Brand Architecture - Case Study

Journal of Marketing Management 200319,1043-1065

James Devlin

NottinghamUniversity BusinessSchool

Brand Architecture in Services:The Example of Retail Financial Services

The term "brand architecture" refers to an organisation'sapproach to the design and management of its brandportfolio. In particular, brand architecture decisions areconcerned with the number of brands to utilise, the role ofspecific brands and the relationship between such brands. Ithas been posited that services organisations tend to adopt acorporate brand approach to the management of their brandarchitecture, having a propensity to rely, in the main, on oneoverarching brand. The study reported here investigates thiscontention in the context of financial services, using anumber of semi-structured interviews with senior marketingmanagers. Findings indicate that although some support forthe corporate branded approach was apparent, the dominantstrategy is a "multi-corporate" approach, where the brandarchitecture comprised a family of main brands. The mainmotivations for such an approach are to maintain strongrelationship franchises with different customer groups and/orto signal distinct competencies to the marketplace. Asexpected, the data shows little support for the approach ofbranding individual services or the wide-scale use of sub-brands.

Keywords: retail financial services, services branding, brand architecture,brand portfolio

Introduction

This paper presents a study of brand architecture strategies in a servicescontext. Brand architecture refers to the nature of the brand spectrum utilisedby an organisation in its marketing efforts (Aaker and Joachimsthaler 2000).In particular, brand architecture describes the number and nature of brandsemployed and the relationship between each brand in the marketing of arange of products or services. At one extreme, companies may employ oneoverarching corporate brand, whilst at the other, individual product orservice brands may be used. In between there are various hybrid options (de

1 Correspondence: Dr James Devlin, Nottingham University Business School, JubileeCampus, Nottingham, NG8 IBB, E mail: [email protected]

ISSN0267-257X/2003/9-10/01043 + 22 £8.00 ©Westburn Publishers Ltd.

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Chernatony 2001; Aaker and Joachimsthaler 2000; Olins 1995). According toDouglas, et al. (2001), it is imperative that managers design, implement andmaintain an harmonious and efficient brand architecture that spans all areasof a firm's operation. In such a manner parsimony, as well as maximumclarity and consistency, can be achieved cost effectively. However, accordingto Petromilli, et al. 2002) many companies struggle to keep their brandportfolios in order. This is perhaps not surprising as many organisations arefaced with increased market dynamism, customer fragmentation andindustry consolidation. Added to that, Petromilli, et al. (2002) suggest thatnatural momentum, egos of senior management and the attraction ofacquisitions tend to produce an over-complex brand architecture in manyorganisations.

However, the dominant proposition in the literature is that the brandarchitecture of services firms will normally be relatively uncomplicated andrudimentary, as services organisations tend to rely on the corporate brandedapproach (de Chernatony 2001; Berry 2000; Dobree and Page 1990; Berry, etal. 1988). This study makes a contribution by investigating empiricallywhether the corporate branding approach is the dominant strategy in themanagement of brand architecture adopted in a services context by elicitingthe views of practitioners, namely senior marketing and brand strategists in aservices environment. The study is important as empirical investigation ofbrand architecture strategies is largely absent from the literature, as are theviews of industry practitioners. Insights will also be provided into thejustification and rationale for the various brand architecture strategiesemployed as well as the practical considerations associated with brandarchitecture management.

The paper proceeds in the traditional manner. In the following section themain literature is reviewed before the methodology is explained. Results arepresented and discussed and implications explored. Finally, limitations areacknowledged and avenues for further research highlighted, beforeconclusions are drawn.

Literature ReviewThe study presented here is concerned with the appropriate brand

architecture for services markets. Thus, in the literature review section, it isnecessary to introduce and explain the notion of brand architecture beforefocusing more specifically upon brand architecture in a services context.Although the importance of brands in the marketing of services has beenhighlighted by a number of writers (Berry 2000; Dall'Olmo Riley and deChernatony 2000; de Chernatony and Dall'Olmo Riley 1999; Dibb and Simkin1993; Zeithaml 1981), far fewer studies have focused upon the nature of the"brand architecture" adopted by services organisations.

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The term "brand architecture" refers to an organisation's approach to thedesign and management of its brand portfolio (Aaker and Joachimsthaler2000) and is defined by those authors as:

"An organising structure of the brand portfolio that specifies brand roles and thenature of relationships between brands."

All "multi-offering" organisations face a choice as to whether to use onesingle brand covering all products or services, a separate distinct stand-alonebrand for each offering, or some combination of these two extremes. Aakerand Joachimsthaler (2000) use the term "branded house" to describe thestrategy where the master, or corporate, brand becomes by far the dominantbrand driver across multiple offerings, often in unrelated markets. Anorganisation such as the Virgin Group tends towards such an approach. Atthe other extreme is a "house of brands" strategy, which involves anindependent set of stand-alone brands each producing an optimum impact inthe targeted market. For instance, the traditional approach of Proctor &Gamble (P & G), with 80 major brands having little or no link with P&G or toeach other, is a house of brands strategy. Between, these two approaches, theauthors see a continuum encompassing "sub-brands", where the masterbrand is the primary frame of reference but is augmented by additionalnaming. Examples include Microsoft Office or Audi TT and "EndorsedBrands", such as Obsession by Calvin Klein or Courtyard by Marriott. Aakerand Joachimsthaler (2000) suggest that, in general, a branded house ormonolithic approach is more likely when the masterbrand has associationsthat enhance the value proposition, is moved into an area where theorganisation appears credible and when there is the potential forcommunication efficiencies. The branded approach is more likely whenseparate brands are needed to create and own an association (often avoidingthe association of the master-brand) and to retain a customer brand bond.

