Chapter 1Introduction

Brand Architecture is the vehicle by which the brand team functions as a unit to create synergy,
clarity and leverage. So if you think of each brand of a company as a football player,
Brandarchitecture assumes a coach’s role by placing each player at the right position and making
themfunction as a team rather than a collection of players. The brand portfolio includes all the
brandsand sub-brands attached to product-market offerings, including co-brands with other
brands.

The architecture should define the different leagues of branding within the organization; how
thecorporate brand and sub-brands relate to and support each other; and how the sub-
brandsreflect or reinforce the core purpose of the corporate brand to which they belong.
One of the most important elements of brand architecture is brand portfolio and its management.
Brand portfolio management is not just a marketing issue, in which a sub-optimal portfolio
dilutes marketing messages and confuses customers. It also directly affects corporateprofitability.
Ill-defined and overlapping brands in a portfolio lead to erosion in price premiums,weaker
manufacturing economies, and sub-scale distribution. In a slower economy, the problemsof an
underperforming portfolio are even more acute: While adding brands is easy, it becomesdifficult
to harvest the value in a brand or to divest it.

Pg 04

The following model proposed by david aakar, maps out of different elements of brand
architecture.

http://htmlimg3.scribdassets.com/df23g79ir1e22dc/images/5-6046e490e3/000.png
pg 05

Pg 06
Chapter 2Brand relationships within a portfolio
Single brand across organization
Examples include Virgin, Red Cross or Oxford University. These brands use a single nameacross
all their activities and this name is how they are known to all their stakeholders –consumers,
employees, shareholders, partners, suppliers and other parties.
o Endorsed brands
Like Nestle’s KitKat, Sony Playstation or Polo by Ralph Lauren. The endorsement of
apparentbrand should add credibility to the endorsed brand in the eyes of consumers. This
strategy alsoallows companies who operate in many categories to differentiate their different
product groups’positioning. A case in point would be the Japanese giants who follow a strategy
of corporatebranding
 Case Study- Japanese Brands
The concept, practice and techniques of branding in the Japanese market are traditionally
verydifferent to their Western counterparts. The large, successful brand is king in the Japanese
marketand, as a result, individual products and lines have often played second fiddle to, or
beenendorsed by, the more powerful corporate brand. Corporate logos often feature prominently
inadvertisements and the endorsement of a successful corporate brand has traditionally been
veryimportant to new products in particular.
One reason for this is that frequent purchasing and ever shifting trends in Japanese society
haveshortened the average life cycle of a product as new fads and ever increasing bench marks
haveresulted in businesses having a necessity for quick model change and new products simply
tomaintain momentum. This quick turnover means that, often, a line will not be in existence
longenough to develop a brand identity of its own and so by attaching a well known corporate
brand,instant kudos is added. Examples of this include Sony whose brand name is attached to
many oftheir products such as the ‘Sony Minidisc’ and ‘Sony Walkman’ and Yamaha who attach
theirown brand name to their lines of motorcycles, musical instruments and sports equipment. As

products have changed quickly, so the discerning Japanese consumer has come to rely on
bignames of strong reputation when making purchasing decisions. The basic driver of a brand in
theJapanese market is success and a large and successful corporate name has often become a
badgethat instantly authenticates a new product on the market, reducing the need for individual
brandsto be built and promoted. Following the difficulties in the Japanese domestic economy in
the1990’s, however, practices are beginning to change in Japan. As the economy slowed,
sobusinesses found themselves able to spend less on product innovation and instead
concentratedon sustaining and promoting established products. Japanese corporations are
increasingly takingon a more Western attitude of creating brands for individual lines as the
product and thecorporate brand are separated. The Playstation 2 is an excellent example; the
Sony name is muchless prevalent in the promotion of the product than the previous Playstation
as Sony attempts tobuild a distinct ‘PS2’ brand, separate from the Sony brand itself. Many of the
large corporatebrands are long standing and they have built strong reputations of reliability,
quality and cuttingedge technology or have come to define a niche market. Whilst the corporate
brand has oftenbeen less important in the marketing of Japanese products for export, they have
been vital in thedomestic market and as they are distanced from products it remains to be seen
how Japaneseconsumers will react to a new generation of product rather than corporate brands
o House of brands
Like Procter & Gamble’s Pampers or Unilever’s Persil. The individual sub-brands are offered
toconsumers, and the parent brand gets little or no prominence. Other stakeholders,
likeshareholders or partners, know the company by its parent brand.

