Unit 41 LO2 Analyze how brands are organized in portfolios and how brand hierarchies are built and managed-BTEC-HND-Level 4 & 5

Course: Pearson BTEC Levels 4 and 5 Higher Nationals in Business

A brand portfolio can be thought of as a group of different brands. Each has its own purpose, but all are made by the same company. At a minimum, these should include both an umbrella brand and at least one product line.

On occasion, it may also include more than one product line. This combination allows engagement opportunities to suit any kind of customer base or marketing strategy desired by the company leadership through multiple channels and touchpoints with anyone in their chain.

Brand hierarchies are re-organized periodically dependent on market needs so current branding is in line with changes within that segment. The goal is not to stop at just maintaining visibility but keeping it up-to-date as well so as not to disappoint customers when they use products they have come to expect from that company.

Also Read: Evaluate how brands are leveraged/extended over time domestically and internationally

Portfolio and hierarchy management:

Brand portfolio strategies, including the house of brands and branded property models

The portfolio management process is a systematic way to analyze your company’s branding and determine what resources are needed for each brand. The purpose of creating the hierarchy is to streamline coordination between brands while making it clear how they will communicate with consumers through unified identification, consistent messaging/messaging architecture, and an integrated marketing approach.

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The elements of the brand hierarchy are:

  • Brand architecture, which defines how brands will be organized within the system and provide a blueprint for creating and nurturing the different attributes of each brand. The architecture helps to make sure that decisions are made at the right level.
  • Marketing communications (i.e., advertising), which presents the full picture of a specific brand while maintaining its own identity in relation to other brands in the portfolio. Each company may have more than one unified marketing approach depending on business needs and legal considerations.
  • Design standards, which serve as guidelines for an overall look-and-feel across all products in order to create greater consistency in the minds of the target market.
  • Physical distribution requirements can help ensure that there is availability and accessibility for all brands in a portfolio. This means that the company will have more money, so they can do things more easily.
  • The product portfolio management process is vital to the success of any company’s brand strategy.

Hierarchy building corporate branding, umbrella branding, family branding, endorsed sub-brands, and individual product branding

Corporate, umbrella, and family brands

The highest level of the hierarchy is the company, family, or umbrella brand. This level uses a cohesive and consistent naming and identity structure to ensure that each product and service is homogeneous throughout the entire range. Corporate strategy is particularly useful for large parent companies with many departments or subsidiaries.

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For example, Heinz Cream of Tomato Soup and Heinz Tomato Ketchup both have similar visual brands on their labels. They also feature the corporate brand Heinz, reducing confusion among consumers, and increasing brand equity in the process.

Endorsed brands

An endorsement brand refers to a brand endorsed by a parent brand, which can be a company, umbrella, or family brand itself. In theory, the endorsement from the parent brand increases the credibility of the endorsed brand in the eyes of consumers. In this method, products are grouped together based on the same brand. They do not rely on homogeneous naming or aesthetics.

For example, the parent company Microsoft lends its brand identity and reputation to Office, Xbox, Windows, and Bing. However, each recognized brand is different because it won’t be immediately recognized as being owned by Microsoft.


Individual brands are consumer-oriented brands, and there is no clear connection between the product and its parent brand. In many cases, there is no connection between the various brands.

This is a common situation when the parent brand acquires a smaller brand that has higher equity among consumers. Here, the parent brand is not important. It is less helpful than the individual products it owns and can actually hurt a company’s image.

How brand equity is built at different levels of the hierarchy

Brand equity can be built at three levels.

  • The first level is the lowest esteem that a company’s brand has, in which the consumer does not associate any of their desired qualities with this particular company.
  • The second level involves the association of some desired qualities with a certain company, but these possessed qualities are below those similar to competitors and consumers prefer other companies’ brands.
  • Lastly, the highest form of brand equity is where customers are willing to exchange money for a company’s product or service without experiencing any apprehension because they believe it will satisfy them completely and/or please them greatly.

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Using the customer-based brand equity model to develop and manage brands

The customer-based brand equity model is a way to measure the willingness of customers to pay. It’s made by the creators of Kilter’s marketing process.

Brand equity is about how much extra money that company can charge over its competitors. This model will show you how companies have to spend more money on advertising if they want to keep up with other companies. It will also show you how advertising affects the company’s profits.

There are three major parts to this: beliefs, expectations, and the market. They are all connected.

For example, an economic problem influences consumer expectations and beliefs.

The use of market research as a key brand management tool

Market research is when people tell you what they think about a product. They might be in a group and talk about it. This helps companies know what they need to do to better sell their product or brand.

Marketers can see what other people are doing and they can decide what to do next. To learn more about how market research impacts branding strategies.

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