The difference between an endorsed brand and a sub-brand is a subtleone. In the former case, the master-brand plays a far less prominent role,perhaps even only being mentioned by association, whereas in the latter case,the master-brand forms the dominant part of the brand. Indeed, Olins (1995)did not distinguish between endorsed and sub-brands. He identifies threebrand structures and termed them monolithic, endorsed and branded, whichis roughly similar to the schema of Aaker and Joachimsthaler, (2000), butwith some different terminology, de Chernatony, (2001) also proposes a"brand spectrum", similar to Aaker and Joachimsthaler, (2000) and Olins,(1995). The ends of the brand spectrum, according to de Chernatony, (2001)are defined in terms of corporate branding and individual product brands. Itis apparent that de Chematony's concept of the corporate brand is closely

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related to those of the monolithic brand and branded house discussed above.Equally, the individual product branding approach is akin to the brandedapproach discussed by Olins, (1995) and the house of brands of Aaker andJoachimsthaler, (2000). In between, there are strong and weak companyendorsement positions, as can be seen from Figure One.

Figure 1. Corporate vs. Line Branding(Adapted from de Chernatony 2001)

Corporate branding Strong company Weak company Individual productendorsement endorsement branding

Importantly in terms of this study, elsewhere in the volume, de Chernatonyrelated the concept of the brand spectrum to branding in a financial servicescontext and postulated that a corporate brand approach to the managementof brand architecture is predominant in financial services markets. Berry,(2000) stressed the importance of corporate branding to services marketsmore generally. As Berry explained, in packaged goods markets the productis the primary focus of the brand, whereas in services the company is theprimary focus of the brand. Although corporate branding is seen asbecoming more important generally (Balmer 1995), it is seen as having aparticularly crucial role to play in the marketing of services.

Dall'Olmo Riley and de Chernatony, (2000) cited Dobree and Page, (1990)as an example of a study stressing the importance of the company name asthe brand and quoted Berry, Lefkowith and Clark, (1988) to illustrate thatconsumers are likely to view all services offered by a company ascomponents of a single brand. Dall'Olmo Riley and de Chernatony, (2000)added that the corporate brand forms the focus of the relationship buildingefforts both inside and outside of a services organisation, in keeping with therelationship focus of the analysis they present. McDonald, et al. (2001)provide further detailed analysis of the prevalence of and challengesassociated with corporate branding in a services context. The authors areequivocal in their conclusions. However, they suggested that corporatebranding may well form an appropriate focus for services markets due to theimportance of interactions between staff and customers in shaping brandperceptions. In addition, Olins, (1995) suggests that while fast-movingconsumer goods brands often focus on individual products, servicecompanies must decide whether to build the brand on a specific product oron the corporate brand.

In a financial services context, Denby-Jones, (1995) suggested that


corporate brands tend to be important and Balmer and Wilkinson, (1991)argued that a strong corporate image is perhaps the most effective form ofdifferentiation. Saunders and Watters, (1993) also studied the growingimportance of branding in financial services, stressing the crucial role thatbrands play in financial services marketing. They further comment upon theneed for a coherent strategy with regard to corporate, divisional andindividual brands, illustrating various approaches. In common witharguments advanced in favour of the importance of corporate brands in aservice context more generally, Milligan, (1995) argues that banking productsare more or less indistinguishable but that corporate branding can helpdifferentiate banking companies and their offerings. Others have arguedsimilarly that consumers show little interest in individual financial servicesofferings, preferring instead to focus upon well known companies (Boyd,Leonard and White 1994; Ford 1990). Dall'Olmo Riley and de Chernatony,(2000) argue that financial services do not lend themselves to individualproduct brands, suggesting that the corporate brand may be particularlyimportant in situations where it is difficult to make a priori judgements.

Thus it is apparent that many authors postulate that an emphasis on thecorporate brand is the predominant approach to the management of brandarchitecture for services organisations. However, although the link betweenservices and the corporate branding approach to the management of brandarchitecture has been covered in the literature and argued in theory, far moreempirical investigation is required to establish whether it is the case inpractice. Most writing on the subject is based upon hypothesised trends andconjecture. The main empirical work in the area (de Chernatony and DallOlmo'Riley 1998; de Chernatony and Dall'Olmo Riley 1999; Dall'Olmo Rileyand de Chernatony 2000) was centred on brand experts and not focusedspecifically upon services or brand architecture concerns. Thus, the analysispresented here contributes to current understanding in a number of ways.Firstly, it elicits the opinions of senior managers from a servicesenvironment. Industry practitioners are important stakeholders in decisionsregarding the management of brand architectures, not least as they are likelyto be responsible for deciding and implementing strategy (assuming thatthere is one). The views of practitioners are also important as Dall'OlmoRiley and de Chernatony, (2000) have suggested that the previous focus onbrand experts has been a significant limitation and that further researchfocusing on managers, staff and consumers would yield an importantcontribution to the branding literature

Secondly, the study focuses specifically upon brand architecture concernsin a services environment. The subject of brand architecture has receivedlittle empirical attention generally, but even less so in a services context. Thusthe subject under scrutiny represents one deserving of further investigation

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and with the potential to yield important insights. McDonald, et al. (2001)suggested that services are requiring of a tailored approach to brandingstrategies. Olins, (1995) noted the importance of the decisions faced byservices firms in deciding whether to emphasise corporate or productspecific brands in their marketing efforts. More generally, Petromilli et al.(2002) suggest that many companies have trouble keeping their brandportfolio in order and, in addition, may lack clear brand architecturestrategies, both when building business generally and when acquiring andmerging.

