If you haven’t read our previous blogs about What is Brand Architecture & Its Examples, you can check it out to read about the basics, the benefits of having a brand architecture and more. Since then, we’ve also published three separate blogs about branded house, sub-brands, endorsed brands, & hybrid brands. We’ll be continuing this brand architecture series and diving into the house of brands model of brand architectures!
What Is House of Brands?
A little similar to endorsed brands, brands that utilise the house of brands model has multiple individual brands under one parent brand. The key difference that’s apparent is that the individual sub-brands will be separate from their parent brand. This means that each of those sub-brands has its own unique brand identity and positioning with no resemblance to its parent brand.
Pros of House of Brands
- Targeted Reach: Since each of the subsidiary brands are not as tied to its parent brand, each brand can achieve its own niche and obtain a specific target market. Thus, each brand within the house of brands can focus on a specific niche, allowing for individual and unique branding, messaging, and customer engagement.
- Independence From Parent Brand & Other Brands Under Parent Brand: In any case that a brand faces reputational issues or financial challenges, the other brands in the portfolio can remain unaffected, reducing overall business risk. This works both ways too; the parent brand doesn’t affect its subsidiary brands and vice versa.
- Broader Audience: With multiple subsidiary brands operating independently, a parent brand can enter various industries and markets simultaneously, effectively reaching a larger audience.
Cons of House of Brands
- More Effort & Costs Needed: With multiple brands operating, this will result in higher costs, especially since each brand is unique. This will lead to finances going towards significant resources, including marketing budgets, personnel, infrastructure and more.
- Success Is To Each Their Own: Unlike a lot of other brand architecture, brands within a house of brands won’t get to leverage from the parent brand’s or other subsidiary brand’s success.
- Brand Cannibalization: Even though certain brands may be in the same house of brands, if not careful, they might be caught in competition towards each other. This, in the long run, leads to cannibalization of sales and market confusion.
House of Brands Examples
1. Procter & Gamble (P&G)
Using the house of brands model, P&G owns various brands that each cater to different markets and industries. P&G’s brands are a good example of a house of brands that are pretty well-known while being an independent brand from their parent brand.
2. Unilever
Unilever is another example, being one of the largest umbrella companies that own big brands that most have a good reputation for themselves.
When to Consider House of Brands as a Brand Architecture
It can be hard to determine what brand architecture is just the right one for you. That being said, a brand should consider the house of brands model when:
- They want to diversify their presence and target market: If a brand has a strong desire to expand its reach through different target markets and audiences, then a house of brands is a great way to do that without affecting the main brand.
- They want to maintain their brand identities: When a brand owns multiple individual brands in different target markets or industries, they wouldn’t have to jeopardise or change their original identity. The same goes for all the brands under that parent brand.
How to Create a House of Brands Model
A house of brands can be a challenging feat. However, when you’ve considered everything said before this line, this is how you can start up a house of brands:
- Create Strong Brand Identities: Owning multiple individual brands can be a little hard to manage when there is no strong brand identity to begin with. Certain brands might fall through or simply not get noticed. Thus, a strong brand identity for the parent brand and all the other brands under them should make a good start. Develop clear brand identities for each product or service, identifying unique value propositions and target markets for each.
- Invest Where It Matters: It can be easy to be a bit reckless with finances when a brand is managing a lot of brands in different target markets. So, in order to avoid any problems in the long run, invest in strategising clear marketing and advertising plans so that each brand reaches its target market efficiently. Tailor marketing efforts to suit the preferences and expectations of the target audience for each brand.
- Establish Strong & Clear Guidelines: It’s always good to determine and establish clear guidelines and governance to ensure consistency and compliance to brand positioning and messaging across all brands.
Conclusion
A house of brands model can be a powerful approach, when done right, for companies aiming to diversify their presence in multiple industries and connect with various target markets effectively. While it has its benefits, it also comes with challenges related to resource allocation and brand cannibalization. By creating strong individual brands and investing in targeted marketing efforts, brands that utilize the house of brands model can grow successfully and create a portfolio that resonates with their consumers, leading to long-term success. Last but not least, always remember that CR8 Consultancy is always ready to assist with your branding needs. So, give us a call!
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