Building your brand: Branded House vs House Of Brands

Brand architecture, which involves building a strong brand, generally defines how a brand appeals to consumers and offers hints on what the brand is intentionally made of. When it comes to establishing a brand, there are two main strategies: Branded House and the House of Brands. While they almost sound familiar, they are actually quite different. In this article, we are discussing these two types of brand architecture: Branded House vs. House of Brands. Let's get started!
Branded House

A Branded House is undoubtedly the most common form of brand architecture. In this type of brand architecture, the firm is the brand. Market sectors and services are subjects of that primary brand, and they are not formally branded. These sub-brands are marketed and operated under the umbrella of the primary brand. Examples of top brands that are well known for this model include Google, Apple, FedEx. For instance, under Apple as a brand, there are sub-brands, including Mac, iPhone, and Apple Music.

Even smaller firms can also successfully pull off Branded House brand approach. It is worth mentioning that the sub-brands are recognized, but not to the extent that they overshadow or weaken the main brand.

Branded House approach is also known as a one-firm brand strategy in professional services. The firm has a single brand: logo mark, messaging, and marketplace positioning. However, the sub-brands service offerings share these brand elements but contain their own unique messaging points depending on the products and services they are offering.

With that said, let’s look at the pros and cons of Branding House:

Pros of Branded House
  • It is more efficient since one marketing strategy and a single brand code covers every offering

  • By keeping every offer under the same brand, confusion and competition are easily avoided

  • It is cost-effective because you don’t have to manage separate brands, which can be costly

  • Customers tend to accept new products that come under the same brand umbrella

  • It allows the sub-brands to grow their brand value a lot faster

Cons of Branded House
  • It can limit the success of the sub-brands if the primary brand is weak or not performing well

  • It is pretty challenging to maintain one brand identity across all the sub-brands and still keep the primary brand’s uniqueness whole

  • The reputation of the brand is at stake. If one sub-brand suffers a backlash, it can affect the other sub-brands

  • It is also difficult to add new brands through mergers and acquisitions

House of Brands approach

Another popular brand architecture approach is the House of Brands. It is the exact opposite of the Branded House approach. While a Branded House maintains the focus on just one, well-known and steady brand, a House of Brands is many brands, each independent of one another, and each with the set of its own audience as well as marketing. The brands within this category usually have their own unique logo, visual identity, communication style, tone, etc. Many House of Brand businesses are holding companies or consumer products, which acquire brands, especially large, global brands with established equity.

Another thing that differentiates House of Brands from the Branded House is that the House of Brands does not grow stronger by referencing other brands; it grows stronger by signifying the singleness of purpose of every single brand.

Some of the great examples of House of Brands include Unilever, P&G, General Motors [GM], etc. While this approach tends to work well for consumer brands, it may not be an ideal approach for the standard company.

Pros of House of Brands

This strategy also has a number of benefits, including:
  • It helps to avoid the one-size-fits-all philosophy and tailor strategies that are ideal to a given audience

  • It allows for better allocation of resources because managers can allocate budgets more effectively if they understand each brand’s position

  • It offers greater elasticity in terms of communication, brand positioning as well as a target audience

  • It minimizes risks because even if one brand suffers a PR disaster, it won’t affect the other brands

  • Brands under the House of Brands can distance themselves from the brand poisoning or 'baggage' that come with the primary brand

Cons of House of Brands

It is no secret that maintaining a brand can be pretty tough. Maintaining a lot of them can be even way more difficult. Here are some of the downsides of the House of Brands approach:
  • It is pretty expensive to manage differentiated brands

  • Creating and implementing numerous marketing strategies can be very overwhelming

  • It can confuse customers about the primary company’s true identity

  • The sub-brands cannot rely on the primary brand to strengthen their reputation

Which approach is right for you?

If your company is significantly growing and you are lucky enough to diversify your product line, you need to decide which brand architecture appeals to you most. So before you either choose a Branded House or House of Brand approach, you need to ask yourself certain questions:

1. How similar are your products to one another?

If the products are naturally dissimilar, it is advisable to create separate brand entities. If two brands have totally different target audiences, selling the same story would not just work.

2. Does the brand come with any baggage?

This is also an important question that can help you choose the right approach that will facilitate your brand’s growth. If your customers strongly believe in your brand to a point that associating with other brands can either damage or alienate your brand, it is good to keep a barrier between your brand and the others.

3. Are you ready to bear the risks if you are rebranding?

Rebranding usually comes with its own risks. Do you think your existing customers will accept the new brand? Is it too late to introduce another brand in a congested market? You need to put these things into consideration when rebranding an acquired band into the Branded House or when you split a product from the primary brand to create its own identity.

4. What about costs?

The main downside of a House of Brands is the cost of maintaining various brands. You have to deal with hiring numerous managers, developing brand assets, creating separate marketing agencies. So you need to determine if these costs worth the benefit.
Answering all these questions correctly can help you choose a brand architecture approach that will help boost your brand’s growth.

About Boris Dzhingarov

Boris Dzhingarov graduated UNWE with a major in marketing. He is the CEO of ESBO ltd brand mentioning agency. He writes for several online sites such as Tech.co, Semrush.com, Tweakyourbiz.com, Socialnomics.net. Boris is the founder of MonetaryLibrary.com and cryptoext.com.
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