10 things you need to know to build your
B B
P P
BR-ND | Emotive Transformers
3rd revised edition - 2020
10 things you need to know to build your
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P
Content
About the authors
5
Introduction
9
1
A brand is a means to an end
14
2
Commitment sought!
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3
Brand portfolio is not the same as
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organization structure 4
22
two importants concepts 5
Brand portfolio and brand architecture:
Brand association transfer: What happens in the brain
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6
One brand, unless...
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7
Strategic determinants:
35
Searching for the ‘very good reasons’ 8
The BR-ND Brand Fan:
39
Complexity made simple 9
BR-ND portfolio development:
48
A 3-step process
10
The rules are set. Now what?
54
10 things you need to know
56
to build your brand portfolio
About BR-ND
59
References
62
About the authors
This booklet is based on the scientific research and practical experience on brand portfolio strategy by Kim Cramer, founder and proud owner of BR-ND. Kim earned her Ph.D. at the University of Amsterdam in 2005, sponsored by SWOCC (Foundation of Scientific Research on Commercial Communication). Since then, she helps organizations with strategic transformation by building brands that make a positive impact on people’s lives. Thanks to Ivo Grupping, naming expert and associate of BR-ND, with whom the Brand Fan was developed. Many thanks to Alexander Koene, creative thinker, founder and proud owner of BR-ND for being the best ‘brand portfolio student-turned-into-master’, who always comes up with the winning portfolio solution. And many many thanks to our clients who trust us with their people and their brands and who give us room to explore, learn and create breakthrough transformation. © BR-ND 2009 - 2020
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Is it better to enter new markets with our current brand or with a new brand? Or the current brand in combination with a sub-brand? Or a new brand endorsed by our corporate brand?
How do we prevent an uncontrolled sprawl of our brands? What to do with the brands of two merging organizations? Do we replace our local brand with our international mother brand?
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How to manage a rebranding? Will there be a transition period with two brands? Which brand will endorse the other brand? And for how long? How do we decide upon the design of combined brands?
How to manage hundreds of product names? What types of names are suited? What will those names look like?
Is the relationship with the mother brand visible? Do we want it to be? Does the portfolio support the corporate brand positioning?
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Introduction Brands trigger associative networks of meanings in the brain. They add value to products, services, and organizations by touching people’s hearts and minds. Brands are capable of distinguishing one product or service from the other, even when these are more or less identical. It has large benefits for brand owners to create preference by developing a unique, relevant and credible position in the brains of prospects, customers, (future) employees and investors. Attractive brands can even influence how we perceive the quality of products and services. Defining how to develop such a mental position is what we call brand strategy. But what if brand owners do not have one, but several brands? Be aware, one brand is already complicated enough. Even so, organizations often have a portfolio full of brands, sub-brands, product brands and proposition names. Sometimes originated from mergers and acquisitions, sometimes from innovations, and sometimes from… well, from what actually? Research on brand portfolio management shows that in most cases, brand portfolios just happened to ‘grow that way’. Without a deliberate strategy. But to efficiently and effectively manage your business, a well thought out strategy makes sense. If only because of limited resources. Rapid growth of online, offline and social media, difficult to reach consumer segments, rapid growth
of competing brands and internationalization are just a few factors that make brand building an increasingly complicated and expensive activity. This booklet describes how deliberate brand portfolio management can support the performance of organizations. It explains the basic principles of brand portfolio thinking and shows which considerations precede an efficient and effective strategy. If you are a brand owner or consultant, we aim to provide you with insights to think about and tools to bring into practice. If you are not a brand owner or consultant, but want to be one in the future, this book is a good start. If you are a family member or friend of a brand owner or consultant, this book helps you to understand the complexity with which your relative or friend has to struggle daily. For everyone else, this booklet might be a nice first introduction into the wondrous world of brands and brand portfolio management.
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What you may already know about brand portfolio As long as providers of branded items have been busy inventing new products and services, brand portfolio management exists. Indeed, conscious or subconscious, each innovation brings up the question: shall we market this under the same brand name or another? Theory on brand portfolio management, however, is relatively young. It was not until the late eighties of the previous century that Olins presented his branding models. Olins had probably never even heard of the term ‘brand portfolio strategy’. Coming from the design world, his branding models were directed at visualizing corporate identity. Still, Olins’ models are the basis for all kinds of typologies that are developed by academics in the field of branding, like Laforet and Saunders, Hill and Lederer, Kapferer, and Aaker. Olins distinguishes the ‘monolithic’, the ‘endorsed’, and the ‘branded’ model. In the monolithic model, all propositions of an organization have the same brand name, usually the corporate brand. Virgin and Fedex are examples of this model. In the endorsed model, the individual brand is supported by the corporate brand. Chanel supports No 5, Mattel supports Barbie, and Unilever supports Ben&Jerry’s. In the branded model, every proposition has its own individual brand name.
