The situation: Your company is in the early stages of planning for a new product launch that is sure to be a hit with distribution and has the potential to shake up the competitive marketplace. Given these implications, the discussion turns to branding. One side of your table is pushing to develop a new product brand identity to give the launch added sizzle and a splash factor. The other side of the table sees the product going to market clearly as an offering of the parent company. So, which side is right?

Of the two scenarios, the former would fit into a “house of brands” strategy. Holding companies, such as Altria, Procter & Gamble and Unilever are prime examples, offering countless independently branded consumer products with barely a mention of the parent. The latter scenario represents a “branded house” approach, where every product in the portfolio is inescapably positioned as an offering of the parent company. Apple and Google fall into this category.

Depending on the needs and situation of the company, either approach to a brand's architecture can be successful. But once the foundation of the brand is poured and the framework established, switching strategies to accomplish short-term objectives can be counter-productive to the integrity of the house. The following is a brief list of considerations for both forms of brand architecture:

House of brands

Pros

• Flexibility in messaging—Having a unique brand independent of the parent company allows the marketer greater freedom in how they position their offering, rather than being locked into the messaging style, values and other attributes of the larger brand. This leads to…
• Greater differentiation through a more focused messaging platform.
• Enhanced market share—In cases where overlapping distribution areas act as a barrier to growth, offering a multibrand strategy can alleviate territorial limitations.
• Globalization—Based on cultural differences, sometimes the only way to effectively market to a foreign audience when the core brand does not translate well is to create a brand that resonates in that region.

Cons

• Resources—Creating and maintaining multiple, distinct brands comes with a price: Identity development, multiple web properties, advertising, literature, legal, brand management time, etc…
• Brand dilution—While the nature of a house of brands model is to decentralize a company’s brand portfolio for maximum marketing effectiveness within each offering, it may not be the best choice for smaller, less established organizations.

Branded house

Pros

• Efficiency and consistency—In a single brand approach the messaging, look and feel of marketing materials is much more consistent and easily embraced through a global organization. This translates to greater economy as less materials and time are required to support the marketing of each offering. Examples of economy range from consolidated literature to having a single corporate web site, as opposed to multiple sites dedicated to each initiative.
• Centralized value—Given that all products and services are centrally branded, recognition and customer loyalty tend to bubble up to the parent company. In turn, this creates a stronger customer relationship that extends beyond the value of the product, but to an elevated respect for the inherent values of the company. This can equate to greater trust and an easier sell of new or related products, even extensions.

Cons

• Inherited “limitations”—Unlike a house of brands, this approach limits the degree in which a product or service can be uniquely marketed. Inherited attributes can include visual identity, messaging, values and customer perceptions.
• Liability—With all products housed under a single brand, the shortcomings of one can have damaging perception effects that ripple across the entire portfolio and corporate brand.

As mentioned, this is a very brief overview of the pros and cons of each model. Feel free to join the discussion and add your thoughts or questions.