Journal of Marketing Management 200319,1043-1065

Brand Architecture in Services:

James Devlin
The Example of Retail Financial Services
The term "brand architecture" refers to an organisation's
approach to the design and management of its brand
portfolio. In particular, brand architecture decisions are
concerned with the number of brands to utilise, the role of
specific brands and the relationship between such brands. It
has been posited that services organisations tend to adopt a
corporate brand approach to the management of their brand
architecture, having a propensity to rely, in the main, on one
overarching brand. The study reported here investigates this
Nottingham contention in the context of financial services, using a
University Business number of semi-structured interviews with senior marketing
School managers. Findings indicate that although some support for
the corporate branded approach was apparent, the dominant
strategy is a "multi-corporate" approach, where the brand
architecture comprised a family of main brands. The main
motivations for such an approach are to maintain strong
relationship franchises with different customer groups and/or
to signal distinct competencies to the marketplace. As
expected, the data shows little support for the approach of
branding 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 services

context. Brand architecture refers to the nature of the brand spectrum utilised
by an organisation in its marketing efforts (Aaker and Joachimsthaler 2000).
In particular, brand architecture describes the number and nature of brands
employed and the relationship between each brand in the marketing of a
range of products or services. At one extreme, companies may employ one
overarching corporate brand, whilst at the other, individual product or
service brands may be used. In between there are various hybrid options (de

1 Correspondence: Dr James Devlin, Nottingham University Business School, Jubilee

Campus, Nottingham, NG8 IBB, E mail: James.Devlin@nottingham.ac.uk
ISSN0267-257X/2003/9-10/01043 + 22 £8.00 ©Westburn Publishers Ltd.
1044 James Devlin

Chernatony 2001; Aaker and Joachimsthaler 2000; Olins 1995). According to

Douglas, et al. (2001), it is imperative that managers design, implement and
maintain an harmonious and efficient brand architecture that spans all areas
of a firm's operation. In such a manner parsimony, as well as maximum
clarity and consistency, can be achieved cost effectively. However, according
to Petromilli, et al. 2002) many companies struggle to keep their brand
portfolios in order. This is perhaps not surprising as many organisations are
faced with increased market dynamism, customer fragmentation and
industry consolidation. Added to that, Petromilli, et al. (2002) suggest that
natural momentum, egos of senior management and the attraction of
acquisitions tend to produce an over-complex brand architecture in many
organisations.
However, the dominant proposition in the literature is that the brand
architecture of services firms will normally be relatively uncomplicated and
rudimentary, as services organisations tend to rely on the corporate branded
approach (de Chernatony 2001; Berry 2000; Dobree and Page 1990; Berry, et
al. 1988). This study makes a contribution by investigating empirically
whether the corporate branding approach is the dominant strategy in the
management of brand architecture adopted in a services context by eliciting
the views of practitioners, namely senior marketing and brand strategists in a
services environment. The study is important as empirical investigation of
brand architecture strategies is largely absent from the literature, as are the
views of industry practitioners. Insights will also be provided into the
justification and rationale for the various brand architecture strategies
employed as well as the practical considerations associated with brand
architecture management.
The paper proceeds in the traditional manner. In the following section the
main literature is reviewed before the methodology is explained. Results are
presented and discussed and implications explored. Finally, limitations are
acknowledged and avenues for further research highlighted, before
conclusions are drawn.

Literature Review
The study presented here is concerned with the appropriate brand
architecture for services markets. Thus, in the literature review section, it is
necessary to introduce and explain the notion of brand architecture before
focusing more specifically upon brand architecture in a services context.
Although the importance of brands in the marketing of services has been
highlighted by a number of writers (Berry 2000; Dall'Olmo Riley and de
Chernatony 2000; de Chernatony and Dall'Olmo Riley 1999; Dibb and Simkin
1993; Zeithaml 1981), far fewer studies have focused upon the nature of the
"brand architecture" adopted by services organisations.
 Brand Architecture in Services 1045

The term "brand architecture" refers to an organisation's approach to the

design and management of its brand portfolio (Aaker and Joachimsthaler
2000) and is defined by those authors as:

