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Brand architecture is a structure that defines the relation between a parent brand and its sub-brands, products/services, sister companies or subsidiaries.
P&G has one of the biggest brand architectures in the world.
A company's brand architecture gives its internal and external stakeholders a clear understanding of how multiple brands or companies under a parent company are related to and different from each other.
From a business perspective, it is a blueprint that helps you take decisions concerning your brand's strategy, its image, operations, and finances. As for the consumer angle, it helps govern how they can access and relate to each brand or company.
A brand architecture is needed when there are multiple companies or brands, with their individual offerings under the same umbrella. It is also needed when a company undergoes expansion within its product/service categories and the business strategy needs redefinition.
There are ideally four different types of brand architectures, and deciding the right architecture requires gathering information on these key questions-Is the market big enough to enter? Is it a lucrative market? Would you want to leverage the positioning and legacy of the corporate/parent brand? How is the competition? Do you have the opportunity to be a leader or pioneer in the market?
A strong master brand with it's sub-brands or products/services extending its name and identity across all their communications. Eg.- FedEx & FedEx Freight.
Here the sub-brand gets most of the attention, since the master brand does not directly endorse the sub-brand. Eg.- Maggi does not highlight its parent brand Nestle on its packaging.
The brand equity of the parent brand is leveraged by linking it to sub-brands in multiple ways. Eg.- Kitkat always carries the logo of Nestle on its packaging.
It is interesting to note, Nestle has both House of Brands and Endorsed Brands in its structure. This is called a hybrid model when seen as a whole.