CONSUMER INSIGHTS FOR

S U S TA I N I N G B R A N D R E L E VA N C E

BRAND ARCHITECTURE:
DESIGNING YOUR BRAND
PORTFOLIO FOR SUCCESS
NEED A NEW
IMAGE-
ANOTHER APPLE?

Carol Phillips & Judy Hopelain

August 2015

A U G U S T   2 0 1 5   B R A N D   A M P L I T U D E ,   L L C     Copyright
    © 2015   Brand  Amplitude
  LLC                  
All Rights Reserved – May Not Be Reproduced Without Permission
 QUESTIONS  WE  ANSWER  HERE  

§  What  is  brand  architecture  and  why  is  it  important?  

§  What  are  the  various  roles  brands  play,  how  are  they  determined  and  why  are  they  
useful?  

§  What  is  the  range  of  brand  architecture  soluMons,  what  are  their  implicaMons  and  
what  determines  which  is  the  best  opMon?  

§  How  do  marketers  go  about  developing  architecture  soluMons  for  their  brands?  

§  How  does  this  work  in  the  real  world?    

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 BRAND  ARCHITECTURE  OVERVIEW  

Brand  architecture  is  part  organizaMon…   …and  part  military  strategy  

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 BRAND  ARCHITECTURE  DEFINED  

Architecture  is  about  opMmizing  the  hierarchy,  linkages,  and  roles  of  brands  within  the  
porRolio  in  support  of  the  business  strategy.  

Products,  business  units,  specific  services,  

markeMng  programs,  features,  line  
extensions,  apps,  web  sites,  etc.  all  need  
monikers.  
 
How  these  names  relate  is  the  difference  
between  brand  coherence  and  brand  
confusion.  

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 BENEFITS  OF  A  CLEAR  ARCHITECTURE  

Brand  architecture  helps  organizaMons  structure  their  brands  and  products  to  drive  value  
and  growth  by  enhancing:  

§  Clarity:  Clarifies  what  the  organizaMon  can  do  for  customers  by  providing  a  
coherent  face  to  the  offering  and  the  business  strategy.  
§  Efficiency:  Increases  markeMng  efficiency  by  ensuring  brand  leverage  without  
overstretching.  

§  Focus:  Provides  direcMon  for  where  to  focus  innovaMon  and  markeMng  
investments  by  disMnguishing  strategic  brands  from  others  in  the  porRolio.  
§  Growth:  Opens  up  new  opportuniMes  for  growth  by  lending  credibility  from  
exisMng,  successful  brands.  
§  Equity:  Enables  equity  to  flow  through  the  porRolio  by    
defining  the  relaMonships  between  porRolio  brands.  

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 BRAND  ARCHITECTURE  TAKES  AN  OUTSIDE-­‐IN  VIEW  

The  opMmal  architecture  usually  does  not  line  up  neatly  with  internal  organizaMonal  
structures  –  and  that’s  okay!      

Brand  Architecture  Is  Externally   OrganizaIonal  Structure  is  

Facing   Internally  Facing  

Masterbrand  
A   Corporate

Business Business
Unit Unit

Brand  B   Sub-­‐   Sub-­‐ Products Products

Endorsed  by  A   Brand  C   Brand  D  

Business  units  are  not  brands.  

Ingredient  or  Feature  

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 ARCHITECTURE  DEFINES  BRAND  ROLES  

Each  brand  asset  needs  a  clear  role  in  the  porRolio.  

Brand  Roles   Master  Brand  

Corporate   Company  name  and  legal  enMty.  Oaen  used  as  
Brand   endorser  but  may  not  be  customer  facing  at  all.  

Master   Drives  purchase  decision  and  defines  user   Sub-­‐Brand  

Brand   experience.  Most  strongly  represents  the  
differenMaMon  inherent  in  the  offer.    
(Driver)  
Endorser   Provides  approval,  credibility  or  guarantee  to  a  
Brand   range  of  products,  but  is  usually  not  the  driver.  

Sub-­‐Brand   Derives  equity  from  another  brand,  usually  the  

Master.  

