Brand Architecture:
Designing Your Brand Portfolio for Success
September, 2014
AGENDA
Agenda
 Brand Architecture Defined
–
Why Brand Architecture
–
Brand Portfolio Roles
 Brand Architecture Solutions
–
Types of Brand Architecture
–
Strategic Considerations
 Brand Architecture Development Process
 Application: McDonald’s Masterbrand Under Fire
 Conclusion
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1
Naming a company is just the first of many business decisions - and
may not even be the most important!
Products, business units, specific
services, marketing programs,
features, line extensions, apps, web
sites and more all need monikers.
How these names relate is the
difference between brand coherence
and brand confusion.
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2
BRAND ARCHITECTURE DEFINED
What’s In a Name?
Brand architecture provides the rules for naming assets in the brand
portfolio and specifies the relationships between them. It also determines
marketing investment priorities and whether and how new acquisitions
should be integrated to the portfolio.
A clear architecture contributes to brand
health and company value.

Makes it easier for customers to navigate
offerings and avoid confusion

Ensures the masterbrand is leveraged
without overstretching

Guides new product and innovation
development

Ensures customer considerations are is
central to naming decisions

Provides direction for where to focus
marketing investments
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Each naming decision has
implications for future decisions,
so it’s important to have a plan.
3
BRAND ARCHITECTURE DEFINED
Architecture Rules
Brand architecture represents the brand to external stakeholders. The
optimal architecture may not line up neatly with internal organizational
structures – and that’s okay!
Organizational Structure is
Internally Facing
Brand Architecture Is
Externally Facing
Masterbrand
A
Corporate
Business
Unit
Brand B
Endorsed by A
Subbrand C
Subbrand D
Products
Business
Unit
Products
Business units are not brands.
Ingredient or Feature
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4
BRAND ARCHITECTURE DEFINED
Brand Architecture = Face of the Business
Each portfolio brand asset needs a clear role that links it to other assets.
Brand Role Descriptions
Corporate
Brand
Master
Brand
(Driver)
Endorser
Brand
Company name and legal entity. Often used
as endorser but may not be customer facing
at all.
Drives purchase decision and defines user
experience. Most strongly represents the
differentiation inherent to the offer.
Master Brand
Sub-Brand
Provides approval, credibility or guarantee to
a range of products, but is usually not the
driver.
SubBrand
Derives equity from another brand, usually
the Master.
Ingredient
Brand
Features, materials, components or parts
that are contained within other branded
products. Not an equity driver, often an
equity energizer.
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1.5
Endorser
Brand
Clear roles simplify decisions
about brand expression
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BRAND ARCHITECTURE DEFINED
Architecture Basics: Brand Roles
“Sony” plays multiple roles in its portfolio. Some offerings have stand-alone
brands.
Corporate Brand
Master Brands
Master Brand: Allows equity to
be shared among brand assets
when used in either driver or
endorser role.
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Sub-Brand
Sub-Brand: Leverages the
strength of the master brand
while helping to separate and
organize the offerings.
6
Stand-Alone Brands
Stand-Alone Brand:
Separates offerings, creates
new sources of equity or
targets new audiences.
BRAND ARCHITECTURE DEFINED
Brand Roles Assigned Based on Business Need
Branded elements live outside the architecture. They may be trademarked
or licensed and can enhance equity by providing uniqueness and
memorability, but they are not offerings.
Brand Elements Live Outside the Architecture
Celebrities lend
meaning
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Characters create
likeability
7
Sponsorships
build affinity
BRAND ARCHITECTURE DEFINED
Brand Architecture: What’s Not Included?
Brand architecture is built to last. It needs to be revisited when companies
change strategic direction or the business has added important capabilities
that go beyond its existing brand structure.
Triggers for Revisiting Architecture
 Merger or acquisition
 Too many brands and offerings are competing for
attention and investment dollars
 Corporate brand and product brands have the
same name, hard to distinguish
I have a problem
 Brands are losing relevance with consumers
 Brand meaning has been diluted or stretched
beyond credibility and effectiveness
 Programs, elements, features or sponsorships are
asking to be treated as brands
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BRAND ARCHITECTURE DEFINED
Signs of Trouble
In 2012, Kellogg’s restructured its brand portfolio to better leverage its
master brand, acquired stand-alone brands and its Olympics sponsorship.