There is no link between the corporate brand and the individual brand. Examples are most products of LVMH: Moët & Chandon, Guerlain, and Tag Heuer are individual brands that stand alone without the support of the corporate brand. Although there is quite some consensus between authors in the field of brand portfolio strategy, most of them use their own terminology. Which does not make it easier to understand. Kapferer, for example, calls the two extreme strategies the ‘mono-brand strategy’ and the ‘multi-brand strategy’. Holzhauer means exactly the same while using the terms in the opposite direction. He describes the use of one brand as the ‘multi-brand strategy’ and the use of multiple brands as the ‘mono-brand strategy’. Aaker talks about a ‘branded house’ and a ‘house of brands’, while Laforet and Saunders talk about ‘corporate dominant’ versus ‘brand dominant’. And then there are all kinds of ‘somewhere in between strategies’, like mixed brands, mono-multi, multi-mono, family brands, token endorsements, product-and-target-group-specific branding. You could easily get lost in the woods of brand portfolio terminology...
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Forget about all those terms and definitions and just remember the most important starting points:
1
Brand portfolios contain different types of brands and names describing different entities, such as corporate brands, business unit brands, proposition brands and category brands or names.
2
The central question is always whether one or several of those brands are necessary to represent the products and services of an organization.
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There are three basic routes that can be placed on a continuum on which the prominence of the corporate brand decreases from ‘mono branding’ to ‘multi branding’. In between, there are all kinds of hybrid situations in which the prominence of the corporate brand, also known as the degree of endorsement, varies.
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1
A brand is a means to an end Organizations often struggle with brand portfolio challenges. Indeed, every time an organization introduces a new proposition, the question arises ‘under which brand?’ Today, more and more organizations market ‘unexpected’ propositions. Financial services by Wal-Mart, healthcare by Virgin, coffee by Coca-Cola. An increasing number of mergers and acquisitions leads to the question of whether to use both brands, one of the brands, or a new brand. ANWB and FOX Verre Reizen, Disney and Pixar, Google and YouTube. Also, a growing number of organizations is aware of the importance of their corporate brand’s visibility on financial, employee, and consumer markets. Nestlé, Unilever, KPN. All of these changes in the brand landscape bring brand portfolio challenges. Inventing and launching a new proposition is exciting. It is even more exciting when the new proposition gets its own identity and the inventors can work together with brand strategists and creatives to discover what this identity should be. A new name, a new logo, and often a new advertising campaign is exciting stuff. It can create a lot of pride and satisfaction for the brand director and his creative agencies.
However, in many cases, there is limited consideration for the ambitions of the organization behind the brand. The corporate strategy. The brand is not a goal in itself, but a means to reach the organization’s objectives. Sometimes, it is indeed necessary to market a new proposition under a new brand name. But often it is desirable to use the existing brand. In practice, questions about how to brand a new proposition are addressed, but a clear set of decision rules is not available. Because of this, decision-making is too often based on personal and ad hoc preferences, often of the people with the most power. Internal politics often steer brand portfolio management. Leading to a sprawl of brands and names. While brand portfolio management should be steered by the organization’s objectives, together with the organization’s characteristics and it’s constantly changing market environment. These should be the strategic starting points. In many cases, these starting points create dilemmas. For example, it is easier to stimulate entrepreneurship when organizational units have the freedom to behave as independent entities, preferably with their own brand. While at the same time, it is easier to stimulate cooperation within the organization with one shared brand. The use of different distribution channels is often a reason to use several brands for one product. But in this case, costs for the organization and confusion at end-use level rise. There are lots of other reasons why brand portfolios consist of more or fewer brands. We call these
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reasons ‘strategic determinants’. In practice, they are seldom consciously considered. And that is precisely where things go wrong. For a brand portfolio to contribute to the performance of an organization, it is necessary to analyse which determinants are relevant and to which direction they point. This is a process that costs time, energy, research, and (don’t forget) a lot of commitment.
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2
Commitment sought! Brand portfolio analysis often leads to the conclusion that the number of brands needs to be rationalized. Therefore, changes within the brand portfolio are probably the most sensitive issues within the numerous branding challenges. An innovation is something to celebrate. A new advertising campaign leads to internal pride. But tell a brand owner and his clients that his brand is going to disappear, and you may be in serious trouble. Brand portfolio projects are in almost all cases emotional processes in which sentiments rule. Objective consideration of the strategic determinants is therefore very important. Even more important is to involve the brand owners and various co-workers in this objective consideration. If we want final decision-makers to embrace the outcome, you better also make them part of the process. Because what would you think if you were told that some ‘Brand Portfolio project team’ decided to cut your brand? Creating commitment is an essential success factor of a new brand portfolio strategy. It takes time, persuasion and perseverance. The process is as important as the content. This also and especially holds for the highest level of the organization. For example, it could be wise to appoint a Brand Board, in which one or more members of the Executive Committee take a seat. Not only to make sure that once decided upon
starting points, determinants, and the resulting brand portfolio strategy are implemented correctly, but also to help to make the decisions. It makes a big difference if a manager is assessed on the performance of an individual brand, or on the contribution of a proposition to the mother brand. Both situations (and their varieties) are present in daily practice.