The above 3 concepts can also be explained figuratively as follows:

Brand relationships spectrum, and there are additional examples of brand

relationships
Chapter 3Portfolio roles
For building effective brand architecture it is necessary to identify the portfolio roles of
eachbrand. It provides a tool to take more system view of the brand portfolio and includes
astrategi cbrand, alinchp in brand, a silver bullet brands and a cash cow brand.
o Strategic brands
A strategic brand or a mega brand is a currently dominating brand that represents a
meaningfulfuture level of sales and profit. For ex: Slate is a strategic brand for Levi’s, TATA
consultancyservices (TCS) is a strategic brand of TATA group of cos. because the vision of the
firm is tomove beyond traditional steel and automobile business.
o Linchpin brands
A linchpin brand unlike strategic brand not necessarily represents a meaningful future level
ofsales and profit but it is a leverage point of a major business area. It indirectly influences
abusiness by providing a basis for customer loyalty. For ex. ‘Park Avenue’, a brand extension
ofRaymond’s launched in mid-eighties. It is a linchpin brand for Raymond’s because it
hasextended the Raymonds’s credibility in different businesses from ready –to- wear trousers
tomen’s toiletries.
Silver bullet
A silver bullet is a brand or sub brand that positively influence the image of another brand. It
canbe a powerful force in creating, changing and maintaining a brand image. for ex. When
IBMThinkPad was launched it has provided a significant boast in public perception of the IBM
brand.Another ex. is the Positioning of Forhans’s Flouride as having branded feature of ‘being
foamy’rather than just ‘protect gums and teeth’. It has served to make credible claim that
Forhans hadachieved another breakthrough in oral care industry.
Cash cow
Strategic, Linchpin and Silver bullet brands involves investments and active management
forfulfilling their strategic mission. The cash cow brands in contrast do not require any
investmentbecause it has a significant loyal customer base. The role of a cash cow brand is to
generatemarginal resources that can be invested in other brands, which will help for future
growth andvitality of brand portfolio. For ex; Niveacre a m the core product of Nivea, a brand
that has beenextended to variety of skin care and related products.
BRAND ARCHITECTURE AND PORTFOLIO MANAGEMENTP a g e | 11
Chapter 4Brand market context roles
For deciding effective brand architecture, the product market context roles of the group of
brandsmust be well defined and coordinated. There are four steps of product market context roles
thatwork together to define a specific offering and these are:
o Endorser and sub brands roles
An endorser brand is an established brand that provides credibility and substance to the
offering.Endorser brands usually represent organizations rather than products because
organizationalassociations such as innovation, leadership and trust are particularly relevant in
endorsementcontext. For example Nestea and Nescafe create associations with its mother brand
Nestle andMcchicken, Mcburgers, Mctikki, etc. from Mcdonald’s. Tata has 80 different
companiesoperating in seven business sectors, which are endorsed under the megabrand TATA.
Thesubbrands on the other hand stretches endorser brands that add associations, a brand
personalityor any other quality which creates brand identity of it for ex. Nestle’s Cerelac,
Gillette’s Sensorand Cadbury’s Bournvita. The understanding and use of endorser brand and
subbrands is a key inachieving clarity, synergy and leverage in the brand portfolio.

Benefit brands
The benefit brand is a brand which offers either features, component ingredients or
serviceswhich becomes the unique selling proposition (USP) of offering. for ex. Gillette
diversified’soral B has a branded feature which shows the time to replace the toothbrush,
Dietcoke, Daburamla, and Neem & Margo soaps have branded component and gradient and
American express,Life insurance corporation (LIC) and Taj group of hotels have the branded
services associatedwith their names.
o Driver role
Driver role is an extent to which a brand drives the purchase decision and defines the use
experience. Brand with a driver role will have some level of loyalty. Brand architecture involves
selecting the set of brands to be assigned a major driver role; those brands will have priority
inbrand building. A driver brand is usually a masterbrand or subbrands but endorser and
secondand third level sub brands can have some driver roles.for ex. Cadbury’s has two
subbrands‘Dairymilk’ and ‘Bournvita’, which have the major driver roles for selling. Another
example isNirma tikia and Nirma washing powder, which is operating in the market with value
for moneyas its major driving role.
Chapter 5Brand portfolio structure
The brands in the portfolio have a relationship with each other. Brand architecture also
involvesdesigning a structure of all the brands, which will provide clarity to the customer rather
thancomplexity and confusion. It must provide a sense of order, purpose and direction to
theorganization. Three approaches can be utilized to present the portfolio structure.
o Brand groupings
A brand grouping is a logical grouping of brands that have meaningful characteristics incommon.
The groups provide logic to the brand portfolio and help its growth overtime.For ex.in case of
Johnson and Johnson Ltd.,the brand grouping can be made using followingcharacteristics.
•
Segment( Infant Care and Intimate Feminine Care)
•
Product (Healthcare and Pharmaceuticles)
•
Design (Classic and Contemporary)

