How to Prioritize your Portfolio of Brands

BBI Learning LogoWhen you have a group of brands and you need to sort through the focus, the temptation is to try to hedge your bets and spread a little love to each brand.  As I managed 15 brands at Johnson and Johnson, I finally came up with a very simple rule that I affectionately called “a third, a third, a third”.  No matter how good the year was, a third of the brands would do amazing, a third would do ok and a third would struggle.  To win in the market, and hit my plan, I had to make sure the third that did amazing out-paced the third that struggled.

Some leaders would see that situation and want to spread their resources to that bottom performing brands, just in case the high performing brands didn’t come through.  But hedging your bet just means you never fully realize the full potential of those high performers.  Here’s the rule:  Focus your resources on those brands that can offer the fastest growth and allow them to outpace those that are slower growth.  

First Look Externally at the Market

For decades, people used the BCG priority grid, BCG-Matrixa simple two by two matrix with market growth on one axis and market share on the other.  The simplicity of the grid works:  how healthy is where you play and what is the opportunity to win where you play?  Stars are where you want to invest and dogs are you want to divest.

A very simple improvement on this grid was to go to a 3×3 version of the grid that gives you more flexibility in choices.  Plus calling it market attractiveness goes beyond just growth and competitive strength goes beyond just market share.  If you want to go deep, I’d encourage you to come up with 3-5 criteria for what each axes can mean.  Market Attractiveness can be a combination of growth, size, profitability, ease of servicing, future growth, manageable barriers to entry.  Your competitive strength could be a combination of growth, size, aligned resources and assets, competitive advantage (technology, patents, positioning), brand loyalty and strength of the connection to consumers.  Each of the 9 boxes has a recommendation for either increasing the market attractiveness or increasing your own brand power.  

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From the grid, you can see three green investment boxes.  Where you have high competitive strength but in a moderately attractive category, it might be worth your while to invest to grow the category.  Conversely, where you have moderate strength in a highly attractive category, you want to invest to strengthen your brand.   The yellow boxes are moderate investment options and the red boxes represent minimal investment or divest situation.  

Then Look Internally at the Market

Once you feel comfortable with how the brands line up externally, it might be worth a second look to compare how they look internally.  As you line up your portfolio, the goal is to maximize the longer term profitability of those brands.  Here you want to look at Brand Growth rates and Margin percentages.  And for each box, there is a recommended action.  For instance if you are a high growth brand with lower margins you want to find a way to take the power associated with the growth and look to increase prices where possible either through a price increase or by trading them up to a premium version of the offering.  Conversely, a medium growth brand in the same low margin box might have less brand power to warrant the price increase, so you should be looking at reducing COGs or marketing spend.  Slide1

You’ll see the same colour combinations, greening meaning invest in growth, yellow is maintain and red means divest.  Each of the 9 boxes has a recommendation of how to optimize the P&L for that brand and the overall portfolio.

To read more about Brand Analysis, I’d encourage you read: How to Go Deeper on Analysis

Focus on the growth Brands and they’ll outpace the decline of the weaker brands

To read more on How to Analyze Your Brand, read the presentation below:

 
 

email-Logo copyABOUT BELOVED BRANDS INC.:  At Beloved Brands, we are only focused on making brands better and making brand leaders better.Our motivation is that we love knowing we were part of helping someone to unleash their full potential.  We promise to challenge you to Think Different.  We believe the thinking that got you here, will not get you where you want to go.  grOur President and Chief Marketing Officer, Graham Robertson is a brand leader at heart, who loves everything about brands.  He comes with 20 years of experience at companies such as Johnson and Johnson, Pfizer Consumer, General Mills and Coke, where he was always able to find and drive growth.  Graham has won numerous new product and advertising awards. Graham brings his experience to your table, strong on leadership and facilitation at very high levels and training of Brand Leaders around the world.  To reach out directly, email me at graham.robertson@beloved-brands.com or follow on Twitter @grayrobertson1

 

At Beloved Brands, we love to see Brand Leaders reach their full potential.  Here are the most popular article “How to” articles.  We can offer specific training programs dedicated to each topic.  Click on any of these most read articles:

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Happy Valentines: A Love Story For Brand Leaders

Why Does Love Matter for a Brand?

Today is all about love.  And while you might be buying some flowers or chocolate for the one you love, what are you doing to show your consumer that you love them?   How do you expect them to love you, if you don’t show them a little bit of love.  

