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What Is Brand Hierarchy?

Brand Scale refers to the route a company organizes and structures its brand portfolio. It involves setting brands and outputs in a form that reflects their connections, precedence, and situations of significance within the company’s generic brand armature.

Here are the key components of brand hierarchy:

  • Corporate Brand:
  • Product Categories or Divisions
  • Individual Brands
  • Product Lines
  • Variants or SKUs (Stock Keeping Units)

 Why Brand Hierarchy is Important?

Here are some key reasons why brand hierarchy is important:

  • Clarity and Organization: Brand hierarchy provides a clear and organized structure to a company’s brand portfolio. It helps consumers to acknowledge the connections between distinctive brands and products, making it smooth for them to navigate and make informed purchase opinions.
  • Brand Equity Management: Each brand within the hierarchy has its level of brand equity, which includes factors like brand recognition, reputation, and consumer trustBy systematizing brands crescively, companies can strategically negotiate and work this brand objectivity to maximize its smash.
  • Resource Allocation: Companies often allocate resources, including marketing budgets and product development efforts, based on the importance and potential of each brand within the hierarchy.
  • Targeted Marketing Strategies: Brand hierarchy allows companies to develop targeted marketing strategies for different brands and products.
  • Brand Extensions: When a company wants to introduce a new product or service, having a clear brand hierarchy can make it easier to decide whether to create a new brand, use an existing brand, or extend an existing brand.
  • Consumer Trust and Loyalty: A well-structured brand hierarchy can enhance consumer trust and loyalty. When consumers have positive experiences with one brand in the hierarchy, that positive association can extend to other brands within the same hierarchy, fostering brand loyalty.
  • Competitive Advantage: A strong and well-managed brand scale can give a competitive advantage. It allows a company to separate its outputs and services from challengers and demonstrate a solitary worth proposition for each brand.
  • Brand Portfolio Management: Bulky troops with different yield immolations frequently have numerous brands in their portfolio. The brand scale helps them handle these portfolios effectively, precluding brand cannibalization and icing that each brand serves a diverse goal in the request.
  • Global Expansion: Global Expansion In transnational requests, brand scale can be particularly important. It allows companies to acclimatize their brand strategy to original preferences and societies while maintaining thickness and consonance at the global position.
  • Legal Protection: Brand hierarchy can also have legal implications, especially regarding trademark and intellectual property protection.

Types of Brand Hierarchies

here are several common types of brand hierarchies that companies use to organize their brand portfolios. Here are some of the most common types:

Branded House (Monolithic):

  • In this type, the corporate brand is the dominant brand, and all products or services are marketed under that single brand name.
  • Example: Google (where various services like Search, Maps, Gmail, etc., all fall under the Google brand).

House of Brands (Pluralistic):

  • In this structure, the corporate brand is not prominent, and individual product brands operate independently. Consumers may not be aware of the parent company.
  • Example: Procter & Gamble, which owns various product brands like Tide, Pampers, and Gillette.

Endorsed Brand:

  • In an endorsed brand structure, the corporate brand is subtly present, endorsing or standing behind the individual product brands.
  • Example: Marriott International, which includes brands like Marriott, Sheraton, and Ritz-Carlton, all endorsed by the Marriott corporate brand.

Sub-brands:

  • In this structure, a parent brand creates sub-brands that carry the parent brand’s name along with their distinct name.
  • Example: Apple’s iPhone, where “iPhone” is the sub-brand under the parent brand Apple.

Brand Extensions:

  • In this type, a company introduces new products or services under an existing brand name.
  • Example: Nike, which extended its brand from athletic shoes to apparel, accessories, and equipment.

Individual Brands:

  • Each product or brand in this hierarchy stands alone with no apparent connection to other brands owned by the same company.
  • Example: The Estée Lauder Companies, which owns individual brands like Estée Lauder, Clinique, and MAC Cosmetics.

Global vs. Local Brands:

  • Companies operating in multiple countries may have a hierarchy that differentiates between global brands (standardized across regions) and local brands (adapted to local markets).

