An Assignment On

BRAND PORTFOLIO

Submitted To: Mr.Sunildro L.S. Akoijam Associate Prof. Institute of Mgt. Studies, K.U.K

Prepared By: Parvesh Sharma Class: 10th Semester

Roll No. 16
Regn. No. 07 UD 1105

Institute of Management Studies, Kurukshetra University, Kurukshetra

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BRAND PORTFOLIO The brand portfolio includes all the brands and sub-brands attached to product-market offerings, including co-brands with other brands. A basic brand architecture parameter is the composition of the brand portfolio. Each brand requires brand building resources. Treating brands as Silos owned by individuals or organizational units can lead to misallocation of resources. It is the logical, strategic and relational structure for all of the brands in the organizations brand portfolio. The total collection of trademarks that a company applies to its products or services. Each make or brand within a business' brand portfolio might be registered under applicable trademark laws and can represent a valuable asset to a company that is often actively promoted to potential customers.

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PRODUCT-MARKET CONTEXT ROLES > Endorser/sub-brands

PORTFOLIO ROLES > Strategic brands

Brand Architecture
> Benefit brands > Co-brands > Driver role > Linchpin brands > Silver bullet > Cash cow brands

BRAND PORTFOLIO STRUCTURE > Brand groupings > Brand hierarchy trees > Brand rang

PORTFOLIO GRAPHICS

> Logo > Visual presentation

Powerful Brand

Optimal allocation of brand-building resources

Synergy in creating > Visibility > Association building > Efficiency

Clarity of offering

Leveraged brand assets

Platforms for future growth options

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Brand Portfolio Strategy

Brand portfolio strategy specifies the structure of the brand portfolio and the scope, roles, and interrelationships of the portfolio brands. The goals are to create synergy, leverage, and clarity within the portfolio and relevant, differentiated, and energized brands. Brand portfolio strategy can be further elaborated in terms of six dimensions: The first of these is the brand portfolio itself, which provided the set of brands to be drawn upon to achieve the portfolio objectives. Two others, product-defining roles and portfolio roles, specify the varied set of roles that each brand could potentially play. The brand scope reflects the product categories or subcategories for which each brand will be relevant and the relationships between brand contexts. The portfolio structure formalizes the relationships between the brands. portfolio graphic indicate how they are to be presented by themselves and relative to other brands.

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The Role of Brand Portfolio Management

The proliferation of brands not only across the entire spectrum of a firms products, but also as a key firm asset, has made brand strategy a key element of corporate strategy. Central to any brand strategy is brand portfolio management - the ability to organize all the firms brands into a coherent brand portfolio and manage the complex interrelationships among brands in these portfolios. This process has become crucial for every company with multiple brands because the objective is to ensure not only that individual brands are successful, but also that the firms overall group of brands is well coordinated and holistic. Well-managed brand portfolios create advantages throughout the firm, from avoiding consumer confusion to ensuring internal efficiency by preventing investment in overlapping product-development and/or marketing efforts. The far-reaching impact of brand portfolio decisions on a companys key economic measures highlights the importance of effective brand portfolio management not only in a marketing programs success, but also in the overall success of a company. Companies managing brand portfolios must address two primary tasks: (1) optimizing the structure of the brand portfolio so that existing brands meet consumer preferences and enhance the firms performance, and (2) adapting the firms brand portfolio to changes in the market environment and in the strategic direction of the firm. The first task requires constant monitoring of the brand portfolio to avoid cannibalization among brands while enhancing the synergistic effects between a companys brands. Adapting a competitive portfolio to the constantly changing business environment requires that brand portfolio managers integrate strategic decisions and environmental information while engaging in some form of brand portfolio restructuring. Three fundamental options are available for brand portfolio restructuring: (a) reorganizing the portfolio by repositioning brands, (b) rationalizing the portfolio through the deletion and/or divestiture of existing brands, and/or (c) expanding the portfolio by adding new brands. While portfolio restructuring may occur using any option alone or in any combination, each option presents the firm with distinctive issues and approaches to managing not only individual brands but also the overall portfolio. Although all three brand-portfolio restructuring options are viable and widely used, this research will focus exclusively on the third option: brand portfolio expansion.

