Brand promotion, how to formulate a brand portfolio strategy?

What is brand portfolio strategy? It is to systematically integrate multiple brands to achieve the purpose of protecting the main brand. This is a systematic brand management strategy. When a company has multiple sub-brands, brand portfolio strategy becomes particularly important. When a company needs to enter an industry segment or diversify its operations, it has to implement a brand portfolio strategy.

For example, P&G has multiple brands of shampoo: Head & Shoulders focuses on professional dandruff removal, Pantene focuses on brightening and beautifying hair, Rejoice combines shampoo and conditioner in one, and Clairol focuses on herbal essences. Each sub-brand has a professional field it specializes in. In addition to shampoo, P&G also has dozens of sub-brands in daily necessities, cosmetics and other fields. Each of them has its own clear positioning and operates independently. So, what are the benefits of a brand portfolio strategy? What are the commonly used brand combinations? These questions will be answered one by one below.

What are the benefits of a brand portfolio strategy?

Why use brand portfolio strategy? Of course, it is because of the benefits of brand portfolio strategy. It is not as simple as adding up the values ​​of sub-brands, and sometimes it can achieve unexpected results.

For example, using high-end brands to establish value advantages. The high-end brands here do not refer to the company's core brands and products, but to the market with the largest premium. The target group in this market is accustomed to equating value with quality, has extremely high requirements for the quality of life, and is accustomed to using high-premium branded goods and using this to build stickiness with the brand. After the brand and users establish stickiness, users will spontaneously spread the brand value of the product and establish the brand's value advantage.

During the melamine incident in domestic milk powder, people's confidence in domestic milk powder fell to the bottom. Many foreign milk powder brands took the opportunity to enter the Chinese market. While driving up milk powder prices, Chinese consumers inadvertently formed the mindset that "foreign brands of milk powder are better than domestic ones." This kind of thinking is not just aimed at a certain brand, but directly distinguishes between foreign and domestic brands. It can be called a strategic crisis for the domestic dairy industry. Foreign milk powder has established value advantages across the board, and its influence continues to this day.

Another example is using low-end brands for flank cover. To put it bluntly, some products are designed to make money from customers, while others are designed to make friends with customers. At the launch of the new Hammer mobile phone, Luo Yonghao joked more than once that "mobile phones don't make money, they are purely for making friends. The back covers of the sentimental series of mobile phones can make dozens of dollars." This highlighted the sentimental attributes of Hammer Technology and enhanced Hammer's brand value, while also distracting from negative factors such as "insufficient production capacity".

The value of low-end brands does not lie in profitability, but in consuming competitors' strength and protecting the main brand when encountering price wars in market competition. For example, if a certain type of dumplings wants to enter a foreign market, the total cost, cold chain, logistics, and warehousing fees will result in a selling price of at least 20 to 30 yuan. At this time, in order to maintain the local market, local dumplings can afford a price of 7 or 8 yuan. At this time, the dumpling company will set up a small dumpling processing factory in the local area and buy dumplings priced at 7 or 8 yuan to hedge against local dumplings. This does not make any money at all, but instead it enters the market with its flagship brand dumplings priced at more than 20 yuan.

Similarly, when local products face the impact of foreign products on the local market, low-end products are also an effective means of defense.

Finally, cross-product portfolios should be implemented to avoid cannibalization. Generally, the characteristics, advantages, and market segment positioning of different sub-brands under the same enterprise will be different, in order to avoid competing for market share at the same time. Family members should not fight against each other. As mentioned earlier, P&G's shampoo is functionally positioned for different market segments. At the same time, it can also seize the shelves of channel dealers through cross-product complementarity.

"You need high-end products? I have them. I also have mid-range and low-end products. How about giving me this whole container?" By integrating products and occupying the terminal of the sales channel, the battlefield left for competitors will naturally be reduced.

The best way to avoid war is to not give your opponent the possibility to join the war, and seizing sales channels is a very good way to do that.

What are the commonly used brand strategy combinations?

