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Can you have too much of a good thing? When it comes to brand portfolios the answer is yes.

Brands can be among a companys most valuable assets but too many brands and sub-brands can
limit growth and productivity.
In the past year alone, we have seen the likes of P&G, GE, Microsof and Mondelez trim their
portfolio of brands for the purposes of getting back to their core, stream-lining or driving efciency
and efectiveness through their business. This is no easy task but the results of optimizing brand
portfolios ofen has a dramatically positive impact on the future success of the corporation. A.G.
Lafey summed up things well when he shared his view on P&Gs plans to divest some of their
brands to optimize their portfolio, he said:
Im not interested in size at all, Im interested in whether we are the preferred choice of shoppers.
This paper outlines our thinking about managing brand portfolios and brand architectures and
outlines our approach to Brand Portfolio Optimization.
The Challenge the danger of over-proliferation

Over the last twenty years brand owners hunting growth have bought, created and extended more
and more new brands and sub-brands. Some are still buying, but more have announced plans to
streamline and prioritize ever burgeoning portfolios. Rather than deliver the growth they desire,
too ofen the results have been an over-proliferation of smaller brands and sub-brands creating
cluttered portfolios and over-complicated architectures.
This over-proliferation makes strategic brand management much more complex and time-
consuming. Too many brands and a plethora of sub-brands encourage a lack of focus.
Every brand manager will want to defend their brand but businesses need to make the ofen
emotionally difcult decision to focus on fewer brands. The dangers are primarily two-fold:
BRANDS-
CAN YOU TOO MUCH OF A GOOD THING?
P&Gs principal brands are down to 60. Its top
10 brands provide 50% of sales
LOreal has concentrated its eforts on ten
major global brands which are responsible for
87% of cosmetic sales
Colgates strategic focus is on 6 global brands
which provide 70% of sales
Danones top 5 brands contribute 60% of sales
A. Too much focus on building the minor brands, at the expense of the key strategic ones.
A signifcant and very real danger is where there is so much emphasis being placed on the minor or
local jewel brands that the more important strategic, international and global brands get reduced
resources budget and time.
B. Lack of clarity for consumers (and staf)
For consumers, an over-proliferation of brands can lead to situations where a company is
increasingly competing with itself where brands lack diferentiation and so are fghting it out for
the same consumers. Consumers dont really understand the diferences and so simply switch to
buying on price or promotion.
For sales and marketing teams, selling a portfolio of fewer truly powerful brands to your customers
is easier and more efective. As in most instances the paradox of choice comes into play, customers
appreciate choice but not chaos.
The solution
The objective of Brand Portfolio Optimization is therefore to help structure and prioritize your
portfolio of brands to best deliver your business objectives. The best way to achieve this is to deploy
the smallest number of brand properties to efectively and efciently occupy the biggest possible
space in the market.
Companies need an approach that marries their business strategy with an evaluation of each
brands potential. They need to simplify as much as possiblebut no more. There is a role for
multiple brand portfolio but not for the increasingly complex and confused stamp collections that
had been emerging.
Our approach to Brand Portfolio Optimization
At The Value Engineers weve had the privilege of helping some of the worlds leading brands, like Unilever,
McDonalds, Fonterra, Nestea, Walmark and Alliance Boots avoid or reduce proliferation, helping them to
navigate their portfolios to gain the largest market share with the fewest possible number of brands.
We use a unique approach that of Brand Portfolio Optimization.
Getting to such a balanced solution requires a rigorous approach that should start with a situational
assessment and the construction of a future-facing market framework.
It must identify which brands are most suitable to own your prioritized territories, based on their
competitive relevance and strength, and your core competencies, to deliver a portfolio solution that is
anchored in your brands current and future positioning. It should explore what is the smallest number
of brand properties needed in a category or categories to potentially occupy the biggest market space
(share of market) now and in the future. Within each positioning territory it should explore the optimal
brand architecture confguration for each of the key brands, so that they control the maximum footprint
without over-stretching.
This rigour provides the platform creating realistic and achievable road-maps for organizations seeking to
drive greater efectiveness and efciency from their portfolio of brands.
