5 Secrets You Need to Know About Brand Portfolio Success

How do you know when you have too many variants in your brand portfolio? In my opinion, the answer is that it’s when you can’t answer that question! Can you?

One of the most popular evergreen posts on C3Centricity is “The Beginners Guide to Brand Portfolio Management.” It seems that we all suffer from a deep-rooted fear of managing and reducing our brand portfolio, especially when it includes many historic or regional variants.

That is why I decided to write about these best-kept secrets in portfolio management, which even large corporations are not always aware of!

 

MORE IS RARELY BETTER!

We live in an over-abundant world of consumer choice, but more is rarely better. The paradox of choice is a powerful concept  popularised by Barry Schwartz.

It states that people actually feel freer when they are given fewer choices. Have you never ended up walking out of a store without the purchase you had planned, because you had been faced with too many choices? I know I have – often!

It is said that the limited choice offered in hard discounters in one of the reasons for their success. It appears that it’s not only about lower prices.

Retailers such as Aldi and Lidl present just one or two brands of each category they stock, in addition to their own brand. The branded products they do sell are almost always the cheapest offering the brand has, or one of their older versions that are no longer very popular. And they are usually at the same price if not even higher than in normal supermarkets!

[bctt tweet=”In this over-abundant world of consumer choice, more is rarely better. #consumer #brand #Marketing ” username=”Denysech”]

More than fifteen years after the first research on which Schwartz based his theory was conducted, new studies have given some alternative perspectives on choice. They claim that large assortments are not always a bad thing. In the study by Gao & Simonson, they propose that there are many factors which were forgotten in Schwartz’s original study.

You can read the full findings of this latest work in Neuromarketing. What I found of particular interest in this article, being the customer champion that I am, is that they conclude by saying that it all depends on understanding your customer – doesn’t everything?! Their summary findings state that:

“In certain situations (when the ‘whether to buy’ decision comes before the ‘which option is best’ decision) a large assortment CAN increase purchase likelihood. Especially in eCommerce, it is possible to reap the benefits of a large product assortment, while helping customers make choices?”

In other words, the online searches that we all now perform before purchasing many articles, will benefit from a wide selection of offers. Once we have decided to buy, then a large choice can become a barrier to the final purchase.

Although Schwartz’s original book was published in 2006, he more recently commented on the current choices facing consumers in “The Paradox of Expanded Choices.” He concludes the article wistfully by saying:

“We can imagine a point at which the options would be so copious that even the world’s most ardent supporters of freedom of choice would begin to say, “enough already.” Unfortunately, that point of revulsion seems to recede endlessly into the future.”

Now I for one really enjoy shopping because I am always on the lookout for the latest introductions and innovations. For the more ordinary shopper, it looks like we need to help their decision-making by reducing the complexity of the task.

One requirement to achieving success, is clearly a deep understanding of your customers so that you can offer the best selection of variants to consumers in each region, if not by individual store. As I have so often mentioned (and sorry if I am boring you with this) it all comes back to knowing and understanding the customer. Simple really!

 

CORPORATIONS ARE BRANDS TOO!

Brand management is essential to a healthy business, but marketing has one of the quickest promotion ladders of many professions. That’s great news for marketers, less so for brands. Why? Well, because marketers want to make an impression and get that promotion as quickly as possible. And one of the easiest ways to do this is by launching a new brand or variant.

I believe this explains why we poor consumers often end up NOT buying something because we just can’t make up our minds between the vast choice of flavours, packs and sizes on display in some large supermarkets and hypermarkets. More is most definitely not always better when it comes to retailing, as I’ve already mentioned!

Does any brand really need tens of flavours/aromas or hundreds of variants?

[bctt tweet=”Does any brand really need tens of flavours/aromas or hundreds of variants? #Brand #Marketing #BrandPortfolio” username=”Denysech”]

To answer this, I decided to take a look at the latest table of leading global brands. According to Interbrand’s “Best Global Brands 2021

  1. Apple
  2. Amazon
  3. Microsoft
  4. Google
  5. Samsung
  6. Coca-Cola
  7. Toyota
  8. Mercedes-Benz
  9. McDonalds
  10. Disney
  11. Nike
  12. BMW
  13. Louis Vuitton
  14. Tesla
  15. Facebook
  16. Cisco
  17. Intel
  18. IBM
  19. Instagram
  20. SAP

Most of these brands certainly don’t have hundreds of variants from which to choose from and therefore the customer’s final selection is relatively easy.

However, interestingly only one of these companies is a CPG (consumer packaged goods) brand.