Before we figure out the brand portfolio method, we need to first figure out the brand relationship map, that is, the attributes of each brand role, which is the basis for formulating a brand portfolio strategy.

Flagship brand - no need to explain much, the most core and important brand of the enterprise, such as BAT.

Endorsing brand refers to the supporting brand behind a brand, which can be divided into explicit and implicit types. The current ones include "Nestle-Milo High Energy Sports Drink" and "Kelon-Rongsheng", etc. The former is the parent brand, which endorses the credibility of the latter's sub-brands. The invisible ones are "Buick - General Motors" and "P&G - Procter & Gamble". The former is a sub-brand, and under the condition of being backed by the credit of the latter, the sub-brand's personality is more prominent.

Sub-brand - focuses on a certain niche area under the father's brand field, with full of personality, no examples will be given.

New brands - also called independent brands, are conceived from their father brands, but after "adulthood" they will operate independently and conduct independent brand promotion and marketing, such as Alibaba's "Damo Academy".

After figuring out the above brand roles, you can start formulating strategies, which is to combine two or more brand roles to create associations between the brand roles.

1. Brand family strategy.

Let's take Procter & Gamble as an example. Procter & Gamble is a brand family. The P&G group brand is the parent of all sub-brands. P&G's dozens of sub-brands cover many fields, and many sub-brands have no connection at all. This strategy enables the group company to flexibly play its own advantages and leading role according to its own advantages, market environment, consumer groups and other uncontrollable factors, occupy the mass market, lead the niche market and cover the market to the greatest extent. However, this strategy also has an obvious disadvantage, which is that the sub-brands will be too dispersed and cannot form scale advantages in a certain field.

Once the development of a certain brand is hindered, there is a high possibility that the entire sub-brand will be cut off due to the lack of synergistic brands.

2. Endorsement brand strategy.

In fact, the main brand uses its own credibility to guarantee the sub-brand and ensure that its value is realized. For example, in brand licensing, new brands are generally unknown, but the endorsing brand is very powerful, and the driving effect of the endorsement brand on the licensed brand is very significant. The success of an authorized brand can also enhance the strength of the endorsed brand.

KitKat is a well-known British chocolate brand. After Nestlé acquired KitKat, it highlighted the authorization of KitKat and promoted KitKat to the world. At the same time, Nestlé's image in the UK has also been improved because of KitKat.

3. Sub-brand strategy.

Sub-brands help the main brand to extend and enter market segments that are less suitable for the main brand to compete in. For example, Huawei Honor. After years of brand positioning and planning, Huawei has gradually entered the field of domestic high-end mobile phones and business mobile phones, demonstrating Huawei's exemplary role as a representative of domestic mobile phones. Honor is an Internet mobile phone brand launched by Huawei in 2013. It represents a young attitude towards life and targets young people.

This is Huawei's extension and expansion of the high-end and business markets to the youth market, protecting Huawei's inherent image as a leading brand of domestic mobile phones and expanding the consumer base.

What needs to be noted in this strategy is whether the sub-brand’s driving force for the main brand is strong enough? If the research shows that the sub-brand has weak driving force, then investing in it is completely unnecessary.

4. Focus on brand strategy.

A typical representative of this strategy is Tencent. No matter what new business or new company, it will always be branded with the penguin element. Tencent concentrates all outstanding businesses and continuously strengthens its flagship brands. The group structure is also based on large business groups to enhance the core value of the flagship brands.

This strategy has two flaws. First, once a product declines in the market,

The process is irreversible and the product will be terminated, such as QQ Pets and WEB QQ. Another point is that once a product of the main brand "makes a small mistake", it will all be blamed on the main brand, directly affecting the value of the main brand. There are too many examples of this.

There are also many other hybrid brand strategies, which I will not list one by one. The main thing is to combine them according to the brand role and their own product characteristics. The strategic results that can be produced can be roughly inferred, and then analyzed in combination with the actual situation.

