Brand Masterclass Week Four

OPEN SOURCE Session Four : Understanding Brand Architecture Idris Mootee CEO Idea Couture Inc. 1 Sept 21, 2007

All brand names mentioned and logos included in this presentation are registered trademarks of their respective owners and are legally protected. Their inclusion in this presentation is only for the purpose of illustration, criticism and analysis. Disclosure: Starbucks, Nike, Kitchen Aid, Jordan, Virgin, BMW, Nintendo, Crate & Barrel are clients of Blast Radius Inc. which I was formerly employed as Senior VP and Chief Strategist. The mentioning of these names are solely for academic purposes and should not be considered as case studies. The material here was prepared solely with public information supported by the author’s analysis during the writing of the book 60-Minute Brand Strategist which was published in four languages. Other brand names including Levis, Apple, Mercedes Benz, Sony, Coca Cola, Macys, Target, Daimler Chrysler, Citibank mentioned here were at some point a client of mine in association with previous firms under which I was employed or co-founded. No confidential or proprietary information were used or mentioned here. This series of presentation is designed to provide relevant and up-to-date information for brand and marketing practitioners and it is not to be used in marketing or rendering of professional services. Some rights reserved. Idris Mootee 2001-2007. Presentation can be freely embedded in any website or blog under creative commons license with prohibition of any commercial use. 2

What is Brand Architecture? It is the logical, strategic and relational structure for all of the brands in the organization’s brand portfolio. The objective is to maximize clarity, synergy and leverage to maximize customer value and internal efficiencies. Master brand Subbrands Product brands Stand-alone brands 3

Why: A clear brand architecture is to help structure a brand's position both now and for the future helps management in the task of building that brand and ensuring that everyone within the organization as well as their ad agencies are working to a common and clearly understood goal. 4

Why do we need one? Consider GM has 32 brand names, P&G has hundreds, BMW has 3, Nintendo has 2 and Starbucks has 1. It gets more and more complicated as most companies have multi-brands from merger and acquisitions, aggressive brand extensions due to pressure for quick profits and increasing complex structures involving sub-brands, endorsed brands and co-brands. 5

Developing brand architecture: Often the task includes periodic regrouping multiple product groups, brand families, reposition them to reflect their role in the market and to create a structure for immediate successful marketing. The establishment of a clearly understood and coherent brand architecture creates the structure within which the vital day- to-day tactical decisions can be made. 6

Brand architecture is strategic: Because many marketing (channel, pricing, advertising and promotions) decisions are mostly tactical in nature, without a well organized brand architecture in place, these day-to-day tactical decisions become strategic and long- winded in nature. 7

What are main advantages of developing a brand architecture? 1. It helps everyone in the organization see and understand all the connections between corporate brands, sub-brands and master brands. 8

What are main advantages of developing a brand architecture? 2. It makes decision making easier when it comes to allocating and sharing marketing resources such as advertising and promotions. 9

What are main advantages of developing a brand architecture? 3.Protect brands by being over- leveraged and being diluted by over- stretching communications messaging and graphic design options. 10

P&G’s brand architecture effectively manage the relationships between product, brands and market segments. Head and Shoulders dominates the dandruff control shampoo category and Pert Plus targets the market for combined shampoo and conditioner. Pantene is positioned as a brand with a technological heritage and the benefit of hair vitality. These brands basically optimizes their brand coverage instead all products under a P&G brands. 11

House of Branded Brand Separation Spectrum Brands House 12

The biggest mistake for any brand portfolio is not having a brand architecture. One can allow each brand to be managed in isolation simply because what is right for an individual brand may be wrong for the portfolio. 13

It is very difficult to generalize what and how to put a vast number of brands in categories and wed sets of them and their relationships into a composite brand architecture. Each industry and category context is very different. The tendency is towards having a “master brand” and only when there is a compelling need for a separate brand is one considered since there is a lot of money involved in the building of a new brand. 14

Four steps to optimize your brand architecture? 1. Start by looking at different ways to look at segmentation and map your brand portfolio to those segmentations. 15

Four steps to optimize your brand architecture? 2. Examine segments with the most profitability and/or growth potential, then identify where your leadership brands can provide the best leverage. 16

Four steps to optimize your brand architecture? 3. Synthesize those information and perform analysis to see if there are sufficient growth opportunities in those leadership brands to make up for the revenue-losing brands. 17

Four steps to optimize your brand architecture? 4. Explore opportunities to reduce those underperforming brands by extending those leadership brands or opportunities for new brands for any underserved segments. 18

How often people want to create another new brand? So the big question is can the business support a new brand? The needs usually consist of one or more of the following: - Create and own a different set of associations - Develop a totally new product offering or a category - Avoid conflict in brand association and identities - Avoid channel conflict - Create a price-driven label for competitive reason - Fulfill needs for new geographies or unique customer segments 19

Brand Separation Spectrum House of House of Endorsed House Branded Sub-brands Brands of Brands House Same Different Strong Linked Token Shadow Umbrella Co-Drivers Not Identity Identity Endorsement Name Endorsement Endorser as Driver Connected Gilette Buick Thomson Tide GE Capital Courtyard Grape Nuts BMW DKNY Sensor LeSabre (GE) (P&G) GE Appliance By Marriott from Post Club Med Sony Sony Lexus HP Obsession by Saturn McMuffin Sony Singles v. Playstation Trinitron (Toyota) DeskJet Calvin Klein (GM) Couples DuPont Touchtone Nutrasweet Friends & Docker's Levi – Europe Virgin Nestea VW Beetle Stainmaster (Disney) (G.D.Searle) Family by MCI LS&Co. Levi – U.S.A. Branded House of House Brands 20

A Brand Architecture Provides Structure and Clarity Brand Separation Spectrum House of Branded Sub- Endorsed House of Branded Sub- Endorsed Brands House Brands Brands Brands House Brands Brands The “LaserJet” is a ‘Marriott’ plays a All products carry P&G is not name of a product lesser role than GE name (except represented that is ‘equal’ with CourtYard NBC) HP 21

Valentino Brand Architecture Support Market Positioning 22

Sony Brand Architecture Provides Category Focus Sony chooses a single-minded, powerful and yet flexible architecture and leverages their corporate brand in many different ways. Corporate Umbrella as Driver Endorser Brand Ingredient Brand Shadow Endorser Co-Brand 23

Intel Brand Architecture Informs Platform and Pricing Decision 24

FedEx Brand Architecture Provides Structure and Clarity 25

Marriott Brand Architecture Provides Structure and Clarity 26

Session four of eight. For notes and discussion visit www.mootee.typepad.com Idris Mootee CEO Idea Couture Inc. 27

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Brand Masterclass Week Four

by Idris Mootee on Sep 22, 2007

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Brand Masterclass Week Four — Presentation Transcript