Every single kind of brand, specifically brands, sub-brands in addition to co-brands in association with other companies, together comprises brand portfolio. For example, With 110 brands and 950 distinct kinds of packages, Hindustan Unilever Ltd. has a brand portfolio that encompasses several market settings such as personal care, beverages, health care, etc. Bearing in mind the portfolio point of view, a brand portfolio can be made strong by the inclusion of other brands. In the same way, recognising the unproductive brands and excluding them as they are of no use to the brand portfolio can also be an option. For example, Parle introduced new toothpaste in the market named “Prudent”. However, Parle had to discard it for its brand portfolio management as it was unsuccessful in developing enough customer base in the oral care market. Brand portfolio management is a comparatively new aspect of brand management that has gained more importance in last few years. The technique of handling and dealing with several brands in a firm is indicated by brand portfolio management. A portfolio refers to the set of brands of a firm. An aggregation of work and resources that are governed as a group to an extent that increases the total business value to the maximum possible level is usually called as a portfolio. Thus, handling all the brands as a group is referred to as brand portfolio management. It is beneficial to understand this concept as there are several firms that are having a lot of brands under their name. Instead of managing all the brands individually, the prime focus is on receiving something more by collective management of brands. However, it does not infer that the firm is no more in need of different brand or product managers but only one brand portfolio manager.
Types of Brands in Portfolio
It is imperative to find out about the portfolio roles of every single brand in order to develop effective and successful brand architecture. It offers a mechanism to view the brand portfolio in a more systematic and methodical manner. There are four kinds of brands in a portfolio namely; strategic brand, a silver bullet, a linchpin brand and a cash cow brand.
Strategic Brands: A brand that denotes a significant future sales and profit levels is called as a mega brand or a strategic brand. For example, Tata Group of companies has a strategic brand by the name of Tata Consultancy Services (TCS). Similarly, Levi’s has a strategic brand called as Slate.
Silver Bullet: A brand or sub-brand that has a favourable and effective impact on the image of another brand is known as silver bullet. For example, Forhan’s Fluoride, besides the only ‘protect gums and teeth’ attribute, positioned itself with the branded attribute of ‘being foamy’. This contributed to Forhan’s success. Another example is that of IBM’s public perception that got a noteworthy hike when IBM ThinkPad was introduced in the market.
Linchpin Brands: A linchpin brand serves as a point of leverage of a significant business sphere and is not similar to strategic brand as it does not inevitably indicate a worthwhile future sales and profit level. It offers a foundation or premise for customer loyalty as it inexplicitly affects a business. For example, Raymond’s brand extension, Park Avenue is a linchpin brand. This is because Park Avenue has boosted the main brand’s reliability and reputation by expanding into the segment Of men’s grooming and toiletries.
Cash Cow Brand: Due to a noteworthy loyal customer base, the cash cow brands do not demand for any investment contrary to strategic, linchpin and silver bullet brands that involve diligent management and for attaining their strategic and well thought out objective. Main function of a cash cow brand is creating marginal resources that will be helpful in making investments in other brands and are beneficial for dynamism and future growth and development of brand. Bathing soap, the basic product of Dove, for example, has expanded to a range of skin care and other associated products.
Brand Portfolio Structure
Every brand is connected with the other in a brand portfolio. Outlining a framework for all the brands is one of the most important functions of brand architecture. It helps in offering simplicity to the customer instead of uncertainty and intricacy. The company should be able to get a specific sense of purpose, Order and direction with the help of this framework. This brand portfolio framework can be presented by making use of the following three ways:
Brand Groupings: A rational organising of brands that have significant attributes in common is known as brand. With time, these groups help the brand portfolio to develop and offer rationality to it. For example, the following attributes can be considered to prepare the brand groupings in case of Johnson and Johnson Ltd.: Design (modern and classic), Segment (Infant care and intimate feminine care) and Product (pharmaceuticals and health care).
