PBL session 3

Brand architecture and brand strategy

1. Compare the brand strategies and architectures of different companies. How and why are they different?

Let's first have a look at what brand strategy and brand architecture mean.

Brand Strategy (several definitions):

• Long-term marketing support for a brand, based on the definition of the characteristics of the target consumers. It includes understanding their preferences and expectations from the brand. (Business Dictionary)
• A long-term plan for the development of a successful brand in order to achieve specific goals. A well-defined and executed brand strategy affects all aspects of a business and is directly connected to consumer needs, emotions and competitive environments. (Aytm)
• A brand strategy is a formal plan used by a business to create a particular image of itself in he minds of current and potential customers. When a company has created and executed a successful brand strategy, people know without being told who the company is and what they do ... As a result, people develop a particular feeling or opinion about a company. This equates to brand equity (the stronger the brand equity, the stronger people feel about a brand). (Study)

In my Marketing course in the first year back in Belgium, my teacher defined brand strategy according to the subdimensions:

• Brand positioning
• Brand personality
• Brand name
• Decisions about extentions

Brand architecture:

• The way in which a company organises and names its products in order to show consumers the differences and similarities between them. (Cambridge Dictionary)
• Describes how a family of brands relate to one another. It indicates how many levels of branding there are, which brands are at each level, which brands relate as brand/sub-brand... (Branding Strategy Insider)

As I mentioned in a previous PBL preparation, you have three kinds of brand architectures:

• Branded identity: daughter company has its own identity and seems to be loose from the mother company. It has its own look and feel, communication, logo... - f.e. Pepsico has Lays
• Endorsed identity: daughter company has its own symbolism and communication, but the mother company's identity remains visible - f.e. Nestlé and Unilever (parent visibility plays a role here too: how visible is the logo from the mother company)
• Monolitic identity: daughter companies have no identity of their own. They just copy that of the mother company - f.e. BMW, Philips, Shell...

Here are a couple of illustrations:

NOTE: sometimes other names are used, for example 'house of brands, braded house, individual blended, hybrid...'

How and why are companies different? Some companies obtain for a monolitic identity for the sub-brands, other ones want it endorsed. I think it all has to do with the similarity between the products. If your products are quite similar, it is a waste of money to make a new brand for it. Same for the look and feel. If a brand has an entirely different positioning than the mother brand, it is useful to obtain for a branded or endorsed identity. (see more question 3)

2. What brand architecture models do companies you know use?

Toyota: hybrid (branded and monolithic) - Toyota has Toyota itself, but also Lexus, which has a completely different look and feel/positioning than Toyota.

Well-known P&G: branded - alle the sub-brands have their own positioning and are seen as different brands 

Unilever: branded (endorsed) - all the sub-brands have their own positioning, but most of the time you can find a little U standing there as well. Although it's a little parent visibility, it's still there.

An Belgian University KULeuven Association is branded and monolitic: it has KULeuven itself, but besides that different other schools (Thomas More, UCLL, Luca, Odisee en Vives).

 

3. Which brand architectures are good for different products and services?

I've already mentioned it a couple of times, but I had a lot of relatable informations in courses at home. In my Marketing Course I used the Dutch book 'Marketing: de essentie' from P. Kotler and G. Armstrong (10th edition). In this book, Kotler and Armstrong mention different advantages and disadvantages for each of the brand architecture types.

Branded Identity (individual)

You usually use a branded identity if all the different products you have are very different (not only in shape, but also in look and feel or status). Lexus, for example, has a completely different positioning than Toyota. A branded identity is the best idea for this product. Same for the products of P&G. They have too many products in too many categories to launch them under the same name. It makes the customers confused. 

Advantage: 

• A lower risk if the mother company fails in one sub-brand. It won't influence the others.
• Customers feels like he has more choice

Disadvantage:

• The sub-brands can't benefit of the mother company having a good name/image
• High marketing costs

Endorsed Identity 

You usually use this if the products you sell are a bit more similar. There is some kind of unity in the separate brands.

Advantage:

• You can benefit a little bit better from the good image of the mother company
• Customers still feel like they have a choice

Disadvantage:

• Marketing cost slightly higher

Monolithic Identity 

You use this if all the products you sell are quite similar to one another. 

Advantage:

• Lower marketing cost
• Benefit from the mother company's image

Disadvantage:

• If you fail in one sub-brand, it will affect the other brands as well

According to this Article from Rajagopal and Romulo Sanchez (2003), brand architecture reflects the brand characteristics of the product market. If products are strongly culturally embedded, local or national brands are more likely to proliferate. You can then focus on local preferences. If the customer preferences and desired product attributes are quite similar worldwide, there are greater opportunities for global or international brands at the corporate level.

4. Analyse the brand strategy and architecture of a chosen company

Let's have a look at Kellogg's. Kellogg's uses an endorsed and branded identity. The K or 'Kellogs' is mentioned in some brands (for example Special K, Rice krispies, Coco Pops...). They really focus on bringing Kellogg's as a brand of great quality.


As you can see, 'Kellogg's' is often mentioned.

Although Kellogg's is in a very competitive environment, they manage to stand out and remain a good reputation. Kellogg's is for example very good at digital marketing. Kellogg's head of digital marketing, Nadeem Amin says the key is to engage with your customers and remain authentic.

One of Kellogg’s recent initiatives was the Open for Breakfast campaign, which saw the brand responding via a dedicated digital channel, www.openforbreakfast.com.au, to consumer queries about anything and everything relating to its cereal brands including Special K, Corn Flakes, Rice Bubbles and Nutri-Grain. The questions and responses were then shared social channels, and not only include static content but also videos, infographics, images and vox pops.“We talked about everything from how we make our cereal, what we believe our breakfast provides to our environmental responsibility,” Amin said. “It invites consumers to ask any question they would like to ask us and we promise to give them open and honest answer.”

Kellogg's mission has always been to make people aware of a healthier lifestyle. The brand focuses on fitness.

Sources for this question:

• Kellogg's' site
• CMO
• Marketing91