Journal of Marketing Management 200319,1043-1065

James Devlin

Brand Architecture in Services: The Example of Retail Financial Services
The term "brand architecture" refers to an organisation's approach to the design and management of its brand portfolio. In particular, brand architecture decisions are concerned with the number of brands to utilise, the role of specific brands and the relationship between such brands. It has been posited that services organisations tend to adopt a corporate brand approach to the management of their brand architecture, having a propensity to rely, in the main, on one overarching brand. The study reported here investigates this contention in the context of financial services, using a number of semi-structured interviews with senior marketing managers. Findings indicate that although some support for the corporate branded approach was apparent, the dominant strategy is a "multi-corporate" approach, where the brand architecture comprised a family of main brands. The main motivations for such an approach are to maintain strong relationship franchises with different customer groups and/or to signal distinct competencies to the marketplace. As expected, the data shows little support for the approach of branding individual services or the wide-scale use of subbrands.

Nottingham University Business School

Keywords: retail financial services, services branding, brand architecture, brand portfolio Introduction This paper presents a study of brand architecture strategies in a services context. Brand architecture refers to the nature of the brand spectrum utilised by an organisation in its marketing efforts (Aaker and Joachimsthaler 2000). In particular, brand architecture describes the number and nature of brands employed and the relationship between each brand in the marketing of a range of products or services. At one extreme, companies may employ one overarching corporate brand, whilst at the other, individual product or service brands may be used. In between there are various hybrid options (de 1 Correspondence: Dr James Devlin, Nottingham University Business School, Jubilee Campus, Nottingham, NG8 IBB, E mail: ISSN0267-257X/2003/9-10/01043 + 22 £8.00 ©Westburn Publishers Ltd.


James Devlin

Chernatony 2001; Aaker and Joachimsthaler 2000; Olins 1995). According to Douglas, et al. (2001), it is imperative that managers design, implement and maintain an harmonious and efficient brand architecture that spans all areas of a firm's operation. In such a manner parsimony, as well as maximum clarity and consistency, can be achieved cost effectively. However, according to Petromilli, et al. 2002) many companies struggle to keep their brand portfolios in order. This is perhaps not surprising as many organisations are faced with increased market dynamism, customer fragmentation and industry consolidation. Added to that, Petromilli, et al. (2002) suggest that natural momentum, egos of senior management and the attraction of acquisitions tend to produce an over-complex brand architecture in many organisations. However, the dominant proposition in the literature is that the brand architecture of services firms will normally be relatively uncomplicated and rudimentary, as services organisations tend to rely on the corporate branded approach (de Chernatony 2001; Berry 2000; Dobree and Page 1990; Berry, et al. 1988). This study makes a contribution by investigating empirically whether the corporate branding approach is the dominant strategy in the management of brand architecture adopted in a services context by eliciting the views of practitioners, namely senior marketing and brand strategists in a services environment. The study is important as empirical investigation of brand architecture strategies is largely absent from the literature, as are the views of industry practitioners. Insights will also be provided into the justification and rationale for the various brand architecture strategies employed as well as the practical considerations associated with brand architecture management. The paper proceeds in the traditional manner. In the following section the main literature is reviewed before the methodology is explained. Results are presented and discussed and implications explored. Finally, limitations are acknowledged and avenues for further research highlighted, before conclusions are drawn. Literature Review The study presented here is concerned with the appropriate brand architecture for services markets. Thus, in the literature review section, it is necessary to introduce and explain the notion of brand architecture before focusing more specifically upon brand architecture in a services context. Although the importance of brands in the marketing of services has been highlighted by a number of writers (Berry 2000; Dall'Olmo Riley and de Chernatony 2000; de Chernatony and Dall'Olmo Riley 1999; Dibb and Simkin 1993; Zeithaml 1981), far fewer studies have focused upon the nature of the "brand architecture" adopted by services organisations.

a separate distinct stand-alone brand for each offering. The difference between an endorsed brand and a sub-brand is a subtle one. perhaps even only being mentioned by association. often in unrelated markets. (2001) also proposes a "brand spectrum". these two approaches. but with some different terminology. endorsed and branded. Examples include Microsoft Office or Audi TT and "Endorsed Brands". whereas in the latter case. (2000) and Olins. The branded approach is more likely when separate brands are needed to create and own an association (often avoiding the association of the master-brand) and to retain a customer brand bond. (2001) are defined in terms of corporate branding and individual product brands. or some combination of these two extremes. At the other extreme is a "house of brands" strategy. Aaker and Joachimsthaler (2000) suggest that. (2000). is a house of brands strategy. the master-brand forms the dominant part of the brand. or corporate. The ends of the brand spectrum. according to de Chernatony. He identifies three brand structures and termed them monolithic. where the master brand is the primary frame of reference but is augmented by additional naming. a branded house or monolithic approach is more likely when the masterbrand has associations that enhance the value proposition. For instance. similar to Aaker and Joachimsthaler." All "multi-offering" organisations face a choice as to whether to use one single brand covering all products or services. which involves an independent set of stand-alone brands each producing an optimum impact in the targeted market. (1995). It is apparent that de Chematony's concept of the corporate brand is closely . Olins (1995) did not distinguish between endorsed and sub-brands. the traditional approach of Proctor & Gamble (P & G). in general. such as Obsession by Calvin Klein or Courtyard by Marriott. brand becomes by far the dominant brand driver across multiple offerings. Aaker and Joachimsthaler (2000) use the term "branded house" to describe the strategy where the master. An organisation such as the Virgin Group tends towards such an approach. Indeed. is moved into an area where the organisation appears credible and when there is the potential for communication efficiencies.Brand Architecture in Services 1045 The term "brand architecture" refers to an organisation's approach to the design and management of its brand portfolio (Aaker and Joachimsthaler 2000) and is defined by those authors as: "An organising structure of the brand portfolio that specifies brand roles and the nature of relationships between brands. de Chernatony. In the former case. which is roughly similar to the schema of Aaker and Joachimsthaler. with 80 major brands having little or no link with P&G or to each other. the authors see a continuum encompassing "sub-brands". the master-brand plays a far less prominent role. Between.

