While there are enough ways of setting or adding new brands in a product portfolio, following a few tips and tricks can bring improvement and better outcomes.
In this article at Forbes, Harsh Pamnani explains that some organizations add new brands in their product portfolio even after having enough brands with significant market presence. The reason being, they follow some hidden opportunities and challenges behind the management of brand portfolios.
Inevitable Steps of Brand Portfolio
Prior to taking a leap, it is vital to consider the pros and cons of the active portfolio before completely diving into the process of establishing a new one. Here are some positive and negative aspects of the brand portfolio:
The Negative Aspect
- New Brands, New Costs: Every new brand conveys a new need, be it packaging, sales force, distribution channel, advertising, promotion, vendor management, or even manufacturing. These needs increase the overall cost of the project.
- More Brands Means More Communication: In the current market scenario, the consumer’s attention span is radically abridged, and the range of marketing channels have amplified. To grab customers’ attention, multiple brands are using millions of ways while the new brand is following the strategy that turns out to be a volley of options for the potential audience.
- Never Ending Pressure: With an aim to gain maximum market share, each new brand brings new expectations and upsurges performance pressure for the managers.
The Positive Aspect
- Create Separate Identities: The brand perceptions are shaped as per the category it represents. Different categories, market segments, and channels have different expectations and a brand cannot talk about multiple qualities of its products at the same time. So, once a product with diverse qualities has been made, a brand has to create an absolutely new identity for it to launch in the market.
- Entry Barriers for Competitors: Cannibalization is a vital element to increase an organization’s market presence. By introducing a new brand that can hamper competitors way more than the company’s own products, many marketers target to capture a different segment of the buyer to make room for their own products.
- To Innovate: To remain pertinent to the consumers, constant innovation is essential for the organizations. However, some innovations backfire in the initial stage. The organizations can draft a new brand to test customer reaction.
- Leverage the Popularity of Acquired Brands: As a global firm acquires a local brand, it gets access to the R&D, manufacturing, distribution, sales, and market dominance of the local brand. While creating its brand portfolio, each organization must target a specific segment and must design a unique proposition for the customers that can be leveraged upon during an acquisition deal.
Click on the following link to read the original article: http://www.forbesindia.com/blog/marketing-and-branding/how-to-create-a-brand-portfolio/