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![BRAND
AMPLITUDE,
LLC
AUGUST
2015
REAL
WORLD
EXAMPLE:
McDONALD’S
CASE
STUDY
The
Branded
House
McDonald’s
Built
23
Using
the
arches,
color
palepe
and
“Mc”
to
idenMfy
and
link
most
of
its
offerings
to
the
master
brand,
it
is
a
prime
example
of
a
Branded
House
architecture.
http://mrktspnkr.wordpress.com/2012/06/29/brands-as-
identifiers-functional-and-symbolic-images/
Tightly
associated
with
burgers,
fries
and
soI
drinks,
the
brand
thrived
in
the
’80s
and
early
’90s.
Through
consistency
and
careful
brand-‐
building,
McDonald’s
became
an
American
icon.
“[McDonald’s] gave millions of Americans
their first jobs while changing the way a
nation ate.” Bloomberg Businessweek,
3/2/03](https://image.slidesharecdn.com/brandarchitecturetoolkitfinal2/75/Assessing-Your-Brand-Architecture-August-2015-24-2048.jpg)
Uploaded byCarol Phillips
Assessing Your Brand Architecture August 2015
The document outlines the concept of brand architecture, emphasizing its significance in structuring a company's brand portfolio for aligning with business strategies and enhancing clarity, efficiency, focus, growth, and equity. It discusses various brand roles, architecture solutions, and frameworks for decision-making, highlighting real-world examples such as Disney and McDonald's to illustrate the application and impact of effective brand architecture. Organizations are encouraged to revisit their brand architecture when strategic changes occur or brands lose relevance.
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Assessing Your Brand Architecture August 2015
- 1. BRAND AMPLITUDE, LLC AUGUST 2015 CONSUMER INSIGHTS FOR SUSTAINING BRAND RELEVANCE Copyright © 2015 Brand Amplitude LLC All Rights Reserved – May Not Be Reproduced Without Permission BRAND ARCHITECTURE: DESIGNING YOUR BRAND PORTFOLIO FOR SUCCESS Carol Phillips & Judy Hopelain August 2015 NEED A NEW IMAGE- ANOTHER APPLE?
- 2. BRAND AMPLITUDE, LLC AUGUST 2015 QUESTIONS WE ANSWER HERE § What is brand architecture and why is it important? § What are the various roles brands play, how are they determined and why are they useful? § What is the range of brand architecture soluMons, what are their implicaMons and what determines which is the best opMon? § How do marketers go about developing architecture soluMons for their brands? § How does this work in the real world? 1
- 3. BRAND AMPLITUDE, LLC AUGUST 2015 BRAND ARCHITECTURE OVERVIEW Brand architecture is part organizaMon… 2 …and part military strategy
- 4. BRAND AMPLITUDE, LLC AUGUST 2015 BRAND ARCHITECTURE DEFINED Architecture is about opMmizing the hierarchy, linkages, and roles of brands within the porRolio in support of the business strategy. 3 Products, business units, specific services, markeMng programs, features, line extensions, apps, web sites, etc. all need monikers. How these names relate is the difference between brand coherence and brand confusion.
- 5. BRAND AMPLITUDE, LLC AUGUST 2015 BENEFITS OF A CLEAR ARCHITECTURE Brand architecture helps organizaMons structure their brands and products to drive value and growth by enhancing: 4 § Clarity: Clarifies what the organizaMon can do for customers by providing a coherent face to the offering and the business strategy. § Efficiency: Increases markeMng efficiency by ensuring brand leverage without overstretching. § Focus: Provides direcMon for where to focus innovaMon and markeMng investments by disMnguishing strategic brands from others in the porRolio. § Growth: Opens up new opportuniMes for growth by lending credibility from exisMng, successful brands. § Equity: Enables equity to flow through the porRolio by defining the relaMonships between porRolio brands.
