Building a Powerful Brand Architecture Strategy

Posted on Nov 1, 2025 in Marketing

A robust brand architecture strategy helps marketers (mkrs) determine which products and services to introduce, and which brand names, logos, and symbols to apply to new and existing offerings.

Main Roles of Brand Architecture

• To Clarify Brand Awareness: Improve customer understanding of the offerings.
• To Improve Brand Image: Maximize the transfer of equity across products.

Three Steps to Develop an Effective Strategy

To successfully execute a brand architecture strategy, marketers should utilize brand portfolio analysis for Step 1 (determining brand potential) and brand hierarchy analysis for Steps 2 & 3 (branding particular products and services).

Step 1: Defining Brand Potential

Defining brand potential provides a clear sense of direction for the brand’s future growth.

1. Articulating the Brand Vision

   Focuses on the long-term potential of the brand. Example: Waste management companies use the vision: Think Green.

   It is key to understand the brand’s current equity to know what the brand could be built upon. The vision must be aspirational, allowing the brand room to grow and improve.

2. Defining the Brand Boundaries

   Based on the brand vision and positioning, this step identifies the specific products or services the brand should offer.

   Marketers must evaluate extending their brand carefully and launch new products selectively.

   *Note: To improve market coverage, companies often target different segments with multiple brands in a portfolio. The trend among many top marketing companies in recent years has been to focus on fewer, stronger brands. Each brand should be differentiated, and the market segment must be large enough to justify its marketing and production costs.

3. Crafting the Brand Positioning

   Effective brand positioning should offer both rational and emotional benefits. It must be:

   • Potent: To permit growth.
   • Relevant: To drive consumer and retailer interest.
   • Differentiated: To sustain longevity.

   Key components of brand positioning include:

   1. Competitive Frame of Reference
   2. Points of Difference (PODs)
   3. Points of Parity (POPs)
   4. Brand Mantra

Step 2: Identifying Brand Extension Opportunities

This step is about identifying new products and services to achieve the defined potential through a well-designed brand extension strategy. (Example: Nike)

A Brand Extension is a new product introduced under an existing brand name.

We differentiate between:

1. Line Extensions: New product introductions within existing categories.
2. Category Extensions: New product introductions outside existing categories.

*Warning: Too many brand extensions fail. Marketers must be rigorous and disciplined in their analysis and development of brand extensions.

Step 3: Branding New Products and Services

This involves deciding on the specific brand elements to use for any particular new product or service associated with the brand. (Example: Cherry Coke)

We can distinguish brand architecture strategies by looking at whether a firm employs a “Branded House” or a “House of Brands.”

Branded House vs. House of Brands

1. “Branded House”: Employing an umbrella corporate or family brand for all its products. This strategy requires a high degree of coherence, where objectives are linked to that specific market.
2. “House of Brands”: A collection of individual brands, all with different names. This situation allows for extreme freedom of management for the individual brands. (Example: Mitsubishi Motors and Electric divisions.)

Most brands adopt a strategy somewhere between these two end points, often employing various types of sub-brands.

Understanding Brand Portfolios and Hierarchies

Brand portfolios and brand hierarchies, by defining various relationships among brands and products, help characterize and formulate brand architecture strategies.

Brand Portfolios

A brand portfolio includes all brands sold by a company in a product category. Market coverage is the primary reason for a firm to have multiple brands in the same category, ensuring potential customers are noticed.

Brand overlap must be minimized so that brands are not competing among themselves. Each brand should have a distinct target market and positioning. Multiple brands allow a firm to pursue different price segments, different channels of distribution, and different geographic boundaries.

Summary: Multiple brands can expand coverage, provide protection, and extend an image. In all brand portfolio decisions, the basic criteria are to minimize overlap and get the most from the portfolio. Each brand-name product must have (1) a well-defined role to fulfill for the firm and, thus, (2) a well-defined positioning indicating the benefits or promises it offers consumers.

Types of Brand Architecture

Examples of brand architecture types based on hierarchy levels:

• Product brands (1 Level – P&G)
• Maker’s mark (2 Levels – Ferrero)
• Endorsing brand (2 Levels – 3M)
• Masterbrand (1 Level – Sony, Nivea)
• Source brand (2 Levels – L’Oréal)

Why Have Several Levels?

• Lower levels communicate information specific to the products, differentiating the product from everything else.
• Higher levels indicate origin and source, providing power, stature, and reassurance.

How Many Levels Should a Brand Architecture Have?

• Developing higher levels is economical.
• Too many levels provide too much information and can be too complex for consumers. Consumer involvement is an important determinant of complexity tolerance.

Evaluating Brand Architecture Strategy

In evaluating a brand architecture strategy, marketers should ask a number of questions, such as:

• Brand Portfolio Assessment: Do all brands have defined roles? Do brands collectively maximize coverage and minimize overlap?
• Brand Hierarchy Assessment: Does the brand have extension potential (within the category or outside)? Is the brand overextended?
• Equity Transfer: What positive and negative brand equity implications will transfer from the parent brand to individual products? What feedback exists from the individual products to the parent brands in turn?
• Profitability: What profit streams result from different branding arrangements? How much revenue does each brand generate? At what cost? What other cross-selling opportunities exist between brands?

Five Guidelines for Marketers

Marketers should keep the following five guidelines in mind when developing brand architecture:

1. Adopt a Strong Customer Focus: Recognize what customers know and want, and how they will behave.
2. Create Broad, Robust Brand Platforms: Strong umbrella brands are highly desirable. Maximize synergies and flow.
3. Avoid Over-Branding: Do not have too many brands.
4. Selectively Employ Sub-Brands: Sub-brands can communicate relatedness and distinctiveness and are a means of complementing and strengthening brands.
5. Selectively Extend Brands: Brand extensions should establish new brand equity and enhance existing brand equity.