Why every CMO should ensure their organisation has clear brand architecture

Dan Ratner

• managing director, uberbrand

Dan Ratner is managing director of branding and communications agency, uberbrand. He has more than 15 years’ experience in marketing, communications and branding and is passionate about branding as an enabler to fulfil organisational objectives. Working closely with uberbrand’s clients Dan works to understanding the current customer perception in the context of business goals and aspirations. Dan works with well-known Australian brands across a variety of sectors including financial services, travel and education.

Growth is essential for businesses but can cause major headaches for CMOs. When organisations expand by introducing new products or acquiring or merging with other companies, the result is often multiple products, services, logos, brands and sub-brands all vying for attention in the marketplace.

Introducing new brands becomes particularly problematic when they overlap with existing ones. Lines can blur and the resulting confusion can see brands competing rather than complementing each other. This leads to unnecessary expenditure, inefficient processes and wasteful duplication of marketing activities.

Ultimately this reduces the organisation’s ability to increase market share across the business and eats away at potential profits. To avoid this, organisations must have a clear brand architecture in which each brand has a unique set of defining characteristics and a strong identity.

The brand architecture maps the brand ecosystem and hierarchy. This overarching view lets the marketing team organise and manage the different brands and properties so that it can go to market with individual offerings under a unified strategy.

There are several situations that might result in a confused brand architecture. To prevent brand dilution, it is vital CMOs are aware of the typical situations that may cause issues.

There are several steps that businesses can take to ensure their brand architecture is working.

1. Assess the number of brands in the portfolio

   It is possible to have too few brands compared with the number of products/services offered. If that happens, each brand’s credibility and specialism is stretched. Each brand must have clear guidelines around its remit and audience. There are very few brands that can be everything to everyone. An insurance group for example, might have several brands in its portfolio, but each should have a different proposition whether that is low cost, additional services or specialist cover.

   On the other hand, too many brands in a portfolio can dilute their power. If each brand has its own marketing budget, this can also result in unnecessary spending on advertising and other marketing activities. If brand differentiation is unclear, customers may simply move from one of your brands to another, leaving your bottom line unchanged.

   Last year for example, the Jetset Travelworld Group (JTG) brought its brands together under a new ‘master’ brand – helloworld. With multiple brands comprising some 1500 agencies across Australia, many of JTG’s brands were competing against each other, causing confusion in the minds of consumers. Bringing them together under helloworld wiped the slate clean and implemented a brand architecture that made sense of the numerous partners within the group.

   A third issue is overlapping brands. This is more likely to occur if there have been recent mergers or acquisitions, so CMOs must analyse the potential disruption these changes will have on brand architecture in advance. CMOs should ensure they are across every brand’s activities to minimise crossover and protect budget.

2. Conduct a brand audit

   Brand is all about perception and relationships. It is quite possible for an organisation to think its brand is strong and perceived positively when in reality the marketplace does not agree. If organisations fail to address any disconnect between the desired and actual perception of the brand, then sales will drop and even formerly loyal customers may not return.

   Regular brand perception audits are essential for companies that need to know if their brand is on track or if they need to redefine or improve perceptions. Brands cannot afford to lose relevance with customers.

3. Ensure there is internal guidance and processes

   There should be clear guidance internally regarding the brand architecture so employees fully understand which brand is the ‘master’ and which brands are ‘subordinate’, and can translate this knowledge into real-world campaigns and conversations.

   Additionally, CMOs should put clear guidelines in place to govern the development of new brands. This will prevent the all too common scenario of business managers introducing new brands with little or no regard to the overarching strategy.

   Too often, brand architecture is based on internal factors such as departmental structure. Brand architecture should be constructed according to the consumer’s perspective and reflect the scope of the market.

The ideal outcome of refining brand architecture is that each part of the portfolio retains its own personality, but also works with the other brands to build a strong, growing business. The right brand architecture can let businesses consolidate to fewer, stronger brands and it can also help identify gaps where new products could be introduced.

Brand architecture helps businesses gain clarity around the relationships between the brands in their portfolio. This in turn helps with more fundamental tasks such as naming conventions and decisions around promoting and spending on each brand.

Assessing brand structure and doing a brand health check should be part of every business plan in 2014.

Tags: brand strategy