House of brands or branded house?

House of brands and branded house are two strategies regarding a brands architecture. Aaker and Joachimsthaler (1990) defines brand architecture as the organizing structure of the brand portifolio, defining the brands role and the relationship between them. In short a house of brands is when a brand is independent from the parent brand, whereas a branded house is when a brand is dependent. We can thus see that P&G is a prime example of a house of brands, with separate entities such as Head & Shoulders, Gillette. For branded house Virgin is a good example with Virgin Airlines and Virgin Records.

Rao et. al (2004) argues that a branded house is more efficient than a house of brands. How come? When one has a branded house, such as Virgin, one could leverage awareness and associations between entities. However, if the firm suffers a crisis it could potentially affect all brands. Let's say that Branson is charged with corruption, this could potentially affect consumers perception of all the Virgin brands. Whereas in a house of brands this would most likely never happen. In a house of brands the brands are separate entities where one could have specific positioning for each brand, avoid channel conflicts and have incongruent product categories. In such a house of brands could have brands with different concepts competing in the same environment, for instance a watch brand with a functional concept (cheap watches, bought primarily just to show time), and symbolic concept (expensive watches, implying status).

In recent times Unilever has decreased its number of brands from 1600 to 400 (!), and P&G has sold Pringles. Are we going towards times where we wish to be more efficient and leverage communication? It is most definitely less costly, and perhaps Branson is the one with the right strategy? What do you think?