Brand Portfolio Expansion

Brand portfolio expansion can itself be divided into three approaches: brand extension, brand creation, and brand acquisition. Of these, brand extensiondefined as any effort to extend a successful brand name through new or modified products or product linesis generally regarded as the most common strategy for adding new products to a brand portfolio. It is estimated that almost 90 percent of brand portfolio expansion activity involves brand extensions, due to the lower risk and resource commitment associated with this option. Risk is reduced by using a brand already established in the market and by drawing on the associated and established manufacturing skills, customer network, and distribution system. Resource commitments are far lower for brand extensions than for the other approaches to

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brand portfolio expansion since company managers are familiar with the brand and its required processes and advertisement synergies are easier to realize. Indeed, the popularity of brand extensions has led to the emergence of an extensive body of research in marketing focusing on this topic. The consensus in this literature is that although brand extensions offer distinct advantages, managers must develop a clear understanding of where they can and cannot extend a brand. Establishing and maintaining appropriate limits for brand extensions is especially important, because brands stretched too far (even if successful) risk diluting the core associations and eroding the customer base and even the value of the mega brand is limited. Due to these limitations of brand extensions, today many companies see more longterm growth possibilities in expanding their brand portfolios via brand creation or acquisition rather than in stretching an existing brand further and further. Some companies launch their own brands as entrants in product categories - Coors with Killians Red, and Miller with Red Dog are examples in the beer industry. Other firms expand their brand portfolio by identifying gaps in their brand line-ups and seeking brands they can buy from other firms P&Gs acquisition of Clairol in 2001 is an example from the personal care products industry. This increased attention to the choice between brand creation and brand acquisition is the topic of this research. It is assumed that in situations in which brand acquisition or creation occurs that a brand extension is neither a possible nor desirable option for brand portfolio expansion. The next section will discuss the specific focus of this research in more detail and will formulate the research questions motivating this research.

A Conceptual Model of Brand Portfolio Expansion

An integrative framework based on the reviewed perspectives resulted in the three broad categories of factors that may impact a firms choice of strategy for brand portfolio expansion between brand creation and brand acquisition. Within each of these three categories are more specific factors, each with a hypothesized relationship to the options for brand portfolio expansion. Figure 3 provides an overview of the hypotheses within the conceptual model framework. The review of prior research demonstrated that the choice of an expansion option is a multilevel decision and to be fully understood has to be evaluated beyond specific context, e.g. brand portfolio characteristics. Theoretically, market structure, firm characteristics and brand portfolio configuration were found to collectively influence the choice of brand portfolio expansion option. Recognizing the mutual effect of variables at all these levels is imperative for advancing research on brand portfolio management.

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Five Key Elements in Managing a Brand Portfolio

A business needs to stay relevant in a dynamic market in which new categories and subcategories are emerging, mergers or brand extensions are taking place. Too often a brand finds its market share declining despite retaining strong awareness, image, and even loyalty. Customers are simply no longer buying. A brand portfolio strategy can help address relevance. Managing brands in a coordinated way helps a company to avoid confusing its customers, investing in overlapping product-development and marketing efforts and multiplying its brands at its own rather that its competitors expense. Here are five key elements to consider in managing a brand portfolio: Differentiate Differentiation is the only alternative to price-dominated competition. However, achieving a sustainable point of differentiation is difficult. Offering base points of differentiation that are effective is generally short-lived as competitors copy them quickly. A portfolio solution is to create branded differentiators, branded features, services or programmes that provide a sustainable point of differentiation. Energize Most brands can use more energy. The energy gap problem is particularly troublesome, ironically, for market-leader firms in mature categories that often have an enviable reputation of high quality, trustworthiness and innovation. Such brands nearly always tend to be viewed as boring. The portfolio solution is to create a branded energiser, a branded product, promotion, sponsorship programme or other entity that will enhance and energise a target brand. The target brand which may be boring, can be linked to a brand that has substantial energy. Extend Most companies desire growth in order to create organisational vitality and to realise the objectives of investors. Even if a growth sub-market is discovered for which competition is modest and an attractive offering is available, a brand asset will be needed to enable the growth option. A portfolio solution is to create and leverage brand assets. A brand extension strategy leverages brands into adjacent product classes. In doing so it is useful to build brand platforms that will eventually span many products, perhaps using sub-brands rather than looking to incremental extensions.

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The concern in any extension decision is the impact that the extension has on the brand in addition to the help the brand will give to the extension. An ill-conceived or badly implemented extension can damage the brand. Brands can also be used to extend vertically. The super-premium market is attractive as it contains most of the product vitality and attractive margins. Vertical brand extensions are often compelling but they represent delicate brand portfolio issues because moving up involves brand credibility and moving a brand down involves risk. Clarify Consumers and employees become frustrated in trying to determine what the firm stands for in the various product-market settings. There is also a lack of brand-building focus, resulting in ineffective use of brand-building budgets. A portfolio strategy can enhance focus and clarity. One route is simply to reduce the number of brands, especially those that are strategic. Another route is to clarify the roles that the various brands would play, develop them for success in those roles and make sure they are used consistently. Still another is to leverage the corporate brand within the portfolio. This usually represents the people, values and culture of an organisation and it is often ideally suited to being an endorser brand. Start and end with the consumer The starting point for marketers is to define categories as consumer do. The marketers need a disciplined way of evaluating their brands opportunities, like analyzing the need states the intersection between what customers want and how they want it.

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