(2000) added that the corporate brand forms the focus of the relationship building efforts both inside and outside of a services organisation. as can be seen from Figure One. (1990) as an example of a study stressing the importance of the company name as the brand and quoted Berry. (2001) provide further detailed analysis of the prevalence of and challenges associated with corporate branding in a services context. (2000) cited Dobree and Page. elsewhere in the volume. whereas in services the company is the primary focus of the brand. they suggested that corporate branding may well form an appropriate focus for services markets due to the importance of interactions between staff and customers in shaping brand perceptions. As Berry explained. (1995) suggests that while fast-moving consumer goods brands often focus on individual products. there are strong and weak company endorsement positions. In a financial services context. de Chernatony related the concept of the brand spectrum to branding in a financial services context and postulated that a corporate brand approach to the management of brand architecture is predominant in financial services markets. In between. (1995) suggested that . it is seen as having a particularly crucial role to play in the marketing of services. However. Corporate vs. in keeping with the relationship focus of the analysis they present. Lefkowith and Clark.1046 James Devlin related to those of the monolithic brand and branded house discussed above. Olins. (1995) and the house of brands of Aaker and Joachimsthaler. (2000) stressed the importance of corporate branding to services markets more generally. Equally. In addition. Line Branding (Adapted from de Chernatony 2001) Corporate branding Strong company endorsement Weak company endorsement Individual product branding Importantly in terms of this study. Dall'Olmo Riley and de Chernatony. Although corporate branding is seen as becoming more important generally (Balmer 1995). The authors are equivocal in their conclusions. et al. Berry. Figure 1. service companies must decide whether to build the brand on a specific product or on the corporate brand. (1988) to illustrate that consumers are likely to view all services offered by a company as components of a single brand. in packaged goods markets the product is the primary focus of the brand. the individual product branding approach is akin to the branded approach discussed by Olins. Denby-Jones. Dall'Olmo Riley and de Chernatony. (2000). McDonald.

Thus it is apparent that many authors postulate that an emphasis on the corporate brand is the predominant approach to the management of brand architecture for services organisations. However. (1993) also studied the growing importance of branding in financial services. preferring instead to focus upon well known companies (Boyd. (2000) argue that financial services do not lend themselves to individual product brands. (1995) argues that banking products are more or less indistinguishable but that corporate branding can help differentiate banking companies and their offerings. Thus. divisional and individual brands. the analysis presented here contributes to current understanding in a number of ways. de Chernatony and Dall'Olmo Riley 1999. Dall'Olmo Riley and de Chernatony. Saunders and Watters. Milligan. although the link between services and the corporate branding approach to the management of brand architecture has been covered in the literature and argued in theory. Industry practitioners are important stakeholders in decisions regarding the management of brand architectures. Leonard and White 1994. not least as they are likely to be responsible for deciding and implementing strategy (assuming that there is one). The subject of brand architecture has received little empirical attention generally. Dall'Olmo Riley and de Chernatony 2000) was centred on brand experts and not focused specifically upon services or brand architecture concerns. The main empirical work in the area (de Chernatony and Dall Olmo'Riley 1998. Thus the subject under scrutiny represents one deserving of further investigation . the study focuses specifically upon brand architecture concerns in a services environment. (1991) argued that a strong corporate image is perhaps the most effective form of differentiation.Brand Architecture in Services 1047 corporate brands tend to be important and Balmer and Wilkinson. illustrating various approaches. stressing the crucial role that brands play in financial services marketing. They further comment upon the need for a coherent strategy with regard to corporate. Others have argued similarly that consumers show little interest in individual financial services offerings. it elicits the opinions of senior managers from a services environment. The views of practitioners are also important as Dall'Olmo Riley and de Chernatony. Most writing on the subject is based upon hypothesised trends and conjecture. (2000) have suggested that the previous focus on brand experts has been a significant limitation and that further research focusing on managers. Firstly. far more empirical investigation is required to establish whether it is the case in practice. Ford 1990). suggesting that the corporate brand may be particularly important in situations where it is difficult to make a priori judgements. In common with arguments advanced in favour of the importance of corporate brands in a service context more generally. staff and consumers would yield an important contribution to the branding literature Secondly. but even less so in a services context.

