Branding is nothing if not a means to provide the market with clarity and meaning.
Brand hierarchy, therefore, is a massively important structural approach for brands to provide exactly that.
Brand hierarchy provides the means to arrange a company’s different brands, products, and services by creating a clear, visual, and conceptual structure for the brand family.
In this article, we’re diving into the importance of brand hierarchy, its differences from brand architecture as well as examples, types, structures, and levels.
What Is Brand Hierarchy? (5 Types, Structures & Examples)
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What Is Brand Hierarchy?
In the name of hierarchy, why don’t we start at the top?
Brand hierarchy is an organizational brand strategy to provide structure to a portfolio of brands.
Brands don’t live in a silo and quite often, organizations have ties and relationships with other brands, forming part of a larger organizational structure of brands, also known as a brand portfolio.
When we think of a standard organizational chart in a business, we’ll likely see some executives at the top followed by middle management followed then by line-managers, then non-management roles.
This is essentially the people hierarchy within a business.
Instead of people, brand hierarchy gives structure and organization to a portfolio of brands, forming part of an overall brand strategy.
Why Is Brand Hierarchy Important?
Along with providing clarity to the market, it also serves as a framework for managing the brand’s portfolio effectively and a structural roadmap and compass for product development and brand expansion.
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Brand Hierarchy vs Brand Architecture?
So what’s the difference between brand hierarchy and brand architecture?
Well, although the two terms are often used interchangeably, brand hierarchy vs brand architecture are two different concepts.
Brand architecture refers to the overall structure of a company’s brands and how those brands relate to one another.
Brand hierarchy on the other hand refers to the arrangement of brands and products within the overall brand architecture.
In other words, brand hierarchy is a component of brand architecture. The hierarchy focuses on organizing the different brands and products within the brand family.
5 Brand Hierarchy Examples, Types & Structures
Brand hierarchy can take on many different models and structures depending on the company’s overarching branding strategy, marketing strategy, industry, and market position.
These elements represent an important consideration for the brand in order to avoid any confusion and to continue to offer clarity to the market.
Whether you’re managing an established brand with established products or introducing a new brand with new products, brand hierarchy represents a solid business strategy to increase clarity and reduce customer confusion.
Here are five types of brand hierarchy and examples.
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Monolithic Brand Hierarchy
A monolithic brand hierarchy is a brand strategy where all of the brand’s products, sub-products and services are positioned and marketed under a single brand name.
Apple, for example, uses a monolithic brand hierarchy structure, where all of the brand’s individual products from the iPhone to the Macbook to the iMac and everywhere in between, are marketed under the Apple corporate brand.
This is an excellent option for smaller brands that want to provide clarity around the products and services they offer.
Endorsed Brand Hierarchy
An endorsed brand hierarchy is a structure where the products and services are positioned as sub-brands under a parent brand which endorses the individual sub-brand.
Nestle, for example, is a parent brand that uses the endorsed hierarchy structure to endorse product lines and sub-brands such as KitKat, Nescafe, and Nestea to name a few.
This approach offers the sub-brands a little more freedom to deviate from the look, feel, and personality of the parent brands when compared to the monolithic structure.
With this approach, each sub-brand boasts its own unique visual brand albeit with a clear presentation of the parent brand.
Branded House Brand Hierarchy
A branded house strategy provides structure to a brand portfolio where the sub-brands clearly leverage the brand name and equity of the parent brand, with a name, position and target audience for each of the sub-brands.
FedEx and Virgin are two perfect examples of a branded house strategy.
All of the Virgin sub-brands such as Virgin Atlantic, Virgin Media and Virgin Money clearly fall under the masthead of the parent brand Virgin.
House Of Brands Brand Hierarchy
The House Of Brands Hierarchy is the most independent brand strategy of all brand hierarchy approaches.
With this approach, the parent brand boasts a brand portfolio of independent brands, each with its own distinct brand elements including brand identity, position, personality, brand messaging and target audience.
This approach enables parent brands to serve a wide variety of markets and market segments with often similar products appealing to distinct groups.
Unilever and Procter & Gamble are the two poster child examples for the house of brands strategy.
Proctor & Gamble boasts 65 brands across 10 product categories with brands including Tide, Pampers and Gilette.
Hybrid Brand Hierarchy
A hybrid brand hierarchy provides parent brands and sub-brands with the flexibility of associations and brand equity of the endorsed brand approach with the freedom of independence of the house of brands approach.