If you hurt brands, you hurt people. You touch emotions. In 2019 it was decided by KPN, a Dutch telecom supplier, to rationalize their portfolio and eliminate the standalone brands XS4ALL and Telfort. This decision hit the national news and a public protest followed, as well as an initiative by employees of XS4ALL to start a new company with the same vision and values under a new brand: Freedom Internet.
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3
Brand portfolio is not the same as organization structure Let us clear up a widely assumed misunderstanding: the brand portfolio is often confused with the organization structure. This especially happens with service providers. In a lot of large service organizations, it is common for business units to want to be differentiated from the rest. This is no surprise since people have the natural desire to distinguish themselves from others. We do not mind being part of something bigger, but we do not want to drown in the mass. However, it is widely assumed that entities like subsidiaries, business units and departments have the ‘right’ to use their own brand. Also, it is assumed that such an ownable brand is, and in fact should be, very different from the mother brand. In practice, by the way, such ownable brands are not really that different; they often just consist of the mother brand with a descriptive label. For example, employees at the business unit ‘Brand X B2B’ see themselves as a totally different brand then their colleagues at ‘Brand X B2C’. The danger
of such perceptions is for organizations to build and maintain ten departments with ten different brands. Or worse, ten different versions of the same brand.
Legal structure Legal structure
Yamaha Corporate Holding Yamaha Corporate Holding
...
US US
Japan Japan
Custom Shop (USA) Custom Shop (USA)
Yamaha Fine Technologies Corp. Yamaha Fine Technologies Corp.
Yamaha Exporting, Inc. Yamaha Exporting, Inc.
Yamaha Metanix Corp. Yamaha Metanix Corp.
Yamaha Corporation of America Yamaha Corporation of America
...
Yamaha Music Media Corp. Yamaha Music Media Corp.
Yamaha Electronics Corporation, U. Yamaha Living tec Corp. Yamaha Electronics Corporation, U. Yamaha Living tec Corp. Yamaha Music Manufacturing, Inc. Yamaha Music Manufacturing, Inc. Yamaha Artist Services, Inc. Yamaha Artist Services, Inc. Yamaha Musical Products, Inc. Yamaha Musical Products, Inc. Yamaha Music InterActive, Inc. Yamaha Music InterActive, Inc.
BRAND PORTFOLIO BRAND PORTFOLIO
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Both in theory and in practice, this is undesirable. Building one strong brand is more or less impossible this way; a variety of associative networks are being created, and the necessary resources are in most cases far from realistic. Of course, there might be good reasons to differentiate certain entities from the rest of the organization, but the simple fact that there are legal or organizational differences does not account for differentiation on a brand level. Yamaha carries one brand for totally different companies with totally different products and services. And it goes even further: while the music industry and the motor industries activities are legally totally separated, they share the same brand! Organization structure is not the same as a brand portfolio.
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4
Brand portfolio and brand architecture: two important concepts Although the terms brand portfolio and brand architecture are often interchangeably used (as are a brand hierarchy, brand structure, and brand system), it can be handy to grasp their differences. In this way, it is easier to make a clear distinction between decisions to be made on an organization level and decisions to be made on a proposition level. On the organization level, questions are raised about the number and types of propositions and their interrelationships. The brand portfolio strategy, based on strategic determinants, provides the answers to these questions. On proposition level, other questions arise. What (combinations of) brand elements are necessary, and what should be the prominence of these elements? In other words, what will the brochure of an insurance proposition look like? Or the package of a dairy product? Will the corporate brand be represented together with a sub-brand? Or just a stand-alone brand? How about the variant name? How prominently will the brand elements be used in relation to each other? This is what we call brand architecture.
Brand Portfolio The total set of labels (brands, sub-brands, product names, variant names, and descriptors) describing the propositions and entities of an organization, and their interrelationships.
Brand Architecture The combination and prominence of verbal and visual brand elements representing a specific proposition or entity. On this level, the creative disciplines of naming and design play an essential role. For it is on this level that the visible aspects of the brand portfolio directly influence the associative network in people’s brains. Involving the creative disciplines during brand portfolio development is hence crucial to bring the abstract strategy to live for both internal and external stakeholders.
