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September, 2014
Brand Architecture:Designing Your Brand Portfolio
for Success
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©2014 Brand Amplitude, LLC All Rights ReservedMay not be reproduced ithout permission
A GE NDA Brand Architecture Defined
! Why Brand Architecture
! Brand Portfolio Roles
Brand Architecture Solutions
! Types of Brand Architecture
! Strategic Considerations
Brand Architecture Developent Process
Application! "cDonald#s "aster$rand %nder &ire
Conclusion
2
Agenda
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B R A "#
A R C $% & ' C &
(R '
#' ) % "' #
hat!s "n a #ame$
*
Products' $usiness units' specific
services' ar(eting progras'
features' line e)tensions' apps' *e$
sites and ore all need oni(ers+
,o* these naes relate is the
difference $et*een $rand coherence
and $rand confusion+
Naming a company is just the first of many business decisions - and
may not even be the most important!
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B R A "#
A R C $% & ' C &
(R '
#' ) % "' #
Architecture Rules
4
Each naming decision has
implications for future decisions,
so it’s important to have a plan.
Brand architecture provides the rules for naming assets in the brand
portfolio and specifies the relationships between them. t also determines
mareting investment priorities and whether and how new ac"uisitions
should be integrated to the portfolio.
"a(es it easier for custoers to navigateofferings and avoid confusion
Ensures the aster$rand is leveraged*ithout overstretching
Guides ne* product and innovation
developent Ensures custoer considerations are is
central to naing decisions
Provides direction for *here to focusar(eting investents
A clear architecture contri$utes to $rand
health and copany value+
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B RA ND
A R C ,- T E C T %RE DE & - NE D
Brand Architecture = Face of the Business
Corporate
Business(nit
Business(nit
+roducts +roducts
Brand architecture represents the brand to e#ternal staeholders. $he
optimal architecture may not line up neatly with internal organi%ationalstructures & and that’s oay!
Brand Architecture Is
Externally Facing
Masterbrand A
Brand BEndorsed by A
Sub- brand D
Sub- brand C
Ingredient or Feature
Organizational Structure is
Internally Facing
Business units are not $rands+
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B RA ND
A R C ,- T E C T %RE DE & - NE D
Each portfolio brand asset needs a clear role that lins it to other assets.
1-.
Architecture Basics: Brand Roles
CorporateBrand
Copany nae and legal entity+ .ften usedas endorser $ut ay not $e custoer facingat all+
asterBrand
!"ri#er$
Drives purchase decision and defines usere)perience+ "ost strongly represents the
differentiation inherent to the offer+
EndorserBrand
Provides approval' credi$ility or guarantee toa range of products' $ut is usually not thedriver+
Su%&
Brand
Derives e/uity fro another $rand' usually
the "aster+
IngredientBrand
&eatures' aterials' coponents or partsthat are contained *ithin other $randedproducts+ Not an e/uity driver' often ane/uity energi0er+
Brand %ole Descriptions
Endorser
Brand
Su%&Brand
aster Brand
'lear roles simplify decisions
about brand e#pression
.
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()ony* plays multiple roles in its portfolio. )ome offerings have stand-alone
brands.
B RA ND
A R C ,- T E C T
%RE DE & - NE D
Brand Roles Assigned Based on Business 'eed
Corporate Brand
Su%&Brandaster Brands Stand&Alone Brands
aster Brand: Allo*s e/uity to$e shared aong $rand assets
*hen used in either driver or
endorser role+
Su%&Brand: 1everages thestrength of the aster $rand
*hile helping to separate and
organi0e the offerings+
Stand&Alone Brand:Separates offerings' creates
ne* sources of e/uity or
targets ne* audiences+
/
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B RA ND
A R C ,- T E C T %RE DE & - NE D
Branded elements live outside the architecture. $hey may be trademared
or licensed and can enhance e"uity by providing uni"ueness andmemorability, but they are not offerings.
