Brand Portfolio Management

Brand Portfolio

The brand portfolio covers all different types of brands owned by the company or the ones that are in direct relation to other owned brands for catering to the needs of different groups of people. For instance, Coca-Cola Company’s brand portfolio subsumes soft drink brands such as Sprite, Fanta and Powerade in addition to its flagship beverage. The need for creating a brand portfolio arises since each brand has specific boundaries beyond which it cannot fulfil the needs of different market segments.

The brand segment involves organising all the brands into a systematic brand portfolio and also taking care of the complex interrelationships between the brands in the portfolios. The benefit of creating a brand portfolio is that the firm can keep a check on all the brands as a whole and create the policies with a broader perspective along with allocating the resources where they are required most.

The method of creating a portfolio is important for every company having multiple brands for ensuring that the firm’s overall group of brands is well coordinated as a whole. Well-managed brand portfolios are beneficial for the firm since it ensures internal efficiency and avoids consumer confusion by preventing methods of overlapping product development and marketing.

Categories Brand Portfolio

The brand portfolio has various categories for the brands as follows:

Fighter brand or flanker brand

This is when a new product is launched in the market by the company within the same category. It is launched in the market where an established brand is already positioned for increasing market share and for catering to the needs of the customers.

For example, Nike which is a well-established brand launches a new product of sub-category.

Cash cow brand

This is when the product in the brand portfolio has reached a certain maturity level in the product life cycle and it is still able to bring in profits required for its survival. These brands are not removed from the market because they bring in the required flow of cash through its sale.

For example, Honda Activa which has been in the market for long is still buoyed in the market.

Low-end entry level brand

A low-entry brand in a brand portfolio includes a product that is offered at a lesser price. These products are added to the portfolio for ensuring the purchase once and for including the customer into the brand family. When the customer becomes a part of the family, he is then persuaded for purchasing the higher-priced product in future.

For instance, Hero MotoCorp elucidates this concept precisely wherein low-priced motorbikes such as CD Dawn, CD Deluxe are added in the brand portfolio to expand the customer base along with the high end bikes such as Karizma, Ignitor, Impulse or Achiever.

High-end prestige brand

A high-end product brand in the brand portfolio is the product offered at a high price to create a sense of prestige in the minds of customers. It affects the other brands in the portfolio or product line as they too get recognition because of the premium brand and its quality.

For example, Tata explains high-end prestige branding, various brands running independently under its periphery to safeguard the sources of equity.

Portfolio Management Analysis

In today’s highly competitive global market, companies are pursuing multi-brand strategies based on product categories and geo-demographic segments. As a result, a company’s product mix across product categories and product lines is packed with numerous brands with slight differentiation. Such a business situation is characterised by brand turmoil within the product line, causing cannibalism of brands within the same company’s product line.

Therefore, some companies are aware of the need for systematic growth of brands in the market and are seeking to develop a brand portfolio by developing brands that are unique to geo-demographic and retail market segments. Companies provide brands with the space they need to grow with the right customer knowledge and branding capabilities.

A brand portfolio refers to the collection of smaller brands that fall under a larger, overarching ‘brand umbrella’ set by a firm, company, or conglomerate. For example, the Coca-Cola Company’s brand portfolio encompasses brands like Sprite, Fanta, and Powerade in addition to its flagship beverage.

Most companies have too many low-priority, low-impact brands to compete in a highly competitive market, making it difficult to create strong brands and develop effective marketing strategies. With an effective portfolio strategy, a product line that is clearly differentiated within the company contributes significantly to the brand’s dissemination.

Developing a brand portfolio strategy involves making decisions about adding or removing brands and categorising brands by product, market and value in use. In addition to differentiating brands by utility value and consumer preferences, the brand portfolio determines how strategic brands can be leveraged in competitive markets, with companies assigning roles and prioritising them. It also facilitates in assigning roles and establishing priorities.

The proliferation of brands not only across a company’s product lines, but also as an important business asset, has made branding an important part of corporate strategy. Located in the heart of any brand strategy is brand portfolio management the ability to organise all of a company’s brands into a cohesive brand portfolio and manage the complex interrelationships between brands in wallet.

This process has become important for any multi-brand company because the goal is to make sure not only the individual brands succeed, but the company as a whole. Well-curated brand portfolio creates benefits the business as a whole, whether it’s avoiding consumer confusion or ensuring efficiency by preventing overlapping investments in product development and/or marketing efforts.

The significant impact of brand portfolio decisions on key economic indicators of a company that highlight the importance of an effective brand portfolio management not only in the success of a marketing program, but also in the overall success of a society.

Brand Product Matrix

Brand product-matrix focuses on various activities for each brand and it helps with visualising all of the products for a brand and studying the product line as a whole. It helps businesses to assess the types of a product category that is available for consumers.

