The digital revolution and the proliferation of information, access, and feedback are forcing firms to reconsider many of their marketing practices. As Dartmouth’s Tuck School of Business Professor Kevin Lane Keller writes, marketers are adopting new processes, abandoning old ones and updating others to improve their odds with consumers.

The concept of brand architecture, Keller believes, has seen several significant changes in the digital era. As it always has though, architecture must be rooted in a realistic strategy to determine the brand’s potential, its elements, and its positioning to consumers.

Even in the digital era, companies have continued to support fewer, stronger “umbrella brands,” so long as the firm can truly deliver on the brand promise in each and every category under the umbrella. Virgin, for example, has adopted a brand promise of “satisfying unmet customers’ needs,” which could be applied to virtually any category. Though strong umbrella brands are highly desirable, firms must carefully consider their brand boundaries to maintain perceived credibility and to keep from spreading brands too thin.

Brand extensions will still be attractive in the digital era but are also not without limits. Once boundaries are established, firms can plan how to best expand equity into new products and categories. Keller believes marketers must exercise caution, though, as online product feedback will kill undifferentiated brand extensions.

A glut of real-time consumer feedback also demands that brand architecture and hierarchies be as simple as possible. Product comparisons proliferate online, and consumers will benefit from an ease of understanding, both within a brand family, and among other brands.

Many of the principles of brand architecture, Keller believes, continue to apply. But a competitive digital environment is here to stay and marketers must be acutely aware of the ways in which some the rules have changed.

The full article is available on WARC here.

The post Mastering brand architecture in a hyper-competitive digital era appeared first on Vivaldi.

Today’s consumers are tight on time and attention, and care less about brands than they do about alleviating their daily challenges. These behavioral shifts coupled with advances in technology demand that traditional concepts like brand architecture – the hierarchical representation of a firm’s portfolio of brands and products – be rethought as network-type structures that facilitate interactions.

Brand architecture defines what a business stands for and how it’s perceived. No business can ignore it.

Traditionally, brand architecture has been a question of naming or design, guided by tools such as the “Branded House vs House of Brands” spectrum. However, leading strategists, Erich Joachimsthaler and Agathe Blanchon-Ehrsam observe fundamental shifts that demand a new approach to architecture strategy:

1. The global economy is shifting from siloed and closed to open and collaborative;
2. The consumer context is changing, with consumers now in control; and
3. Consumers have an abundance of products and services to choose from.

Unlike their antecedents, the authors write, today’s brands are no longer built simply to protect or insulate. Winning brands are cultivated to create interactions and convey an understanding of consumers’ lives. They must adopt architecture models that are more fluid, flexible, and adaptable, following three key imperatives:

1. Encompass the ecosystem of value creation;
2. Establish a foundation of data, technology, and analytics; and
3. Define a user-centric strategic logic.

Consider Amazon, whose brand “faces” can range from physical bookstores to kitchen cabinet-mounted Dash buttons. Both can serve as portals to greater offerings. Amazon presents itself according to how consumers most need it, and their data proves no two consumers are identical.

Innovative architecture models present consumers with simplified portfolios and clarified offerings. And as the authors demonstrate, businesses can wield the potential to create entirely new competitive advantages for their company or brand.

The full article is available on WARC here.

The post Brand Architecture: New Solutions to Old Problems appeared first on Vivaldi.

Today’s brand management requires flexibility, and rapid experimentation requires nimble speed. In our always-on business environment, teams need to be empowered to respond with agility. So, how does this play into practical measures for establishing your brand architecture strategy?

Here are five clear steps to make it all come together:

#1. Consider the Full Portfolio Ecosystem

Everything is connected, so be sure to extend your audit of the current state of your architecture to include your full ecosystem. Think beyond your own portfolio of products, considering all the ways in which you add value to your customers – including your partnerships, ancillary products that work together with your own, and more.

• Understand your extended frame of reference and how customers view/define the category by mapping your customers’ most frequent use cases
• Take into consideration the products and service elements that are part of the broader value proposition to your customer, not just your product suite

Taking this broad view will help clarify challenges to address and opportunities to leverage.

