Brand portfolio strategy presentation

Presented by

Muthoni Kanyana CEO

MK-‐AFRICA

Brand Por.olio Strategy

-‐ David Aaker

“You need to change the orienta0on of a company so that people think of brands as assets. Then you must manage your

por;olio of brand assets.”

Ques0ons You May Hear from Management

•  Why do we have two brands serving the same purpose in our por5olio?

•  How should we use our budget to drive brand growth? •  We need to consolidate brands. What is your

recommenda;on? •  What is the ra;onale for how you have allocated your

marke;ng budget? •  How well do our customers understand what we have to

offer?


The effec=ve crea=on, deployment and management of brand assets in support of simultaneous top-‐ and boFom-‐line growth

Topics •  About MK-‐Africa

•  Brand and brand porIolio strategy

•  Brand architecture vs. brand porIolio strategy

•  An approach to brand porIolio strategy •  Brand porIolio strategy in the hotel industry •  Leading brand porIolio prac=ces for driving

growth •  Conclusion

A Sustainability Marke=ng Firm

Who We Are




•  An approach to brand porIolio strategy •  Brand porIolio strategy case study •  Leading brand porIolio prac=ces for driving


hFps://www.youtube.com/watch?v=JKIAOZZritk

What is branding?

What is a Brand Por.olio Strategy? The effec=ve crea=on, deployment & management of

brand assets in support of simultaneous top and boFom-‐line growth

Maximum PorIolio Value

Access to new markets and Consumers

Marke=ng Investment Efficiency

Strengthened Customer

Rela=onships

Uncovered Latent Brand Poten=al

Key Benefits

Relevance of a Brand PorIolio Strategy Brands =e a company to its customers – the brand strategy must inform and be informed by the business strategy

Brand strategy is business strategy…

Business Strategy

Professional Experience & Execu=on

Research Brand & Brand

Company PorIolio Strategy Customer Experience

Feedback, percep=ons, sa=sfac=on, etc.

Why is Brand PorIolio Strategy So Challenging? Generally, no single group is reviewing or has the authority to manage the en=re porIolio, resul=ng in many challenges for senior execu=ves…

•  Overlapping brands in a porIolio offering similar products/services targeted to the same customer

•  Inefficient alloca=on of brand-‐building resources including having to support mul=ple brands across mul=ple countries

•  Mergers & acquisi=ons resul=ng in bloated brand porIolio

•  No clear brand-‐driven growth plaIorms to fuel future growth

•  Internal constructs, poli=cs, and new product development drive porIolio strategy vs. customer-‐insights and strategic growth drivers

•  Lack of porIolio management system






Brand Architecture vs. Brand Por.olio Strategy

Brand Architecture Brand Por.olio Matrix

Addresses how a company can Addresses how a company can best structure and communicate use its brand(s) to achieve top-‐

its por5olio of brands and boEom-‐line growth

Brand Architecture vs. Brand Por.olio Strategy

Brand Architecture Strategy

•  Brand Architecture, describes how a family of brands relate to one another

•  There are essen=ally 3 architectural naming models to which businesses subscribe: -‐ Masterbrand, Endorsed Brand & Individual Brand.

•  Many brand architectures are complex, requiring diligence in streamlining and aFemp=ng to maintain consistency

•  Brand architecture is a cri=cal component of brand porIolio strategy


Cash Cows Low Growth; High Market

Share

•  Strong compe==ve businesses, which generate cash surplus

•  Typically have a strong brand recall which allows the company to charge higher prices than its compe=tors.

•  The excess cash generated could be deployed by the company for dividends, debt repayments & driving future growth in other segments of the company (i.e. Ques=on Marks or Stars)

Stars High Growth; High Market

Share

•  Stars have a high market share in a fast-‐growing industry.

•  However, since they operate in a fast paced industry, they require huge amounts of investment to sustain their market leadership.

•  The inten=on in running such businesses is to turn them into cash cows should they sustain their market leadership for a long =me, especially when the economy slows down, if not, they may have to be divested (like Dogs).

QuesDon Marks High Growth; Low Market

Share

•  Ques=on Marks are businesses which hold a small share in a fast-‐growing industry.

•  The future performance of these businesses is uncertain and companies should invest very carefully in Ques=on Marks.

