How to Choose the Optimal Brand Architecture for a Group of Companies

At What Stage Does Architecture Become a Problem Rather Than a Formality

With two or three directions, the architecture can be left informal — the owner remembers what belongs to what. The problem arises with the fourth or fifth brand: customers confuse products, the sales department cannot explain to the procurement manager why there are two similar SKUs in the portfolio, and investors in due diligence ask questions that nobody in the company is ready to answer within five minutes. According to a study by Harvard Business School, companies with formalized brand architecture receive 3,5 times more market visibility than companies with a haphazard portfolio. The indicator is calculated through the share of mentions, search demand, and recognition of each portfolio asset relative to the category — that is, this is not about a nice presentation, but about a measurable difference in reach.

Three Models and the Difference in the Cost of Managing Each

There are three classic models, but real portfolios are almost always hybrid. The difference between them is not in design, but in the number of people and money needed to ensure the model does not collapse within a year.

Developing brand architecture in Russia costs from 250 to 950 thousand rubles — the range depends on the number of directions and the depth of the portfolio audit. If you need not only the architecture but also a portfolio strategy with a defined role for each brand, the budget starts from 650 thousand. One-time development is not the main expense item: maintaining a brand house with three assets requires three marketing teams, which results in a multiple, not a one-time, increase in the payroll fund. Companies usually do not count this figure before launching, and then cut the budget of one of the brands — and it quietly loses its position.

How to conduct a portfolio audit: six steps without skipping any

Most materials on brand architecture stop at describing models and do not provide an algorithm for a holding with heterogeneous directions. The working sequence we apply in projects looks like this:

1. Compile a full registry of assets — all brands, sub-brands, and product lines, including those that ended up in the portfolio through acquisitions and which the management company sometimes simply forgets about.
2. For each asset, define the target audience, price segment, and sales channel — without these three variables, further analysis makes no sense.
3. Build a matrix of audience intersections and find areas where two brands sell similar products to the same people — this is the cannibalization risk zone.
4. Assess reputational connectivity: if one brand gets into a scandal, will it pull the others along with it under the current visibility architecture?
5. Calculate the managerial load—how many people are physically needed for individual brand strategies and whether these people are already in the staff, not just in plans.
6. Assign each asset a role: growth driver, niche brand, defensive brand (blocking brand), or a candidate for merger with the parent brand.

Audience overlap determines the choice of model.

Weak audience intersection — for example, premium cosmetics and corporate B2B-training within one holding — eliminates the architecture question: customers do not see the connection between brands and should not see it, the brand house works without losses. If the audience is the same and the brands are simply called differently, this is a direct path to a brand house. Maintaining two parallel marketing efforts for the same audience is a pure waste of budget that does not yield market share growth, but only divides the existing audience between the company's own products.

Cannibalization coefficient: specific thresholds

Cannibalization is a situation in which sub-brands within a portfolio take sales from each other rather than from external competitors. The coefficient is calculated as the ratio of lost sales of one brand to the increase in sales of another within the same group. The range 0,3–0,5 is considered normal: some degree of intersection is inevitable and even helps retain customers within the company group. When the indicator exceeds 1, the company loses market share in a pure sense — all the growth of one brand is offset by losses of another, and the overall effect for the group is negative. With such an indicator, the solution is one of two: either separate the brands into different audiences and price segments or consolidate them under one umbrella.

When architecture is reviewed: three triggers

Architecture is not designed for decades ahead without review. Three situations that require returning to a portfolio audit: acquiring a company with its own brand and loyal audience, merging two or more structures, and changing the business model — for example, shifting from B2B to B2C. In each case, the previous portfolio logic no longer explains what the market sees.

Fast or gradual: the speed of migration is calculated, not guessed at by eye

Fast migration — a sharp transition to a master brand within a few weeks, justified in mature markets where customers quickly accept the new name if the service does not change at the moment of transition. Gradual — a stretched transition over months with the simultaneous existence of the old and new names, applied where the audience is sensitive to name changes and a sharp replacement provokes outflow.

The transition of Docdoc to SberZdorovye — is an example of a gradual scenario with a specific mechanism: for several months a warning about the name and logo change was displayed on the website, so that regular users would not mistake the resource for a phishing site or decide that the service had shut down. Without this step, the company risked losing part of its user base simply due to panic, not due to real dissatisfaction with the service.

After the triple merger, SIX Group consolidated a portfolio of more than 70 sub-brands into a single hybrid architecture and achieved 93% approval of the project among employees — a metric that is rarely seen in rebranding projects of this scale. The reason is that internal communication was structured as a separate track, parallel to the external one: employees understood the new portfolio logic before clients saw it, rather than learning about it from a press release together with the market.

Rules of architecture for mixed portfolios

The advice 'study the audience and calculate the resources' does not work literally if the portfolio simultaneously contains B2B-production and B2C-retail, or if premium and economy segments coexist. In such cases, more specific rules apply.

• B2B prefers brand ownership: buyers choose suppliers based on company history and contractual guarantees, not emotional attachment to the product name.
• B2C with emotional purchasing — food, services for individuals — works better in a brand house: end consumers rarely check who owns the brand, which frees up flexibility in positioning.
• Premium and economy in one portfolio almost always require name separation: transferring the name of the premium product to the budget line devalues the flagship faster than it gives a sales boost to the economy line.
• If premium and economy technically sell the same product—typical in banking services—endorsement works: mentioning the parent company in small print as a guarantee of reliability without visual brand merging.

Four mistakes that cost the most when choosing architecture

Choosing a model 'by beauty' is the most common mistake: a company copies the Unilever structure because it looks solid, not because portfolio audit has confirmed it. The second mistake is ignoring the managerial resource: the brand portfolio is chosen, but a year later it turns out that three separate marketing teams of the company are not up to the task, and one of the product lines begins to degrade due to insufficient funding. The third one is a sharp fast-migration where the audience is conservative and perceives the name change as the disappearance of a familiar service rather than as brand renewal. The fourth one is simply placing the acquired asset on the balance sheet without reviewing its role in the portfolio: without deciding who it reports to and for which audience it works, the brand either begins to cannibalize the parent product or slowly dies without budget and attention.