Most of the commodity companies have two or more brands. The question of which brand architecture to follow primarily arises at the time of introducing a new brand. The dilemma is similar to other industries:

Should you operate with Brand Extension strategy or Endorsed Brand strategy?

Should the identity of the new brand be completely away from the existing brand?

What is perception of the present brand in the consumers’ mind?

When to use which Brand Architecture?

Companies adopt various brand architecture for managing their brands, depending on their strategy.

Brand Extension or Branded House:

This brand architecture strategy is used when the brand equity of the existing brand is high and can be transferred to the new brand. It is generally used when a premium brand wants to introduce an even more premium brand.

Ultratech Cement launched an even more premium product Ultratech SUPER. The mass media advertisements were mostly for mother Ultratech brand, though at the retail counters, Ultratech SUPER was also promoted.

Endorsed Brand or Sub-brands:

For some companies, the trust level is high on the existing brand but it is seen more as a value brand than premium brand. The new brand to be launched is desired to be positioned in the premium segment. Then endorsed brand strategy is used. It is also used when the company is a conglomerate diversified in multiple products and wants to extend the brand equity to the new businesses.

When Lafarge entered India, it wanted to encash on the existing brand strength of Lafarge. So the brands it launched were Lafarge Duraguard and Lafarge Concreto. The focus on Lafarge was less, visible from the packaging of the product. All in-house developed Tata products have a mention of Tata in their brand name.

Standalone Brand or House of Brands:

This strategy is used when the image of the existing brand is quite negative and will have an adverse impact on the new brand if the consumers come to know that it from the same manufacturer. Alternatively, it is used when the brand perception of the existing brand is so strong that consumers will not be able to associate the new brand with a premium segment. A value brand from can potentially erode the premiumness associated with the existing brand.

Bangur Cement and Rockstrong Cement are from the same parent company Shree Cement but have no mention of Shree Cement on any of their marketing communications.

Mixed strategies:

Then there are variants which are midway between the strategies. The focus on the parent brand ranges from high to low and are used by commodity companies, depending on the market feedback and requirement.

Brand Architecture defines the communication on the product packaging, advertisement in media and in-shop promotion, along with other things.