Does the corporate organization match the brand portfolio?

A brand is only successful if the factors governing its production work together in a coordinated and motivated manner. The success of a group logic and a brand portfolio cannot be assessed without analysing the conditions of its development and, above all, the type of organisation. Since this is not widely publicised, or may even be deliberately played down, it tends to be overlooked as a key factor in the success of a brand portfolio policy.

The main risk of a brand portfolio is the gradual de-energising of the brands, reduced to the state of increasingly undifferentiated ‘outer casings’ that are little more than publicity devices. This is exacerbated by the fact that the economic press only talks in terms of groups and therefore publicises the fact that brands that were once different are now produced by the same group.

Its readers, often opinion leaders, are within their rights to ask certain questions, behind the bodywork, what remains of the brand identity? Do Jaguars still have a Jaguar engine or do they have a Ford engine? Will the specificity of Saab disappear with its integration within the GM group?

The essence of a brand is differentiation. Anything that detracts from this is a threat –within the context of a favourable economic equation, of course.

To a certain extent, over-centralisation is responsible for the loss of differentiation. At Fiat, the different brands are managed within the same department, with Alfa Romeo alongside Lancia and Fiat, a type of organization that leads one to wonder whether the company still believes in its brands.

Conversely, PSA – Europe’s second largest car manufacturer, almost on a par with Volkswagen – may use the same factories but Peugeot and Citroën remain separate organizations with their own product plan, marketing, design, publicity, sponsorship and, of course, distribution network (Folz, 2003).

Volkswagen has abolished the VAG (Volkswagen Audi) network and given each brand its own distribution network. It has to be said that the sales force in the VAG network had a strong tendency to push the Volkswagen models rather than the very similar Audi models, which were 10 per cent more expensive.

Part of Seagram’s problems can be explained by the over-centralised organisation of its international brands. The development of international campaigns at all price levels is a classic tendency among all centralised organisations. It is significant that the first thing the buyer of Seagram did was to decentralise the organisation of the brand portfolio. Thus the management of Martell, the flagship of cognac worldwide, was relocated in Cognac where famous brandy is produced, while Chivas was returned to London.

LVMH, world leader in the luxury market with such famous brands as Christian Dior, Christian Lacroix, Vuitton, Moet, Hennessy and Tag Heuer, has an interesting business model. The group manages 45 international luxury brands. When asked about the upper limit on the number of brands in such a portfolio, the group’s CEO, B Arnault, replied that there wasn’t one.

In fact, success in the luxury sector depends on there being three types of people able to work together – in design, management and marketing – but this is impossible to achieve at a centralized level. At LVMH, however, each brand is a ‘house’, a mini-company, and this makes it possible to create the optimum conditions under which extremely talented people from these three areas of competence are able to work together. As heads of their ‘brandcompany’, they are more motivated and their remuneration is directly proportional to their financial results and the international reputation of the brand.

Although it not as widely known, l’Oréal functions in the same way. It is significant that within the l’Oréal group, reference is made to the Garnier ‘house’, the Lancôme ‘house’ and so on. These ‘houses’ are autonomous operational units that manage their business with an international approach.

In the field of distributor brands, changing from the single brand – usually a store brand – to private labels also affects the organisation. The recent transformation of Decathlon (the world’s fifth largest retailer of sports clothing and equipment), from the Decathlon brand to the so-called ‘passion brands’ portfolio, had far-reaching repercussions for the organization – is it in fact possible to develop ‘passion brands’ within a centralizing structure? The first people who have to be inspired by this passion are those within the organisation, the managers and the teams, then the co-designers, the fans and the opinion leaders. There is a need to recreate a formal autonomy.