A couple of years ago Interbrand made a great summary chart (below) showing the value of the top 100 brands of 2019, which clearly shows the importance of the different sectors. You have to search to find the CPG brands – bottom right-hand corner!

Interbrand Top Brands 2019
Image source: Interbrand

Going back to the 2021 results, I decided to take a closer look at the sub-category of consumer brands. (Note: Interbrand still separates alcohol and beverages from CPG!) Here are the top 10 CPG brands, including beverages and alcohol):

  1. Coca-Cola (6)
  2. Pepsi (28)
  3. Budweiser (37)
  4. Nescafe (40)
  5. Pampers (44)
  6. L’Oreal (53)
  7. Gillette (61)
  8. Nestle (62)
  9. Danone (65)
  10. Colgate (68)

What immediately strikes me is that many of these brands are actually also the names of the corporations who make them. This might explain why few consumer goods companies appear in this list, because they just have (far?!) too many brands and variants.

A few of the larger CPGs – like Unilever and Nestle – have started associating their company name more prominently with their brands. However, they have taken two very different approaches.

Unilever places its corporate logo on the back face of their product’s packaging, leaving the brand logo as the hero on the front. Nestle, on the other hand, incorporates its logo into the front panel design of most of its brands. There are a few noticeable exceptions which include their waters and Purina petcare brands. Both of these were run as stand-alone businesses in the past, which might explain this.

I am assuming that both organisations chose to prominently display their company logo in addition to the brand, in order to increase corporate reputation and also consumer trust, especially for their lesser-known brands. Interestingly, Unilever is not amongst the top 100 brands of 2019, so perhaps the addition on the back panel is too discrete to have any real impact?

I am closely watching to see if this strategy results in increased loyalty in the long-term, because for now their performances are not demonstrating a positive return. Their latest P/E ratios are both significantly lower than that of the S&P 500 average of 24.07.


If you’d like to measure the relationship between your brands and your corporate brand, then we should talk.


BUSINESSES ARE FOCUSING BETTER

An interesting trend in the past decade or so, is that some CPG leaders, such as P&G, Unilever and Nestle have significantly culled the number of their brands’ SKUs. In some cases, this has meant reducing them from thousands down to “mere” hundreds and they continue to do so on a regular basis.

Taking Pareto’s Principle as a guide, it should be relatively easy to cut the bottom 5%, 10% or even 20% of brand variants without losing significant share. This is why these companies continue to do this frequently; it makes good business sense.

Going back to Interbrand’s latest report, they mention that the fastest risers, led by Tesla, significantly outperformed other brands on three factors:

  • Direction
  • Agility
  • Participation

The most successful companies set a clear mission and vision, to ensure that the entire organisation knows where they’re going. And they bring new products and services to market much more quickly and when necessary, pivot to account for the rapidly changing customer needs.

Brand management has become far more challenging in recent years exactly because consumers are changing faster than ever. However, what is surprising is that most CPG giants still don’t evolve fast enough, which is why they are being challenged by the more flexible and agile startups!

But they are going to have to change if they want to stay in the race. For now, it appears that they know theoretically that they should be better focusing their portfolio and making frequent adjustments in line with their consumers’ changes. But in the end, they don’t go far enough, perhaps because they’re scared of losing share.

If you are struggling to make the difficult decision of culling variants in your portfolio yourself, then perhaps I can provide a few reasons to convince you to make that much-needed pruning:

  • Those multiplications of flavours, aromas, packaging etc you are making are renovations, not innovations. Wake up marketers, you are not innovating! Renovations should be primarily replacements of less successful offers, not additions to your already over-extended brand.
  • Retailers can’t stock every variant, so the more you offer the less chance you have of getting wide distribution. Think back to your pre-launch market assumptions; I bet they included a wildly exaggerated level of distribution in order to get that precious launch approval!
  • Precise targeting and a deep understanding of your consumers are the most successful ways to limit SKU explosion. If you are suffering from too many variants, then perhaps you should go back and review what you know about your consumers and what they really need.

Arguably some categories need constant renovation (food and cosmetics to name just a couple) but even that’s no excuse for simply multiplying SKUs. Use the “one in, one out” rule I mentioned above, because if you don’t, the retailer probably will. And with little concern for your own plans and preferences.

