Brand hierarchy, otherwise known as brand architecture, refers to the brand strategy behind the relationships between various parts of a business. Broadly speaking, this strategy is best summarized by grouping products and services according to their associated similarities and differences.
Aspect
Explanation
Brand Hierarchy
– Brand Hierarchy is a strategic framework used by companies to organize and structure their brand portfolio, products, and services in a way that clarifies their relationships and significance to consumers. It helps manage and communicate brand identity effectively.
Levels
– Brand hierarchy typically consists of several levels, which can include Corporate Brand, Family Brand, Individual Brand, and Product Brand. Each level has a distinct role in the overall branding strategy.
Corporate Brand
– At the top of the hierarchy is the Corporate Brand, which represents the overarching identity and values of the company. It often carries the company name and is associated with its reputation and heritage.
Family Brand
– Below the corporate brand, there may be Family Brands, which encompass a group of related products or services. These brands share common attributes and values, and their association can enhance consumer trust and recognition.
Individual Brand
– Individual Brands are specific brands within the family that represent distinct product lines or categories. They have their own identities but still benefit from the trust and reputation of the family brand.
Product Brand
– At the lowest level are Product Brands, representing individual products or services. They may carry their unique names and identities but can also leverage the credibility of both the individual and family brands.
Benefits
– Clarity: Brand hierarchy provides clarity to consumers, helping them understand the relationships between various products and their parent brands. – Consistency: It ensures consistent messaging and brand values across the portfolio.
Flexibility
– Companies can adapt their brand hierarchy to accommodate new products, enter different markets, or reposition existing offerings. This flexibility allows for strategic growth and diversification.
Brand Equity
– An effective brand hierarchy can enhance the overall brand equity of a company. Strong corporate and family brands can positively influence the perception of individual products or services.
Examples
– The Coca-Cola Company: Coca-Cola is the corporate brand, and beneath it, there are family brands like Diet Coke and Coca-Cola Zero Sugar, which further extend to individual product brands like Coca-Cola Classic and Sprite.
Challenges
– Maintaining consistency and relevance across all levels of the hierarchy can be challenging, especially as brands evolve and consumer preferences change. – Overcomplexity can confuse consumers if not managed effectively.
Conclusion
– Brand hierarchy is a strategic tool that helps companies organize their brand portfolio, convey relationships to consumers, and build trust and recognition. It’s a dynamic framework that adapts to the changing needs and goals of the business.
Table of Contents
Understanding brand hierarchy
As companies grow, so too do their product ranges. Brand hierarchies help businesses and indeed consumers communicate vital brand elements and feature differences between individual products in a range.
Brand hierarchy is important for the simple fact that many businesses overlook the strategy entirely.
These businesses tend to have a preoccupation with releasing products and services without first thinking about the relationship between them.
As a result, the association between offerings is vague and not reflective of the wider brand. Consumers then become confused and unable to make a purchasing decision, which negatively impacts revenue and profits.
Establishing a robust brand architecture is not difficult and can be performed at any stage of business development.
However, those who focus their initial efforts on product development at the expense of brand hierarchy may encounter a costly rebrand in the future.
The three types of brand hierarchy
Corporate, umbrella, and family brands
The highest level of the hierarchy is corporate, family, or umbrella brands.
This level uses cohesive and consistent naming and identity structures, ensuring that individual products and services are homogenous throughout the range.
The corporate strategy is particularly useful for large parent companies that have many divisions or subsidiaries.
For example, Heinz Cream of Tomato Soup and Heinz Tomato Ketchup both share similar visual branding on their labels.
They also feature the corporate brand Heinz in their names, reducing confusion among consumers, and increasing brand equity in the process.
Endorsed brands
Endorsed brands are those that have been endorsed by a parent brand that is either a corporate, umbrella or family brand itself.
In theory, the endorsement from the parent brand adds credibility to the endorsed brand in the eyes of consumers.
In this approach, products are linked or grouped according to brand identity itself and do not rely on homogeneous naming or aesthetics.
For example, parent company Microsoft lend its brand identity and credibility to Office, Xbox, Windows, and Bing.
But each endorsed brand in isolation is distinct in the sense that it is not immediately recognizable as being owned by Microsoft.
Individual
Individual brands are consumer-facing brands where no explicit link between the product and its parent brand is promoted.
In many cases, there is also no link between individual brands themselves.
This is a common occurrence when parent brands acquire smaller brands with high equity among consumers.
Here, the parent brand is irrelevant and often detrimental to brand equity compared to the individual products it takes ownership of.
