6 Powerful Brand Portfolio Strategy Types And Examples Introduction

Today’s consumers are spoilt for choice. They are continuously bombarded with brands vying for their attention. In this bustling market scenario, companies must strategically manage their brands to ensure they resonate with consumers and meet their ever-changing needs. 

This is where brand portfolio strategy comes into play. Sometimes, it is not enough to rely on a single brand to reach all customers and meet all their needs. 

Instead, companies often find value in building a portfolio of brands, each with its unique positioning and target audience.

This approach allows the company to cover a larger share of the market and cater to various consumer needs without diluting the brand’s core identity.

So, how do companies navigate this complex landscape? 

How do they manage their multiple brands to ensure growth and profitability while keeping their customers’ needs in focus?

The answer lies in a well-crafted brand portfolio strategy.

What is Brand Portfolio Strategy?

illustration of brand logos

A brand portfolio strategy is a strategic plan outlining how a company’s collection of brands should be organized and managed to achieve its business objectives. 

It involves making strategic decisions about brand strategy, including:

Brand Architecture

Brand Offerings

Marketing Efforts

And more

The goal is to balance the marketing investment across brands, capitalize on market opportunities, and minimize overlap between brands.

The brand portfolio strategy can be likened to a game of chess. Each brand in the portfolio is a piece on the chessboard, each with its unique moves and roles. 

The brand manager, like a chess player, must carefully strategize each brand’s moves to create a competitive advantage, ensuring each brand plays its part without encroaching on the territory of other brands in the portfolio.

The Importance of Brand Portfolio Strategy

In today’s intensely competitive business landscape, a well-constructed brand portfolio strategy is more important than ever. It can be the difference between a company that struggles to differentiate itself and one that stands out in a crowded market.

An effective brand portfolio strategy can help a company maximize its market share and profitability by:

Ensuring each brand targets a specific market segment

Avoiding cannibalization of sales between brands in the portfolio

Efficiently using marketing resources

Achieving a stronger position in the market.

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Top Advantages of a Brand Portfolio Strategy

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Implementing a brand portfolio strategy comes with a host of advantages. 

For starters, it allows a company to address a wider range of customer segments, thereby broadening its market reach.

Having multiple brands under one roof enables the company to cater to different consumer preferences, price points, and usage occasions, increasing its chances of capturing more market share.

Secondly, a diverse brand portfolio can also serve as a defensive strategy against competitors.

Introducing new brands or sub-brands in the market can pre-empt competitors and occupy more shelf space, thereby limiting the competition’s growth opportunities.

6 Brand Portfolio Strategy Examples, Types and Models

While the idea of a brand portfolio strategy may seem overwhelming at first, understanding the different types or models can make it easier to grasp. There are six main types of brand portfolio strategies:

House of Brands

Branded House

Endorsed Brands

Sub-Brands

Hybrid Brands

Free-Standing Brands

Let’s take a closer look at each of these.

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1. House of Brands (P&G)

Imagine a large house with many rooms, each hosting a different party. This is the essence of a ‘House of Brands’ strategy. 

In this model, a parent company owns multiple brands, each operating independently, often targeting different market segments. 

The brands have their own identities and marketing strategies, and consumers may not even be aware of the connection between them.

Take Procter & Gamble for instance. P&G creates more independence for brands within their portfolios with many customers unaware of the associations. 

The brand architecture is a structural representation of the affiliations and partnerships between brands, and where associations are clear, brand equity and reputation and leveraged.

#2. Branded House (Apple)

In contrast to the ‘House of Brands’, a ‘Branded House’ operates under a single, overarching brand. The company uses its brand as the umbrella for various products or services, emphasizing the master brand’s value. 

This approach allows companies to leverage the strength and reputation of the master brand to promote multiple products or services.

Apple has created various sub-brands for its products, including the iPhone and Apple TV+.

Each product is known well enough to stand apart as product brands.

However, they all incorporate Apple branding and leverage the brand visual identity and ethos of the master brand.

In this way, Apple can insert new products into different markets with the weight of the overarching Apple brand and its credibility.

#3. Endorsed Brands (Marriot International)

Endorsed Brands is a hybrid strategy that features a parent endorsed brand endorsing sub-brands, combining the strength of the parent brand with the individual identities of the sub-brands. 

