Is introducing a new brand the right step for your company?

June
10, 2021

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One of the most common challenges customers grapple with – from solo preneurs to established businesses – is structuring and managing multiple brands. The tendency is to jump straight to logo development to turn a new idea or innovation into a new brand. The problem with this approach is that it takes investment, resources, and time to build that commercial identity. Usually, these challenges do not become clear until long after the launch and affect not only the performance of the new brand, but the entire company. Here, however, is the good news; Not all innovations need to take the form of a new identity, and often several are not even the answer. The solution can be a lot simpler than fragmenting marketing funds and other internal resources.

Before you begin registering a new company and creating a new logo, you need to reconsider how the innovation that is hopefully at work fits into your overall brand portfolio (also known as "brand architecture") and what role it plays plays in achieving the business goals and vision.

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There are four main types of brand architecture models:

House of Brands: These are independent and unaffiliated brands that sometimes have only the most subtle indications that there is a single parent brand behind everyone. This is usually used when the parent brand isn't credible enough to play in different categories or segments.

Sub-brands: A structure where the parent brand is modified slightly so that it can expand and serve different categories or audiences. Sub-brands can create different personalities, but still have to adhere to the strict principles of the parent brand.

Endorsed Brands: Here the parent brand acts as a subtle endorsement to convey security and credibility, but in general these can "express" themselves in unique ways.

Branded House: In this model, the focus is on the parent brand and additional brands are usually more differentiated by characteristics, while the positioning, message and visual identity of the parent brand are retained.

How to evaluate the right architecture for your company

1. Ask how your innovation really differs from a current brand. Does it serve a whole new audience? Is it for a whole new category on the market? If the answer to both is yes, it could be an early sign that a new brand is needed.

2. Ask about opportunities to share and / or gain brand equity. What could your innovation gain from being associated with your current brand? What could the current brand gain from being associated with innovation? Many innovations actually borrow a lot of equity from the original brand. In these cases, innovation would benefit from being associated with the more established one. It's an opportunity to quickly position innovations in the minds of an audience and stakeholders and give them a shortcut to gain important traction early on. When using innovation to expand the ability to express brand equity, maintaining some connection with an established brand is critical.

Related: 4 Signs You Need To Align With Your Brand Values

On the other hand, some innovations offer the chance to revitalize the established brand by creating a new relevance point. This established identity can be used where it makes sense for shared resources, capital, bargaining power and the like, while you can bask in the fresh light of innovation.

3. Understand the opportunities and risks. Is there an opportunity to achieve economies of scale with your marketing investments? Could your existing brand credibly serve this new audience? If you can strategically use marketing money to build a portfolio by striking the right balance between branded and innovation-specific support, then you are really on the right track. Your resources and return on investment can be optimized to meet an overall goal.

The downside is the “all eggs in one basket” dilemma. When a crisis hits and your brands are tightly connected, everyone is facing the music. Their separation requires them to stand alone, but can be beneficial for risk diversification and diversification of a portfolio (just like an investment portfolio).

Related: 4 Branding Tips From Gary Vaynerchuk and Entrepreneurs Who Built Brands The World Can't Ignore

Examples of good brand applications

Building the Sustainability References of a Consumer Products Giant: Unilever launched the Love Beauty & Planet brand with a range of plant-based hair and beauty products that quickly expanded into the Love Home & Planet household care range. From the outside, it presented itself as an independent, environmentally conscious unit. It enabled Unilever to build its sustainability credentials and attract new audiences – environmentally conscious millennials – on a large scale by leveraging its market power with retailers.

This is not new for Unilever, the archetypal architecture of the House of Brands. In the case of Love Beauty & Planet, the parent company couldn't lead with its parent brand to get the job done, but Love Beauty & Planet builds on Unilever's sustainability references. This is used at the corporate and retail level rather than being widely communicated to consumers.

Enabling the world domination of a conscious brewery: Scottish independent craft brewery BrewDog uses a branded house structure with strong positioning, visual identity and messaging about their product portfolio and venues. This allows the brand to use and locate marketing funds effectively when it makes sense to do so. Every new product it brings to market differs only in style (not in message or identity). Each new venue they open will only be customized to the extent that it makes sense for the local market (without affecting the BrewDog parent brand), from Tokyo to Las Vegas. They are strategically able to get their message across to the world – a highly profitable, independent, ethical and climate-neutral craft brewery. In my book, that's a delicious strategic brand architecture.

Sometimes all the signs point to the creation of a new brand, but sometimes there is no need to invest in developing something completely new. The key is investing in building a brand portfolio more strategically, sharing resources for the greater benefit of the company, and on the way to realizing your vision.

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