#2. A Forward Thinking Brand Architecture Strategy

Always be preparing the future. By proactively adopting a forward-thinking perspective, you’ll establish organizing principles that help ensure a durable brand architecture – one that can be “stretched” appropriately when required.

• Think through the strategic vision of the organization and future growth scenarios (even beyond those that may be formally considered) in order to explore how future plans or business directions could impact the new architecture
• Align the new brand architecture strategy with the larger purpose of the organization, creating a clear connection between the overarching company story and the organizational logic of the architecture, thereby ensuring that they can evolve together

Be sure to keep future possibilities in mind when developing the critical drivers and organizing principles which will shape your architecture recommendations.

#3. Re-balance Your Stakeholders

As you develop and evaluate possible portfolio scenarios, it’s incredibly important to broaden the set of stakeholders considered. Up to now, your brand architecture may have been focused on customer needs and simplifying their decision-making processes. But the role of brands is shifting from communicating with customers about product differentiation to defining broader value creation for a multiplicity of stakeholders.

• Understand how your various stakeholder groups think and link brands together in a portfolio
• Develop a range of scenarios, thinking through options of portfolio structures, brand hierarchies, and architecture relationships that satisfy the needs of your many stakeholders – note that these may diverge and lead to opposing scenarios
• Evaluate the scenarios using a combination of brand, business, and multi-stakeholder screening criteria to understand trade-offs between stakeholder needs and interests
• Consider conducting qualitative or quantitative research across your stakeholder groups to validate the architecture recommendation

Take a note from the success of new autonomous car brands: no longer dependent solely on convincing the consumer buyers, these brands must also attract the support of sophisticated partners, tech ventures, local governments, safety researchers, etc. Accordingly, your own brand architecture will also need to be increasingly meaningful to all the stakeholders who you are hoping to attract.

#4. Empower Teams by Creating Clear Boundaries

To harness that nimble agility that’s key to success in the digital age, make sure to build for flexibility, developing easy-to-use tools that allow for effective real-time decision making.

• Anticipate that unexpected scenarios will pop up before it is time to rethink the entire brand architecture strategy
• Develop brand guidelines that clarify key nomenclature and levels of branding in the recommended architecture in a way that is adaptable and modular, not uniform or static
• Create clear decision trees to help guide future decision making, and outline exceptions to the rule; this will help solve brand architecture questions as they arise
• Enable actionability for all parties involved in marketing – not just for internal stakeholders, but also for partners, agencies, vendors, etc.
• Reassess frequently, with a willingness to adapt as markets change

The right processes, tools, and governing bodies can allow a brand architecture strategy to morph and satisfy the needs of the team, helping them to meet evolving demands and take advantage of arising opportunities.

#5.  Include the Brand Architecture Strategy as Part of the Employer Value Proposition

Last but not least, don’t forget the internal perspective – that will help employees connect the new brand architecture with the larger purpose of the organization, understanding how their individual efforts directly contribute to the broader mission of the company.

• Consider current and new employee needs as you evaluate scenarios, including retention and recruiting challenges as well as opportunities tied to certain brand equities and relationships
• When developing the migration for the new brand architecture strategy, make sure it includes both an action plan for the brands themselves as well as detailed tactics and guidelines for sharing and explaining the changes to employees

With the freelance economy on the rise and a continuing talent shortage, employer names will be an increasingly important signal and shorthand for projecting a brand’s culture and workplace. This is something to keep in mind when launching a new division or acquiring a new business.

Learn how Vivaldi is helping companies across industries create stronger brands. 

The post Five Steps to a Modern Brand Architecture Strategy appeared first on Vivaldi.

Q: In a changing industry context, how does brand architecture help solve some of the major challenges that companies grapple with?

 A: Most industries today are changing at a rapid pace. As a result, many companies have legacy brand architecture systems that may have served them well under old paradigms but these systems are no longer truly supporting the current strategy and go-to-market approaches. It’s important to keep a sharp eye on your architecture system to ensure that it fits what your customers need, and how your business model is evolving. In many instances, revisiting your brand architecture can be an opportunity to shift from an inside-out view of how products are organized, to an outside-in view of how customers see them.

Q: If brand architecture is one of the many challenges of the modern marketer, how important is brand architecture relative to other initiatives in order to drive growth?

