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lar customer segments with dissimilar, but complementary, needs. Here, brands actually trade equities to extend each other’ s c redibility footprint. It’s optimal to fill gaps in brands or to put forth a combined offering that’s unmatched by any one brand. Disney as a master brand, for example, is known for “wholesome family entertainment,” and all of its sub-brands and products must support this master brand identity. Thus, Disneyland and Disney World are known as exciting theme parks, but they also receive Disney’s halo association with wholesome family entertainment. The inter- relationships are easy to see because the Disney master brand is directly leveraged in each sub-brand. Branded Partnerships Brand relationship mapping may reveal gaps in the portfolio where no existing brand is relevant or credible to extend in the near future. In these cases, too many organizations will tend to jump to the conclusion that they need to create or acquire a new brand. But creating new brands is expensive and risky, and the desired benefits of acquired brands are rarely realized. In contrast, branded partnerships may be a powerful and less risky means to extend a brand’s value creation footprint. For example, the Intel brand’s recognized leadership in microprocessors may create the perceptual license to sell PCs, which also may present an attractive market opportunity. However, Intel may not possess or desire to possess the organizational capabilities to manufacture PCs. Conversely, Bausch & Lomb may have the organizational capabilities to manufacture and distribute mouthwash, and this may represent a significant market opportunity. However, consumers are unlikely to embrace a Bausch & Lomb branded mouthwash because it doesn’t fit well with the product’s perceptual license. In both cases, branded partnerships may be the optimal strategy for capitalizing on the opportunity and maximizing the portfolio. While less risky and costly than creating or acquiring new brands, success with branded partnerships requires careful selection and planning. The objective of such partnerships is to enable brand perceptual license to extend into areas where it could not otherwise go on its own, and where the attributes and benefits provided by one brand complement those offered by the other. For example, Trek and Volkswagen joined forces to offer a Trek bike and bike rack with the Jetta. This move reinforced Jetta’s attributes of “fun” and “sporty” and led to a 15% increase in Jetta sales. Similarly, Dreyer’s has built significant competencies in partnership branding, seeing each partnership as an opportunity to increase its ability to appeal to new customers in new segments. It has its own brands––Dreyer’s Grand, Dreamery––and co-branded and private-label relationships with M&M Mars, The Girl Scouts of America, Starbucks, and Godiva. All these help in the overall pursuit to own the freezer. These relationships and constructs are incorporated within the context of its overall architecture. The key to a branded partnership focuses on addressing the needs of the customer and not getting too caught up in either the details of the partnership or the hype. Too often, this has not been the case. The excitement over the success of Intel, Dolby, and the Eddie Bauer Ford Explorer has lead to numerous illconceived branded partnerships that may have sought to capitalize on a trend, but in reality offered little real value to customers of either brand. Strategic Consolidation Natural momentum, management egos, and the allure of promising acquisitions are the reasons why an unhealthy degree of brand proliferation occurs. Most businesses suffer from the resulting economic and management burdens of trying to support too many undifferentiated brands in the portfolio. Brands within a given portfolio may have differing equities and serve different market needs or customer segments, but they often may not be differentiated or meaningful enough to consumers to justify the costs and effort needed to effectively support them. Given the realities of globalization, budget limitations, and brand proliferation in the marketplace, companies that can focus their limited resources on a smaller number of valued brands will be the ones to achieve global and category dominance. While many organizations recognize this, too few are able to effectively address the issue because of the emotional attachments that exist. The result is further brand proliferation and a sub-optimized brand portfolio. Here again is where brand i n t e r- relationship mapping and the value creation footprint can both identify areas where brands may be consolidated as well as be the means for bringing the market focus and objectivity needed for effectively addressing these issues. Brand arc h i t e c- t u re helps define the varying roles that diff e rent brands should play within the portfolio––identifying and re i n f o rcing some as power brands that will be strongly supported growth drivers for the business and others that may be important niche brands needed to fill out the portfolio. The focus is on optimizing the value of the overall brand portfolio, not necessarily of the individual brands. If done through a strategic brand lens, mergers and acquisitions can fill identified gaps in, or expand the relevance and reach of, brand portfolios. Unfortunately, this is seldom done because most mergers are still about the art of the deal and accelerating top-line revenue growth. Managers tend to emphasize the terms and management implications of the deal, but often fail to determine how the brand or brands being acquired will fit into and complement the existing brand portfolio or identify new synergistic value creation opportunities that will optimize the new portfolio’s value. As stated previously, the result of most mergers and acquisitions is more often brand proliferation and market confusion than the realization of new brand synergies and brand value creation. There are exceptions, which tend to result from companies applying a strategic brand lens and using brand architecture to guide and drive merger and acquisition activity. Companies like GE and Clorox have used well-defined brand architectures and strategies to consistently guide the selection, integration, and leverage of new brands and businesses. And S. C. Johnson took a similarly strategic approach in its purchase of the Ziploc brand. It clearly defined the role brand would play in complementing its existing portfolio, the opportunities for future brand