Thus, empirical investigation into brand architecture in a services contextwill provide an insight into how organisations approach the management oftheir brand portfolios and whether reliance upon the corporate brand is, assuggested by the literature, the predominant approach. In addition, the studywill also help to highlight lessons from perceived good practice and fromstrategies which practitioners felt were less successful.

Methodology

This study incorporates a qualitative methodology, as suggested by Carson,et al. (2001) when attempting to generate depth of understanding. In-depth,semi-structured interviews were chosen as the research instrument. In-depthinterviews have been noted as perhaps the most fundamental of allqualitative research methods (Thietart 2001). Interviews were chosen as themost appropriate instrument in the initial stage of the research due toadvantages suggested by Marshall and Rossman, (1989), namely thatinterviews allow for large amounts of in-depth information to be collectedquickly and questions can be asked for immediate clarification. In terms of thedegree of structure, Thietart, (2001), suggests a balance between interviewstructure and flexibility to allow for clarification and exploration of emergingthemes. Thietart, (2001) further suggests that a checklist may be used as aloose structure for the interview, but that the researcher should allow fordeviations to follow interesting lines of argument and to allow for freeflowing discussion. In this manner, a semi-structured approach to the datagathering process was adopted in this study.

The context chosen for the study was retail financial services. This wasdeemed appropriate as according to Devlin, (1998), financial services areexcellent examples of highly intangible and often complex service offerings.In addition, the context of financial services has previously been usedextensively to illustrate and elucidate arguments relating to more generalservices marketing and branding (c.f. Devlin 1998; McDonald et al. 2001). Inaddition, McDonald et al. (2001) note the potential importance andchallenging nature of branding issues in financial services. Saunders and


Watters (1993) also study the growing importance of branding in financialservices, stressing the crucial role that brands play in financial servicesmarketing. Branding has, therefore, been highlighted as potentiallyimportant and challenging in financial services markets. Therefore, it issuggested that the retail financial services context provides an interestingcase study upon which to base investigation of the issues raised in this paper.

Table 1: Participants in Study

Role Brief Description of Company

Participant A Director responsible forCorporate Affairs

Participant B General Manager responsiblefor Marketing and Planning

Participant C Director responsible for GroupMarketing

Participant D Senior Manager responsible forMarketing Communications

Participant E

Participant F

Manager responsible forMarket Researcb

Director responsible forMarketing

Participant G Director responsible forbranding and e-marketing

Participant H Group Head responsible forbrands management

Bank and other financial servicesinstitution, non-quoted

Building Society developed fromregional roots, mutual

Large diversified PLC insuranceand otber financial servicescompany

Bank and otber financial servicesinstitution, PLC, previously abuilding society

Financial services function oflarge retail organisation, PLC

Financial services function oflarge grocery retail organisation,PLC

Clearing bank and otber financialservices institution, PLC

Large diversified PLC insuranceand otber financial servicescompany

Thus, in late summer 2001, eight semi-structured interviews were arrangedwith a range of industry practitioners familiar with branding and relatedstrategies. All practitioners were involved in the marketing function withinretail financial services organisations, primarily at the level of MarketingDirector or Marketing Manager. Full details are provided in Table 1, whichhas been worded in such a way as to protect anonymity whilst attempting toavoid confusion. The process for selecting the number of interviews took intoaccount the number required for common themes to emerge, allowingreasonably robust conclusions to be drawn. Other qualitative studies have

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incorporated similar sample sizes in order to produce high-level peer-assessed output in the management field (Bettencourt and Gwinner 1996;Fineman 1996; Taylor, et al. 1996; Dyck and Starke 1999). In addition, as canbeen seen from Table 1, the participants are drawn from a broad range ofinstitutions, including those best described as major clearing banks, buildingsocieties, ex-building societies, large diversified insurance companies andtwo "non-traditional" suppliers. The latter term covers such institutions asfood retailers and others which now operate in the financial services arena.Thus, encouragingly, those interviewed represent institutions which in sumencompass most main areas of financial services, giving the sample animpressive breadth of coverage. In addition, the recommendation of Carson,et al. (2001) to compare results across different contexts is met. The samplewas one of convenience, in that it was selected in the main from themembership of an industry-funded research group which sponsors researchprojects. The membership of this research group is drawn from a largevariety of institutions operating in financial services markets and thusprovided the opportunity to establish a sample that is representative of thevarious types of market participants.

