Brand Portfolio Secrets to Success (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 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 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 reasons for their success; it’s not only 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 even higher than in normal supermarkets.

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 original study.

You can read the full article on this latest work in Neuromarketing. What I found of particular interest, 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 things, 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.

THE 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.
  • You need to manage the corporate brand just like your other brands, especially if it appears prominently on packaging and your other communications’ materials.
  • Make an annual review of all your brands and variants and ruthlessly cut the bottom 20%.
Continue Reading

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. 

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?
Continue Reading

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. Continue Reading

Why Most Marketing Plans Fail & 9 Ways to Succeed with Yours

This Monday is Memorial Day in the US, when Americans everywhere think back to those in the US Armed Forces who gave their lives in the line of duty. I too am thinking back, but to all the marketing plans and ideas that have been sacrificed!

The reasons why some plans are accepted and others aren’t are many. Non-alignment with corporate plans is one of the most usual, but lack of clarity, consistency, preparation or budget are also common. And even when accepted, they aren’t always executed as planned. So I thought that it would be useful to take a look back at our own marketing plans that we set earlier this year and review what is and isn’t working. We still have time to make changes and meet our 2014 targets, so which of the following is your current issue?

Declining market share

Firstly, you should be ashamed that you’ve let your br and slide so much that you are actually losing share! Br and equity measures would have given you a clear warning that something was going wrong, months if not years ago! Did you ignore the numbers or were your efforts too small to have the necessary impact? Either way, it’s time to start working out what’s going wrong. Review the 5P’s of marketing for starters and prioritise actions based on what you find.

Stable market share

So your br and’s growth is slowing? This happens in the normal life-cycle of a br and, so no panic, but you do need to take action to renew growth. But don’t think that small tweaks will be enough. Competition is ruthless these days and you will need to create some buzz around your br and. Surprise and delight is the name of the game to win (back) consumers. Start from your strengths and then ramp one or two of them up a couple of levels.

Declining image

As mentioned above, your br and image will start to weaken before market share is affected (>>and%20image%20will%20start%20to%20weaken%20before%20market%20share%20is%20affected%20%20[tweetlink]” target=”_blank” rel=”nofollow”>Tweet this<<), so in theory you still have time to prevent significant share loss. But you must act now! It is more effective to review your image ratings by experience group, to see what you need to do to recover lapsed users or convert more trialists. In my experience the answers should be clear from a regularly run and thoughtfully analysed br and image study using a well-developed attribute list.

Losing consumer trust

This is a serious issue. (as if the others aren’t!) Trust in companies and br ands is what enables consumers to forgive mistakes or accept higher prices. (>>and%20br ands%20is%20what%20enables%20consumers%20to%20forgive%20mistakes%20or%20accept%20higher%20prices%20%20[tweetlink]” target=”_blank” rel=”nofollow”>Tweet this<<) And it tips the balance in your favour in product comparability when performances are similar. Trust is a complex principle built out of a number of influencing factors, such as integrity, reliance, confidence, quality and worthiness. Which of these has resulted in your consumers’ loss of trust? Once identified, you will need to review how you can influence it. Continue Reading

Brand Portfolio Management: How to Make More (Money) with Less (Brands)

How do you know when you have too many brands 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 Brand Portfolio Management”. This week I’d like to take it a little further and speak about some of the reasons brand portfolio management is so important.

 

Br and portfolio management

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 is by launching a new brand 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 brand really need tens of flavours / aromas and hundreds of variants? I decided to take a look at the leading global brands to help answer this. According to Interbrand, these are the top 10 most valuable global brands:

                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 brands 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) brand, so I decided to look at the sub-category of consumer brands (Interbrand separates Food and Beverage brands from other consumer brands, don’t ask me why, especially when many make both! The four beverage brands in the top 100 – Coca-Cola (3), Pepsi (22), Nescafe (37), Sprite (69) – would all fall into the top ten consumer brands):

                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 Interbrand says in the summary of this category

“Consumer brands 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 brands, that window is narrow.”

This might explain why consumer brands 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 brands’ SKUs about 15 years ago from thousands down to “mere” hundreds and continue to do so on a regular basis. Continue Reading

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. Continue Reading

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