PHARMA MARKETING IS ON THE CUSP OF A BIG CHANGE – IT’S THE BRAND ARCHITECTURE

PHARMA MARKETING IS ON THE CUSP OF A BIG CHANGE – IT’S THE BRAND ARCHITECTURE

Preamble

In March 1974 when I joined the pharmaceutical industry as a Medical Representative with an MNC, Carter-Wallace Ltd. we had just nine brands

Carisoma / Carisoma Compound

Colimex Drops

Diovol Tablets and Suspension

Dimol

Gravol

Miltown

Salazopyrin

Sensival

Walamycin

It seemed perfectly reasonable at the time to be a 'House of Brands'. Nine brands under one corporate umbrella, Carter-Wallace.

A similar 'House of Brands' strategy was employed by pharmaceutical giants like Pfizer, Glaxo, MSD, Abbott, E-Merck, Fulford, JB Chemicals, Alembic, and Sarabhai Chemicals, each boasting a modest portfolio of 12 to 18 products.

Fast forward to today, and Wallace Pharma (formerly Carter-Wallace) astoundingly has 136 brands on its website. The sheer number of brands from Alkem, Sun Pharma, Torrent, Intas, and Dr. Reddy's is equally mind-boggling and nearly impossible to tally.

Does the architectural model "House of Brands" remain a sustainable strategy for the future?

Before we delve into this, let us know a little about brand architecture, so we are on the same page. What’s the genesis of the word ‘brand architecture’?

The term "brand architecture" is borrowed from the field of architecture. Encyclopaedia Britannica defines architecture as the art and technique of designing and building, as distinguished from the skills associated with construction

In essence, architecture aims to fulfil both practical needs and artistic expression. This means it serves both functional and aesthetic purposes. While these two goals can be seen separately, they are inherently linked and their importance can vary.

When we talk about brand architecture, we're not referring to physical buildings. Instead, it's a metaphorical concept that involves designing and organizing a complex structure, like a company's complex product portfolio, to ensure everything is clear, functional, and coherent. This approach helps in managing a range of products effectively and presenting them in a unified and understandable way.

Why "Architecture" in "Brand Architecture"?

1.       Structure and Organization: Just as an architect designs a blueprint for a building, brand architecture refers to the structural organization of a company’s portfolio of brands, sub-brands, and products. The goal is to establish a clear and logical relationship between them, akin to creating a master plan for a complex physical structure.

2.       Foundation and Framework: In construction, a solid foundation and framework ensure stability. Similarly, brand architecture provides a foundational strategy for how brands interact and grow within an organization, ensuring stability and coherence in the marketplace.

3.       Visual and Strategic Alignment: Like an architect considers aesthetics and functionality, brand architects ensure that all brands within a portfolio align visually and strategically to maintain consistency and appeal.

4.       Navigation and Clarity: Just as a well-designed building is easy to navigate, a well-structured brand architecture helps customers and stakeholders understand the relationships between brands, making it easier to navigate the company’s offerings.

Evolution of the Term

The term likely emerged as marketing professionals borrowed analogies from other disciplines to explain abstract business concepts in easy and relatable terms.

Architecture provided a perfect metaphor for describing the intricate design and planning needed to build and manage a family of brands effectively. Over time, "brand architecture" became a specialized concept in marketing and business strategy.

Brand architecture

Brand architecture is a strategic framework that defines how different brands within a company are organized, structured, and related to each other.

Think of it like a family tree for a company's brands.

There are several common types of brand architecture:

1.       House of brands: Multiple separate brands under one corporate umbrella like our pharmaceutical brands. Another classic example outside the pharma industry is Hindustan Unilever like Surf Excel, Wheel, Lux, Lifebuoy, Dove, Hamam, Clinic Plus, Red Label, Taj Mahal Tea, and more

Currently, knowingly or unknowingly, a majority of pharma companies in India operate as ‘House of Brands’.

2.       Monolithic architecture (Branded House): One master brand with sub-brands like Maruti Suzuki cars with Maruti Alto, Maruti Alto K 10, Maruti Wagon R, Maruti Dzire, Maruti Fronx, Maruti Swift, Maruti Grand Vitara, Maruti Brezza, Maruti Ertiga and more.

Bata India is one more example. You have Bata Zappy, Bata Hush Puppies, Bata Red Label, Bata North Star, Bata Weinbrenner, Bata Sunshine, Bata Scholl, Bata Bubblegummers, Bata Ambassador, Bata Power and many more.  

3.       Endorsed architecture (Hybrid): A parent company supports individual brands. Combining elements of the branded house and house of brands, the hybrid model allows for greater flexibility. A prominent example is Tata Sampann. Tata Sampann uses this to promote dry fruits, makana, whole spices, food grains like chana, chana dal. Besan, green moong, organic urad dal and so on, Tata Salts has rock salt, pink salt, iodized salt, sea salt and more. It’s ‘House of Tata’ is the mother brand.  Besides Tata also owns Tata Motors, Tata Steel, TCS, Tata Hotels.