Coca-Cola uses this strategy to their advantage, having acquired brands such as Fanta, Sprite, and Dasani that were successful in their own right.
Those who are motivated to do so can discover the connection of these brands to The Coca-Cola Company, but they nevertheless continue to exist in original, recognizable forms.
Benefits of incorporating brand hierarchy strategy
Reduces customer confusion. Businesses offering a line of unrelated products confuse consumers as to the brand they are trying to create and convey. Establishing a proper brand hierarchy lessens this confusion, establishes consistency, and leads to increased brand equity.
Reduces competition. In some cases, sub-products achieve such popularity with consumers that the weaker core brand loses popularity. Brand hierarchy strategies focus on strengthening the primary brand so that products under its “umbrella” do not compete with or undermine each other.
Provides clarity. When brands are visually or otherwise segregated with a hierarchy, it allows businesses to develop a marketingstrategy for each. Since each brand will have its own target audience and brand story, clarity reduces the chances of brand dilution or improper messaging.
Brand hierarchy examples
Now that we’ve explained the theory behind brand hierarchy, let’s take a look at some real-world examples.
FedEx
FedEx operates an umbrella brand hierarchy where the master brand is linked to all products and subproducts.
The company has many business branches across various services such as FedEx Office, FedEx Ground, FedEx Freight, FedEx Trade Networks, and FedEx Express.
While these branches perform different functions and operations, they remain united under the core FedEx brand.
Proctor & Gamble
Proctor & Gamble utilizes an individual brand hierarchy with a vast portfolio of strong product brands that have no overt connection to the company itself.
Below is a look at just some of these brands arranged by product category:
Fabric care – Bounce, Cheer, Ariel, Tide, and Gain.
Grooming – Braun, Gillette, Gillette Venus, and The Art of Shaving.
Haircare – Head & Shoulders, Herbal Essences, Old Spice, and Pantene.
Distinctive Premium – Le MERIDIEN, Westin, and Renaissance Hotels.
Classic Select – Courtyard Hotels, Four Points, and SpringHill Suites.
Distinctive Select – AC Hotels, Aloft Hotels, and Moxy Hotels.
Classic Longer Stays – Marriott Executive Apartments, and Residence Inn.
Distinctive Longer Stays – element, and Homes & Villas by Marriott International.
Mondelez International
Mondelez International is an American multinational food and beverage company that specializes in chocolate, cookies, powdered beverages, confectionery, and gum.
The company has a more complex brand hierarchy with various family brands, individual brands, and modifiers (models) under the core Mondelez brand. To explain this structure in more detail, consider these examples:
Cadbury (family brand) – Dairy Milk, 5 Star (individual brands), Dairy Milk Hazelnut, Old Gold, Caramilk (models).
Most consumers think of the Golf or Beetle when they think of German auto-manufacturer Volkswagen, but the company owns multiple vehicle brands with each having many model designations.
Given the pedigree of some brands among car enthusiasts, Volkswagen’s hierarchy is comprised of individual brands with little relationship to its core brand aside from perhaps some minor style similarities.
Some of these individual brands include:
Audi – with models such as the A3, A5, A7, and R8.
Porsche – with models such as the Cayman, Boxster, and Macan.
Lamborghini – a premium sports car manufacturer with models such as the Huracan, Aventador, and Urus.
Volkswagen Commercial Vehicles – these include the Caddy, Amarok, and Transporter.
Ducati – a motorcycle brand with models including the Superleggera, Scrambler, Streetfighter, and Multistrada.
Additional Case Studies
Unilever:
Corporate Brand: Unilever
Individual Brands: Dove, Axe, Lipton, Ben & Jerry’s, Hellmann’s, among others. Each of these brands has its own identity and stands on its own, though they all fall under the Unilever corporate umbrella.
Individual Products: Within the Lay’s brand, for instance, you have flavors/varieties like Classic, Salt & Vinegar, and Barbecue.
Sony:
Corporate Brand: Sony
Endorsed Brands: Sony PlayStation, Sony Pictures, Sony Mobile.
Individual Products: Within Sony PlayStation, you have PlayStation 4, PlayStation 5, and PlayStation VR.
The Gap Inc.:
Corporate Brand: The Gap Inc.
Individual Brands: Gap, Banana Republic, Old Navy, Athleta, Intermix. Each of these brands targets a different market segment, from casual wear to upscale fashion.
Volkswagen Group (beyond the previously mentioned brands):
Corporate Brand: Volkswagen Group
Individual Brands: SEAT, Škoda, Bentley, Bugatti. Each of these caters to a different market segment, from affordable to luxury.
