1. Executive summary: A key aspect of managing brand equity is adopting the proper branding
strategy. Brand names of products typically consist of a combination of different names and
other brand elements. A brand architecture strategy for a firm identifies which brand elements a
firm chooses to apply across the various products or services it sells. Several tools aid in
developing a brand architecture strategy. Combining the brand–product matrix, the brand
portfolio, and the brand hierarchy with customer, company, and competitive considerations can
help a marketing manager formulate the optimal brand architecture strategy. The brand–product
matrix is a graphical representation of all the firm’s brands and products, with brands as rows
and the corresponding products as columns. The rows represent brand– product relationships and
capture the firm’s brand extension strategy. Marketers should judge potential extensions by how
effectively they leverage existing brand equity to a new product, as well as how effectively the
extension, in turn, contributes to the equity of the existing parent brand. The columns of the
matrix represent product–brand relationships and capture the brand portfolio strategy in terms of
the number and nature of brands to be marketed in each category and nature of common and
distinctive brand name elements across the firm’s products. By capturing the potential branding
relationships among the different products sold by the firm, a brand hierarchy graphically
portrays a firm’s branding strategy. One simple representation of possible brand elements and
thus of potential levels of a brand hierarchy is (from top to bottom): corporate (or company)
brand, family brand, individual brand, and modifier. Corporate or family brands can establish a
number of valuable associations to differentiate the brand, such as common product attributes,
benefits, or attitudes; people and relationships; programs and values; and corporate credibility. A
corporate image will depend on a number of factors, such as the products a company makes, the
actions it takes, and the manner in which it communicates to consumers. Communications may
focus on the corporate brand in the abstract or on the different products making up the brand line.
Any corporate name changes and rebranding efforts need to be done carefully.
Chapter objectives
• Define the key components of brand architecture.
• Appreciate how a firm determines which brand elements to choose to apply across the
products it offers for sale (Branding Strategy or brand architecture)?
• Assemble a basic brand hierarchy for a brand.
• Describe how a corporate brand is different from a product brand.
2. Content:
Brand Architecture-
The Brand- product matrix
Breadth of a Branding Strategy
Depth of a Branding Strategy
Brand Hierarchy-
Building Equity at Different Hierarchy Levels
Corporate Image Dimensions
Introduction: The branding strategy of a firm determines which brand elements a firm chooses
to apply across the products it offers for sale. Many firms employ complex branding strategies.
We being by describing two important strategic tools. The brand –product matrix and the brand
hierarchy help to characterize and formulate branding strategies by defining various relationships
among brand and products.
Brand Architecture
• Branding strategy is critical because it is the means by which the firm can help
consumers understand its products and services and organize them in their minds.
Two important strategic tools: The brand-product matrix and the brand hierarchy help
to characterize and formulate branding strategies by defining various relationships among
brands and products.
• The branding strategy for a firm reflects the number and nature of common or
distinctive brand elements applied to the different products sold by the firm.
– Which brand elements can be applied to which products and the nature of new
and existing brand elements to be applied to new products.
3. The role of Brand Architecture
Clarify: brand awareness
– Improve consumer understanding and communicate similarity and differences
between individual products
Motivate: brand image
– Maximize transfer of equity to/from the brand to individual products to improve
trial and repeat purchase.
Developing Brand Architecture Strategy
3 Steps or Requirements
1. Defining the Potential of the brand in terms of its “market footprint”.
2. Identifying the Product and Service Extensions that will allow the brand achieve that
potential.
3. Specifying the brand elements and positioning associated with the specific products and
services for the brand.
The Brand- Product Matrix
4. # Must define:
– Brand-Product relationships (rows)
• Line and category extensions
– Product-Brand relationships (columns)
• Brand portfolio
Important Definitions:
# Product line
– A group pf products within a product category that are closely related.
# Product mix (product assortment)
– The set of all product lines and items that a particular seller makes available to
buyers.
# Brand mix (brand assortment)
– The set of all brand lines that a particular seller makes available to buyers.
Breadth of a Branding Strategy: The breadth of a branding strategy describes the number
and nature of different products linked to the brand sold by a firm. The firm has to make strategic
decision about how many different product lines it should carry-
• Breadth of product mix:
# Aggregate market factors
# Category factors
# Environmental factors
# Aggregate market factors: Descriptive characteristics of the market itself. All else being
equal, a category is attractive if it is relatively- Market size(measured in both units and dollars),
Market Growth(in current and projected terms), Stage in Product Life Cycle, Sales cyclicity,
Seasonality, Profits.
5. # Category factors: Underlying structural factors affecting the category. In general, a category
is attractive if the threat of new entrants is low (due to barriers of entry from economies of scale,
product differentiation, capital requirements, switching costs, or distribution systems);
bargaining power of buyers is low(when the product is a small percentage of buyers, costs or is
sharply differentiated, or when buyers are earning high profits, lack of information about
competitive offerings or are unable to integrate backword); current category rivalry is low (when
there are few or an imbalance of competitors in fast growing markets); few close product
substitutes exist in the eyes of consumers; and the market is operating at or near capacity.
# Environmental factors: External factors unrelated to the products customers and competitors
that affect marketing strategies. A host of technological, political, economic, regulatory, and
social factors will affect the future prospects of a category.
