Nowadays, product placement goes beyond just ensuring distribution, it is all about creating ‘brand experiences at the point of purchase’. Image Credit: Ahmed Kutty/Gulf News Archives

In today’s world where most multinationals or regional marketing companies have several brands operating within the same category, how does a marketer optimise the brand portfolio? Managing a multiple brand portfolio can be complex, but a powerful portfolio strategy ensures increased shareholder value, prevents market share erosion to competition and reduces the risk of cannibalisation.

Look across almost any sector, and one would find brands that are owned by the same parent company. For example, Unilever owns both Dove and Lux brands, and in many markets also owns a few local brands within the body wash category (Good Morning in Egypt, Breeze in India, etc.). Similarly, Coca-Cola and Pepsi have brands within regular colas, diet colas, flavoured CSDs, lime-based CSDs, juice drinks and even water. In the automotive sector, each manufacturer could have multiple brands (like General Motors has Chevrolet, Cadillac, GMC, etc.), and each brand has further sub-brands for each category of automobile.

In such a complex scenario, the marketer’s aim would be to optimise the brand portfolio and deliver incremental value to shareholders by ensuring that “the whole adds up to more than the sum of the individual parts”?

Based on our experience of working with some of the leading brands and marketing organisations in the region, we believe that there is a ‘Six Step Pathway’ to optimising a brand portfolio. These are:

Segment: The start of any portfolio strategy has to be a robust segmentation exercise that identifies segments or groups within the market with distinct needs. The segmentation approach could differ by category — for example, in some categories a values and lifestyle-based approach would be more appropriate (for instance, automotive), while in others an occasion-based approach would be required (beverages, snack foods, etc.). Whatever the approach, the idea should be to arrive at six to eight well-defined segments.

Position: Further to the segmentation, the marketer could decide which segments his brands could address. It is not essential to have brands for each segment, what is more important is that there is a very high fit between the segment values and what the brand being positioned in that segment stands for. And each brand within the portfolio should have a unique positioning.

Get the mix right: Many brands fail to deliver because not enough attention has been paid to the entire mix. At times, the product may not live up to the positioning message, or the packaging may not be user-friendly or the pricing could be inappropriate. Only if all the elements of the product gel together to deliver the positioning promise does the brand have a good chance of success. The mix should also be in keeping with the intended positioning of each brand — for example, poor quality packaging for a premium product is a recipe for disaster.

Communicate: Many marketers tend to believe that communication is all about shouting the hardest. In contrast, our experience has been that focused, single-minded communication that explains the brand promise in an engaging manner tends to hit the mark more often than not.

Place: Placement is all about making the product available and visible at the place where the target consumer is most likely to look for the product. Nowadays, placement goes beyond just ensuring distribution, it is all about creating ‘brand experiences at the point of purchase’. This is equally relevant to both FMCG, services as well as lifestyle products. In recent work with a luxury automotive manufacturer, we went about creating a multi-sensorial brand experience that would be in sync with the intended positioning of the brand, and the inputs have been used to design the brand’s showroom.

Reinvent: Brands are not static — they have a life of their own, and they evolve over time. Marketers needs to be cognisant of this and ensure that their brands are being re-invented every three to four years to keep abreast of changing consumers needs and preferences. This brings us back full circle to the segmentation exercise.

Having said that, each organisation has its unique challenges and having an optimal portfolio strategy ensures that the right decisions are taken on which brands to invest in, which to milk and which to divest.


— The writer is the CEO of AMRB, a Dubai-based research consultancy.