Corporations must routinely ask “how should we allocate existing financial and human resources among our brands to grow shareholder value?” Firms should focus on getting the most from existing brands through better organizing and managing brands and brand inter‐relationships within the existing portfolio. “Brand architecture” is the way a company organizes, manages, and markets their brands. It must align with and support business goals and strategies. Different business strategies require different brand architectures. The two most common types are: “Branded house” architecture – employs a single (master) brand to span a series of offerings that may operate with descriptive sub‐brand names and “House of brands” architecture – each brand is stand‐alone; the sum of performance of the independent brands is greater than they would be if under a master brand. Neither type is better than the other. Some companies use a mix of both. The key is to have a well‐defined brand architecture strategy. Steps to maximize brand architecture: take stock of your brand portfolio from the perspective of customers because their view is the foundation for your strategy; do “brand relationship mapping” to identify the relationships and opportunities between brands across your portfolio. Check for these criteria: the perceived or potential credibility of the brands in that space – the perceptual license; whether or not the company currently has or can develop competencies in that space – the organizational capabilities; and whether the size and current or potential growth of the market is significant enough to merit exploitation and investment – the market opportunity. Mine the opportunities where all three criteria are met (aka, the “sweet spot”). Or use these innovative strategies if all criteria do not intersect: “pooling” and “trading,” branded partnerships’, strategic brand consolidation, brand acquisition, new brand creation. Continuously emphasize the portfolio‐wide thinking and business‐wide implications of brand‐oriented decisions. Create a brand council. When managed strategically and used as a structure to anticipate future business and brand needs, concerns, and issues, brand architecture can be the critical link to business strategy and the means to optimize growth and brand value.
Businesses risk losing customers when traditional product‐based features, attributes, and benefits are no longer differentiated. Offsetting that risk requires taking a more customer‐centric approach to the brand and business. This entails developing a far deeper understanding of the customer than can be gained through traditional demographic‐based research. At issue is what motivates the purchase decision, and how well the motivating factors are being addressed or could be better addressed at each customer touch point. Organizations seeking to adopt a more customer‐focused strategy will learn from the approach DuPont Performance Coatings took in grappling with this challenge, based on an extensive program of qualitative and quantitative research with customers around the globe. This article focuses on two particular areas of interest. First is the model and far‐reaching research conducted, which revealed comprehensive details on customer priorities and product usage behaviors. The characteristics uncovered became the basis for segmenting customers into groups that could be better targeted to re‐establish relevance and solidify their relationship with the brand. Second is the customer touch‐point analysis, which facilitated alignment of functional groups within the organization (product, sales, customer service, etc.) and equipped them to deliver on newly developed, segment‐specific value propositions. This major initiative has enabled DuPont to reprioritize internal efforts and business practices and been a catalyst for broader organizational changes notably the dissolution of many functional silos that previously had hindered its ability to deliver against its brand promise.
Companies commonly view brand architecture as primarily a tactical, one‐time exercise. But it can be the means to drive both greater top‐line growth and bottom‐line performance.
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