The role and significance of strategic branding

A strategic brand is an important brand that has strategic development significance in the development process of an enterprise. Such a brand needs to remain strong at all times and always receive priority resources. For strategic brands, the most important thing for companies is to ensure the correct allocation of resources. The main priorities for allocating resources are current flagship brands, future flagship brands and key brands.

The first two are easy to understand. The last key brand refers to the one that does not directly produce brand value but is a key node in the main brand or major business field. For example, the Nobel Prize itself is a brand, but it does not directly produce commercial value. However, it is a key node in the development of science and technology and business in many fields such as physics, chemistry, medicine, and literature. It is a beacon that drives technological innovation. If it needs regulatory, commercial, and social resources, it will generally be met unconditionally, although the Nobel Prize Foundation generally does not need it.

Among resource-first brands, there is another exception, which is the cash cow brand. The literal meaning is understandable, referring to a brand that allows an enterprise to quickly accumulate funds in the short or long term. This brand can directly convert resources into funds, especially at the stage when the company needs a large amount of cash flow, resources should be allocated first. However, this brand has many pitfalls and is particularly prone to failure, so managers need to be extremely careful. my country's online micro-loan industry will have a large concentration of such cash cow brands, but these "trees" will fall quickly.

Strategic branding is not equal to brand strategy, but it is an important part of it. Like nerve nodes, extremely sensitive. When evaluating strategic brands, you need to think twice.

Evaluation and integration of brand strategy

Many companies face the problem of brand overload, which can lead to inefficiency, chaotic management and other issues. Some companies even simply believe that a brand is just a registered trademark, and if they cannot manage it, they will just throw it aside and hide it, resulting in a waste of brand resources. At this time, it is necessary to evaluate and integrate the overall brand strategy, eliminate the dross and retain the essence, optimize the brand portfolio from the outside to the inside, and reformulate the strategy.

1. Decide which brands are worth evaluating. These brands include all brands and sub-brands and are grouped into one comparable quadrant. When the objects in the quadrant can be compared to determine their pros and cons, decisions are relatively easy to make.

2. Conduct brand analysis from various dimensions. In terms of brand value, what are the levels of popularity, quality, differentiation, relevance, and user perception? Do these factors increase or decrease the value of the brand? What are the sales levels, customer growth, growth prospects, and profitability levels supported by the brand? Are there commercial advantages? Does the brand fit the company’s development vision? Can it be transferred to other brands or products at the same time? A comprehensive analysis of these dimensions can help shorten the decision-making time.

3. Based on the above two points, form a basic opinion on brand evaluation and then decide the level of investment in each brand. The first tier is mainly strategic brands, each of which can coordinate all sub-brands, and the marketing strategies are mainly at the regional, national and global levels. The second tier includes flagship brands and valuable sub-brands, such as WeChat under the Tencent brand, which are the most important brands besides strategic brands. The third echelon is the cash cow brand, providing blood supply for the first and second echelons. For example, Tencent’s gaming businesses – Honor of Kings and PlayerUnknown’s Battlegrounds – are mobile games and also natural product brands.

Apart from these, all other brands can be cleared out because they cannot attract the market either in terms of brand value or commercial value, and can be considered for closure or sale.

4. Implementation of brand portfolio strategy. It can be implemented gradually, which will not weaken users' recognition of the brand and reduce the impact on the brand. It can also be implemented suddenly, providing users with a one-time opportunity to trust the new brand. It is often used when the brand needs to reverse its overall market credibility. For example, a company merger is the best time.

A company's brand does not exist independently, it needs to work together and collaborate. The fundamental purpose of brand portfolio strategy is to enable the company to go further. There needs to be a gap between the main brand and the sub-brand. Strategic brands must have their own height. Different brands have different functions and play different roles as soldiers in the commercial battlefield, which requires strategic deployment of group operations.

Strategists need to have a long-term vision, protect strategic brands and flagship brands, coordinate supporting brands and sub-brands, and eliminate brands that should be eliminated. In addition to vision, it is also a perfect reflection of the strategist's breadth of mind and courage.

Author: Seven Princes

Source: PR Home