synergies and consolidation, and new products that would help drive growth and redefine the Ziploc brand. Similarly, brand-based acquisitions can be used to reshape brand identities by creating and promoting desired brand linkages within the portfolio. One of the objectives Unilever hoped to achieve through its acquisition of Ben & Jerry’s Ice Cream was to enhance the image and associations of its brand as socially responsible. Ben & Jerry’s, a brand representing both high quality, unique ice cream and social and environmental responsibility, had the perfect equities to help Unilever achieve this and thus extend the license and identity of the brand. Through strategic management of this brand linkage, Unilever has begun to successfully migrate some of these desired brand equities from the Ben & Jerry’s to the Unilever brand. C reating a whole new brand is expensive and risky and should only be examined in cases when the other afore m e n t i o n e d value creation strategies are not viable. Even Procter & Gamble, one of the most successful brand-building companies, has had to focus on other means to optimize brand portfolio value. On the heels of several failed new brand launches, P&G concluded that the costs and risks associated with launching new brands would leave inadequate re s o u rces to fund, support, and grow the curre n t portfolio. Instead, its recent brand portfolio optimization strategies have focused on rationalizing and eliminating weaker brands in the portfolio as well as establishing new branded partnerships and linkages between portfolio brands that were once kept separate. In certain situations, however, creating a new brand may be the best option. The development and launch of these new brands must not only be grounded in proven and traditional brand management approaches, but also must align with forward-looking brand architecture strategies and long-term brand value creation and portfolio optimization. Managing the Brand Traditional approaches to brand management are not as focused on and supportive of brand portfolio optimization as they could or should be. Hierarchical brand arc h i t e c t u res as well as brand management’s focus on siloed brand-building activities and accountabilities continue to re i n f o rce a sub-optimal approach to brand management. While senior marketing executives or category managers may have purview and accountability across multiple brands, their focus on brand syne rgies is generally less strategic in dealing with issues like shelf space management and replenishment across brands. Brand management needs to shift to a new mindset geared to maximizing the value of the brand portfolio as a whole. Vi e w i n g each brand in isolation will result in a sum that is equal to its parts (1+1+1=3). The new brand portfolio approach results in a sum that is greater than its parts (1+1+1>3) because the efforts behind building one brand are now put in the context of the whole. In order for this strategic mindset shift to come about, a few changes in the brand management structure need to occur. First of all, goals and objectives must be clearly delineated so all are clear on what the brand portfolio is trying to achieve. If the goal is to expand the footprint of the master brand, everyone must know where the brand wants to go and begin planning around how his or her brands and organization can help that occur. Second, in multi-brand organizations, category managers must assume a more active branding role, becoming owner of the brand portfolio and manager of the brand architecture. They will know the equities of each brand, how they are shared (or not) between brands, and help brand managers see the bigger brand picture. In addition, compensation of brand mangers must ensure that behavior changes supporting the 1+1+1>3 approach become a reality. Otherwise, they’ll continue to maximize the value of their one brand because that is what defines their success. The other key to successful brand portfolio management is establishing guidelines and criteria for decision making. The guidelines clearly articulate the brand strategy and appro a c h (e.g., a master brand approach using targeted sub-brands in target markets). They also articulate the diff e rent types of brands that will be leveraged, the role each plays in the portfolio, the equities each offers, and how these equities are related to and s h a red between each brand. Guidelines must also establish what exceptions will be allowed, which helps establish clear criteria and removes subjectivity and emotion from the decisionmaking pro c e s s . To make sure the brand guidelines are being followed, it’s critical to establish a brand council that oversees the performance of the brand portfolio and enforces the brand guidelines. It also p rovides a forum to bring brand managers together. These councils should consist of each brand manager, the category manager, and other strong brand influencers. The council will be a foru m for updating everyone on what all the brands are doing and allow strategic and tactical planning between brands to occur. The increasing tendency among the most forward-thinking organizations is to ensure that their brand strategies are better aligned with––if not incorporated into––their overall business strategies. This is, in fact, the next logical step for maximizing the brand’s value as one of the organization’s most crucial business assets. But melding the brand and business strategies is no small challenge. A crucial first step is to ensure that the organization’s family of brands is being viewed and managed just as proactively as other assets––through the appropriate approach to and utilization of a more strategic approach to brand architecture. Brand architecture, based less on the static, internally focused hierarchy of brands and more on the customer’s experiences and value derived from them, represents an untapped, but powerful strategic weapon. It better enables the organization to take full advantage of synergies between its brands and respond efficiently to market opportunities. By broadening the view of brand architecture to focus on the brand portfolio instead of individual brands, the growth-inhibiting effects created by the typical siloed approach to brand management can be largely removed. The end result is a business that smartly leverages the value of its brand portfolio to achieve long-term growth in keeping with the organization’s strategic goals. ■ About the Authors Michael Petromilli is a director and Dan Morrison is an engagement manager in <strong>Prophet</strong>’s Chicago office. They may be reached at mpetromilli@prophet.com and dmorrison@prophet.com.
Page 1 and 2: c re at i n g b ra n d h a rm o ny
Page 3: EXECUTIVE b r i e f i n g Brand arc

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