I was asked to present some ideas on branding and strategy recently and thought it would be very relevant for my blog.
A brand strategy is, in essence, a focused strategic platform that guides just about every aspect of the business.
If a brand is a house, then the various departments are the rooms, and the brand platform is the foundation.
Going into more detail, there are three basic brand architectures.
Branded House. Examples include Virgin Group, Volkswagen, Adobe and Apple. These brands use a single name across all their activities and this name is how they are known to all their stakeholders – consumers, employees, shareholders, partners, suppliers and other parties.
From my perspective, a Branded House, when done properly, provides reassurance to the customer that those that choose this BRAND share an attribute.
Not a product attribute but an identifiable attribute that the brand offers which not only sets them apart but is integral to their (the customers) own personal identification. Choosing a certain brand is not necessarily a matter of showing off. Rather it is a means of trust in a company and personal fulfillment to some degree based on that company’s core values instead of having to rely solely on product attributes like in the House of Brands model.
So, when a Branded House launches a new product or sub-brand, the new addition to their stable automatically gains a level of acceptance and importance because of the previous identification with the parent brand.
The parent brand is how the customer knows that the brand is for them.
Taken from the book Emotional Branding by Marc Gobe, he states,
• Apple projects a humanistic corporate culture and a strong corporate ethic, characterized by volunteerism, support of good causes or involvement in the community. Nike blundered here. Apple, on the other hand, comes across as profoundly humanist. Its founding ethos was power to the people through technology, and it remains committed to computers in education. “It’s always about people,” Gobe said.
• The company has a unique visual and verbal vocabulary, expressed in product design and advertising: This is true of Apple. Its products and advertising are clearly recognizable.
• The company has established a “heartfelt connection” with its customers. This can take several forms, from building trust to establishing a community around a product
Generally speaking, creating a Branded House is a more efficient model than being a house-of-brands because it allows for a more cost effective means for new product launches and brand extensions.
The advantage of a Branded House is that all the products and services can share the same budget, customer, and market position.
However, executing the House of Brands strategy successfully require diligence and hard work. Both of these are relatively rare — and therefore very valuable.
It is just plain easier to launch individual brands or to try to differentiate your Branded House because all these require is an understanding of yourself — not an understanding of your most coveted prospects and customers.
Endorsed Brands. Like Nestle’s KitKat, Sony PlayStation or Polo by Ralph Lauren. The endorsement of a parent brand should add credibility to the endorsed brand in the eyes of consumers. This strategy also allows companies who operate in many categories to differentiate their different product groups’ positioning.
House of Brands. Like Procter & Gamble’s Pampers or Whirpool’s KitchenAid. individual sub-brands are offered to consumers, and the parent brand gets little or no prominence. Other stakeholders, like shareholders or partners, know the company by its parent brand.
The advantage of a House of Brands is that each brand is free to fight its battles on its own terms.
Good branding can help a company ensure that customers return and continue to purchase from them – brand loyalty is the highest reward in an age of fickle decision-making and a dazzling array of merchandise from which to choose.