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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


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


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


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


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


perceptions of brandsand their roles8

1hat are the

various ways the

portfolio could beconfigured going

forward8

1hich architecture


the short and long-term business and

brand objectives8

Strategic

Business Analysis

7ow closely aligned

are the brand and



&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



1hat are the

various ways the


forward8

1hich architecture



brand objectives8

Strategic

Business Analysis

7ow closely aligned

are the brand and



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



1hat are the

various ways the


forward8

1hich architecture



brand objectives8

Strategic

Business Analysis

7ow closely aligned

are the brand and



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



1hat are the

various ways the


forward8

1hich architecture



brand objectives8

Strategic

Business Analysis

7ow closely aligned

are the brand and



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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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