Family Brands:

  • This involves using a common family name across a range of related products or services.
  • Example: The Coca-Cola Company, which includes products like Coca-Cola, Diet Coke, and Coca-Cola Zero.

Umbrella Brands:

  • An umbrella brand encompasses a range of related but distinct products or services.
  • Example: Virgin Group, which covers diverse industries including Virgin Records, Virgin Atlantic, and Virgin Mobile.

Private Label Brands:

  • These are brands developed and marketed by retailers themselves.
  • Example: Amazon Basics, which offers a range of products directly produced by Amazon.

Brand Hierarchy Levels

Brand hierarchy typically consists of several levels, each serving a specific purpose within the organization’s branding strategy. Here are the common brand hierarchy levels, listed from the highest to the lowest:

Corporate Brand (Corporate Identity):

  • This is the top level of the brand hierarchy and represents the overall identity of the company itself.
  • The company’s values, mission, and vision are included in it.
  • Example: The Coca-Cola Company, Apple Inc..

Family Brand (House Brand):

  • Under the corporate brand, there might be a family of brands that share a common brand identity, values, and reputation.
  • These brands often have a thematic connection or a common element in their names.
  • Example: Coca-Cola, Diet Coke, and Coca-Cola Zero, all under The Coca-Cola Company.

Individual Brand (Product Brand):

  • These are distinct brands, each with its unique name and identity, but they are part of the same family of brands.
  • Individual brands may have their unique positioning, target audience, and brand story.
  • Example: Nike, Adidas, and Puma, all under the athletic footwear category.

Sub-brand:

  • Sub-brands are closely related to individual brands but carry the parent brand’s name along with their unique name.
  • They often indicate a special product line or variation.
  • Example: Apple’s iPhone, where “iPhone” is a sub-brand under the parent brand Apple.

Product Line:

  • Within individual brands or sub-brands, there may be different product lines.
  • Product lines are groups of related products that share similarities in terms of functionality, features, or target market.
  • Example: Under the Nike brand, you have product lines like Air Max, Free, and Zoom.

Product Variant or SKU (Stock Keeping Unit):

  • These are specific variations or versions of products within a product line.
  • Variants can differ in aspects such as size, color, flavor, or other characteristics.
  • Example: Different sizes and colors of Nike Air Max sneakers.

Brand Extensions:

  • Brand extensions involve introducing new products or services under an existing brand name.
  • These new offerings are typically related to the core products or values of the original brand.
  • Example: Apple extending its brand from computers to smartphones (iPhone), tablets (iPad), and smartwatches (Apple Watch).

Private Labels or Store Brands:

  • These are brands created and marketed by retailers themselves.
  • They serve as in-house alternatives to national or international brands.
  • Example: Amazon Basics, Kirkland Signature (Costco).

Models of Brand Hierarchy

Here are some notable models:

  1. Keller’s Brand Equity Pyramid:
    • Developed by Kevin Lane Keller, this model focuses on building and managing brand equity. It consists of four levels:
      • Brand Identity: This is the basic level, where consumers recognize and are aware of the brand.
      • Brand Meaning: This level associates tangible and intangible benefits with the brand, creating brand associations.
      • Brand Response: At this level, consumers develop judgments and attitudes toward the brand.
      • Brand Resonance: The highest level involves creating a strong emotional connection with the brand, resulting in brand loyalty and advocacy.
  2. Aaker’s Brand Identity Model:
    • Developed by David Aaker, this model emphasizes the elements that make up a brand’s identity. Its dimensions are:
      • Brand as Product: This refers to the specific attributes and features of the product.
      • Brand as Organization: It includes the values and culture of the company.
      • Brand as Person: This dimension gives human characteristics and traits to the brand.
      • Brand as Symbol: This involves using symbols, logos, and other visual elements to represent the brand.
  3. Interbrand’s Brand Valuation Model:
    • Interbrand is a global brand consultancy that developed a model to assess and value brands. It considers several factors, including financial performance, brand strength, and brand role:
      • Financial Analysis: This involves evaluating the brand’s contribution to the company’s financial performance.
      • Role of Brand: This assesses the brand’s influence on consumer choice and loyalty.
      • Brand Strength: It measures the brand’s ability to secure earnings and deliver those to stakeholders.
  4. Kapferer’s Brand Identity Prism:
    • This model, developed by Jean-Noël Kapferer, visualizes the various elements that contribute to a brand’s identity. It is represented as a six-sided prism:
      • Physique: The brand’s tangible, physical characteristics.
      • Personality: The brand’s character and personality traits.
      • Culture: The brand’s values, beliefs, and cultural context.
      • Relationship: The type of relationship the brand seeks to establish with its consumers.
      • Reflection: How the brand reflects the consumer’s self-image.
      • Self-Image: How the brand wants to be seen by consumers.
  5. Parent-Child-Grandchild Model:
    • This model is used to depict the hierarchical relationship between the corporate brand, product brands, and variants. The corporate brand is the parent, product brands are the children, and variants are the grandchildren.

