Brand portfolio strategy and brand architecture

By James Last updated Dec 4, 2022

“Brands are part of our everyday life. Every day we decide which brands to buy to meet our needs for food, care, clothing, and social identity. Because branding is an important part of the consumer decision, companies must have a clear strategy for their brand portfolio and how to manage it.”

In a comparative study, marketing sources show that there are different definitions of what a brand is.
The brand portfolio strategy defined in these sources is how a company manages its sub-brands in its target market according to factors such as consumer perceptions of price and quality as well as how competitors behave in the market.
The brand design also poses the same challenge of considering a simple definition of what it is.
This article emphasizes that the main concept of brand architecture is the mental organization of brand users.
And that means how the parent brand and its sub-brands are portrayed in the consumer’s mind.
How do customers perceive the following aspects of this brand?

A: Where is the position of each brand in the brand portfolio?
B: What are the unique characteristics of each brand?
A: Which of the brands meets their basic needs

Brand portfolio strategy and brand architecture

This article points out that based on the primary research available in current sources, the two concepts of brand portfolio and brand architecture of both units have similarities and differences in the following 4 main elements.

A: Brand Management Strategy
B: Number of marks
C: Competition
D: label placement

brand architecture

Introduction
A brand investment strategy is an important part of building a company’s brand equity, which is influenced by brand identity.

According to Morgan, and Rego (2009), the special value of a company is the increase in product value combined with the brand name and its underlying meaning (identity), along with the fact that factors such as quality, profit-cost Ratio height, environment attitude, etc. Be part of this identity.

Next, consider the resource’s designed identity that can create extra value for your brand.
It includes consumer awareness of the brand name, brand diversity, influencing factors, and the presence of unique and loyal customers and associations that the company seeks to create or maintain.

Thus, brand strategies provide a guide for brand decisions, and these strategies can assure managers that their marketing efforts are consistent and aligned with certain core values that complement organizational values and culture. IS.

Lafort and Saunders (2007) also confirm that a company’s brand identity is a strongly recognized value. However, how one connects a company’s identity with the brands of the product type or brand portfolio and, on the other hand, relates a company’s products depends on the general customer perception of the company.

However, Chillan (2008) states that brand portfolio strategies are much more than questions related to a hierarchical or competitive relationship between one brand and another. To explore the possibilities of coexistence and balance between different brands integrated into one company, what could be the meaning of brand architecture?

Effective brand portfolio management requires managers to clearly and continuously examine the implications of implementing a brand portfolio strategy on key issues, including:

A: Balancing the number of brands necessary to achieve balanced management of the company’s brand
B: The impact of globalization on brands
C: How to best manage relationships between brands

From a broader business strategy perspective, companies consider brand portfolio management because this structure provides the necessary discipline to support and drive a successful corporate strategy. The following target companies:

1. When the company has a fast growth goal.
2. When the company is merged.
3. Time to change the manager.

According to the above, the brand portfolio allows companies to:

Determine strategies for each brand in the portfolio that needs to be repositioned.
Identify underperforming brands and eliminate them
And it also helps companies to be aware of the risks faced by a single branding strategy and avoid these strategies.
Some examples of brand architecture strategy definitions mentioned in various sources are as follows.

Keller said that brand architecture strategy determines which of the 3 visual elements such as the company’s brand name, logo, symbol, etc. can help customers understand the products and services provided by the company, thereby organizing the customers of those products and services. in your mind.

Brand architecture strategy is a little deeper, both dimensions determine the breadth and depth or complexity of the brand, and this is how the role of brand architecture is expressed.

a: Clarification or brand awareness; increasing customer understanding and unique similarities and differences between products and services for brand audiences.

b: Motivation Brand Image: The right image created by the brand in the mind of the audience motivates the four audiences.

Therefore, an increased transfer of special brand value using brand architecture and various services is used to improve customer experience and repeat purchases.

In a similar study, Keller and Bexendorf (2017) argued that brand architecture is a hierarchical structure that corresponds to the identity of a company’s products and services.

This feature can help each sub-brand to better understand the different associations between the transferable company logo and the products in its collection.

and determines in advance possible mutual effects and their responses.

The brand architecture strategy defines and defines the number and nature of common and distinctive brands (names, logos, symbols, etc.) used in their products.

And this suggests that a company’s brand (4) should clarify what visual elements are present in that company’s new products and services and the relationship between its components.

This is because there are many definitions in marketing resources regarding these two fundamental topics of brand management.

The purpose of this article is to present a comparative study that leads to the following conclusion.

A: Giving brand and marketing professionals a unique approach how to improving brand management.
B: It helps to decide and formulate strategies and which brand architecture model or brand strategy may be more suitable for their business.
C: It helps to measure the number of financial resources used by companies in terms of brand and advertising of products in global markets.

