Brand architecture serves as the corporate roof under which a business can protect and unify its brand portfolio. Fortune 500 companies, e.g. the P&Gs, Krafts, and Coca-Colas of the world, utilize brand positioning strategies to protect their numerous brands from external market forces, as well as to unify brands in order to enhance consumer associations and perceptions. The process of developing brand architecture is a strategic one, based on identifying threats and creating strong corporate bonds amongst brands that work to mitigate the risk of brand failure. These risks can come from not only consumer preferences, but market fragmentation, competitors, and the pressure to extend existing brand recognition across multiple products. With threats like these in an ever-expanding and competitive global marketplace, companies with weak brand infrastructures will struggle to compete.
Hostess, maker of the iconic Twinkie, is a recent example of a major brand failure. The company’srefusal to modify its product line in order to adapt to changing consumer tastes is cited as a major reason why Hostess plummeted into bankruptcy. Since the company’s collapse, private equity firms Metropoulos & Co. and Apollo Group Management have purchased Hostess with the goal of building a stronger and more stable corporate roof under which the Twinkie, Ding-Dong, and other Hostess brands may again flourish. The two private equity firms will need to decide how to best position the brands in order to mitigate the risks posed by the many volatile and unpredictable market threats. If industry best practices are any indication, Metropolous and Apollo Group will position the Hostess brand by modeling one of the four most common brand positioning strategies, shown in the infographic below.
Via Russ Merz, Ph.D., Alexander Hamilton