Ingredient   Features,  materials,  components  or  parts  that   Endorser    

Brand   are  contained  within  other  branded  products.   Brand  
Not  an  equity  driver,  oaen  an  equity  energizer.   Clear  roles  simplify  decisions  
about  brand  expression    
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 ARCHITECTURE  ALLOWS  BRANDS  TO  PLAY  MULTIPLE  ROLES  

Sony  plays  mulMple  roles  in  its  porRolio  due  to  the  needs  of  the  business.  Some  offerings  
have  stand-­‐alone  brands  that  do  not  feature  the  Sony  name  at  all.  

Corporate  Brand  
 
     
Master  Brands   Sub-­‐Brand   Ingredient  Brand   Stand-­‐Alone  Brands  

Master  Brand:  Allows  equity   Sub-­‐Brand:  Leverages   Ingredient  Brand:  Brings   Stand-­‐Alone  Brand:  
to  be  shared  among  brand   the  strength  of  the   energy  and  news  to  an   Separates  offerings,  creates  
assets  when  used  in  either   master  brand  while   offering.  Always  used  in   new  sources  of  equity  or  
driver  or  endorser  role.       helping  to  separate  and   conjuncMon  with  another   targets  new  audiences.      
organize  the  offerings.     porRolio  brand.  
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 WHAT’S  INCLUDED  IN  ARCHITECTURE?  

Only  offerings  are  included  in  the  architecture.  Trademarked  or  licensed  branded  
elements  live  outside  the  architecture  and  enhance  equity  by  providing  uniqueness  and  
memorability.    
Branded Elements Are Not Included in Architecture

CelebriIes  lend   Characters  create   Sponsorships    

meaning   likeability   build  affinity  

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 BRAND  ARCHITECTURE  SOLUTIONS  

There  is  a  broad  spectrum  of  brand  architecture  soluMons.    

Spectrum of Brand Architecture Solutions

Hybrid  

 House  of   Branded  

Independent  brands,  each   Brands   House   Single  parent  brand  
maximizing  its  impact  on   spans  a  set  of  offerings.  
the  market.  

•  Builds  individual  strong  brands   •  Maximizes  markeMng  spending  

for  category  dominance   efficiency  

•  Limits  risk  by  containing  brand   •  Maximizes  awareness  among  all  

reputaMons  (good  for  high  risk   stakeholders  (i.e.,  investors,  
industries)   employees)  

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 MOST  SOLUTIONS  ARE  A  HYBRID  

Brand  architecture  soluMons  fall  on  a  spectrum.  Most  soluMons  fall  somewhere  
between  branded  house  and  house  of  brands.    
House  of  Brands   Hybrid   Branded  House  

Builds  equity  in  strong  stand-­‐ Leverages  strong  master  brand   Results  in  strong  master  
alone  brands  across  a  wide   while  allowing  flexibility.   brand.    
range  of  categories    

Requires  significant   Requires  careful  planning  to  avoid   Can  be  difficult  to  extend  
markeMng  investment   confusing  customers  or  diluMng   beyond  the  experMse  of  the  
Con the  master  brand.   master  brand.  
s

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 BRAND  ARCHITECTURE  SOLUTION  IMPLICATIONS  

Architecture  decisions  have  investment  implicaMons,  and  the  opMmal  soluMon  is  
determined  in  large  part  by  the  business  strategy.  

 House  of   Branded  

Brands   House  
Do  the  brands  address  the  same   Target  mulIple   Target  single  or  few  
or  different  customer  segments?   segments   segments  

How  important  is  it  to  represent  

the  brand  the  same  way  in   Address  individual   Reinforce  a  global  
different  geographies?   geographies   organizaIon  mindset  

Are  there  synergies  that  can  be  

Few  synergies  to  be   Many  synergies  to  be  
leveraged  between  different  
leveraged     leveraged  
brands  or  business  units?    

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 EXAMPLE:  DISNEY  BRAND  ARCHITECTURE  SOLUTION  

Disney  uses  a  mix  of  brand  architecture  soluMons  to  build  and  protect  its  diverse  businesses.  

Independent  brands,  each    House  of   Branded   Single  parent  brand  

maximizing  its  impact  on   Brands   House   spans  a  set  of  offerings.  
the  market.  

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 BRAND  HIERARCHY  EXAMPLE:  DISNEY  

Architecture  defines  clear  hierarchies….  