- 6. BRAND AMPLITUDE, LLC AUGUST 2015 BRAND ARCHITECTURE TAKES AN OUTSIDE-‐IN VIEW The opMmal architecture usually does not line up neatly with internal organizaMonal structures – and that’s okay! Corporate Business Unit Business Unit Products Products Brand Architecture Is Externally Facing Masterbrand A Brand B Endorsed by A Sub-‐ Brand D Sub-‐ Brand C Ingredient or Feature OrganizaIonal Structure is Internally Facing Business units are not brands. 5
- 7. BRAND AMPLITUDE, LLC AUGUST 2015 ARCHITECTURE DEFINES BRAND ROLES Each brand asset needs a clear role in the porRolio. Corporate Brand Company name and legal enMty. Oaen used as endorser but may not be customer facing at all. Master Brand (Driver) Drives purchase decision and defines user experience. Most strongly represents the differenMaMon inherent in the offer. Endorser Brand Provides approval, credibility or guarantee to a range of products, but is usually not the driver. Sub-‐Brand Derives equity from another brand, usually the Master. Ingredient Brand Features, materials, components or parts that are contained within other branded products. Not an equity driver, oaen an equity energizer. Brand Roles Endorser Brand Sub-‐Brand Master Brand Clear roles simplify decisions about brand expression 6
- 8. BRAND AMPLITUDE, LLC AUGUST 2015 Sony plays mulMple roles in its porRolio due to the needs of the business. Some offerings have stand-‐alone brands that do not feature the Sony name at all. ARCHITECTURE ALLOWS BRANDS TO PLAY MULTIPLE ROLES Corporate Brand Sub-‐Brand Master Brands Stand-‐Alone Brands Master Brand: Allows equity to be shared among brand assets when used in either driver or endorser role. Sub-‐Brand: Leverages the strength of the master brand while helping to separate and organize the offerings. Stand-‐Alone Brand: Separates offerings, creates new sources of equity or targets new audiences. 7 Ingredient Brand: Brings energy and news to an offering. Always used in conjuncMon with another porRolio brand. Ingredient Brand
- 9. BRAND AMPLITUDE, LLC AUGUST 2015 WHAT’S INCLUDED IN ARCHITECTURE? 8 Only offerings are included in the architecture. Trademarked or licensed branded elements live outside the architecture and enhance equity by providing uniqueness and memorability. CelebriIes lend meaning Characters create likeability Sponsorships build affinity Branded Elements Are Not Included in Architecture
- 10. BRAND AMPLITUDE, LLC AUGUST 2015 BRAND ARCHITECTURE SOLUTIONS There is a broad spectrum of brand architecture soluMons. 9 House of Brands Branded House Single parent brand spans a set of offerings. Independent brands, each maximizing its impact on the market. • Maximizes markeMng spending efficiency • Maximizes awareness among all stakeholders (i.e., investors, employees) Hybrid Spectrum of Brand Architecture Solutions • Builds individual strong brands for category dominance • Limits risk by containing brand reputaMons (good for high risk industries)
- 11. BRAND AMPLITUDE, LLC AUGUST 2015 MOST SOLUTIONS ARE A HYBRID 10 Brand architecture soluMons fall on a spectrum. Most soluMons fall somewhere between branded house and house of brands. House of Brands Hybrid Branded House Con s Builds equity in strong stand-‐ alone brands across a wide range of categories Requires significant markeMng investment Results in strong master brand. Can be difficult to extend beyond the experMse of the master brand. Leverages strong master brand while allowing flexibility. Requires careful planning to avoid confusing customers or diluMng the master brand.
- 12. BRAND AMPLITUDE, LLC AUGUST 2015 BRAND ARCHITECTURE SOLUTION IMPLICATIONS 11 Do the brands address the same or different customer segments? How important is it to represent the brand the same way in different geographies? Are there synergies that can be leveraged between different brands or business units? Target mulIple segments Few synergies to be leveraged Address individual geographies Reinforce a global organizaIon mindset Many synergies to be leveraged Target single or few segments Architecture decisions have investment implicaMons, and the opMmal soluMon is determined in large part by the business strategy. House of Brands Branded House
- 13. BRAND AMPLITUDE, LLC AUGUST 2015 12 Single parent brand spans a set of offerings. Independent brands, each maximizing its impact on the market. House of Brands Branded House Disney uses a mix of brand architecture soluMons to build and protect its diverse businesses. EXAMPLE: DISNEY BRAND ARCHITECTURE SOLUTION
- 14. BRAND AMPLITUDE, LLC AUGUST 2015 Brand Type DescripIon Example Corporate Brand A single brand targeted at mulMple stakeholders that unites the porRolio of brands under a common strategy Master Brand A broad brand that is the primary frame of reference for the customer. It is used as an umbrella across a wide range of product categories, services and geographies that can exist without the support of another brand. Category Brand Broad groupings of product and service offerings that reflect mulMple customer segments that use similar technologies. Sub-‐Category Brand Groups of products and services within a Category that help customer find relevant offerings. They can be organized around products, applicaMons or customer segments. Disney Princess CollecMon Product / Service Line Brand A collecMon of like offerings that helps simplify the buying process for the customer by signaling a unique value proposiMon relaMve to compeMMve offerings. BRAND HIERARCHY EXAMPLE: DISNEY Architecture defines clear hierarchies…. 13
