How is a House of Brands different from a Branded House? Why is there a current shift towards fewer brands? The Brand Architecture Spectrum lets companies see where they are now and whether they need to change to support their business strategy.
If you google Brand Architecture Spectrum at the moment you will almost certainly have a near top result for coca cola. That's because last year they made a pretty big shift in their brand architecture to what is known as Branded House.
This is where your product range is very close together in brand terms. Some say Coca Cola have done this to save a colossal amount of money from their advertising budget. Now Diet Coke is pretty similar to Coke Zero and they can run a single advertising campaign instead of four.
Coca Cola is now a Branded House, saving costs in the process:
The Brand Architecture Spectrum has four zones:
- Branded House
- Sub Brands
- Endorsed Brands
- House of Brands
By having these four zones it help businesses understand where they sit currently and if their brand strategy needs to change to align with their future business strategy. Ultimately the end objective is to maximise your opportunities in the markets that you currently or plan to operate in.
You can clearly see the difference in the brand strategy between these four global brands:
Branded House and Sub Brands are easier to manage and can be less confusing for your audience. The risk is that you do not convey your full suite of goods or services to maximise sales.
Endorsed Brands are standalone but show a link back to the parent brand. This offers reassurance and can help to cross sell. The risk is that the parent brand can easily be overlooked and also appear to confuse the audience as the individual brand still needs to be strong.
House of brands is useful if you have many different products and/or services and you operate in diverse markets. But the downside is that it is costly to manage many brands and opportunities for cross-selling will be limited.
The race to have less brands
I believe that there is a trend of moving brands towards or into the Branded House category with many more large companies other than Coca Cola streamlining and killing off brands so that they can be more responsive, nimble and save costs.
It can also be argued that too many brands is just too confusing and audiences are turned off by messages that feel too complex. This means the middle ground may not be a desirable option.
What can SME's do?
Smaller businesses should take note too. If this is happening with the world's largest brands there must be good reason and it would be wise to review your brands – both internal and external – to make sure you have the right strategy in place.
Think about what the audience wants to hear. How much do they need to understand and remember all whilst you move move them to a positive or buying position.