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INTRODUCTION
For long-term financial prosperity, the successful launch of new products and services is of paramount importance to firms. Firms must maximize brand equity across all the different brands and products and services they offer. The brand architecture strategy for a firm provides guidance as to which products and services a firm should introduce and how they should be branded in doing so.
Specifically, the brand architecture strategy determines which brand elements - brand names, logos, symbols and so forth - a firm should apply across new and existing products and services. Brand architecture strategy is critical because it is the means by which the firm can help consumers understand the products and services it offers and organize them in their minds. Brand architecture strategy defines both brand breadth or boundaries and brand depth or complexity. Which different products or services should share the same brand name? How many variations of that brand name should we employ? The role of brand architecture is twofold:
Clarify - Brand awareness : Improve consumer understanding and communicate similarity and differences between individual products and services.
Motivate - Brand image : Maximize transfer of equity to/from the brand to individual products and services to improve trial and repeat purchase.
Brand names may consist of multiple brand name elements (Volvo XC60) and may be applied across a range of products (Volvo cars and trucks). Many firms employ complex brand architecture strategies. What is the best way to characterize a firm's brand architecture strategy? What principle or guidelines exist to choose the right combinations of brand names and other brand elements to best manage brand equity across the entire range of a firm's products?
Developing a brand architecture strategy involves three key steps: (i) defining the potential of a brand in terms of the extent of its 'market footprint', (ii) identifying the types of product and service extensions that would allow a brand to achieve that potential and (iii) specifying the brand elements and positioning associated with the specific products and services associated with the brand. We next outline key considerations in each of these three steps.
STEP 1: DEFINING BRAND POTENTIAL
The first step in developing an architecture strategy is defining the brand potential. There are three important considerations in...