Brand  Type   DescripIon   Example  

Corporate  Brand   A  single  brand  targeted  at  mulMple  stakeholders  that  unites  the  
porRolio  of  brands  under  a  common  strategy  

Master  Brand   A  broad  brand  that  is  the  primary  frame  of  reference  for  the  
customer.    It  is  used  as  an  umbrella  across  a  wide  range  of  
product  categories,  services  and  geographies  that  can  exist  
without  the  support  of  another  brand.    
Category  Brand   Broad  groupings  of  product  and  service  offerings  that  reflect  
mulMple  customer  segments  that  use  similar  technologies.  

Sub-­‐Category   Groups  of  products  and  services  within  a  Category  that  help   Disney  Princess  CollecMon    
Brand   customer  find  relevant  offerings.    They  can  be  organized  around    
products,  applicaMons  or  customer  segments.  

Product  /  Service   A  collecMon  of  like  offerings  that  helps  simplify  the  buying  
Line  Brand   process  for  the  customer    by  signaling  a  unique  value  proposiMon  
relaMve  to  compeMMve  offerings.  

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 BRAND  RELATIONSHIPS  EXAMPLE:  DISNEY  

…and  relaMonships  among  brands  in  a  porRolio.  

RelaIonship   Best  used  when…   Example  

Primary   Brands  are  enMrely  consistent  with  core  values  and  posiMoning  of  
master  brand    

Shared   Core  values  of  the  brand  are  quite  consistent  with  the  master  
brand,  but  augmentaMon  is  needed  

Endorsed   Master  brand  equity  limits  the  brand’s  image  and  thus  
necessitates  some  independence;  endorsement  adds  credibility  
or  meaning  

Invisible   Brand  is  inconsistent  with  core  values  of  master  brand;  risks  
diluMng/eroding  parent  brand  

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 HOW  TO  DECIDE  WHICH  SOLUTION  IS  RIGHT?  

Three  guiding  principles  help  to  ensure  the  brand  architecture  has  the  opMmal  
business  impact:  

Right  Number   Sufficiently  cover  the  market  and  target  

customer  segments  with  the  fewest  
brands  possible.  
 

Clear  SeparaIon   Make  it  easy  for  customers  to  find  the  
soluMon  they  seek  by  ensuring  “daylight”  
between  brand  offerings.  

MarkeIng  Efficiency   Fulfill  customer  needs  (and  generate  

revenue)  while  minimizing  brand  
development  and  management  costs.  

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 ARCHITCTURE  DIRECTS  STRATEGIC  PRIORITIES  

Not  all  brands  are  equally  important.  Architecture  guides  decisions  about  innovaMon  
and  investment  as  porRolio  brands  compete  for  resources.  
 
Example  
 
Strategic  Brand   Significant  contributor  to  company’s  future  sales,  
percepMons  or  market  posiMon.    

DisInguisher   Enhances  the  differenMaMon  of  another  brand.  Also  

Brand   referred  to  as  ‘branded  energizer’  or  silver  bullet.    

Cash  Cow   Money  making  brand  that  does  not  represent  future  
significant  growth.  

Corporate    Brand   May  have  low  visibility  to  customers,  but  important  to  
regulatory  bodies,  investors,  employees,  trade  groups,  
partners.    
Fighter/Flanker   Addresses  compeMMve  threat.  Protects  share  of  other  
Brand     brands  in  the  porRolio.  

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 EXAMPLE:  AMAZON  

Amazon  keeps  its  strategic  businesses  separate  through  stand-­‐alone  brands,  and    
uses  an  endorsed  approach  for  its  other  brands.    
 

Cash Cow Strategic Brands Stand-Alone

Brands

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EXAMPLE:  STARBUCKS    

Starbucks  is  thoughRully  expanding  its  porRolio  to  separate  its  high  growth  and  
premium  businesses  from  its  mainline  coffeehouses  and  Starbucks  Express  stores.    

Cash Cows Strategic Brands Flanker/fighter

Brand

Starbucks Express format Starbucks Reserve

coffeehouses stores (2015) Roastery and Tasting
Room (Seattle)
Starbucks Reserve
stores (2015)

http://news.starbucks.com/news/starbucks-accelerates-growth-of-store-formats

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 WHEN  TO  REVISIT  ARCHITECTURE?  

