Brand Architecture: What Is It?

Navigating brand architecture might sound complex, but at its core, it’s simply about clarity. Today, we’re breaking down exactly what brand architecture means, why it matters, and how getting it right can significantly streamline your customer experience and drive your business forward.

What is Brand Architecture?

Brand architecture is a strategic framework that determines how your company’s brands, products, or services relate to one another and how they will be presented in the market.

It can commonly be mistaken for the company’s organizational structure. Some assume that how they are legally or operationally structured is the same as how they have to go to market. But that’s actually not the case.

For example, a company may be structured like this:

But go to market like this:

In its simplest form, brand architecture is your brand portfolio strategy. The ultimate goal is to make it easy for customers to understand what you do and how what you have to offer relates (or doesn’t.) It makes it easy for your customers to buy based on how they want to buy. The most effective brand architectures align with how customers naturally think about your business. 

Types of Brand Architecture

There are four common types of brand architecture systems that are typically used. Branded House, House of Brands, Endorsed, and Hybrid. Let's take a closer look at each one.

‍The Branded House (Masterbrand)

This architecture is usually one of the easiest to understand as the parent brand is the star. This portfolio strategy emphasizes a unified brand identity across all products and services.

The Branded House architecture usually has two classifications: monolithic and sub-brands.

Monolithic

Monolith demonstrates little to no distinction between its product and service brands.

Sub-brand

Product and service brands are closely tied to the parent brand, but they have some unique characteristics.

Pros: 

• Easier to create brand equity under one brand identity
• Typically easier for customers to recognize products, and understand their relationship to other products and services
• Valuable when all products and services can be targeted to the same audience(s)
• Streamlined resources for brand management and typically more cost-effective for marketing purposes

Cons: 

• If one product or service develops a bad reputation, it can impact the other products and services
• It can be harder to maintain if your company grows into new markets with different audiences

Endorsed Brand

Sitting in the middle of a Branded House and House of Brands is the Endorsed Brand. Under this model, sub-brands have their own unique brand identity, but are endorsed by the parent brand.

Pros: 

• Individual brands can still have their own unique identity while gaining credibility from the parent brand
• Endorsement can build trust for those already loyal to the parent brand
• Allows for more flexibility for the individual brands to carve out their own brand elements

Cons: 

• The parent brand can become diluted; quality may not be the same across all endorsed brands
• Negative spill-over can occur if one endorsed brand gets a bad reputation
• Often more cumbersome to manage with different brand standards, marketing, etc.

House of Brands

Sitting at the other end of the spectrum is House of Brands which uses a different logo and name for every brand. Here, there is usually no visible connection to the parent company.

Pros:

• Brands are independent and usually hyper-targeted to specific audiences
• One brand's negative publicity or reputation doesn't affect the others as easily
• Provides the opportunity to create different visual identities for each brand
• Greater flexibility to launch and experiment with new brands and/or discontinue brands

Cons:

• Higher marketing and operational costs to manage multiple independent brands
• Brand equity is not as transferrable across the portfolio of brands
• Requires more resources and effort to maintain consistency

Hybrid Model 

The chameleon of all architectures, and often the most complicated, is the Hybrid model. In this case, some brands have the parent name/logo, and others have their own independent brands. At times, there may even be endorsed brands as well.

Pros:

• You can target many different customers because the sub-brands have different brand strategies
• May reduce risk across the brand portfolio if reputation damage occurs
• Can allow for shared resources and efficiencies for some brand components

Cons:

• Consistency can be challenging to manage and govern
• Brands can become diluted and weaken brand strength
• Typically more resource-intensive and complicated  
• Can create internal conflict or competition amongst brands
• Customers may struggle to see the connection between brands; weakened brand equity

Brand Architecture in Real Life

When brand architecture isn't clearly defined and thought through with a long-term perspective, brand confusion can slow down sales and frustrate potential customers. Let's take a look at a couple of real-life examples.

