Is your company a Branded House or House of Brands?

If you don’t know the answer off the top of your head, that’s a problem. If you’re in a B2B or Information Technology company and gave either one as your answer, that could be a problem too.

Most branding practice and academic study originated in the B2C world and most examples and case studies of brand portfolio strategies are about B2C companies. The academic classifications of the most common branding architectures are:

• Branded House – uses one master brand name across all products which are usually assigned descriptive or identity sub-brand names. In this model the products or sub-brands have a tight connection to the provider.
• House of Brands – each product line is a stand-alone brand that is specifically positioned in a particular market segment independent of other brands in the company. The brands have no intentional connection to the provider.
  

Looking at these models from a B2B and Information Technology industry perspective, it’s tough to find examples of companies that exclusively use one or the other. Microsoft is an example of a Branded House with Microsoft Windows, Microsoft Office, Microsoft Word, etc. But they also have stand-alone brands such as Xbox, Zune and Bing, although there is a known provider connection. Oracle seems to be a House of Brands example where they have retained independent brand identities such as PeopleSoft, Siebel, JD Edwards, Hyperion, Oracle, etc. But these brands all have a known connection to Oracle as the provider.

B2B companies are fundamentally different from B2C companies in just about every aspect of their operations, customers and markets. Many technology companies operate in both B2B and B2C worlds. While B2C buyers couldn’t care less that P&G is the company behind Crest, Pringles or Tide, B2B and information technology buyers care a great deal about who is the provider company for a product they buy. This gives rise to a 3rd branding architecture as the prevalent model for B2B and IT companies:

• Hybrid or Asymmetrical – uses elements of both the Branded House and House of Brands models in a defined architecture for a company’s specific circumstances.
  

What B2B and IT companies typically use, and what their customers expect, is a known and trusted umbrella brand. Adobe is a good example of a Hybrid model with stand-alone brands such as Acrobat, Photoshop, Flash, etc. all prefixed with the overarching Adobe brand. The hybrid or asymmetrical architecture doesn’t mean that you haphazardly do whatever you like for branding. It means that you use elements of both in a properly structured, well-defined and internally published brand architecture specific to your company and market situation.

"Brand is the 'f' word of marketing. People swear by it, no one quite understands its significance and everybody would like to think they do it more often than they do" - Mark di Soma, Audacity Group

A major concern with the Branded House and Hybrid umbrella brand architectures is that when something goes wrong in one product line or sub-brand, it could impact other products, sub-brands, markets and customers whether related or not, in the house or umbrella brand. In the Hybrid architecture, introducing a new umbrella brand across previously independent brands originating from organic development or acquisitions, is a huge and long-term undertaking, but it’s what B2B and IT customers and the marketplace want and expect.

Back to the title of this post – it’s a good question, but the underlying more important fundamental questions to take away are:

• Do you have a Brand Portfolio Strategy? Or in different terminology, do you have a Brand Architecture?
• If so, what is it and does everyone in your company understand and follow it?
• If not, when are you going to develop it?
  

Your comments are always welcome.
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