Branded House vs House of Brands
For generations we have been influenced by logos, colours, messaging and the like – when it comes to the ‘stuff’ in our lives. Anything ranging from our comfy sofa (DFS most likely), our food (branded or not), our clothes (Next, M&S, other) – down to the plasters (Elastoplast) you stick on your child’s grazed knee.
Some of those brands are standalone brands – where the company and the product are one and the same. Others are a brand within a family of brands for one company and then others are a part of conglomerate, sitting under what’s called a ‘house of brands’.
The reason this is handy for you to understand, is because it will affect how you look at branding your small business, or how your personal brand fits into these structures.
This is the most common form of brand architecture, and more than likely is the one that will resonate with you the most, as a solo-preneur or micro business owner (under 10 team members).
A good example of a branded house is Apple. The company itself is Apple and has its own identity, personality, value proposition and place in the market.
It then manufactures products which are sub-brands of the main brand and synonymous with the same identity and value proposition. In essence all of its sub-brands are marketed and operated under the umbrella of the main brand.
Benefits of a Branded House:
- Less complicated
- Always controlled by the top down
- Aligned values, personality and target audiences (avatars)
- Easier control over the brand (styling, editorial)
- Quicker to launch new products when branding and guidelines are the same for all products
Potential pitfalls of a Branded House:
- All products and their reputation will be heavily weighted on the value of the main brand. If something goes wrong in the market place whether that’s a poor PR piece, or major disruption that causes a media outrage or rise in customer dissatisfaction – this can affect all sub-brands.
- Might be limiting if wanting to break into a new customer base which isn’t a direct fit with the House Brand
House of Brands
Now this is the complete opposite situation to a branded house. A house of brands structure exists where there is (usually) a large umbrella holding company that owns and is home to numerous brands.
Each brand is independent of the others and is more than likely owned by another company (within the umbrella company’s ownership). Every brand also has its own place in the market, may serve different audiences, have different identifies (look and feel) and marketing strategies.
WOW – so NOT my cup of tea. I’m getting a migraine just thinking of the brand management involved there!
Unilever is one of the best examples to explain this type of brand architecture. Unilever itself, while has its name and brand – it owns hundreds of household names (brands) that you will recognise – but wouldn’t immediately say: “Ah yes, I’ll have some of the Unilever spread on my toast.” You would rather say “Marmite”.
Benefits of a House of Brands:
- Each brand is free to market to their audience (according to their own marketing and brand strategy). They don’t directly hinge off the back of the reputation of the House owner’s brand. (Although – if Unilever went down the tubes, I’m sure there’d be repercussions!)
- The reach of new markets. By being a part of a house of brands means that there is always opportunity for cross distribution/selling/marketing to similar or new audiences.
Pitfalls of a House of Brands:
- While I’m sure it doesn’t hurt Dove that Unilever owns it…Unilever itself doesn’t exactly have a name or reputation that is recognisable for many of its brands. They buy the brands – because they are already leaders in their market place. So – the brands in a House of Brands don’t directly benefit from the ‘value’ / reputation of the house brand. (Although I’d argue with big players like Unilever – this doesn’t stack up as a pitfall!)
- There is probably an element of MURKINESS here – who controls who? Who leads who? An issue with many complex organisational structures.
Which brand structure works for you?
For many professionals and small businesses – you are really looking at a Branded House set-up. I will say that it is possible to create sub-brands for your business that do serve slightly different audiences. As long as you can recognise the identity of the product and the customer is clear – you are good to go. As a holding brand (the business behind you) though – you do need to map out WHO you are as a business.
Think of yourself as a small ‘Apple’ type company – what values are synonymous with your brand? The reputation and key messaging of this main business’ brand will be very important for any sub-brand you launch into the future.
Personal Brand or Company Brand?
This will obviously be a big question for many entrepreneurs and especially for subject matter experts – people who are engaged or hired for their extensive knowledge and expertise in a specific area. They are usually consultants, specialists or niche coaches and get more business because of personal referrals and the reputation they have built over years.
My answer to this is: potentially you need a mix of both. As Daniel Priestley, from Dent Global, will tell you when he talks about being a Key Person of Influence > there is always a recognisable character/person who drives the business and who people recognise as the person behind the brand. They want to be excited and enthralled by this person – enough so, to come and do business with them.
So – I would argue (as Daniel does) that any entrepreneur or CEO is really a personal brand and should view themselves as such. And, if there is a bigger business behind them that potentially manufactures or sells products / services which are varied, there’s an argument for a company brand (with product sub-brands) too.
As a subject matter expert though, you will also be creating online programmes or consultation packages within your value ladder – which could indeed have their own brand identities as well.
In the digital communication based world we live in, its so much easier for audiences to understand you and what you can do for them – if you communicate as a person.
Bitesize Insights & Truths on Branding for Micro-Businesses.