Too many names, not enough focus on customer value

One of our clients learned the importance of thinking through brand architecture and naming the hard way. They were complicating their sales process by assigning unique names and logos to nearly every product—even though their internal marketing resources were limited and their sales cycle lengthy. Rather than aligning with how customers naturally thought about their solutions, the sales team communicated based on their own internal organizational structure, resulting in unnecessary complexity and confusion. Here’s how that scenario played out:

Jupiter: Parent Company

Cyrus: Software Division

Jero: SaaS platform

Cirix: Enterprise solution

Exero: SMB solution

(For the purpose of this example, we have substituted the actual brand names, but used them in the same context.)

Imagine being a customer, and in the first few minutes of the sales pitch, you hear something like this:

Hi, I’m Jared, the SVP of Sales Engineering at Jupiter. I’m excited to talk to you today about our Cyrus division and what our Jero platform can offer you. Jero is our SaaS platform that offers Cirix or Exero, depending on what best suits your business needs. Cirix comes with our innovative predictive analytics learning technology and artificial intelligence. Exero is our analytical solution tailored to your customized needs.

Huh? Come again? 

It’s one thing to read it in written form, it’s an entirely different thing to listen and try to keep track of all the names and moving parts. 

Realistically, the company only had one solution, and when you really peeled back the layers, the enterprise and SMB solutions weren’t that different. One product offering had a few more features, but nothing substantial to warrant a completely separate product name and visual identity.

Ultimately, the company was repositioned under a Branded House (Masterbrand) strategy where the architecture and naming were drastically simplified. Jupiter was the brand. They offered a SaaS solution. And they offered three pricing options depending on the number of users you needed. 

The end result: more deals closed in less time with fewer resources.

Brand spillage of the worst kind

For the sake of this insight, we'll call the company ABC Corp.

ABC Corp had been in business for nearly a decade and had successfully built a strong parent brand. With their growth, they had acquired several companies. Some targeted the parent brand's audience, others did not.

They were also about to launch a new brand––one that was in an adjacent industry as the parent brand, but focused on completely different audience sectors. This is how we were first introduced.

Before applying an architecture and naming strategy to the new brand, we paused to ask the question: "Why did you decide to go to market as ABC Corp for all of your products and services?" The looks we received spoke for themselves––consideration had not been given to the brand architecture or naming. The pros and cons had not been considered other than assuming the parent brand's reputation was strong, and adding more companies, products, and services would be perceived as growth.

As we polled ABC's audience, our research proved otherwise.

Many of ABC's clients and partners no longer thought of them the same way. Beyond being confused and thinking the brand was trying to be everything to everyone, some of the company acquisitions had created significant brand spillage of a not so favorable experience. Though some of the companies had became ABC Corp, while others assumed the endorsement "An ABC Corp Company", much of their company culture and operations went untouched. And somewhat unknowingly, had damaged ABC's reputation.

Internally, the research demonstrated a fragmented, semi-dysfunctional culture. The same company signed their paychecks, but employees felt the need to compete with the other "segments" within the company. Some employees went as far as to say "The competition between our companies internally is worse on the inside than it is with our outside competitors."

In this situation, a Hybrid approach of Masterbrand and Endorsed wasn't necessarily the right strategy. And our research wasn't the only indicator of that. Finance and human resources had the proof as well.

Ultimately, without a thoughtful and intentional brand architecture strategy, what appeared to be growth on the surface was, in reality, creating confusion, eroding brand equity, and fueling internal dysfunction—proving that how a brand is structured in the market can be just as important as what it offers.

Quick take

Brand architecture isn't just a strategic exercise–it's a foundational element that shapes how your business is perceived and experienced in the market. Getting your approach wrong cannot only impact top-line growth but erode your bottom line as well. Whether you're building a brand from scratch or managing through a growing portfolio, your brand architecture can directly impact your business success.

If you need help figuring out the best approach for your business, we're here to help. Get in touch.