The main objective of creating a brand product matrix is to understand the brand-product relationship for creating a product marketing strategy and look for areas where the product line can be expanded. This form of a matrix is used by big corporations that have multiple brands and they can list all of the products for each brand and look at them collectively.

It helps the corporate with understanding the gaps in the product line and if there is an overlap and its relationship with the parent brand. The product-brand matrix helps the business entity with deciding whether or not to introduce a new brand for serving a specific market segment. Various brands are represented in rows and the columns represent the product category

The brand extension strategy of the firm is shown through the rows of the brand-product matrix that represent brand-product relationships and various products and their nature that are being sold under the brands of the business entity. The figure given above for the brand product matrix shows that each column represents each brand and the various product lines of the company portfolios within a single category.

The row represents the product categories and the breadth of each product category that the business covers. The depth of the brand product matrix is useful for analysing the market segments and product types a company covers in a particular category. Each sub-brand represents a different “personality” for different target markets and segments.

The breadth of the brand product matrix is useful in giving an overview of the product categories covered and each brand represents different types of products for consumers.

The brand product matrix helps businesses in the following manner:

By analysing and creating structures in business’ portfolios
Get a proper understanding of brands and future brand extension
Be able to evaluate and access the brand’s key features and differentiation from the competitors and it also provides flexibility for improvement for further product development
Helps with preventing brand clash where the businesses are offering the similar features or a product or service of an already existing brand.

Dimensions of Brand Portfolio Strategy

A brand portfolio strategy involves the design, deployment and management of multiple brands as a coordinated portfolio of meaningful-based assets that address the needs of diverse customers in a marketplace and maximise return while minimising risk.

The significant aspects involved in creating a firm’s brand portfolio strategy are related to:

Scope

It includes the number of brands offered and marketed by the firm and the different market segments in which it competes with these brands. It consists of brand categories, sub-categories and future scope.

Positioning

It refers to the master brands, endorser brands, sub-brands, driver roles and more. It involves the consumer’s perception regarding the quality and price of the firm’s brand.

Brand portfolio roles

It includes strategic brands, brand energisers, silver bullets, flanker brands, cash cow brands and more.

Portfolio structure

It of brand network and brand hierarchy. Brand portfolio models: It consists of the endorsed brands, sub-brands, branded house and house of brands.

Competition

It is the number of brands within the firm’s portfolio that compete with one another by being positioned equally and appealing to similar consumers.

The factors given above provide an effective scenario for creating a brand portfolio strategy that helps with:

Creating strong brands

The offering of strong brands is effective in connecting with the emotions and decision-making of the consumers along with providing effective differentiation.

Creating synergy

The brands help with creating a synergy of brands that strengthens the relationships resulting in cost efficiencies.

Providing clarity in product offerings

It helps with providing definite clarity among various product offerings for creating a clear identity among potential consumers.

Leverages brand equity

It helps with leveraging brand equity by increasing its impact and through brand extensions that help to realise the complete value of the brand. It provides a strong framework for dealing with the brand extension opportunities. Planning future growth: It creates a foundation for making strategic decisions for planning for the brand’s future in the marketplace.

Many large organisations have a portfolio of brands and there are two dimensions needed for managing the portfolio of these brands:

The breadth of product mix which involves the various product categories with their different nature linked with brands that are sold.
Depth of the branding involves the number and nature of various brands and product lines and models in a product category.

Brand Portfolios and Market Segmentation

A portfolio of brands is built by companies to meet the needs of the market through different brands that offer differentiated products and different identities. The composition of the brand portfolio reflects the type of market segmentation chosen by the company. A brand portfolio is an umbrella that includes the various brands or brand lines of a particular firm’s functions to serve the needs of the different target markets.

The balanced portfolio strategy for products helps with analysing the potential in the market for creating value-based propositions for market segmentation. It helps with converting prospects into customers by segmenting and funnelling them through personalised efforts. It helps with identifying customers that are willing to pay more for a particular service that they perceive as an added value.

Market segmentation helps with identifying targeted groups of con- sumers by putting them into groups or segments with common needs and who respond similarly to a marketing action and offer them tailor products and branding in a manner that attracts the group.

Market segmentation helps the firms to target different types of customers who perceive the value of certain products and services differently from the others. The segmentation of the markets helps the business to focus on understanding buyer motivations and repositioning their portfolios according to the value-based segmentation for higher returns. Including the value-based segmentation with the balanced brand portfolio strategy is effective in targeting the areas with significant growth potential.

Market segmentation is effective for organisations with minimising risks by strategically analysing products that are likely to earn a share of a target market and the effective ways to market and deliver those products in the markets.