Here’s a cute ad that Coke, one of the most beloved brands, is doing to celebrate the day with their consumers.  

More Love Means More Profits

Brand Leaders are thinkers and don’t always feel comfortable getting all emotional.  They don’t have time for fluff, because they have a bottom line to hit.  How many times have we heard: “keep it simple, show my product shot, say my superiority claim, show a demo and the product will sell itself”.  

But what if I told you that the more love you can generate for your brand, the more money you will make.  Does that sound like crazy talk?

The Brand Love Curve

In the consumer’s mind, brands sit along a hypothetical Brand Love Curve, going from Indifferent to Like It to Love It and finally becoming a Beloved Brand for Life. 

Love Curve Detailed

The farther along the curve the deeper the connection.  At the beloved stage, demand becomes desire, needs become cravings, and thinking is replaced with feelings.  Consumers become outspoken fans.  That connection helps drive a positional power for your brand—a power versus competitors, customers, suppliers and even versus the very consumers that love you.  With that power, consumers will pay more, use more and follow where the brand goes next.   All this love goes straight to the bottom line. 

Brand Love: 

Marketers keep debating what makes a great brand.  Is it the product, the advertising or even the experience?  There are 5 sources of Brand Love: the brand promise, experience, strategy, innovation and the communication of the brand story.   

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The brand’s promise must be relevant, simple and compelling enough to connect. A brand can only be better, different or cheaper.  Otherwise it won’t be around for very long.  The most beloved brands are based on an idea worth loving.  The strategic choices should start with where the brand is on the Brand Love Curve and finding ways to create a deeper connection.  Externally, the promise is delivered through communication, but just important the brand acts as an internal beacon to the culture and the R&D.   The brand story expresses the promise in a compelling way, whether through paid media, earned, social and search.  The experience created by the culture has to over-deliver the brand promise. Freshness of innovation, keeps the brands one-step ahead of competitors.   Every new product should tie back to the brand promise.   Execution in every facet matters:  you have to love what you do.   If you don’t love the work how do you expect your consumer to love your brand?

 

Brand Power: 

Once you create love with your consumer, the key is turning that love into power. 

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That starts with a power over the very consumers that love them.  The most loyal users line up in the rain for new products, promote and defend the brand, pay the price premium and even follow the brand to new categories.  With this connection, beloved brands have a power over channels, as people would rather switch stores than switch brands.  There’s a power over the media. Not only can you afford more paid media, you can generate more free media: earned, social or search media.  Apple generates over a billion dollars of free media via the mainstream media and social media.  Beloved Brands have a power over employees that want to be part of the brand who intimately know and bring a passion to the brand before they even start.

Brand Profit:

Because the brand is now tied more to how you feel than just the product, there’s a direct impact on the P&L. 

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The most beloved brands create momentum as crowds follow crowds, turning it into share gains.  Consumers follow the Brand into new categories.   The price is inelastic with loyal brand fans pay a 20-30% price premium and even the weakened channels and take lower margins.  In terms of costs, suppliers will cut their price to be on the brand’s roster, and higher volumes lower cost of goods.  With higher share, new categories, an inelastic price and lower cost structure, the most beloved brand can turn the connection into growth profits. 

 

The formula for a Beloved Brand is simple:
Beloved = Power = Growth = Profit

 

So maybe it’s time for Brand Leaders to start asking: “And how will this make our consumers love my brand”

 

 

Here’s a summary on Creating a Beloved Brand: 

 

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  1. How to Write a Creative Brief.  The creative brief really comes out of two sources, the brand positioning statement and the advertising strategy that should come from the brand plan.  To read how to write a Creative Brief, click on this hyperlink:  How to Write a Creative Brief
  2. How to Write a Brand Positioning Statement.  Before you even get into the creative brief, you should be looking at target, benefits and reason to believe.   To read how to write a Brand Positioning Statement, click on this hyperlink:  How to Write an Effective Brand Positioning Statement
  3. Turning Brand Love into Power and Profits:  The positioning statement sets up the promise that kick starts the connection between the brand and consumer.  There are four other factors that connect:  brand strategy, communication, innovation and experience.   The connectivity is a source of power that can be leveraged into deeper profitability.  To read more click on the hyper link:  Love = Power = Profits 

Brand LeadershipI run the Brand Leader Learning Center,  with programs on a variety of topics that are all designed to make better Brand Leaders.  To read more on how the Learning Center can help you as a Brand Leader click here:   Brand Leadership Learning Center