(1998). (2002) suggest that many companies have trouble keeping their brand portfolio in order and. (2001) note the potential importance and challenging nature of branding issues in financial services. Thietart. namely that interviews allow for large amounts of in-depth information to be collected quickly and questions can be asked for immediate clarification. as suggested by Carson. Olins. both when building business generally and when acquiring and merging. The context chosen for the study was retail financial services. the predominant approach. More generally. Methodology This study incorporates a qualitative methodology. financial services are excellent examples of highly intangible and often complex service offerings. In addition. McDonald et al. Thietart.1048 James Devlin and with the potential to yield important insights. (2001). et al. This was deemed appropriate as according to Devlin. In addition. et al. (2001) when attempting to generate depth of understanding. semi-structured interviews were chosen as the research instrument. as suggested by the literature. (2001) suggested that services are requiring of a tailored approach to branding strategies. McDonald et al. (1995) noted the importance of the decisions faced by services firms in deciding whether to emphasise corporate or product specific brands in their marketing efforts. (2001) further suggests that a checklist may be used as a loose structure for the interview. In terms of the degree of structure. may lack clear brand architecture strategies. In-depth interviews have been noted as perhaps the most fundamental of all qualitative research methods (Thietart 2001). McDonald. Devlin 1998. Petromilli et al. Thus. empirical investigation into brand architecture in a services context will provide an insight into how organisations approach the management of their brand portfolios and whether reliance upon the corporate brand is. the study will also help to highlight lessons from perceived good practice and from strategies which practitioners felt were less successful. In this manner. suggests a balance between interview structure and flexibility to allow for clarification and exploration of emerging themes. a semi-structured approach to the data gathering process was adopted in this study. in addition. In-depth.f. In addition. Saunders and . the context of financial services has previously been used extensively to illustrate and elucidate arguments relating to more general services marketing and branding (c. but that the researcher should allow for deviations to follow interesting lines of argument and to allow for free flowing discussion. Interviews were chosen as the most appropriate instrument in the initial stage of the research due to advantages suggested by Marshall and Rossman. (1989). 2001).

PLC Financial services function of large grocery retail organisation. PLC Clearing bank and otber financial services institution. Other qualitative studies have . which has been worded in such a way as to protect anonymity whilst attempting to avoid confusion. non-quoted Building Society developed from regional roots. stressing the crucial role that brands play in financial services marketing. been highlighted as potentially important and challenging in financial services markets. previously a building society Financial services function of large retail organisation. in late summer 2001. PLC. The process for selecting the number of interviews took into account the number required for common themes to emerge. Full details are provided in Table 1. All practitioners were involved in the marketing function within retail financial services organisations. Branding has. allowing reasonably robust conclusions to be drawn. it is suggested that the retail financial services context provides an interesting case study upon which to base investigation of the issues raised in this paper.Brand Architecture in Services 1049 Watters (1993) also study the growing importance of branding in financial services. eight semi-structured interviews were arranged with a range of industry practitioners familiar with branding and related strategies. primarily at the level of Marketing Director or Marketing Manager. therefore. PLC Large diversified PLC insurance and otber financial services company Participant D Participant E Participant F Participant G Participant H Thus. mutual Large diversified PLC insurance and otber financial services company Bank and otber financial services institution. Table 1: Participants in Study Role Participant A Participant B Participant C Director responsible for Corporate Affairs General Manager responsible for Marketing and Planning Director responsible for Group Marketing Senior Manager responsible for Marketing Communications Manager responsible for Market Researcb Director responsible for Marketing Director responsible for branding and e-marketing Group Head responsible for brands management Brief Description of Company Bank and other financial services institution. Therefore.

those interviewed represent institutions which in sum encompass most main areas of financial services. 1996. In addition. including those best described as major clearing banks. Dyck and Starke 1999). Subsequently. (2001) and. (2001) to compare results across different contexts is met. particular challenges arise in presenting and discussing results.1050 James Devlin incorporated similar sample sizes in order to produce high-level peerassessed output in the management field (Bettencourt and Gwinner 1996. Such an approach is in line with that recommended by Carson. encouragingly. et al. In the course of the analysis. whilst seeking to protect the anonymity of participants. . As this project discusses branding issues extensively. the participants are drawn from a broad range of institutions. Subsequently. large diversified insurance companies and two "non-traditional" suppliers. et al. including many of those who took part in the initial study. Themes included material related to brand architecture in financial services. importantly. The convention used below is that the letters A to H are used to identify the participant/organisation as per Table 1 above. transcripts were produced and analysed. ex-building societies. giving the sample an impressive breadth of coverage. This allowed the views of various practitioners to be compared and contrasted and emergent themes identified. The latter term covers such institutions as food retailers and others which now operate in the financial services arena. Then. across case analysis was carried out by gathering data on the various topics under investigation together in summary documents. results were presented to and discussed with a group of practitioners. Taylor. data concerned with similar issues was gathered together and in this manner many exemplar quotations were identified to aid analysis and discussion. to allow the researcher to acquire a more complete and in-depth understanding of the data and common themes within it. as can been seen from Table 1. The interviews lasted approximately one hour and a brief pro-forma guide was used. In addition. In addition a brief descriptor. et al. helps confirm the reliability and validity of the findings. The analysis was carried out using a visual inspection and interpretation method rather than relying upon a computer package. building societies. Fineman 1996. The membership of this research group is drawn from a large variety of institutions operating in financial services markets and thus provided the opportunity to establish a sample that is representative of the various types of market participants. in that it was selected in the main from the membership of an industry-funded research group which sponsors research projects. as well as other areas to be reported elsewhere. Results are presented in the following section. Thus. The sample was one of convenience. Analysis was initially carried out "within case" with different themes being identified by different colour coding. during the second stage of the process. the recommendation of Carson.