Brand Hierarchy Trees: The brand portfolio framework can at times be represented by brand hierarchy trees. Similar to an organisation chart, the brand hierarchy tree framework has both vertical as well as horizontal aspects. The vertical aspect illustrates the amount of brands and sub brands required for various market segments. Whereas, the horizontal aspect considers the sub brands and endorsed brands that come under a specific brand. An example of a very famous brand Colgate whose hierarchy tree for the Colgate oral care indicates that Colgate name includes toothpaste, dental floss, toothbrush and various other oral hygiene products. The category toothbrush can be further divided under different brands like classic, plus, precision, youth and colour change. Further, the toothbrush category Plus includes other brands such as ‘the wild ones’ and ‘diamond head’. An outlook useful in studying or examining the brand architecture is offered by the brand
hierarchy tree presentation. Both the people working in the firm as well as the customers are assisted by productive and successful brand architecture. Simplicity is created due to presence of a rational and objective hierarchy framework.
Brand Range: Determining the extent of portfolio brands also comes under the purview of brand architecture. Various issues and aspects such as the extent of stretching a mega brand or a sub brand horizontally and vertically in the brand hierarchy tree can be described through brand architecture This range can be explained for every brand in the brand portfolio that stretches across product categories or has the capability of doing so. Firms should study these aforesaid issues and aspects by differentiating between the brands in their function as a master brand as well as an endorser. It is also necessary to identify that co-brands and sub-brands can have a significant mle in leveraging brands.
Guidelines for Developing Brand Portfolio Strategy
An effective and cohesive brand portfolio strategy can be developed with the help of below mentioned directives or guidelines:
- Make Sure that Each Brand has a Well-Defined Role or Set of Roles to Play in Each Product-Market Context: With a view to be productive and successful within a particular role, it is essential for a brand to be actively controlled and managed. Brand building resources should especially be assigned based on these roles and not owing to the sales and profits that they generate. For example, linchpin brands (like General Motors’ ‘On-Star’ offers distinction to other brands), future master brands, endorser brands and forth coming brand platforms should get sufficient finance in order to carry out their functions.
- Identify the Strategic Brands that will Play a Driver Role in Supporting Major Businesses in Future: Brands that outline the usage experience and steer the buying decision are said to play ‘a driver role.’ The driver role Of a brand highlights the product offering and outlines its value and paves the way to compete in the market. The current or coming up Star player Of the business is the strategic brand, a brand that will determine amount of success the firm can achieve in future.
- Understand the Roles of Sub-Brands and Endorsed Brands when Deciding how to Brand a New Offering: The distance permitted by a sub-brand keeps on increasing starling from a master brand, moving on to endorsed brand and the maximum in case of a new brand. But it is necessary to understand the amount of distance actually required. Following are the three considerations that must be kept in mind while determining if a new brand is required and in branding new product offerings:
- Will the new product offering be enhanced through the present brands?
- Will the present brands be enhanced through the new product offering?
- What is the reason behind generating a new product offering?
Articulate the Business Strategy: The business strategy that enumerates the product market growth, development directions and the related value propositions is closely associated with brand portfolio strategy and therefore, a business strategy needs to be effectively formulated. These growth and development directions require the necessary support which is available when the brand is perfectly positioned. Specifically in priority product markets, reliability and visibility should be provided to new product offerings by the brands.
- Find or Create Branded Differentiators: A significant and effective point of distinction for a branded product offering over a prolonged span of time can be developed by actively handling the branded characteristics, constituents, services, technologies and schemes. For example, the Westin hotels have the Heavenly Bed as their branded differentiator.
- Create or Exploit Branded Energisers: A little more of dynamism and energy could be used by nearly all the brands. Well-known brands out of so many others present in the market particularly, might get weak and worn out. In such cases, branded energisers should be developed or utilised to give life to a specific brand. Such energisers could be a branded product, programme, symbol, sponsorship, promotion or any other object. Branded energisers can be managed by some other company (such as association of Home Depot with Habitat for Humanity) or by a company itself (like, The Avon Walk for Breast Cancer).
- Leverage Strong Brands through Brand Extensions: An organisation should search for expansion opportunities that Will be suitable and improve brand value through its customer base and associations. The brand should be enhanced by the expansion in terms of offering associations, clarity, energy, communication efficiencies and means of approach to growth and development. It is always necessarily better to create brand platforms with an insight for the quintessential brand future instead of bringing about impromptu brand expansions.
