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Brand 'Urban Plannin': Further Notes on Brand Architecture

We’re all familiar with the distinction between a Branded House (BH) and a House of Brands (HoB). Unsurprisingly, there are all sorts of permutations within these two distinct frameworks for organizing and deploying one’s branded assets into the marketplace. And, it is a rare specimen — if one exists — that is absolutely pure…even the vaunted GE has a stray wing of free-floating brands, like NBC Universal and related entertainment properties, which live in pristine seclusion from the touch of their parent. FedEx may be the closest thing we have to a pure, ‘textbook’ exemplar.

The truth about companies’ brand portfolios — especially in B2B — is that they more resemble brand urban planning than brand architecture. That is, their brands — or agglomerations thereof — tend to occupy different city blocks, within a grid (the Master Portfolio) rather than a single building (architecture). A perfect example — and one I examined in my last blog post — is Marriott. Marriott occupies 3 square blocks of brand real estate. One of those blocks is pure House-of-Brands. Its sub-portfolio of luxury hotels and spas includes: Ritz-Carlton, Renaissance, Autograph Collection, and Bulgari. Across the street is the hybrid block, packed tight with co-brands like Marriott Courtyard and Marriott Residence Inn. Finally, there is the Master Brand neighborhood with tenants like JW Marriott and Marriott Vacation Club.

If the ‘brand urban planning’ metaphor has a family resemblance or structural affinity with any of the three classic brand architecture models, it is with the House of Brands, the barely (or abstractly) contained agglomeration of independent brands, each with its own persona, name, visual identity, target market, business category and characteristics. What is interesting to note about this model is how different it is, depending on whether it manifests in the B2B world or the B2C world.

In the retail world, the HoB is (more often than not) brand architecture by design, rather than default. Looking, again to a classic example, Proctor & Gamble manages a vast array of consumer product brands that span a highly diverse array of markets, product categories, demographics, and consumer psychographic profiles. The diversity, differentiation, and autonomy of these brands is a deliberate ‘alignment construct’ — there is purpose and deep forethought about the development of each individual brand and the portfolio as a collection of such.

In the B2B world, the HoB is more often than not, the mark of highly acquisitive businesses that don’t have the ‘appetite’ and/or a systematic framework (brand architecture system or operational platform) for integrating such properties. They are or remain just that: properties — this is, by contrast, brand architecture by default. The business-to-business HoB is often, and often correctly, interpreted as the mark of a ‘mere’ holding company. And it is more likely to be a transparent expression of chaos, dis-organization, or more charitably, the unsurprising absence of an accommodating framework.

This is not to say the HoB model cannot have a thoughtful blueprint behind it in the B2B realm. It is also worth pointing out the difference that B2C HoB architectures are very often assemblies of products (usually developed organically), whereas in B2B, they are assemblies of companies or businesses, accrued from without, the latter operation-like organ transplant — a more complex and disruptive process, sometimes fraught with resistance from acquirees. Note that Oreos would no more protest being gobbled up by Kraft, than by kids.

Nor is it to say that there is anything wrong with holding companies, even less with holding companies transparently expressing themselves outwardly as Houses of Brands — portfolios of acquired properties. It is only to say what is sensible: that the House of Brands model can and does portend different business realities; that it is sometimes the manifestation of a strategy; sometimes a symptom of none. What we can also say, from experience, is that B2C HoBs are more likely to remain HoBs over time, whereas B2B HoBs — at least those that are not simply holding companies and content to remain so — are more likely to migrate to simpler models, hybrids or branded houses — a topic I’ll take up in a separate blog.

Comments

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