Asian companies are moving away from a fixed approach to brand architecture, whether that’s the “branded house” or the “house of brands”, in favour of a hybridisation strategy, according to an industry figure.

In the October issue of Admap, Jay Milliken, senior partner and Asia regional lead at Prophet, discusses the evolving approach to brand architecture in Asia and how this offers a more flexible way to build brands while also “requiring a more professional view of brands to actively manage assets and build brand equity”.

Essentially, a masterbrand model among traditional manufacturing companies has had to evolve as businesses have grown in size and complexity.

“These new-generation brands are seeking more flexibility for several reasons,” Milliken notes, “including the ability to shift to premium pricing and capture more affluent consumers than the masterbrand.”

Consumer behaviour in certain markets is also a factor: Chinese consumers, for example, tend to be product-driven and practical rather than brand loyal. “They prefer top-performing brands within each product category, so brand equity often does not carry over.”

And as Asian businesses expand into new overseas markets, often by acquisition, it will often make sense for them to “keep the acquired brands as a separate masterbrand with their different target consumers in their key geographies”.

Digital brands may arrive at the same hybridisation approach from a different starting point, with many building a portfolio of different digital offers – the house of brands – before subsequently leveraging the equity built out of these distinct brands to introduce a new sub-brand.

“Tencent, for example, started with its instant messaging platform Tencent QQ, where Tencent plays a co-brand/endorser role. As QQ’s popularity and reputation has blossomed, Tencent has created more offerings around the QQ brand, creating its own brand family.”

But no matter where companies start or end up in terms of their brand architecture, they need to be aware that the hybrid approach “can be messy”.

“Those who manage brands need to focus not just on the logo and the look and feel of the brand but also to understand the role of the masterbrand and its relationship to the sub-brands in the portfolio,” Milliken advises.

“To develop new brands in a meaningful way while retaining overall brand relevance and loyalty, companies need to take a more strategic approach.”

Sourced from Admap