The market segment is created based on these criteria to identify different market segments:

Based on homogeneity or common needs within a segment
By being distinctive or being unique from other groups
Based on reactions or a similar response to the market

By minimising risks and having clarity regarding the marketing and delivery of the products the company can focus its resources on the profitable options.

The markets can be segmented in several ways such as:

Geographically: Segmenting the markets according to region or area
Demographically: Creating market segments based on age, gender, family size, income or life cycle
Psycho-graphically: Building market segments based on social class, lifestyle or personality
Behaviourally: Segmenting the markets according to benefit, use or response

Multi-brand Strategies and Limitations

Multi-brand strategy is when the organisation sells two or more brands in the same product segment. The multi-brand strategy is normally created for different target groups or different price segments.

For example, Nestlé has a multi-brand portfolio of more than 2000 products. L’Oreal as a company has several brands in its portfolio. A company having a portfolio of brands can offer products with unique features and we offer our customers a wide range of choices and target specific customers or market segments.

For example, a cosmetics company that wants to produce both affordable and high-end products may sell products under different brand names to cater to different customer tastes and priorities.

More established and large corporations typically have the money and power to implement multi-brand strategies. Since a company usually specialises in a certain industry, it often has the capability of making a wide variety of similar products. The multi-brand strategy helps the business in making thoughtful and effective marketing and sales for attaining certain goals that help the business make more money.

If the brands are consistent with their purpose, good quality, images and messages it helps the customers to recognise and remember them. The business must create visual designs that make their brands visually distinctive and significant that help customers understand the differences and avoid any confusion. The various brands in the multi-brand strategy can appeal to and attract different customers and have an impact on their emotions. Over the long run, the firms need to be flexible, creative, innovative and move according to the trends.

Even though a multi-branding strategy can help the company be more profitable on the other hand releasing multiple products with the same brand name can also lead to many problems.

The limitations associated with a multi-brand strategy are:

Keeping brands distinctly different

It becomes challenging for organisations to keep all brands separate and have a strong identity for each one of them. While maintaining solid brand identities for each product at times it becomes difficult to distinguish all products from one another weak brand identity can lead to confusion with consumers especially when they see the different brands as interchangeable.

Profit-oriented company

The image of the company is viewed as a profit-seeking organisation and not as customer-oriented which damages the image of the company in the long run. It gives the company a bad image and the strategy can dilute the effectiveness of the brand name.

Loss of credibility

The firm loses its credibility if the consumers decide they do not want to purchase products from them anymore which will result in a negative impact on the sales. This can affect all the various goods that the business produces.

Quality standards

It is seen that the new products introduced in the markets do not match up to the standards of quality since the consumer expects a certain level of quality when they’re making a purchase. When the new product doesn’t live up to those same standards, people will ignore those products and give negative reviews.

Weak brand personality

The firms selling sell different products need to focus on building a strong brand personality for each brand. If the consumers do not connect with the brand they are less likely to purchase them.

Performance of the products

The firms need to analyse and evaluate if it’s worth investing more time and marketing efforts in lower performing products. A big disadvantage of having multiple brands is that one product may be more profitable than the others.

Case Study: Brand Portfolio Management at Gillete

Gillette is one brand that immediately reminds everyone of razors. Over the years, the brand has been popular for its safety razors and also offers shaving and personal care products. In 2005, in a merger, Gillette and Procter & Gamble were amalgamated. Initially, the assets of Gillette were assimilated into Procter & Gamble as Global Gillette.

To offer the best in quality, Gillette conducted a research to know the opinion of customers about the existing razors in the market. According to Gillette’s analysis of the customer market, the Indian market, till the 1990s, was dominated by disposable razors. It was also reported that customers were looking for a multipurpose cartridge razor. This provided Gillette an opportunity to focus on delivering its high-tech cartridge and disposable razors by providing three attributes – closeness, comfort and safety.

The brand also brought sensor razors with independently moving twin blades in the market. However, the price of the sensor razors was relatively high. The company specially focused on taking feedback from college students and professionals to know their opinion about sensor razors. After analysing their opinions, the company came out with a disposable sensor razor along with five free blades. This had a positive impact on the customers of that segment (students and professionals). As a result of this offer, many customers switched to Gillette.

In the Indian market, Gillette introduced its various products under different price segments. For example, Gillette’s Mach3 triple-blade razor was launched in the Indian market in 2004 and was kept at a premium price. However, the research on customer buying behaviour revealed that most Indian men still preferred skin irritation, took long shaving time and was generally unpleasant

Thereafter, in 2010, Gillette introduced its latest product offering, Gillette Guard razor, which it created especially for the Indian market and included more customised features. It was priced as low as Rs 15 per razor and also featured a refill cartridge at Rs 5 only. With these new changes, it managed to meet customer expectations on safety and ease of use. Thus, it was found that there was a significant rise in the customer buying behaviour.