Unpacking the definition
The easiest way to understand a house of brands model is to look at examples of the main players.
P&G as a house of brands
Together with Unilever, P&G is an example that is used heavily when speaking about a house of brands approach. The brands operate like separate companies (from a brand perspective at least). Each brand can focus on themselves – establishing the right tone of voice, taking risks and creating their own visual language.
Each brand is therefore easier to sell to another company giving the main corporation a huge degree of flexibility.
This approach is however, expensive! Without being able to consolidate the investment into the master brand the resources needed for marketing and communication are huge.
Alphabet as a house of brands
Alphabet own a number of brands including Nest, Calico, YouTube and of course Google. The brands cover a number of industries including health and tech. The parent company Alphabet isn’t consumer facing, and therefore very little resource will go into ensuring the brand is relatable and communicates well to its audience.
Alphabet as an example is less clear cut, in that it operates with a house of brands model. Whereas Google operates a branded house model. But rarely will you find a straightforward illustration – brand architecture can be a complex beast!
The introduction of the Alphabet brand has meant the strain has been taken off Google. Alphabet can acquire new ventures without risking Google’s reputation. A house of brands approach means the companies can make investment decisions on an individual basis rather than any acquisitions needing to fit into an existing structure.
Interested in brand architecture? We’ve also written a blog post on what a branded house is.