- Focus on Vertical Extensions: At times, when it is just not practical to develop a new brand, vertical extensions become essential even though they can be dicey and uncertain. But occasionally, an endorsed brand or sub-brand plan will decrease the associated threats of expanding a brand at the time of shifting into a new market. Entering a super-premium market also demands for similar requirements. Execution requires dealing With sensitive matters in both the cases.
- Corporate Brand can be a Powerful Master Brand or Endorser: A corporate brand can be a powerful master brand or endorser because it is distinctly adapted to gain the firm’s assets, legacy, expertise, value systems, human resource, performance and citizenship. Firms are hardly like each other although competitive products offered by the firms could be. Till the time a corporate brand is supporting something favourable and significant, it is a probable source of distinction.
- Reduce the Size of the Portfolio when Possible: A firm should refrain from including unnecessary brands. It is also necessary to remove such brands that have become irrelevant and contribute no more to the profits. Also, a brand should be downgraded 10 descriptor Status in case it is not able to perform its role as a driver or not able to get much acceptance.
An idea of a group of brands, their interpersonal relationship and their roles and functions is collectively known as brand portfolio strategy. It should be capable of providing visibility, synergy, energy, distinction, leverage and pertinence. A continuous endeavour to evaluate and enhance is often required to accomplish this objective.
Issues Related to Managing Brand Portfolio
There are many portfolio issues that are delicate on an organisational level and it requires a hardworking team to tackle them. Below described are few of such issues related to brand portfolio:
- Allocation Of Resources: Allocation of resources for all brands and functions is one of the delicate issues to be addressed and which includes meddling with the decentralised culture and framework that usually offers power and desirable dynamism for a firm. Mature brands and markets will undoubtedly receive surplus resources without scrutiny and regulation of the portfolio level, and this will result in scarcity of resources for future emerging markets and brands.
- Decision Whether to Add Brands or Sub-brands: It is observed that there is an organisation prejudice for including more brands and therefore, this decision should be made based on explicit instructions and directions. There is a tendency Of managers to blow up the potential and the uniqueness Of the probable product offerings. Also, the brand name represents their attachment to the product offerings, However, it is expensive for a firm to launch new brands in the market with regard to organisational, financial and managerial resources; and this expense keeps on increasing, as it is a future liability for the organisation that is included in the responsibilities for other brands.
- Deletion of Brands or Even Dialling them Down: There are certain brands which people and firms get immensely fond of and which becomes a representation of their position and indicator of the value of the activities conducted by the firm. Hence, eliminating a brand is very risky. In addition, it is invariably simple to find different grounds as to justify the significance of a brand’s equity and the reason it is dangerous to withdraw it. Furthermore, the firm certainly has a turnamund plan available at all times. It can be a demanding task for the firms to every time consider the prospect of the entire portfolio and the complete business strategy. Occasionally, organisations have to make some random decisions. For example, Unilever made a tyrannical decision to decrease its portfolio by removing 75 per cent of its brands.
- Leverage Brand by Extending it Horizontally or Vertically: Decisions of expansion of brands whether horizontally or vertically are made in a decentralised method in several firms. Even though the use of a specific brand can pose a threat to the equity of the firm, firms do take such decisions if they feel it can be beneficial for the overall growth and development. An organisation should be competent and ready to mediate to safeguard the brand. For example, an individual from the executive group of Nestle plays a role of brand champion for one of its significant international brands. This brand champion is obligated to ensure that the brand is not expanded into context in which its brand equity Will be devalued.
- Visual Presentation of the Brands: This issue deals with regulation of the visual brand presentation to ensure that they are demonstrated in a uniform manner leading to enhanced effectiveness. It is not often considered as a delicate matter but if not managed in an effective manner can lead the organisation to troubled grounds. Basic philosophies should be conveyed to employees who will be demonstrating the brand on a visual basis in the end. Those employees should be made aware of the available models and regulations that display the perfect colour, size, fonLs, and kinds that are essential to be utilised in each context. Also, the firm should appoint a certain group or an individual to comprehend and make sure there is uniformity in all the presentations of brand visuals.