BRAND PORTFOLIO OPTIMIZATION
Over the years we have worked with numerous organizations helping them
to review and optimise their portfolios and have developed a tried and tested
approach based on seven stages:
Brand Portfolio Optimization Brand Portfolio Optimization
Deployment
Brand Portfolio Optimization in action
Fonterra
Fonterra is a global dairy business, co-operatively-owned, headquartered in New Zealand, which
collects and uses over 20 billion litres of milk each year. The team at Fonterra realised they had a
problem - a portfolio with too many brands that was increasing confused and unruly to manage.
Working with Fonterra across their 250+ brands we were able to signifcantly slim-down the
portfolio of brands and help them deliver a structured portfolio which requires signifcantly less
management time. Speciality parts of the business now had clear reasons to exist and globally
brands were aligned so that Fonterra could operate across the largest possible markets with the
least number of brands.

Walmark
Walmark is the largest producer of vitamins, minerals and supplements in CEE. It has over 40
brands across its core markets. The Value Engineers worked with Walmark to optimize their
portfolio helping them to develop and deliver strategies focussed on fewer brands. In 18 months
several of these focus brands are already number one across the markets in which they are sold with
others following suit.
Find out more about our approach
When individual brands face the pressures of over-proliferation (too many sub-brands and too
many opportunities) we work with brand owners using similar approaches and techniques to deliver
more focused and efective brand plans.
To talk with the Value Engineers about your brand portfolio or to fnd out about our approaches to
help optimise the impact of individual brands please contact:
Owen Williams, Group CEO in the UK - owen.williams@thevalueengineers.com
Alex Waters, President in the USA alex.waters@thevalueengineers.com
Giles Lury, Chairman in the UK giles.lury@thevalueengineers.com
Chris Potts, EVP in the USA chris.potts@thevalueengineers.com
MANAGING SUB-BRAND PORTFOLIOS-
MANAGING MULTIPLICITY
Looking into the history of marketing, the emergence of sub-brands can perhaps be traced back to
Henry Ford, or rather to General Motors response to the Model T Ford. While Henry Ford actually said
You can have any colour as long as its black, he might as well have said You can have any car as
long as its a Model T Ford. The Ford approach was based on maximised standardization, maximum
economies of scale and a one brand size will ft all.
General Motors response was known as the Sloan Ladder. It was based on the identifcation of
fve diferent segments, fve distinct price grades ofering A car for every purse and fve distinct
endorsed sub-brands the fve diferent marques. It was a move that heralded the importance of
segmentation and sub-branding all in one strategic thrust.
Since then there has been an explosion of brand portfolios to the extent that a confused consumer
recently lamented on a blog about the confusion of too much choice.
I went through the shelves and counted them, and its total madness. In addition to the original
Colgate Great Regular Flavor toothpaste, they have the following versions to choose from:
Colgate Tartar Protection toothpaste, Baking Soda & Peroxide, MaxClean with Whitening, MaxWhite
with Mini Bright Strips, MaxFresh with Germ-Fighting Strips, Total Whitening with Stand Up Cap,
Total Advanced, Total Advanced Gentle Care, Total Advanced Fresh & Whitening (New!), Total
Advanced Gum Defense, Sensitive Multi-Protection, Sensitive Enamel/Protect, OpticWhite
And in each of the above categories, you get to choose your favor. Theres.
Crystal Mint, Polish Rush, Intense mint, Clean mint, Gel, Paste, Clean mint paste, Mint strip paste
gel, Gentle mint, Fresh mint, Sparking mint, Cool mild mint.
And then many of them come in two or three sizes.
The combinations are so complex that Im sure they ofer even more than 43 choices
Source: www.thebigquestions.com
The truth is that brands need to fnd a balance between conformity and chaos; avoiding both
archaic, overly-simplistic monolithic approach of yesterday to the anarchic over-proliferation of
sub-brands that has spread like a virus through many companies.
They need to embrace and manage multiplicity they need to simplify as much as possible but no
more.