Triggers for revisiting architecture:
 Had acquired multiple new
brands – Keebler, Kashi,
Morningstar – and needed to
elevate Kellogg’s corporate
brand above its cereal master
brand
 Needed to strengthen the
meaning of the Kellogg’s
brand - it’s about the power of
breakfast, not just cereal.
 Wanted to leverage
investment in 2012 Olympics
to benefit all Kellogg’s subbrands
“If you look at our portfolio we have a number of master
brands: and we had to start separating out the
Kellogg’s brand from the Kellogg company …we then
needed to be very clear about what Kellogg’s the brand
stood for and provide the north star for all the subbrands that kind of sat underneath it.”
“Kellogg’s is a truly iconic brand …We felt that having a
stronger brand, driving a stronger point of view, a more
powerful identity and have at the center an umbrella to
talk about our portfolio more holistically, to talk about
the power of breakfast, to talk about the value of
cereal.”
http://www.forbes.com/sites/jenniferrooney/2012/05/10/kelloggs-embarkson-major-brand-overhaul/
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9
BRAND ARCHITECTURE DEFINED
Example: Kellogg’s
Brand architecture solutions fall on a spectrum. Most are hybrid solutions,
falling somewhere between branded house and house of brands.
House of Brands
Hybrid
Branded House
Builds equity in strong
stand-alone brands across
a wide range of categories
Leverages strong master
brand while allowing flexibility.
Results in strong master
brand.
Requires significant
marketing investment
Requires careful planning to
avoid confusing customers or
diluting the master brand.
Can be difficult to extend
beyond the expertise of
the master brand.
Cons
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BRAND ARCHITECTURE SOLUTIONS
Types of Brand Architecture
Disney uses a mix of brand architecture solutions to build and protect its
businesses.
Stand-Alone Brands
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Hybrid
11
Branded House
BRAND ARCHITECTURE SOLUTIONS
Hybrid Solutions Are Most Common
Architecture decisions have investment implications, so selection of the
optimal solution is determined by business strategy.
House of Brands
Branded House
Target multiple
segments
Target single or few
segments
How important is it to
represent the brand the same
way in different geographies?
Address individual
geographies
Reinforce a global
organization mindset
Are there synergies that can
be leveraged between different
brands or business units?
Few synergies to be
leveraged
Many synergies to be
leveraged
Do the brands address the
same or different customer
segments?
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BRAND ARCHITECTURE SOLUTIONS
Determining the Optimal Architecture
Three guiding principles help to ensure brand architecture has the optimal
business impact.
Right Number
Sufficiently cover the market and target
customer segments with the fewest
brands possible.
Clear Separation
Make it easy for customers to find the
solution they seek by ensuring
“daylight” between brand offerings.
Highest Profit
Fulfill customer needs (and generate
revenue) while minimizing brand
development and management costs.
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13
BRAND ARCHITECTURE SOLUTIONS
Brand Architecture Principles
Not all brands are equally important. Architecture guides decisions about
innovation and investment as portfolio brands compete for resources.
Example
Strategic
Brand
Significant contributor to company’s future sales,
perceptions or market position.
Distinguisher
Brand
Enhances the differentiation of another brand. Also
referred to as ‘branded energizer’ or silver bullet.
Cash Cow
Money making brand that does not represent
future significant growth.
Corporate
Brand
Low visibility to customers, but important to
regulatory bodies, investors, employees, trade
groups, partners.
Fighter/Flank
er Brand
Addresses competitive threat. Protects share of
other brands in the portfolio.
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BRAND ARCHITECTURE SOLUTIONS
Architecture Decisions Are Strategic
Samsung has strategically separated the Galaxy brand from its consumer
electronics and enterprise brands through an endorser strategy, and invests
primarily in Galaxy.
Cash Cow
Strategic Brand
Feature Mobile Phones
Android Smartphones
Digital Cameras and
Camcorders
Wearable Tech
Tablet PCs
Corporate Brand
Windows Smartphones
Solutions Exchange
Android Tablets
Windows Tablets
Android Cameras
Windows Laptops
Enterprise Solutions
Android Wearables
Windows Desktops
Enterprise Ready Devices
Home Theater and Audio
Home Appliances
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*Not Sub-Branded
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Flanker/fighter
Brand
15
Samsung Knox
BRAND ARCHITECTURE SOLUTIONS
Example: Samsung’s Architecture Directs
Investment
 Amazon keeps its acquired strategic businesses separate through a standalone strategy. It uses an endorsed approach for all other brands.