- 15. BRAND AMPLITUDE, LLC AUGUST 2015 RelaIonship Best used when… Example Primary Brands are enMrely consistent with core values and posiMoning of master brand Shared Core values of the brand are quite consistent with the master brand, but augmentaMon is needed Endorsed Master brand equity limits the brand’s image and thus necessitates some independence; endorsement adds credibility or meaning Invisible Brand is inconsistent with core values of master brand; risks diluMng/eroding parent brand …and relaMonships among brands in a porRolio. 14 BRAND RELATIONSHIPS EXAMPLE: DISNEY
- 16. BRAND AMPLITUDE, LLC AUGUST 2015 HOW TO DECIDE WHICH SOLUTION IS RIGHT? 15 Three guiding principles help to ensure the brand architecture has the opMmal business impact: Fulfill customer needs (and generate revenue) while minimizing brand development and management costs. Sufficiently cover the market and target customer segments with the fewest brands possible. Make it easy for customers to find the soluMon they seek by ensuring “daylight” between brand offerings. Right Number MarkeIng Efficiency Clear SeparaIon
- 17. BRAND AMPLITUDE, LLC AUGUST 2015 ARCHITCTURE DIRECTS STRATEGIC PRIORITIES 16 Not all brands are equally important. Architecture guides decisions about innovaMon and investment as porRolio brands compete for resources. Strategic Brand Significant contributor to company’s future sales, percepMons or market posiMon. DisInguisher Brand Enhances the differenMaMon of another brand. Also referred to as ‘branded energizer’ or silver bullet. Cash Cow Money making brand that does not represent future significant growth. Corporate Brand May have low visibility to customers, but important to regulatory bodies, investors, employees, trade groups, partners. Fighter/Flanker Brand Addresses compeMMve threat. Protects share of other brands in the porRolio. Example
- 18. BRAND AMPLITUDE, LLC AUGUST 2015 EXAMPLE: AMAZON 17 Amazon keeps its strategic businesses separate through stand-‐alone brands, and uses an endorsed approach for its other brands. Strategic BrandsCash Cow Stand-Alone Brands
- 19. BRAND AMPLITUDE, LLC AUGUST 2015 EXAMPLE: STARBUCKS 18 Starbucks is thoughRully expanding its porRolio to separate its high growth and premium businesses from its mainline coffeehouses and Starbucks Express stores. Strategic BrandsCash Cows Flanker/fighter Brand http://news.starbucks.com/news/starbucks-accelerates-growth-of-store-formats Starbucks Reserve Roastery and Tasting Room (Seattle) Starbucks Reserve stores (2015) Starbucks coffeehouses Express format stores (2015)
- 20. BRAND AMPLITUDE, LLC AUGUST 2015 WHEN TO REVISIT ARCHITECTURE? 19 It’s Mme to revisit brand architecture when an organizaMon changes strategic direcMon or adds important new capabiliMes. § Significant merger or acquisiMon § Too many brands and offerings are compeMng for apenMon and investment dollars § Corporate brand and product brands have the same name and are hard to disMnguish § Brands are losing relevance with customers § Brand meaning has been diluted or stretched beyond credibility and effecMveness § Programs, elements, features or sponsorships are asking to be treated as brands Triggers for RevisiIng Architecture I have a problem
- 21. BRAND AMPLITUDE, LLC AUGUST 2015 EXAMPLE: KELLOGG’S BRAND PORTFOLIO RE-‐EVALUATION 20 In 2012, Kellogg’s restructured its brand porRolio to beper leverage its master brand, acquired stand-‐alone brands and Olympics sponsorship. http://www.forbes.com/sites/jenniferrooney/2012/05/10/kelloggs-embarks-on-major-brand-overhaul/ “We had to start separa7ng out the Kellogg’s brand from the Kellogg company …Kellogg’s is a truly iconic brand … We felt that having a stronger brand, driving a stronger point of view, a more powerful iden7ty and have at the center an umbrella to talk about our por@olio more holis7cally, to talk about the power of breakfast, to talk about the value of cereal.” § Acquired new brands § Needed to elevate Kellogg’s corporate brand above its cereal master brand § Needed to strengthen the meaning of the Kellogg’s brand beyond cereal to breakfast § Wanted to leverage investment in 2012 Olympics to benefit all Kellogg’s sub-‐brands Stated Reasons For Revisiting Architecture
- 22. BRAND AMPLITUDE, LLC AUGUST 2015 EVALUATING ARCHITECTURE OPTIONS In general, we evaluate brand architecture from a handful of perspecMves. For example, having more answers to the lea in the assessment tool suggests leaning toward a House of Brands approach is best. 21 OrganizaIon Product/service brand equity MarkeMng spend Corporate brand equity CompeIIon CompeMMve set Stakeholders Number Customer needs Cross-‐selling opportuniMes Strong equity Supports mulMple brands Low/negaMve equity Fragmented Many Diverse Low Low/no equity Supports few brands Strong equity Consolidated Fewer Singular High Branded House House of Brands Architecture Assessment
- 23. BRAND AMPLITUDE, LLC AUGUST 2015 BRAND ARCHITECTURE DEVELOPMENT 22 We use a four-‐step process to idenMfy the opMmal architecture soluMon. Overview of Recommended Four-‐Step Approach Brand Architecture Mapping AlternaIves Development EvaluaIon of AlternaIves Strategic Business Analysis How aligned are external and internal percep7ons of brands and their roles? What are the various ways the por@olio could be configured going forward? Which alterna7ve best fits the short and long-‐ term business objec7ves? How closely aligned are the brand and business strategies?