The case for expansion
There are a number of good reasons for the creation of sub-brands, they include:
1. Stretch into new sectors economically
2. Help re-energize an existing masterbrand by positively building, modifying or changing at
tributes and associations of the masterbrand
3. Ward of targeted competitive threats
4. Increase visibility for new or diferentiated product ranges
5. Provide clarity for the consumer and aid their purchase decision making and simultaneously
help guide the brand team in their allocation of resources
1. Stretch into new categories economically
The frst and perhaps most ofen used reason for the creation of a sub-brand is to stretch a strong
existing (master) brand into a new sector or category by adding values that are not present in that
brand. The sub-brand thereby acts as a bridge to those new markets or market sectors where the
master brand values are not sufcient.
An example might be the Gillettes Venus sub-brand. Here the need was to ensure no loss of
business. The Gillette masterbrand was re-focused on a specifc sub-set of its total market while
broadening its positioning away from shaving from men to women in order to focus on mens
personal care so it could expand into new sectors. It needed to ensure and indeed build its business
with women, hence the need for the Venus sub-brand.
2. Help re-energize an existing masterbrand by positively building,
modifying or changing attributes and associations of the masterbrand
The second route is in many ways the inverse of the frst. It is where a sub-brand is launched
to help reinvigorate a weak or weakening masterbrand. It may be a situation where consumers
know a brand well (and indeed may well trust it), but where that relationship may be in danger
of being taken for granted or is a little tired. A strong sub-brand cannot only be successful in its
own right but can cause consumers to take a fresh look at or indeed have a re-assessment of the
masterbrand.
3. Ward of targeted competitive threats
Many large masterbrands cover whole categories, like Sony and electronics and so have an over-
arching proposition which is ofen focused on the center ground of their category. While this
provides a strong and economically efcient core for the brand, there can be a danger that the
proposition is too category generic and not sector specifc enough for certain key sub-segments
which might be particularly proftable or competitive. Here the development of a sub-brand can be
used to ward of competitive threats from more targeted competitive brands.
For Sony the development of Vaio and Luminera have been extremely successful in this regard.
4. Increase visibility for new or diferentiated product ranges
Many brands go through regular product and/or service upgrades which are communicated by
an increase in the number attached to the brand or by reference to the year in which the upgrade
happened.
In situations like this it can be appropriate to introduce a sub-brand when the new product is much
more than a yearly upgrade, where it is a step change in performance. In other words the role of a
sub-brand in this instance is to signal that this new ofering from the existing brand is particularly
newsworthy, diferentiated or novel.
Examples can be found in many markets but are not surprisingly prevalent in high-tech markets
with both Intel and Microsof Windows adopting this strategy.
5. Provide clarity for the consumer and aid their purchase decision making
and simultaneously help guide the brand team in their allocation of
resources
The fnal reason overlaps to some degree with some of the other routes described above and is
perhaps a summation of an overall reason for a portfolio of sub-brands. Namely, a portfolio of sub-
brands should aim to provide the guidance and signposting for consumers deciding what do I want
to buy? It can then simultaneously provide some internal clarity about the strategic importance of
key sub-ranges and thereby provide guidance for allocation of brand building, marketing resources,
and budget.
Muller Yoghurts has a set of sub-brands which helps signal the diferent ranges within its portfolio
Muller Corner, Muller Light, Mullerice, Muller Amore, Muller Little Stars and Muller Vitality.
However, like with most things in life it is possible to have too much or many of a good thing and one
of the greatest problems facing companies nowadays is an over-proliferation of sub-brands.
So while there are many reasons for creating sub-brands there are almost as many good reasons for
limiting their use too:
A. Too much focus on building the sub-brands/endorsed sub-brands and not the masterbrand
B. Too many (costly) sub-brand building programmes diluting resources
C. Lack of clarity for consumers (and staf)
D. Trying to enter into sectors that are contradictory to the masterbrand
A. Too much focus on building the sub-brands/endorsed sub-brands and
not the masterbrand
A signifcant and very real danger is where there is so much emphasis being placed on the sub-
brands that (over time) the masterbrand is denuded of meaning and becomes little more than a
quality endorsement stamp. Whilst this may sound an unlikely outcome, it is something that has
occurred on number of occasions in the UK market.
