Academic journal article IUP Journal of Brand Management

Need States: The Missing Link to the Brand Portfolio Strategy Paragon

Academic journal article IUP Journal of Brand Management

Need States: The Missing Link to the Brand Portfolio Strategy Paragon

Article excerpt


Consider the following statement and the true implication that follows from this piece of information for brand portfolio management:

The starting point for marketers is to define categories as consumers do. Over the past decade or so, PepsiCo, for example, has recognized that customers choose, among all nonalcoholic beverages, not just carbonated ones to satisfy their need for refreshment. It has therefore made acquisitions (Gatorade, SoBe, Tropicana), developed new products (Amp, Aquafina), and completed several joint ventures (the one with Starbucks led to the bottled Frappuccino). Strong operating results have followed (Carleotti et al., 2010).

The observation above deviates from the biased norm that the companies can decide their moves and their various brand architectures, but is congruent with the idea that brands are owned by the consumers and that any subtle brand architecture strategy will only be as good as the consumers allow it to be (Keller, 2012). In a recent global study on meaningful brands, it is indicated that more than 73% of the brands would not be missed if they disappeared entirely and fewer than 20% of the global brands have a meaning that touches the lives of end-consumers. Some of these brands are Google, IKEA and Mango (Havas Media Group, 2013). A more drastic conclusion from the study is that people have a growing cynicism towards brands in general and they do not expect one brand to be able to deliver all important brand benefits. This finding has more direct implications for brand portfolio management, in that not only do consumers value meaningful brands, but also consider a diverse set of brands as being meaningful. Furthermore, the top meaningful brands outperform the stock market by 120% (Havas Media Group, 2013). It appears that only brands that have resonance with their customer base will be able to survive in the future, i.e., brands that can provide an answer to the pertinent consumer question: What about you and me? (Keller, 2012). In this world of fickle loyalty, effective brand portfolio management will probably be more important than ever before (Aaker, 2004; and LaForet and Saunders, 2005).

Brand Architecture Versus Brand Portfolio Management

There is an important difference between brand portfolio management and brand architecture: brand architecture represents, at best, an idealistic map of a territory, while brand portfolio management becomes the real expression of a brand architecture strategy. For example, a company might possess a well thought-out brand architecture without having so much of a strategy to implement and fulfill the same brand architecture. And even if a company provides a branded house model, they must sooner or later deviate from this norm if they buy a local brand with local brand equity or if they reach toward the premium or luxury segment of the market. In addition, recent research indicates that an aggregation of brands is not in and of itself a brand portfolio. The juxtaposition of brands is one of the elements, but not the sole element, necessary for the development of a brand portfolio, which is a combination of a brand ensemble and key factors borne out of organizational savoir-faire (Chailan, 2008, p. 1). The emergence of brand architecture was based to a large extent on a seminal article from Sloan Management Review, which was first published in Sloan Management Review, elaborated in the book Brand Leadership and partly reiterated in the book Brand Portfolio Strategy. "The Brand Relationship Spectrum" model became a trendsetting yet incredibly opportunistic tool for fin de siècle brand managers, consultants and brand-oriented CMOs in the era of mature brand equity, with a brandscape of endorsers and sub-brands, rather than streamlined branded houses or house-of-brands (Aaker and Joachimsthaler, 2000a and 2000b; Aaker, 2004; and Filipson, 2009).

A more dynamic contribution was provided by Keller (2012) that included four levels: corporate brand, master brand, individual brand and modifier brand. …

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