How To Create A Brand Hierarchy?

Strategic decisions for a business or firm and creating a portfolio of brand companies are included in developing and maintaining the brand hierarchy. Here are steps to guide you through the process:

  • Understand Your Business Strategy
  • Identify Existing Brands and Products
  • Analyze Brand Relationships
  • Define Brand Objectives and Roles
  • Prioritize Brands
  • Determine Brand Architecture
  • Allocate Resources
  • Consider Consumer Perception
  • Address Legal and Regulatory Considerations
  • Test and Validate
  • Document and Communicate
  • Implement and Monitor
  • Adapt as Necessary

Brand Hierarchy Examples

Here are some real-world brand hierarchy examples from various industries:

The Coca-Cola Company:

    • Corporate Brand: The Coca-Cola Company
    • Family Brands: Coca-Cola, Diet Coke, Coca-Cola Zero
    • Individual Brands: Sprite, Fanta, Minute Maid, Dasani, Powerade
    • Sub-brands: Coca-Cola Cherry, Coca-Cola Vanilla

Procter & Gamble (P&G):

    • Corporate Brand: Procter & Gamble
    • Family Brands: Pampers, Gillette, Tide, Crest
    • Individual Brands: Venus (under Gillette), Charmin (under P&G)

Estée Lauder Companies:

    • Corporate Brand: Estée Lauder Companies
    • Individual Brands: Estée Lauder, Clinique, MAC Cosmetics, Bobbi Brown

Nestlé:

    • Corporate Brand: Nestlé
    • Divisions: Nestlé Waters, Nestlé Health Science, Nestlé Skin Health
    • Individual Brands: Perrier, Poland Spring (under Nestlé Waters)

Marriott International:

    • Corporate Brand: Marriott International
    • Sub-brands: Marriott, Sheraton, Ritz-Carlton
    • Sub-brand Variants: Marriott Bonvoy (loyalty program under Marriott)

Apple Inc.:

    • Corporate Brand: Apple Inc.
    • Product Categories: iPhone, iPad, Mac, Apple Watch, Apple Music
    • Product Variants: iPhone Pro, iPad Air

Unilever:

    • Corporate Brand: Unilever
    • Product Categories: Personal Care, Home Care, Foods & Refreshments
    • Brands: Dove, Axe, Knorr, Lipton

Amazon:

    • Corporate Brand: Amazon
    • Sub-brands: Amazon Web Services (AWS), Amazon Prime, Amazon Basics

The Walt Disney Company:

    • Corporate Brand: The Walt Disney Company
    • Business Segments: Disney Media Networks, Disney Parks, Experiences and Products, Studio Entertainment

Wrap up:

The purpose of demonstrating a brand scale is to give clarity and build within a company’s brand portfolio. It helps consumers conclude the jointures between different products and brands, making it easy for them to navigate and make purchasing judgments. Similarly, it helps the company distribute resources, handle brand equity, and elaborate marketing schemes effectively.

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