Question: "What I
need to do is help educate others (and myself) on the latest thinking on a
branded house vs. a house of brands or a combination of both.
As we are looking to expand
our membership and our business offerings, I need to be prepared to discuss and
recommend what might be the right approach."
Answer:
Branded Houses
Most organizations operate
as branded houses to some degree. That is, most organizations use their
organization brand at least to some degree when communicating about the
organization’s products and services. The organization may have many sub-brands
or the organization brand may endorse certain other brands or some combination
of the two, but usually the organization brand is somewhere in the mix.
In this scenario, the
organization brand should stand for something and it should present itself as a
brand, not a financial holding company. For instance, if the original
organization brand has “Holding Company,” “Financial Assets” or something
similar as part of its name, that does not help the organization brand feel
like much of a real brand, but rather as a conglomerate that acquires other
brands.
At a minimum, the
organization brand should stand for quality or innovation or responsiveness or
some other admirable quality. However, it would do well to stand for something
more than that too – perhaps the fulfillment of a particular customer need,
leadership in a particular category or adherence to a particular set of
admirable values.
Many organizations are more
complicated than this in their architectures. In addition to an organization
brand and many sub-brands and endorsed brands, they may also have some
stand-alone brands. Very complicated organizations may have multiple levels of
branding. Large and complex universities often have four or more levels of
branding. Having said this, we strive to help our clients simplify their
architectures so that they have no more than two levels of branding, as that is
all a typical person can remember.
Ideally, sub-brands are
chosen primarily to make the parent (or organization) brand more relevant to a
particular customer need segment or product or service category. But the
sub-brand and parent brands are linked in a way that the assurance comes from the
parent brand and the credit primarily goes back to the parent brand.
Houses of Brands
In contrast to this, some
organizations are houses of brands. Unilever, P&G and other traditional
consumer packaged goods companies fall into this category. Organizations that
follow this path are marketing-driven organizations in which each separate
brand is supported by an expert marketing staff and a substantial marketing
budget. The advantage of this is the creation of numerous strong independent
brands. The downside of this is the significant resources required to support
such an approach. Few organizations have the marketing talent and financial
resources required to make this type of approach successful.
The key in deciding between
these two approaches is a realistic assessment of your organization’s capacity
and will to support a house of brands. Regardless of the approach you take, in
brand architecture, simpler is always better, not only for cost savings reasons
but also because it simplifies customer decisions.
I wish you great success in
your brand architecture discussions.
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