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Brand Portfolio Secrets to Success (The 5 Things You Need to Know)

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 the question!

One of the most popular evergreen posts on C3Centricity is “Guide to Brand Portfolio Management.” It seems that we all suffer from a deep-rooted fear in 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 main reasons for their success; it’s not just about lower prices.

They usually present just one or two brands for each item they stock and the branded products they do stock are almost always at the same price if not higher than normal supermarkets.

In this over-abundant world of consumer choice, more is rarely better. #consumer #brand #Marketing Click To Tweet

More than ten years after the first research on which Schwartz based his theory, new studies have given some alternative perspectives on choice, claiming 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 study.

You can read the full article on this latest work in Neuromarketing. What I found of particular interest, being the true customer champion that I am, is that they conclude 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 will benefit from a wide selection of offers. Once we have decided to buy, then a large choice can become a barrier to final purchase.

 

Although Schwartz’s original book was published in 2006, he recently commented on the current choices facing consumers in “The Paradox of Expanded Choices.” In it he concludes 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.”

I for one enjoy shopping because I am always looking out for the latest introductions and innovations. For the more “normal” shopper, it looks like we need to help their decision-making by reducing the complexity of the task.

One requirement to achieving success in this 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 store. As I have so often mentioned (and sorry if I am boring you with this) is that 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 it 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 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?

To answer this, I decided to take a look at the latest table of leading global brands. According to Interbrand’s “Best Global Brands of 2016:”  

      1. Apple
      2. Google
      3. Coca-Cola
      4. Microsoft
      5. Toyota
      6. IBM
      7. Samsung
      8. Amazon
      9. Mercedes- Benz
      10. General Electric

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, so 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 CPG brands, including beverages, within the Top 100:

      1. Coca-Cola (3)
      2. Pepsi (23)
      3. Gillette (24)
      4. Pampers (28)
      5. Nescafe (36)
      6. Kellogg’s (39)
      7. L’Oreal (45)
      8. Danone (55)
      9. Nestle (56)
      10. Colgate (57)
      11. Lego (67)
      12. Johnson & Johnson (73)
      13. Sprite (86)
What immediately strikes me is that many of these brands are actually also the names of the corporations behind them.
 
This might explain why few consumer goods companies appear in this list because they just have 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 differing 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 petcare brands. Both of these are run as stand-alone businesses, which certainly explains this. 
 
I am assuming that both organisations did this to increase corporate reputation and also consumer trust, especially for their lesser-known brands. 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.

 

Businesses are focusing better 

An interesting trend in the past decade or so, is that some CPG leaders, such as P&G and Unilever, 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 any significant share. This is why both companies continue to do this on a frequent basis, it just makes good business sense.

A newer, alternative strategy some of the better-managed companies are also using, is the selling off of certain brands or even categories. This enables them to better focus on their core businesses.

After a long tradition of the big buying the small – and often more successful competitors – the trend seems to be reversing.

Katie Rothschild from Interbrand noticed this too. In her analysis she says:

“A number of FMCG brands have a stronghold within the BGB table, such as Gillette (#24), Pampers (#28) and Kellogg’s (#39). These are global household names that possess a combination of strong heritage, positive family associations, and the trustworthiness that is all-important for brands that are bought on a daily basis and consumed instantly. 
However, it is becoming increasingly apparent that the success of smaller, niche brands is starting to chip away at the market share of these global giants and shake up the traditional approach of FMCG marketing. 
Niche brands cleverly make use of their nimble size to tap into new trends, be first to market, and win new audiences through visual and verbal storytelling. The big guys are taking notice. 
Niche brands focus on a particular market position, demographic, or unmet consumer need, and with this focus comes deep understanding of consumer’s needs and wants. What can established global businesses learn from the success of these brands, and what growth opportunities do they represent?”
What is surprising is that most CPG giants still don’t focus, or at least not to the same extent as many startups do! But it looks like they are going to have to change if they want to stay in the race. For now, it’s as if they know theoretically that they should be making cuts and some do make a few of them. But in the end, they don’t go far enough perhaps because they’re scared of losing share.
If you are struggling to make this difficult decision 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 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.

 

The Secrets

In conclusion, to summarise the best strategies for brand portfolio management, which seem to be 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.
  • You need to manage the corporate brand just like your other brands, especially if it appears prominently on packaging and other communications’ materials.
  • 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.
  • Innovate less but better. Be more targeted with each of them and include your customers in their development.
  • 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 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 regular trimming and who can’t face up to the lack of success of some of their “babies”. Are you one of them? What’s your excuse? I’d love to hear your reasons for keeping all your SKUs.