The Marriot hotel is an excellent example of a hybrid brand hierarchy where each of its hotels and resorts has a unique sub-brand.
Some of these sub-brands leverage the endorsed brand approach such as the Marriot Executive Apartments and the Marriot Courtyard, with others falling under the House of Brand structure such as Ritz-Carlton, Westin, and Sheraton.
Brand Portfolio vs Product Portfolio
Another set of words that are often used interchangeably is product portfolio and brand portfolio though there is a difference.
A brand portfolio refers to the collection of brands that a company owns or manages while a product portfolio refers to the collection of products and services that the company offers.
Brand hierarchy helps to manage both brand and product portfolios effectively and creates a guideline and strategic direction for management when it comes to product development and expansion.
What Are The Levels Of Brand Hierarchy?
Brand hierarchy has a few different levels that create a clear visual and conceptual structure for the brand family.
Here are the different levels of brand hierarchy:
The corporate brand is the overarching parent brand and the top level of the brand hierarchy, representing the overall corporate brand of a company, for example, The Coca-Cola Company and Amazon are corporate brands.
The family brand level represents a group of brands under a common parent brand, for example, Virgin’s sub-brands such as Virgin Atlantic and Virgin money are part of the same brand family under the Virgin parent brand.
An individual brand represents and independent brand with its own unique identity, position, and target audience.
Although individual brands may be part of a larger brand portfolio, they operate independently.
A product brand represents a specific product or service within an individual brand.
For example, Apple is an individual brand that owns a portfolio of product brands such as iPhone and MacBook. The these are products of Apple, they have been structured as separate brands.
What Are The Advantages Of Brand Hierarchy?
As we’ve already covered there are plenty of business advantages to a well-structured brand hierarchy.
But let’s dive a little deeper.
A clear brand hierarchy helps to establish and maintain brand differentiation and customer loyalty over time.
The trust build-up across a brand family serves as a point of difference across markets and a reason to choose one brand over another.
Brand equity is the value of the brand name and reputation which translates into the willingness of consumers to choose a brand or pay a premium for a brand over its competitors.
Brand hierarchy across a brand portfolio allows equity to flow from one brand to another.
Efficient Brand Management
Managing brands and brand families are far more efficient and effective with a well-established brand hierarchy, helping brand management with strategic decision-making.
Deciding what products to develop or how to develop them is a challenge at the best of times.
Brand hierarchy provides parent brand managers with clarity on the markets they serve and where the demand is higher.
Managing multiple brands is no easy task and when consistency is the cornerstone of building trust, it becomes even more challenging.
Brand hierarchy provides the clarity that paves the way for consistency across multiple brands and their marketing strategies from social media marketing, to content, advertisements, digital marketing and everywhere in between.
How Do You Manage Brand Hierarchy?
Managing brand hierarchy requires a strategic approach and a clear understanding of the company’s overarching brand strategy.
Here are some hey steps to help you manage brand hierarchy effectively.
#1 Define Your Brand Strategy
Within a brand’s hierarchy, there needs to be a guiding strategy for the overall organization.
Is there a certain market, type of person, industry or sub-industry your organization will serve? Define who you’re for and who you’re not for.
#2 Define Your Brand Positioning Strategy
Knowing where you want your overarching brand to sit in the market is a key decision.
Once you’re clear on the position of your parent brand, you then need to get clear on the position of each brand in the portfolio within their given markets.
#3 Define Your Brand Architecture
Define the overall structure of your brand architecture strategy and the different types of brands within the brand family.
Include brands you expect to develop or acquire in the future based on your possible expansion strategy.
#4 Create A Roadmap For Product Development
Clarity on the brand’s strategy, position, and architecture paves the way for strategic decision-making.
A roadmap for product development also provides a roadmap for growth and expansion.
#5 Monitor And Evaluate
Keep an eye on the hierarchy of your brand and the performance of brands within the family.
Learn from both the successes and failures of brands within the portfolio and use these learnings to optimize the strategy.
Over To You
Brand hierarchy is an essential component of a successful branding strategy for companies with multiple brands or even multiple products.
It provides a clear visual and conceptual structure for the brand family, helps to maintain brand equity and customer loyalty, and creates a roadmap for product development and expansion.
Understanding the different types, structures, and levels of brand hierarchy, and managing it effectively, can help businesses build a strong and enduring brand in today’s competitive market.
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