects the current brand equity.
  • Once you have decided on your brand architecture model you should develop a tool kit and migration plan which is the fourth and last step.
  • The objective of this step is to make the brand architecture actionable and to begin implementing.
  • Other useful tools are brand guidelines manual, to clarify the nomenclature and levels of branding in the recommended architecture.
  • You need to clarify the scope and strategic intent of each of the key brands.
  • As you can see, developing a brand architecture is not only about using logic to decide the product’s name.
  • It requires a much deeper understanding of the business, the brand intent and the target customers.

3.7 Top 5 indicators of a brand architecture issue or opportunity.

  • In the last lecture we discussed how to develop your brand architecture.
  • The first indicator of an issue is when brands are cluttered and confusing, both to customers and employees.
  • The second indicator we have covered in previous lectures, and it is when there is no internal system for managing how new brands or sub-brands are developed.
  • The third indicator of an issue is where there is no clear plan for integrating recently acquired brands into the existing architecture.
  • On a different level, the fourth indicator is not getting enough leverage from your key brands, such as your corporate brand.
  • Lastly, as we analyze in the Sony case, another issue is when your brand architecture is not aligned with your business strategy, or is not set up to allow the company to explore new growth opportunities.
  • You can use it as a guideline when developing the actual name for the new brand.

3.8 Things to consider when naming your brand.

  • Hi, this is an extra lecture that we created to help you in developing the name of your next brand.
  • Simply to use this process to develop the actual name of a new brand.
  • You might ask yourself, why do I need a process for generating a name? In our years of experience, this is a field where everybody wants to participate.
  • The process we have developed begins with a selection of the criteria for key success attributes for your name.
  • Think of what are the best routes of names that fit with the product or service concept, and fit the specified criteria.
  • Once you have a long list, use internal product and customer knowledge to short list the best naming alternatives.
  • The types of questions you want to ask are, what are the name associations and potential improvement areas? What things stand out from these names? What kind of experience will the name provide? What is it comparable to? After you’ve had your final selection, create a name guide development.

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