Parents and children have special relationships, be they people or brands. From a brand architecture perspective parent brands are usually known as the “corporate brand” or even technically speaking the “holding company.” It is the originator and owner of what usually becomes the “family of brands,” with each family member dedicated to reaching and fulfilling a specific opportunity or need in the marketplace.
Today a brief brand architecture story to share. Back in the early 90s, not long after Nestlé had acquired the Carnation company it decided to start using the Nestlé brand as an endorsement on most of its products.
Scion, offshoot of Toyota and heir to the fortune, is dead. Sometimes criticized for its ugly appearance: “A car which can easily be mistaken for an abandoned fridge when parked,” it tried hard to be one of the cool kids. But, in the end, it didn’t make enough young friends, it cost its parents too much money, so they killed it.
Despite its continuing popularity, mergers and acquisition (M&A) has a terrible track record. Reviews find that the chance of an acquisition increasing shareholder value is no better than a flip of the coin.
A solid brand architecture strategy can significantly improve the odds of acquisition success. Given that the odds are no better than 50/50 (based on analysis of how many past acquisitions increased shareholder value), companies should make sure they have their brand architecture ducks in a row before they join the impending stampede to buy companies or brands.
