How to Use Research to Guide B2B Brand Architecture Decisions

What is brand architecture?

Most organizations manage multiple brands. A large organization may have an extensive portfolio of brands, including:

• A corporate-level brand (e.g., Alphabet or Google)
• Business unit or subsidiary brands (e.g., Google Search)
• Brands that represent a group of product lines (e.g., Google Pixel, which is a line of mobile devices)
• Product brands (e.g., Google Pixel 5, which is one of Google’s most recently launched devices)

Brand architecture is how this portfolio is organized, i.e., how the brands relate to and differentiate from each other.

Some companies develop their brand architectures in a very structured way, with each brand being built with a specific strategy in mind. Others have developed their brand architectures in a more unstructured manner; companies are acquired, and products are launched, but not much thought is given to how each brand fits together.

Many companies are between these two extremes. They have a strategy, but it is not applied 100% of the time.

There are many benefits to having a well-structured brand architecture:

• It simplifies marketing, reducing costs and effort
• It provides internal and external stakeholders with a lot more clarity about what a brand stands for
• It makes it easier to raise awareness of other brands in the portfolio
• It makes it easier to cross-sell (as there’s less risk in purchasing from a brand when you trust its parent/sister companies)
• It allows you to use your brands to communicate particular business objectives to the target market
• It enables you to target specific segments more accurately (e.g., targeting a particular segment with one brand without cannibalizing the efforts of other portfolio brands)
• It reduces customer confusion about what each brand does
• Ultimately, it boosts brand equity/value

When considering changes to the brand architecture, you need to consider:

• What is your company’s broader business strategy? If the goal is to cut costs, could you rationalize the existing brand portfolio?
• Which existing brands already have a lot of equity (e.g., high awareness, high affinity)? The brand architecture should be structured to leverage these strengths, where appropriate
• How do existing brands relate to each other? To what extent is there overlap or differentiation? If many are similar, do you need to be investing so much in managing different brands? Or should you try to re-position some brands to make them more distinct?
• Is the brand architecture easy to understand? Do naming conventions clearly articulate the difference between different brands (e.g., iPhone, iPhone mini)? Does each brand play a clear/distinct role?
• What is the relationship between product/subsidiary brands and the corporate brand? Do they support/reinforce each other, or does one brand negatively impact others?
• What market segments do you want to target? Are there existing brands that have higher equity among a specific segment? And would you benefit by aligning certain brands with particular segments?
• How do your existing brands relate to competitors’ brands? Is there sufficient differentiation?
• Are there any gaps in the existing portfolio that would need to be filled by building a new brand or re-positioning an existing one? For example, perhaps a sizable proportion of the target audience looks for low-cost solutions, but all of your current solutions have a premium positioning?
• Is the brand portfolio future-proof? If customers’ needs change, can existing brands react? If you are going to launch a new product or service, will they use existing brands? And if you acquire new brands, how seamlessly can they be integrated into the architecture?

What are the types of brand architecture models?

Companies that manage multiple brands use one of four brand architecture models:

1. Master Brand
2. House of Brands
3. Endorsed Brand
4. Hybrid

#1. Master Brand

In this strategy, the corporate brand is prioritized. Each subsidiary or product brand uses the corporate brand in its name.

G.E. is a classic example of the Master Brand strategy. All G.E. sub-brands use the G.E. label, e.g., G.E. Healthcare, G.E. Capital, G.E. Transportation. This model is suited to companies that meet some of the following criteria:

• Their subsidiaries or products are relatively homogeneous
• They have a corporate brand with a lot of equity/value
• They want to minimize their investment in brand management (i.e., focus efforts on the corporate brand rather than on sub-brands

#2. House of Brands

This model is effectively the inverse of the Master Brand model. The corporate brand is de-prioritized in favor of product or subsidiary brands. Indeed, the target audience may have little to no awareness of the parent brand.

Additionally, the sub-brands have no link to each other or their parent brands.

Marketing services holding companies, such as WPP, are classic examples of the House of Brands model. WPP owns many autonomous brands (e.g., Ogilvy, Kantar, Landor & Fitch).

This model is suited to organizations that fit the following criteria:

• Their subsidiaries or products are relatively heterogenous
• They have a corporate brand with limited brand equity/value, but their sub-brands have brand value/equity
• There is a benefit in managing multiple brands that overlap but seem autonomous (e.g., WPP can increase their chances of winning RFPs by owning various brands that may respond to the RFP. Some of the brands may lose, but WPP should still win)
• They are able and willing to make significant investments in brand management

#3. Endorsed Brands

This model is somewhere between the two extremes. Like the House of Brands model, sub-brands are prioritized. Unlike the House of Brands model, the corporate brand is leveraged to add credibility or trust. The sub-brands benefit from being associated with the parent company.

Examples of the Endorsed Brand approach include:

• Marriott – its sub-brands, such as Courtyard and Residence Inn, include Marriott prominently in their branding, and all share a similar visual style
• The Kellogg company produces many different products, each with its distinct brand, but ensures that these products are endorsed with the famous ‘Kellogg’s’ logo

#4. Hybrid model

Many companies commit to one of the above strategies. Some use a hybrid approach combining two or more models.

For example, Alphabet uses the House of Brands and Master Brand models:

• Many of its core products sit under the Google Master Brand umbrella (e.g., Google Search, Google Adwords, Google Maps)
• Some product brands sit outside of the Master Brand umbrella (e.g., Nest, GV, Calico)

Sometimes these hybrid approaches arise organically, and sometimes they’re intentional.

