Brand Hierarchy

brand hierarchies

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

Explore the different brand hierarchy models and learn how to choose the best approach to grow your brand’s influence and market share.

Corporate Brands

Products and services are usually under corporate brands, representing the company’s total offerings. The corporate brand, closely tied to its parent organization, benefits from positive associations.

A corporate brand visually represents the company’s vision, values, personality, positioning, image, and vision, establishing brand equity for individual or sub-brands.

A strong corporate brand can build relationships with key stakeholders, such as customers, employees, and financial institutions, through a 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. Launching new products under a well-respected brand is easier and more cost-effective than creating a new brand from scratch. Distributing brand investments across multiple products is another advantage.

Positive synergy effects can benefit all products in a family brand. However, a failure in one product can negatively impact the reputation of all products under the same brand. Incompatible quality and pricing among products can also lead to negative effects.

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 helps create a clear and consistent message across all products and brands, enhancing the overall brand image. It helps create a structured and logical framework that enhances both clarity and consistency in branding, benefiting both the company and its consumers

Efficiency in Marketing

By organizing brands and products logically, brand hierarchy allows companies to maximize the impact of their marketing efforts, ensuring that resources are used effectively and that marketing strategies are coherent and aligned across all levels.

Customer Loyalty

 Encourages customer loyalty through consistent quality and brand recognition. Simplified product navigation enhances satisfaction and loyalty.

Market Segmentation

Brand hierarchy helps in market segmentation by clearly defining and organizing brands to target specific customer groups effectively. It allows companies to tailor marketing strategies for different segments, ensuring each brand or product line addresses the unique needs and preferences of its target audience.

Resource Allocation:

Helps in the efficient allocation of resources by identifying which brands or product lines are most profitable.

Conclusion

Brand hierarchy organizes a company’s brands into clear levels like corporate, family, and individual brands, making it easier for customers to understand and choose products. This structure ensures each brand maintains its unique identity while aligning with the company’s overall values.

This organized approach not only simplifies marketing efforts by focusing resources effectively but also enhances customer loyalty through consistent brand experiences tailored to different market segments. By leveraging strong brands and streamlining communication, companies can maximize their impact and build stronger connections with their customers.

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