This strategy can provide consumers the assurance of the parent brand while enjoying the unique offering of the sub-brands.

Marriott International, for example, features Marriott Hotels, Courtyard by Marriott, and Residence Inn by Marriott, each targeting different segments with the Marriott endorsement. 

#4. Sub-Brands

Sub-brands are a type of brand portfolio strategy where brands are connected to the parent brand but have their own identity. 

They target specific market niches and are able to leverage the parent brand’s reputation while also establishing their own unique position.

A great example of this is Coca-Cola includes Coca-Cola, Diet Coke, and Coca-Cola Zero Sugar, catering to different consumer preferences for the same product category.

#5. Hybrid Brands (VF Corporation)

Blend elements of the existing brand with new, distinct brand features. Target specific but overlapping market segments

Allow for flexibility in positioning while maintaining a connection to the parent brand

VF Corporation excels as a hybrid brand by managing a diverse portfolio of distinct lifestyle and apparel brands like The North Face and Vans. 

It leverages centralized innovation to enhance efficiency across its brands, while maintaining strong brand equity through clear market positioning and customer loyalty. Strategic acquisitions expand its reach, and a balanced global-local strategy ensures relevance worldwide. 

This approach allows VF Corporation to meet diverse consumer needs while maintaining consistent brand integrity and innovation.

#6. Free-Standing Brands (L’Oréal,)

Last but not least, we have Free-standing Brands. These brands operate independently without a visible connection to the parent company. 

This strategy allows brands to target specific markets or niches without being tied to the parent brand’s reputation or market position.

L’Oréal exemplifies the effective management of free-standing brands with its diverse portfolio, including Lancôme (luxury beauty), Garnier (mass-market beauty), and Kiehl’s (premium skincare). 

Each brand operates with a distinct identity and tailored marketing strategies, allowing for targeted consumer engagement and brand-specific innovation. This autonomy enhances operational efficiency and enables swift market-specific decisions. 

Moreover, the separate brand structure mitigates risks, as challenges within one brand do not directly impact the others. 

This approach allows L'Oréal to cover the entire beauty spectrum efficiently, ensuring brand loyalty, extensive market reach, and overall resilience.

Brand Portfolio Management Techniques

business management leader talking with employees

Managing a brand portfolio is akin to juggling multiple balls. It requires careful planning, strategic thinking, and constant monitoring. Here are some techniques to effectively manage your brand portfolio.

First, revisit your strategic intent. Understand why you have multiple strategic brands and what each brand’s role is in the portfolio.

Next, evaluate the financial performance of each brand. This will help you identify which brands are contributing to your bottom line and which are not.

Lastly, address “gray assets” - brands that aren’t performing and are diluting resources. This might involve pruning or repositioning these brands to maximize the overall performance of the portfolio.

How to Develop a Comprehensive Brand Portfolio Strategy

pepsico grocery products

Creating a successful brand portfolio strategy is much like crafting a masterpiece. It requires vision, skill, and a keen understanding of the canvas (the market) you’re working with. Here are a few steps to help you develop a comprehensive brand portfolio strategy.

Link your brand portfolio strategy to your company’s mission and objectives. Your brand portfolio should be a reflection of your company’s strategic direction.

Identify key consumer markets and segments. Understand who your target market is and how your brands meet these consumers’ needs.

Develop a roadmap for each product or service. This should outline how each brand will achieve its objectives and contribute to the overall portfolio.

Identify marketing opportunities and risks. This will help you navigate potential hurdles and capitalize on opportunities as you manage your brand portfolio.

Examples of Successful Brand Portfolio Strategies

Beyond the giants like Procter & Gamble and Apple, there are numerous examples of companies employing brand portfolio strategies effectively in various industries. 

Let’s examine a few case studies that showcase the strategic management of brand portfolios.

Revlon: A House of Brands Strategy

Revlon house of brands illustration

Revlon Inc., known for its cosmetics, skincare, fragrance, and personal care products, employs a ‘House of Brands’ strategy. 

This approach allows Revlon to target different consumer segments with its diverse range of brands.