A: Brands are incredibly important and brand architecture is the vehicle by which customers make sense of the overall portfolio of brands. Brand valuations vary by industry, but in some cases – such as heavyweight consumer brands – they exceed 50% of the shareholder value. So your brand and its architecture are critical to building company value.

If your brand architecture is muddied, confusing, or overly complex, it can impede value creation. For example, if your offering requires a lot of explanation by your frontline employees, that’s a clue that you should take time to assess your architecture. Ideally, your architecture is as seamless and straightforward as possible for customers to navigate, in order to support a frictionless customer experience and an easy decision-making process.

Q: What are some case studies of recent brand architecture changes in the marketplace that you find compelling and why?

A: There was a lot of discussion about Google’s Alphabet play. For me, this was a strong brand architecture move on their part. Although they were bucking the trend of brand consolidation, the creation of the Alphabet parent brand made sense, given how Google had rapidly grown, scaled, and entered into new markets. Different markets can require wildly different approaches, strategies, and cultures. Now, Alphabet can experiment, make unexpected acquisitions, and penetrate new segments – investing in high stakes industries such as autonomous cars and life science research – while reducing the risk to the Google brand which brings in most of their revenue today. So the move allowed Google to remain “Googley” while giving permission to Alphabet to expand and stretch in new ways.

I also love the simplicity of the Google brand architecture. The nomenclature takes a descriptive approach so it’s very clear what users are getting with each Google-branded product. In today’s environment, there’s power in simplicity.

Q: What are the advantages of a clear brand architecture?  

A: There are numerous advantages in having a clear brand architecture. A clear and simplified approach will make it easier for salespeople to sell and for customers to buy, which alone is pretty powerful. But beyond this, another advantage is that you can reduce your marketing investment. Brands are like children, they require constant care, nurturing, and attention to thrive. So it requires careful thought to determine if infrastructure investments across a multitude of brands truly serve your organization. Do you really need bespoke marketing resources and programs for each and every brand, or would you be better off concentrating your investment? Some of those bespoke brand and marketing investment dollars could likely be used to grow and fuel your business in new ways.

Q: What are the major pitfalls that organizations can run into when implementing brand architecture work? 

A: I think in any organization, you have internal and external stakeholders that are attached to certain brands within the portfolio. That’s understandable. It’s important to keep this in mind and communicate your strategy along the way. Also, have solid data and market research to support the new direction. Data and research helps you make more fact-based decisions and removes emotions from the process. Drive with data.

Socializing any changes you intend to make to your brand strategy is also important. There’s a significant education process that goes along with moving toward a more strategic approach to brand management. Most people associate branding with logos and colors but it’s so much more than that!

Q: You have led successful redesigns of brand architecture, what are three tips or guidelines for marketers embarking on a brand architecture project?

A: My first tip would be don’t make any brand architecture redesign recommendations without getting to the core of your business strategy. It’s important that the system works not only for today but that it’s flexible enough to support the future.  Vivaldi was a terrific partner throughout our process because their expertise lies in both branding and strategy, so they understood the importance of ensuring that our architecture approach was joined up with our business strategy.

My second tip would be to talk to as many stakeholders across your organization as you can manage. Talk to salespeople who are out in the field, your senior leaders, marketers, technologists and so on. You’ll uncover many meaningful insights and perspectives along the way.

My last and most important tip would be to start at the top. Work closely with your leadership team to gain buy-in early on in the process.

Q: How does brand architecture help support the brand and growth objectives of McGraw-Hill? 

A: The education business of McGraw-Hill has always traditionally been known as a textbook publisher and that legacy is reflected in our brand architecture. Our organization is undergoing a significant transformation to being a learning science organization. Our business is much more digitally oriented than ever before. So as our business and our markets evolve, the goal is to have our brand architecture reflect those changes.

Note: the opinions expressed by Liz Austin are hers alone. The views, information, or opinions expressed in our Q&As are solely those of the individuals involved and do not necessarily represent those of their employers, in this case, McGraw-Hill.

The post Q&A with McGraw-Hill’s Liz Austin On Brand Architecture Frameworks appeared first on Vivaldi.

