The relationship between the corporate brand, consumer brands, sub-brands, products, product variants and acquired businesses in a company’s portfolio is defined by brand architecture. Brand architecture also determines how the corporate brand plays a part in the marketing of products and services, and is in particular important when a company has a complex brand and product portfolio.
In part 1, we covered the two extreme types of brand architecture – branded house, which describes a company with many products and offerings under one masterbrand and house of brands, when a company has varied products and offerings but markets them with their own identities.
Today, we look at what’s in-between the two extremes: sub-brands and endorsed brands.
The sub-brands architecture is closer to a branded house strategy, in that the masterbrand most often acts as a key driver. In some cases both the masterbrand and sub-brands are considered co-drivers, but the sub-brand is never stronger than the masterbrand.
This brand architecture type is often reflected in the naming pattern: the masterbrand starts off the product title and the sub-brand follows it. A good example of where this is used is the range of MTV channels. For instance, MTV Rocks and MTV Dance are two names in the MTV brand, where MTV plays the major role and “Rocks” and “Dance” build new associations, reaching out to different audiences with different music tastes. Also products such as Pepsi Max or Nivea Q10 have strong parent brands acting as the key drivers. There are also cases, where the masterbrand and sub-brand are seen as co-drivers. In Sony PlayStation, the two brands are equally strong as are “Adidas” and “Originals” in Adidas Originals.
The sub-brands architecture is convenient when you want to extend your main brand to new target audiences – for example, Disney Junior targeting a younger audience than the Disney masterbrand. The architecture also works when attempting to enrich the masterbrand with new associations, whether you want to make it a bit younger, edgier or more premium. It’s also a good strategy when you have a limited marketing budget and want to build the sub-brand’s awareness based on what has already been built by the masterbrand. Finally, it’s effective when reputation risk related to different products is low, as a problem with a sub-brand can affect the masterbrand.
In contrast to sub-brands, endorsed brands are closer to the house of brands architecture. As with a house of brands, endorsed brands see many products and offerings under separate brands, but they are supported by the masterbrand. In this case, the endorsed brand plays a major role, has a separate identity and uses the masterbrand’s endorsement as a quality stamp – it helps the endorsed brand build awareness and trust. However, unlike sub-brands, endorsed brands have only limited potential to enrich the masterbrand.
The naming structure of an endorsed brand sees the endorsed name first, followed by the masterbrand. Also the logo and branding of the endorsed brand is more prominent than that of the masterbrand. Examples of brands fitting this strategy include KitKat with endorsement from Nestlé, Xbox from Microsoft, Courtyard by Marriott and Munchies strongly supported by Vice. A popular approach within this framework is the linked name strategy, where the endorsed brand’s name is based on the masterbrand’s name. Examples include Nescafé, based on masterbrand Nestlé, and Danio, which comes from Danone.
The endorsed brands architecture is a good choice, when you want to target different audiences, while continuing to use the power of the masterband. It also works, when you want to build different propositions and new associations for different products. Similarly to the house of brands architecture, you need a substantial marketing budget to build awareness of each endorsed brand. However, the presence of the masterbrand in branding and communication should make this job a bit quicker and cheaper. In terms of the reputation risk, endorsed brands rarely affect other brands in your portfolio.
Despite the fact that in theory the four brand architecture types are distinct and seem to imply separate strategies, there are many companies which successfully apply all of them at the same time. For example, Nestlé, L’Oréal and Danone have complex brand and product portfolios and use sub-brands and endorsed brands as well as branded house and house of brands simultaneously.
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