- 24. BRAND AMPLITUDE, LLC AUGUST 2015 REAL WORLD EXAMPLE: McDONALD’S CASE STUDY The Branded House McDonald’s Built 23 Using the arches, color palepe and “Mc” to idenMfy and link most of its offerings to the master brand, it is a prime example of a Branded House architecture. http://mrktspnkr.wordpress.com/2012/06/29/brands-as- identifiers-functional-and-symbolic-images/ Tightly associated with burgers, fries and soI drinks, the brand thrived in the ’80s and early ’90s. Through consistency and careful brand-‐ building, McDonald’s became an American icon. “[McDonald’s] gave millions of Americans their first jobs while changing the way a nation ate.” Bloomberg Businessweek, 3/2/03
- 25. BRAND AMPLITUDE, LLC AUGUST 2015 There were signs of trouble starMng in the late 1990’s, as business lagged and new products failed. 24 1995 2000 2010 2015 The low-‐fat McLean Deluxe and Arch Deluxe burgers, meant to appeal to adults, bombed Sales stagnated while costs increased as the product offering expanded/ became more complex In an effort to regain relevance, McDonald’s acquired Chipotle Mexican Grill and Boston Market in 1999 Spun off Chipotle in 2006 to refocus on core hamburger business 2005 Salads represent only 2-‐3% of McDonald’s sales in the United States. CEO Don Thompson admiped “I don’t see salads as being a major growth driver in the near future.” (5/13) Record number of franchisees lea the system in 2002 In 2004, “Supersize Me” brought apenMon to what too much McDonald's does to your body and how it makes you feel. U.S. comp store sales slipped 1.7% in Q1 and 1.5% in Q2 of 2014 McDONALD’S CASE STUDY: TIMELINE
- 26. BRAND AMPLITUDE, LLC AUGUST 2015 McDONALD’S CASE STUDY: STEP 1 25 Brand Architecture Mapping AlternaIves Development EvaluaIon of AlternaIves How aligned are external and internal percep7ons of brands and their roles? What are the various ways the por@olio could be configured going forward? Which architecture alterna7ve best fits the short and long-‐ term business objec7ves? Strategic Business Analysis How closely aligned are the brand and business strategies? Brand Architecture Development Process Focused on health-‐centric global ini7a7ves, puQng food quality first. Marke7ng now organized by consumer groups such as millennials, families and adults rather than by product. Stepping up digital, including e-‐commerce, fast-‐tracking tes7ng of mobile payments and ordering. In June it set up a "learning lab" at a restaurant in Laguna Niguel, Calif., to beZer understand what people want and to experiment with customizable burgers
- 27. BRAND AMPLITUDE, LLC AUGUST 2015 McDONALD’S CASE STUDY: STEP 2 26 Execu7ves worry the master brand has lost relevance. Millennials have defected to fast casual chains like Chipotle and Five Guys and Moms no longer see McDonald’s as a good place for kids. Consumer Reports more than 32,000 subscribers rated McDonald's burgers the worst-‐tas7ng of 20 rival burger chains. Brand Architecture Mapping AlternaIves Development EvaluaIon of AlternaIves How aligned are external and internal percep7ons of brands and their roles? What are the various ways the por@olio could be configured going forward? Which architecture alterna7ve best fits the short and long-‐ term business and brand objec7ves? Strategic Business Analysis How closely aligned are the brand and business strategies? Brand Architecture Development Process hpp://online.wsj.com/arMcles/mcdonalds-‐faces-‐millennial-‐ challenge-‐1408928743hpp://online.wsj.com/arMcles/mcdonalds-‐ faces-‐millennial-‐challenge-‐1408928743 hpp://www.businessweek.com/arMcles/2014-‐09-‐09/ mcdonalds-‐happy-‐meal-‐problem-‐kids-‐turn-‐away-‐from-‐fast-‐food hpp://www.chicagobusiness.com/arMcle/20140906/ ISSUE01/309069980/mcdonalds-‐has-‐a-‐new-‐generaMonal-‐problem-‐ kids#