it is evident that the one overarching corporate brand approach . although different terminology was used. I mean. personal loans from (Brand E) we only use (Brand E). the recommendation of Thiertart. an approach which is not uncommon in the reporting of qualitative research. using the same sort of graphics as (Brand B) does." may be added where it is judged to aid comprehension. termed in this case an overarching brand. quotations are provided as spoken unless alteration is essential to ensure confidentially or to provide context and enhance understanding. some support was apparent for the corporate branded approach. there is a marked reliance on one main brand. In addition. although product descriptors may be used. (Brand B). as with all reported speech. The data reveals that. some practitioners indeed identified primarily with the corporate approach: We have an over-arching brand. it has only been corrected where such correction is essential to aid comprehension. (Participant E) Thus. we had a couple of sub-names we toyed with. However. In order to protect the integrity of the data. Thus confidentiality is protected whilst a greater understanding of the brands is facilitated. rather than the endorsed or individually branded structure. Although the grammar is occasionally imperfect. Most of our things are product description so it's (Brand A Gold Card) or it might be a (Brand A Account Name 1) or a (Brand A Account Name 2). to provide the relevant context. Readers should note that where examples using actual companies are given in the results section. is likely to prevail in services markets. that is as far as it goes in terms of branding. you know. Results The relevant literature suggests that the corporate branding approach to the management of brand architecture. Similar sentiments were echoed by participants B and E: It is really. this is not an indication of whether or not those institutions participated in the research. (Participant A) As participant A explains. where a participant refers to a third party brand by way of example. but it's (Brand A). (Brand B property services) which is a sub-brand but very similar. (Participant B) It would just be. Substantial quotes are occasionally employed. In this manner.Brand Architecture in Services 1051 such as "sub-brand" or "high net-worth brand. (2001) to "let the data speak for itself" is heeded. that part of the quotation is provided unaltered.

It is conceded that there are examples of very large and complex institutions tending towards the corporate approach.We are very committed to our brand being (Brand B) and our products sitting within that.1052 James Devlin receives most support and is seen as most suitable by smaller. I'm really trying to think and I can't. (i..e. Participant C was even more candid in his assessment: We've had things [service specific brandsj which I personally think are irritants. separate from that. the attempt of a product manager to differentiate something that they produced and is really just an irritant. and interestingly. However. we had an account called (Branded Account B) and things like that.. Others agreed: It seemed like a good idea for about 10 minutes. Simplicity and the presence of strong core brand values to leverage were the primary drivers the decision to brand in a corporate manner...we believe there is much more mileage and ability to be able to drive a brand like (Brand B) rather than develop a product brand or whatever it might be. a waste of time...I'm trying to think of one [a service specific brand namej that's worked. but these were account names.There aren't many. (Participant A) Participant A was extremely sceptical as to the value attached to service specific brand names and hence their usefulness in attracting consumers in the marketplace. there was general agreement that the individually branded structure. but stressed the current importance of the corporate brand.. I think we had a little cluster of products we called (Service Specific Brand C). such as Leeds Liquid Gold) are of limited value: / wouldn't expect them [service specific brand namesj to have any saliency in the market place. as discussed below. This is to me a waste of money. (Participant B) Participant B recalled that the individually branded approach was somewhat fashionable in retail financial services in the late 1980s and early 1990s in the UK. At the other end of the spectrum. . (Participant C) Participant B also hinted that individual or sub brands may be introduced for . such as the Orchard and Vector accounts previously offered by Midland Bank and even endorsed service specific brands. service specific brands. the corporate branded approach did not emerge as the dominant brand architecture strategy. That's a very conscious decision that we made. less diversified institutions and in non-traditional suppliers of financial services.