Amazon.com is the closest thing the company has to Cash Cows, though it
appears to still have healthy growth potential.
Cash Cow
Strategic Brands
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Stand-Alone Brands
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BRAND ARCHITECTURE SOLUTIONS
Amazon’s Architecture Also Directs Decisions
 Starbucks is thoughtfully expanding its portfolio to separate its high growth
and premium businesses from its mainline coffeehouses and new
Starbucks Express stores.
Cash Cows
Starbucks coffeehouses
Express format
stores (2015)
Strategic Brands
Flanker/fighter
Brand
Starbucks Reserve
Roastery and Tasting
Room (Seattle)
Starbucks Reserve
stores (2015)
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http://news.starbucks.com/news/starbucks-accelerates-growth-of-store-formats
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BRAND ARCHITECTURE SOLUTIONS
Starbucks is Expanding to Meet Business Needs
When selecting the optimal architecture, it’s important to evaluate options
using agreed criteria.
Business
Strategic Fit?
Help achieve and support
strategic priorities?
Business Support?
Support different business
units and/or market
segments?
Flexibility?
Accommodate changing
market conditions?
Implementation?
Brand
Build Equity?
Fit with/protect
existing equities or
create new ones?
Create Synergies?
Create synergies
across the portfolio?
Provide Leverage?
Enable marketing and
brand-building
efficiencies?
Ability to execute
successfully?
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Customer
Maximize Clarity?
Minimize customer
confusion?
Address Multiple
Stakeholders?
Meet the needs of
multiple
stakeholders?
BRAND ARCHITECTURE SOLUTIONS
Assessing Brand Architecture Options
Effective brand architecture directly impacts the market value of a business,
so it’s worth taking the time to get it right.
Brand Architecture Development Process
Strategic
Business Analysis
Brand Architecture
Mapping
Alternatives
Development
How closely aligned
are the brand and
business strategies?
How aligned are
external and internal
perceptions of brands
and their roles?
What are the
various ways the
portfolio could be
configured going
forward?
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19
Evaluation of
Alternatives
Which architecture
alternative best fits
the short and longterm business and
brand objectives?
BRAND ARCHITECTURE DEVELOPMENT
The Way Forward
Through consistency and careful brand-building, McDonald’s became an
American icon. Using the arches, color palette and “Mc” to identify and link most
of its offerings to the master brand, it is a prime example of a Branded House
architecture.
“[McDonald’s] gave millions of Americans their first jobs
while changing the way a nation ate.”
Bloomberg Businessweek, 3/2/03
Tightly associated with
burgers, fries and soft drinks,
the brand thrived in the ’80s
and early ’90s.
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20
http://mrktspnkr.wordpress.com/2012
/06/29/brands-as-identifiersfunctional-and-symbolic-images/
MCDONALD’S CASE STUDY
The Branded House McDonald’s Built
New menu items
like the low-fat
McLean Deluxe
and Arch Deluxe
burgers, meant to
appeal to adults,
bombed
1995
Sales
stagnated while
costs increased
as the product
offering
expanded/beca
me more
complex
Record
number of
franchisees
left the
system in
2002
2000
In an effort to
regain relevance,
McDonald’s
acquired Chipotle
Mexican Grill and
Boston Market in
1999
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.
Spun off Chipotle
in 2006 to refocus
on core
hamburger
business
2005
In 2004,
“Supersize Me”
brought attention
to what too much
McDonald's does
to your body and
how it makes you
feel.
21
U.S. comp store sales
slipped 1.7% in Q1
and 1.5% in Q2 of
2014
2010
2015
Salads represent only 23% of McDonald’s sales in
the United States. CEO
Don Thompson admitted “I
don’t see salads as being a
major growth driver in the
near future.” (5/13)
MCDONALD’S CASE STUDY
Signs of Trouble Starting in Late 1990s
Brand Architecture Development Process
Strategic
Business Analysis
Brand Architecture
Mapping
Alternatives
Development
How closely aligned
are the brand and
business strategies?
How aligned are
external and internal
perceptions of brands
and their roles?
What are the
various ways the
portfolio could be
configured going
forward?