Estée Lauder Companies:
Corporate Brand: Estée Lauder Companies
Individual Brands: Estée Lauder, Clinique, M·A·C, Bobbi Brown, La Mer, among others. Each brand focuses on different beauty and skincare niches and demographics.
Alphabet Inc.:
Corporate Brand: Alphabet Inc.
Individual Brands/Subsidiaries: Google, YouTube, Waymo, DeepMind, Verily. Although Google was the original company, it was restructured to become a subsidiary of Alphabet, allowing the conglomerate to diversify its business ventures.
Adidas Group:
Corporate Brand: Adidas Group
Individual Brands: Adidas (with its own sub-brands like Adidas Originals and Adidas Performance), Reebok.
Procter & Gamble (P&G):
Corporate Brand: Procter & Gamble
Individual Brands: Pampers, Ariel, Gillette, Head & Shoulders, among many others. Each of these caters to different consumer needs, from baby care to personal grooming.
LVMH (Moët Hennessy Louis Vuitton):
Corporate Brand: LVMH
Individual Brands: Louis Vuitton, Dior, Sephora, Givenchy, Moët & Chandon, among others. This luxury conglomerate encompasses various sectors from fashion and leather goods to wines and spirits.
Key takeaways:
Brand hierarchy is a means of organizing different brands and their associated products under a larger, parent brand.
Brand hierarchy can be divided into three main types: corporate, endorsed, or individual. Each has a different organizational structure based on real or perceived relationships between a parent company and its various brands.
A brand hierarchy strategy is most effective when implemented as a foundational element of business operations. It clarifies the future direction of a brand and avoids individual products within a brand potentially undermining each other.
Key Highlights
Definition: Brand hierarchy (or brand architecture) is the structure and relationship between various parts of a business and its brands.
Purpose: Helps businesses communicate vital brand elements and differentiate products or services, preventing consumer confusion and reinforcing brand identity.
Hierarchy Types:
Corporate, Umbrella, or Family Brands: Highest level, with consistent naming and identity across products or services. Example: Heinz.
Endorsed Brands: Sub-brands that have the backing of a parent brand, adding credibility. Example: Microsoft’s endorsement of products like Office and Xbox.
Individual Brands: Standalone brands with no explicit connection to the parent brand. Often seen in acquisitions. Example: Fanta under Coca-Cola.
FedEx: Uses an umbrella brand strategy with different services like FedEx Office and FedEx Ground under the main FedEx brand.
Proctor & Gamble: Employs an individual brand strategy with a vast range of products, each standing alone (e.g., Tide, Crest).
Marriott: Combines both individual and endorsed brand strategies, categorizing its hotel chains based on luxury and exclusiveness.
Mondelez International: Has a complex hierarchy with family brands like Cadbury, individual brands like Dairy Milk, and model variations.
Volkswagen: Owns multiple vehicle brands (e.g., Audi, Porsche, Lamborghini) each with its own set of models, largely employing an individual brand strategy.
Strategic Importance: Implementing a thoughtful brand hierarchy strategy from the outset can guide a brand’s future direction, ensuring clarity and consistency across the board.
If implemented as a foundational element of business operations, brand hierarchy can help clarify the future direction of a brand and avoid individual products within a brand potentially undermining each other. Thus, it helps improve the brand’s overall performance, both internally and externally, by:
Reducing customer confusion.
Reducing competition.
Providing clarity.
What are the levels of a brand hierarchy?
Brand hierarchy is divided into three main types: corporate, endorsed, or individual. The highest level of the hierarchy is corporate. The second level is endorsed brands. The third level is individual brands consumer-facing brands.
How do you manage a brand hierarchy?
To correctly manage brand hierarchy, companies must focus their efforts on ranking their products, as their initial efforts on product development are executed, to avoid having costly rebranding in the future. Thus, it’s critical to incorporate a brand hierarchy framework within product development to properly organize a product portfolio.
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Funnel marketing is modeled after the marketing funnel, a concept that tells the company how it should market to consumers based on their position in the funnel itself. The notion of a customer embarking on a journey when interacting with a brand was first proposed by Elias St. Elmo Lewis in 1898.
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Growth marketing is a process of rapid experimentation, which in a way has to be “scientific” by keeping in mind that it is used by startups to grow, quickly. Thus, the “scientific” here is not meant in the academic sense. Growth marketing is expected to unlock growth, quickly and with an often limited budget.
