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Sunday, March 8, 2009

Trimming portfolio pounds for brand health

Not all products and services are created equal. Not all deserve "brand" status. Particularly in this environment, where resources are scarce and need to be laser-like focused on customer satisfaction.

Some brands might not meet customers' important unmet needs, be able to meet revenue or profit goals or no longer support your business strategy. Identifying opportunities to trim portfolio fat turns up more resource to support those brands that are both strategically and financially the most important to the company (and your consumers).

Your portfolio goals should be to create:
• the optimal number of brands in line with business strategy
• each with a clearly defined role
• that work together to support one another
• grow value back to the company and shareholders
• and make it easy for customers to navigate and purchase their desired products

In an environment in which you have more to do with less, here are some questions that brand owners need to be asking:
Principle. What is the organizing principle of the portfolio
Perspective. What story is the portfolio telling from a customer perspective
Place. Do each of the brands in the portfolio have a clearly defined role; is there sufficient separation between the company offerings
Positioning. Which of your brands is best positioned for growth
Profit. How do our different brands contribute to profitability
Potential. Which offer future economic potential; and does market attractiveness (size and potential growth) merit investment
Performance. Do you sufficiently cover the market and target customer segments, with the fewest brands possible
Possibilities. Which brands are more firmly positioned for future growth

Answers to these questions (which really come down to relative brand strength and market attractiveness) should lead to the following actions:
• shut down weakest outcast brands
• rationalize overlapping brands
• push sleeper brands to realize full potential
• defend power brands that are strategically and financially important
• launch or acquire brands to fill gaps

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