Simply understood, brand architecture is the art and science of structuring the portfolio to meet your strategic goals, defining the brand number, scope, and relationships needed to compete. Just as Modern Architecture prioritized function, a Brand Architecture is only as good as it is well-suited for the purpose it strives to achieve. Given the disruption observed today across industries and segments, it’s no wonder that companies are considering structural rather than topical solutions to the challenges they face.

Yet the context in which brand architecture decisions are being made has changed. Gone are the days of “competitive strategy”, with the military-inspired view of competition as a zero-sum game, where market share needs to be stolen from competitors, often in a street-by-street battle to win over each individual segment. The type of brand architecture required to win in this game demanded a dogged focus on each segment, and a sniper-like collection of individual brands sharply focused on each one. While there was always a place for a variety of architectures – see Joachimsthaler’s brand relationship spectrum – houses of brands were favored, as it enabled segment-by-segment competition and risk protection. P&G was the king of houses of brands, slicing and dicing the market not just by products and demographics, but also by psychographics, price range, buying patterns or attitudes. In B2B, houses of brands were omnipresent, with a product-driven logic that led to branding new features meant to provide short-term competitive advantage.

In today’s day and age, companies like Google or Amazon do not pursue growth through incremental market share gains; rather, they focus on understanding their customers’ needs and creating entirely new markets to answer them. Creating a house of brands for these markets would be folly – not only would each brand need to be created from scratch, increasing the already significant investment, but the new category itself often needs to be explained to consumers, compounding the cost.

Instead, investing in a strong master brand-led architecture and putting multiple if not all brands under the leadership of a strong brand, presents numerous advantages. First, mergers and acquisitions, or partnerships, are making it necessary to bring multiple market participants to “the same page” – and this common ground often involves a master brand recognized by all. Second, the risk profile of a “branded house” architecture has changed:  the master brand can create an aura of innovation and risk-taking, supporting the launch of new products. Third, investments can be streamlined, as a strong master brand can be leveraged across markets and product launches. Finally, a track record of success in creating new categories can create goodwill, creating a virtual circle of success.  To achieve this, brand architecture does not need to be a pure “branded house” – in many cases, a strong master brand creates substantial leverage and a much cleaner portfolio, even as a few particularly strong brands can continue existing as sub-brands. An example of this is Salesforce, that leverages its master brand consistently – yet allows more independence to a few specific sub-brands, such as Pardot.

There are 3 key imperatives to build this type of brand architecture – to be clear, meaningful and stretchable.

Clear: Just as modern architecture thrives on clear and clean lines, so does brand architecture. In the age of micro-segmentation, micro-targeting, information overload and digital fragmentation, you need a clear and loud voice in order to stand out. In the context of short attention spans where specific moments and needstates need to be targeted in addition to consumer/customer profiles, multiple brands often lead to confusion. The technology space understood this early, where clear and simple architectures that bring together simple design, as Apple, with complex technology, as SAP – always under the discipline of a rigorously simple way to organize.

In addition, one of the key reasons for the regained popularity of clean, streamlined architectures, often organized around a single master brand, has been the emergence of platforms, or 2-way marketplaces structured around mutual value creation. By definition, bringing various stakeholder groups to one platform requires building a single brand, in order to enable network effects so critical for building scale. As Uber expands into different marketplaces and “uberizes” different industries, leveraging the power of its master brand is likely to lead to faster expansion than building a targeted brand for each industry from scratch.

Meaningful: Just as modern architecture prioritizes function over embellishments, a solid brand architecture is founded on brands and values meaningful to consumers (or customers), rather than product feature distinctions. Brand architecture needs to be re-organized around brands that have a “reason for being” compelling enough to elicit passion, and introducing a clear distinction between brands that merit air time with consumers vs. “clutter”. The “decluttering” trend is gaining traction in brand architecture – just as in the popular consumer “decluttering” technique, only brands that “bring joy” to consumers get the spotlight. TED, for example, leverages the powerful TED master brand, positioned around “ideas worth spreading”, in a set of sub-brands that target meaningful occasions and contexts for intellectual exploration (TED Talks, TEDx, TED-Ed, TED Prize, TED Fellows, TED Institute, TED Radio Hour).

