Brand Hierarchy

Feeling lost in a brand jungle? Brand hierarchy is your map to brand clarity.

Explore different brand hierarchy models and learn how to choose the best method to maximize your brand’s influence and market positioning.

Corporate Brands

Services and products fall under corporate brands, which embody the overall products of the company. The corporate brand, owing to its tight relationship with its parent organization, gains benefit from positive associations.

A corporate brand visually communicates the company’s positioning, personality, image, values, and vision to develop brand equity for a single entity or sub-brand. It only needs a strong company brand to build relationships with essential stakeholders, such as customers, employees, and lenders, on the basis of rich organizational history and context.

A solid corporate branding strategy can bring significant value by realizing the company’s long-term vision and uniquely positioning it in the market. This strategy leverages non-tangible assets, resulting in branding excellence across the corporation. Successful corporate brands include Intel, IBM, Siemens, Singapore Airlines, and General Electric.

Corporate brand strategy is the most popular in the B2B market, offering B2B companies a chance to establish something consistent and lasting in a changing industrial environment. Having multiple brands in a fluctuating market is often not advisable.

Corporate brand management is built on a company’s corporate image, tailored to stakeholders’ needs but based on its corporate identity. Corporate brands must be broad to succeed, even though product brands often focus on B2B customers.

Family Brands

Family brand strategies use one brand to represent related or similar products in a product line or group. Unlike corporate branding, a business can use multiple family brands, while the corporate brand serves as the sole umbrella brand for all products and services.

A successful family brand requires similarity and coherence in its products and services, including a consistent quality standard, field of application, and marketing strategy.

Family brands often extend beyond narrowly defined product lines. They can be categorized into line brands or range brands. Range brands cover a wider variety of products and services not grouped together, and are common in the B2C market.

Many family brands were not initially launched as such but evolved through brand extensions. In today’s competitive market, establishing a successful brand is challenging and costly. New product releases under an already established good brand are cheaper and less time-consuming than creating a new brand. Spreading of brand investments on various products is another advantage.

Synergy effects are beneficial to all products of a family brand. However, the failure of one product will impact the image of all the products within the same brand in a negative manner. Inconsistency in price and quality across products can have undesirable consequences.

Individual Brands

A brand strategy markets each product or service under a unique brand name, separate from the managing company.

Individual brand strategies create distinctive brand identities specific to each product or service. This product-specific profile targets customers effectively, allowing brands to be capitalized.

Each product having its own brand name is a key advantage. Individual brands can survive corporate parent problems; a bad reputation for one brand won’t affect others in the corporation. Companies can create diverse growth platforms based on their brand.

However, establishing and managing multiple brands is costly. Products with long life cycles can justify high brand costs, but it’s important to evaluate if separate brands make sense for industrial goods with short life cycles.

For B2B businesses, a mix of a few brands and a corporate strategy is optimal. A unique selling proposition (USP) based on a highly innovative product or service forms a strong individual brand foundation.

Companies must be cautious about having too many product brands, as it can dilute the corporate brand. The corporate brand should always be prioritized and supported by product brands.

Modifier

Marketers can choose to market corporate, family, or individual brands, but they need to distinguish their brands based on different models or product items.

Modifiers identify a specific model, goods type, product version, or configuration. For example, Land O’Lakes butter comes in “Whipped,” “Unsalted,” and “Regular” flavors. Yoplait yogurt is available in “Light,” “Custard-Style,” and “Original” flavors.

Modifiers make products easier for consumers to understand and more relevant, simplifying manufacturers’ tasks when trading in the market. If a strong association with the parent brand is established, modifiers can even become trademarks.

Product Descriptor

The product descriptor of a branded product is not a brand element, but it is an important part of the branding strategy. It helps consumers understand the product and identify relevant competitors.

Describing a product can be challenging, especially if it has unique functions or has been dramatically altered. For example, modern public libraries offer more than just books and storytime; they provide social, educational, cultural, and recreational activities.

When introducing a new product, using a familiar name can help, but it might cause confusion about how it differs from similar products.

Examples of Brand Hierarchies of Apple Incorporation

Corporate Brand: Apple

Family Brands: iPhone, iPad, MacBook

Individual Brands: iPhone 14, iPad Pro, MacBook Air

Modifiers: iPhone 14 Pro, iPad Mini, MacBook Pro 16″

Product Descriptors: 256GB, Silver, 2023 Edition

Why Brand Hierarchy

Clarity and Consistency

It assists in creating a clear and consistent message for all brands and products, evolving the overall image of the brand. It assists in creating a rational and structured process that enhances both clarity and consistency in branding which is advantageous to both the company and the customers.

Efficiency in Marketing

By positioning products and brands into a consistent hierarchy, brand hierarchy allows companies to maximize marketing ROI with optimal utilization of resources and guaranteed consistency and complementary marketing across all levels.

Customer Loyalty

Makes customer loyalty possible because of familiarity and consistency with the brand. Simple navigation of products pleases and increase loyalty.

Market Segmentation

Brand hierarchy facilitates market segmentation by brand building and positioning in such a way that customer segments are managed in an economical manner. Brand hierarchy helps organizations to modify their marketing strategy in order to address each segment in a way where each brand or product line satisfy the particular needs and wants of its market segment.

Resource Allocation

Facilitates effective resource allocation by identifying the most profitable brands or product lines.

Conclusion

Brand hierarchy organizes a company’s brands into easy-to-understand hierarchies like corporate, family, and personal brands in a way that it is made easy for the consumers to comprehend and choose products. The company creates a distinct personality for each brand while still connecting it to the company’s values as a whole.

This disciplined process not only makes marketing more efficient by placing resources where they will be most effective, but also builds customer loyalty by introducing repetitive brand experiences to a range of market segments. By leveraging the power of strong brands and reducing communications clutter, organizations can provide maximum influence and build stronger relationships with customers.