The main benefit of having a hybrid approach is that it gives the organization more flexibility:

• When a decision needs to be made about a new brand (e.g., due to acquisition or product development), the organization can pick the model that works best for that specific sub-brand. For example, if you’re launching a product that poses a potential risk to the master brand, you can spin it off as a standalone brand. Or, if you’ve acquired a brand that is struggling due to low awareness, you can give it a boost by bringing it under the Master Brand umbrella. Or, if you have limited resources to develop a new independent brand, you can build on an existing Master brand
• It also allows sub-brands to have different levels of independence from the Master Brand. In the case of Google, Calico is entirely standalone, while G.V. (originally Google Ventures) tries to straddle independence and Master Brand status

The role of research in B2B brand architecture projects

B2B marketing research can help companies to identify the optimal brand architecture.

One of the primary objectives of brand architecture research is to explore perceptions of the existing brand architecture:

• The extent the market is aware of all of your company’s capabilities
• Awareness of existing brands
• Affinity towards existing brands
• Perceptions of each brand
• How brands relate to each other (e.g., any overlap or differentiators?)
• How brands relate to competitors (e.g., any strengths or weaknesses?)
• Perceptions of the existing architectures’ structure (e.g., is it easy to understand what each brand does, and what each brand means?)

Another objective is to evaluate the impact of changing the architecture:

• How the organization can better leverage existing perceptions and brand equity
• The role of brand in purchasing decisions
• Perceptions of alternative architectures (N.B. this may have to be explored indirectly – see below)
• The benefits and drawbacks of changes (e.g., likely resistance to sunsetting a brand that may have significant equity)

Based on these insights, we can make clear recommendations about the optimum brand architecture strategy.

Best practices when conducting B2B brand architecture research

#1. Don’t focus on the logo(s).

A brand is more than a name and logo. It’s what these signals mean to an individual – the feelings and beliefs they conjure up and the impact this has on behavior.

Therefore, the optimal brand architecture triggers the most positive feelings and beliefs and leads to the desired behavioral outcome (e.g., a purchase).

Brand architecture research needs to look beyond logos and names to what portfolio brands represent.

#2. Use qualitative and quantitative techniques where possible.

Qualitative research allows you to explore brand perceptions in-depth. Because qualitative techniques are more exploratory, you can go beyond superficial statements to identify the underlying emotional reaction to brands.

Quantitative research also has value in brand architecture projects. First, you can validate some of the hypotheses developed during other stages of research. Second, it provides a robust platform for making critical business decisions.

Generally, we recommend conducting qualitative research before doing a quantitative survey so that you can incorporate all of your findings into your questionnaire design.

#3. Look internally, not just externally.

If the people who ‘live’ a brand daily don’t buy into it, it will not succeed in the marketplace. Brand architecture research projects should include interviews with employees to ensure that the final brand architecture reflects internal perceptions.

For example, let’s say that you are exploring whether you should shift from a Branded House to a Master Brand model. You don’t just need to study how customers and prospects would react to the change. You also need to check that employees will be comfortable with it.

It’s possible that certain brands’ employees feel that their employer is so different from the corporate brand that a re-brand isn’t realistic. In that scenario, you may need to adopt a hybrid model in which most product brands are re-branded under the Master Brand umbrella, but one or two brands sit outside the umbrella.

#4. Think about how your brands can serve different market segments.

Your target audience is likely to have a broad range of needs, motivations, and challenges. You may already be aware of the different segments in the market – for example, you may already take different personas or segments into account when building your marketing strategy.

Your brand architecture can be built cleverly to ensure that each brand is aligned with a specific market segment. For example:

• Brands can be aligned with specific needs-based segments. For example, Product Brand X can be targeted to customers who are looking for an easy-to-integrate solution. Brand Y can be targeted to customers who want more functionality
• Brands can target specific market positions. For example, Brand X can target the premium end of the market, and Brand Y can target the ‘value’ end of the market
• Brands can also be aligned with specific company types. For example, Brand X can be aligned with the healthcare sector; Brand Y can be aligned with the technology sector

By aligning each brand to a specific segment of the target market, companies can:

• Maximize the value of each brand
• Avoid cannibalization
• Emphasize areas of expertise
• Enable cross-promotion and cross-selling

B2B segmentation research can be a useful tool to guide this process. If you don’t already have a needs-based segmentation, statistical analysis can identify the segments that exist in the market. At that point, you can start to see if individual segments already have an affinity for existing portfolio brands.

#5. Use a range of techniques to explore the optimal brand architecture.

Decision-makers may have strong opinions about some of the individual brands you manage, but they may feel less strongly about your brand architecture as a whole.

As a result, there is a limit to how much useful information you will gather from asking decision-makers ‘which architecture would you prefer.’

Other techniques may be needed to test which architecture would lead to the best outcomes indirectly.

Take, for example, the conjoint family of techniques (e.g., Menu-Based Choice or Discrete Choice Modeling). These techniques have a few benefits:

• They allow you to present options in a way that’s reflective of the decision-makers’ B2B buying process
• They put branding into context – research participants have to consider pricing, messaging, and features, not just brands
• You can test a broad range of possible outcomes, including structures you hadn’t even considered
• You can incorporate financial metrics into the analysis process so that you can gauge which brand architecture is likely to maximize revenue or profitability