Example brand portfolio
Brand Portfolio Martini Ziekenhuis
Maasstad Ziekenhuis
MST
St Antonius
OLVG Catharina CWZ
Santeon Several leading Dutch teaching hospitals formalized their cooperation and initiated the creation of a collective national brand, named Santeon. The purpose is to further improve the quality of medical care through intensive cooperation.
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Example brand architecture corporate brand
endorser brand
domain label
visual identifier
proposition descriptor
The individual hospitals have their own brand identity, but are increasingly unified with Santeon brand endorsement.
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5
Brand association transfer: What happens in the brain The brand architecture influences the degree to which products and services of an organization are visibly related to each other and to the mother brand. This has consequences for stakeholders’ reactions towards the brands. If people know that two brands belong together, association transfer happens in their brains; associations from one brand are transferred to the other brand and vice versa. Brand association transfer is explained by the associative network theory. According to this theory, our memory functions as a complicated network of related concepts. The more often two concepts are activated simultaneously, for example through joint exposure to these concepts in the real world, the stronger the association. In psychology, we call this phenomenon classical conditioning. So, when a corporate brand is again and again visibly linked to a product brand, the connections between the corporate brand associations and the product brand associations become stronger.
For example, the associative networks of Apple and MacBook are more interconnected than the associative networks of Mars and Whiskas. While our brain is trained to understand that MacBook is a brand of Apple, it is not trained to know that Mars produces a range of catfood brands, such as Whiskas, Eukanuba, and Sheba, and also a range of confectionary brands, such as the Mars bar, Milkyway and Twix. The stronger the visible link between two elements of the brand architecture, the stronger the brand association transfer. When associative networks resemble each other, they are placed in the same mental category. Brand portfolio management has everything to do with the question of whether this is desirable. Do we want propositions to be part of the same category, or do we want them to be differentiated?
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trendsetter smooth edges
innovation
aluminium
high tech
glass stairs big stores
minimalism foolproof steve jobs
genius bar
valuable company
apple
expensive premium
macbook
iOS iPhone trendy designers companies
creativity
laptop
compact
macOS
rectangle silver spacegrey
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Be careful, having non-linked brand architecture, without any verbal or visual connection, does not automatically mean that people are not aware of the relationship between the brands. Such was the case for Facebook and Instagram. In 2019 Facebook implemented a renewed brand architecture by endorsing their acquired brands (Instagram, Whatsapp, Oculus, Messenger, and Portal).
old generation family american billionaire
formal fake news
mark zuckenberg articles
posts
social media
instagram likes
pictures
addiction
mobile memes
advertising influencers
captions
fun
new generation photoshop
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st Strategic inants
friends
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One brand, unless… The challenge to rethink the degree of differentiation within the brand portfolio leads to the question of what the optimal structure of the portfolio is. This question has a simple answer: the most efficient brand portfolio, independent of the number of propositions, consists of one brand. In this case, every investment in product performance and communication increases the visibility and strength of this one brand. Which is desirable, because people have a preference for things that are big and well-known. This is explained by the ‘mere exposure’ effect: the more exposure to a phenomenon, the more positive its assessment. The brain prefers the known above the unknown, even if the exposure is subliminal. Size and brand awareness are ‘proof’ that the product or service is okay; it means that a lot of people think it is trustworthy. And by nature, we like to choose the choice of the masses. According to Ehrenberg, we are even more loyal to brands with a large market share then to brands with a smaller market share, a pattern he calls the ‘Double Jeopardy’ effect. To be noticed throughout the daily information overload, a big and highly visible brand is of great importance.
Economies of scale, however, are not the marketers’ single argument. Segmentation, distribution conflicts, risk reduction, and ownership issues are examples of factors pleading for a portfolio of more than one brand. The danger of one brand is that is it expected to cover so many product and service categories, that it becomes an abstract concept lacking any uniqueness. While ‘unique’ is exactly what brands are meant to be, according to common belief of branding professionals. So, the real answer to the question ‘what is the most efficient and effective brand portfolio?’ should be: ‘that depends’. It depends on the reasons why it is necessary and desirable to differentiate propositions from each other and from the mother brand. And on the true relevance of these reasons. Not so simple after all... To simplify the complexity of brand portfolio challenges, in which lots of arguments are usually present, we must conduct a structured search for those arguments that are actually relevant and steering. Is it really necessary to have an individual brand for each distribution channel? Does local brand equity rightly account for an international portfolio of numerous small brands? Do needs and wants of stakeholders really differ enough to support the need for different brands? Are sub-brands really necessary to differentiate? Or are descriptive labels different enough?
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Only if there is a ‘very good reason’ to differentiate, one should differentiate. Preferably on the lowest possible level. With the least possible number of brands and sub-brands to invest in. Because building strong brands just happens to be easier if we can concentrate time, money, and energy.
