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.
Copyright © 2009 The Marketing Mélange and Ingistics LLC. http://marketing.infocat.com

Are you Branding or Positioning?

Two interesting observations I’ve found over the years during discussions with B2B companies about Branding and Positioning:

1. There always seems to be some confusion about what constitutes Branding versus Positioning
2. Too many seem to want to start with Branding or do a Branding exercise.

A Brand is a visual, emotional or cultural identity in the minds of your buyers. Branding is the promotion of this identity in the market to place the visual, emotional or cultural association of your brand in your target buyers’ minds. However, Branding actually comes from Positioning, which must be developed before you even consider doing Branding.

According to Al Ries and Jack Trout in their seminal book Positioning: The Battle for Your Mind, “Positioning starts with a product. A piece of merchandise, a service, a company, an institution, or even a person. Perhaps yourself. But positioning is not what you do to a product. Positioning is what you do to the mind of the prospect. That is, you position the product in the mind [and context] of the prospect.”

Both deal with placing something in your buyers’ minds. The key distinction is that Branding is an identity whereas Positioning is the promise of the value you create for your customers.

Here’s an often cited example to illustrate the difference – Volvo set out many years ago to build the safest vehicles on the road – that was an intentional position they wanted to claim in the automobile market. Volvo did not set out to brand the name, they focused on delivering on their positioning promise and proved it was real, not just some marketing eyewash. Today when someone mentions “safe vehicle” they think “Volvo”, or vice versa. The positioning, and delivering on the promise of value created the brand – not the other way round. That’s where the confusion arises, people look at companies like Volvo today and see a brand, but don’t realize how the brand identity actually evolved from the original positioning.

Branding takes many years, lots of money and consistent delivery on your positioning. When people think about great brands, it’s mostly consumer products like Coke, Nike, Starbucks, etc. I would argue that very few B2B companies qualify as great brands when you don’t confuse brute-force name recognition with branding.

“Nowadays, branding is often what you do when you cannot differentiate. So much of current marketing communications is shouting but with nothing special to say.” – Steve Johnson, Pragmatic Marketing

Most B2B marketers don’t have the resources, time or wherewithal to do a thorough job of branding. Successful B2B companies have great positioning and focus on delivering the promise of that positioning. Positioning is where you should start and spend your time as a successful B2B marketer. Branding will come from good positioning and delivering on your promise.

Your comments are always welcome.
Copyright © 2009 The Marketing Mélange and Ingistics LLC. http://marketing.infocat.com