This post had been updated and adapted from one which first appeared on C3Centricity in May 2014

C3Centricity used images from “Winning Customer Centricity” and Dreamstime in this post.

How to Stop Brand Decline: Following Brand Image is More than Meets the Eye

If the headline caught your eye, then you are probably challenged by a declining brand. Am I right?

Unfortunately for you, I’m not going to give you an easy five-step solution to turn around that faltering, or dying brand. And I will chastise you for letting it get that far! But I’ll also give you five ideas to help you understand why your brand is declining.

I was speaking with an ex-colleague of mine who is frustrated by her boss – aren’t we all at times? She is working on a brand that is globally doing OK, but the brand image results are beginning to show some worrying signs. The most important attributes identified for the product are all trending in the wrong direction.

Her boss continues to argue that since sales are good, why should they worry? He even went further and claimed that as the brand’s sales were doing well, there was no reason to continue to measure its image! This is just madness; wouldn’t you agree?

Brand image metrics are one of the best ways to follow the health of the brandif you are following the right attributes. 

Brand image metrics are one of the best ways to follow the health of the brand. #brand #marketing #brandimage Click To Tweet

By right I mean metrics that are relevant for the brand and the category. I have heard marketers request to measure their advertising slogans in a brand image study. This is obviously wrong, but it still comes up regularly when I’m working with a relatively inexperienced marketer. The reason you don’t is because slogans change, but the essence of a brand shouldn’t.

So if you don’t measure its advertising (directly), what should you measure? I think that the three most important areas to cover are:

  • the rational, functional benefits
  • the emotional, subjective benefits
  • the relational, cultural benefits

Let me give some examples, so you better understand:

  • Rational, Functional: removes stains, has a crunchy coating, offers 24-hour service.
  • Emotional, subjective: trustworthy brand, high quality, makes me more attractive.
  • Relational, cultural: a Swiss brand, trendy, traditional

In addition to these three image areas, I would suggest you also follow the brand’s personality and value perception. Both of these will impact its image and can provide clues to help understand changes in the image.

One further best practice is to also follow your main competitors so you have a good perspective of the category and its main selling points. Sometimes declines in image come from a competitor emphasizing an attribute for which you were previously known. As a result, although your brand hasn’t changed anything, its association with the attribute can decline due to the competitive actions.

Coming back to my friend and her manager, she asked me what she could do to persuade her boss to continue measuring brand image. This is what I told her to discuss with him.

  1. Review the attributes that have been measured, especially those showing the largest changes. Can you agree on why these have happened? Are you measuring the right metrics that cover the category or are you in need of updating them? Markets change and perhaps your attributes no longer reflect the latest sensitivities. This might be the reason for the image declines while sales continue to rise because the brand corresponds to these new customer needs and desires.
  2. Review customer care line discussions to see what customers are calling in about. See if there are any comments that tie in with the image attribute changes. These discussions will also highlight any areas that you are not currently following in your image tracker – see #1.
  3. Review your customer persona. Have you followed their changes or are you appealing to a new segment of users? If the latter, this might explain the sales increases. However, if you are measuring your brand image on a sub-group of category users that no longer reflect your current customers, this could explain the decreasing metrics. For more information on how to complete a detailed persona description, check out “How well do you know your customers?”
  4. Review market dynamics. If you are following sales and not share, you may be losing customers to other brands which are driving market growth. This might explain why sales are growing, but the image is declining.
  5. Review social media discussion. Today we have the luxury of finding out what people really think about a brand from discussions on social media. If your brand has a solid following or a respected customer base that shares their experience online, then this is a great way to know what is working and what is not. People tend to share negative experiences more than positive ones, so rather than taking offence we can obtain valuable information about a brand’s vulnerabilities.

These five areas will make for a lively discussion for my friend and her boss. They should also provide the necessary information for you to slow and hopefully reverse the negative sales trend of your brand. Of course, once you have the knowledge on what to do, you will need to take appropriate actions, but I’ll cover that in another post.

Have you tried other ways to manage a declining brand? Have I missed other actions to take to better understand what is happening? If so I’d love you to share your own experiences.