One brand, unless.
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Ten most heard misconceptions in brand portfolio decisions
“This is truly a unique proposition deserving its own logo” A quick scan showed that all competitors had the same proposition in its basic assortment.
“That may hold for fast movers, but it is totally different for service providers” Although contexts may differ, the basic principles of brand portfolio management are exactly the same.
“When we have rationalized everything towards one brand, we are ready” That one brand has to be appealing! Is it clearly positioned? Does it touch people’s hearts?
“If our Marketing and Communication are in agreement, we have succeeded” Branding is not just a Marketing or Communication game. Commitment is needed from the top of the organization, as well as from Sales and all other key players.
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“Our brand is so well-known; we can not simply throw all that awareness away” Research showed that brand awareness was highly overrated.
“That is another legal entity” Why shouldn’t different legal entities operate under the same brand?
“We always choose the multi-brand strategy” A strategy should not be defined for all propositions at once. Every proposition deserves its own analysis and conclusion.
“Our intermediaries will never agree” Research showed that intermediaries did not have a problem with direct sales through the Internet.
“The cultures differ too much” The current cultures differed, but the desired shared culture steered towards one brand.
“A brand portfolio project is too expensive” Although changes in the portfolio cost money, the investment often leads to a cost reduction.
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Strategic determinants: Searching for the ‘very good reasons’ It is often thought that the choice for a brand portfolio strategy has to be made for all propositions of the organization at once. Sometimes marketeers believe they have to choose for a mono branding strategy, an endorsement strategy, or a multi branding strategy. Every proposition, however, deserves its own analysis and strategic choice, dependent on the specific market situation. Many factors may affect the structure of the brand portfolio. To prevent common factors like budget and internal politics from being the only factors considered, a checklist of strategic determinants can be useful. A structured internal and external analysis gives insight into the true relevance of these determinants. First, it is necessary to understand which determinants actually play a role. Second, we need facts and figures of these determinants. Third, it should be clear what the consequences are for the brand portfolio. Let’s take the determinant ‘distribution’ as an example. This determinant is of course only relevant for propositions that are marketed through different distribution channels.
The question is to what degree these channels differ due to distributor needs, end-user expectations, pricing, et cetera. If differences are absent or very small, differentiation on a brand level is not required. Different communication channels, packaging styles, and price levels are, if necessary at all, enough to differentiate the propositions within one brand. In practice, determinants often operate simultaneously. Sometimes they point into different directions. For example, the determinant ‘culture’ can point towards using one brand (‘one brand stimulates internal unity’), while the determinant ‘brand equity’ can point towards using a second brand (‘this brand is very strong in this specific market’). The art is to choose which determinants have priority above others. Not an easy task. But fortunately, one essential determinant is always leading. Or at least, should be. Strategy. The organization strategy, corporate purpose and desired mental brand position should be the most important determinants for the brand portfolio. For brand positioning and brand portfolio are two sides of the same coin. They can support and strengthen each other.
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Checklist Strategic Determinants
Checklist Strategic Determinants
Strategic Determinants
Relevant Facts
Consequence?
Weight
More / less brands 1 - 10
What is...
Link with mother brands
Priority
Core business Brand positioning Visibility Economics of scale Degree of centralization Internal Competition Culture Segmentation Distribution Risk Budget Ownership Market development Technology Competition Internationalization Legislation Demographics Internal Politics
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The BR-ND Brand Fan: Complexity made simple Brand portfolio challenges are complicated. The amount of information is hard to manage, as are the consequences of potential portfolio solutions. The BR-ND Brand Fan model visualizes and simplifies the current and desired brand portfolio structure and brand architecture. It is an instrument to help direct portfolio decision making and management. The model is based on the dynamic relationship between the degree of dominance of the mother brand versus the degree of dominance of other (sub) brands, category names, and proposition names. The dynamic relationship is important, since, in practice, brand portfolios are never static. The BR-ND Brand Fan translates a complicated phenomenon like brand portfolio management into a comprehensible and practical instrument, even for non-branding professionals from the lowest to the highest level.
The mother brand is the central element in the BR-ND Brand Fan. The model describes two important things:
1
The place where current and future propositions, categories, sub-brands and individual brands appear in the brand portfolio
2
The brand architecture rules in that specific place that prescribe the visual and verbal representation of the proposition.
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The BR-ND Brand Fan distinguishes four levels describing the degree of differentiation of propositions from the mother brand.
Levels 1 and 2 are subordinate to the mother brand. The brand architecture of propositions on these levels should completely (level 1) or mostly (level 2) follow the visual and verbal identity of the mother brand.
