How can you use brand architecture strategy as a small business?
Whilst brand architecture is usually reserved for large corporations with multi-million dollar / pound brands, there is a lot smaller businesses can learn from thinking about their own brand architecture, strategically.
The majority of the decision making comes down to risk and how quickly a brand needs to grow. I’ve written more detailed blog posts about the main approaches; branded house or house of brands but will briefly outline decision making process here.
Different industries have a greater level of risk when it comes to brand failure. I’m talking about the type of risk that brands rarely recover from. Pharmaceuticals are one of those industries, food production would be another. As soon as your brand has poisoned thousands of people, you are going to have to have a very comprehensive PR strategy to make a dent in restoring a brand.
There are other industries where the culture increases risk. Take phone hacking within journalism. The tabloid culture in the UK has been murky for years. So, there is a much greater risk of something or someone damaging a brands reputation.
Accessing the potential risk level is the first step I’d take to working out the correct approach. The house of brands method favoured by companies such as Unilever and P&G is often the most appropriate solution.
Fast growing sectors
Sometimes companies need to grow quickly, really quickly. The growth strategy is to grow at all costs. Usually due to products that are trending but sometimes when there is a gap in the market and a race with competing companies. Whilst many businesses wish for fast growth, the type I am talking about here is growing without being too concerned with backlash. A high risk strategy but often a branded house approach can work, especially when combined with brand values such as experimental or risk taking.
Think of Virgin. Richard Branson has been able to launch a number of sub brands quickly. Most people in the UK (I imagine) would recognise the Virgin name. It has traction. They can launch brands quickly in the home the people will at least try their offering once. However, Virgin’s brand values work well in their context, and are fairly unique. We will have more grace for the Virgin brand as we see Richard Branson as an entrepreneur, maybe a maverick and definitely a risk taker. The failure of Virgin student, Virgin cars and Virgin brides don’t seem to impact on how we perceive the overall brand. So much so that Virgin have written a blog post about the failures.
An example company that is perhaps more applicable to most other companies looking to take a branded house approach would be Google. Google books, groups, videos, maps, translate. They benefit from the same speed of uptake, Google could launch a new service tomorrow and hundreds of thousands of people would try it. However, they have a core business model of ‘search’. The same with FedEx and Amazon. The core business is flexible enough to add numerous brands to its offering. The risk of a product failing however is minimal compared to launching an entirely new service. So the branded house approach often works well for them.
Brands need to work for the audience they are designed for. If the audiences vary drastically from product to product, or service to service, the decision around brand architecture will be made for you! A house of brands approach is usually the most viable option. P&G have got Gillette and Pampers within their range. You would need to hire an incredible designer to create a brand that would work for both audience groups. The house of brands approach tends to be taken when the corporation deals in products rather than services.
Overall, most companies will take a hybrid approach to brand architecture. Rarely will you see one approach. Companies grow, they buy other companies, diversify their offerings and access risk. Take Apple; the sub brands you would recognise as part of a branded house would be iPhone, Apple Music, Apple Pay, iPad. But they also own Shazam and Beats. The BBC split their brand architecture into the master brand, service brands and content brands. Whilst there is no clear direction considering risk, industry, growth strategy and audience are wise places to start.