Brand Architecture: (hat)s 'ot Included*
&elebrities
lend meaning
&haracters
createli'eabilit(
Sponsorships
build a)nit(
Brand *lements +ie -utside the Architecture
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B RA ND
A R C ,- T E C T %RE DE & - NE D
Signs of +rou%le
Brand architecture is built to last. t needs to be revisited when companies
change strategic direction or the business has added important capabilities
that go beyond its e#isting brand structure.
"erger or ac/uisition
Too any $rands and offerings are copeting for
attention and investent dollars
Corporate $rand and product $rands have the
sae nae' hard to distinguish
Brands are losing relevance *ith consuers
Brand eaning has $een diluted or stretched
$eyond credi$ility and effectiveness
Progras' eleents' features or sponsorships are
as(ing to $e treated as $rands
+riggers for Re#isiting Architecture
" hae a problem
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B RA ND
A R C ,- T E C T %RE DE & - NE D
n ++, ellogg’s restructured its brand portfolio to better leverage its
master brand, ac"uired stand-alone brands and its /lympics sponsorship.
10
Exa,ple: -ellogg)s
http33-orbes-com3sites35ennierrooney320123031036elloggs7embar6s7on7ma5or7brand7overhaul3
2ellogg’s is a truly iconic brand 01e felt that having
a stronger brand, driving a stronger point of view, a
more powerful identity and have at the center anumbrella to tal about our portfolio more holistically, to
tal about the power of breafast, to tal about the
value of cereal.*
(f you loo at our portfolio we have a number of
master brands2 and we had to start separating out the
ellogg’s brand from the ellogg company 0we thenneeded to be very clear about what ellogg’s the
brand stood for and provide the north star for all the
sub-brands that ind of sat underneath it.*
,ad ac/uired ultiple ne*
$rands 3 4ee$ler' 4ashi'
"orningstar 3 and needed to
elevate 4ellogg#s corporate$rand a$ove its cereal aster
$rand Needed to strengthen the
eaning of the 4ellogg#s
$rand 5 it#s a$out the po*er of
$rea(fast' not 6ust cereal+
Wanted to leverageinvestent in 7897 .lypics
to $enefit all 4ellogg#s su$5
$rands
+riggers for re#isiting architecture:
http://www.forbes.com/sites/jenniferrooney/2012/05/10/kelloggs-embarks-on-major-brand-overhaul/http://www.forbes.com/sites/jenniferrooney/2012/05/10/kelloggs-embarks-on-major-brand-overhaul/http://www.forbes.com/sites/jenniferrooney/2012/05/10/kelloggs-embarks-on-major-brand-overhaul/http://www.forbes.com/sites/jenniferrooney/2012/05/10/kelloggs-embarks-on-major-brand-overhaul/
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B RA ND
A
R C ,- T E C T %RE S .1 %T - .N
S
Brand architecture solutions fall on a spectrum. 3ost are hybrid solutions,
falling somewhere between branded house and house of brands.
11
+ypes of Brand Architecture
.ouse of Brands .y%rid Branded .ouse
&ons
Builds e/uity in strong
stand5alone $rands acrossa *ide range of categories
Re/uires significant
ar(eting investent
Results in strong aster
$rand+
Can $e difficult to e)tend
$eyond the e)pertise of
the aster $rand+
1everages strong aster
$rand *hile allo*ing fle)i$ility+
Re/uires careful planning to
avoid confusing custoers or
diluting the aster $rand+
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B RA ND
A
R C ,- T E C T %RE S .1 %T - .N
S
4isney uses a mi# of brand architecture solutions to build and protect its
businesses.
12
.y%rid Solutions Are ost Co,,on
Stand&Alone Brands .y%rid Branded .ouse
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B RA ND
A
R C ,- T E C T %RE S .1 %T - .N
S
Do the $rands address the
sae or different custoer
segents:
,o* iportant is it to
represent the $rand the sae
*ay in different geographies:
Are there synergies that can
$e leveraged $et*een different$rands or $usiness units:
1*
"eter,ining the Opti,al Architecture
.arget multiplesegments
/e s(nergies to
be leeraged
Addressindiidual
geographies
%einforce aglobal
organiationmindset
an( s(nergies
to be leeraged
.arget single orfe segments
.ouse of Brands Branded .ouse
5rchitecture decisions have investment implications, so selection of the
optimal solution is determined by business strategy.
