For the majority of December 2022 and into January 2023, the world has been captivated by the recently uncovered conspiracy of the nepotism baby, or nepo baby for short. In a nutshell, nepo babies are children of Hollywood industry insiders who likely benefitted from their family connections in the launching of their own careers. For example, “Emily in Paris” star Lily Collins, is the daughter of musician Phil Collins. Or “Stranger Things” star, Maya Hawke, who is the daughter of Ethan Hawke and Uma Thurman.
In today’s Bluetext blog, we’ll uncover the role nepotism plays in the world of sub-brands and product suites. We’ll discuss when it may be right to reference a parent brand and act as a branded house, and when it makes sense to market your solutions separately under distinct brands and operate as a house of brands.
The Case for the Branded House
The most common form of brand architecture for brands big and small, a branded house operates as a set of sub-brands housed underneath a core, parent brand. A house of sub-brands benefits companies that offer multiple services or products, especially when a parent brand provides solid brand recognition and visibility. To the consumer, it is very clear that these offerings all come from the same parent company.
From a marketing perspective, a branded house operates under one marketing strategy and avoids confusion in the marketplace regarding who owns the sub-brand. This strategy typically works best when each sub-brands target audience share commonalities. A similar industry or job function, or perhaps the sub-brands are compliments with bundling potential. A branded house is recommended if the parent brand has an established positive reputation with consumers.
The Google Workspace is perhaps the world’s most famous branded house today. The goliath product suite houses Gmail, Sheets, Docs, Calendar, Meet, Drive, and so much more. As soon as you see the simplistic style and elementary school scheme of one of these sub-brand logos, you know it’s Google baby. With a staggering 3 billion users worldwide, Google takes up a vast majority of the work app ecosystem and certainly benefits from architecting its business as a branded house. Their brand recognition is strong and Workspace apps are seamlessly integrated, allowing customers direct ease of use.
Adobe Creative Cloud
Another of today’s tech giants, Adobe, launched Creative Cloud in 2011 featuring known and loved standalone applications such as Photoshop, Lightroom, Acrobat, After Effects, XD, and Illustrator in one package. The logos for each app offer a periodic table-inspired collective look and feel that tells the user it is an Adobe product and part of a branded house. These products are designed to serve separate functions but complement and strengthen each other. Therefore making the case to bundle or purchase the entire ‘Cloud’…because if you’re going to rent most rooms you might as well buy the house right?
Sourcefire hired Bluetext to reimagine its product architecture and create a branded house that would sit underneath the main SourceFire brand. Their suite of products, Snort, AMP, Immunet, and Firepower were great standalone applications but lacked a cohesive story that would tie them to Sourcefire. Bluetext renamed the products FirePower, FireSight, FireAMP, and FireCloud, taking inspiration from the Sourcefire name and perceived recognition in the market. Bluetext was also able to sunset Sourcefire’s famed, “Snorty the Pig” gracefully as part of the rebrand, shifting the brand perception from startup to global leader. For Sourcefire, having a branded house of products aligned its marketing strategy and increased its overall brand perception. Following, the successful rebrand, the company was acquired by Cisco for $2.7 billion.
The Case for the House of Brands
A house of brands is remarkably different from a branded house, where each brand has its own unique brand identity and marketing strategy usually dictated by the target demographic. The major benefit to operating as a house of brands is the ability to service a diverse set of target markets and create economies of scale for the parent brand. On the other hand, a house of brands can be a complex system to run, and maintaining each brand’s success may be almost impossible.
Procter and Gamble
For over 180 years, Procter and Gamble has specialized in a variety of products across a wide range of target markets. Chances are, you’ve used a P&G product without even knowing it. Have you brushed your teeth with Crest toothpaste? Washed your hair with Head & Shoulders shampoo? Cleaned your clothes using a Tide POD? P&G probably wasn’t the first association you made with this experience. All of these brands and so many more are the product of a successful house of brands.
That being said, the company has gone through a reshuffle in recent years. As of 2014, Procter and Gamble decided to retire or sell close to 100 of their existing brands, leaving just 80 brands that made up 95% of their profits. This is a classic example of a house of brands getting too big (and too expensive) to manage and needing to cut costs. Nonetheless, this is a great move by P&G, allowing the company to adapt and support their profit-making brands, and reallocate spend to develop new, innovative products that will pay dividends in the future.
British consumer goods company, Unilever, has been in business for just under 100 years and has grown to operate in over 190 countries around the world. Unilever specializes in products related to food, cleaning products, toothpaste, and beauty products, and they are the largest producer of soap in the world. Did you use Dove soap this morning? Spread some Hellman’s mayonnaise on your sandwich at lunch? Snack on a pint of Ben & Jerry’s ice cream last night? All of these brands operate under the Unilever house of brands. Unilever’s success derives from operating multiple brands in the same category targeted at unique demographics. The same consumer doesn’t buy both Dove and Suave soap, but both are owned by Unilever. This allows the company to target as much of the market as possible, all through the power of branding.
GM is the largest automaker in the United States, operating brands including Chevrolet, Buick, GMC, and Cadillac. General Motors is possibly the perfect example of a house of brands that operates at all levels of the market to reach as many consumers as possible. A prospective car buyer is not in the market for either a Chevrolet or a Cadillac. Each brand represents a segment of the market and positions itself accordingly from a price, performance, and look and feel perspective. GM has positioned itself as a brand with potential to truly appeals to everyone by offering distinct models to just about every price range, catering to wide range specific preferences.
GM has also expanded outside of the US market, competing in Europe with its brands Opel and Vauxhall, and in China with its brands Baojun and Wuling. General Motors has also been very successful in its brand consolidation efforts. For example, the company bought Hummer in 1998 and discontinued the brand in 2010. A Hummer EV pickup truck and an SUV are now in the works and will be marketed under the GMC brand. Another example of brand consolidation under GM was the acquisition of the Yellow Cab Manufacturing Company, which produced cars for the Yellow Cab company in New York City. General Motors acquired a controlling stake in the company in 1925 and bought the business entirely in 1943. Following the complete acquisition, the company was absorbed into its brand, GMC.
With brand perception under constant scrutiny, brand architecture is an important consideration in today’s marketing world. For many companies, a branded house is the best structure as it allows them to operate under a core, leading brand and logo, focusing on one market strategy. For others who are targeting multiple market segments in the same category, a house of brands is the correct choice as it allows them to compete at as many levels of the market as possible. Not sure which strategy is the right one for your company? Speak with the experts at Bluetext today.