You are welcome to share your thoughts on this article written by Mike Taylor, Executive Director, Strategy & Research at Interbrand, Cincinnati
Great brands stand the test of time; during periods of economic uncertainty, a company’s brands can be its strongest assets. Within the entire collection of brands that a company owns—its brand portfolio—reside tremendous opportunities for long-term growth. Strong brand portfolios span generations, fueling success year in and year out, no matter the business climate. Much like a well-planned and structured financial portfolio, a brand portfolio’s whole is definitely greater than the sum of its parts. Developing and managing a comprehensive brand portfolio strategy can help a company mitigate risk, balance uncertainty, create synergies, and take advantage of market opportunities.
As a global leader in brand valuation, Interbrand has developed 10 principles of brand strength which can also help a company examine and understand its brand portfolio and build the foundation for long-term success.
1. Commitment: A strong brand portfolio requires the commitment of the company’s leaders, for it is in the long-term management of the portfolio as a whole where true long-term value is determined. This commitment includes conducting rigorous analyses and assessments on a regular basis.
2. Protection: A robust brand portfolio creates strengths and synergies on multiple levels that protect the company against uncertainty and risk. It also enables the efficient use of financial and technological resources by investing them against brand assets that address emerging businesses, new consumer targets and developing opportunities. By understanding the role that each brand plays, both individually and within the portfolio as a whole, a company can achieve true balance and protection.
3. Clarity: Just as individual brands need to provide a clear view of their purpose, position and values, so does the portfolio. The portfolio strategy establishes and communicates a company’s long-term vision, enabling employees, external partners, the business community and consumers to understand that direction, vision and values. Thus, a company’s portfolio strategy evolves over a number of years and decades via investments, acquisitions and divestitures of key brand assets.
4. Responsiveness: A well-managed brand portfolio helps a company to be more nimble and flexible. As new challenges and opportunities arise, the array of brands and associated strategies such as new sub-brands, architectures, and repositioning allow the company to adapt quickly to fully leverage current market conditions and potential business opportunities.
5. Authenticity: A brand portfolio and its individual components must be anchored by a company’s capabilities and expertise. The portfolio should have an organic logic, reflecting both its authentic heritage and its future reality.
6. Relevance: Staying relevant to consumers and their lives is the greatest strength of a well-managed portfolio. Through potential brand adaptations and investment strategies in new retail channels, technologies, countries or competitive offerings, a robust brand portfolio helps a company remain relevant and important.
7. Understanding: Consumers may have a fairly clear understanding of certain easily recognizable or long-established brands, but what about the other brands in a company’s portfolio? In this age of increasing market transparency and consumer sophistication, a company must clearly understand all of the contents of its brand portfolio and implement effective communication strategies to help enable that understanding among consumers and the business community.
8. Consistency: If a brand begins to demonstrate inconsistency, consumers are sure to recognize it and the business can suffer. Similar to the commitment principle, a brand portfolio should demonstrate consistency over time, reflecting the direction and dedication that is happening at a corporate level. Without this, the portfolio becomes merely a collection of disconnected and uncoordinated assets.
9. Presence: Brand presence refers to how prevalent and pervasive an individual brand is among consumers, customers and the business community; companies often spend millions of dollars across numerous communication and retail channels to strengthen brand presence. Similarly, brand presence can be created and nurtured for an entire portfolio. Currently, several major fast-moving consumer goods (FMCG) corporations are using their corporate logo on their various individual brand advertisements and online to boost the portfolio’s brand presence. Whether a company wants to be this overt or focus more on targeted communications to stockholders and the business community, the presence of the entire portfolio is becoming more important.
10. Differentiation: Each brand within a portfolio must not only have a distinct and unique position and benefit, it must differentiate itself in its voice, look and feel. Lacking this distinct uniqueness, a brand’s strength may become questionable; when this happens, the company should determine whether the portfolio is better served by placing that brand under the architecture and ownership of another existing brand.
Implementing a proactive, long-term brand portfolio strategy can be challenging, particularly given the day-to-day demands of managing individual brands. However, taking a longer and broader view of success and applying these 10 principles of strength to both individual brands and the larger portfolio can help a company build a powerhouse portfolio with virtually unlimited potential.
About the Author
As Executive Director of Strategy & Research at Interbrand, Mike Taylor leads a dynamic team of strategic business specialists.
Mike has over 25 years in the FMCG industry with experience in Finance, Global Strategy, Branding, Innovation and Design. His broad client list includes leading branding companies and retailers across a breadth of businesses from beauty to food to hardware.