- 28. BRAND AMPLITUDE, LLC AUGUST 2015 McDONALD’S CASE STUDY: STEP 3 27 Brand Architecture Mapping AlternaIves Development EvaluaIon of AlternaIves How aligned are external and internal percep7ons of brands and their roles? What are the various ways the por@olio could be configured going forward? Which architecture alterna7ve best fits the short and long-‐ term business and brand objec7ves? Strategic Business Analysis How closely aligned are the brand and business strategies? Brand Architecture Development Process Branded House approach makes it difficult to change percep7ons. Consider reserving McDonalds as corporate brand and build equity in new stand-‐alone brands and sub-‐brands. • Sub-‐brands or stand-‐alone brands for Kids or Millennials or other priority targets may help separate new ini7a7ves from current offerings. • New digital ini7a7ves provide a pla@orm for a new, more relevant brand. hpp://adage.com/arMcle/news/ mcdonald-‐s-‐files-‐trademark-‐mcbrunch/ 294911/? McDonald’s applied for a new trademark for a McBrunch brand in September 2014
- 29. BRAND AMPLITUDE, LLC AUGUST 2015 28 Key evalua7on criteria relate to ability to support the business, build new sources of equity and beZer address the needs of Millennials and kids/Moms. The assessment illustrates the case for more brand separa7on to enhance appeal among Millennials and kids/ Moms. Brand Architecture Mapping AlternaIves Development EvaluaIon of AlternaIves How aligned are external and internal percep7ons of brands and their roles? What are the various ways the por@olio could be configured going forward? Which architecture alterna7ve best fits the short and long-‐ term business and brand objec7ves? Strategic Business Analysis How closely aligned are the brand and business strategies? Brand Architecture Development Process McDONALD’S CASE STUDY: STEP 4 Architecture Assessment
- 30. BRAND AMPLITUDE, LLC AUGUST 2015 KEY TAKEAWAYS § Architecture aligns business and brand goals by defining clear roles, relaMonships and investment prioriMes among porRolio brands. § A coherent brand architecture makes markeMng more efficient and effecMve by ensuring customers and other stakeholders understand what the business can do for them. § House of Brands and Branded House are just two of many possible architecture soluMons. Most companies used a hybrid approach. § Brand architecture should be revisited periodically to ensure business requirements are being addressed and the structure is opMmal for supporMng the business strategy. § IdenMfying the opMmal architecture is a 4-‐step process. 1.29 29
- 31. BRAND AMPLITUDE, LLC AUGUST 2015 HOW WE CAN HELP ü Audit your brand to idenMfy gaps and opportuniMes ü Generate ideas for closing the gaps ü Evaluate your brand architecture and recommend ways to increase clarity, efficiency and equity. ü Develop a compelling, energizing brand idenMty and audience-‐specific posiMonings that align with the idenMty ü Measure and track your brand’s health over Mme Judy Hopelain @judyhopelain judy@brandamplitude.com Carol Phillips @carol_phillips carol@brandamplitude.com 30
Editor's Notes
- #8 For example, take a brand like Sony. Here’s a few ways Sony presents itself to the world. Sony is primary – it is the ‘master brand’ – the story teller. The other names are sub-brands, partner brands, programs and products. They all live within the world of “Sony,” and both support and draw strength from the master brand. As with Sony, you need to think who’s telling your story make it a prominent part of the story.
- #12 Three buckets, bullets above
- #23 http://www.businessweek.com/stories/2003-03-02/mcdonalds-hamburger-hell http://www.nbcnews.com/id/4433307/ns/business-us_business/t/mcdonalds-phasing-out-supersize-fries-drinks/#.VA-bn1birKg