Winning customer centricityThis post includes concepts and images from Denyse’s book  Winning Customer Centricity. You can buy it in Hardback, Paperback or EBook format in the members area, where you will also find downloadable templates and usually a discount code too.

The book is also available on Amazon, Barnes and Noble, iBook and in all good bookstores. If you prefer an Audiobook version, or even integrated with Kindle using Amazon’s new Whispersync service, it’s coming soon!

How to Stop Customer Satisfaction Drip, Dripping Away

I recently spent a few days in a condo that I have rented before in Miami Beach. It is a wonderful penthouse suite with panoramic views of the sea to the east and Miami city and port to the west. I rent it because I am always delighted to spend a few days of vacation in such a perfect place.

However, this last time I wasn’t happy. What has changed? Very little really but enough to make me feel disappointed. That made me reflect on how quickly our customers can move from delighted to dissatisfied because of some small detail we might have overlooked or which we ourselves see as irrelevant. Let me explain.

  1. I arrived at the condo building, but the usual doorman with whom I had built a good relationship has been replaced by a new person. Just as efficient but not “my” doorman; he didn’t know me so he came across as less welcoming and friendly. In the business world our customers like to be recognized for their loyalty.
  2. The condo was as perfect as ever, but had obviously been cleaned in a rush in time for my arrival. It smelt wonderful of course, but I didn’t notice the high-sheen tiled floor was this time wet and I went skidding onto my backside as soon as I entered. Customers notice when things are wrong more than when everything is right.
  3. The usual paper products were supplied, but only four sheets of kitchen roll and not many more of toilet paper! No big deal but it meant I had to immediately go out and buy them first thing the following morning instead of lazing at the beach. Customers will sometimes buy a competitive product rather than go searching when yours is out-of-stock.
  4. I went to bed early upon arrival because I was tired from the sixteen hour trip and the six hour time difference. I had never noticed before but neither the blinds nor the (too short) curtains cut out the daylight, so I tossed and turned for hours before sleep finally took over. Small issues with your product or service may go unnoticed – at least until there are many more “small issues.”

I am explaining these details to demonstrate how little things can build upon one another to create dissatisfaction. The same can happen to your customers. So ask yourself, what little changes have you been making that your customers haven’t (yet) noticed?

  • Reducing pack content just a little
  • Reducing the cardboard quality of packaging
  • Making the flavouring just a little more cheaply
  • Increasing the price just a few cents
  • Shipping just a few days later than usual
  • Call centres being not quite as friendly as they used to be
  • Response time to queries and requests a little slower than before

These adaptations are unlikely to be noticed by your customers at the time they are implemented, unless they are already unhappy with your product or service. The minor changes you have been making over the past months or years will have gone by without any impact on sales. Therefore you decide to make a few more. Each will save you a little more money, which adds up to big savings for you.

However, one day your customers will notice and question their original choice (>>Tweet this>>). To avoid this slow drain on your customers’ satisfaction and delight, here are a few ways to avoid this situation arising in the first place:

  1. When you run product tests, compare not only to the current product and your major competitors but also to the previous product. (or its ratings if the product is no longer available)
  2. Run a PSM (price sensitivity meter) or similar test to check levels of price perceptions and acceptable ranges.
  3. Measure br and image on a regular basis and review trends not only the current levels.
  4. Check that call centres are judged on customer satisfaction and not (just) on the number of calls answered per hour.
  5. Offer occasional surprise gifts or premium services to thank your customers for buying.
  6. Aim to make continuous improvements in response times both online and in call centres.

Perhaps surprisingly, in many categories, customer satisfaction, loyalty and delight come from the small differences and not the big basics (>>Tweet this<<). For example:

  • Consumers are delighted by the perfume of a shampoo more than by the fact that it cleans their hair.
  • Amazon surprises and delights its customers by occasionally offering premium delivery for the price of st andard.
  • Kids will choose one fastfood restaurant over another because of the “free” gifts offered.
  • Women love to buy their underwear from Victoria’s Secrets because they walk out with a pretty pink carrier bag overflowing with delicate pink tissue paper.
  • Men buy their girlfriends, wives and mistresses jewellery from Tiffany because they know that the little aqua box they present to their loved one already says it all, even before it is opened.
  • A car is judged on its quality and safety by the “clunk” of the door closing, more than its safety rating.