Levels 3 and 4 exceed the mother brand. Only propositions that for some reason need true differentiation from the mother brand appear on these levels. For example, because they are targeted towards totally different market segments with different needs. Or market segments where the mother brand does not have credibility. Sometimes, these brands are so strong that the mother brand does not add value. Sometimes, the mother brand does not have total ownership over the propositions. Sometimes, the propositions are about to be sold. Based on such strategic determinants these propositions deserve their own brand. Therefore, brand architecture is mostly (level 3) or completely (level 4) independent of the verbal and visual identity of the mother brand.
Weight
Level 1
Level 2
Primary Brand Domain Brand portfolio Standard propositions that fill in the mother brand; the basic assortment Brand architecture 100% visual style of mother brand Generic, descriptive proposition names
Secondary Brand Domain Brand portfolio ‘Crown jewels’: added value propositions that support the mother brand; strategic PMCs and initiatives Brand architecture Visual style of mother brand more prominent than of sub brand Semi-descriptive / associative proposition names
brand
Level 4 Separate Brand Domain Brand portfolio Independent propositions Brand architecture 0% visual style of the mother brand Distinctive names that support positioning of the individual stand alone brands
Level 3 Related Brand Domain Brand portfolio Distinctive propositions that are loosely related to and therefore endorsed by the mother brand Brand architecture Visual style of mother brand more prominent than of individual brand Distinctive names that support positioning of the individual brands
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Level 1 | the basis The first level represents the primary brand domain. Here, the mother brand functions as the main brand for all categories and propositions filling in and supporting the mother. The primary domain actually is the reason to exist for the mother brand. The products and services in this domain are not unique; most other brands within the same market have them in their assortment. Hence, it is important that the categorization, naming, and design of these propositions optimally support the brand positioning. The brand architecture rules differ per mother brand, but in general, it can be said that propositions on level 1 should completely conform to the visual identity and house style principles of the mother brand. Verbally, generic and descriptive terms should be used.
Level 2 | added value On the second level, the secondary domain, the mother brand functions as the main brand for unique added value propositions and concepts. These propositions and concepts are the ‘crown jewels’ that show what the mother brand has, besides the basic assortment. While level 1 can be seen as the ‘shop’ where you can find everything you expect in a structured way, level 2 can be seen as the ‘shop window’ where you can find highlighted added value concepts. The brand architecture on this level should thus also optimally support the brand positioning. In general, 43
propositions on level 2 should mostly conform to the visual style of the mother brand; however, to be noteworthy as a crown jewel, some degree of distinctiveness is also critical. Also, a strong degree of visual consistency between the sub brands in level 2 is preferred. Unity by variety. Verbally, more distinctive names can be used, preferably names that can be legally protected (stand-alone or combined with the mother brand). Some verbal consistency is favoured here as well.
Level 3 | endorsement On the third level, the related brand domain, the mother brand functions as an endorser for propositions that are related, but distant from the mother brand. These can be dual brands, where the relationship with the mother brand is about 50/50, or endorsed individual brands, where the mother brand functions as medium or weak endorser. While sub-brands with a strong endorsement support the mother brand, individual brands with a medium or weak endorsement hardly support the mother. Here, it is the other way around: the mother brand heavily supports the individual brand. An endorsement can be verbally, visually, or both. For sub-brands, the brand architecture rules are still related to the visual and verbal style of the mother brand. For endorsed individual brands, there is almost complete freedom. Legally, the brands on level 3 should be independently registered and monitored. 44
Level 4 | no relationship The fourth level represents the separate brand domain. Here, entities (subsidiaries, propositions) appear that operate individually in the market, the mother brand being no more than an invisible sender. Brands in this domain seem to have nothing to do with the mother brand since they are not visually nor verbally connected. Only annual reports and communication on employee or business to business markets sometimes show these brands as part of the organization’s brand portfolio. In this domain, there are no brand architecture rules; propositions do not have to conform to the mother brand’s style. The BR-ND Brand Fan is a dynamic model; propositions can migrate from one level to another. This often happens via level 3, where there is a hybrid brand architecture of two brands having an explicit relationship. Culture determinants, for example, often require a temporary brand architecture of two merging brands, before migrating to one. It is also common to introduce a new proposition as a sub-brand, before stimulating it to migrate to an individual brand with a medium or weak endorsement.
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46
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9
BR-ND portfolio development: A 3 step-process The BR-ND Portfolio Development tool contains three steps: analysis, creation, and implementation. Taking these steps leads to brand portfolio management based on facts and tangible consequences.