•  If their performance does not live up to the expecta=ons, Ques=on Marks should be reclassified as Dogs and should be divested.

Dogs Low Growth; Low Market

Share

•  These are businesses, which have a low market share with no scope for growth.

•  Because these businesses do not hold much economic promise, organiza=ons should either not invest in them or sell them as soon as possible.


•  Brand porIolio strategy addresses key strategic business issues and decisions rather than the linkages of brands within the

•  It is the intersec=on of brand and business strategy

•  By strategically building, leveraging, and protec=ng the company’s brands, the brand porIolio strategy op=mizes the value of the en=re porIolio

•  It is not sta=c but is grounded in market dynamics and can change drama=cally over =me

Brand Architecture vs. Brand PorIolio Strategy

Brand architecture provides a more tac=cal focus while brand porIolio strategy provides a more strategic focus

BRAND ARCHITECTURE BRAND PORTFOLIO STRATEGY

Sample QuesDon: Sample QuesDon:

•  What should this brand be called? • Is this not only the right brand, but Should it be linked to the master the right category in which to grow brand or not? revenues by 15%?

Primary ObjecDve: Primary ObjecDve:

•  Achieve clarity and synergy among VS. • Maximize porIolio value by brand(s) in the porIolio strategically growing, leveraging,

and protec=ng brands in a porIolio

Scope of AcDviDes: Scope of AcDviDes:

•  Customer research to understand • Comprehensive fact base (customer exis=ng equi=es of brands and brand data – qual./quant.)

•  Brand, business, and customer filters • PorIolio mapping to iden=fy op=mal solu=on

•  Business case development •  Naming and visual iden=ty system

.






An Approach to Brand Portfolio Strategy Take a long-term, holistic approach to managing your portfolio of brands

Stage 1 Stage 2 Stage 3

Renovation & Identification of Optimization Rationalization Growth Opportunities

•  Focus and clarify portfolio • Expand brand and business • Maintain brand relevance to ensure efficient allocation frame of reference • Manage portfolio roles to of resources • Leverage brand(s) into new combat market pressures,

•  Determine scope, roles and markets or customer e.g., consumer bifurcation relationships of brands in segments • Build branded differentiators the portfolio (brand • Make strategic brand or energizers to maintain architecture) acquisitions brand-built margins

Ongoing

Management System

•  Determine appropriate organizational structure to manage brands as a portfolio

•  Develop metrics system to track brand and business performance across the portfolio

•  Other operationalization issues, e.g., channel, sales force, pricing?

An Approach to Brand Portfolio Strategy The following questions begin the brand portfolio strategy process

! What is the optimal number of brands in a specific Optimal

Number? portfolio?

! What is the scope of each brand within the portfolio? Scope?

! What are the roles and responsibilities for each brand Roles / Responsibilities? (silver Bullet)

within the portfolio?

! How do brand linkages affect equity of other brands in Equity Transfer?

the portfolio? (brand architecture)

! How should acquired brands be integrated into the Acquisitions?

portfolio?

! What is the strategic roadmap for the portfolio to facilitate Strategic Roadmap?

future growth?

Case Analysis

Dove: Evolu=on of a brand

What is Dove? •  A cleansing brand in the

health and beauty sector owned by UNILEVER

•  Unilever, a leading global manufacturer of packaged consumer goods, operates in the food, home and personal care categories

UNILEVER Por.olio

UNILEVER CompeDtors

(Annual revenue of $69 billion)



In February 2000 Unilever embarked on a five-‐year strategic ini=a=ve called “Path to Growth.” An

important part of this ini=a=ve was a plan to winnow its more than 1,600 brands down to 400.

Why the need for fewer brands?

•  Global decentraliza=on brought problems of control.

•  Lack of a unified global iden=ty.

•  A small number of brands would be selected as “Masterbrands” and there would be a global brand unit for each Masterbrand.

1957

Launched in the market

1 970’s Popularity i nc reased as milder soap

2 000

Campaign for real beauty

2 002

Self-‐esteem project

1995

Extension of Dove’s range of products

Evolu=on of brand “Dove”

1957: The ‘QuesDon Mark’ Phase

•  The 1957 launch adver=sing campaign for Dove was created by the Ogilvy and Mather adver=sing agency.

