The challenge of multi-brand management is to successfully address the different needs of customers without your own brands or products cannibalizing each other. We support you in mastering this balancing act. We define roles and territories of brands in the market. We design product portfolios in such a way that they are “mentally convenient” for customers while at the same time maintaining self-similarity to the brand.
In contrast to brand architectures, the focus of brand portfolios is on the horizontal arrangement of brands. It is particularly challenging when a company wants to better capture a market through more brands, as Volkswagen AG does with VW, Audi, Skoda or Seat. The issue here is,
Determining the roles of the brands in the market. For example, in the detergent market, Spee is Henkel’s fighting brand, while Persil is the top product.
Clearly defining the territories that you want to occupy with the brand so that different target groups can be addressed effectively. Persil is for premium customers, Spee for price-sensitive buyers.
The yardstick for this is the radical alignment to different customer needs. This results in different options for segmenting markets. The better the brands cover these segments with their brand promises, the more successful a brand portfolio is. Too many brands with too little clear profile lead to cannibalization effects. The additional costs of multi-brand management are no longer covered, or only inadequately covered, by the resulting additional sales.
As a rule, companies tend to want to offer more and more. More brands, more products, more advertising, etc. However, more is not always necessarily better. People have limited cognitive capacities. The faster the pace and the greater the number of new products, the more likely sales will fall. This is the logical consequence, considering that customers will turn away if they feel overwhelmed by the flood of products.
The biggest challenge with product portfolios is that they become more comprehensive over the years as new trends and customer needs are translated into new products. Product portfolios then grow in number of products and usually become confusing for customers. Instead of buying more, this complexity often leads customers to buy less and turn to competitor offerings that are easier for them to access.
Therefore, product portfolios as well as new innovations and variants must be developed hard to meet customer needs and brand identity. Only if these
can long-term profitability be guaranteed.
We sharpen promising brands, eliminate weak brands and products, and focus on covering potential growth areas. We support you in developing a product portfolio in which each individual product plays an important role, which clearly illustrates the added value of each product, and which guarantees long-term sales and profitability while reducing costs. We also explore systematics for integrating future brands and products and maximize existing synergies.