BUILDING BRAND ARCHITECTURE

1.INTRODUCTION:

Brand Architecture is a system that organizes brands, products and services to help an
audience access and relate to a brand. A successful Brand Architecture enables consumers to
form opinions and preferences for an entire family of brands by interacting or learning about
only one brand in that family.

An established Brand Architecture is an important guide for brand extensions, sub-brands and
development of new products. It will also provide a road map for Brand Identity development
and design, and remind consumers of the value proposition for the entire brand family. It also
provides the maximum brand value by fully leveraging both corporate and sub brands.

Like most marketing topics, I could write on a book on this. As such, I’ve left out some nuance,
but I’ve tried to provide enough information to be a useful jumping off point.

Here are some short definitions for key concepts to get us started:

Master brand: A top-level corporate brand that encapsulates other branded products and
services.

Brand extension: a product or service launched by a known brand name, where the extension
is in a different category than the brand’s other products or services.

Below are the three most common types of Brand Architecture:

1. Branded House – This offers a very logical path to brand extensions and new
brands. In a branded house, the master brand is always present and is easily linked to
and leveraged by extensions. A good example is FedEx. FedEx Kinko’s provides very
different (but complimentary) services than the master FedEx brand, but is easily linked
back to FedEx, and therefore shares its credibility.

2. House of Brands – This insulates and protects the master brand from brand extensions
and in turn protects brands from each other. A house of brands also allows for a Master
Brand to have competing brands in the same segments. A good example is Proctor and
Gamble. If Crest, for instance, had some kind of brand crisis, none of the other brands
would be affected.
 3. Hybrid or Endorsing Brand – This is a more flexible way to package brands under a
master brand. Brand extensions are given separate identities and are associated with the
master brand, or not, depending on the context. This gives you the freedom to have
independent strategies for the brand extensions, but to also use the equity of the master
brand when it’s convenient. A good example is Toyota with the Lexus and Scion
brands.

These three types are the most common, and they each have different strengths and weaknesses,
as I allude to above. Deciding the right structure for your brand takes an extensive amount of
research, and an in-depth understanding of your position, offerings, strategy.

2.BRAND PYRAMID:

Fig: Brand pyramid of Nike

NIKE’S CBBE MODEL:
SALIENCE: Customers consider NIKE of a brand with high quality and good design sport
shoes
PERFORMANCE: Nike products own high technical performance
IMAGERY: People consider that Nike represents the high status, cool, style. The winner in
the competitive spot activities
JUDGEMENTS: Consumers give high credibility to NIKE due to its high quality good
design and innovation
FEELINGS: Nike focuses on inspiration of their consumers, making them believe that all
they need is “JUST DO IT”
RESONANCE: Nike proposes the customization services to its customers by offering from
the customized shoes to the personal video filming of participants during the run
3.BRAND COMPARISION:
Brand comparison of Nike and Adidas

The brand value of Nike has increased year-on-year since 2010 and reached around 34.4 billion
U.S. dollars in 2020. In comparison, the Adidas brand was valued at approximately 12.07
billion U.S. dollars in 2020 – increasing for the fifth consecutive year following two years of
decline.
4.BRAND VALUE/EQUITY:
Brand equity refers to the importance of a brand in the customer’s eyes, while brand value is
the financial significance the brand carries. Both brand equity and brand value are educated
estimates of how much a brand is worth.

Equity and brand value are similar, but not the same. Oftentimes, there is confusion around
how each differs so let’s look at exactly what each means:

Brand Equity

Brand equity is a set of assets or liabilities in the form of brand visibility, brand associations
and customer loyalty that add or subtract from value of a current or potential product or
service driven by the brand. It is a key construct in the management of not only marketing,
but also business strategy.

In the late 1980s, brand equity helped create and support the explosive idea that brands are
assets that drive business performance over time. That idea altered perceptions of what
marketing does, who does it, and what role it plays in business strategy.

Brand equity also altered the perception of brand value by demonstrating that a brand is not
only a tactical aid to generate short-term sales, but also a strategic support to a business
strategy that will add long-term value to the organization.

Brand Value

Brand value, on the other hand, is the financial worth of the brand. To determine brand value,
businesses need to estimate how much the brand is worth in the market – in other words, how
much would someone purchasing the brand pay?

It is important to note that a positive brand value does not automatically equal positive brand
equity.

5.LIST OF SOURCES:

https://www.gravitygroup.com/blog/what-is-brand-architecture/

https://www.slideshare.net/Cletus2k3/brand-managementnike

https://www.statista.com/statistics/985227/brand-value-comparison-of-nike-and-adidas-
worldwide/

https://www.prophet.com/2016/09/brand-equity-vs-brand-value/