Strategic Brand Management Related Practice Tests

Strategic Management Practice Tests
Brand Equity In Question What Is A Brand? Differentiating Between Brandassets, Strength And Value Tracking Brand Equity Goodwill: The Convergence Of Finance And Marketing How Brands Create Value For The Customer How Brands Create Value For The Company Corporate Reputation And The Corporate Brand Strategic Implications Of Branding What Does Branding Really Mean? Permanently Nurturing The Difference Brands Act As A Genetic Programme Respect The Brand ‘contract’ The Product And The Brand Each Brand Needs A Flagship Product Advertising Products Through The Brand Prism Brands And Other Signs Of Quality Obstacles To The Implications Of Branding Brand And Business Building Are Brands For All Companies? Building A Market Leader Without Advertising Brand Building: From Product To Values, And Vice Versa Are Leading Brands The Best Products Or The Best Value? Understanding The Value Curve Of The Target Breaking The Rule And Acting Fast Comparing Brand And Business Models: Cola Drinks From Private Labels To Store Brands Evolution Of The Distributor’s Brand Are They Brands Like The Others? Why Have Distributor's Brands? The Financial Equation Of The Distributor’s Brand The Three Stages Of The Distributor’s Brand The Case Of Decathlon Factors In The Success Of Distributor's Brands Optimising The Dob Marketing Mix The Real Brand Issue For Distributors Competing Against Distributor's Brands Facing The Low-cost Revolution Should Manufacturers Produce Goods For Dob's? Brand Diversity: The Types Of Brands Luxury, Brand And Griffe Service Brands Brand And Nature: Fresh Produce Pharmaceutical Brands The Business-to-business Brand The Internet Brand Country Brands Thinking Of Towns As Brands Universities And Business Schools Are Brands Thinking Of Celebrities As Brands The New Rules Of Brand Management The Limits Of A Certain Type Of Marketing About Brand Equity The New Brand Realities We Have Entered The B To B To C Phase Brand Or Business Model Power? Building The Brand In Reverse? The Power Of Passions Beginning With The Strong 360° Experience Beginning With The Shop The Company Must Be More Human, More Open Experimenting For More Efficiency The Enlarged Scope Of Brand Management Licensing: A Strategic Lever How Co-branding Grows The Business Brand Identity And Positioning Brand Identity: A Necessary Concept Identity And Positioning Why Brands Need Identity And Positioning The Six Facets Of Brand Identity Sources Of Identity: Brand Dna Brand Essence Launching The Brand Launching A Brand And Launching A Product Are Not The Same Defining The Brand’s Platform The Process Of Brand Positioning Determining The Flagship Product Brand Campaign Or Product Campaign? Brand Language And Territory Of Communication Choosing A Name For A Strong Brand Making Creative 360° Communications Work For The Brand Building Brand Foundations Through Opinion Leaders And Communities The Challenge Of Growth In Mature Markets Growth Through Existing Customers Line Extensions: Necessity And Limits Growth Through Innovation Disrupting Markets Through Value Innovation Managing Fragmented Markets Growth Through Cross-selling Between Brands Growth Through Internationalisation Sustaining A Brand Long Term Is There A Brand Life Cycle? Nurturing A Perceived Difference Investing In Communication No One Is Free From Price Comparisons Branding Is An Art At Retail Creating Entry Barriers Defending Against Brand Counterfeiting Brand Equity Versus Customer Equity: One Needs The Other Sustaining Proximity With Influencers Should All Brands Follow Their Customers? Reinventing The Brand: Salomon Adapting To The Market: Identity And Change Bigger Or Better Brands? From Reassurance To Stimulation Consistency Is Not Mere Repetition Brand And Products: Integration And Differentiation Specialist Brands And Generalist Brands Building The Brand Through Coherence Defining The Core Identity Of The Brand Confirming The Presence Of Brand Core Facets In Each Product Identifying The Role Of Each Product Line In The Construction Of The Brand Graphically Representing The Overall System Of The Brand Checking The Coherence Worldwide The Three Layers Of A Brand: Kernel, Codes And Promises Respecting The Brand Dna Managing Two Levels Of Branding Growth Through Brand Extensions What Is New About Brand Extensions? Brand Or Line Extensions? The Limits Of The Classical Conception Of A Brand Why Are Brand Extensions Necessary? Building The Brand Through Systematic Extensions: Nivea Extending The Brand To Internationalize It Identifying Potential Extensions The Economics Of Brand Extension What Research Tells Us About Brand Extensions Avoiding The Risk Of Dilution Balancing Identity And Adaptation To The Extension Market Segments Assessing What Should Not Change: The Brand Kernel Preparing The Brand For Remote Extensions Keys To Successful Brand Extensions Is The Market Really Attractive? An Extension-based Business Model: Virgin How Execution Kills A Good Idea: Easycar Brand Architecture The Key Questions Of Brand Architecture Type And Role Of Brands The Main Types Of Brand Architecture The Flexible Umbrella Brand The Aligning Umbrella Brand (masterbrand) Choosing The Appropriate Branding Strategy New Trends In Branding Strategies Internationalising The Architecture Of The Brand Some Classic Dysfunctions What Name For New Products? Group And Corporate Brands Corporate Brands And Product Brands Multi-brand Portfolios Inherited Complex Portfolios From Single To Multiple Brands: Michelin The Benefits Of Multiple Entries Linking The Portfolio To Segmentation Global Portfolio Strategy The Case Of Industrial Brand Portfolios Linking The Brand Portfolio To The Corporate Strategy Key Rules To Manage A Multibrand Portfolio The Growing Role Of Design In Portfolio Management Does the corporate organization match the brand portfolio? Auditing The Portfolio Strategically A Local And Global Portfolio – Nestlé Handling Name Changes And Brand Transfers Brand Transfers Are More Than A Name Change Reasons For Brand Transfers The Challenge Of Brand Transfers When One Should Not Switch Analysing Best Practices Transferring A Service Brand How Soon After An Acquisition Should Transfer Take Place? Managing Resistance To Change Factors Of Successful Brand Transfers Brand Turnaround And Rejuvenation The Decay Of Brand Equity The Factors Of Decline Distribution Factors When The Brand Becomes Generic Preventing The Brand From Ageing Rejuvenating A Brand Growing Older But Not Ageing Managing Global Brands The Latest On Globalisation Patterns Of Brand Globalisation Why Globalise? The Benefits Of A Global Image Conditions Favouring Global Brands The Excess Of Globalisation Barriers To Globalisation Coping With Local Diversity Building The Brand In Emerging Countries Naming Problems Achieving The Delicate Local–global Balance Being Perceived As Local: The New Ideal Of Global Brands? Local Brands Can Strike Back The Process Of Brand Globalisation Globalising Communications: Processes And Problems Making Local Brands Converge Financial Valuation And Accounting For Brands Accounting For Brands: The Debate What Is Financial Brand Equity? Evaluating Brand Valuation Methods Brand Valuation In Practice The Evaluation Of Complex Cases What About The Brand Values Published Annually In The Press? Strategic Brand Management Interview Questions