as individual services may well not be branded separately. at least partially. almost a "house of brands" at .. in a significant number of cases. In essence. which is perhaps not surprising given real-world complexities. it is apparent that the branding of specific services approach received little support from the interview participants. It should also be remembered that. fairness. In addition.. they are not a branded approach. for the purposes of retailing financial services.What you need to do is make things clear and transparent to the customer and sub branding can mitigate against that. Such examples are not truly corporate brand architecture strategies as they are predicated on the use of more than one brand. then what does (to use a hypothetical example)(Brand D)'s Orchard account stand for then? Why would that be any different? (Participant The risk of individual service brands and sub-brands causing confusion was also highlighted. both brands were retained as separate entities. from one or a series of mergers. Other examples include Lloyd-TSB (a brand itself the product of a merger) retaining the Cheltenham and Gloucester and Scottish Widows brands and the Abbey National keeping the Scottish Mutual brand. the brand architecture of many institutions has resulted. Participant D highlighted the risk of diluting the message of the main brand by using individual service or sub brands: We used to do a lot of it and we do less of it now. each resulting in separate brands being retained. a significant consideration in a market environment where consumer interest and understanding are limited: By sub-branding you can offen obscure what it is you are trying to sell people because if the market is calling something (say) an ISA and you call it an Orchard I don't think its particularly helpful. we were just diluted effectively what the (Brand D) brand should be.. For instance.. both the Halifax and Bank of Scotland brands have been retained.. nor are they really examples of endorsed or sub-brands. when the Halifax and Bank of Scotland merged recently the corporate entity became HBOS. what is witnessed is a family of main. ..I'd rather call a pension a pension. Closer inspection of the data reveals that the brand architecture of most institutions is more complex than the simple overall corporate or branded approaches. Likewise. brands approach. better value. brand architecture strategies do not necessarily equate to what could be described as either an endorsed or sub-branded strategy. However. when the Royal Bank of Scotland took over the National Westminster Bank. Equally. to mark one's territory and signal it internally. or corporate.if (Brand D) stands for.Brand Architecture in Services 1053 internal and politically motivated reasons.. easier to use... (Participant H) Thus.

(Participant G) Participant G explained his organisation's multi-corporate approach in some detail. Expertise. (Main Brand Gl) being the competency in mortgages. very difficult to stretch your banking brand across the total range of meeting customer needs. Such insights can be related to the arguments of Aaker and Joachimsthaler. insurance companies do insurance. The data provides both evidence of the multi-corporate approach to brand architecture management and some interesting insights into the rationales for multi-corporate branding. (Main Brand HI) has a heritage in retail investment." also referred to as expertise or heritage by certain participants. (Participant H) . (Main Brand H3) has a reputation of serving a particular community. using arguments closely related to those made regarding competencies above. which we are. Such an approach could be construed as similar to Aaker and Joachimsthaler's notion of "owning an association. indicating that the brand architecture consisted of three main brands. and building societies do savings and mortgages. heritage and reputation. For instance: Better value strategy is based around (Main Brand Gl) because it's the relationship and distribution brand. So there are both distribution channel factors and they have a heritage in different areas. which is the IFA community. (2000) in support of adopting a house of brands approach. The first main rationale apparent from the research is the need for separate brands to signal separate competencies to the marketplace. each employed to signal distinctive competencies in particular areas of financial services. it is very. Participant G was a strong advocate of the argument that separate brands are necessary to signal specialist competencies. and then using our key competency brands and to give us the breadth of bank assurance: (Main Brand Gl) being the competency in banking. (Main Brand G2>) being the competency in life pensions and investments. And if you try to be a bank assurance supplier.1054 James Devlin the corporate level which could be described as "multi-corporate". (Participant G) Participant G elaborated upon the role of various brands within the brand architecture and continued by explairung that customer perceptions were the driving force: It comes back to the fact that in consumers' minds' banks do banking. This was a common perception of practitioners and a particularly prominent finding. Once again. evidence of a multi-corporate approach to the management of brand architecture also emerges. Participant H talked about expertise. (Main Brand HI) has a heritage in long to medium term savings products.

(Main Brand C5) is the place to be.Brand Architecture in Services 1055 Participant C also provided evidence of a multi-corporate approach which is at least partially competence based: If you own boats. and they have a competence which is product based. assuming that. you want your yacht or boat insured. [You would keep brands separate] because there are two separate markets you are going for and you can get a greater overall market share by doing it separately. by the addition of the asset management arms of (Main Brand C3) and the asset management arms of (Main Brand C2) to product a brand that had an asset management competence. (Participant A) If there is a lot of customer association with a brand like say "Scottish Widows" or "Cheltenham and Gloucester" then. rather than a relationship route. we'll have one super brand. it is the place to be. right. Interestingly. (Participant C) Participant D talked in terms of heritage. that's a true brand association and one that you can leverage sensibly and profitably then that's probably more powerful. it appears that some organisations see their brand . In fact [customers will] choose it over most others. (2000) that the brand is important in serving as a relationship fulcrum. (Participant C) And continued by explaining how a particular brand was introduced by the organisation to help signal a competence in asset management: {Main Brand C4) was invented by us. both generally and in post-merger situations: I suppose my view again is that you've got two routes when you make that merger you either say. (Participant D) Other participants expressed the view that different brands could be useful in maintaining relationships with different groups of customers. or you keep the brands separate and run them separately. They understand boats. has a product route to it. which could reasonably be interpreted as having a history of competence in a particular area: People's opinion of (Main Brand Dl) is predicated by its heritage. (Participant F) Such an approach is obviously akin to the arguments of Aaker and Joachimsthaler (2000) that separate brands may be needed to retain or capture different customer franchises and also related to the arguments of DairOlmo Riley and de Chernatony. so we are primarily linked to savings and mortgages and the building society heritage.