•  The message was, “Dove soap doesn’t dry your skin because it’s one-‐quarter “cleansing cream.”

hFps://www.youtube.com/watch?v=6sU8g0b1vDY

1970s: The ‘QuesDon Mark’ Phase

The term “cleansing cream” was replaced with “moisturizing cream”—but Dove stayed with the claim not to dry skin, and with the refusal to call itself a soap,

for over 40 years

1995: The ‘QuesDon Mark’ Phase

•  Brand extension: from 1995 to 2000, Dove extended its range of products.

•  It also ventured into men’s products.

The Star Phase: Campaign for Real Beauty

•  In 2000, Dove’s global brand director led a worldwide inves=ga=on into women’s responses to the iconography of the beauty industry.

•  Unilever went to 3,000 women in 10 countries and explored some of the hypotheses generated by the psychologists.

•  Among the findings was the fact that only 2% of respondents worldwide chose to describe themselves as beau=ful.

The Star Phase: Campaign for Real Beauty •  “Young, white, blonde and

thin” were the almost universal characteris=cs of women portrayed in adver=sing and packaging

•  For many women these were unaFainable standards, and far from feeling inspired, they felt taunted.

•  In the search for an alterna=ve view of the goal of personal care, Unilever tapped two experts: Nancy Etcoff, a Harvard University psychiatrist and author of the book, Survival of the Prexest and Suzy Orbach a psycho-‐therapist and author of the book, Fat is a Feminist Issue.

•  Unilever also hired photographer John Rankin Waddell, an Avant-‐guarde fashion photographer well-‐known for using ordinary people in supermodel contexts and for books of nudes featuring plain-‐looking models.

The Star Phase: Campaign for Real Beauty

Campaign for Real Beauty

hFps://www.youtube.com/watch?v=XpaOjMXyJGk

Campaign for Real Beauty •  Most viewed and 3rd most shared commercial of all =me -‐

viewed more than 114 million =mes & uploaded in 25 languages to 33 of the brand's YouTube Channels

•  The 12-‐year old campaign has won a plethora of ad awards and sales have jumped to $4 billion today from $2.5 billion in its inaugural year.

•  In September 2006, Landor Associates iden=fied Dove as one of 10 brands with the greatest percentage gain in brand health and business value in the past three years. It computed that the brand had grown by $1.2 billion.

Unilever BCG Matrix




•  An approach to brand porIolio strategy •  Leading brand porIolio prac=ces for driving


Leading brand por.olio pracDces for driving growth

Three considera=ons for driving growth through brand porIolio strategy:

1.  Set a clear customer focus

ü  Understand customer profitability, iden=fy customer targets, and evaluate how well each brand in the porIolio meets customers needs

ü  A more comprehensive understanding of drivers of customer choice enables marketers to beFer structure the porIolio

Leading brand por.olio pracDces for driving growth

2.  Op=mize the brand porIolio ü  The goal is to drive growth and generate marke=ng

efficiencies

ü  Decisions o{en require tough calls and must be guided by detailed analysis of customer targets, brand performance and impact on business results

3.  Organize for success ü  Most companies fail to op=mally manage their brand

porIolios

ü  Senior execu=ves must ins=tute the organiza=onal structures, processes, and metrics that foster long-‐term brand-‐building




•  An approach to brand porIolio strategy •  Leading brand porIolio prac=ces for driving


ParDng Thoughts… Some key success factors regarding the development & implementa=on of a winning porIolio strategy:

•  A brand porIolio strategy should logically flow from, and lend

support to, the broader business strategy

•  As a rule, a porIolio of fewer, bigger and beFer brands is preferred over a broader porIolio of regional and niche brands

•  A brand porIolio strategy must provide clarity on the scope, role and interrela=onship for all brands within the porIolio

•  Brand porIolio strategy should dictate the level and mix of investment and communica=on priori=es across the porIolio

•  It is impera=ve to have an organiza=onal structure that is empowered to manage the brands and is aligned with the right talent and processes

•  A measurement system needs to be establish to gauge and guide success of the brand porIolio

How to unify & scale sustainability across brand por.olio

People . Planet . Profits

Unique Positive Contribution (UPC)

Asante Sana

Marketing

Brand portfolio strategy presentation