Brand hierarchy trees

Sometimes the brand portfolio structure can be captured by brand hierarchy trees. The
brandhierarchy tree structure looks like an organization chart with both horizontal and
verticaldimensions. The horizontal dimensions reflect the subbrands and endorsed brands that
resideunder a brand umbrella. The vertical dimension captures the number of brands and
subbrandsthat are needed for different segments of the market. For ex. Colgate, the hierarchy tree
for theColgate oral care shows that Colgate name covers toothpaste, toothbrush, dental floss and
otheroral hygiene products. Again under toothbrush it has brands like plus, precision, classic,
youthand colour change. Under Colgate plus toothbrush it has brands like diamond head and "the
wildones". The brand hierarchy tree presentation provides perspective to help evaluate the
brandarchitecture. A successful brand architecture makes a range of offerings both to the
customersand to those inside the organization, Having a logical hierarchy structure among sub
brands helpsgenerate the clarity.
Brand range
Brand architecture also involves deciding the range of portfolio brands. It throws light on
thesome issues like how far a brand (Megabrand or subbrand) should be stretched horizontally
inthe brand hierarchy tree? How far should they be stretched vertically in to the different
markets?The brand range can be described for each brand in the portfolio that spans product
classes or hasthe potential to do so. The above issues must be analyzed by organizations by
distinguishingbetween the brands in its role as an endorser and master brand and recognize that
sub brands andco- brands can play a key role in leveraging brands.
o Portfolio Graphics
The logo of the brand or the company as well as the visual representation also form an
integralpart of the architecture.The identifying logos, trademarks, packaging, symbols, product
designs,taglines and even the touch and feel aspect of the product are all included in portfolio
graphics.These are helpful towards building a strong brand, and drive the purchase toward the
brand.
The unique shape of Tupperware containers, the Swoosh of Nike, the colour blue which is
synonymous with IBM, are all signs of strong pictorial brand associations.
When compared to Indian Airlines logo, the Jet Airways logo definitely stands out, because of its
relative signage.
Changes in brands and brand management systems are but obvious, especially with regard to
thevaried functions a brand performs. Hence the role of brand architecture is to
maintainequilibrium between so many brands within and outside the organisation. In the new
world ofcompetition, survival essentially depends upon the effective management of brand
architecture.

Chapter 6Characteristics of the ideal brand portfolio

There is a clear analogy between managing a brand portfolio and a football team. The
footballpitch is the market map. You have to decide in which areas you will dominate – whether,
forexample, the midfield or the flanks. The players, represented by brands, have to cover
thepriority areas. Each will have a specific role but will still contribute to the team. The
managerwill avoid players who duplicate – for example, two small fast strikers – or who detract
fromteam effort. Some players are stars (super brands) while others have a more pedestrian
role(support brands).

Chapter 6Characteristics of the ideal brand portfolio

There is a clear analogy between managing a brand portfolio and a football team. The
footballpitch is the market map. You have to decide in which areas you will dominate – whether,
forexample, the midfield or the flanks. The players, represented by brands, have to cover
thepriority areas. Each will have a specific role but will still contribute to the team. The
managerwill avoid players who duplicate – for example, two small fast strikers – or who detract
fromteam effort. Some players are stars (super brands) while others have a more pedestrian
role(support brands).