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B RA ND
A
R C ,- T E C T %RE S .1 %T - .N
S
14
Brand Architecture /rinciples
&ulfill custoer needs ;and generate
revenue< *hile inii0ing $rand
developent and anageent costs+
Sufficiently cover the ar(et and target
custoer segents *ith the fe*est
$rands possi$le+
"a(e it easy for custoers to find thesolution they see( $y ensuring
2daylight= $et*een $rand offerings+
Right 'u,%er
.ighest /rofit
Clear Separation
$hree guiding principles help to ensure brand architecture has the optimal
business impact.
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B RA ND
A
R C ,- T E C T %RE S .1 %T - .N
S
Not all brands are e"ually important. 5rchitecture guides decisions about
innovation and investment as portfolio brands compete for resources.
1
Architecture "ecisions Are Strategic
StrategicBrand
Significant contri$utor to copany#s future sales'perceptions or ar(et position+
"istinguisherBrand
Enhances the differentiation of another $rand+
Also referred to as >$randed energi0er# or silver$ullet+
Cash Co0 "oney a(ing $rand that does not representfuture significant gro*th+
CorporateBrand
1o* visi$ility to custoers' $ut iportant to
regulatory $odies' investors' eployees' tradegroups' partners+
Fighter1Flan2er Brand
Addresses copetitive threat+ Protects share ofother $rands in the portfolio+
Exa,ple
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B RA ND
A
R C ,- T E C T %RE S .1 %T - .N
S
)amsung has strategically separated the 6ala#y brand from its consumer
electronics and enterprise brands through an endorser strategy, and invests primarily in 6ala#y.
1.
Exa,ple: Sa,sung)s Architecture "irects In#est,ent
Strategic Brand
*nterprise %ead(Deices
Samsung 3no
Solutions*change
*nterpriseSolutions
AndroidSmartphones
Android .ablets
Androidearables
Android &ameras
/eature obilePhones
Digital &ameras
and &amcorders
.ablet P&s
earable .ech
5ome .heater andAudio
5ome Appliances
*Not Sub-Branded
indosSmartphones
indos .ablets
indosDes'tops
indos +aptops
&ash &o &orporate Brand/lan'er67ghter Brand
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B RA ND
A
R C ,- T E C T %RE S .1 %T - .N
S
5ma%on eeps its ac"uired strategic businesses separate through a stand-
alone strategy. t uses an endorsed approach for all other brands.
5ma%on.com is the closest thing the company has to 'ash 'ows, though it
appears to still have healthy growth potential.
1/
A,azon)s Architecture Also "irects "ecisions
StrategicBrands
&ash &o Stand8AloneBrands
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B RA ND
A
R C ,- T E C T %RE S .1 %T - .N
S
Star$uc(s is thoughtfully e)panding its portfolio to separate its high gro*th
and preiu $usinesses fro its ainline coffeehouses and ne*
Star$uc(s E)press stores+
1
Star%uc2s is Expanding to eet Business 'eeds
Strategic Brands&ash&os
/lan'er67ghter Brand
http33nes-starbuc6s-com3nes3starbuc6s7accelerates7groth7o7store7ormats
Starbuc's %esere%oaster( and.asting %oom9Seattle
Starbuc's %eserestores 9201;
Starbuc'sco
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Strategic Fit*
,elp achieve and support
strategic priorities:
Business Support*
Support different $usiness
units and?or ar(et
segents:
Flexi%ility*
Accoodate changing
ar(et conditions:
I,ple,entation*
A$ility to e)ecute
successfully:
Brand
Build E3uity*
&it *ith?protect e)isting
e/uities or create ne*
ones:
Create Synergies*
Create synergies
across the portfolio:
/ro#ide 4e#erage*
Ena$le ar(eting and
$rand5$uilding
efficiencies:
axi,ize Clarity*
"inii0e custoer
confusion:
Address ultiple
Sta2eholders*
"eet the needs of
ultiple
sta(eholders:
B RA ND
A R C ,- T E C T
%RE S .1 %T
- .N S
1hen selecting the optimal architecture, it’s important to evaluate options using agreed criteria.