B. Too many (costly) sub-brand building programmes
Similar to this is where there is an over proliferation of sub-brands which results in there being
too many (costly) sub-brand building programmes rather than fewer more focused, and more
strategically important ones. The issue here is one of prioritisation, not just masterbrand versus
sub-brands. This can be manifested in a situation where each years new sub-brand is given a
launch budget in year one, but then abandoned in year two as the next years new sub-brand is
given that support. Known jokingly as the L.A.P.D. Launch, Abandon, Panic, Delist - its worth
investigating whether your brand could be charged with this.
C. Lack of clarity for consumers (and staf)
An over-proliferation of sub-brands can lead to a situation where the size of the portfolio and its
structure can become too complex and where the only people who really understand it are the
brands marketing department as it can get to a position where it lacks resonance with consumers,
and how they shop. This can be particularly evident if the sub-brands dont relate to consumers
needs and drivers, if there are too many sub-brands that overlap, or where there are sub-brands
that are not clearly diferentiated / do not have a unique reason to exist.
One brand where there is a danger of this happening is Nivea. Nivea has some very good and clear
targeted sub-brands but is now getting to a stage where over proliferation leads to the danger
of confusion. For example Nivea Sun and Men are clear but the increasing number of variations
targeted primarily at women is where there may be an issue Crme, Sof, Visage, Vital, Body,
Beautie, Bath care, Hair Care and Body Care.
D. Trying to enter into sectors that are contradictory to the masterbrand
Though not a particularly frequent problem it is still an occasional one - where a sub-brand is
used to try and stretch an existing masterbrand into a category or sector where the link to the
masterbrand is tenuous at best and completely inconsistent at worst
Tips on managing your portfolio.
How then do companies make this work; how do they avoid the dangers of over-proliferation whilst
taking advantage of the benefts strong sub-brands can provide. Three tips are:
i) Ensure there is a common understanding of the relevant terms internally
Even in the most experienced of marketing teams it can be amazing to fnd the diferent
understanding and defnitions of what is and isnt a sub-brand. So defning the terms, making
sense of the soup of possible confusions by creating a common vocabulary and defnitions is an
important frst step what is a sub-brand, an endorsed brand, a product descriptor?
ii) Having a clarity of purpose a clear rationale for the brand architecture
It is relatively easy to make at least a superfcial case for a new sub-brand when segmentation and
consumer insight are so important to all marketers, but brand architecture decisions need to be
objectively assessed against
- the business strategy - what do you want to achieve and where do you want to take/drive
the brand
- the brand strategy - what do you want the brand to mean/stand for- what are the
parameters of this
The business strategy and economics ofen suggest a more monolithic structure with less sub-
branding whilst marketing may veer towards a more segmented approach. Like most things in
marketing there is no one right answer but the tension between the two is important and ensures a
balanced judgement is made.
iii) Creating and maintaining a manageable portfolio
Following on from the above, it pays therefore to have an agreed process for selection (and
retention/culling) of sub-brands.
Companies need a process and agreed basis on which each candidate should be assessed - again
refecting both business and brand strategy needs. The sorts of criteria might include:
Is it sufciently commercially attractive to justify its creation or maintenance?
Does the sub-brand help drive business that fts strategically with the overall brand (re)positioning?
Does it help build a category/sector or key brand attribute (value or personality) that is central to the
future brand development?
Finally regular reviews need to consider not just new candidates for inclusion but also candidates
to be pruned, downgraded, or migrated into other properties. It may not be a case of one in one
out but if the only decision is whether to add more and more sub-brands, it would suggest over-
proliferation is only a matter of time.
It is worth remembering that given the increasing restrictions on launching new (master)brands,
launching a new sub-brand is one way for ambitious brand managers to make their mark, and so
companies need to guard against unnecessary empire building. In short the need is not too over-
simplify, not too over-proliferate but to manage a commercial and consumer relevant multiplicity of
ofers.
To talk with the Value Engineers about your brand portfolio or to fnd out about our approaches to
help optimize the impact of individual brands please contact:
Owen Williams, Group CEO in the UK - owen.williams@thevalueengineers.com
Alex Waters, President in the USA alex.waters@thevalueengineers.com
Giles Lury, Chairman in the UK giles.lury@thevalueengineers.com
Chris Potts, EVP in the USA chris.potts@thevalueengineers.com

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