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

All "multi-offering" organisations face a choice as to whether to use one

single brand covering all products or services, a separate distinct stand-alone
brand for each offering, or some combination of these two extremes. Aaker
and Joachimsthaler (2000) use the term "branded house" to describe the
strategy where the master, or corporate, brand becomes by far the dominant
brand driver across multiple offerings, often in unrelated markets. An
organisation such as the Virgin Group tends towards such an approach. At
the other extreme is a "house of brands" strategy, which involves an
independent set of stand-alone brands each producing an optimum impact in
the 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 to
each other, is a house of brands strategy. Between, these two approaches, the
authors see a continuum encompassing "sub-brands", where the master
brand is the primary frame of reference but is augmented by additional
naming. Examples include Microsoft Office or Audi TT and "Endorsed
Brands", such as Obsession by Calvin Klein or Courtyard by Marriott. Aaker
and Joachimsthaler (2000) suggest that, in general, a branded house or
monolithic approach is more likely when the masterbrand has associations
that enhance the value proposition, is moved into an area where the
organisation appears credible and when there is the potential for
communication efficiencies. The branded approach is more likely when
separate brands are needed to create and own an association (often avoiding
the association of the master-brand) and to retain a customer brand bond.
The difference between an endorsed brand and a sub-brand is a subtle
one. 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 three
brand structures and termed them monolithic, endorsed and branded, which
is roughly similar to the schema of Aaker and Joachimsthaler, (2000), but
with 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. It
is apparent that de Chematony's concept of the corporate brand is closely
1046 James Devlin

related to those of the monolithic brand and branded house discussed above.
Equally, the individual product branding approach is akin to the branded
approach discussed by Olins, (1995) and the house of brands of Aaker and
Joachimsthaler, (2000). In between, there are strong and weak company
endorsement 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 product

endorsement endorsement branding

Importantly in terms of this study, elsewhere in the volume, de Chernatony

related the concept of the brand spectrum to branding in a financial services
context and postulated that a corporate brand approach to the management
of brand architecture is predominant in financial services markets. Berry,
(2000) stressed the importance of corporate branding to services markets
more generally. As Berry explained, in packaged goods markets the product
is the primary focus of the brand, whereas in services the company is the
primary focus of the brand. Although corporate branding is seen as
becoming more important generally (Balmer 1995), it is seen as having a
particularly 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 as
the brand and quoted Berry, Lefkowith and Clark, (1988) to illustrate that
consumers are likely to view all services offered by a company as
components of a single brand. Dall'Olmo Riley and de Chernatony, (2000)
added that the corporate brand forms the focus of the relationship building
efforts both inside and outside of a services organisation, in keeping with the
relationship focus of the analysis they present. McDonald, et al. (2001)
provide further detailed analysis of the prevalence of and challenges
associated with corporate branding in a services context. The authors are
equivocal in their conclusions. However, they suggested that corporate
branding may well form an appropriate focus for services markets due to the
importance of interactions between staff and customers in shaping brand
perceptions. In addition, Olins, (1995) suggests that while fast-moving
consumer goods brands often focus on individual products, service
companies must decide whether to build the brand on a specific product or
on the corporate brand.
In a financial services context, Denby-Jones, (1995) suggested that
 Brand Architecture in Services 1047

corporate brands tend to be important and Balmer and Wilkinson, (1991)

argued that a strong corporate image is perhaps the most effective form of
differentiation. Saunders and Watters, (1993) also studied the growing
importance of branding in financial services, stressing the crucial role that
brands play in financial services marketing. They further comment upon the
need for a coherent strategy with regard to corporate, divisional and
individual brands, illustrating various approaches. In common with
arguments advanced in favour of the importance of corporate brands in a
service context more generally, Milligan, (1995) argues that banking products
are more or less indistinguishable but that corporate branding can help
differentiate banking companies and their offerings. Others have argued
similarly that consumers show little interest in individual financial services
offerings, 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 individual
product brands, suggesting that the corporate brand may be particularly
important in situations where it is difficult to make a priori judgements.
Thus it is apparent that many authors postulate that an emphasis on the
corporate brand is the predominant approach to the management of brand
architecture for services organisations. However, although the link between
services and the corporate branding approach to the management of brand
architecture has been covered in the literature and argued in theory, far more
empirical investigation is required to establish whether it is the case in
practice. Most writing on the subject is based upon hypothesised trends and
conjecture. The main empirical work in the area (de Chernatony and Dall
Olmo'Riley 1998; de Chernatony and Dall'Olmo Riley 1999; Dall'Olmo Riley
and de Chernatony 2000) was centred on brand experts and not focused
specifically upon services or brand architecture concerns. Thus, the analysis
presented here contributes to current understanding in a number of ways.
Firstly, it elicits the opinions of senior managers from a services
environment. Industry practitioners are important stakeholders in decisions
regarding the management of brand architectures, not least as they are likely
to be responsible for deciding and implementing strategy (assuming that
there is one). The views of practitioners are also important as Dall'Olmo
Riley and de Chernatony, (2000) have suggested that the previous focus on
brand experts has been a significant limitation and that further research
focusing on managers, staff and consumers would yield an important
contribution to the branding literature
Secondly, the study focuses specifically upon brand architecture concerns
in a services environment. The subject of brand architecture has received
little empirical attention generally, but even less so in a services context. Thus
the subject under scrutiny represents one deserving of further investigation
1048 James Devlin

