25-08-2017, 09:32 PM
BRAND PORTFOLIO: A path towards brand development or devastation
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Introduction
One of the firm’s most valued assets is the repute of its brands. Many organizations today are extending their brands into multiple product categories to leverage their brands. As a result, many brands are becoming affiliated with a diverse product portfolio1. Managing the brand portfolio is a tough job which can be effectively done with the help of brand management. Brand management shapes and influence the very perception of the brand managers by orienting diverse aspects of their operations, performance, interpretation, and ultimately decision-making.
Brand portfolio-Meaning
A brand portfolio is a group of various brands under a common umbrella brand, which is owned by a particular organization or business. Brand portfolio includes all co-brands and sub-brands offered in a market.
Conflicting viewpoints about brand portfolios
Some researchers suggest that a large brand portfolio empowers a company to get greater hold than its competitors and also dissuades the entry of brands from rivals (Bordley 2003; Shocker, Srivastava, and Ruekert 1994). On the contrary, others suggest that small brand portfolios enables greater production and distribution economies and advertising and administrative efficiency (Aaker and Joachimsthaler 2000; Bayus and Putsis 1999; Kumar 2003). Similarly, some researchers’ advocates that companies should make portfolios in which their brands complement each other thus strongly position the brands in the customers mind leading to greater administrative and promotional efficiency (Aaker and Joachimsthaler 2000; Bayus and Putsis 1999; Kumar 2003). As opposed to the former suggestion some argue that greater competition for the same market segment among brands in a company’s portfolio deter the rivals’ entry directing to efficiently deploying a company’s resources (Lancaster 1990; Shocker, Srivastava, and Ruekert 1994)2.
Brand portfolio: Advantages
1. Broadening the brand meaning and reinforcing the brand image.
2. Increase in market coverage leading to increase market share and efficiently leveraging with the evolving needs of the consumers.
3. Versatility in the products provided to market thus seeking greater variety of customers.
4. Increase in the promotional efficiency and advertising, selling, and promotional costs are reduced.
5. Cost of distribution also decreases.
6. Most of the environmental threats are neutralized by different brands in a portfolio.
7. The company gains competitors edge enabling costly imitations of the brands and less close substitutes.
8. Enhances the innovation and growth process of the company leading to brand extension.
Brand portfolio: Disadvantages
1. If brand portfolio is extended too far it may cause a loss in reliability.
2. Brand image may damage if one product fails.
3. Large brand portfolios demand huge investments and efficient management.
4. Risk factor is that the products in a portfolio may overlap and cannibalize its own brands.
Conclusion
In order to utilize the full capability of brand portfolio, it should be efficiently managed and coordinated. Today, marketers should synchronize the different brands in a portfolio by boasting the potential but not active brands to their full capability, by launching or acquiring new brands strategically, by pruning overlapping brands, and by terminating the weakest brands.