It’s  Mme  to  revisit  brand  architecture  when  an  organizaMon  changes  strategic  direcMon  or  
adds  important  new  capabiliMes.    

Triggers  for  RevisiIng  Architecture    

§  Significant  merger  or  acquisiMon  
§  Too  many  brands  and  offerings  are  compeMng  for  
apenMon  and  investment  dollars   I have a problem
§  Corporate  brand  and  product  brands  have  the  
same  name  and  are  hard  to  disMnguish    

§  Brands  are  losing  relevance  with  customers  

§  Brand  meaning  has  been  diluted  or  stretched  
beyond  credibility  and  effecMveness    
§  Programs,  elements,  features  or  sponsorships  are  
asking  to  be  treated  as  brands  

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 EXAMPLE:  KELLOGG’S  BRAND  PORTFOLIO  RE-­‐EVALUATION  

In  2012,  Kellogg’s  restructured  its  brand  porRolio  to  beper  leverage  its  master  brand,  
acquired  stand-­‐alone  brands  and  Olympics  sponsorship.  
 
Stated  Reasons For
Revisiting Architecture

§  Acquired  new  brands   “We  had  to  start  separa7ng  out  the  Kellogg’s  brand  from  
the  Kellogg  company  …Kellogg’s  is  a  truly  iconic  brand  …
§  Needed  to  elevate  Kellogg’s   We  felt  that  having  a  stronger  brand,  driving  a  stronger  
corporate  brand  above  its  cereal   point  of  view,  a  more  powerful  iden7ty  and  have  at  the  
master  brand   center  an  umbrella  to  talk  about  our  por@olio  more  
§  Needed  to  strengthen  the  meaning   holis7cally,  to  talk  about  the  power  of  breakfast,  to  talk  
of  the  Kellogg’s  brand  beyond   about  the  value  of  cereal.”    
cereal  to  breakfast    
§  Wanted  to  leverage  investment  in  
2012  Olympics  to  benefit  all  
Kellogg’s  sub-­‐brands  

http://www.forbes.com/sites/jenniferrooney/2012/05/10/kelloggs-embarks-on-major-brand-overhaul/

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 EVALUATING  ARCHITECTURE  OPTIONS  

In  general,  we  evaluate  brand  architecture  from  a  handful  of  perspecMves.  For  example,  
having  more  answers  to  the  lea  in  the  assessment  tool  suggests  leaning  toward  a  House  
of  Brands  approach  is  best.  
Architecture  Assessment  
House  of  Brands   Branded  House  
OrganizaIon      
Product/service  brand  equity   Strong  equity   Low/no  equity  
MarkeMng  spend   Supports  mulMple  brands   Supports  few  brands  
Corporate  brand  equity   Low/negaMve  equity   Strong  equity  
     
CompeIIon      
CompeMMve  set   Fragmented   Consolidated  
     
Stakeholders      
Number   Many   Fewer  
Customer  needs   Diverse   Singular  
Cross-­‐selling  opportuniMes   Low   High  

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 BRAND  ARCHITECTURE  DEVELOPMENT  

We  use  a  four-­‐step  process  to  idenMfy  the  opMmal  architecture  soluMon.  

Overview  of  Recommended  Four-­‐Step  Approach  

 

 Strategic  Business   Brand  Architecture   AlternaIves   EvaluaIon  of  

Analysis   Mapping   Development     AlternaIves  

How  closely  aligned   How  aligned  are  external   What  are  the  various   Which  alterna7ve  best  
are  the  brand  and   and  internal  percep7ons   ways  the  por@olio   fits  the  short  and  long-­‐
business  strategies?   of  brands  and  their   could  be  configured   term  business  
roles?   going  forward?       objec7ves?  
 
 
 
 
 

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 REAL  WORLD  EXAMPLE:  McDONALD’S  CASE  STUDY  

Using  the  arches,  color  palepe  and  “Mc”  to  idenMfy  and  link  most  of  its  offerings  to  the  
master  brand,  it  is  a  prime  example  of  a  Branded  House  architecture.  