The interviews lasted approximately one hour and a brief pro-formaguide was used. Subsequently, transcripts were produced and analysed. Theanalysis was carried out using a visual inspection and interpretation methodrather than relying upon a computer package, to allow the researcher toacquire a more complete and in-depth understanding of the data andcommon themes within it. In the course of the analysis, data concerned withsimilar issues was gathered together and in this manner many exemplarquotations were identified to aid analysis and discussion. Analysis wasinitially carried out "within case" with different themes being identified bydifferent colour coding. Themes included material related to brandarchitecture in financial services, as well as other areas to be reportedelsewhere. Then, during the second stage of the process, across case analysiswas carried out by gathering data on the various topics under investigationtogether in summary documents. This allowed the views of variouspractitioners to be compared and contrasted and emergent themes identified.Subsequently, results were presented to and discussed with a group ofpractitioners, including many of those who took part in the initial study.Such an approach is in line with that recommended by Carson, et al. (2001)and, importantly, helps confirm the reliability and validity of the findings.

Results are presented in the following section. As this project discussesbranding issues extensively, whilst seeking to protect the anonymity ofparticipants, particular challenges arise in presenting and discussing results.The convention used below is that the letters A to H are used to identify theparticipant/organisation as per Table 1 above. In addition a brief descriptor.


such as "sub-brand" or "high net-worth brand," may be added where it isjudged to aid comprehension. Thus confidentiality is protected whilst agreater understanding of the brands is facilitated. However, where aparticipant refers to a third party brand by way of example, that part of thequotation is provided unaltered.

In order to protect the integrity of the data, quotations are provided asspoken unless alteration is essential to ensure confidentially or to providecontext and enhance understanding. Although the grammar is occasionallyimperfect, as with all reported speech, it has only been corrected where suchcorrection is essential to aid comprehension. Substantial quotes areoccasionally employed, to provide the relevant context, an approach which isnot uncommon in the reporting of qualitative research. In this manner, therecommendation of Thiertart, (2001) to "let the data speak for itself" isheeded. Readers should note that where examples using actual companiesare given in the results section, this is not an indication of whether or notthose institutions participated in the research.

Results

The relevant literature suggests that the corporate branding approach to themanagement of brand architecture, rather than the endorsed or individuallybranded structure, is likely to prevail in services markets. The data revealsthat, although different terminology was used, some practitioners indeedidentified primarily with the corporate approach:

We have an over-arching brand. I mean, we had a couple of sub-names we toyedwith. Most of our things are product description so it's (Brand A Gold Card) orit might be a (Brand A Account Name 1) or a (Brand A Account Name 2), butit's (Brand A). (Participant A)

As participant A explains, although product descriptors may be used, thereis a marked reliance on one main brand, termed in this case an overarchingbrand. Similar sentiments were echoed by participants B and E:

It is really, (Brand B), (Brand B property services) which is a sub-brand but verysimilar, using the same sort of graphics as (Brand B) does. (Participant B)

It would just be, you know, personal loans from (Brand E) we only use (Brand E),that is as far as it goes in terms of branding. (Participant E)

Thus, some support was apparent for the corporate branded approach. Inaddition, it is evident that the one overarching corporate brand approach

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receives most support and is seen as most suitable by smaller, less diversifiedinstitutions and in non-traditional suppliers of financial services. Simplicityand the presence of strong core brand values to leverage were the primarydrivers the decision to brand in a corporate manner. It is conceded that thereare examples of very large and complex institutions tending towards thecorporate approach. However, and interestingly, the corporate brandedapproach did not emerge as the dominant brand architecture strategy, asdiscussed below.

At the other end of the spectrum, there was general agreement that theindividually branded structure, (i.e. service specific brands, such as theOrchard and Vector accounts previously offered by Midland Bank and evenendorsed service specific brands, such as Leeds Liquid Gold) are of limitedvalue:

/ wouldn't expect them [service specific brand namesj to have any saliency in themarket place.. .I'm trying to think of one [a service specific brand namej that'sworked...There aren't many, I'm really trying to think and I can't. (ParticipantA)

Participant A was extremely sceptical as to the value attached to servicespecific brand names and hence their usefulness in attracting consumers inthe marketplace. Others agreed:

It seemed like a good idea for about 10 minutes, we had an account called(Branded Account B) and things like that, but these were account names...We arevery committed to our brand being (Brand B) and our products sitting withinthat. That's a very conscious decision that we made...we believe there is muchmore mileage and ability to be able to drive a brand like (Brand B) rather thandevelop a product brand or whatever it might be, separate from that. (ParticipantB)

Participant B recalled that the individually branded approach was somewhatfashionable in retail financial services in the late 1980s and early 1990s in theUK, but stressed the current importance of the corporate brand. Participant Cwas even more candid in his assessment:

We've had things [service specific brandsj which I personally think are irritants. Ithink we had a little cluster of products we called (Service Specific Brand C).This is to me a waste of money, a waste of time, the attempt of a product managerto differentiate something that they produced and is really just an irritant.(Participant C)

Participant B also hinted that individual or sub brands may be introduced for


internal and politically motivated reasons, to mark one's territory and signalit internally. Participant D highlighted the risk of diluting the message of themain brand by using individual service or sub brands:

We used to do a lot of it and we do less of it now... we were just diluted effectivelywhat the (Brand D) brand should be...if (Brand D) stands for... better value,fairness, easier to use, then what does (to use a hypothetical example)(Brand D)'sOrchard account stand for then? Why would that be any different? (Participant

The risk of individual service brands and sub-brands causing confusion wasalso highlighted, a significant consideration in a market environment whereconsumer interest and understanding are limited:

By sub-branding you can offen obscure what it is you are trying to sell peoplebecause if the market is calling something (say) an ISA and you call it an OrchardI don't think its particularly helpful...What you need to do is make things clearand transparent to the customer and sub branding can mitigate against that.. .I'drather call a pension a pension. (Participant H)

Thus, it is apparent that the branding of specific services approach receivedlittle support from the interview participants.

