Should your business utilise a branded house, a house of brands, or endorsed brand hierarchy? Adam Longobardi of Something Big on how to structure a brand hierarchy that makes sense.

At Something Big we spend a lot of time unravelling and re-structuring businesses branding. One of the most overlooked elements of branding that seems to get businesses in the biggest ‘pickle’ is structuring and taking a strategic approach to identifying and positioning the various parts, divisions, business units and services or products you sell.


The approach you take to defining your brand architecture is unique to your business strategy and objectives. All great decisions start with taking a step back and asking questions, so looking at how to structure your branding and taking a strategic approach to identifying and positioning the various parts of your business, is no different. Below are some of the many questions we ask our clients.

  • Are all the different offerings united by a central brand idea?
  • Who is your target audience and how do you define them?
  • Do some of your offerings come with a more ‘premium’ price tag?
  • How much brand equity do you have in the parent?


What is brand hierarchy?


Essentially, brand hierarchy is referring to the brand strategy behind the relationships between the various parts of a business, from the overall corporate brand(usually the parent company) for example Mondelez, down to their divisions e.g. Cadbury, further on down to the product ranges they offer e.g. Cadbury Dairy Milk, and even further down to individual products e.g. Cadbury Dairy Milk Fruit & Nut.


You can see why businesses get in a pickle and you may at this point feel that this is only a problem for large businesses who have well known global brands or undergo mergers and acquisitions. But it’s not.


We meet many SMEs who get tangled up in the positioning of their brand hierarchy, perhaps because they’ve acquired other businesses along their journey that haven’t been fully integrated into their brand hierarchy. Or often and more commonly, their leaders have started new businesses, products and services along the way with their own names and identities, of which some have been more successful than others causing the hierarchy to get confused.


So, how do you approach unravelling your brand hierarchy? It might be easier to share some visual examples of different options for structuring your brand hierarchy. The following examples lay out three very different brand strategies.

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Endorsed brands


In our first example, there is a clear parent and child relationship between the overall brand Microsoft and its products. This requires the products never to be sold by any brand other than Microsoft and also requires any new services or products offered to stay very strictly within this visual identity.

Whilst this is a very restrictive strategy, you can see that all the brand value is held and optimised in the Microsoft brand with less value in the product names. This is a great strategy when trying to increase the brand value of a single brand, e.g. pre an exit or IPO.

Read: Build a brand for the market, not the marketing team


Branded house


In our second example, we can still see huge value in the parent brand Virgin, but these brands can stand alone, like siblings. The parent features within each of them so they can be presented individually.

Unlike our Microsoft example, it’s clear to see that the products and services they offer are quite different from each other, so this brand strategy gives them more freedom to promote themselves differently. You may wonder how train services and records can even be related and how this brand strategy sticks together other than their names and visual identities. Virgin is a great example of driving brand purpose and values across their brands.

Read: Sick of hearing about the "Why"? Here's why you shouldn't be


House of brands


And finally, our last example demonstrates a more traditional parent brand, with a number of unrelated stand-alone brands sitting within its portfolio. This is a very useful brand strategy when you may be continually bringing new brands to market, some of which will fail or disappear and others become heroes, or you may acquire or sell brands.

It’s also a great strategy if the target audiences of the various brands are different or you want to drive different values in each brand. Of course, in this scenario, you’ll also see that the brand value of the parent company is then optimised in a different way, the value is based more on its portfolio than purely its brand value.


Defining your brand hierarchy


Ultimately, the strategic direction you take needs to be considered at the beginning to avoid a potential costly problem further down the road that may require you to rethink your whole strategy.

Adam Longobardi is Account Director at Something Big, GO! Network Member and leading creative communications agency. If you'd like to connect with agencies that can support on rebrand projects that fit your needs, get in touch here.