Masterbranding, sub-branding, and portfolio branding (or some hybrid of these) are the main options in the brand architecture playbook. But determining which is the right approach can be very difficult. Each approach has its advantages and limitations based on the specific circumstances.
Another challenge in selecting the right brand architecture, one that is less recognized, is that these three terms are not always defined consistently. This is significant because it may result in a strategy that is not well thought out and may create confusion in directing and executing the strategy down the line. In other words, there’s a real danger of getting thrown by the definitions themselves, rather than determining the best path going forward.
Here are some examples:
Which of these two scenarios best reflects the essence of a masterbrand architecture?
1. A masterbrand architecture creates one solitary, high-level corporate trademark, with all offers in the portfolio linked directly to that trademark. With this strategy, all product names are descriptive in nature; they are not unique trademarks. Virgin is an example of a masterbrand, with descriptively named companies and services like Virgin Air, Virgin Mobile, and Virgin Radio.
2. Intel is a masterbrand architecture with product offerings such as Pentium, Centrino, and Core Duo. While each one of these products has its own name and offers a different level of performance, it is the Intel brand that allows a consumer to believe that the chip he or she purchases will have the same high level of quality as all other Intel products.
The first example offers a point of view on how the overarching masterbrand strategy is intended to impact the naming of businesses and products underneath.
The second example offers a point of view that focuses on the promise of the overarching brand. The masterbrand is the anchor for that promise, and all products reinforce that singular claim. The fact that products have their own brand identities is secondary and maybe even irrelevant. It is more important that in the minds of consumers, all products ladder up conceptually to the Intel masterbrand.
So the takeaway is that you can look at a masterbrand strategy two different ways—one that is more conceptual and one that is more executional. Neither is wrong. But it is important to establish guidelines for branding new products and acquisitions accordingly. A company may be so attracted to a uniform executional approach that it may lose sight of the unique marketing requirements of certain offerings in portfolio.
Which of these three scenarios best reflects the essence of a sub-brand architecture?
1. The Disney brand has always been closely associated with G-rated films. As Disney started to experiment with and distribute more PG-13 and R-rated films, it created the Touchstone brand to provide distance from the family-friendly Disney image. At its outset, Touchstone Pictures was intended as a sub-brand that would display little association with the Disney masterbrand.
2. Sub-brands are part of a company’s family of brands and come under the overall umbrella of the main brand or company name. Each of these brands may have a distinct brand promise, position, and personality.
3. A sub-brand architecture employs the corporate brand or masterbrand as the main reference point, but the product itself also has a distinctive name. FedEx has been successfully using a sub-brand strategy, with FedEx Ground, FedEx Home, FedEx Freight, etc., to identify its various shipping methods.
As with masterbranding, sub-brand architecture strategy is defined in different ways.
The Disney/Touchstone example points to an approach that intentionally creates distance from the masterbrand. This is a common strategy when a company creates an offering that deviates from the core promise or acquires a company that may not be a good short-term or long-term fit.
The Sony example points to a strategy where there is a definite connection to the masterbrand, but allows key businesses to have their own promise, position, and personality.
The FedEx example seem very close to the Virgin masterbrand scenario. In this case, a color scheme with descriptive names forms the core of the strategy.
The fact is, you’ll find numerous examples of the term "sub-brand" defined each way. Which is right or wrong is not the issue. The challenge is knowing which camp the company falls into and then directing and executing the architecture accordingly.
For some companies, the intent is to bolster the parent brand by closely connecting it to a number of secondary brands. For other companies, the goal is distance for either positioning or competitive purposes. And lastly, some strategies, like Sony’s, fall in between.
Portfolio Brand Architecture
It’s easy to see how consumer goods companies like P&G constitute what we commonly think of as a portfolio brand structure. There is good reason to keep individual brands in the portfolio separate and distinct. In this way, the company can more effectively segment the marketplace and even have brands that compete with one another. At the same time, the parent brand is much less of a consideration in consumer purchase decisions.
Because portfolio brand architecture is often closely associated with these types of companies and their offerings, the term may be over-simplified and misunderstood when applied to the strategy of some other types of companies. Here’s an example:
UnitedHealth Group brand was created in 1998 as the Wall Street name for its holdings.
At that time, some businesses were branded to closely relate to the parent name, including UnitedHealthcare, Unimerica, and Uniprise. Others were branded to have more distance, including Ovations and Ingenix.
In recent years, UnitedHealth Group has evolved its brand architecture strategy. It now anchors its architecture on two key businesses: United Healthcare and Optum. It defined this approach in its annual report as “a portfolio of independent but strategically linked business identities.” To the public at large, these two entities are represented as two very distinct brands, with minimal tie to the parent.
P&G’s portfolio consists of multiple product families and individually packaged brands. UnitedHealth Group’s approach and needs are a lot different. In a way, the Optum brand strategy is very similar to the Disney approach. However, in this case, it is less about shielding the parent’s brand image and more about giving Optum the freedom it needs to grow and compete effectively.
Flexibility Is Key
As you can see with the above real-word examples, flexibility based on business realities is key. Most companies are hybrid in their structure for good reason. The terminology should not be an obstacle to establishing the best approach.
Many companies strive to create a masterbrand architecture for its simplicity and efficiency. However, if viewed in the right way, a company can build a strong masterbrand, both in concept and execution, and still allow the flexibility to have strategic endorsed and/or independent brands as well. This is particularly significant for brand managers in defining, maintaining, and codifying their company’s brand architecture.