Closer inspection of the data reveals that the brand architecture of mostinstitutions is more complex than the simple overall corporate or brandedapproaches, which is perhaps not surprising given real-world complexities.In addition, brand architecture strategies do not necessarily equate to whatcould be described as either an endorsed or sub-branded strategy. It shouldalso be remembered that, in a significant number of cases, the brandarchitecture of many institutions has resulted, at least partially, from one or aseries of mergers, each resulting in separate brands being retained. Forinstance, when the Halifax and Bank of Scotland merged recently thecorporate entity became HBOS. However, for the purposes of retailingfinancial services, both the Halifax and Bank of Scotland brands have beenretained. Likewise, when the Royal Bank of Scotland took over the NationalWestminster Bank, both brands were retained as separate entities. Otherexamples include Lloyd-TSB (a brand itself the product of a merger)retaining the Cheltenham and Gloucester and Scottish Widows brands andthe Abbey National keeping the Scottish Mutual brand. Such examples arenot truly corporate brand architecture strategies as they are predicated on theuse of more than one brand. Equally, they are not a branded approach, asindividual services may well not be branded separately, nor are they reallyexamples of endorsed or sub-brands. In essence, what is witnessed is afamily of main, or corporate, brands approach, almost a "house of brands" at

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the corporate level which could be described as "multi-corporate".The data provides both evidence of the multi-corporate approach to brand

architecture management and some interesting insights into the rationales formulti-corporate branding. Such insights can be related to the arguments ofAaker and Joachimsthaler, (2000) in support of adopting a house of brandsapproach. The first main rationale apparent from the research is the need forseparate brands to signal separate competencies to the marketplace. This wasa common perception of practitioners and a particularly prominent finding.Such an approach could be construed as similar to Aaker andJoachimsthaler's notion of "owning an association," also referred to asexpertise or heritage by certain participants. For instance:

Better value strategy is based around (Main Brand Gl) because it's therelationship and distribution brand, and then using our key competency brandsand to give us the breadth of bank assurance: (Main Brand Gl) being thecompetency in banking, (Main Brand Gl) being the competency in mortgages,(Main Brand G2>) being the competency in life pensions and investments.(Participant G)

Participant G elaborated upon the role of various brands within the brandarchitecture and continued by explairung that customer perceptions were thedriving force:

It comes back to the fact that in consumers' minds' banks do banking, insurancecompanies do insurance, and building societies do savings and mortgages. And ifyou try to be a bank assurance supplier, which we are, it is very, very difficult tostretch your banking brand across the total range of meeting customer needs.(Participant G)

Participant G explained his organisation's multi-corporate approach in somedetail, indicating that the brand architecture consisted of three main brands,each employed to signal distinctive competencies in particular areas offinancial services. Participant G was a strong advocate of the argument thatseparate brands are necessary to signal specialist competencies.

Participant H talked about expertise, heritage and reputation, usingarguments closely related to those made regarding competencies above.Once again, evidence of a multi-corporate approach to the management ofbrand architecture also emerges.

Expertise, (Main Brand HI) has a heritage in retail investment, (Main BrandHI) has a heritage in long to medium term savings products, (Main Brand H3)has a reputation of serving a particular community, which is the IFA community.So there are both distribution channel factors and they have a heritage in differentareas. (Participant H)


Participant C also provided evidence of a multi-corporate approach which isat least partially competence based:

If you own boats, it is the place to be, you want your yacht or boat insured, (MainBrand C5) is the place to be. They understand boats, and they have a competencewhich is product based, has a product route to it, rather than a relationship route.(Participant C)

And continued by explaining how a particular brand was introduced by theorganisation to help signal a competence in asset management:

{Main Brand C4) was invented by us, by the addition of the asset managementarms of (Main Brand C3) and the asset management arms of (Main Brand C2) toproduct a brand that had an asset management competence. (Participant C)

Participant D talked in terms of heritage, which could reasonably beinterpreted as having a history of competence in a particular area:

People's opinion of (Main Brand Dl) is predicated by its heritage, so we areprimarily linked to savings and mortgages and the building society heritage. Infact [customers will] choose it over most others. (Participant D)

Other participants expressed the view that different brands could be usefulin maintaining relationships with different groups of customers, bothgenerally and in post-merger situations:

I suppose my view again is that you've got two routes when you make thatmerger you either say, right, we'll have one super brand, or you keep the brandsseparate and run them separately. [You would keep brands separate] because thereare two separate markets you are going for and you can get a greater overallmarket share by doing it separately. (Participant A)

If there is a lot of customer association with a brand like say "Scottish Widows"or "Cheltenham and Gloucester" then, assuming that, that's a true brandassociation and one that you can leverage sensibly and profitably then that'sprobably more powerful. (Participant F)

Such an approach is obviously akin to the arguments of Aaker andJoachimsthaler (2000) that separate brands may be needed to retain orcapture different customer franchises and also related to the arguments ofDairOlmo Riley and de Chernatony, (2000) that the brand is important inserving as a relationship fulcrum.

