Optimising brand architecture in a dynamic global environment: perspectives from brand practitioners Krista Maas de Villiers Student Number: 15389279 A research project submitted to the Gordon Institute of Business Science, University of Pretoria, in partial fulfilment of the requirements for the degree of Master in Business Administration. 7 November 2016 © University of Pretoria ABSTRACT Brand architecture, the way in which brands are organised and navigated, is a critical aspect of strategic branding. How firms organise their brands optimises their financial prosperity. Despite its importance, and although research in the field is evolving, limited research has been conducted in a dynamic global context. To respond to this need, both academic literature and brand practitioners call for the development of more flexible brand architecture models. The purpose of this research is to explore academic and brand practitioner perspectives on brand architecture. Qualitative, exploratory research was conducted to identify influencing factors which should be considered when designing an optimal brand architecture. A total of fifteen in-depth interviews were conducted with leading brand strategy consultants across North and South America, Europe, Africa, Australia and Asia in order to explore influencers of brand architecture choices, drivers of shifts in brand architecture as well as the notion that there exists a requirement for dynamic brand architecture. In answering the research question a number of themes emerged. Findings showed that dynamic brand architecture is indeed occurring in practice. Drivers of such development were further identified. Clear implications for practice as well as theory are discussed. Finally, a framework for optimal brand architecture was developed which proposes that brand architecture incorporates the drivers of both time and place in order to build a dynamic brand architecture that drives consumer-based brand equity and optimises business results. ii © University of Pretoria KEYWORDS Brand Architecture, Corporate Brand, International Branding iii © University of Pretoria DECLARATION I declare that this research project is my own work. It is submitted in partial fulfilment of the requirements for the degree of Master of Business Administration at the Gordon Institute of Business Science, University of Pretoria. It has not been submitted before for any degree or examination in any other University. I further declare that I have obtained the necessary authorisation and consent to carry out this research. _____________________________ Name _____________________ Date _____________________________ Signature iv © University of Pretoria CONTENTS 1 CHAPTER 1:PROBLEM DEFINITION AND PURPOSE ................................................................1 1.1 BACKGROUND TO THE RESEARCH PROBLEM ................................................................1 1.2 BUSINESS MOTIVATION .................................................................................................2 1.3 ACADEMIC MOTIVATION ...............................................................................................3 1.4 RESEARCH SCOPE ...........................................................................................................4 1.5 STRUCTURE OF THE REPORT ..........................................................................................4 2 CHAPTER 2: THEORY AND LITERATURE REVIEW ....................................................................6 2.1 INTRODUCTION ..............................................................................................................6 2.2 BRANDING ......................................................................................................................6 2.3 BRAND EQUITY ...............................................................................................................7 2.3.1 DEFINITION .............................................................................................................7 2.3.2 BENEFITS & DRIVERS ..............................................................................................8 2.3.3 APPROACHES ..........................................................................................................8 2.3.4 VALUE .....................................................................................................................9 2.4 CONSUMER-BASED BRAND EQUITY ............................................................................ 10 2.4.1 DEFINITION .......................................................................................................... 10 2.4.2 APPROACHES ....................................................................................................... 11 2.4.3 MEASURES ........................................................................................................... 11 2.4.4 MANAGING CONSUMER-BASED BRAND EQUITY ................................................ 12 2.5 BRAND ARCHITECTURE ............................................................................................... 12 2.5.1 DEFINITION .......................................................................................................... 12 2.5.2 APPROACHES TO BRAND ARCHITECTURE ........................................................... 13 2.6 INFLUENCERS OF BRAND ARCHITECTURE CHOICES .................................................... 17 2.6.1 CHOICES .............................................................................................................. 17 2.6.2 COUNTRY CULTURE AND BRAND ARCHITECTURE .............................................. 23 2.7 CONCLUSION ............................................................................................................... 27 3 CHAPTER 3: RESEARCH QUESTIONS .................................................................................... 28 4 CHAPTER 4: RESEARCH METHODOLOGY AND DESIGN ....................................................... 30 4.1 INTRODUCTION ........................................................................................................... 30 4.2 METHODOLOGY .......................................................................................................... 30 4.3 RESEARCH DESIGN ...................................................................................................... 31 4.4 POPULATION ............................................................................................................... 32 4.5 UNIT OF ANALYSIS ....................................................................................................... 33 4.6 SAMPLING METHOD AND SIZE .................................................................................... 33 V © University of Pretoria 4.7 MEASUREMENT INSTRUMENT .................................................................................... 33 4.8 DATA GATHERING PROCESS ........................................................................................ 34 4.9 ANALYSIS APPROACH .................................................................................................. 34 4.10 LIMITATIONS ............................................................................................................... 36 4.11 VALIDITY AND RELIABILITY .......................................................................................... 36 4.12 CONCLUSION ............................................................................................................... 37 5 CHAPTER 5: RESULTS ........................................................................................................... 38 5.1 RESPONDENT OVERVIEW AND SCOPE ........................................................................ 38 5.2 ANALYTICAL PROCESS ................................................................................................. 40 5.3 DEVISED DEFINITION ................................................................................................... 41 5.3.1 BRAND DEFINITION ............................................................................................. 41 5.3.2 BRAND ARCHITECTURE ESSENCE ........................................................................ 41 5.3.3 BRAND ARCHITECTURE DEFINITION.................................................................... 42 5.4 ARCHITECTURAL INFLUENCERS ................................................................................... 44 5.4.1 OVERVIEW ........................................................................................................... 44 5.4.2 COMPANY ............................................................................................................ 47 5.4.3 MARKET ............................................................................................................... 58 5.4.4 STAKEHOLDERS ................................................................................................... 60 5.4.5 BRAND ................................................................................................................. 62 5.4.6 EMERGING CONSIDERATIONS/CONCLUSION ..................................................... 66 5.5 DEVELOPING FLUIDITY ................................................................................................ 67 5.5.1 GLOBALISATION .................................................................................................. 68 5.5.2 CULTURE .............................................................................................................