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Strategies for a house of brands or a branded house
Kate Elizabeth — 19th October 2018
The question of a house of brands or a branded house leads into brand architecture and is another way to approach the development of your architecture and structure.
Whether you are an established brand looking to expand, or a new business mapping your brand and product structure, you will benefit from a considered approach to brand hierarchy, allowing you to scale your brand when you grow.
Branded house definition
A branded house is structured so all brands names and product brands (see key definitions) use the name of the master brand in their naming conventions and have a tie through their visual identities as well.
Each brand feeds into the master identity, reinforcing the brand attributes, and also draws down on the strength of the master brand. To re-appropriate a cliche, for a branded house, the sum of the parts makes the whole larger and stronger.
Branded house example
Apple has multiple products, and many of them are known well enough to stand apart as product brands. However, they are all clearly branded Apple and leverage the brand visual identity and ethos of the master brand.
Benefits of a branded house strategy
The branded house strategy works well to provide a common platform for individual product brands while each marketing and positioning element simultaneously builds both the product brand and the master brand.
A branded house takes advantage of the same outcomes and audience - it capitalises on existing synergies and doesn't cannibalise products within the house because the purposes are differentiated.
Planning, resources and budget are all centralised rather than split between teams and brands in a branded house model. Building and controlling a single brand is also easier for brand and marketing teams.
Negatives of a branded house strategy
A branded house strategy makes it difficult to add new audiences (who aren't users of your core brand) or to add new brands through mergers and acquisitions. New audiences often need a different outcome from the product or category, a different value proposition or a different price. They may be consciously avoiding your brand because it doesn't meet their needs and will be sceptical of a play into a new space with the existing brand, or it may not be possible to make a play into this space because of strategic or values-based limitations.
An Android phone user is unlikely to adopt an Apple tablet because they philosophically disagree with the closed eco-system of Apple. The product brand in this instance (linked to the master brand) doesn't allow this flexibility.
House of brands definition
A house of brands has diverse audiences, outcomes, brand purposes and visual identities, sitting underneath a corporate brand. The brands, promoted as separate entities, often without reference to the corporate brand, let alone each other
A house of brands doesn't grow stronger by referencing other product brands; it grows stronger by demonstrating singleness of purpose for each product brand.
The most critical element to underpin a house of brands is the audience, and the brand's promise to this audience.
House of brands example
Unilever is the brand behind many brands. For a full list of the Unilever brands, see here.
Some of its most prominent brands in Australia include Lynx, Dove, Lipton, Streets, Bushell’s and Continental.
These products are so disparate, with the purposes and audiences so diverse that it couldn’t possibly market them all under the one brand. Some of this is naturally due to the acquisition of additional brands over the 80+ year history of the company.
However, the strength for the Unilever brands is the individual and recognisable brand identities – customers buy Lynx because they think it will get them through the awkwardness of teenage years with as little heartbreak as possible. They are purchasing the brand – the promise to the customer – that is unique to Lynx.
Benefits of a house of brands strategy
A house of brands works best with the individual brands clearly defined by distinct target markets and marketing strategies - most commonly consumer brands. It works where a particular target market doesn't respond to the other brand e.g. the user of Dove for Men isn’t particularly enamoured by the Lynx brand and doesn't want his body care routine associated with that of teenage boys.
Negatives of a house of brands strategy
The downside of a house of brands approach is that it requires more effort to plan and build different the different brands that make up a house of brands. Again, it is imperative that the brands don’t cannibalise each other – in that case, you are better off with a branded house.
Alongside increased effort is increased budget, because you cannot rely on cross-overs from one product brand and audience to naturally pitch another brand to the same audience.
Hierarchies can often be quite complex in a house of brands and the corporate brand underpinning all of them can become lost. Unilever, for example, had no branding presence on the packaging of its product brands for years, and now has only a small logo presence.
Hybrid brand house definition
A hybrid brand house usually occurs following mergers and acquisitions - what started out as a branded house (all linked through the master brand with common brand promises, naming conventions and visual identities) has now become a little bit Frankenstein's monster with new brands now part of the roster with separate promises, positioning and branding.
In a hybrid brand house model some of the brands remain linked and others, while being in the same category perhaps, sit separately.
Hybrid brand house example
An example of a hybrid brand house is Coca-Cola.
Coca-Cola has the core Coke range - Coke, No Sugar, Diet - all using the Coca-Cola brand and visual identity. They also own Sprite, Fanta, Powerade among other product brands.
These product brands all have their own identities, product visions, brand personalities and positions within the market.
Benefits of a hybrid brand strategy
A hybrid brand commonly occurs through purchasing another company or expanding their offering into new spaces, e.g. adding sports drinks to the roster. It allows you to capture new markets and audiences and ensures new offerings don't confuse your existing customers.
Negatives of a hybrid brand strategy
This model essentially becomes the same as a house of brands with the same budget and management considerations.
Brand strategy considerations
Building a strong brand is the goal of any brand strategy. When deciding what brand strategy is suitable for your company, there are some key considerations:
Consider your outcomes and your audience - what is the outcome you are promising to deliver through your brand?
Who will benefit from you delivering this promise?
What will your naming conventions be?
Will you build awareness of all brand entities or just those consumer-facing?
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