Brand architecture used to be neatly divided into two schools. Those favouring a dominant corporate brand (such as Amex or Virgin) chose the Branded House model, while others opted for the House of Brands, typified by numerous sub-brands with little or no mention of the company behind them (for example, General Mills and Reckitt Benckiser).
[RussianDolls] Several emerging trends have rendered these concepts over-simplistic and outdated. Firstly, the ubiquity of information has lifted the veil of the company behind the product and therefore these brands are becoming ever more interlinked. As a result, enlightened customers are becoming more demanding and discerning in their purchasing decisions. Secondly, the sheer cost of maintaining brands is forcing a rethink of where to invest the marketing dollars. And finally, as companies more frequently acquire strong brands with long histories in new geographies, it gets harder to simply or immediately absorb these into the masterbrand.
In response, companies are increasingly turning to a “brand network model encompassing more differentiated and tailored relationships between corporate and product brands.
Corporate brands are taking greater prominence, in an attempt to project organizational values, convey trust and build brand equity with multiple stakeholders. Recent ads by Apple feature the tagline “designed in California” and focus on the company, not its products. And FedEx has introduced a more consistent corporate umbrella across all its sub-brands, including its acquisition of Kinko’s, now known as FedEx Office.
Portfolio rationalisation is high on the agenda, as consumer-products giants such as Heinz and Nestlé refocus spend on fewer, flagship brands, in order to improve the return on investment in marketing. The business-to-business world has followed suit, with the aerospace and defence corporation EADS rebranding its group and two of its business units as Airbus, the more famous brand used on its commercial aircraft. Similarly in 2013, technology and specialty materials company Celanese launched an eponymous, unified brand representing all the company’s businesses and previously associated brands.
Another strategy is to connect multiple brands and the parent brand within marketing communications. P&G’s “Thank you Mom” Olympic campaign featured several of its best-known brands and highlighted the company name. And through its Starwood Preferred Guest (SPG) reward programme, the hotel chain brings together all seven of its sub-brands.
These various examples arguably involve a smarter use of the marketing budget than single brand campaigns. The ubiquitous presence of the corporate brand also makes it easier to integrate newly-acquired brands into a portfolio, allowing them to retain their names and distinct attributes while still creating a link.
Creating and managing a brand network requires a higher level of coordination between different parts of the business, and a more frequent evaluation of portfolio and architecture opportunities. It requires new roles to manage the corporate brand and the brand portfolio, and the inclusion of portfolio decisions as part of the planning process. To achieve consistency to express the corporate brand, various functions such as PR, Corporate Communications, Corporate Responsibility and Investor Relations should also be more closely aligned
The effort should be worth it, enabling companies to present a consistent brand story across all their products and services, and instilling a strong set of brand values into every customer experience.
This article originally appeared on the Economist Lean Back blog