House of brands vs. branded house: definitions and benefits

By Indeed Editorial Team

Published 14 November 2022

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

When a business has multiple brands, knowing how to decide between a house of brands and a branded house strategy can help guide sales and marketing strategies. This usually includes factoring in the pillars of digital commerce for multi-brand campaigns and strategies. Learning about the key differences between these branding strategies can be very useful for marketing professionals to know. In this article, we look at an overview of a house of brands vs. a branded house strategy, look at the benefits and drawbacks of each strategy and explain how the three pillars of digital commerce impact multi-brand strategies.

Overview of a house of brands vs. a branded house strategy

Below, you can find an overview of a house of brands vs. a branded house strategy, including the definitions of each term:

What is a branded house?

A branded house is a marketing model that defines the company as the brand. This means that the different services and products provided by the company fall under a primary brand. For example, a company may have different offerings, such as broadband and TV services, flights and banking services that fall under one main brand. It allows for different subset brands to receive the same recognition as the flagship brand's offerings, without detracting from the primary brand.

For many professional services, opting for a branded house framework is also known as the one-firm brand strategy. With this strategy, the company uses a single brand, including logos and messaging, to direct its other services and strategies. The company's other offerings typically have unique messaging but similar brand elements so customers know they're related in some way.

Related: What is sub-branding and why is it a useful strategy?

What is a house of brands?

An alternative brand strategy model is the house of brands, which focuses more on the subsets of a company's brands. In this model, the primary brand receives almost no attention to allow for more focus on the subset brands. This is more commonly seen with larger umbrella companies that have a diverse portfolio of subset brands. For this method to work, a lot of investment in each brand is necessary, as every subset brand conducts its own messaging and branding.

Related: How to develop a brand identity (plus tips for success)

Benefits of these branding strategies

Below are the benefits of a house of brands and branded house strategy:

Branded house benefits

The most significant benefit of choosing a branded house strategy is that it focuses on the main brand, which allows subset brands to benefit from the primary brand's success. It also helps to establish a shared platform for individual brands within a company and develop both the main brand and the smaller ones at the same time.

Alongside this, it doesn't sacrifice the company's products or services. Instead, it involves segmenting different brands to target different audiences. It also means that things like marketing planning, resource management and budgets are all centralised, rather than segmented across different branding teams. This makes it easier for marketing teams and branding departments to effectively synergise efforts across the business.

Related: What is brand management? (Definition, benefits and tips)

House of brands benefits

Opting for a house of brands strategy has several benefits. In particular, it helps to define individual brands, which helps businesses to enter specific markets and roll out tailored marketing strategies. It also helps sub-brands to enter markets where the main brand isn't well known or received. For example, a company may own a beauty brand that caters to younger demographics and one that caters to older demographics. They target different audiences so the main company benefits from differentiating each brand.

Related: Global branding: definition, benefits and useful strategies

Drawbacks of these branding strategies

Below are the drawbacks of a house of brands and branded house strategy:

Branded house drawbacks

One of the biggest challenges for a branded house strategy is bringing in new audiences who don't use the core brand or adding new brands with mergers. The problem stems from the idea that new audiences look for different outcomes from the offering, such as a new value proposition or different pricing for a product. Audiences may also actively avoid a brand because it doesn't address their needs and may not trust an existing brand when it enters a new field.

Also, companies may be unable to enter certain spaces due to strategic issues or misaligned values. For example, some smartphone users may be less likely to switch to a different operating system if the other operating system has different values. If one operating system is fully customisable and the other has a reputation for preventing its users from customising, the latter may struggle to attract the same audiences as the first company.

Related: Co-branding basics: advantages, strategies and examples

House of brands drawbacks

The biggest drawback to a house of brands strategy is the level of effort required to build different campaigns for individual brands. Companies are also generally cautious about sacrificing the potential of one brand to give a different brand a larger audience. If that starts to be the case, then opting for a branded house strategy is usually preferable. It also eliminates the opportunity for cross-over branding, which increases the overall marketing costs as it takes more effort to create campaigns for individual brands.

When working with a house of brands strategy, the hierarchy of these individual brands can become quite complicated. This often leads to the main brand becoming less prominent or even entirely unknown. Many people may be unaware of what a company does as its sub-brands tend to get more attention from the public.

How do the three pillars of digital commerce impact multi-brand strategies?

When working with multi-brand strategies, such as the house of brands or branded house strategies, it's useful to factor in the three pillars of digital commerce as it helps inform decision-making. The three pillars of digital commerce include commerce, content and community. Below, you can find out how the three pillars of digital commerce impact multi-brand strategies:

Using the right commerce model

There are many different commerce models that work well with multi-brand strategies. For example, if a multi-brand business is mature or established, companies can leverage the brand value that they've built to bring in new forms of commerce. For example, a company with mature brands in mining and natural resource extraction may choose to use their primary brand's success to launch a marketplace that sells used equipment for the industry. By using the primary brand's reputation, the marketplace already had the intended audience's trust.

Related: What is corporate branding? (And how to improve it)

Utilising the correct platform for content

As more multi-brand businesses look into different commerce models, it's becoming quite common for them to also consider creating their own. To effectively cater to an audience, multi-brand companies try to find a viable platform that allows them to integrate commerce with marketplace functionality. For example, a company may form a partnership with another which uses a business-to-business-to-consumer (B2B2C) model that gives brands customer insights, helps push brand loyalty and offers protection for businesses to survive market disruptions.

Using this marketplace model helps both brands by growing direct-to-consumer (D2C) sales while still maintaining a channel for resales and partners for fulfilment. It's known as a conflict-free D2C and it helps establish an integrated solution that provides commerce, order management systems and marketplace capabilities.

Related: What is a content marketing role? (Plus tasks and careers)

Creating a community experience that meets strategy goals

Choosing between a house of brands and a branded house strategy is a significant decision for multi-brand companies. The reason for this is that selecting one strategy over the other directly impacts the customer experience and journey. Due to the significance of this decision, these companies tend to consider several variables to help guide them. Some of these variables include:

  • whether brand separation is crucial to the business

  • whether some brands work more effectively in specific markets

  • whether any sub-brands share any customer bases

  • whether there are any competition dynamics between these sub-brands

Alongside helping these companies to decide between these two strategies, these variables also help the company to establish a strategy that aligns with the customer experience by including different capabilities, such as social commerce or mobile commerce.

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