[bctt tweet=”Renovations should be replacements of less successful offers, not additions to your already over-extended brand. Otherwise you end up confusing your customers with too much choice. #Brand #Marketing #Portfolio” username=”Denysech”]

THE 5 SECRETS

In conclusion, to summarise the best strategies for brand portfolio management, which seem to be a well-guarded secret since many corporations still ignore them, are:

  1. Remember, that if you offer a vast choice of variants for each brand, consumers could get analysis paralysis and end up walking out of the store without buying anything.
  2. You need to manage the corporate brand just as you do your other brands, especially if it appears prominently on packaging or your other communications’ materials.
  3. Make an annual review of all your brands and variants and ruthlessly cut the bottom 20%. If you want to keep any of them, then you must have a good reason – such as that it’s a recent launch – and a plan to actively support them.
  4. Innovate less but better. Be more targeted with each innovation and include your consumers in their development.
  5. Be realistic in your distribution targets. Know what will sell where and why. Not only are you more likely to keep your share, but you’ll also make friends with your retailers.

 

Coming back to the leading consumer brands from the Interbrands’ list, all top ten excel in brand portfolio strategies that are precisely differentiated, clearly targeted and well communicated.

David Aaker wrote an article on L’Oreal a few years ago that explains the above theories very well. Even if it’s from December 2013, not much has changed and it still makes a great read; highly recommended.

I believe that most brands with tens or hundreds of variants in a market, are being managed by lazy marketers. People who don’t have the courage to manage their brands effectively by regularly trimming their poorest performers. They must face up to the lack of success of some of their “babies”.

Are you one of these marketers? What’s your excuse? I’d love to hear your reasons for keeping all your SKUs.


Need help in cleaning up your brand portfolio, so you can put your efforts where they will bring the most return?

Let’s talk; contact me here.

How People Recognise Brands: I Can Guarantee It’s Not What You’re Thinking!

How do you think people recognise your brand? Is it by its logo, its colour, its pack, its jingle? Well, you may be surprised to learn these are all only pieces of the puzzle. A brand is a combination of elements, that together make it recognisable. But consistency and compatibility are often the two missing parts that are most often forgotten in building a brand.

Before I get started, I would like to suggest that you read a highly popular post on the topic of brand image here on C3Centricity, if you missed it before. It’s called “What Every Marketer Needs to Know about Brand Image, Equity, Personality & Archetypes” and will give you some great background information.

It covers the topic of brand image metrics in quite some depth, so is a great primer. But I feel that there is so much more to brand recognition that needs to be considered, than the elements that I mentioned in that post.

For example, more and more brands today additionally rely on a face, a voice, an aroma, a unique packaging style, a slogan or a sound that immediately identifies them. And when they do, their brand image gains in depth as well as emotional engagement.

In fact I believe that brands that lack connection with their customers are missing these powerful additions. They rely on mere basics to build their brand’s image, but they are no longer sufficient in today’s online -dare I say virtual? – world.

So here is my very personal perspective on some of the best examples in each of the additional areas I just mentioned. Feel free to add your own in the comments.

FACE

Progressive’s Flo and Dr Rick

Some of the faces which represent brands are of celebrities, while others are of unknown people who become celebrities thanks to the brand’s advertising.

One of the first faces I think of for a brand is Flo from Progressive. She won the hearts of Americans, ever since she was first introduced in 2008, with her helpful but quirky discussions with potential customers.

Flo made insurance less confusing and more friendly through her “girl next door” looks and sparky attitude.

In 2012, an animated box was added to their campaign concepts, to represent the company’s products in what was hoped to be a more fun and young-spirited way. Apparently, the vast number of ads with Flo – over 100 – had resulted in a “love her or hate her” relationship, but the box didn’t have the success of Flo.

About five years ago Progressive finally found the answer to attracting younger adults, coming out in 2017 with the “Group session” ads, one of which you can watch below. These were later morphed into self-help sessions with a group leader called Rick, who comes back in 2021 as Dr Rick (see more below). 

Dr Rick claimed to help the younger adult target group Progressive wanted to attract by claiming to help them from becoming their parents. The “On call” campaign was born and appears to have succeeded where the animated box didn’t.

 

With the replacement of long-standing, award-winning CMO Jeff Charney by Remi Kent, former senior VP and global CMO of the consumer business group at 3M, we’ll have to see where Kent takes the brand going forward.

 

Nespresso

George Clooney has been the face of Nespresso for many, many years, in fact since 2006. He started off as a smooth and superior man-about-town; the type of man many women would love to be with and men would love to be. But over the years he has become far more approachable, even funny.

This new style means that the ads are always entertaining, even for non-Nespresso drinkers. In one of the latest, a Game of Thrones-inspired commercial featuring Nathalie Dormer, Clooney plays a knight who slays the dreaded dragon. When the medieval queen asks what he wants for saving the kingdom, he doesn’t reply but heads off to New York. “Tis all I desire,” he says as he returns to the palace with a cup of Nespresso in his hand. (See video below, thanks to Madame Figaro)

I wonder if like Progressive, Nestle is trying to open the appeal of its Nespresso brand to younger coffee drinkers through the use of more humour. Perhaps they are (also) hoping that the videos get shared on social media. Can we expect cats too in the future?!!

