“Brand Architecture” refers to how an organization names and organizes its offerings. The goal is to cover as much of the market as possible with the least number of brands. Organizations with more than one brand (which is most organizations), also need to decide where in the brand portfolio to build equity. For most organizations, decisions about brand architecture and where to focus their resources are the most important brand decisions they will make.

Getting the Brand Architecture right eases decisions about where to invest for long-term growth. It aligns marketing decisions with business objectives and ensures efficient use of marketing resources. Conversely, failure to optimize the portfolio through smart brand architecture is at the root of many brand strategy problems.

Master Brands: Efficient but Potentially Risky

The current fashion in architecture leans toward master brands, an approach sometimes referred to as a “Branded House.” Master brands organize offerings neatly under one brand roof. In contrast, the "House of Brands" approach relies on discrete stand-alone brands.

The all-eggs-in-one basket master brand approach is highly efficient, but carries risk. One risk is that product failure or a PR crisis with one product can spill over to others, as we have seen with Boeing. Another master brand risk is brand dilution. Dilution happens when a brand’s meaning is stretched too far, making it vulnerable to inroads from more narrowly targeted offerings. There is a good reason why Amazon is launching hundreds of fashion brands: multiple brands increase Amazon’s chances of success with diverse consumer audiences. Some of the softness seen in major CPG brand performance and loss of equity in power master brands like Oscar Mayer may be attributable to loss of relevance due to brand dilution. These brands are being challenged by store brands, on the one side, and more narrowly focused niche, luxury and online exclusive brands on the other.

The Role of Sub-Brands and Branded Differentiators

Sub-brands help customers and prospects navigate a company’s range of offerings and more easily understand where they “fit”. Sub-brands also help companies address opportunities with targets that may not relate easily to the master brand.

We recently recommended a sub-brand approach to a health care products company that dominates its category. We suggested they create a new, more youthful sub-brand to complement its established brand which caters mostly to older women. We learned through research that although many younger women suffer the same conditions as their mothers, they don’t always care to admit it! Speaking to the specific needs of new moms and active young women will help the company optimize its revenue across the total market.

For another client, we recommended naming a specific product ingredient to help distinguish a premium line from its value priced line. Without this extra level of branding, it wasn’t clear how the premium line justifies its premium price.

Has Tide Succumbed to the Brand Stretch Temptation?

P&G's Tide Cleaners may be an example of a master brand risking overstretch. Tide is a giant master brand spanning multiple laundry and fabric care categories. The brand has worked hard for several years to develop wash and fold laundry delivery services under the name “Tide Spin.”

Last July, P&G acquired Chicago-based start-up Pressbox. Pressbox offers 24/7 dry cleaning and laundry pick-up and drop-off services via app-controlled lockers installed in residential properties. The acquisition allows P&G to reach new audiences with 24/7 pick up and drop off laundry services and dry cleaning. They immediately re-branded the combined services, “Pressbox by Tide.” In February, P&G rebranded again, pulling together all its services together under one name, “Tide Cleaners”, retiring the Pressbox name entirely.While this approach is no doubt efficient, we wonder if it is smart to rely so heavily on the Tide name? The master brand approach may look efficient, but could sub-optimize Tide's opportunity in services, and especially in dry cleaning.

Tide currently has little brand equity in pick-up and delivery services, and is not well known for dry cleaning.

Furthermore, the Tide name may work against Pressbox’s carefully nurtured premium image as a provider of upscale, premium-priced garment care.

Finally, Pressbox relies heavily on sales to property managers to gain access to apartment and condo residents. Will they attach the same prestige to Tide Services as they do now to Pressbox? Time will tell.

Is your architecture working as hard for you as it could? Check out our Brand Architecture Toolkit to learn more about optimizing your brand portfolio.