and the planets may be brands that are quite famous through their history. A participant commenting on the Lloyds-TSB approach provided an example of this approach: They also have to span different competence areas and on balance have historically not been able to demonstrate a competence in the area that Scottish Widows have demonstrated. but it is a competence brand rather than a relationship brand. the reason being is that in the market in which we operate relationships are key.manufacturer brands and product brands are similar but I think it's quite possible for a manufacturer to have several product brands (Participant C) Brands are known for being product providers Ifor instancej Halifax sells mortgages. so therefore it makes sense for them to retain the Scottish Widows name and brand probably. then you can find a way through to both what the customer requires and wants and also something that's economically sensible. (Participant C) The split was also referred to as a retailer/manufacturer or retailer/product provider split in some cases: The (Main Brand C2) role is changing from being the retail brand to the product brand. .1056 James Devlin architecture strategy as an amalgam of the relationship and competency signalling strategies. The relationship brand in this arrangement may also have a competence in a particular area. [orj may be brands that aren't so famous. (Participant C) The mixture of the relationship brand and the competency-signalling brand approaches normally involves one primary relationship or retailer brand that is then used to distribute financial services of various other brands associated with a particular competence or product group. (Participant C) It just so happens if you then find that the marketplace actually wants an offering which has a relationship with access to specialist competencies. Prudential sells insurance and pensions. Lloyds-TSB provides banking services. whereas I think they are trying to build Lloyds-TSB into a relationship brand. whereby the sun is the major brand which is advertised and communicated and has a relationship role with the customer. Participant C referred quite neatly to such a situation as a "sun and planets" approach. but they operate more on a product delivery platform rather than a relationship platform. as well as the following: We currently operate a basket of brands where you could argue it's called a sun and planets type approach. as evidenced by the quote above from participant G.. But as organisations begin to become much more "multi- .

done that. Organisations may choose to retain separate brands in the post-merger brand family if they are associated with distinct competencies. no! (Participant C) Thus. so use the brand as a means of avoiding channel conflict. or if it is felt that the relationships with customers would be damaged if brands were dropped or changed. We've been there. However. despite the doubts expressed by some practitioners. the experience of Lloyds-TSB suggests that retail financial services firms should . an interesting half way house is the approach adopted by Lloyds and TSB who simply amalgamated both brands by adding a hyphen in between when they merged. branding in retail financial services seems to have moved beyond the "different brands for different channels" model: I think the junior version of the beast would match brand to channel.Brand Architecture in Services 1057 product". so it's a very careful balancing act. This is probably due to the desire to retain customer relationships with the separate brands which are assumed to have distinct positions. (Participant H) But in general. a pertinent observation given the large number of mergers and acquisitions which have and continue to take place in financial services markets. with regard to strategies for managing brand architecture. so it is not just a branding issue there's also business issues around it as well. Arguably. It should be noted that both of these motivations also apply potentially to post-merger situations. companies must make the transition to become much more of an active brand with the consumer. was that of having different brands for different distribution channels: I think 50% of (Main Brand G3) business comes from the IF A market. (Participant H) The other motivation highlighted for a multi-corporate approach to branding. brand amalgamation has been less prevalent in retail financial services than other areas of financial services (such as investment banking or accountancy) or other industries. In this respect. got the T shirt and its not as simple as that. So there are both distribution channel factors and they have a heritage in different areas. albeit less frequently. so there you have to make sure they don't confuse that channel. the two primary motivations for adopting the common multi-corporate approach are to retain relationships with distinct groups of customers and to signal distinct competencies to the marketplace. become much more "customer-centric" than "manufacturing-centric". (Participant G) (Main Brand H3) has a reputation of serving a particular community which is the IFA community.

. a number of practitioners also acknowledged the challenges associated with formulating and implementing brand architecture strategies. the other extreme is a single mono brand. Some participants were more candid about the difficulties of putting theory into practice: (Main Brand DI) retail has a very clear understanding of its brand and its positioning in the market. That historically was a route that we felt was a sensible route however economically it may not be possible given the scale of some of our businesses. sub-branding or branding our product lines. (Participant C) Thus. the range of customer segments and the dynamics of the market may mitigate against using one main brand: Two extreme options.1058 James Devlin perhaps consider brand amalgamation more frequently. that of relying on one overarching brand in all areas is not . with the most popular approach being more akin to a multi-corporate approach. the study has provided useful insights into the brand architecture strategies of retail financial services firms and has shown that the corporate brand approach is less prevalent than posited. one is a collection of unrelated.. So scale is an important issue here for how many brands you have and how you use them appropriately. we do that on a very standard brand management model to decide whether to enter a new market with a new association or we are talking to existing customers with a different offer. it was interesting to hear just how often matters pertaining to branding are currently "under review" or "being thought about". so what we have is a significant number of brands that bang up against each other. Purely anecdotally. findings indicate that the corporate branded approach to the management of brand architecture in financial services. Notwithstanding such observations. it is apparent that there is some evidence to suggest that a number of financial services organisations are still grappling with the question of the appropriate approach to the management of their brand architecture. within that there are a variety of shades of opinion and one of which is that a portfolio of equally important equally supported consumer brands. stand alone brands. However. and when we consider branding.But what the group doesn't have is an idea of how to manage its brand portfolio. so is market dynamics and the segments that you want to operate in and the two issues do not always coincide in theory so therefore you have to make practical pragmatic choices. (Participant D) Participant C emphasised that pragmatic choices may not coincide with those which may be theoretically the most desirable. indicating that the scale of the business. is another option along that continuum. with some even acknowledging there may be no such thing as a single most suitable approach. Thus far.