9@
Assessing Brand Architecture Options
Business Custo,er
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B RA ND
A
R C ,- T E C T %RE DE E 1 .P "E NT
Effective brand architecture directly impacts the maret value of a business,
so it’s worth taing the time to get it right.
78
+he (ay For0ard
Brand Architectureapping
Alternati#es"e#elop,ent
E#aluation ofAlternati#es
7ow aligned are
e#ternal and internal
perceptions of brands
and their roles8
1hat are the
various ways the
portfolio could be
configured going
forward8
1hich architecture
alternative best fits
the short and long-
term business and
brand objectives8
StrategicBusiness Analysis
7ow closely aligned
are the brand and
business strategies8
Brand Architecture "e#elop,ent /rocess
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" C D .NA
1 D# S C A S E S
T %D
$hrough consistency and careful brand-building, 3c4onald’s became an
5merican icon. 9sing the arches, color palette and (3c* to identify and lin most
of its offerings to the master brand, it is a prime e#ample of a Branded 7ouse
architecture.
21
+he Branded .ouse c"onald)s Built
http33mr6tspn6r-ordpress-com3201230.323brands7as7identi8ers7unctional7and7
Tightly associated *ith
$urgers' fries and soft drin(s'
the $rand thrived in the #8s
and early #@8s+
(:3c4onald’s; gave millions of 5mericans their first jobs
while changing the way a nation ate.*
Bloomberg Businesswee,
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" C D .NA
1 D# S C A S E S
T %D
22
Signs of +rou%le Starting in 4ate 5667s
1 2000 2010 201
Ne* enu ites
li(e the lo*5fat"c1ean Delu)e
and Arch Delu)e
$urgers' eant to
appeal to adults'
$o$ed
Sales stagnated
*hile costsincreased as
the product
offering
e)panded?$eca
e ore
cople)
-n an effort to
regain relevance'"cDonald#s
ac/uired Chipotle
"e)ican Grill and
Boston "ar(et in
9@@@
Spun off Chipotlein 788 to refocus
on core ha$urger
$usiness
200
Salads represent only 75
F of "cDonald#s sales inthe %nited States+ CE.
Don Thopson aditted 2-
don#t see salads as $eing
a a6or gro*th driver in
the near future+= ;?9<
Record
nu$er offranchisees
left the
syste in
7887
-n 788H'
2Supersi0e "e=$rought attention
to *hat too uch
"cDonaldIs does
to your $ody and
ho* it a(es you
feel+
-%+S+ cop store salesslipped 9+JF in 91and 1-: in 92 o2014
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" C D .NA
1 D# S C A S E S
T %D
2*
Strategic "irection
Brand Architecture
apping
Alternati#es
"e#elop,ent
E#aluation of
Alternati#es
7ow aligned are
e#ternal and internal
perceptions of brandsand their roles8
1hat are the
various ways the
portfolio could beconfigured going
forward8
1hich architecture
alternative best fits
the short and long-term business and
brand objectives8
Strategic
Business Analysis
7ow closely aligned
are the brand and
business strategies8
Brand Architecture "e#elop,ent /rocess
&ocused on health5centric glo$al initiatives' putting food /uality first+
"ar(eting no* organi0ed $y consuer groups such as illennials'
failies and adults rather than $y product+
Stepping up digital' including e5coerce' fast5trac(ing testing of
o$ile payents and ordering+ -n Kune it set up a Llearning la$L at a
restaurant in 1aguna Niguel' Calif+' to $etter understand *hat people
*ant and to e)perient *ith custoi0a$le $urgers
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" C D .NA
1 D# S C A S E S
T %D
E)ecutives *orry the aster $rand has lost relevance *ith
consuers as!