In today’s world of dwindling product / service differentiation and an overload of choice, which I already spoke about in the last post entitled “Do your Shoppers face a purchasing dilemma? How to give the right customer choice every time”, your customers want to be made to feel cared-for, not cheated. Find new ways to surprise and delight them and they will remain loyal, even if you have to increase your prices. As L’Oreal continues to remind its consumers every time they buy one of their products, “They’re worth it”.

If you would like to review your br and building and learn new ways to catalyse your own customers to greater loyalty and delight, then contact us for an informal discussion of your needs. I know we can help.

Winning Customer Centricity Book

Don’t forget to check out my latest book Winning Customer Centricity. It’s available in Hardback, Paperback and eBook formats on Amazon and andnoble.com/w/winning-customer-centricity-denyse-drummond-dunn/1121802409?ean=9782970099802″ target=”_blank”>Barnes & Nobles, as well as in all good bookstores. And if you haven’t yet joined, sign up for free to become a C³Centricity Member  and get a DISCOUNT CODE as well as many free downloads, templates, case studies and much more.

C³Centricity used an image from Miami andBeaches in this post.

 

Br and Portfolio Management: How to Make More (Money) with Less (Br ands)

How do you know when you have too many br ands and variants? In my opinion the answer is that you have too many when you can’t answer the question! A couple of months ago I wrote a very popular piece called “ A Beginners Guide to Br and Portfolio Management”. This week I’d like to take it a little further and speak about some of the reasons br and portfolio management is so important.

 

Br and portfolio management

Br and 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 br ands. Why? Well because marketers want to make an impression and get that promotion as quickly as possible. And one of the easiest ways is by launching a new br and or variant.

 

I believe this is one of the main reasons why we poor consumers often end up NOT buying something, because we just can’t make our minds up between the vast choice of flavours, packs and sizes on display in some large hypermarkets. More is most definitely not always better when it comes to retailing! (>>Tweet this<<)

Does a br and really need tens of flavours / aromas and hundreds of variants? I decided to take a look at the leading global br ands to help answer this. According to Interbr and, these are the top 10 most valuable global br ands:

                1. Apple
                2. Google
                3. Coca-Cola
                4. IBM
                5. Microsoft
                6. General Electric
                7. McDonald’s
                8. Samsung
                9. Intel
                10. Toyota

Now most of these br ands certainly don’t have hundreds of variants from which to choose and therefore final selection is relatively easy. However, interestingly only one of these is a CPG (consumer packaged goods) br and, so I decided to look at the sub-category of consumer br ands (Interbr and separates Food and Beverage br ands from other consumer br ands, don’t ask me why, especially when many make both! The four beverage br ands in the top 100 – Coca-Cola (3), Pepsi (22), Nescafe (37), Sprite (69) – would all fall into the top ten consumer br ands):

                1. Gillette (16)
                2. Pampers (29)
                3. Kellogg’s (30)
                4. L’Oreal (39)
                5. Danone (49)
                6. Colgate (50)
                7. Heinz (53)
                8. Nestle (56)
                9. Johnson & Johnson (81)
                10. Duracell (85)

As Elan Cole from Interbr and says in the summary of this category

“Consumer br ands bank on their unique versions of these products to generate and grow value. But as soon as one br and patents a technology, competitors ( and the retailer that sells it) race to copy it, one-up it, or make it in strawberry flavor. The advantage that technology brings to a br and is only as valuable as the window of time that the br and controls the manufacturing and access to it. For consumer br ands, that window is narrow.”

This might explain why consumer br ands tend to have far more variants than some of the other leading br ands and categories mentioned above, whose technical advances often last longer.

Two of the leaders in CPG (Unilever and P&G) both culled the number of their br ands’ SKUs about 15 years ago from thous ands down to “mere” hundreds and continue to do so on a regular basis. Taking Pareto’s Principle as a guide, it is relatively easy to cut the bottom 5%, 10% or even 20% of br and variants without losing any significant share. This is why both companies continue to do this on a frequent basis.

What is surprising however, is that other CPG giants don’t, or at least not to the same extent! It’s as if they know they should be making cuts and so make a few, but in the end they don’t go far enough because they seem to be scared of losing share. If you are struggling to make this difficult decision 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!
  • 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 underst anding 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?), but even that’s no excuse for simply multiplying SKUs. Use the “one in, one out” rule, because if you don’t the retailer probably will and without regard for your own plans and preferences.
  • Remember, that if you offer a vast choice of variants for each br and, consumers could get analysis paralysis and end up walking out of the store without buying anything

Coming back to the leading consumer br ands from the Interbr ands’ list, all top ten excel in br and portfolio strategies that are precisely differentiated, clearly targeted and well communicated. David Aaker wrote an article on L’Oreal a few months ago ( Which firm has the best br and portfolio?) which explains the above theories quite well.