which in the case of financial services means having brands for individual or small groups of services. Arguably. such as HSBC or Citibank tending towards the one main corporate brand approach. there are instances of some very large organisations adopting the corporate approach. The findings of this study concurred with the arguments put forward in the previous literature. with this approach receiving very little support from practitioners and being largely dismissed as an irrelevance. In addition. perhaps not surprisingly. to be smaller. are likely to adopt the corporate branding approach. this approach is occasionally apparent but not particularly prevalent. The main reasons cited for deviating from the corporate branded approach were to n\aintain relationship franchises with distinct customer groups and to signal distinctive competencies to the marketplace. Berry 2000. Similar sentiments were expressed with regard to the use of sub-brands. less diversified institutions. The relatively few institutions tending towards the one main corporate brand approach appear. An important implication derived from this finding is that managers must ensure that their motivations for using more than one main brand are both well conceived and justified by consumer perceptions. less diversified institutions and non-traditional suppliers of financial services. Branded approaches generally were seen as a distraction from the main brand and likely to confuse consumers rather than add to the overall brand essence of the offering. At the other end of the branding spectrum. Such a point is taken up below in the discussion regarding the multi-corporate approach. practitioners generally deem the practice of branding individual financial services superfluous. Lefkowith and Clark 1988) suggests that services firms. However. this approach was seen as potentially adding cost to . The findings from this study show that in financial services. Discussion and Implications Previous literature (de Chernatony 2001. Perhaps the most common approach to management of brand architecture to emerge is a "multi-corporate" approach with institutions having a family of main brands to help maintain relationships with different customer groups and/or signal distinct competencies. This is essential as supporting more brands is usually more costly and therefore benefits must accrue to justify such costs. At the other end of the brand strategy spectrum is the branded approach to the managen\ent of brand architecture. Arguably there are exceptions with some very large organisations. HSBC and Citibank provide examples. in their strategies for managing brand architecture.Brand Architecture in Services 1059 as prevalent as suggested in the services marketing literature. Dobree and Page 1990. Institutions that tend towards the overall corporate approach are usually smaller.

politically motivated ones. All other things being equal. separate brands should only be maintained if the strength of customer relationships . Therefore. or delete one or more brands and replace it with another existing brand or amalgamate brands in some way. organisations face a choice. externally motivated reasons. When having separate brands in the brand portfolio in order to maintain relationships with different customer franchises. delete or possibly even amalgamate brands. the maintenance of separate brands must bring benefits to offset the increased costs. but also in an ongoing fashion. of maintaining separate brands. It is important to note that both of these potential justifications also apply to post-merger situations. Also.e. The two main motivations according to those responsible for formulating brand architecture strategy are to help maintain relationships with different customer groups and/or signal distinct competencies. rather than for predominantly internally. Either they maintain their complete brand family. From a managerial perspective. i.1060 James Devlin the marketing budget without any obvious return. In the relatively few cases in which such an approach was adopted. Managers must ensure that they are certain that an individual or sub-brand is effective in adding to the brand essence of the offering and should be clear as to exactly what value is being added in the eyes of consumers by the addition of the sub or individual brands. Retaining a consumer focus should help ensure that managers only attempt to sub or individually brand for the correct. before embarking upon such a strategy. such as brand managers attempting to mark their territory and make their product or product group look different and perhaps more important. Both after merger. Managers should note that they must ensure that their perception as to the role and value of the sub or individual brand is informed by the perceptions of consumers. managers should be aware that such an approach has rarely yielded success in the past. The findings indicated that the most common approach to management of brand architecture in retail financial services is a "multi-corporate" one with institutions having a family of main brands in their brand portfolio. both financial and other. There was also a suggestion that such strategies may be driven to a large extent by internal concerns. managers must ensure that the case for maintaining separate brands is proven. One of many examples would be Lloyds-TSB having Cheltenham and Gloucester and Scottish Widows as core components of its brand architecture. often in the form of brands traditionally associated with separate companies. when brand strategists face brand architecture choices as to whether to maintain. it was not normally deemed a success. that rationalisation of the brand portfolio would weaken relationships. managers should be aware that both academic theory and the vast majority of practitioners are in agreement as to the limited value of the branded approach in financial services.

