In this section, we will explore the various models of organizational structures that companies can adopt to manage their brand portfolios effectively. Understanding these models is crucial for optimizing brand coherence and value.

1. Brand Architecture: The organizational structure of brands within a company, establishing how they relate to each other and how they are presented to the market.
2. Brand Portfolio: The collection of all brands owned by a company.
3. Brand Hierarchy: The levels of brands within a company, from the corporate brand to individual product brands.

In a monolithic structure, the company uses a single brand name across all its products and services. This approach leverages the strength of the corporate brand to build recognition and trust.

Example:

• Google: Google uses its brand name across various services like Google Search, Google Maps, Google Drive, etc.

Advantages:

• Strong brand recognition.
• Simplified marketing efforts.
• Consistent brand experience.

Disadvantages:

• Risk of brand dilution.
• Difficult to target diverse market segments.

In this model, individual brands are supported by an endorsement from the corporate brand. The endorsement adds credibility while allowing the individual brands to maintain their unique identities.

Example:

• Marriott: Marriott endorses various hotel brands like Courtyard by Marriott, Residence Inn by Marriott, etc.

Advantages:

• Leverages corporate brand strength.
• Flexibility for individual brands.
• Easier to introduce new brands.

Disadvantages:

• Complex brand management.
• Potential for brand confusion.

In a pluralistic structure, the company operates multiple brands, each with its own unique identity and target market. The corporate brand is often not prominently featured.

Example:

• Procter & Gamble (P&G): P&G owns various brands like Tide, Pampers, Gillette, etc., each with its own identity.

Advantages:

• Targeted marketing for different segments.
• Reduced risk of brand dilution.
• Flexibility in brand positioning.

Disadvantages:

• Higher marketing costs.
• Complex brand management.
• Potential for internal competition.

A hybrid structure combines elements of the monolithic, endorsed, and pluralistic models. Companies use a mix of strategies to optimize brand management and market reach.

Example:

• Coca-Cola: Coca-Cola uses its corporate brand for some products (e.g., Coca-Cola, Diet Coke) while also managing distinct brands (e.g., Sprite, Fanta).

Advantages:

• Flexibility in brand strategy.
• Ability to leverage corporate brand strength.
• Targeted marketing for different segments.

Disadvantages:

• Complex brand management.
• Potential for brand confusion.
• Higher marketing costs.

Apple uses a monolithic structure, with the Apple brand name prominently featured across all its products (e.g., iPhone, iPad, MacBook).

Unilever employs a pluralistic structure, managing multiple brands like Dove, Axe, and Lipton, each with its own identity.

Nestlé uses a hybrid structure, endorsing some brands (e.g., Nestlé Pure Life) while also managing distinct brands (e.g., Nespresso, KitKat).

Exercise: Identify the Structure Model

Given the following companies, identify the organizational structure model they use:

1. Samsung: Samsung Electronics, Samsung Galaxy, Samsung Home Appliances.
2. PepsiCo: Pepsi, Mountain Dew, Lay's, Quaker.
3. Microsoft: Microsoft Office, Xbox, LinkedIn.

Solution:

1. Samsung: Monolithic (Branded House)
2. PepsiCo: Pluralistic (House of Brands)
3. Microsoft: Hybrid

• Mistake: Confusing brand endorsement with a monolithic structure.

  • Tip: Remember that in an endorsed structure, individual brands maintain their unique identities but are supported by the corporate brand.

• Mistake: Assuming a company with multiple brands always uses a pluralistic structure.

  • Tip: Check if the corporate brand is prominently featured or if there is a mix of strategies.

Understanding the different organizational structure models is essential for effective brand management. Each model has its advantages and disadvantages, and the choice depends on the company's goals, market strategy, and brand portfolio. In the next section, we will delve into the relationships between brands within these structures.