This figure represents an ideal football team. The shaded areas in midfield, on the flanks and up-
front are where they look to dominate to win. Companies, unlike football teams, are notrestricted
by any fixed boundaries, and may enter any market they wish. And they are not limitedto 11
products or brands – though perhaps they should be.
So the ideal portfolio:
•
Fits the company’s future vision and destination
•
Prioritizes markets and key segments
•
Efficiently covers those priority segments
•
Ruthlessly prunes out those that do not fit
•
Fills gaps through new or extended brands and acquisitions

Case Study : Allied Domecq

One case study which is often quoted to represent an ideal brand portfolio is Allied
Domecq.Allied Domecq Spirits and Wine Ltd is one of the largest players in the alcoholic drinks
marketwith colossal brands such as Beefeater Gin, Kahlua liquor, Sauza tequila, Tia Maria and
Malibuin their portfolio. The company also own a chain of some 3,500 pubs in the UK and
theAmerican fast food giant Dunkin’ Donuts.Their website claims that ‘Allied is about brands
andpeople’ and with some of the world’s leading alcoholic drink brands and an exclusive
database ofsome three million consumers to assist in understanding their customers it would be
difficult toargue with the statement. The Allied portfolio of brands is carefully managed for a
largecompany with such a vast range. Allied have prioritised the area’s that they wish to compete
insuch as high quality spirits (Courvoisier cognac, Ballantines Finest Scotch) and ready to
drinkcocktails and positioned their brands accordingly. This has been supported by brand
extensionsand a policy of buying individual, cherry picked, brands to strengthen their portfolio;
Allied haverecently produced a new range of Kahlua cocktails and purchased brands such as
Malibu, MummChampagne and the US distribution right s for Stolichnaya vodka. This policy
has allowed Alliedto manage their portfolio effectively. They have covered their priority areas,
maintained asustainable number of brands and have largely avoided overlapping and causing
cannibalisation.The strategy seems to be working. In 2001, Allied reported pre tax profits of
£236million over asix-month period, an increase of 16% on the previous year. Allied’s four core
drinks brands,Kahlua, Sauza, Beefeater and Ballantines are all the second biggest of their kind
globally andwith a vast portfolio of second tier products, a commitment to market research and
innovativeproducts such as their ready to drink cocktails, Allied’s focus on portfolio
management seems tobe paying off.

Chapter 7Major mistakes in portfolio management

The biggest mistake is to allow each brand to be managed in isolation because what is right for
an individual brand may be wrong for the portfolio in terms of:
•
Too many brands in too many segments: there may be too many brands in relation to
consumer needs, retailer space and company ability to promote
•
Duplication and overlap
•
Gaps in priority market segments
•
Inefficiencies in operations and the supply chain
•
Diffused and therefore ineffective resource allocation.

To return to the football analogy, this approach will result in bunching and poor coverage of the
playing area like the following figure :\
Chapter 8Why managing a brand portfolio is Important
“Lack of focus means that energy and resources are dissipated. Focus, in contrast, ensures
thatpeople and resources are concentrated where they can add greatest value.” (Source:
Fitzgerald,2001)
Portfolio management will influence the following areas:
o Resource
Resources such as R&D and marketing spend need to be allocated to areas of best return.
Eachbrand requires brand-building resources. Without a clear picture of the portfolio, it will be
harderto identify how best to support the brands that will bring the best returns. If each brand is
fundedsolely according to its profit contribution, high-potential brands with modest current sales
couldbe starved of resources.
o Efficiency
Create synergy with your brand portfolio – strong associations can not only benefit all the
brandsbut also be cost efficient by creating economies of scale in both manufacturing
andcommunications. Looking at brands as standalone silos is a recipe for confusion and
inefficiency.Are there too many or too few brands? Could some be consolidated, eliminated or
sold
Growth
Davidson identifies six ways in which portfolio management enhances growth:
•
Clear prioritization of future focus by major market
•
Prioritization by brand and product
•
Concentration of spend on priority market, brands and products
•
Operational cost savings through simplified business

• Disposal of brands which don’t fit

•
Gap filling by product development and acquisition
Leverage
Leverage your brand equity. Leveraging brands makes them work harder. A proper
portfolioanalysis can highlight which brands are best suited to extension, for instance. The more
effectiveand powerful your brands are, the stronger your leverage and the bottom line.
Clarity
Clarity of product offerings will underpin a consistent brand identity with all the stakeholders.
A balanced portfolio would take advantage of the relative strength of each type of brand to
support others