Given the above, the relevance of these discussions is appropriate and practical for both universities and businesses given the large volume of these materials.

brand architectures

3Cs in brand portfolio strategy

Academic market research offers different and sometimes similar definitions of what a “brand portfolio” is, although a single definition does not address all of these sources.

According to Wills, Morgan, and Rego (2012), a brand portfolio is formed when active companies have more than one brand in consumer markets.

Most retail businesses create and change their brand portfolio by working with a single brand or by buying and selling other brands.

According to Lee, a reviewer of Velmink (2008), a brand portfolio can usually be viewed as a brand network consisting of a set of interconnected brand groups.

A brand portfolio may include initiatives such as brand family building, which is an attempt to create a cognitive connection between a parent brand and its subsidiary or even sub-brands.

Finally, Swat Al et al. (2010) prove that brand portfolios are complex models that respond to market fragmentation, dynamic levels of communication channels, international realities, increased product competition, and pressure. designed to leverage and enhance existing brand assets in cost-effective ways.

After reviewing recent sources on brand portfolio strategy, this article provides an easy-to-read and comprehensive definition.

Brand portfolio strategy can be expressed in terms of how companies target their main and sub-brands in the market, taking into account the main elements:

a: The price the buyer expects
b: perceived quality
c: the type of competition in the target market

As part of the 3Cs in the business sector, companies should consider how to implement their strategy in terms of:

1: Type of brand management approach (brand house, brand house, sub-brands, approved brands, and mixed brand portfolio management)
2: Number of species
3: Brand evaluation
4: Competition between a specific brand basket and other brand structures

The company’s brand strategy, along with its architecture, is the main factor that leads to the creation of value, mentioned again, these value-creating factors include the owners’ perception that it uses a brand with strength and consistency. Organizations, as well. Because it is unique to the audience.

1-2 key elements
1-1-2 Adopt brand portfolio management strategies

Marketing researchers use the term “brand portfolio strategy” when discussing how to expand and enhance an organization’s brand portfolio.

According to Devlin and McKenney (2008). one of them. Of these two methods, one involves a range of joint ventures to share products.

Consequently, companies can adopt several strategies:

Building and maintaining sustainable local brands
Use local changes and global ideas to update a brand or create something new

The creation of a brand or the development of brands, regardless of the adopted strategy of the brand portfolio, is evaluated according to the group of its ability to increase the value of the equity of the brand.

The following are models of the key strategies of the brand portfolio architecture adopted by companies to date:

1) Branding: This strategy, also known as a brand portfolio, is used by companies that use the company brand in common across all products.

The benefits associated with this strategy are increased brand awareness and brand awareness, reduced marketing and advertising costs due to amortization, and generalization of costs across the brand portfolio, in general terms, it is also called a positive spillover effect on all products.

However, in particular, If there is a problem with a product, There are risks associated with this strategy; especially those that damage the brand name; It causes a negative effect; Which means it can be created. across the entire namesake brand portfolio.

On the other hand, it creates what is known as the risk of dilution, which occurs when the same name is used in multiple product categories, which causes its meaning to be too diffuse and creates different associations and confusion for customers.

2) House of Brands: This approach is more common than single-brand strategies.

Separate brands are created for different products or markets.
Some companies that use a separate brand may mention the identity of the parent company with something like an address or a small logo on the package.
However, some brands choose not to define cross-brand relationships due to specific strategies based on a different quality, price, or target customers.

3) Sub-brands: Many products use hybrid brands that consist of two or more brands.

This happens when a company combines a brand or range (primary brand) with another brand (sub-brand) in a hybrid relationship for building and communication purposes.

4) Approved Trademarks: Hereby, such trademarks are certified in the name of the company or house.

For these strategic reasons, they are usually marketed with claims such as “brought to you“, “by the manufacturers” or “branded (original brand)”.
Using approved brands does not expose companies to reputational risk and allows for a more diverse brand position than when corporate branding is the only option.

5) Mixed (or Mixed) Brand Strategy: This includes some of the above.

A closer look at companies coded for a hybrid strategy.
This approach plays an important role in mergers and acquisitions of new companies: the hybrid strategy is more likely to be a temporary strategy rather than an active brand strategy.

The same authors say that these five strategies differ in terms of tools, prominence, or the degree to which corporate brand equity is presented (e.g., corporate branding communications), and brand identity, which drives consumer behavior (e.g., the role of stimulus -brand), distinguish.

Each of these changes in turn affects the expected patterns, benefits, and risks.

In terms of marketing performance (effective marketing to increase loyal customers or increase market share), the greater number of brands served to a smaller segment of the market, the lower level of competition within the basket, and the stronger consumer awareness they will be the strongest driver of brand portfolio strategy for consumer loyalty.

Conversely, in terms of increasing market share, the exact opposite appears to be the case, with smaller brand portfolios offered in more market segments, with intra-category competition and lower perceived quality, and with higher market share. There is more to it than the market. (Morgan and Rego 2009)

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