Brand Equity

Brand architecture

Brand architecture is the structure of brands within an organizational entity. It is the way in which the brands within a company’s portfolio are related to, and differentiated from, one another. The architecture should define the different leagues of branding within the organisation; how the corporate brand and sub-brands relate to and support each other; and how the sub-brands reflect or reinforce the core purpose of the corporate brand to which they belong.

Types of brand architecture

There are three generic relationships between a master brand and sub-brands:

1. Monolithic brand or Branded house Examples include Virgin Group, Red Cross or Oxford University. These brands use a single name across all their activities and this name is how they are known to all their stakeholders - consumers, employees, shareholders, partners, suppliers and other parties.

2. Endorsed brands Like Nestle’s KitKat, Sony PlayStation or Polo by Ralph Lauren. The endorsement of a parent brand should add credibility to the endorsed brand in the eyes of consumers. This strategy also allows companies who operate in many categories to differentiate their different product groups’ positioning.

3. Product brand or House of brands Like Procter & Gamble’s Pampers or Henkel’s Persil. The individual sub-brands are offered to consumers, and the parent brand gets little or no prominence. Other stakeholders, like shareholders or partners, know the company by its parent brand.

4. Umbrella brand spanning across a range of sub brands. Like NIVEA skin care as the umbrella and 14 specific sub brands e.g. “NIVEA Creme”, “NIVEA Visage”, “NIVEA Bath Care” etc.

Brand loyalty

Brand loyalty has been proclaimed by some to be the ultimate goal of marketing.In marketing, brand loyalty consists of a consumer’s commitment to repurchase the brand and can be demonstrated by repeated buying of a product or service or other positive behaviors such as word of mouth advocacy. True brand loyalty implies that the consumer is willing, at least on occasion, to put aside their own desires in the interest of the brand.

Brand loyalty is more than simple repurchasing, however. Customers may repurchase a brand due to situational constraints, a lack of viable alternatives, or out of convenience.Such loyalty is referred to as “spurious loyalty”. True brand loyalty exists when customers have a high relative attitude toward the brand which is then exhibited through repurchase behavior.This type of loyalty can be a great asset to the firm: customers are willing to pay higher prices, they may cost less to serve, and can bring new customers to the firm. For example, if Joe has brand loyalty to Company A he will purchase Company A’s products even if Company B’s are cheaper and/or of a higher quality.

An example of a major brand loyalty program that extended for several years and spread worldwide is Pepsi Stuff. Perhaps the most significant contemporary example of brand loyalty is the fervent devotion of many Mac users to the Apple company and its products.

Brand