Stretchable: Modern architecture is dynamic – it finds its force in the midst of usage; movement is often embedded into its very bones. In today’s fast-changing world, brand architecture is a moving target – clients increasingly ask to design architectures that fit their growth ambitions, thinking through future growth scenarios and architecting space for the future product pipeline. In particular in industries undergoing disruption, where next generation products aim to upset the status quo, their addition to any brand architecture may require a fundamental rethink.

Much as strategy has become “real time” as the window for strategic planning has shortened, brand architecture is also becoming more “real time”, requiring more frequent reassessment, adaptations and flexibility as markets change. Witness the frequency with which Uber readjusts its portfolio. WeWork, the popular co-working space, also exploits the strength of the master brand to stretch into near-in categories such as hospitality with WeLive or the ventures space with WeWork Labs.

Traditionally, companies considered a house of brands architecture as a risk management tool – a way not to put all your eggs in one basket. It turns out, in the age of platforms and digital disruption, a masterbrand-led architecture can help you build a bigger basket, to hold more eggs.

The post The Modern Revival of Brand Architecture appeared first on Vivaldi.

The post Strategy and Architecture of Brand Portfolios appeared first on Vivaldi.

The Brand Relationship Spectrum is composed of four basic strategies which feed into nine sub-strategies. The four basic strategies are: House of Brands, Endorsed Brands, Sub-brands and Branded house. The House of Brands strategy, “involves an independent set of stand-alone brands, each maximizing the impact on a market.” This is best laid out by the two identifying sub-strategies: Not Connected and Shadow endorser. A brand that is Not Connected, is one that is completely independent of the company or brand that takes ownership of it, an example being the relationship between Saturn and GM. On the other hand, a Shadow Endorser is a brand that, “is not visibly connected to its endorser brand, but many consumers know about the link.” For example, Toyota is the Shadow Endorser of Lexus.

Endorsed Brands, the second of the four main strategies, are independent brands that “are still independent, but they are also endorsed by another brand, usually an organizational brand.” The corresponding sub-strategies: Token Endorsement, Linked Name and Strong Endorsement, reflect the level of endorsement an endorser brand plays in the space of an endorsed brand. There is a subtle yet crucial point of differentiation between a Token Endorsement brand such as Universal Pictures, A Sony Company and McMuffin, a Linked Name brand which is linked to McDonalds via the “Mc.” The most distinct of these sub-strategies is Strong Endorsement, as in Courtyard by Marriott, where the endorser brand is an inextricable part of the endorsed brand’s name and identity.

“This set of challenges has created a new discipline that can be labeled ‘brand architecture’ because it deals with relationships and structures not unlike those facing an architect who must design the structure and layout of rooms, buildings, and cities.”

The third strategy within the Brand Relationship Spectrum is Sub-brands. These brands are, “connected to a master or parent brand and augment or modify the associations of that master brand.” Sub-brands require a master brand or “driver” of which there are two kinds, representing[ the sub-categories that fall under the umbrella of Sub-brands: Co-Driver and Master Brand as Driver. A Co-Driver situation, such as Gillete Mach 3, is defined by both the master brand and the sub-brand having major driver roles. Buick LeSabre is a situation in which the master brand is the driver, because the sub-brand is simply a name that differentiates on product functionality.

The spectrum’s two ends present a nearly circular finish as the fourth sub-strategy is called A Branded House. This strategy places an emphasis on the master brand in which it, “moves from being a primary driver to a dominant driver role across multiple offerings.” There are two ways or sub-strategies by which to approach this method: Different identity or Same Identity. The former is exemplified by the relationship between Levi Europe and Levi US. Two separate identities which stem from the same brand in order to align with differentiating markets. The latter is personified by BMW. No matter where in the world you go, a BMW is a BMW.

The Brand Relationship Spectrum is not a completely finite way of developing brand architecture. There are combinations of different strategies and sub-strategies that can be used. The key is to tailor a brand architecture to the specifications of the brand because using too many, too few or the entirely wrong strategies and sub-strategies can prove highly ineffective.

The post The Brand Relationship Spectrum and the Key to Brand Architecture appeared first on Vivaldi.

The post Coca-Cola’s shift to a ‘branded house’ appeared first on Vivaldi.

