Beyond BH and HOB: a five-part categorisation of brand architecture strategies

8 important questions on Beyond BH and HOB: a five-part categorisation of brand architecture strategies

What is the definition of endorsed branding?

Uses both separate and corporate brands but the second brand is superior to and more visible than the corporate brand. The second brand is most visible by presentation and the word "by" indicates a superordinate corporate brand connection.

What are the pros of Endorsed Branding?

  1. Faster market penetration of the individual brands;
  2. unique brand promise thus identity of individual brands which lowers your brand stretch risk;
  3. Quality is assured from the parent brand.

What are the cons of Endorsed Branding?

  1. Risk of dilution;
  2. You need management of several brands;
  3. Negative spillover between the brands - this brings risks from related brands when situations take place.
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What is the definition of a House-of-Brands?

One corporate brand that has many brands that are not linked to the corporate brand. The brands target different specific market segments. Risk is distributed over several brands.

What are the pros of a House-of-Brands?

  1. Reducing stretch risk - because of focus on individual market segments;
  2. Reducing risk of brand dilution - there are separate brand promises and reputations;
  3. Reducing reputation risk - avoids negative spill-over.

What are the cons of House-of-Brands?

  1. Risk of cannibalisation - weak brand loyalty and brands are often commoditised (gestandaardiseerd);
  2. It is inefficient from a operational perspective.

What is a BH-HOB hybrid architecture strategy, that usually comes forth out of a Merger or Acquisition to drive share value?

This is a mixed architecture where at least 2 of the 4 strategies are combined. BH-HOB is a good example as Fanta and Sprite fall under HOB of the corporate brand Coca-Cola and Cola Zero is BH.

What is a con of the BH-HOB hybrid architecture?

Evidence that it improves performance is not yet there.

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