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House of Brands vs. Branded House

Most businesses feel the pressure to grow sales by launching brand extensions and brand adjacencies.

Marty Neumeier is a smarty-pants marketing/advertising guy. Heā€™s done lots and shared lots of great stuff in multiple must-read books. One of those must-read books is ZAG: The Number One Strategy of High-Performance Brands (2006). In it, Marty shares enduring advice on strategically growing a brand.

As we marketers know, most businesses feel the pressure to grow sales by launching brand extensions and brand adjacencies. And after a few brand extensions and brand adjacencies have launched, marketers are left with managing a portfolio of brands. This is where Marty helped me to better understand the strategy of brand portfolio management.

Marty explains…

ā€œThere are two main models for organizing brand portfolios. The first is a HOUSE OF BRANDS, meaning a company that markets a range of separate brand names (Procter & Gamble). The second model is a BRANDED HOUSE, meaning that the company itself is the brand, and its products or services are subsets of the main brand (Hewlett-Packard).

The advantage of a house of brands is that each brand is free to fight its battles on its own terms, unfettered by the meaning of the parent brand.

The advantage of a branded house is that all the products and services can share the same budget, customer, and market position.ā€


Marty is indeed a smarty-pants marketing/advertising guy, eh?