What is a Brand Hierarchy?

Your brand hierarchy (also known as brand architecture) is how you organize and structure your product and brand portfolio. So sit tight as we dig into the basics of brand hierarchy and give you an idea of where to begin figuring out what hierarchy is the right move for your business.

There are many different variations of the following structures and not all companies’ hierarchies are necessarily easy to identify - but generally we refer to three basic structures when talking about brand hierarchy which is what we will be covering in this post.

The Branded House (Monolithic Master Brand Strategy)

The branded house is a strategy where all of the products and sub-brands fall under the same name as the master brand. A well known example would be FedEX.

The Branded House structure creates cohesiveness, minimizes confusion and builds brand equity for the overarching corporate brand. Monolithic brands need to be extra careful with practices such as consistency (you know we’ll beat the consistency horse to death) to make sure that the strategy is successful. Basically, FedEx simply calling something "FedEx Freight" is not enough to qualify it as a strong monolithic brand if there is no conceptual, visual and strategic consistency, you got to back the claim up! This is what can make this strategy tricky for our free spirits out there that hate the constraints of consistency. That said, a huge advantage is that your marketing dollar will stretch further as investing marketing efforts into the Corporate Master Brand will trickle down to the sub-brands. On the flip side, if the master brand suffers, everything suffers, we’re putting all of our eggs in one basket here people!

House of Brands.

In a House of Brands approach the products and sub-brands are completely separated from the Master Brand, a famous example is Unilever. In this architectural structure there is no connection between Unilever as a Master Brand and their sub-brand Dove, but also no connection between the sub-brands Dove and Axe, both Unilever brands.

This approach is ideal for a big conglomerate like Unilever that carries an array of products across various categories and brand identities. Not only does Dove and Skippy Peanut Butter have little to do with each other category wise, but why would I want to buy my soap from the same company that sells my peanut butter? There is a conceptual disconnect. But even among brands within the same category problems can arise. How do you marry Dove and Axe with such incredibly competing messages? Dove the brand championing natural beauty and loving your body as it is, and Axe: The Womanizer. It is conceptually bewildering that these two would share the same parent.

This structure enables Unilever to carry an incredibly diverse portfolio and not tarnish any of their brands by associating a diverse Master Brand or competing category brands with each other. Klondike is simply Klondike. Not Unilever-Klondike, or Vaseline-Dove-Skippy’s-Klondike.

The drawback? Because let’s be real, there always is one, each brand requires significant investment and can’t piggy back of each other. Unilever’s investment in Q-tips brand equity will not trickle over to Lipton. Hence, each brand needs to be built and cared for as separate identities. On the flip side, if Axe suffers, it won’t affect Hellmann’s Mayonnaise.

Endorsed Brand Architecture

The Endorsed hierarchy is somewhat of a hybrid of the two. The sub-brands stand on their own two legs, but with endorsement from the parent brand (Think Sony Playstation & Nestle KitKat). Another famous example is Marriot. Courtyard is a brand on its own, but the endorsement by Marriot adds substantial credibility. Contrarily, if we look at Toyota, the Toyota brand does not endorse Lexus. Lexus is a premium brand and Toyota endorsing it does little to build the Lexus brand.

As you may have guessed, the benefits and drawback of this structure are a combination of the other two. If the Marriot brand suffers all of the endorsed sub-brands will take some form of hit, but on the flip side they can also operate independently enough where if Courtyard drops in brand equity that does not mean JW Marriott will. And you guessed it, that marketing dollar spent building the Corporate Marriott brand will stretch to the endorsed brands.

Deciding on what brand structure is best for your business is a big decision that will have lasting effects on your strategy and brand(s). It could end up hurting your business if you apply a Branded House approach when you’re really a House of Brands company - or on the flip side catapult you to success with a strategically applied monolithic hierarchy.

Whichever one you choose, make sure it makes sense for your company. Don’t get lured into a Monolithic approach because you want to stretch that marketing dollar if it’s not right, because you might end up having to explain to your customers how you’re supposedly both Dove and Axe.

Need help figuring it out? Give us a call for a consultation!