and with the potential to yield important insights. McDonald, et al. (2001)
suggested that services are requiring of a tailored approach to branding
strategies. Olins, (1995) noted the importance of the decisions faced by
services firms in deciding whether to emphasise corporate or product
specific brands in their marketing efforts. More generally, Petromilli et al.
(2002) suggest that many companies have trouble keeping their brand
portfolio in order and, in addition, may lack clear brand architecture
strategies, both when building business generally and when acquiring and
merging.
Thus, empirical investigation into brand architecture in a services context
will provide an insight into how organisations approach the management of
their brand portfolios and whether reliance upon the corporate brand is, as
suggested by the literature, the predominant approach. In addition, the study
will also help to highlight lessons from perceived good practice and from
strategies 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-depth
interviews have been noted as perhaps the most fundamental of all
qualitative research methods (Thietart 2001). Interviews were chosen as the
most appropriate instrument in the initial stage of the research due to
advantages suggested by Marshall and Rossman, (1989), namely that
interviews allow for large amounts of in-depth information to be collected
quickly and questions can be asked for immediate clarification. In terms of the
degree of structure, Thietart, (2001), suggests a balance between interview
structure and flexibility to allow for clarification and exploration of emerging
themes. Thietart, (2001) further suggests that a checklist may be used as a
loose structure for the interview, but that the researcher should allow for
deviations to follow interesting lines of argument and to allow for free
flowing discussion. In this manner, a semi-structured approach to the data
gathering process was adopted in this study.
The context chosen for the study was retail financial services. This was
deemed appropriate as according to Devlin, (1998), financial services are
excellent examples of highly intangible and often complex service offerings.
In addition, the context of financial services has previously been used
extensively to illustrate and elucidate arguments relating to more general
services marketing and branding (c.f. Devlin 1998; McDonald et al. 2001). In
addition, McDonald et al. (2001) note the potential importance and
challenging nature of branding issues in financial services. Saunders and
 Brand Architecture in Services 1049

Watters (1993) also study the growing importance of branding in financial

services, stressing the crucial role that brands play in financial services
marketing. Branding has, therefore, been highlighted as potentially
important and challenging in financial services markets. Therefore, it is
suggested that the retail financial services context provides an interesting
case 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 for
Corporate Affairs
Participant B General Manager responsible
for Marketing and Planning
Participant C Director responsible for Group
Marketing
Participant D Senior Manager responsible for
Marketing Communications
Participant E Manager responsible for
Market Researcb
Participant F Director responsible for
Marketing
Participant G Director responsible for
branding and e-marketing
Participant H Group Head responsible for
brands management
Bank and other financial services
institution, non-quoted
Building Society developed from
regional roots, mutual
Large diversified PLC insurance
and otber financial services
company
Bank and otber financial services
institution, PLC, previously a
building society
Financial services function of
large retail organisation, PLC
Financial services function of
large grocery retail organisation,
PLC
Clearing bank and otber financial
services institution, PLC
Large diversified PLC insurance
and otber financial services
company

Thus, in late summer 2001, eight semi-structured interviews were arranged

with a range of industry practitioners familiar with branding and related
strategies. All practitioners were involved in the marketing function within
retail financial services organisations, primarily at the level of Marketing
Director or Marketing Manager. Full details are provided in Table 1, which
has been worded in such a way as to protect anonymity whilst attempting to
avoid confusion. The process for selecting the number of interviews took into
account the number required for common themes to emerge, allowing
reasonably robust conclusions to be drawn. Other qualitative studies have
1050 James Devlin