For strategic reasons, Tata also has concealed it origins for strategic reasons in Zudio, Croma, Jaguar Land Rover, Stellantis, Fiat Chrysler, Daewoo to name a few.  

The goal of brand architecture is to create clarity for consumers, maximize brand value, and help companies strategically manage their brand portfolio. It helps determine how brands are positioned, marketed, and how they interact with each other in the marketplace.

Good brand architecture makes it easier for customers to understand a company's offerings and can create synergies between different brands.

Brand architecture is a crucial concept that every growing company must understand. When businesses expand beyond a single product, they face important decisions about how to name and position their offering.

Let’s hear what the brand guru Jean-Noel Kapferer says in his book ‘Strategic Brand Management’ in the chapter on ‘Brand Architecture: Handling a Large Product Portfolio’.

Take a look at real-world examples. Have you noticed how some retailers like Croma create their own branded products using the store's name? Or consider how major Japanese companies like Toyota, Sony, and Panasonic consistently use their corporate name across different product lines? These strategies aren't coincidental—they're deliberate branding choices.

These approaches highlight a fundamental challenge in brand management: determining the relationship between a company's corporate identity and its individual product lines. As companies grow and diversify, - once they stop being just one product company, they must carefully decide how to leverage their brand equity across multiple products and markets.

Branding is more complex than it might seem at first glance. The World Organization for Industrial Property offers a foundational legal definition of a brand: it's essentially a unique symbol that sets one company's products apart from others.

Globally, a brand has two critical jobs:

- Differentiate products in the marketplace

- Signal where a product comes from

As a company grows and its product line expands, maintaining these two functions becomes increasingly challenging.

Imagine a small artisan bakery that starts with just one type of bread. It's easy to distinguish their product and communicate its origin. But what happens when they introduce cookies, cakes, and pastries? The brand's original clear identity can become muddled.

This is the branding puzzle that many successful companies must solve. How do you keep your brand distinctive and recognizable while continuing to innovate and expand? It requires careful strategy, consistent messaging, and a deep understanding of your brand's core identity.

For greenhorn brand managers, the key is to recognize that your brand is not just a logo or a name—it's a promise to your customers. As your company grows, that promise must remain clear, compelling, and consistent across all your products.

Why Pharma Companies Need to Rethink Their Brand Architecture

When a company starts expanding its product line-up, it faces a critical challenge: how to name and organize its products in a way that makes sense to everyone.

A smart brand architecture should do several key things:

1.       Create Clarity for All Stakeholders

Your branding strategy needs to be crystal clear, not just for your sales team, but for everyone who interacts with your products—whether they're doctors, patients, or customers. Think of it like creating a roadmap that anyone can understand at a glance.

2.       Establish a Logical System

The naming and branding should follow consistent rules that can be easily applied across different divisions of your company. This means your marketing team, sales team, and product development team can all work from the same playbook.

3.       Support both Short-Term and Long-Term Goals

A great brand architecture does double duty: it helps drive immediate sales while also building your brand's reputation over time. It's like planting a banyan tree. When young it provides shade to a few people today. As it grows bigger and stronger in future years it can provide shade To many more.

4.       Stay Flexible and Future-Ready

The best brand strategies anticipate change. They're designed to accommodate new products and evolving market trends, ensuring your brand remains adaptable and relevant.

Imagine your brand as a flexible framework that can grow and shift with your company, always maintaining its core identity while welcoming innovation.

For beginner brand managers, the key takeaway is this: your brand architecture is more than just a naming convention. It's a strategic tool that communicates your company's identity, supports your business objectives, and creates a clear path for future growth.

I'll highlight two prominent Indian pharmaceutical companies and their brand architectures:

1. Dr. Reddy's Laboratories

Dr. Reddy's showcases a sophisticated brand architecture that balances corporate identity with product-specific branding.

Corporate Strategy:

- Strong corporate branding across global markets

- Uses the parent company name for institutional and investor communications

- Develops distinct brand identities for different pharmaceutical segments

Product Branding Approach:

- Generic medicines marketed under specific brand names

- Prescription drugs with doctor-focused branding

- Over-the-counter (OTC) products with consumer-friendly names

- Separate branding for different therapeutic areas (cardiovascular, oncology, etc.)

2. Sun Pharmaceutical Industries

Sun Pharma represents another interesting model of brand architecture.

