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EXECUTIVE b r i e f i n g
Brand architecture has become an important component of both a business’ brand and business strategies, but it’s rarely used as
the strategic weapon it’s meant to be. When used strategically, however, a well-structured brand portfolio can drive growth for forward-thinking
businesses and help the whole family of brands reach its full potential.
the value of individual brands as well as maximizing the overall
portfolio’s value––primarily because they’re rarely understood
and generally overlooked.
H e re the opportunity for true brand value creation is neither
in looking at what can be done with brand Aor with brand
B, but what can be done with the latent synergies that exist
between them. It’s Coke’s ability to attract new Sprite and
Minute Maid drinkers, given the reassurance that all are a part of
the Coca-Cola brand family, or for Pepsi to expand the reach and
associations of its brands through its branded restaurant entities.
It’s the opportunity to increase an IT manager’s propensity to
p u rchase Tivoli software or consulting services from IBM based
on positive experiences and associations with IBM eServers.
Taking advantage of these synergistic opportunities first
re q u i res identifying where they exist and how much value customers
may derive from them. This starts with understanding the
equities and relevance of each brand in the portfolio––the attributes,
associations, and affinity that customers assign to them.
Relationship Mapping
Brand relationship mapping goes far beyond the traditional
approach of simply inventorying, classifying, and grouping the
existing brands within a given portfolio. Instead, it defines (1)
the relevance and credibility of brands, from the customer perspective,
across various need states and product/service sets; (2)
perceived limitations and extendibility of brands; (3) areas of
inter-relationship and overlap between the brands; and (4) gaps
within the portfolio.
Relationship mapping is a critical first step in identifying
potential opportunities for increasing the overall value of the
brand portfolio. Specifically, it will identify areas and means
for creating brand value, whether through leveraging existing
brands, consolidating brands, or acquiring and developing
new ones.
Once opportunities for creating brand value have been
identified, the next step is determining if and how to pursue
them in light of (1) perceptual license (i.e., the perceived or
potential credibility of brands in that space); (2) organizational
capabilities (i.e., the current or desired competencies of the
organization); and (3) market opportunity (i.e., the relative size
of the opportunity afforded). These three distinct, yet inter-related,
lenses define the value creation “footprint” and how that
particular opportunity should be pursued. (See Exhibit 1.)
The most obvious and potentially easiest value cre a t i o n
opportunities are those that fall within the bounds of perc e p t u a l
license, fit well with organizational capabilities, and offer an
attractive market opportunity. It’s easy to identify and eff e c t i v e l y
pursue these opportunities through the focus of traditional brand
a rc h i t e c t u re and management. Tr a d i t i o n a l l y, the best brandbuilding
organizations have continually increased the size of this
“sweet spot” by extending the relevance of existing brands and
acquiring new organizational capabilities to take advantage of
e m e rging market needs and opportunities.
Brand-building opportunities that exist outside of this
sweet spot, however, may afford the greatest potential for
longer-term value creation and maximizing the value of the
brand portfolio as a whole. They’re also the most likely to be
overlooked under traditional brand architecture and management
approaches that reward growth of individual brands, but
provide little incentive for pursuing synergistic opportunities
between brands and maximizing brand portfolio value. In contrast,
opportunities outside this sweet spot are more geared
toward maximizing the whole brand portfolio and increasing its
value beyond the sum of the individual brands that comprise it.
They also may require using more innovative brand-building
strategies, such as brand pooling and trading, branded partnerships,
strategic consolidation, and brand-based acquisition.
Pooling and trading. Pooling and trading are two interrelationship
driven brand-building approaches that can help
optimize the collective brand portfolio. Brand pooling occurs
when multiple, distinct brands in a portfolio are used in a concerted
fashion to address a broad spectrum of differing consumer
needs. While each brand may possess unique equities
and provide benefits aimed at different customer segments,
collectively they enable the portfolio to maximize relevance to
the broader market, achieve category benefits and its domination,
and maximize cross-selling and loyalty-building opportunities
across brands.
Trading occurs when two or more brands are used together––often
when a master brand creates sub-brands to serve simi-
E X H I B I T 1
Brand value creation footprint