The decision and launch is an important one for Coca-Cola, as it is for any marketer who manages a larger brand or product portfolio. It offers the potential for greater clarity, synergy and leverage. Advertising the four products together under the Coca-Cola brand communicates the breadth of offerings from full-calorie to low-calorie or zero-sugar versions and helps clarify consumer choices, which is important when only five percent of consumers today know that Coca-Cola offers lower-calorie and sugar-free products. It also creates brand-building synergies by bundling all marketing spend on a single brand, while driving greater penetration and trial of the product sub-brands. Finally, it creates leverage, with major initiatives such as the new multimedia platform Coca-Cola Journey benefiting the overall portfolio.

But it also carries some risk. Any major packaging change in the beverage category lives under the specter of the Tropicana debacle. But more broadly, consumers could be confused or alienated by the change in relative weight given to the product sub-brands: Will consumers who drank Diet Coke still choose it at the shelf when it is so heavily branded Coca-Cola? A lot to consider. Many companies are leveraging master brands through line extensions and integrated marketing programs. Yet Coca-Cola is pushing the envelope the furthest in terms of building a more unified branding approach.

Our CEO Erich Joachimsthaler and Prof. David Aaker developed a spectrum that defines a continuum of strategies; at one end is the “House of Brands,” where each brand has its own brand identity, often representing a separate demographic, need, or occasion. Head & Shoulders and Pantene, both owned by Procter & Gamble, are good examples. On the opposite end of the spectrum is the “branded house,” where all products are marketed under a single brand. For example, all BMWs are BMWs regardless of the series.

Should other marketers consider a similar move to a branded house?

To assess the potential for their own brands and portfolios, marketers should ask four questions:

1. What is the overall brand promise and what type of brand relationship do you aspire to create with consumers?

Coca-Cola’s overall brand promise had been about refreshment for the past century when seven years ago Coca-Cola moved away from refreshment because it had become a point of parity with competitors and began to focus on the emotional consumer territory of “open happiness.” For the launch of the one-brand strategy, the brand promise was slightly modified to “choose happiness” to emphasize the idea of options. Thus, the single over-arching brand promise could reinforce Coca-Cola’s decision to move toward a “branded house” strategy.

2. What is the role of the brand in consumers’ daily life contexts?

To accomplish its growth strategy, Coca-Cola targets 30 drinking occasions and aspires to be part of consumer lives in these contexts. These occasions guide the execution of its strategies and range from “gotta have it to go” to “family home meal.” Coca-Cola’s overall brand promise works across all these occasions, which makes a “branded house” strategy a strong option to drive trial and repeat consumption for the four sub-brands.

3. What are the competitive dynamics in the overall business ecosystem?

Competition is intense in the cola category, with shifting consumer preferences and significant retailer pressures. A recent US Gallup poll showed that 63% of Americans avoid soda, which explains the ten-year decline in soda volume sales. It is important to recognize that Coca-Cola does not compete against only other colas like Pepsi, but also other beverage and refreshment alternatives and even against non-consumption. By moving to a “branded house” strategy, Coca-Cola provides retailers with additional incentive and marketing support to carry the full portfolio.  And as part of a larger business ecosystem, it becomes more difficult for some retailers such as Whole Foods to stop carrying Coca-Cola in favor of smaller emerging brands.

4. How does the master brand create value?

Coca-Cola’s new “branded house” strategy creates value to consumers by simplifying the many brand promises to just one. Consumers are not necessarily better off with more messages, more stories, more content, more brand promises and more choices. “Choose Happiness” simplifies the consumer’s choice: Coca-Cola. The strategy also creates value for Coca-Cola by driving higher penetration through trial and higher incidence of consumption for each of the four sub-brands, which increases overall share of occasion and share of market, and by bundling the overall marketing spend around just one brand, which creates greater share-of-voice.

In the end, a move toward a “branded house” strategy should be a considered decision. In the right situation, it can be a driver of value creation; but the benefits should be carefully weighted against the risks.

Top 5 Brands to Watch as Candidates for a “Branded House” strategy:

• Hershey 
• Dorito’s
• Yoplait
• Monster Energy
• Mountain Dew

The post Coca-Cola and the Shift to the “Branded House”: Should Other Marketers Consider a Similar Move? appeared first on Vivaldi.