or spend far more on strengthening the one combined brand. managers need to heed the views of consumers in this respect. it quickly deleted the Midland Bank brand and replaced it with HSBC (as part of its overall brand strategy of having mainly an overarching corporate brand). Some negative comment was still apparent amongst participants of this study. such as accountancy. although most commentators would now agree that the strategy has been a success. However. they should establish consumer perceptions on such issues. This is a significant point as. All other things being equal. or that more brands are inherently better than fewer. the attitudes of consumers is key in establishing whether there is scope for brand rationalisation or brand amalgamation. The move was initially greeted with some scepticism. Obviously. To provide an example. Managers should not assume that customers will be upset or somehow disenfranchised by brand rationalisations. In particular. rather than automatically assuming that the maintenance of brands is essential. when HSBC acquired the Midland Bank in the UK. law and merchant banking. An exception is the case of Lloyds Bank and the Trustees Savings Bank (or TSB as it was commonly known). However. It may be the case that managers are assuming that consumers have a strong relationship with a particular brand and that is used as a justification for keeping the brand in the organisation's brand architecture. then it is a sensible strategy. provided the cost saving of no longer having to maintain the Midland brand more than offsets the potential loss from the weakerung of the customer franchise over time. such a move either allows the organisation to economise on the costs of maintaining two brands. there has tended to be brand proliferation within many organisations' brand architectures. given the widespread consolidation which has taken place in financial services. Such an approach is particularly prevalent after merger in professional services. When these two firms merged they became Lloyds-TSB. diligent research may reveal that the consumer franchise would not be adversely effected by brand deletion. . the degree of rationalisation may have been less than that acceptable to consumers in a number of cases. However. such as brand amalgamation in some form. Due to vested interests and internal politics. it is arguably less in evidence in retail financial services. Managers are also urged to consider options other than the bipolar alternatives of brand maintenance and brand deletion. Managers need to consider such matters. This move was greeted with scepticism from commentators as the time and some of the participants in this study were still questioning the wisdom of such a move. To an extent.Brand Architecture in Services 1061 would otherwise suffer to a greater degree than the potential cost saving associated with deleting the brand. such attitudes may be context specific. for instance consumers may be more loath to accept the demise of a brand with a strong regional bond.

hence. Thus. Such a point is acknowledged. Thus managers may well be implementing brand architecture strategies which are significantly more complex and costly than is necessary. An example would be Abbey National using the Scottish Mutual brand in the provision of insurance related financial services. Notwithstanding the acknowledged limitations. A further requirement is that brands are associated with. Limitations and Recommendations for Further Research The primary limitation of this study is the fact that the context is confined to the field of financial services. Such an approach makes sense if consumers do not perceive that one brand can span all of the areas of competence required to deliver the range of financial services in an organisation's portfolio. it should be noted that the financial services context has been used with success in the past to investigate branding and other marketing issues in services. In adopting such a strategy in the management of brand architecture. and are effective at. but it does give rise to the one of the main recommendations for further research. was to signal to consumers distinctive competencies in providing different types of financial services. Conclusions This study employed the context of retail financial services as a case study of the brand architecture of firms operating in a services environment. however.1062 James Devlin The other main rationale for maintaining a family of corporate brands in the brand architecture. rather than one overarching brand. it is suggested that the paper makes a valid contribution to an area of interest to academics and practitioners alike. managers have implicitly assumed that consumers do believe that different competencies are required to deliver different financial services effectively and that separate main brands within the brand architecture signal such differing competencies effectively in the marketplace. Such assumptions need to be backed up with evidence that consumers do hold such views. Such a limitation does not invalidate or necessarily diminish the value of the results and discussion. signalling distinctive competencies. It may well be the case that managers are spending a large amount of money supporting separate brands to signal distinct competencies. when in reality consumers do not perceive the need for different competencies and. separate brands. the generalisability of the findings may be questionable. to investigate similar matters in other services markets. The notion of brand architecture relates to an organisation's design and management of its brand portfolio and in particular the number of brands .

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W. (Eds. In 1996 Jim was awarded the best paper prize at the Annual UK Academy of Marketing Conference and in 1998 he won the award for the best paper published in the European Journal of Marketing. Marketing of Services.186-189 About the Author Dr James Devlin is Reader in Marketing at Nottingham University Business School. Business School and has recently returned from a period of secondment to Nottingham University Business School. Journal of Marketing Management.). R. A. Services Industries Journal. Malaysia Campus. J. American Marketing Association. pp.Brand Architecture in Services 1065 Zeithaml. In: Donnelly. now Cass. During his academic career. . and George. Strategic Marketing Journal and many others. Jim continues to research and publish in the area of retail financial services marketing and has published articles in such journals as the European Journal of Marketing. Chicago. Jim has also worked for City University. V. H. (1981). Jim worked in private banking for a number of years before joining the University of Nottingham. "How Consumer Evaluation Processes Differ Between Goods and Services". Upon graduating.

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