Academic journal article IUP Journal of Brand Management

The Nature and Scope of Brand Portfolio Signals within Brand Portfolio Management

Academic journal article IUP Journal of Brand Management

The Nature and Scope of Brand Portfolio Signals within Brand Portfolio Management

Article excerpt

Brand portfolio management not only requires creating and sustaining brand portfolio singáis in the marketplace, but also gradually developing an understanding of those signals. This paper discusses the opportunity space for creating and sending relevant brand portfolio signals from the brand owners to the market(s) in terms of end-consumers or financial markets. In addition, a valuable distinction between strategic and tactic brand portfolio signals are provided in the text.

Introduction

Creating and sustaining a strong brand portfolio balance has become a brand portfolio objective for many firms beside more traditional objectives, such as synergy, leveraging, clarity and building generally strong brands (Aaker, 2004). This is true for any type of brand portfolios, be they in the soccer category, the entertainment category, and product or service brands. With increased focus on brand portfolio management, the issue of market signaling becomes a crucial skill for developing effective brand strategy. However, the brand portfolio signal must overcome the noise in the market to have a true impact on any target group. Consider the power and implication of the brand portfolio signal sent out by the Luxoticca group around their brand licensing process:

Luxoticca's brand portfolio is one of the richest and most prestigious in the industry as its major global brands are backed by leading brands at a regional level and in particular niche markets. It has also an optimal balancing of house and license brands.

(The Luxoticca Brand Portfolio, www.luxoticca.com)

The brand portfolio signal sent out by the Luxoticca group is of a multi-stake holder kind. First, it is a story about a brand-balance signal, with respect to how marketing resources should be balanced. Second, it is a signal around business-strategy and the ways that business can be built around licensed entities. Third, it is a signal to investors around cash-flow generations from brands-in-use (Hsu et al, 2010; and Uggla and Lashgari, 2012). Finally, it is a customer-based brand equity brand portfolio signal, an end-consumer narrative around the strength and equity of certain particular brand associations. In many and varied ways, a brand owner can thus create and send out brand portfolio signals to the marketplace with more or less substance that will add (or subtract to) the total brand delivery. From this overarching view, we may conclude with defining a brand portfolio signal as:

An intentional brand portfolio-related stimuli from the firm to stakeholders and consumers in the market on a more or less visible level of value.

First, the intentional component can be based on very different levels, for example, it can be a stimuli concerning brand portfolio objectives, a certain brands architecture, a press-release concerning post-merger brand behavior, etc. Second, the direction and flow of meaning from firm to customers provide endorsement to the fact that to a certain extent, brand portfolio related stimuli also reflect a brand promise of a kind, or at least facets herein. The value component finally relates to the level in a value hierarchy where the brand portfolio message fits in. For instance, the brand portfolio signal may revolve around luxury, premium or value signals.

Strategic Versus More Tactic Brand Portfolio Signals

A first distinction can be made between strategic and tactic brand portfolio signals. Strategic singáis are intended to create a long-term change for the brand and its disposition in the market. A brand acquisition, or a co-branding venture such as the long- term contract between Disney and McDonalds can be viewed as a strategic signal, providing long-term value and also long-term consequences for the firm. Tactic signals are very different, they may also have more short-term intentions and consequences; for instance, a press-release signaling a short-term change in the portfolio or a promotion campaign of any kind with implications for the portfolio. …

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