1. Brand portfolio audit During the analysis phase (Brand Portfolio Audit) all brands and propositions within the portfolio are studied. First individually (1a. individual brand analysis), to understand why they exist, how strong they are, who they compete with, and what legal status they have. Second, the brand portfolio is studied as a whole (1b. portfolio structure analysis), to understand if and how the brands and propositions are interrelated. The analysis gives insight into the current situation and the strategic determinants that have played a role in the past. While analysing, the current brand portfolio is visualized by the BR-ND Brand Fan. This clearly shows the current brand architecture of all propositions. In practice, such visualization often
demonstrates a non-coherent and poorly planned brand portfolio. Sometimes it even reveals total chaos. But more important, it makes clear where the lack of consistency and balance is strongest.
2. Interpretation & creation During the creation phase, the translation from strategy to brand portfolio takes place. First, the strategic starting points are listed (2a. strategy-portfolio translation). One centrally managed European brand portfolio, for example, is another starting point than local freedom in entrepreneurship. One of the most important starting points is the core business. How is it defined? Is this definition to be maintained? Should it be broader? Or smaller? Which propositions fall within the scope and which do not? A second important starting point is brand positioning. A brand representing creativity generally has more degrees of freedom than a brand representing authority. The brand positioning is by definition an ambition towards the future; it describes how the brand is to be seen by its stakeholders. The brand portfolio can help to stress aspects that are until now underemphasized. By structuring the portfolio in a certain way, but also by creating names and designs that support the positioning. Based on the strategic starting points, various brand portfolio scenarios are developed (2b. portfolio scenario creation). Again, these scenarios are
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visualized by the BR-ND Brand Fan. The scenarios are not limited to the level of the main brands. Sub brands, semi-descriptive, and descriptive labels are also included. A decision tree can help to orderly list the criteria (strategic determinants!). Based on this, decisions can be made about the place of the propositions in the brand portfolio. To give insight into the practical consequences of the brand portfolio scenarios, it is essential to prototype the various brand architecture options. A strategy is nice, but what does it actually mean for my packaging, stationery, and website? Only when the strategy is translated into concrete brand manifestations, it is possible to make wellsubstantiated decisions.
3. Decide & implement After one or several brand portfolio scenarios are developed, it is time to validate the options (3a. gap analysis). Which internal and external barriers are expected? What are the implementation risks? And how about the costs? Which scenario is the most ambitious? And which the least? Are the scenarios future-proof? Which one best matches the brand positioning? The gap analysis can be conducted by a ‘brand team’, but it can also incorporate internal or external validation research. After the gap analysis, which has possibly led to the adaptations of the scenarios, a choice has to
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be made. This is a management decision. After all, even after a profound analysis, many roads lead to Rome. The top management of the organization has to choose and be able to defend the choice. They should also take care that the rest of the organization understands, believes, and acts according to the strategy. After the decision has been made, the implementation is to be planned. The current and desired situations are known, but how do we migrate towards the future? What is the road from ‘ist’ to ‘soll’? This is where transition planning helps (3b. transition planning). This describes how long the transition will take and which criteria are used along the way. For example, an organization with a large communication budget is better able to inform a large number of people in a short time period then an organization with a small budget. And an organization with a small number of easyto-reach stakeholders requires relatively less time for the transition. Sometimes, the transition period is set beforehand, to force the internal organization to implement changes rapidly. If it is, for instance, decided to conclude the transition within two years, everyone involved has to fully commit to getting it done. Sometimes, it is chosen not to set a fixed date, but to establish transition criteria that determine the transition speed. The ‘harder’ these criteria, the easier it is to monitor the transition. ‘We only change brand X for brand Y when brand Y has 60% awareness within our target group’, is an example of such a ‘hard’ criterium.
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In practice, brand portfolio challenges do not always involve the entire portfolio. The BR-ND Portfolio Development tool can also be used for specific questions like ‘which place in the Brand Fan is the best suited for our new product?’, or ‘is it wise to replace our local brand for our international mother brand?’. Indeed, even for specific questions like that, the analysis, creation, and implementation steps are needed.
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Phases
Steps
Questions to define relevant SD’s
1a
1 Brand portfolio audit
individual brand analysis
Which brands? Why? How strong (brand equity)? Competition? Legal status?
1b portfolio structure analysis
Roles? Verbally and/or visually interrelated? Overlap/differentiate?
2a
2 Interpretation & creation
strategy portfolio translation
Strategic intents? Starting points?
2b portfolio scenario creation
Brand portfolio scenarios? Brand architecture verbalization & visualization?
3a
3 Decide & implement
gap analysis
3b transition planning
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Pros and cons? Internal and external barriers and risks?
Transition period? Transition criteria?