For instance, Revlon caters to the mass market, while its brand Elizabeth Arden appeals to the premium segment. Almay offers hypoallergenic makeup, and SinfulColors serves the niche market of bold, vibrant nail colors. 

Each brand operates independently, with its own brand identity and marketing strategy, allowing Revlon to cover a wider market spectrum without brand overlap.

Hilton: Endorsed Brands at Play

Hilton Endorsed Brands illustration

Hilton Worldwide showcases an 'Endorsed Brands' strategy with its portfolio of hotels and resorts.

The parent brand Hilton endorses various sub-brands such as Hilton Garden Inn, aimed at mid-priced markets, and Waldorf Astoria, which represents luxury accommodations. 

Each sub-brand maintains its unique identity and caters to different customer segments, from budget-conscious travelers to those seeking opulent experiences, all with the reassurance of Hilton’s legacy of hospitality.

PepsiCo: Diversification with Hybrid Brands

PepsiCo’s ‘Hybrid Brands’ strategy is evident in its diverse product offerings. 

The company blends the strength of its master brand with distinctive features of its various beverages and snacks.

PepsiCo markets Pepsi, its flagship cola, alongside hybrid brands like Pepsi Max and Diet Pepsi that cater to specific consumer preferences for taste and health consciousness. 

The company also manages a wide array of other products such as Lay’s, Quaker, and Tropicana, each with overlapping yet distinct market segments, demonstrating the flexibility and reach of PepsiCo’s brand portfolio.

By exploring these case studies, it becomes clear that the strategic management of a brand portfolio is not limited to the largest corporations. 

Companies of various sizes and industries can leverage brand portfolio strategies to target different market segments, avoid brand dilution, and effectively use marketing resources to enhance their market presence and profitability.

Conclusion

We’ve embarked on a thorough exploration of the world of brand portfolio strategies, delving into its importance, advantages, different types, and real-world examples. Whether you’re managing a ‘House of Brands’, a ‘Branded House’, or any of the other strategies, the key is to ensure each brand in your portfolio has a clear purpose and target audience. 

It’s about creating a symphony of brands that work in harmony to meet diverse consumer needs, capture market opportunities, and drive profitable growth for your company.

As we wrap up, remember that a successful brand portfolio strategy is not a static document. It’s a dynamic blueprint that must evolve with your business, your customers, and the market. So, as you navigate the complex world of brand portfolio strategy, keep your eyes on the horizon, anticipate changes, and be ready to adapt.

After all, in the words of Charles Darwin, “It is not the strongest of the species that survives, nor the most intelligent, but the one most responsive to change.”

Key Takeaways

A brand portfolio strategy helps companies manage their brands to capture a larger market share, avoid cannibalization, and use marketing resources efficiently while targeting specific consumer segments.

There are six main types of brand portfolio strategies, each with different management and positioning approaches, including House of Brands, Branded House, Endorsed Brands, Sub-brands, Hybrid Brands, and Free-standing Brands.

Successful brand portfolio management involves aligning brands with the company’s strategic objectives, financial performance evaluation, pruning non-performing brands, and adapting to market changes.

Frequently Asked Questions

What are the 4 roles of brand portfolio?

The four roles of brand portfolio are: flanker brands, cash cow brands, low-end entry-level brands, and high-end prestige brands. Each of these roles serves a different purpose within the brand portfolio.

What should be included in a brand portfolio?

Your brand portfolio should include all the elements that make up your brand and sub-brands, such as logos, slogans, packaging, colors, names, domain names, and trademarks. This comprehensive collection represents your brand’s identity and assets.

What is portfolio strategy?

Portfolio strategy is the set of decisions that investors make to preserve or grow their wealth for the future. Without a strategy, investors may act irrationally and put their money at risk.

What is a brand portfolio strategy?

A brand portfolio strategy is a strategic plan that outlines how a company organizes and manages its collection of brands to achieve its business objectives, including decisions about brand architecture, offerings, and marketing efforts.

What are the primary types of brand portfolio strategies?

There are six primary types of brand portfolio strategies, including House of Brands, Branded House, Endorsed Brands, Sub-brands, Hybrid Brands, and Free-standing Brands. Choose the one that aligns best with your company’s goals.

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