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 can
been seen from Table 1, the participants are drawn from a broad range of
institutions, including those best described as major clearing banks, building
societies, ex-building societies, large diversified insurance companies and
two "non-traditional" suppliers. The latter term covers such institutions as
food retailers and others which now operate in the financial services arena.
Thus, encouragingly, those interviewed represent institutions which in sum
encompass most main areas of financial services, giving the sample an
impressive breadth of coverage. In addition, the recommendation of Carson,
et al. (2001) to compare results across different contexts is met. The sample
was one of convenience, in that it was selected in the main from the
membership of an industry-funded research group which sponsors research
projects. The membership of this research group is drawn from a large
variety of institutions operating in financial services markets and thus
provided the opportunity to establish a sample that is representative of the
various types of market participants.
The interviews lasted approximately one hour and a brief pro-forma
guide was used. Subsequently, transcripts were produced and analysed. The
analysis was carried out using a visual inspection and interpretation method
rather than relying upon a computer package, to allow the researcher to
acquire a more complete and in-depth understanding of the data and
common themes within it. In the course of the analysis, data concerned with
similar issues was gathered together and in this manner many exemplar
quotations were identified to aid analysis and discussion. Analysis was
initially carried out "within case" with different themes being identified by
different colour coding. Themes included material related to brand
architecture in financial services, as well as other areas to be reported
elsewhere. Then, during the second stage of the process, across case analysis
was carried out by gathering data on the various topics under investigation
together in summary documents. This allowed the views of various
practitioners to be compared and contrasted and emergent themes identified.
Subsequently, results were presented to and discussed with a group of
practitioners, 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 discusses
branding issues extensively, whilst seeking to protect the anonymity of
participants, particular challenges arise in presenting and discussing results.
The convention used below is that the letters A to H are used to identify the
participant/organisation as per Table 1 above. In addition a brief descriptor.
 Brand Architecture in Services 1051

such as "sub-brand" or "high net-worth brand," may be added where it is

judged to aid comprehension. Thus confidentiality is protected whilst a
greater understanding of the brands is facilitated. However, where a
participant refers to a third party brand by way of example, that part of the
quotation is provided unaltered.
In order to protect the integrity of the data, quotations are provided as
spoken unless alteration is essential to ensure confidentially or to provide
context and enhance understanding. Although the grammar is occasionally
imperfect, as with all reported speech, it has only been corrected where such
correction is essential to aid comprehension. Substantial quotes are
occasionally employed, to provide the relevant context, an approach which is
not uncommon in the reporting of qualitative research. In this manner, the
recommendation of Thiertart, (2001) to "let the data speak for itself" is
heeded. Readers should note that where examples using actual companies
are given in the results section, this is not an indication of whether or not
those institutions participated in the research.

Results

The relevant literature suggests that the corporate branding approach to the
management of brand architecture, rather than the endorsed or individually
branded structure, is likely to prevail in services markets. The data reveals
that, although different terminology was used, some practitioners indeed
identified primarily with the corporate approach:

We have an over-arching brand. I mean, we had a couple of sub-names we toyed

with. Most of our things are product description so it's (Brand A Gold Card) or
it might be a (Brand A Account Name 1) or a (Brand A Account Name 2), but
it's (Brand A). (Participant A)

As participant A explains, although product descriptors may be used, there

is a marked reliance on one main brand, termed in this case an overarching
brand. Similar sentiments were echoed by participants B and E:

It is really, (Brand B), (Brand B property services) which is a sub-brand but very
similar, 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. In
addition, it is evident that the one overarching corporate brand approach
1052 James Devlin

receives most support and is seen as most suitable by smaller, less diversified
institutions and in non-traditional suppliers of financial services. Simplicity
and the presence of strong core brand values to leverage were the primary
drivers the decision to brand in a corporate manner. It is conceded that there
are examples of very large and complex institutions tending towards the
corporate approach. However, and interestingly, the corporate branded
approach did not emerge as the dominant brand architecture strategy, as
discussed below.
At the other end of the spectrum, there was general agreement that the
individually branded structure, (i.e. service specific brands, such as the
Orchard and Vector accounts previously offered by Midland Bank and even
endorsed service specific brands, such as Leeds Liquid Gold) are of limited
value:

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

Participant A was extremely sceptical as to the value attached to service

specific brand names and hence their usefulness in attracting consumers in
the 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 are
very committed to our brand being (Brand B) and our products sitting within
that. That's a very conscious decision that we made...we believe there is much
more mileage and ability to be able to drive a brand like (Brand B) rather than
develop a product brand or whatever it might be, separate from that. (Participant
B)

Participant B recalled that the individually branded approach was somewhat

fashionable in retail financial services in the late 1980s and early 1990s in the
UK, but stressed the current importance of the corporate brand. Participant C
was even more candid in his assessment:

We've had things [service specific brandsj which I personally think are irritants. I
think 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 manager
to 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
 Brand Architecture in Services 1053

internal and politically motivated reasons, to mark one's territory and signal
it internally. Participant D highlighted the risk of diluting the message of the
main 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 effectively

what 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)'s
Orchard account stand for then? Why would that be any different? (Participant

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

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

Thus, it is apparent that the branding of specific services approach received

little support from the interview participants.
Closer inspection of the data reveals that the brand architecture of most
institutions is more complex than the simple overall corporate or branded
approaches, which is perhaps not surprising given real-world complexities.
In addition, brand architecture strategies do not necessarily equate to what
could be described as either an endorsed or sub-branded strategy. It should
also be remembered that, in a significant number of cases, the brand
architecture of many institutions has resulted, at least partially, from one or a
series of mergers, each resulting in separate brands being retained. For
instance, when the Halifax and Bank of Scotland merged recently the
corporate entity became HBOS. However, for the purposes of retailing
financial services, both the Halifax and Bank of Scotland brands have been
retained. Likewise, when the Royal Bank of Scotland took over the National
Westminster Bank, both brands were retained as separate entities. Other
examples include Lloyd-TSB (a brand itself the product of a merger)
retaining the Cheltenham and Gloucester and Scottish Widows brands and
the Abbey National keeping the Scottish Mutual brand. Such examples are
not truly corporate brand architecture strategies as they are predicated on the
use of more than one brand. Equally, they are not a branded approach, as
individual services may well not be branded separately, nor are they really
examples of endorsed or sub-brands. In essence, what is witnessed is a
family of main, or corporate, brands approach, almost a "house of brands" at
1054 James Devlin

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

Better value strategy is based around (Main Brand Gl) because it's the
relationship and distribution brand, and then using our key competency brands
and to give us the breadth of bank assurance: (Main Brand Gl) being the
competency 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 brand
architecture and continued by explairung that customer perceptions were the
driving force:

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

Participant G explained his organisation's multi-corporate approach in some

detail, indicating that the brand architecture consisted of three main brands,
each employed to signal distinctive competencies in particular areas of
financial services. Participant G was a strong advocate of the argument that
separate brands are necessary to signal specialist competencies.
Participant H talked about expertise, heritage and reputation, using
arguments closely related to those made regarding competencies above.
Once again, evidence of a multi-corporate approach to the management of
brand architecture also emerges.

Expertise, (Main Brand HI) has a heritage in retail investment, (Main Brand
HI) 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 different
areas. (Participant H)
 Brand Architecture in Services 1055

Participant C also provided evidence of a multi-corporate approach which is

at least partially competence based:

If you own boats, it is the place to be, you want your yacht or boat insured, (Main
Brand C5) is the place to be. They understand boats, and they have a competence
which 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 the

organisation to help signal a competence in asset management:

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

Participant D talked in terms of heritage, which could reasonably be

interpreted as having a history of competence in a particular area:

People's opinion of (Main Brand Dl) is predicated by its heritage, so we are

primarily linked to savings and mortgages and the building society heritage. In
fact [customers will] choose it over most others. (Participant D)

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

I suppose my view again is that you've got two routes when you make that
merger you either say, right, we'll have one super brand, or you keep the brands
separate and run them separately. [You would keep brands separate] because there
are two separate markets you are going for and you can get a greater overall
market 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 brand
association and one that you can leverage sensibly and profitably then that's
probably more powerful. (Participant F)

Such an approach is obviously akin to the arguments of Aaker and

Joachimsthaler (2000) that separate brands may be needed to retain or
capture different customer franchises and also related to the arguments of
DairOlmo Riley and de Chernatony, (2000) that the brand is important in
serving as a relationship fulcrum.
Interestingly, it appears that some organisations see their brand
1056 James Devlin

architecture strategy as an amalgam of the relationship and competency

signalling strategies, as evidenced by the quote above from participant G, as
well as the following:

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

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

The mixture of the relationship brand and the competency-signalling brand

approaches normally involves one primary relationship or retailer brand that
is then used to distribute financial services of various other brands associated
with a particular competence or product group. Participant C referred quite
neatly to such a situation as a "sun and planets" approach. The relationship
brand in this arrangement may also have a competence in a particular area. A
participant commenting on the Lloyds-TSB approach provided an example
of this approach:

They also have to span different competence areas and on balance have historically
not been able to demonstrate a competence in the area that Scottish Widows have
demonstrated, so therefore it makes sense for them to retain the Scottish Widows
name and brand probably, but it is a competence brand rather than a relationship
brand, whereas I think they are trying to build Lloyds-TSB into a relationship
brand. (Participant C)

The split was also referred to as a retailer/manufacturer or retailer/product

provider split in some cases:

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

Brands are known for being product providers Ifor instancej Halifax sells
mortgages. Prudential sells insurance and pensions, Lloyds-TSB provides
banking services. But as organisations begin to become much more "multi-
 Brand Architecture in Services 1057

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

The other motivation highlighted for a multi-corporate approach to

branding, albeit less frequently, was that of having different brands for
different distribution channels:

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

(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 different areas. (Participant H)

But in general, branding in retail financial services seems to have moved

beyond the "different brands for different channels" model:

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

Thus, with regard to strategies for managing brand architecture, the two
primary motivations for adopting the common multi-corporate approach are
to retain relationships with distinct groups of customers and to signal
distinct competencies to the marketplace. It should be noted that both of
these motivations also apply potentially to post-merger situations, a
pertinent observation given the large number of mergers and acquisitions
which have and continue to take place in financial services markets.
Organisations may choose to retain separate brands in the post-merger brand
family if they are associated with distinct competencies, or if it is felt that the
relationships with customers would be damaged if brands were dropped or
changed. In this respect, an interesting half way house is the approach
adopted by Lloyds and TSB who simply amalgamated both brands by
adding a hyphen in between when they merged. Arguably, brand
amalgamation has been less prevalent in retail financial services than other
areas of financial services (such as investment banking or accountancy) or
other industries. This is probably due to the desire to retain customer
relationships with the separate brands which are assumed to have distinct
positions. However, despite the doubts expressed by some practitioners, the
experience of Lloyds-TSB suggests that retail financial services firms should
1058 James Devlin

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 that
the corporate brand approach is less prevalent than posited, with the most
popular approach being more akin to a multi-corporate approach. However,
a number of practitioners also acknowledged the challenges associated with
formulating and implementing brand architecture strategies. Purely
anecdotally, it was interesting to hear just how often matters pertaining to
branding are currently "under review" or "being thought about". Some
participants were more candid about the difficulties of putting theory into
practice:

(Main Brand DI) retail has a very clear understanding of its brand and its
positioning in the market, and when we consider branding, sub-branding or
branding our product lines, we do that on a very standard brand management
model to decide whether to enter a new market with a new association or we are
talking to existing customers with a different offer...But what the group doesn't
have is an idea of how to manage its brand portfolio, so what we have is a
significant number of brands that bang up against each other. (Participant D)

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

Two extreme options, one is a collection of unrelated, stand alone brands, the
other extreme is a single mono brand, within that there are a variety of shades of
opinion and one of which is that a portfolio of equally important equally
supported consumer brands, is another option along that continuum. That
historically was a route that we felt was a sensible route however economically it
may not be possible given the scale of some of our businesses. So scale is an
important issue here for how many brands you have and how you use them
appropriately, so is market dynamics and the segments that you want to operate
in and the two issues do not always coincide in theory so therefore you have to
make practical pragmatic choices. (Participant C)