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To reach out directly, email me at graham.robertson@beloved-brands.com

About Graham Robertson: The reason why I started Beloved Brands Inc. is to help brands realize their full potential value by generating more love for the brand.   I only do two things:  1) Make Brands Better or 2) Make Brand Leaders Better.  I have a reputation as someone who can find growth where others can’t, whether that’s on a turnaround, re-positioning, new launch or a sustaining high growth.  And I love to make Brand Leaders better by sharing my knowledge.  Im a marketer at heart, who loves everything about brands.  My background includes 20 years of CPG marketing at companies such as Johnson and Johnson, Pfizer Consumer, General Mills and Coke.  My promise to you is that I will get your brand and your team in a better position for future growth. Add me on LinkedIn at http://www.linkedin.com/in/grahamrobertson1 so we can stay connected.

When Your Brand is Liked but Not Loved

Don’t feel bad about being at the Like It stage, because that’s where most brands are.

You have been able to successfully carve out a niche and be a chosen brand against a proliferation of brands in the category.    And you have good share results, moderate profits and most brand indicators are reasonably healthy.  It’s just that no one loves you.

Does it really matter?   Brands move from Indifferent to Like It to Love It to Beloved Brand for Life.  But isn’t being Liked Enough?   If you could move to a Loved brand, you would have a very tight connection with consumers.  That connection becomes a source of power that you can harness, and then use to drive higher growth and profits.  How can you harness the power Love in the market?  If you are loved, you’ll have power over retailers generating preferential treatment, because they know their consumers will switch stores before they switch brands.  You can push suppliers for lower costs because they’ll want to tell others they supply you,  You can generate free press, because your brand is now all of a sudden newsworthy.  You’ll have cheaper real estate because malls will want your brand to anchor the new mall.   Employees will sacrifice wages just to have your brand on their resume.   And loved brands can even use that power on the very consumers that love you already:  new products will generate early awareness and trial.   All this power, derived from the connectivity to consumers, can be harnessed to generate higher growth rates and added profits.  Ask Apple, who is the most loved and the most profitable.  They understand the formula:  Beloved = Power = Growth = Profit.

Many times I find it hard to convince logical brand managers that being more loved matters.  They stick to the safe logic of claims over benefits, stick to the rational of side-by-side demonstrations and they settle for likeable execution instead of pushing for loveable work.  They worry going emotional feels risky.  Unsafe.   I’m a logical profit driven marketer.  I believe in proof.  Emotional is silly agency talk.  You might be right because the only advantages a Loved Brand offers is higher growth rates, higher margins, lower costs to serve and overall higher profitability.  So stick to being liked and your modest results.

How the consumer sees your Brand at the Liked Stage:  

Consumers see your brand as a functional and rational choice they make.   They tried it and it makes sense so they buy it, use it and they do enjoy it.  It meets a basic need they have.  They likely prefer it versus another brand, but they think it is better, cheaper or easier to use.  Or your mom told you to use it.  But, consumers don’t have much of an emotional connection or feeling about the brand.     Where Indifferent is really bad, you’re ordinary, which is just a little bit better.  Overall, consumers see you brand in the “it will do” space.

Why is your brand Stuck at the Like It stage?

There are seven possible reasons why you are at the Like It Stage:

  1. Protective Brand Leaders means Caution:  While many of these brands at the Like It are very successful brands, they get stuck because of overly conservative and fearful Brand Managers, who pick middle of the road strategies and execute “ok” ideas.  On top of this, Brand Managers who convince themselves that “we stay conservative because it’s a low-interest category” should be removed.   Low interest category means you need even more to captivate the consumer.
  2. We are rational thinking Marketers:  Those marketers that believe they are strictly rational are inhibiting their brands.  The brand managers get all jazzed on claims, comparatives, product demonstration and doctor recommended that they forget about the emotional side of the purchase decision.   Claims need to be twisted into benefits—both rational and emotional benefits.   Consumers don’t care about you do until you care about what they need.  Great marketers find that balance of the science and art of the brand.   Ordinary marketers get stuck with the rational only.
  3. New Brand with Momentum:  Stage 2 of a new brand innovation is ready to expand from the early adopters to the masses.   The new brand begins to differentiate itself in a logical way to separate themselves from the proliferation of copycat competitors.   Consumers start to go separate ways as well.  Retailers might even back one brand over another.  Throughout the battle, the brand carves out a base of consumers.
  4. There’s a Major Leak:  If you look at the brand buying system, you’ll start to see a major leak at some point where you keep losing customers.  Most brands have some natural flaw—whether it’s the concept, the product, taste profile ease of use or customer service.   Without analyzing and addressing the leak, the brand gets stuck.  People like it, but refuse to love it.
  5. Brand changes their Mind every year:  Brands really exist because of the consistency of the promise.  When the promise and the delivery of the promise changes every year it’s hard to really connect with what the brand is all about.  A brand like Wendy’s has changed their advertising message every year over the past 10 years.  The only consumers remaining are those who like their burgers, not the brand.
  6. Positional Power–who needs Love:  there are brands that have captured a strong positional power, whether it`s a unique technology or distribution channel or even value pricing advantage.  Brands like Microsoft or Wal-Mart or even many of the pharmaceuticals products don`t see value in the idea of being loved.   The problem is when you lose the positional power, you lose your customer base completely.
  7. Brands who capture Love, but no Life Ritual:  There are brands that quickly capture the imagination but somehow fail to capture a routine embedded in the consumers’ life, usually due to some flaw.   Whether it’s Krispy Kreme, Pringles or even Cold Stone, there’s something inherent in the brand’s format or weakness that holds it back and it stays stuck at Loved but just not often enough.  So, you forget you love them.
There are lots of reasons your brand is stuck at Like It, mainly because so many of brands are at the Like It stage.  And there’s nothing shameful in it, but just know you could get more from your brand.

Indicators that Your Brand is stuck at the Like It stage

  • Low Conversion to Sales.   While the brand looks healthy in terms of awareness and equity scores, the brand is successful in becoming part of the consumer’s consideration set, but it keeps losing out to the competition as the consumer goes to the purchase stage.  It usually requires a higher trade spend to close that sale which cuts price and margins.
  • Brand Doesn’t Feel Different:  A great advertising tracking score to watch is “made the brand seem different” which helps to separate itself from the pack, many times speaking to the emotional part of the messaging.
  • Stagnant Shares:  Your brand team is happy when they hold onto their share, content to grow with the category.
  • High Private Label Sales:    If you only focus on the ingredients and the rational features of the product, the consumer will start to figure out they get the same thing with the private label and the share starts to creep up to 20% and higher.

How to get past the Like It stage and move towards the Love It stage

  • Focus on action and drive Consideration and Purchase:  stake out certain spaces in the market creating a brand story that separates your brand from the clutter.  Begin to sell the solution, not just the product.  Build a Bigger Following:  Invest in building a brand story that helps to drive for increased popularity and get new consumers to use the brand.
  • Begin to Leverage those that already Love:  Focus on the most loyal consumers and drive a deeper connection by driving the routine which should increase usage frequency.  On top of that, begin cross selling to capture a broader type of usage.
  • Love the Work:  It is time to dial-up the passion that goes into the marketing execution.   Beloved Brands have a certain magic to them.  But “Like It’ brands tend to settle for ok, rather than push for great.  With better work, you’ll be able to better captivate and delight the consumers.  If you don’t love the work, how do you expect the consumer to love your brand.
  • Fix the Leak:  Brands that are stuck have something embedded in the brand or the experience that is holding back the brand.  It frustrates consumers and restricts them from fully committing to making the brand a favourite.  Be proactive and get the company focused on fixing this leak.
  • Build a Big Idea:  Consumers want consistency from the brand—constant changes to the advertising, packaging or delivery can be frustrating. Leverage a Brand Story and a Big Idea that balances rational and emotional benefits helps to establish a consistency for the brand and help build a much tighter relationship.

Brands at the Like It stage get complacent.  You need to drive the Love into the work, and find the balance between rational and emotional benefits. 

 

About Graham Robertson:  I’m a marketer at heart, who loves everything about brands. I love great TV ads, I love going into grocery stores on holidays and I love seeing marketers do things I wish I came up with. I’m always eager to talk with marketers about what they want to do.   I have walked a mile in your shoes.  My background includes CPG marketing at companies such as Johnson and Johnson, Pfizer Consumer, General Mills and Coke.  I’m now a marketing consultant helping brands find their love and find growth for their brands.  I do executive training and coaching of executives and brand managers, helping on strategy, brand planning, advertising and profitability.  I’m the President of Beloved Brands Inc. and can help you find the love for your brand.  To read more about Beloved Brands Inc, visit http://beloved-brands.com/inc/