Winning with Simplicity: Examining Your Brand Portfolio in Recessionary Times

CMOs have become master jugglers as many have portfolios overflowing with brands created, acquired, and merged over the last decade—product brands, business line brands, and corporate brands. Some brands have a strong presence in the marketplace, but many of these brands lack real equity. In fact, what many organizations perceive as brands are in fact just names. Whether made up of “names” or real brands with strong equity, a portfolio of multiple brands drives complexity and cost—such as the costs for keeping a brand top of mind, continuously refreshing the creative, and protecting your trademark. Also, there is the cost of missed opportunities for unifying the organization around a single brand promise, increasing customer loyalty, cross-selling, or cultivating marketing synergies. In this recessionary climate, CMOs should examine their portfolio to determine if their brands have clear reasons for being. Killing the weak brands may be the right strategic choice. And, streamlining your portfolio down to a few strong brands, or possibly a single master brand, can have compelling benefits—focus, clarity, and efficiency.

While it may not work for all companies, BlackBerry operates with a strong master brand. The company names each new product/device by reinforcing the link to BlackBerry with a hybrid naming structure such as BlackBerry Storm or BlackBerry Curve. BlackBerry illustrates how a simple and clean brand portfolio structure can bolster value creation in the long run, rather than splintering impact.

Can you handle the truth? Some questions to ask yourself

Portfolio composition can often be dictated by the passionate cries of brand managers or sales teams who insist that their brand cannot die. The reality is that brand names are discontinued every day. Our research and experience show that brand equity is often overestimated—especially in the B2B world—and customers can (and do) accept the changeover to a new brand. Identifying the winners and losers in a brand portfolio requires an objective approach, and these four questions help clarify a brand’s reason for being.

+ What is the strategic fit of the brand? CMOs must assess the brand’s alignment with the long-term corporate and business strategies. Each brand should have a clear business need and distinct identity. Perhaps the role is to drive topline sales growth, afford access to new markets and customers, or fuel margin expansion through premium pricing.

+ How strong is the brand in the marketplace? Being a brand requires that you have a loyal following among your customers, and that you can command a price premium over your competition. Being a brand requires that if you were to disappear tomorrow you would be truly missed. Many brands fail to meet these standards and do not represent real brands but names.

+ What else could your organization do with the current resources allocated to the brand? The real issue here is opportunity cost. Many times an organization forgoes real opportunities when it chooses to maintain the status quo rather than kill a brand. CMOs should consider if the current financial and staff resources could be more effectively deployed for a greater return on investment (ROI) elsewhere in the organization.

+ How does the brand support and/or reinforce the organization’s culture? Having a storehouse of brands can have a divisive effect on an organization. Most brands spawn their own cultural silos driven by distinct marketing teams, sales forces, R&D resources, etc. It is critical to determine if the brand is a galvanizing or fragmenting force for your organization.

This analysis provides hard data to separate the wheat from the chaff and inform any portfolio decision. If a brand lacks a compelling reason to exist, the CMO should consider how to eliminate it while minimizing customer defections or blows to internal morale. A quick name change or co-branding with the ultimate goal of moving to a single brand may be effective approaches for an organization. Regardless, a brand migration strategy goes hand-in-hand with a brand rationalization decision.

What might the finish line look like?

Whether managing a single brand or a streamlined collection of a few strong brands, CMOs can realize compelling benefits with a focused portfolio—namely clarity of purpose, less complexity, better communications, and marketing efficiencies.

Google represents a company that did not create a complex web of many brands, despite its rapid wave of new product introductions. They linked descriptive product names with the master brand (e.g., Google Earth and Google Maps) to accrue brand equity to Google over time. The strong master brand has allowed Google to enter into many spaces, while building the strength and meaning of the Google brand overall. Consider the recent foray into health care with Google Health. What’s next? Google ___ (you fill in the blank).

While a strong master brand can offer great efficiency, not every company can reduce its portfolio to a single brand. Focusing on a few strong brands may allow a company to speak to different target audiences or operate in different channels, providing compelling reasons for multiple strong brands to co-exist. GE brands all its divisions with the GE brand and a descriptive name with the exception of NBC Universal. The entertainment division maintains the NBC and Universal brands, as these brands have greater equity (and credibility) than GE in the entertainment space.

So get started…today is tomorrow

Change is never easy, but now is the time to turn crisis into opportunity. Focus and simplicity are powerful levers for a CMO to wield during these uncertain times. It’s time to examine your portfolio and become more deliberate about what’s in and what’s out. Brand rationalization might be the right thing to do. The medicine may taste bad in the moment, but you will feel better in the long run.

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