Aug 25, 2011

Brand Portfolio Establishment In Branding Strategies

Brand blurring is a common problem at many companies, but it’s not the only one. Brand portfolios often bloat, fragmenting marketing resources and destroying economies of scale. Management time is frequently eaten up with refereeing brand usage. And brands sometimes get lost in large portfolios. The challenge is that the processes for managing brand portfolios have not grown at the same pace as people’s enthusiasm for creating and expanding those portfolios. In particular, few companies have a formal methodology that enables them to clear away the debris from earlier, less successful branding efforts. Companies required in this regard straightforward approach for streamlining their brands into a more powerful and effective portfolio.
A new approach to “Portfolio planning” is to brand management as strategic planning is to budgeting. Like strategic planning, brand portfolio planning is a periodic, discrete event that allows managers to step back from the crush of daily problems and chart the course ahead. And just as the strategic plan looks across markets and business units to identify areas of opportunity and challenge, brand portfolio planning looks across the entire brand set with an eye both for reallocating resources toward the areas of greatest opportunity and for identifying necessary interventions to prevent loss of competitive advantage.
The best approach is to start with an inclusive definition of the brand set and then winnows the resulting list down to 50 or so brands for deeper review. The place to begin compiling the list is usually the legal department, which typically maintains the company’s formal registry of trademarks. To that basic list must be added two other less obvious sets of brands. The next step is to understand the contribution of each brand on the list, starting with an analysis of annual revenues, direct marketing expenses and so on. The next step, assessing each brand’s market position, will seem reasonably familiar to brand managers. Brand traction is a measure of how strong a brand is today.
Brands tend to fall into different categories, depending on their contribution to the company (contribution), current market performance (traction) and future prospects (momentum). Each type of brand requires a different plan of action. The challenge is that people often have difficulty distinguishing among the different categories. Many companies consequently make the mistake of starving their power, sleeper, soldier and wallflower brands to divert resources to other brands that should have been discontinued. To avoid such mistakes, managers should grade each brand in their portfolios against the same criteria at the same time. By looking specifically at a brand’s contribution, traction and momentum for brand portfolio health.

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