Brand Hierarchy

A brand hierarchy can be used to graphically represent a company’s branding strategy. It displays the nature and number of distinctive brand elements found across all products and reveals their specific ordering.

This is based on the understanding that different brand elements can be used to brand products in different ways, depending on how they are combined for a particular product.

Companies begin diversifying their products with new products and positioning schemes. To identify their products and services, they create a brand hierarchy. The brand hierarchy is used to identify the essential brand elements and modifications in the products.

The brand hierarchy was created from the realization that products can be brand in different ways depending upon how many brand elements are being used and how they are combined.

A Brand hierarchy is created to show how products are interconnected with each other because certain elements of a brand are used in more than one brand. While some brand elements are shared across many products, others may only be found on certain products.

The brand hierarchy is a strategic subject matter however given a less important priority in the organization. Management thinks about it later once the products are made available on market.

There are many ways to describe brand elements and levels in the hierarchy. The simplest way to represent the hierarchy from top-to-bottom might be:

Corporate Brands

All products and services are usually incorporated under corporate brands. The company’s total offerings are represented by the corporate brand. A corporate brand is closely related to its parent organization and benefits from positive associations.

The corporate brand is a visual representation of the corporate vision. It encapsulates corporate values, personality, positioning, image, and vision. It establishes brand equity for individual brands or sub-brands.

Strong relationships can be built with key stakeholders such as customers, employees, and financial institutions, by having a richer organizational history and context.

A solid corporate branding strategy can bring significant value to any company as it helps in the realization of the long-term vision. It also positions the corporation uniquely in the market.

This strategy allows a company leverages its non-tangible assets, resulting in branding excellence across the corporation. Many corporate brands are very successful. Examples include Intel, IBM, Siemens, Singapore Airlines, and General Electric.

Among all branding strategies, Corporate brand strategy is considered the most popular brand strategy in the B2B market. Corporate brands offer a unique opportunity for B2B companies looking to establish something consistent and lasting in an ever-changing industrial marketing environment. It is often not a good idea to have multiple families or individual brands in an ever-changing market.

Corporate brand management is built on a company’s corporate image. It is explicitly tailored to the needs of each company’s stakeholders but still based on its corporate identity. Corporate brands must be broad in order to succeed, even though product brands tend to focus on B2B customers.

Family Brands

Family brand strategies involve using one brand to represent two or more products that are related or very similar in a product line or group.

This strategy differs from corporate branding in that the business can use multiple family brands while the corporate brand is the sole umbrella brand to cover all the products and services it sells.

A family brand must have sufficient similarity and coherence in all of its products and services. This is a prerequisite for success. This requires a similar standard of quality, an identical field of application, and a matching marketing strategy.

Many family brands today tend to go beyond the limits of narrowly defined product lines. It makes sense to separate the family brand strategy into two distinct categories: a line brand strategy or a range brand strategy. The latter, as the name suggests, includes a wider range of products and services that are not all grouped together. In the B2C market, family brands are very common.

Many family brands were not originally launched as family brands but were transformed over time through brand extensions. Well-known brands are under constant fire in today’s highly competitive market. In order to gain the reputation of a successful brand and quickly gain acceptance in the market, the competition is intensifying and the costs of introducing products and services increase.

It’s much easier to launch new products and services under a well-respected brand than it is to create a brand entirely from scratch. The cost-effective distribution of brand investments across multiple products is another advantage.

Positive synergy effects can be enjoyed by all products in the product line. The same can happen with a corporate brand strategy. However, the negative effects of one product or service failing can have very serious consequences.

A product’s bad reputation can have severe negative consequences for all products that are sold under the same brand. These negative effects can also be possible if all products or services sold under the same family brand are not compatible in quality and price.

Individual Brands

A brand strategy is a way to market every product or service under a unique brand name. It is not related to the company that manages it.

Individual brand strategies aim to create distinctive, clear brand identities that are specific to the product or service they represent. Because it targets customers, a product-specific profile allows brands to be capitalized.

This allows each product to have its own brand name, which is a key advantage over other branding strategies.

Individual brands have another advantage: they can survive in the face of corporate parent problems. The bad brand reputation of the individual brand will not transfer to the other brands of the corporation. Companies can create a variety of growth platforms based on their brand.

It is expensive to establish brands and manage multiple brands. A product with a long product life cycle (PLC) will not amortize the high brand costs. It is important to carefully evaluate whether it makes sense to create separate brands for industrial goods with short PLCs.

A combination of a few brands and a corporate strategy is the best strategy for B2B businesses. A unique selling proposition (USP), which is a highly innovative product or service, is the best foundation for a strong individual brand.

A company must be cautious about how many product brands it has. Too many brands can either do nothing or drain the corporate brand’s blood. The corporate brand should always be the most important and supported by product brands.

Modifier

Marketers can choose to market corporate, family, or individual brands. However, they need to distinguish their brands based on the various types of models or product items.

Modifiers are used to identify a specific model or goods type, or a particular product version or configuration. Land O’Lakes butter is available in three flavors: “Whipped,” “Unsalted” and “Regular”. Yoplait yogurt is available in “light,” “custard-style,” and “original” flavors.

Modifiers make products easier to understand and more relevant for consumers and it makes manufacturers’ jobs easy too while trading them on the market. If they can establish a strong association with the parent brand, modifiers can even be trademarks.

Product Descriptor

The product descriptor of the branded product is not considered to be a brand element, but it can be an important component of branding strategy. The product description helps consumers to understand the product and helps them identify the relevant competitors.

Sometimes it can be difficult to explain the product, whether it is a new product with unique functions or an existing product that has been dramatically altered.

Public libraries don’t just offer books to borrow or take a child to storytime. Modern public libraries offer a full range of services, including social, educational, cultural, and recreational activities.

If a new product is being introduced, it may be helpful to introduce it using a familiar name, but this could lead to a loss of understanding about how it differs from other closely related products.