But humour is only one way to attract younger adults. Today they are very sensitive to such themes as eco-friendly, sustainability and recycling. For this reason, Nespresso also uses its advertising time to address these hot topics. Here is a recent example where they created a short series on being carbon neutral:

 

There are many other examples of “faces” that we now immediately recognise and associate with their brands. Even if some have been dropped over the years, they still maintain their strong connection:

SC Johnson’s Mr Clean and the muscle man

Quaker Oats and the Quaker.

Coca-Cola and the Polar Bear

Marlboro and the Cowboy – Darrell

Duracell / Energiser and the Pink Bunny

 

Each face is chosen to represent the brand because it fits with the values with which it wants to be linked. For example:

The Muscle man suggests toughness, never tired, perfect for house cleaning when you want the quickest and easiest solution to difficult jobs.

The Quaker implies integrity, harmony, simplicity, perfect for natural products.

The Polar Bear is associated with cold, stimulating, refreshing liquid (ocean), perfect for a carbonated soft drink.

The Cowboy suggests independence, freedom, strength, perfect for a masculine brand.

The Bunny implies endurance. never-ending energy, perfect for a long-lasting battery.

You will notice that more and more “faces” are now cartoon characters, rather than real people. The advantage of doing this is that associations are unlikely to change, unlike people. Just consider some of the recent sporting disasters which resulted in brands firing their “faces”.

Almost all celebrity spokespeople are required to sign an agreement containing certain moral or behavioural clauses. These give the brands the right to cancel a contract if the celebrity does something which could be damaging to the brand.  Nike has done this with Maria Sharapova, Manny Pacquiao, Michael Vick and Lance Armstrong.  Tiger Woods was apparently dropped by Gillette, Accenture, AT&T, Gatorade and Tag Heuer. Wow, that must have lowered his income somewhat!

Find out more about the challenges of choosing a face for a brand in this article on advertising law, and this one on the top 15 athletes who were dropped by their sponsors.

 

SOUND / VOICE / TONE OF VOICE

Besides the faces of celebrities, some brands have adopted a very individual voice or sound as well. This adds more personality to a brand and further helps it to stand out.

The sounds can be actual voices, such as the infamous Budweiser’s Wassup campaign that was first aired in 1999. (yes really that long ago!) Or the tones used in print advertising, which have become even more important with the rise of social media.

Both Coke and Pepsi use sound to great effect. For Coke, it is the ice being dropped into a glass and then fizzing Coke being poured over it. For Pepsi, although it may have started by using the sound of the ring pull releasing the fizzing bubbles from the can, the brand now introduces unknown music performers with their “sound drop” campaign.

Kellogg’s believed that the reason for their success was the sound their cornflakes made when they were being eaten. In fact, they hired a Danish sound lab to recreate the Kellogg’s crunch for inclusion in their advertising. It became so identifiable and uniquely Kellogg’s Cornflakes that the company went on to patent it.

Unilever’s Magnum is another brand with a distinctive sound. The ice cream is instantly recognised today from the cracking as the model bites into the chocolate coating. This sound is used at the beginning and at the end of the ads for their bars and more recently for their chocolate topped tubs too. Here is one of their recent ads showing the sound being used for both ice cream versions.

 

 

Moving on to the tone of voice on social media, some of the best examples I’ve come across include:

Innocent: Would you be interested in following a Twitter account that posted about natural fruit drinks all day? Probably not, and Innocent Drinks clearly understands that. Instead of simply advertising its juice products, Innocent posts chuckle-inducing, highly relatable content. Innocent comes across as being just a friend who is always coming out with random, yet spot-on observations of life. Who wouldn’t want to follow them on Twitter for this daily dose of fun?

Innocent twitter

Tiffany: This heritage brand was recently acquired by LVMH and has shown remarkable growth following a daring change in its communications strategy. Its ‘Not Your Mother’s‘ campaign experienced significant backlash for offending its longtime customers, the older luxury customers. While it was certainly a risky move for Tiffany, they do say that the age group they are targeting is not as young as their critics believe it is.

Their tweets have always been more product related than in the past, but in line with their new positioning efforts, they include younger models wearing pieces in normal day-to-day situations. It relies far less than before on the elegant, cool sophistication of its physical presence in luxury surroundings and the use of its signature colour has also been stripped way back. I wonder if this will weaken or reposition its image in the longer-term? What do you think?