Focused on health-centric global initiatives, putting food quality first.
Marketing now organized by consumer groups such as millennials,
families and adults rather than by product.
Stepping up digital, including e-commerce, fast-tracking testing of
mobile payments and ordering. In June it set up a "learning lab" at a
restaurant in Laguna Niguel, Calif., to better understand what people
want and to experiment with customizable burgers
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22
Evaluation of
Alternatives
Which architecture
alternative best fits
the short and longterm business and
brand objectives?
MCDONALD’S CASE STUDY
Strategic Direction
Brand Architecture Development Process
Strategic
Business Analysis
Brand Architecture
Mapping
Alternatives
Development
How closely aligned
are the brand and
business strategies?
How aligned are
external and internal
perceptions of brands
and their roles?
What are the
various ways the
portfolio could be
configured going
forward?
Evaluation of
Alternatives
Which architecture
alternative best fits
the short and longterm business and
brand objectives?
Executives worry the master brand has lost
relevance with consumers as:
Millennials have defected to fast casual chains like
Chipotle and Five Guys.
Moms no longer see McDonald’s as a good place for
kids.
Last month, Consumer Reports said a survey of
more than 32,000 subscribers rated McDonald's
burgers the worst-tasting of 20 rival burger chains.
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23
http://www.businessweek.com/articles/2014-0909/mcdonalds-happy-meal-problem-kids-turn-awayfrom-fast-food
http://www.chicagobusiness.com/article/20140906/ISSUE0
1/309069980/mcdonalds-has-a-new-generational-problemkids#
http://online.wsj.com/articles/mcdonalds-faces-millennialchallenge1408928743http://online.wsj.com/articles/mcdonalds-facesmillennial-challenge-1408928743
MCDONALD’S CASE STUDY
Brand Architecture Mapping
Brand Architecture Development Process
Strategic
Business Analysis
Brand Architecture
Mapping
Alternatives
Development
How closely aligned
are the brand and
business strategies?
How aligned are
external and internal
perceptions of brands
and their roles?
What are the
various ways the
portfolio could be
configured going
forward?
Evaluation of
Alternatives
Which architecture
alternative best fits
the short and longterm business and
brand objectives?
Branded House approach makes it difficult to change perceptions.
May need to reserve McDonalds as corporate brand and build equity
in new stand-alone brands and sub-brands.
Corporate brand could be focused on target-relevant purpose (e.g.,
transparency in food sourcing; championing clean, healthy foods and
ingredients; supporting a living wage for hourly workers)
Sub-brands or stand-alone brands for Kids or Millennials or other priority
targets may help separate new initiatives from current offerings.
New digital initiatives provide a platform for a new, more relevant brand.
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24
McDonald’s applied
for a new trademark
for a McBrunch brand
in September 2014
http://adage.com/article/news/mcdonal
d-s-files-trademark-mcbrunch/294911/?
MCDONALD’S CASE STUDY
Architecture Alternatives
Brand Architecture Development Process
Strategic
Business Analysis
Brand Architecture
Mapping
Alternatives
Development
How closely aligned
are the brand and
business strategies?
How aligned are
external and internal
perceptions of brands
and their roles?
What are the
various ways the
portfolio could be
configured going
forward?
Key evaluation criteria relate
to ability to support the
business, build new sources
of equity and better address
the needs of Millennials and
kids/Moms.
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25
Evaluation of
Alternatives
Which architecture
alternative best fits
the short and longterm business and
brand objectives?
MCDONALD’S CASE STUDY
Selecting the Optimal Solution
 Brand architecture is a strategic business design solution that is aligns
business and brand goals
 Architecture defines clear roles, relationships and investment priorities
among brands
 A coherent brand architecture makes marketing more efficient and effective
by ensuring customers and other stakeholders understand what the
business can do for them
 House of Brands and Branded House are just two many possible
architecture solutions. Most companies used a hybrid approach.
 Brand architecture should be revisited periodically to ensure business
requirements are being addressed and the structure is optimal for supporting
the business strategy
 Identifying the optimal architecture is a 4-step process that begins with a
strategic business assessment and concludes with a recommended solution
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26
CONCLUSIONS
Key Takeaways
To Learn More, Contact Us:
Carol Phillips
carol@brandamplitude.com
Judy Hopelain
judy@brandamplitude.com
269-429-6526
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415-810-8268
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