Interestingly, it appears that some organisations see their brand

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architecture strategy as an amalgam of the relationship and competencysignalling strategies, as evidenced by the quote above from participant G, aswell as the following:

We currently operate a basket of brands where you could argue it's called a sunand planets type approach, whereby the sun is the major brand which isadvertised and communicated and has a relationship role with the customer, andthe planets may be brands that are quite famous through their history, [orj may bebrands that aren't so famous, but they operate more on a product deliveryplatform rather than a relationship platform, the reason being is that in themarket in which we operate relationships are key. (Participant C)

It just so happens if you then find that the marketplace actually wants an offeringwhich has a relationship with access to specialist competencies, then you can finda way through to both what the customer requires and wants and also somethingthat's economically sensible. (Participant C)

The mixture of the relationship brand and the competency-signalling brandapproaches normally involves one primary relationship or retailer brand thatis then used to distribute financial services of various other brands associatedwith a particular competence or product group. Participant C referred quiteneatly to such a situation as a "sun and planets" approach. The relationshipbrand in this arrangement may also have a competence in a particular area. Aparticipant commenting on the Lloyds-TSB approach provided an exampleof this approach:

They also have to span different competence areas and on balance have historicallynot been able to demonstrate a competence in the area that Scottish Widows havedemonstrated, so therefore it makes sense for them to retain the Scottish Widowsname and brand probably, but it is a competence brand rather than a relationshipbrand, whereas I think they are trying to build Lloyds-TSB into a relationshipbrand. (Participant C)

The split was also referred to as a retailer/manufacturer or retailer/productprovider split in some cases:

The (Main Brand C2) role is changing from being the retail brand to the productbrand.. .manufacturer brands and product brands are similar but I think it's quitepossible for a manufacturer to have several product brands (Participant C)

Brands are known for being product providers Ifor instancej Halifax sellsmortgages. Prudential sells insurance and pensions, Lloyds-TSB providesbanking services. But as organisations begin to become much more "multi-


product", companies must make the transition to become much more of an activebrand with the consumer, become much more "customer-centric" than"manufacturing-centric". (Participant H)

The other motivation highlighted for a multi-corporate approach tobranding, albeit less frequently, was that of having different brands fordifferent distribution channels:

I think 50% of (Main Brand G3) business comes from the IF A market, so thereyou have to make sure they don't confuse that channel, so it's a very carefulbalancing act, so it is not just a branding issue there's also business issues aroundit as well. (Participant G)

(Main Brand H3) has a reputation of serving a particular community which isthe IFA community. So there are both distribution channel factors and they havea heritage in different areas. (Participant H)

But in general, branding in retail financial services seems to have movedbeyond the "different brands for different channels" model:

I think the junior version of the beast would match brand to channel, so use thebrand as a means of avoiding channel conflict. We've been there, done that, gotthe T shirt and its not as simple as that, no! (Participant C)

Thus, with regard to strategies for managing brand architecture, the twoprimary motivations for adopting the common multi-corporate approach areto retain relationships with distinct groups of customers and to signaldistinct competencies to the marketplace. It should be noted that both ofthese motivations also apply potentially to post-merger situations, apertinent observation given the large number of mergers and acquisitionswhich have and continue to take place in financial services markets.Organisations may choose to retain separate brands in the post-merger brandfamily if they are associated with distinct competencies, or if it is felt that therelationships with customers would be damaged if brands were dropped orchanged. In this respect, an interesting half way house is the approachadopted by Lloyds and TSB who simply amalgamated both brands byadding a hyphen in between when they merged. Arguably, brandamalgamation has been less prevalent in retail financial services than otherareas of financial services (such as investment banking or accountancy) orother industries. This is probably due to the desire to retain customerrelationships with the separate brands which are assumed to have distinctpositions. However, despite the doubts expressed by some practitioners, theexperience of Lloyds-TSB suggests that retail financial services firms should

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perhaps consider brand amalgamation more frequently.Thus far, the study has provided useful insights into the brand

architecture strategies of retail financial services firms and has shown thatthe corporate brand approach is less prevalent than posited, with the mostpopular approach being more akin to a multi-corporate approach. However,a number of practitioners also acknowledged the challenges associated withformulating and implementing brand architecture strategies. Purelyanecdotally, it was interesting to hear just how often matters pertaining tobranding are currently "under review" or "being thought about". Someparticipants were more candid about the difficulties of putting theory intopractice:

(Main Brand DI) retail has a very clear understanding of its brand and itspositioning in the market, and when we consider branding, sub-branding orbranding our product lines, we do that on a very standard brand managementmodel to decide whether to enter a new market with a new association or we aretalking to existing customers with a different offer...But what the group doesn'thave is an idea of how to manage its brand portfolio, so what we have is asignificant number of brands that bang up against each other. (Participant D)

Participant C emphasised that pragmatic choices may not coincide with thosewhich may be theoretically the most desirable, indicating that the scale of thebusiness, the range of customer segments and the dynamics of the marketmay mitigate against using one main brand:

Two extreme options, one is a collection of unrelated, stand alone brands, theother extreme is a single mono brand, within that there are a variety of shades ofopinion and one of which is that a portfolio of equally important equallysupported consumer brands, is another option along that continuum. Thathistorically was a route that we felt was a sensible route however economically itmay not be possible given the scale of some of our businesses. So scale is animportant issue here for how many brands you have and how you use themappropriately, so is market dynamics and the segments that you want to operatein and the two issues do not always coincide in theory so therefore you have tomake practical pragmatic choices. (Participant C)

