Learn Strategic Brand Management
Brand Equity In Question
Strategic Implications Of Branding
Brand And Business Building
From Private Labels To Store Brands
Brand Diversity: The Types Of Brands
The New Rules Of Brand Management
Brand Identity And Positioning
Launching The Brand
The Challenge Of Growth In Mature Markets
Sustaining A Brand Long Term
Adapting To The Market: Identity And Change
Growth Through Brand Extensions
Handling Name Changes And Brand Transfers
Brand Turnaround And Rejuvenation
Managing Global Brands
Financial Valuation And Accounting For Brands
Companies regularly reassess the relevance of their brand portfolio. Numerous matrices have been devised to help them do this – all derived from matrices used for the evaluation of the activity portfolios created by consultants such as the Boston Consulting Group, McKinsey and Mercier.
These matrices incorporate profitability, the competitive situation and the potential for growth. But can matrices for the analysis of an activity portfolio be simply converted into matrices for the evaluation of a brand portfolio?
There are two possible levels of analysis. The first is the intra-brand level which evaluates the portfolio of brand products (subbrands or daughter brands) according to the criteria mentioned above – are they in declining or non-cash generating segments, what are the growth vectors for the future? The second level asks the same questions at multi-brand level, on the global chessboard of actual and predictable competition. The lines and columns of the matrix are growth and profitability.
The markets are then shown as circles whose size reflects the actual size of the market. Brands are represented as portions of these circles (markets) where the portions reflect their market share.
The most classic way of structuring a portfolio is to divide the brands into groups according to attractiveness and function. This makes it possible to identify:
Another form of audit consists of regularly evaluating the ability of the current portfolio to ensure the profitable coverage of future markets. Is the current portfolio the right response to market developments and competitive logic?
Thus, in the insurance sector, everyone is familiar with the growth of new distribution methods, like the telephone and the internet. An insurance company cannot afford not to be represented in this way. However, since the conditions offered are so very different from those offered by the network of general agents and brokers, they need to be represented by a specialist brand.
This is how UK insurer Aviva structured its brand portfolio. Eurofil was created to cover the growing segment of lowcost car insurance without creating conflict with Aviva’s other insurance distribution networks.
The segmentation of a market by user status (linking volumes, expectations and competitors to the use made of the product) also makes it possible to identify unexploited pockets of growth in the current portfolio. The first question to be asked is whether a range extension would offer an opportunity to gain a foothold in these areas. In this respect, all Nivea’s sub-brands reflect this determination to exploit all the potential sources of growth on the beauty-care market by capitalising on the single Nivea brand.
When this cannot be done, a company must have the courage to launch a new brand. For instance, in 2003, after trying everything under the global Barbie brand, Mattel decided to launch the new Flavas brand.
Auditing the portfolio can also reveal that it does not constitute enough of a barrier to prevent competitors entering the market, or even an incitement for them to leave. For example, it is impossible to find Orangina on the French TGV (high-speed train) network or in many airports and stations, even though it is the second largest soft-drinks brand in the country.
The logic of the operators of the caféhotel- restaurant network is to choose a soft- drinks distributor offering a complete portfolio – from cola to lime and fruit juice. So clients of the Coca-Cola Company receive Fanta (a fizzy orange drink) and Minute Maid (fresh orange juice) but not Orangina. This therefore creates a local monopoly and prevents free choice among end consumers.
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