The key questions of brand architecture - Strategic Brand Management

There are five types of question:

  • What to call new products? Should they be given a descriptive name or a brand name? When Lafarge invented a revolutionary, fluid and therefore extremely smooth concrete, should it have called it simply fluid cement, or Agilia? In the latter case, how should the link be made between this so-called daughter brand, Agilia, and the so-called parent brand, Lafarge? Should one say Lafarge Agilia or Agilia by Lafarge? Does the same rule apply for all daughter brands? How should it be expressed on the packaging of cement sacks, on the products themselves, on distributors’ shelves, or on the stands at trade shows?
  • How many brand levels to adopt? Should there be only one brand name within the company? This is the choice for most Asian groups. This means naming the products in a descriptive manner in order to have one single brand. Thus, we talk about Samsung televisions, Samsung mobile phones and Samsung digital cameras. In the same way, there are Braun coffee machines, Braun razors, Braun electric toothbrushes and Braun hairdryers. Conversely, for decades Philips razors have been known by the name Philishave, and we talk of the Apple iMac and now the iPod.
  • How much visibility to give to the corporate name, group name and the company name itself? Should everything be brought together under this one name, as Siemens and Axa have done, or should the name be given a role as a guarantee of daughter brands, as 3M and Danone have done? On all 3M products (such as Scotch and Post-It) we find a visible 3M signature. Conversely, you have to turn the Evian water bottle round to find the Danone Corp logo on the label at the back. As for Procter & Gamble’s products and brands (Ariel, Tide, Dash, Always and so on), it takes a sharp eye to spot the name of the local subsidiary in the small print. Pharmaceutical laboratories answer these questions in different ways, depending on whether they operate in the prescribed products sector, or in over-the-counter (OTC) medication, or even manufacture generic medicines (Moss, 2007).

Within groups, should the brand be situated at the corporate level (Accor), or at the divisional or business unit level, as with the Accor Casino or Accor Hotels brands, alongside the well-known product brands (Formule 1, Motel 6, Red Roof, Etap, Mercure, Novotel, Sofitel, Suite Hotels and so on)?

  • More generally, should there be a different name for the company and the commercial brand? Thus, France Telecom is still the name of the institution, and Orange is now the only commercial brand, now that the Equant (which was dedicated to businesses) and wanadoo (previously the only international France Telecom brand dedicated to the internet) brands have been suppressed.
  • Should the same architecture apply around the world? For example, in the country of origin, in Europe, in the United States and in Asia? These are necessary, even crucial questions, which need to be answered in order to make the continually renewed product offer easy to read, while at the same time building the brand’s reputation through this offer.

The term ‘branding strategy’ is used for decisions on:

  • the number of brand levels to be implemented (one, two or even three?);
  • the role of the corporate in the product value communication: should it be absent, strongly present, or hardly present?
  • the relative weight of these brands, and the graphic arrangement of their coexistence on all the documents, packaging, and products, but also industrial sites, offices, and business cards of salespersons and managers;
  • the degree of globalisation of the architecture. There are a few typical responses to these questions: these models are called branding strategies. They are discussed in detail below.

First of all it is necessary to return to the key questions of brand architecture. Brand architecture is therefore a strategy: it may be ideal, or may lead to losses of efficiency, even to paralysis. In any case, what is expected is a coherent and well-founded response, even if it must change as competitive conditions evolve, rendering the previous choice of architecture null and void, or inefficient and too expensive. In fact, groups never cease to change their brand architecture, as the examples below illustrate.

In 1990, l’Oréal Paris, which had previously limited itself to endorsing its brand ranges worldwide (Elnett, Elsève, Studio Line, etc) by discreetly signing them, overturned this state of affairs, henceforth giving l’Oréal Paris a key role, under which all these so-called star brands had to fall into line, thereby displaying a community of values and communications style.

In the B2B sector, Henri Lachmann undertook the reverse change when he took over from Didier Pineau Valenciennes as managing director of the Schneider Electric Group. The latter was responsible for taking Schneider from a fragile status as ironmongers to that of a global high-tech company specializing in industrial electrical equipment, thanks to the acquisition of companies famous throughout the world (such as Merlin Gerin, Telemecanique, Yorkshire Switchgear, the Italian company Modicon and the American Square D).

Pineau Valenciennes’ goal was to achieve a unique corporate brand as quickly as possible, which would also play the part of a commercial brand: as its competitors Siemens, ABB, GE and Legrand and Hager do, Schneider Electric became the keystone of the whole offer. This involved the progressive disappearance of the specialized companies such as Telemécanique and Merlin Gerin, relegated to the rank of daughter brands, then to names of ranges.

Taking over management of the company, Lachmann had a different vision. It was necessary to do the opposite, revitalising the daughter brands to worldwide recognition, since they were the capital of the emerging company Schneider Electric. This resulted in an architecture with two brand levels (that of the corporate name and that of the daughter brands).

In 2005, all products manufactured anywhere in the world by Unilever, a leading group in mass-market products, had to carry the U logo in a highly visible and identifiable way. Until then the company had been hidden, or at least not identified on product packaging, except for the legally required mention of the legal name of the local subsidiary (such as ‘Lever Industan Ltd’ in India).

This emergence of the corporate brand is a fundamental tendency, but Unilever’s competitor, Procter & Gamble, still hides its identity on its packaging. It is true that the company has had to cope with a particularly persistent and unpleasant rumour (Kapferer, 1987).

In 2006, Veolia, the world leader in environmental services (water and waste treatment, energy, delegated public transport) decided to remove its three trade brands, through which it had communicated since their creation: Connex for transport, Dalkia for energy and Onyx for waste treatment, substituting them with the unifying name Veolia: so the brands became Veolia Transport, Veolia Energy and so on.

Clearly brand architecture is not a technical or tactical problem, but a strategic one. The choice of one leads to a commitment that lasts several years, and it may become a source of cost cutting or of expensive inefficiencies. What is under discussion is not a formal problem of graphic organisation, but the concomitant construction of turnover, growth and a real brand capital, a source of competitive advantage. Brand growth implies increased complexity, and therefore the risk of loss of image coherence, and of dilution of the brand capital.

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