I believe most br ands with hundreds of variants in a market, are being managed by a lazy marketer who also doesn’t have the courage to face up to the lack of success of some of his “babies”. Are you one of them? What’s your excuse? I’d love to hear your reasons for keeping all your SKUs.

C³Centricity used images from Microsoft and Dreamstime in this post.

Beginners Guide to Brand Portfolio Management

This week I want to share some ideas with you that were prompted by a client’s question. I was recently asked about brand portfolio management and what to do to ensure that a company is correctly differentiating its offers. This question was in reference to the service industry, which is arguably more challenging since there are no physical products, but the basic requirements remain the same.

Brand portfolio strategies are an essential prerequisite for the long-term success of multi-brand companies. It is vital for these organisations to consider not only external but also internal competitors.

According to marketing theory, there are two types of brand portfolio models, the house of brands and branded property. The House of Brands model refers to a portfolio where brands have different names across categories. Most of the major consumer goods companies use this model. The advantage of this model is that since the brands are independent, the failure of any single one of them has little impact on the others.

The Branded Property model uses one brand across all categories. Virgin is a good example of this, with its airline, media and train companies all being similarly identified. The advantage of this model is that positive images of one benefit all categories; however a negative publicity or event will also have a direct impact on all brands within the family.

Interestingly, both Unilever and P&G have been placing more emphasis on the company brand associated with their brands in recent years. This move followed a ruthless culling of both their portfolios of brands, from thous ands down to mere hundreds. The addition of the corporate name has come at a time of decreasing consumer trust in brands, which is certainly not helped by the growing adoption of private label, including those from discounters such as Lidl and Aldi.

Even though these two portfolio models exist, in reality firms tend to use components of both models together in their brand portfolio strategy.

For any company which has more than one or two brands, it is important to regularly review their portfolio strategy; here are some thoughts to help:

Two rules of portfolio creation

There are two basic principles for the design of a successful brand portfolio. The first is to maximise market coverage, so that no potential customers are being ignored. And second, to minimise the overlap between the company’s brands, so they aren’t directly competing with each other and trying to attract the same customers. If you can achieve both of these then your brand portfolio will have a solid foundation.

Identify the category

Surprisingly many don’t do this first essential step and end up with a sub-optimal strategy; let me explain why. Suppose you sell a carbonated soft drink and think you are in competition with other carbonated soft drinks. Consumers on the other h and see your brand as being in a larger category of soft drinks which also includes fresh fruit juices, because your product contains juice as well as being carbonated.

If you didn’t know this, you would not only miss out on identifying your true market potential, but may even alienate current users through inappropriate communications. It is essential to ask consumers about the category in which you are competing; a simple brand or pack sort is a great exercise for this.

Identify the category “need states”

Need states are the intersection between what customers want and how they satisfy this need. Although many marketers think about need states from time to time, most define their brands by consumer demographics or product attributes. This can lead to brand overlap and cannibalization.

Although the exercise of identifying needs states can be a challenge, the results can often identify new ways for existing brands to compete. It can identify “white spots” in the market as well as significant overlaps, even between brands from the same company, which is clearly undesirable. Once found, both situations can be addressed, offering the potential for significant growth, often without the need for new brand launches.

Identify the brand roles

Not all brands in your portfolio will be of equal value to the organisation. The Boston Consulting Group’s growth /share matrix is still one of the best and simplest tools for identifying those worth investing in, despite having been introduced as long ago as 1968. Since it is well-known and hopefully understood I won’t go into more detail here, but those interested in knowing more can read about it in a recent article by its creator Bruce Hendersen here.

Brand growth share matrix
Source: BCG Growth / Share Matrix

 

 

Differentiate your brands

Once the category and need states have been identified, and the current brand role is plotted, it is important to differentiate and communicate these differences to customers. Articulating each brand’s target market and value proposition will also support a review of future challenges and responses in advance of them happening.

Hopefully this short post has given you some food for thought on your own brand portfolio strategy. What you would add?

C3Centricity used images from Dreamstime and BCG in this post.

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