The  Branded  House  McDonald’s  Built  

“[McDonald’s] gave millions of Americans
their first jobs while changing the way a
nation ate.” Bloomberg Businessweek,
3/2/03

Tightly  associated  with  burgers,  fries  

and  soI  drinks,  the  brand  thrived  in  
the  ’80s  and  early  ’90s.  Through  
consistency  and  careful  brand-­‐
building,  McDonald’s  became  an  
American  icon.    

http://mrktspnkr.wordpress.com/2012/06/29/brands-as-
identifiers-functional-and-symbolic-images/

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McDONALD’S  CASE  STUDY:  TIMELINE  

There  were  signs  of  trouble  starMng  in  the  late  1990’s,  as  business  lagged  and  new  
products  failed.    
The  low-­‐fat  McLean  
Record  number  of     Spun  off  Chipotle  in   U.S.  comp  store  
Deluxe  and  Arch  
franchisees  lea   2006  to  refocus  on   sales  slipped  1.7%  
Deluxe  burgers,  
the  system  in   core  hamburger   in  Q1  and  1.5%  in  
meant  to  appeal  to  
2002   business   Q2  of  2014  
adults,  bombed  

1995   2000   2005   2010   2015  

Sales  stagnated   In  an  effort  to   In  2004,  “Supersize   Salads  represent  only  2-­‐3%  
while  costs   regain  relevance,   Me”  brought   of  McDonald’s  sales  in  the  
increased  as  the   McDonald’s   apenMon  to  what   United  States.  CEO  Don  
product  offering   acquired  Chipotle   too  much   Thompson  admiped  “I  don’t  
expanded/ Mexican  Grill  and   McDonald's  does  to   see  salads  as  being  a  major  
became  more   Boston  Market  in   your  body  and  how  it   growth  driver  in  the  near  
complex   1999   makes  you  feel.     future.”  (5/13)  

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 McDONALD’S  CASE  STUDY:  STEP  1  

Brand  Architecture  Development  Process  

 Strategic  Business   Brand  Architecture   AlternaIves   EvaluaIon  of  

Analysis   Mapping   Development     AlternaIves  

How  closely  aligned   How  aligned  are  external   What  are  the  various   Which  architecture  
are  the  brand  and   and  internal  percep7ons   ways  the  por@olio   alterna7ve  best  fits  
business  strategies?   of  brands  and  their   could  be  configured   the  short  and  long-­‐
roles?   going  forward?       term  business  
  objec7ves?  
 
Focused  on  health-­‐centric  
  global  ini7a7ves,  puQng  food  quality  first.  
Marke7ng  now  organized     by  consumer  groups  such  as  millennials,  families  
and  adults  rather  than  by     product.  
Stepping  up  digital,  including  e-­‐commerce,  fast-­‐tracking  tes7ng  of  mobile  
payments  and  ordering.    In  June  it  set  up  a  "learning  lab"  at  a  restaurant  in  
Laguna  Niguel,  Calif.,  to  beZer  understand  what  people  want  and  to  
experiment  with  customizable  burgers  

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 McDONALD’S  CASE  STUDY:  STEP  2  

Brand  Architecture  Development  Process  

 Strategic  Business   Brand  Architecture   AlternaIves   EvaluaIon  of  

Analysis   Mapping   Development     AlternaIves  

How  closely  aligned  

How  aligned  are  external   What  are  the  various   Which  architecture  
are  the  brand  and  
and  internal  percep7ons   ways  the  por@olio   alterna7ve  best  fits  
business  strategies?   of  brands  and  their   could  be  configured   the  short  and  long-­‐
roles?   going  forward?       term  business  and  
  brand  objec7ves?  
 
Execu7ves  worry  the  master  
  brand  has  lost  
  defected  to  fast  casual  
relevance.  Millennials  have  
chains  like  Chipotle  and  Five  Guys  and  Moms  no  
longer  see  McDonald’s  as  a  good  place  for  kids.    
Consumer  Reports  more  than  32,000  subscribers   hpp://www.businessweek.com/arMcles/2014-­‐09-­‐09/
mcdonalds-­‐happy-­‐meal-­‐problem-­‐kids-­‐turn-­‐away-­‐from-­‐fast-­‐food  

rated  McDonald's  burgers  the  worst-­‐tas7ng  of  20    hpp://www.chicagobusiness.com/arMcle/20140906/