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The rules are set. Now what? Applying a brand portfolio strategy is like raising a family. While it is good for each member to develop their respective individuality, members can also grow by being part of the family. The ‘right proportion’ of togetherness, interrelatedness, and individuality will probably vary for each family member. Finding this ‘right proportion’ is the portfolio strategy. The problem with testing to see what works is that it is difficult to find a control family. Developing a brand portfolio strategy is a complicated and intensive task, in which the involvement of key players within the organization is crucial. Once clearly defined, the brand portfolio is easier monitored. New propositions find their place in the portfolio through transparent decision criteria that include the brand architecture rules and, thus, the degrees of freedom for naming and design. These are defined in (digital) brand manuals that preferably contain the legal status of all names and images. Developing the brand portfolio is, however, not a one-time operation. Not only the content of the strategy, but also the process of management, monitoring, and (if necessary) adaptation needs to be created. Each level within the Brand Fan has
its own control mechanisms, which can be more or less strict. A periodical review by a Brand Board is recommended to ascertain whether or not the brand portfolio strategy is still the most efficient and effective way to reach the organization’s objectives. Maybe other strategic determinants have become more important. After all, markets develop, as do organizations’ ambitions.
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10 things you need to know to build your Brand Portfolio
1. A brand is a means to an end The organization’s objectives should be the strategic starting points for the branding strategy.
2. Commitment sought! Involving top management, internal brand owners, and other key players, is an essential success factor of the strategy.
3. Brand portfolio is not the same as organization structure. The simple fact that there are legal or organizational differences does not mean that subsidiaries, business units, and departments have the ‘right’ of their own brand.
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4. Brand portfolio and brand architecture: two important concepts On an organization level brand portfolio questions arise: about the number and types of propositions and their interrelationships. On a proposition level brand architecture questions arise about the combination and prominence of verbal and visual brand elements.
5. Brand association transfer: What happens in the brain Brand association transfer is the phenomenon that associations of one brand are transferred to another brand and vice versa. The stronger the visible link between two elements of the brand architecture, the stronger the brand association transfer.
6. One brand, unless‌ The most efficient brand portfolio consists of one brand. However, one brand is not always the most effective. What the most efficient and effective brand portfolio is, depends on the reasons why it is necessary and desirable to differentiate propositions from each other and from the mother brand.
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7. Strategic determinants: searching for the ‘very good reasons’ A structured internal and external analysis gives insight into the relevance of the strategic determinants and the consequences for the brand portfolio.
8. The BR-ND Brand Fan: complexity made simple The BR-ND Brand Fan visualizes the brand portfolio structure and brand architecture. The model describes the place where propositions appear in the brand portfolio and which brand architecture rules apply to that place.
9. BR-ND Portfolio Development: a 3-step process The BR-ND Portfolio Development tool contains three steps: analysis, creation, and implementation. Taking these steps leads to brand portfolio management based on facts and tangible consequences.
10. The rules are set. Now what? Not only the content, but also the process of management, monitoring, and (if necessary) adaption of the brand portfolio strategy needs to be created. This requires at least a responsible team and a clear procedure.
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About BR-ND | Emotive Transformers
BR-ND is an Amsterdam-based boutique consultancy supporting organizations with strategic transformation through Emotive Branding. We stand for a beautiful, livable and just world in which brands contribute to people’s happiness. Leading to positive behaviour, innovation and responsible growth. As we believe in action from within, we work closely with the people who ‘are’ the brand, in an approach that finds the balance between individual and organisational drives. To get organizations in motion, we create tools that are both based on the latest scientific knowledge and fun to work with. As the inventor of 23plusone and publisher of the 23plusone Friends license, we are excited to share our ideas, knowledge and expertise worldwide with like-minded people, to make a lasting impact together. BR-ND is a certified B-Corp.
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References Aaker, D.A. (2004). Brand portfolio strategy: Creating relevance, differentiation, energy, leverage, clarity. New York: Free Press. Cramer, K. (2005). Onder moeders paraplu? Determinanten en effecten van merkportfoliostrategieĂŤn. Amsterdam: SWOCC. Ehrenberg, A.S.C., Goodhardt, G.J., & Barwise, T.P. (1990). Double jeopardy revisited. Journal of Marketing, 54 (July), 82-91. Hill, S. & Lederer, C. (2001). The infinite asset: Managing brands to build new value. Boston: Harvard Business School Press. Kapferer, J. (1992). Strategic brand management: New approaches to creating and evaluating brand equity. London: Kogan Page. Laforet, S. & Saunders, J. (1994). Managing brand portfolios: How the leaders do it. Journal of Advertising Research, 34(5), 64-76. Olins, W. (1989). Corporate identity: Making business strategy visible through design. London: Design Council.
Š 2009 - 2020 BR-ND | Emotive Transaformers Amsterdam | The Netherlands welcome@br-nd.com | www.br-nd.com
3rd revised edition - 2020
BR-ND | Emotive Transformers Amsterdam | The Netherlands welcome@br-nd.com www.br-nd.com