Thus, it is apparent that there is some evidence to suggest that a number of

financial services organisations are still grappling with the question of the
appropriate approach to the management of their brand architecture, with
some even acknowledging there may be no such thing as a single most
suitable approach. Notwithstanding such observations, findings indicate that
the corporate branded approach to the management of brand architecture in
financial services, that of relying on one overarching brand in all areas is not
 Brand Architecture in Services 1059

as prevalent as suggested in the services marketing literature. Institutions

that tend towards the overall corporate approach are usually smaller, less
diversified institutions and non-traditional suppliers of financial services.
However, there are instances of some very large organisations adopting the
corporate approach. Arguably, HSBC and Citibank provide examples. At the
other end of the branding spectrum, practitioners generally deem the
practice of branding individual financial services superfluous. Perhaps the
most common approach to management of brand architecture to emerge is a
"multi-corporate" approach with institutions having a family of main brands
to help maintain relationships with different customer groups and/or signal
distinct 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 for
managing brand architecture, are likely to adopt the corporate branding
approach. The findings from this study show that in financial services, this
approach is occasionally apparent but not particularly prevalent. The
relatively few institutions tending towards the one main corporate brand
approach appear, perhaps not surprisingly, to be smaller, less diversified
institutions. Arguably there are exceptions with some very large
organisations, such as HSBC or Citibank tending towards the one main
corporate brand approach. The main reasons cited for deviating from the
corporate branded approach were to n\aintain relationship franchises with
distinct customer groups and to signal distinctive competencies to the
marketplace. An important implication derived from this finding is that
managers must ensure that their motivations for using more than one main
brand are both well conceived and justified by consumer perceptions. This is
essential as supporting more brands is usually more costly and therefore
benefits must accrue to justify such costs. Such a point is taken up below in
the discussion regarding the multi-corporate approach.
At the other end of the brand strategy spectrum is the branded approach
to the managen\ent of brand architecture, which in the case of financial
services means having brands for individual or small groups of services. The
findings of this study concurred with the arguments put forward in the
previous literature, with this approach receiving very little support from
practitioners and being largely dismissed as an irrelevance. Similar
sentiments were expressed with regard to the use of sub-brands. Branded
approaches generally were seen as a distraction from the main brand and
likely to confuse consumers rather than add to the overall brand essence of
the offering. In addition, this approach was seen as potentially adding cost to
1060 James Devlin

the marketing budget without any obvious return. In the relatively few cases
in which such an approach was adopted, it was not normally deemed a
success. There was also a suggestion that such strategies may be driven to a
large extent by internal concerns, such as brand managers attempting to
mark their territory and make their product or product group look different
and perhaps more important. Therefore, before embarking upon such a
strategy, managers should be aware that such an approach has rarely yielded
success in the past. Also, managers should be aware that both academic
theory and the vast majority of practitioners are in agreement as to the
limited value of the branded approach in financial services. Managers must
ensure that they are certain that an individual or sub-brand is effective in
adding to the brand essence of the offering and should be clear as to exactly
what value is being added in the eyes of consumers by the addition of the
sub or individual brands. Managers should note that they must ensure that
their perception as to the role and value of the sub or individual brand is
informed by the perceptions of consumers. Retaining a consumer focus
should help ensure that managers only attempt to sub or individually brand
for the correct, externally motivated reasons, rather than for predominantly
internally, politically motivated ones.
The findings indicated that the most common approach to management of
brand architecture in retail financial services is a "multi-corporate" one with
institutions having a family of main brands in their brand portfolio, often in
the form of brands traditionally associated with separate companies. One of
many examples would be Lloyds-TSB having Cheltenham and Gloucester
and Scottish Widows as core components of its brand architecture. The two
main motivations according to those responsible for formulating brand
architecture strategy are to help maintain relationships with different
customer groups and/or signal distinct competencies. It is important to note
that both of these potential justifications also apply to post-merger situations,
when brand strategists face brand architecture choices as to whether to
maintain, delete or possibly even amalgamate brands.
From a managerial perspective, the maintenance of separate brands must
bring benefits to offset the increased costs, both financial and other, of
maintaining separate brands. When having separate brands in the brand
portfolio in order to maintain relationships with different customer
franchises, managers must ensure that the case for maintaining separate
brands is proven, i.e. that rationalisation of the brand portfolio would
weaken 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 or
amalgamate brands in some way. All other things being equal, separate
brands should only be maintained if the strength of customer relationships
 Brand Architecture in Services 1061

