Stop wasting "brain space" with bad brand decisions

This newsletter comes from the hosts of The Marketing Architects, a research-first show answering your biggest marketing questions. Find us on Apple Podcasts or wherever you listen to podcasts!

 

Should you put all your products under one master brand, or create separate brands for each? This week, we're breaking down the science behind these decisions with our Director of Brand, Beth Kuchera. 

—Elena  

 

Brand architecture affects credibility, pricing, and cross-selling opportunities.      

Getting this decision right can make or break your new product launch. The wrong choice wastes the expensive brain space you've already built in consumers' minds.  

 

When to choose a branded house vs house of brands.                     

Research from Jungju Yu shows that the best choice depends on two key factors: supply-side relatedness (how similarly your products are made) and demand-side relatedness (whether they serve the same customers). 

1. Choose branded house when: Your products share production technology or capabilities, but serve different audiences. Think Honda using their engine expertise across motorcycles, cars, and lawnmowers for different customer segments.

2. Choose house of brands when: Products are closely related in both how they're made AND who they're for. This prevents the temptation to coast on one product's reputation instead of investing equally in all brands.

3. Consider five key factors. Your new product's credibility, your parent brand's reputation, pricing perceptions, audience connection, and internal resource allocation should all play a role in choosing your brand architecture.

4. Review your resources honestly. Creating separate brands costs significantly more in design, strategy, team management, and ongoing maintenance. Many companies choose to create additional brands based on excitement rather than realistic resource assessment. 

The bottom line? Emotional decisions about "cool new brands" often backfire. Strategic decisions based on customer insight and resource reality drive growth. 

Listen in on our discussion.

 

“A Model of Brand Architecture Choice: A Branded House vs. A House of Brands” 

This research by Jungju Yu provides the economic framework behind when firms should use the same brand across markets versus different brands.  

Read the article.

 

 

Strategy over emotion.                  

“The best marketing decisions are made with the head, not the heart.” 

— David Packard, co-founder of Hewlett-Packard