Thus, it is apparent that there is some evidence to suggest that a number offinancial services organisations are still grappling with the question of theappropriate approach to the management of their brand architecture, withsome even acknowledging there may be no such thing as a single mostsuitable approach. Notwithstanding such observations, findings indicate thatthe corporate branded approach to the management of brand architecture infinancial services, that of relying on one overarching brand in all areas is not


as prevalent as suggested in the services marketing literature. Institutionsthat tend towards the overall corporate approach are usually smaller, lessdiversified institutions and non-traditional suppliers of financial services.However, there are instances of some very large organisations adopting thecorporate approach. Arguably, HSBC and Citibank provide examples. At theother end of the branding spectrum, practitioners generally deem thepractice of branding individual financial services superfluous. Perhaps themost common approach to management of brand architecture to emerge is a"multi-corporate" approach with institutions having a family of main brandsto help maintain relationships with different customer groups and/or signaldistinct competencies.

Discussion and Implications

Previous literature (de Chernatony 2001; Berry 2000; Dobree and Page 1990;Lefkowith and Clark 1988) suggests that services firms, in their strategies formanaging brand architecture, are likely to adopt the corporate brandingapproach. The findings from this study show that in financial services, thisapproach is occasionally apparent but not particularly prevalent. Therelatively few institutions tending towards the one main corporate brandapproach appear, perhaps not surprisingly, to be smaller, less diversifiedinstitutions. Arguably there are exceptions with some very largeorganisations, such as HSBC or Citibank tending towards the one maincorporate brand approach. The main reasons cited for deviating from thecorporate branded approach were to n\aintain relationship franchises withdistinct customer groups and to signal distinctive competencies to themarketplace. An important implication derived from this finding is thatmanagers must ensure that their motivations for using more than one mainbrand are both well conceived and justified by consumer perceptions. This isessential as supporting more brands is usually more costly and thereforebenefits must accrue to justify such costs. Such a point is taken up below inthe discussion regarding the multi-corporate approach.

At the other end of the brand strategy spectrum is the branded approachto the managen\ent of brand architecture, which in the case of financialservices means having brands for individual or small groups of services. Thefindings of this study concurred with the arguments put forward in theprevious literature, with this approach receiving very little support frompractitioners and being largely dismissed as an irrelevance. Similarsentiments were expressed with regard to the use of sub-brands. Brandedapproaches generally were seen as a distraction from the main brand andlikely to confuse consumers rather than add to the overall brand essence ofthe offering. In addition, this approach was seen as potentially adding cost to

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the marketing budget without any obvious return. In the relatively few casesin which such an approach was adopted, it was not normally deemed asuccess. There was also a suggestion that such strategies may be driven to alarge extent by internal concerns, such as brand managers attempting tomark their territory and make their product or product group look differentand perhaps more important. Therefore, before embarking upon such astrategy, managers should be aware that such an approach has rarely yieldedsuccess in the past. Also, managers should be aware that both academictheory and the vast majority of practitioners are in agreement as to thelimited value of the branded approach in financial services. Managers mustensure that they are certain that an individual or sub-brand is effective inadding to the brand essence of the offering and should be clear as to exactlywhat value is being added in the eyes of consumers by the addition of thesub or individual brands. Managers should note that they must ensure thattheir perception as to the role and value of the sub or individual brand isinformed by the perceptions of consumers. Retaining a consumer focusshould help ensure that managers only attempt to sub or individually brandfor the correct, externally motivated reasons, rather than for predominantlyinternally, politically motivated ones.

The findings indicated that the most common approach to management ofbrand architecture in retail financial services is a "multi-corporate" one withinstitutions having a family of main brands in their brand portfolio, often inthe form of brands traditionally associated with separate companies. One ofmany examples would be Lloyds-TSB having Cheltenham and Gloucesterand Scottish Widows as core components of its brand architecture. The twomain motivations according to those responsible for formulating brandarchitecture strategy are to help maintain relationships with differentcustomer groups and/or signal distinct competencies. It is important to notethat both of these potential justifications also apply to post-merger situations,when brand strategists face brand architecture choices as to whether tomaintain, delete or possibly even amalgamate brands.

From a managerial perspective, the maintenance of separate brands mustbring benefits to offset the increased costs, both financial and other, ofmaintaining separate brands. When having separate brands in the brandportfolio in order to maintain relationships with different customerfranchises, managers must ensure that the case for maintaining separatebrands is proven, i.e. that rationalisation of the brand portfolio wouldweaken relationships. Both after merger, but also in an ongoing fashion,organisations face a choice. Either they maintain their complete brand family,or delete one or more brands and replace it with another existing brand oramalgamate brands in some way. All other things being equal, separatebrands should only be maintained if the strength of customer relationships