would otherwise suffer to a greater degree than the potential cost saving
associated with deleting the brand. To provide an example; when HSBC
acquired the Midland Bank in the UK, it quickly deleted the Midland Bank
brand and replaced it with HSBC (as part of its overall brand strategy of
having mainly an overarching corporate brand). This move was greeted with
scepticism from commentators as the time and some of the participants in
this study were still questioning the wisdom of such a move. However,
provided the cost saving of no longer having to maintain the Midland brand
more than offsets the potential loss from the weakerung of the customer
franchise over time, then it is a sensible strategy. Managers need to consider
such matters, rather than automatically assuming that the maintenance of
brands is essential, or that more brands are inherently better than fewer. In
particular, managers need to heed the views of consumers in this respect. It
may be the case that managers are assuming that consumers have a strong
relationship with a particular brand and that is used as a justification for
keeping the brand in the organisation's brand architecture. However, diligent
research may reveal that the consumer franchise would not be adversely
effected by brand deletion. This is a significant point as, given the
widespread consolidation which has taken place in financial services, there
has tended to be brand proliferation within many organisations' brand
architectures. Due to vested interests and internal politics, the degree of
rationalisation may have been less than that acceptable to consumers in a
number of cases. Managers should not assume that customers will be upset
or somehow disenfranchised by brand rationalisations, they should establish
consumer perceptions on such issues.
Managers are also urged to consider options other than the bipolar
alternatives of brand maintenance and brand deletion, such as brand
amalgamation in some form. Such an approach is particularly prevalent after
merger in professional services, such as accountancy, law and merchant
banking. However, it is arguably less in evidence in retail financial services.
An exception is the case of Lloyds Bank and the Trustees Savings Bank (or
TSB as it was commonly known). When these two firms merged they became
Lloyds-TSB. All other things being equal, such a move either allows the
organisation to economise on the costs of maintaining two brands, or spend
far more on strengthening the one combined brand. The move was initially
greeted with some scepticism, although most commentators would now
agree that the strategy has been a success. Some negative comment was still
apparent amongst participants of this study. Obviously, the attitudes of
consumers is key in establishing whether there is scope for brand
rationalisation or brand amalgamation. To an extent, such attitudes may be
context specific, for instance consumers may be more loath to accept the
demise of a brand with a strong regional bond.
1062 James Devlin

The other main rationale for maintaining a family of corporate brands in the
brand architecture, rather than one overarching brand, was to signal to
consumers distinctive competencies in providing different types of financial
services. An example would be Abbey National using the Scottish Mutual
brand in the provision of insurance related financial services. Such an
approach makes sense if consumers do not perceive that one brand can span
all of the areas of competence required to deliver the range of financial
services in an organisation's portfolio. A further requirement is that brands
are 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 different
competencies are required to deliver different financial services effectively
and that separate main brands within the brand architecture signal such
differing competencies effectively in the marketplace. Such assumptions
need to be backed up with evidence that consumers do hold such views. It
may well be the case that managers are spending a large amount of money
supporting separate brands to signal distinct competencies, when in reality
consumers do not perceive the need for different competencies and, hence,
separate brands. Thus managers may well be implementing brand
architecture strategies which are significantly more complex and costly than
is necessary.

Limitations and Recommendations for Further Research

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

Conclusions

This study employed the context of retail financial services as a case study of
the brand architecture of firms operating in a services environment. The
notion of brand architecture relates to an organisation's design and
management of its brand portfolio and in particular the number of brands
 Brand Architecture in Services 1063

within the portfolio and the relationship between them. Previous arguments
advanced in the relevant literature suggested that services firms would rely
primarily on one overarching corporate brand. Findings from the current
study indicate a more complex picture in financial services. There was a
small amount of support for the corporate branded approach to the
management of brand architecture and, as expected, very little support for
the 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 an
organisation's brand architecture. The main rationales provided by
practitioners for adopting such an approach were to maintain a strong
relationship franchise with different customer groups and/or signal distinct
competencies to the marketplace. The multi-corporate approach differs from
that predicted by the literature and represents an important addition to the
understanding of brand architecture in a services setting.

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About the Author

Dr James Devlin is Reader in Marketing at Nottingham University Business

School. Upon graduating, Jim worked in private banking for a number of
years before joining the University of Nottingham. During his academic
career, Jim has also worked for City University, now Cass, Business School
and has recently returned from a period of secondment to Nottingham
University Business School, Malaysia Campus. Jim continues to research and
publish in the area of retail financial services marketing and has published
articles in such journals as the European Journal of Marketing, Journal of
Marketing Management, Services Industries Journal, Strategic Marketing Journal
and many others. In 1996 Jim was awarded the best paper prize at the
Annual UK Academy of Marketing Conference and in 1998 he won the
award for the best paper published in the European Journal of Marketing.