ISSUE01/309069980/mcdonalds-­‐has-­‐a-­‐new-­‐generaMonal-­‐problem-­‐
rival  burger  chains.   kids#  
 
hpp://online.wsj.com/arMcles/mcdonalds-­‐faces-­‐millennial-­‐
challenge-­‐1408928743hpp://online.wsj.com/arMcles/mcdonalds-­‐
faces-­‐millennial-­‐challenge-­‐1408928743  
 

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 McDONALD’S  CASE  STUDY:  STEP  3  

Brand  Architecture  Development  Process  

 Strategic  Business   Brand  Architecture   AlternaIves   EvaluaIon  of  

Analysis   Mapping   Development     AlternaIves  

How  closely  aligned   How  aligned  are  external   What  are  the  various   Which  architecture  
are  the  brand  and  and  internal  percep7ons   ways  the  por@olio   alterna7ve  best  fits  
business  strategies?   of  brands  and  their   could  be  configured   the  short  and  long-­‐
roles?   going  forward?       term  business  and  
  brand  objec7ves?  
 
Branded  House  approach     makes  it  difficult  to  change  percep7ons.  Consider  
 
reserving  McDonalds  as  c  orporate  brand  and  build  equity  in  new  stand-­‐alone  
brands  and  sub-­‐brands.    
•  Sub-­‐brands  or  stand-­‐alone  brands  for  Kids  or  Millennials  or  other  priority   McDonald’s  applied  for  a  new  
targets  may  help  separate  new  ini7a7ves  from  current  offerings.     trademark  for  a  McBrunch  brand  
in  September  2014  
•  New  digital  ini7a7ves  provide  a  pla@orm  for  a  new,  more  relevant  brand.     hpp://adage.com/arMcle/news/
mcdonald-­‐s-­‐files-­‐trademark-­‐mcbrunch/
294911/?  

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 McDONALD’S  CASE  STUDY:  STEP  4  

Brand  Architecture  Development  Process  

 Strategic  Business   Brand  Architecture   AlternaIves   EvaluaIon  of  

Analysis   Mapping   Development     AlternaIves  
How  closely  aligned   How  aligned  are  external   What  are  the  various   Which  architecture  
are  the  brand  and   and  internal  percep7ons   ways  the  por@olio   alterna7ve  best  fits  
business  strategies?   of  brands  and  their   could  be  configured   the  short  and  long-­‐
roles?   going  forward?       term  business  and  
  brand  objec7ves?  
  Architecture  Assessment  
Key  evalua7on  criteria  relate     to  ability  to  support  the  
business,  build  new  sources  o   f  equity  and  beZer  address  
the  needs  of  Millennials  and    kids/Moms.  
The  assessment  illustrates  the  case  for  more  brand  
separa7on  to  enhance  appeal  among  Millennials  and  kids/
Moms.  

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 KEY  TAKEAWAYS  

§  Architecture  aligns  business  and  brand  goals  by  defining  clear  roles,  relaMonships  
and  investment  prioriMes  among  porRolio  brands.  

§  A  coherent  brand  architecture  makes  markeMng  more  efficient  and  effecMve  by  
ensuring  customers  and  other  stakeholders  understand  what  the  business  can  do  
for  them.  

§  House  of  Brands  and  Branded  House  are  just  two  of  many  possible  architecture  
soluMons.  Most  companies  used  a  hybrid  approach.    

§  Brand  architecture  should  be  revisited  periodically  to  ensure    

business  requirements  are  being  addressed  and  the  structure  is    
opMmal  for  supporMng  the  business  strategy.  

§  IdenMfying  the  opMmal  architecture  is  a  4-­‐step  process.  

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29  
 HOW  WE  CAN  HELP  

ü Audit  your  brand  to  idenMfy  gaps  and  opportuniMes    

ü Generate  ideas  for  closing  the  gaps  
ü Evaluate  your  brand  architecture  and  recommend  ways  to  increase  clarity,  efficiency  
and  equity.  
ü Develop  a  compelling,  energizing  brand  idenMty  and  audience-­‐specific  posiMonings  
that  align  with  the  idenMty  
ü Measure  and  track  your  brand’s  health  over  Mme  

Carol  Phillips   Judy  Hopelain  

@carol_phillips   @judyhopelain  
carol@brandamplitude.com   judy@brandamplitude.com  
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