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!
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.
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:
- 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.