"illennials have defected to fast casual chains li(e Chipotle
and &ive Guys+
"os no longer see "cDonald#s as a good place for (ids+
1ast onth' Consuer Reports said a survey of ore than
7'888 su$scri$ers rated "cDonaldIs $urgers the *orst5
tasting of 78 rival $urger chains+
24
Brand Architecture apping
Brand Architecture
apping
Alternati#es
"e#elop,ent
E#aluation of
Alternati#es
7ow aligned are
e#ternal and internal
perceptions of brandsand their roles8
1hat are the
various ways the
portfolio could beconfigured going
forward8
1hich architecture
alternative best fits
the short and long-term business and
brand objectives8
Strategic
Business Analysis
7ow closely aligned
are the brand and
business strategies8
Brand Architecture "e#elop,ent /rocess
http33online-s5-com3articles3mcdonalds7aces7millennial7challenge71402/4*http33online-s5-com3articles3mcdonalds7aces7millennial7challenge71402/4*
http33-businessee6-com3articles3201470703mcdonalds7happy7meal7problem76ids7turn7aay7rom7ast7ood
http33-chicagobusiness-com3article3201400.3%;;('013*00.03mcdonalds7has7a7ne7generational7problem76ids<
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" C D .NA
1 D# S C A S E S
T %D
2
Architecture Alternati#es
Brand Architecture
apping
Alternati#es
"e#elop,ent
E#aluation of
Alternati#es
7ow aligned are
e#ternal and internal
perceptions of brandsand their roles8
1hat are the
various ways the
portfolio could beconfigured going
forward8
1hich architecture
alternative best fits
the short and long-term business and
brand objectives8
Strategic
Business Analysis
7ow closely aligned
are the brand and
business strategies8
Brand Architecture "e#elop,ent /rocess
Branded ,ouse approach a(es it difficult to change perceptions+
"ay need to reserve "cDonalds as corporate $rand and $uild e/uity
in ne* stand5alone $rands and su$5$rands+
Corporate $rand could $e focused on target5relevant purpose ;e+g+'transparency in food sourcingM chapioning clean' healthy foods and
ingredientsM supporting a living *age for hourly *or(ers<
Su$5$rands or stand5alone $rands for 4ids or "illennials or other priority
targets ay help separate ne* initiatives fro current offerings+
Ne* digital initiatives provide a platfor for a ne*' ore relevant $rand+http33adage-com3article3nes3mc
donald7s78les7trademar67mcbrunch324113=
Mc#onald>sapplied or a netrademar6 or aMcBrunch brandin ;eptember2014
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" C D .NA
1 D# S C A S E S
T %D
4ey evaluation criteria relate
to a$ility to support the
$usiness' $uild ne* sources
of e/uity and $etter addressthe needs of "illennials and
(ids?"os+
2.
Selecting the Opti,al Solution
Brand Architecture
apping
Alternati#es
"e#elop,ent
E#aluation of
Alternati#es
7ow aligned are
e#ternal and internal
perceptions of brandsand their roles8
1hat are the
various ways the
portfolio could beconfigured going
forward8
1hich architecture
alternative best fits
the short and long-term business and
brand objectives8
Strategic
Business Analysis
7ow closely aligned
are the brand and
business strategies8
Brand Architecture "e#elop,ent /rocess
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C .N C 1 %
S - .N S
Brand architecture is a strategic $usiness design solution that is aligns
$usiness and $rand goals Architecture defines clear roles' relationships and investent priorities
aong $rands
A coherent $rand architecture a(es ar(eting ore efficient and effective
$y ensuring custoers and other sta(eholders understand *hat the
$usiness can do for the
,ouse of Brands and Branded ,ouse are 6ust t*o any possi$le
architecture solutions+ "ost copanies used a hy$rid approach+
Brand architecture should $e revisited periodically to ensure $usiness
re/uireents are $eing addressed and the structure is optial for supportingthe $usiness strategy
-dentifying the optial architecture is a H5step process that $egins *ith a
strategic $usiness assessent and concludes *ith a recoended solution
2/
-ey +a2ea0ays
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Carol +hillipscarol?brandamplitude-com2.7427.2.
@udy $opelain 5udy?brandamplitude-com
4171072.
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