would otherwise suffer to a greater degree than the potential cost savingassociated with deleting the brand. To provide an example; when HSBCacquired the Midland Bank in the UK, it quickly deleted the Midland Bankbrand and replaced it with HSBC (as part of its overall brand strategy ofhaving mainly an overarching corporate brand). This move was greeted withscepticism from commentators as the time and some of the participants inthis study were still questioning the wisdom of such a move. However,provided the cost saving of no longer having to maintain the Midland brandmore than offsets the potential loss from the weakerung of the customerfranchise over time, then it is a sensible strategy. Managers need to considersuch matters, rather than automatically assuming that the maintenance ofbrands is essential, or that more brands are inherently better than fewer. Inparticular, managers need to heed the views of consumers in this respect. Itmay be the case that managers are assuming that consumers have a strongrelationship with a particular brand and that is used as a justification forkeeping the brand in the organisation's brand architecture. However, diligentresearch may reveal that the consumer franchise would not be adverselyeffected by brand deletion. This is a significant point as, given thewidespread consolidation which has taken place in financial services, therehas tended to be brand proliferation within many organisations' brandarchitectures. Due to vested interests and internal politics, the degree ofrationalisation may have been less than that acceptable to consumers in anumber of cases. Managers should not assume that customers will be upsetor somehow disenfranchised by brand rationalisations, they should establishconsumer perceptions on such issues.

Managers are also urged to consider options other than the bipolaralternatives of brand maintenance and brand deletion, such as brandamalgamation in some form. Such an approach is particularly prevalent aftermerger in professional services, such as accountancy, law and merchantbanking. However, it is arguably less in evidence in retail financial services.An exception is the case of Lloyds Bank and the Trustees Savings Bank (orTSB as it was commonly known). When these two firms merged they becameLloyds-TSB. All other things being equal, such a move either allows theorganisation to economise on the costs of maintaining two brands, or spendfar more on strengthening the one combined brand. The move was initiallygreeted with some scepticism, although most commentators would nowagree that the strategy has been a success. Some negative comment was stillapparent amongst participants of this study. Obviously, the attitudes ofconsumers is key in establishing whether there is scope for brandrationalisation or brand amalgamation. To an extent, such attitudes may becontext specific, for instance consumers may be more loath to accept thedemise of a brand with a strong regional bond.

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The other main rationale for maintaining a family of corporate brands in thebrand architecture, rather than one overarching brand, was to signal toconsumers distinctive competencies in providing different types of financialservices. An example would be Abbey National using the Scottish Mutualbrand in the provision of insurance related financial services. Such anapproach makes sense if consumers do not perceive that one brand can spanall of the areas of competence required to deliver the range of financialservices in an organisation's portfolio. A further requirement is that brandsare associated with, and are effective at, signalling distinctive competencies.In adopting such a strategy in the management of brand architecture,managers have implicitly assumed that consumers do believe that differentcompetencies are required to deliver different financial services effectivelyand that separate main brands within the brand architecture signal suchdiffering competencies effectively in the marketplace. Such assumptionsneed to be backed up with evidence that consumers do hold such views. Itmay well be the case that managers are spending a large amount of moneysupporting separate brands to signal distinct competencies, when in realityconsumers do not perceive the need for different competencies and, hence,separate brands. Thus managers may well be implementing brandarchitecture strategies which are significantly more complex and costly thanis necessary.

Limitations and Recommendations for Further Research

The primary limitation of this study is the fact that the context is confined tothe field of financial services. Thus, the generalisability of the findings maybe questionable. Such a point is acknowledged, however, it should be notedthat the financial services context has been used with success in the past toinvestigate branding and other marketing issues in services. Such a limitationdoes not invalidate or necessarily diminish the value of the results anddiscussion, but it does give rise to the one of the main recommendations forfurther research; to investigate similar matters in other services markets.Notwithstanding the acknowledged limitations, it is suggested that the papermakes a valid contribution to an area of interest to academics andpractitioners alike.

Conclusions

This study employed the context of retail financial services as a case study ofthe brand architecture of firms operating in a services environment. Thenotion of brand architecture relates to an organisation's design andmanagement of its brand portfolio and in particular the number of brands


within the portfolio and the relationship between them. Previous argumentsadvanced in the relevant literature suggested that services firms would relyprimarily on one overarching corporate brand. Findings from the currentstudy indicate a more complex picture in financial services. There was asmall amount of support for the corporate branded approach to themanagement of brand architecture and, as expected, very little support forthe use of individual brands or the large-scale use of sub-brands. However,the approach that received the most support from the data is a "multi-corporate" approach where a family of main brands are incorporated into anorganisation's brand architecture. The main rationales provided bypractitioners for adopting such an approach were to maintain a strongrelationship franchise with different customer groups and/or signal distinctcompetencies to the marketplace. The multi-corporate approach differs fromthat predicted by the literature and represents an important addition to theunderstanding of brand architecture in a services setting.

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About the Author

Dr James Devlin is Reader in Marketing at Nottingham University BusinessSchool. Upon graduating, Jim worked in private banking for a number ofyears before joining the University of Nottingham. During his academiccareer, Jim has also worked for City University, now Cass, Business Schooland has recently returned from a period of secondment to NottinghamUniversity Business School, Malaysia Campus. Jim continues to research andpublish in the area of retail financial services marketing and has publishedarticles in such journals as the European Journal of Marketing, Journal ofMarketing Management, Services Industries Journal, Strategic Marketing Journaland many others. In 1996 Jim was awarded the best paper prize at theAnnual UK Academy of Marketing Conference and in 1998 he won theaward for the best paper published in the European Journal of Marketing.

Brand Architecture - Case Study

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