Guerrilla marketing is an advertising strategy that seeks to utilize low-cost and sometimes unconventional tactics that are high impact. First coined by Jay Conrad Levinson in his 1984 book of the same title, guerrilla marketing works best on existing customers who are familiar with a brand or product and its particular characteristics.
Hunger marketing is a marketing strategy focused on manipulating consumer emotions. By bringing products to market with an attractive price point and restricted supply, consumers have a stronger desire to make a purchase.
Integrated marketing communication (IMC) is an approach used by businesses to coordinate and brand their communication strategies. Integrated marketing communication takes separate marketing functions and combines them into one, interconnected approach with a core brand message that is consistent across various channels. These encompass owned, earned, and paid media. Integrated marketing communication has been used to great effect by companies such as Snapchat, Snickers, and Domino’s.
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Integrated marketing describes the process of delivering consistent and relevant content to a target audience across all marketing channels. It is a cohesive, unified, and immersive marketing strategy that is cost-effective and relies on brand identity and storytelling to amplify the brand to a wider and wider audience.
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Multichannel marketing executes a marketing strategy across multiple platforms to reach as many consumers as possible. Here, a platform may refer to product packaging, word-of-mouth advertising, mobile apps, email, websites, or promotional events, and all the other channels that can help amplify the brand to reach as many consumers as possible.
Multi-level marketing (MLM), otherwise known as network or referral marketing, is a strategy in which businesses sell their products through person-to-person sales. When consumers join MLM programs, they act as distributors. Distributors make money by selling the product directly to other consumers. They earn a small percentage of sales from those that they recruit to do the same – often referred to as their “downline”.
The Net Promoter Score (NPS) is a measure of the ability of a product or service to attract word-of-mouth advertising. NPS is a crucial part of any marketing strategy since attracting and then retaining customers means they are more likely to recommend a business to others.
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Neuromarketing is the domain of large companies with similarly large budgets or subsidies. These include Frito-Lay, Google, and The Weather Channel.
Newsjacking as a marketing strategy was popularised by David Meerman Scott in his book Newsjacking: How to Inject Your Ideas into a Breaking News Story and Generate Tons of Media Coverage. Newsjacking describes the practice of aligning a brand with a current event to generate media attention and increase brand exposure.
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Real-time marketing is as exactly as it sounds. It involves in-the-moment marketing to customers across any channel based on how that customer is interacting with the brand.
Relationship marketing involves businesses and their brands forming long-term relationships with customers. The focus of relationship marketing is to increase customer loyalty and engagement through high-quality products and services. It differs from short-term processes focused solely on customer acquisition and individual sales.
Reverse marketing describes any marketing strategy that encourages consumers to seek out a product or company on their own. This approach differs from a traditional marketing strategy where marketers seek out the consumer.
Remarketing involves the creation of personalized and targeted ads for consumers who have already visited a company’s website. The process works in this way: as users visit a brand’s website, they are tagged with cookies that follow the users, and as they land on advertising platforms where retargeting is an option (like social media platforms) they get served ads based on their navigation.
Sensory marketing describes any marketing campaign designed to appeal to the five human senses of touch, taste, smell, sight, and sound. Technologies such as artificial intelligence, virtual reality, and the Internet of Things (IoT) are enabling marketers to design fun, interactive, and immersive sensory marketing brand experiences. Long term, businesses must develop sensory marketing campaigns that are relevant and effective in eCommerce.
Services marketing originated as a separate field of study during the 1980s. Researchers realized that the unique characteristics of services required different marketing strategies to those used in the promotion of physical goods. Services marketing is a specialized branch of marketing that promotes the intangible benefits delivered by a company to create customer value.
Sustainable marketing describes how a business will invest in social and environmental initiatives as part of its marketing strategy. Also known as green marketing, it is often used to counteract public criticism around wastage, misleading advertising, and poor quality or unsafe products.
Word-of-mouth marketing is a marketing strategy skewed toward offering a great experience to existing customers and incentivizing them to share it with other potential customers. That is one of the most effective forms of marketing as it enables a company to gain traction based on existing customers’ referrals. When repeat customers become a key enabler for the brand this is one of the best organic and sustainable growth marketing strategies.
360 marketing is a marketing campaign that utilizes all available mediums, channels, and consumer touchpoints. 360 marketing requires the business to maintain a consistent presence across multiple online and offline channels. This ensures it does not miss potentially lucrative customer segments. By its very nature, 360 marketing describes any number of different marketing strategies. However, a broad and holistic marketing strategy should incorporate a website, SEO, PPC, email marketing, social media, public relations, in-store relations, and traditional forms of advertising such as television.
Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