Tiffany Tweet

 

Old Spice: Having been successfully relaunched with its “Man your man could smell like” campaign, which was directed at females, it then moved to a more irreverent and fun tone which was designed to appeal to younger men. At least that’s what I think, but let me know what you think in the comments. I feel they lost their advantage over Axe (Lynx) during that time, so I’m glad to see that they are once again showing a real man’s man, but with a nice twist – even men need skin products. Here’s one of their latest ads, that personally reminds me of that earliest campaign.

 

AROMA

Smell is the only one of the five senses which connects with the right-hand side of the brain – did you know that? This is the area of the brain where creativity, emotion and hunger are processed, and memories of pleasurable experiences are stored there. Because of this, smell is the sense that can trigger an impulse reaction in someone.

As you know, branding is about creating an emotional connection with users and therefore aroma is a powerful ally in doing this. There is little logic involved in impulse purchases! We see it, we want it, we buy it. Aroma is being increasingly used these days to build brand attraction even further.

It is a powerful yet subtle way to gain customer loyalty, especially in such industries as retail, travel, hospitality, healthcare, finance or any business operating in a closed and controlled environments. You find yourself feeling good in certain places without really knowing why.

But aroma is so powerful, that some consumer products have been created or relaunched using it as their USP. Anyone remember the “green apple” scent that was all the rage back in the seventies?

Herbal Essences is a more modern example. It was originally launched as a single shampoo. But in the 1990s it was relaunched using commercials featuring women moaning with pleasure while using the fragrant product. The shampoos offered “a totally organic experience” thanks to their unique and luxurious perfumes.

Interestingly, and just like Nespresso, it too has joined the sustainable, eco-friendly and bio interests of recent years. Here is one of its more recent ads:

Coffee is an obvious choice for marketing on scent as a priority, even if taste is what will probably keep customers loyal. But in the past it was impossible for customers to test new brands before purchasing. The recent introduction therefore of the one-way degassing valves on coffee packaging, both grain and ground, is a welcome addition.

One-way degassing valve on coffee packaging

While scratch and sniff stamps have made a timid return on some personal and home care items, other brands have been launched in the past few years that are positioned almost exclusively on aroma, such as P&G’s Lenor Unstoppables™.

So you see the retail examples of the past are rapidly being joined by numerous consumer goods brands.

 

PACKAGING

Colour and shape are important elements of brand pack recognition. But packaging goes way beyond this today, as the above coffee example shows. A pack can become a brand’s signature, whether through its unique form, touch or sound. Yes, a pack can have a sound too – see the numerous examples below.

When thinking shape, Coke obviously springs to mind first, but Toblerone chocolate, Perrier water and Pringles chips also have distinctive packs. Their success can be witnessed by the copy-cat look-alike packs that have been launched by competitors ever since. In some cases even the pack’s colour is similar, making brand identification on-shelf more of a challenge. Go into any discounter outlet of Lidl and Aldi and you will be frequently confused by the brand they are actually offering.

Unique packaging forms have also become important in a number of industries as a way of combating market saturation or stagnation. These include cigarettes, candies, condiments and perfumes. In the later, product shape plays a vital role since the bottles are transparent and the majority are colourless too. Luxury can therefore only be suggested through the caps’ materials and by its form as well as that of its bottles.

Shape can also be used as a differentiator in providing additional benefits to the user. Think about the Heinz Ketchup squeeze bottle or the pump dispensers offered on products from cosmetics to liquid hand wash.

Companies are paying more attention to the sound their products’ packaging makes too. There is the well-known clunk of a luxury car door (not sure if we would call it a pack!), but also of the lid closing on a Pantene shampoo bottle. The click of a pen cap or mascara wand when closed are studied and evaluated so that they give just the right sound for associations with luxury or safety.

Branding is becoming ever more challenging with the explosion of line extensions, as well as all the new product offers that continue to be launched every year. But customers are demanding novelty, even as they also become ever more confused by the vast range of choice in some categories Therefore to stand out from the competition, a brand needs more elements to highlight its image and personality.

As I have shared in this article, a brand’s face, voice, sound, tone, aroma and pack all increase its differentiation and enhance brand recognition.

In addition, research shows that stimulating more of a user’s senses significantly increases loyalty. What does that mean for your business? Well it could mean an estimated 25-30% of your brand’s revenue just from better stimulating your customers’ senses! So what are you waiting for?  

For more ideas about improving your Brand Building, check out our other content. And if you need more support then contact me here: https://c3centricity.com/contact

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