Corporate Strategy:

- Aggressive growth through strategic acquisitions

- Consolidated brand identity after merging multiple pharmaceutical companies

- Strong global presence while maintaining local market sensitivities

Product Branding Approach:

- Branded generics in domestic and international markets

- Separate product lines for different therapeutic segments

- Uses both corporate and product-specific branding strategies

- Distinct branding for specialty pharmaceuticals

Both companies demonstrate how Indian pharma firms navigate complex branding challenges by:

- Maintaining a strong corporate identity

- Creating flexible product-level branding

- Adapting to different market requirements

- Balancing global and local branding needs

Let me provide some concrete examples of brand architecture from Indian companies outside healthcare and pharma to help illustrate these principles:

1. Tata Group: A Masterclass in Brand Architecture

Tata is perhaps the most sophisticated example in India. They use a hybrid approach:

- Some brands prominently feature the Tata name (Tata Motors, Tata Steel)

- Others have distinct identities while maintaining a subtle Tata connection (Titan, Tanishq)

- Yet others operate almost independently (Jaguar Land Rover, Stellantis, and Fiat Chrysler which Tata owns),

This strategy allows Tata to leverage its corporate reputation while giving individual brands the flexibility to compete in their specific markets.

2. Reliance Industries: Branded Diversification

Reliance demonstrates how a conglomerate can create distinct yet connected brand identities:

- Reliance Jio (telecom)

- Reliance Retail

- Reliance Digital

- Reliance Fresh

Each brand carries the Reliance DNA but is clearly positioned for its specific market segment.

3. ITC Limited: Clever Product Branding

ITC brilliantly manages brands across multiple sectors:

- Food products like Sunfeast and Bingo

- Premium cigarettes under the India Kings brand

- Personal care products like Fiama and Vivel

- Stationery under the Classmate brand

Each brand operates independently while benefiting from ITC's corporate strength.

4. Godrej: Balancing Corporate and Product Brands

Godrej showcases another approach:

- Some products prominently use the Godrej name (Godrej Appliances)

- Others have more independent branding (Real Good Chicken, Nature's Basket)

- Their consumer products like Godrej No. 1 soap maintain a strong corporate connection

5. Mahindra Group: Flexible Brand Architecture

Mahindra demonstrates how a corporate brand can span diverse industries:

- Automotive (Mahindra & Mahindra)

- IT services (Tech Mahindra)

- Financial services (Mahindra Finance)

- Hospitality (Club Mahindra)

Key Learning’s for Brand Managers

- There's no one-size-fits-all approach

- Brand architecture should reflect your company's strategy

- Flexibility is crucial

- Corporate reputation can be an asset or a constraint

Reasons to change the current model - Why Pharma Companies Need to Rethink Their Current Model

When a company grows and adds more products, it faces a crucial challenge: how to name and organize its product line-up effectively.

A smart brand architecture needs to do several important things:

1. Create Crystal Clear Communication

The naming system should be so simple that everyone—from doctors to patients and the caregivers at home—can easily understand what the company offers. Think of it like creating a clear roadmap that anyone can follow at a glance.

2. Establish Consistent Rules

The branding approach must have logical rules that work across all company divions. This means your marketing, sales, and product teams are all speaking the same language.

3. Support Multiple Business Goals

A great brand architecture should:

- Boost short-term sales

- Build long-term brand value

- Create a recognizable identity across different products

4. Stay Flexible and Forward-Thinking

The best brand architectures are designed to:

- Anticipate future product developments

- Accommodate new product lines

- Remain relevant as the company evolves

Imagine your brand strategy as a flexible framework that can grow with your company, maintaining its core identity while welcoming innovation.

The key for brand managers is to see their brand architecture not just as a naming convention, but as a strategic tool that communicates the company's identity and future potential.

Conclusion

In the dynamic and competitive landscape of the Indian pharmaceutical industry, establishing a clear and cohesive brand architecture is paramount for long-term success.

If your decision is to trim down your product portfolio to ten to twelve brands, 'The House of Brands' architecture is undoubtedly the best. It would indeed be a great and bold decision to optimize your resources and focus on ten to twelve brands. Leverage the Pareto Principle to reach a decision. The next step is to introduce those products which become mega brands, the No. 1 or No. 2 brand in the category.

However, if you decide to continue with a large portfolio, endorsed architecture (hybrid) model emerges as an optimal strategy, seamlessly blending the credibility of a corporate brand with the individuality of its sub-brands. This approach empowers you to leverage the trust and reputation associated with your corporate identity while allowing sub-brands the flexibility to cater to specific therapeutic areas, markets, or patient needs.

By adopting this model, you can achieve a delicate balance between differentiation and consistency. It ensures that each sub-brand retains its unique identity and value proposition while benefiting from the parent company's established credibility. This alignment fosters stronger connections with doctors and patients, driving loyalty and trust.

Moreover, the endorsed architecture model supports scalability and adaptability in response to market dynamics. It provides a structured framework that simplifies portfolio management and enhances marketing efficiency, enabling organizations to address diverse market demands effectively.

Ultimately, this approach underscores your commitment to patient-centricity, innovation, and trustworthiness.

By strategically aligning brands under the endorsed model, you not only reinforce your market presence but also contribute meaningfully to improved health outcomes.