glasses focusing on the horizon

Simply defined, a brand portfolio is the collection of brands owned by a company. Often for big companies, more and more brands will be created to reach more and more audiences. While targeting more audiences sounds like a great way to build and grow a company, too many brands can cause confusion about the individual brand’s role – and eventually the corporate identity as a whole.  The problem for many companies is they think more brands will make them more successful, but they have neither the architecture nor the ability to manage a multiplicity of brands well.

Maintaining and creating a successful brand is not an easy feat; much less maintaining tens or hundreds of brands. Think of each brand as a child. If you had three children, you would likely be able to nurture them, help them grow, and create individualized identities. If you had 100 kids, that same level of support seems daunting and impossible. The same goes for brands. If a company houses a few brands, it can create meaningful and well thought out campaigns. Furthermore, it will have the resources to maintain and ensure the growth and success of each brand. If a company houses a long list of brands, it becomes challenging to monitor and help each brand carve out a unique role.

Done correctly, creating a brand is very expensive. They are an investment and require a large amount of funding even to reach the market. Very few companies have been able to create and build long a long list of brands. Some of the best examples of these types of companies are Coca-Cola and Toyota. Coke now owns over 800 drink products, and Toyota maintains over fifty vehicle brands. However, these two companies did not start with this many brands. Coca-Cola began selling a single product – Coke. After the company saw how successful Coke was, they decided to sell different types of Coke, then juices, waters, and so on. Toyota was the same. The Japanese car manufacturer began selling cars and trucks with one vehicle. With the success of that first brand, they added vehicles and markets. Today, they are one of the world’s biggest manufactures with an extensive and growing portfolio – comprised of brands that have evolved and remained focused.

The key take-away from these examples is to start small and focused. It is unlikely that a company is going to enter the market and successfully launch and build multiple brands at once. The critical challenge for organizations facing the specific questions of how many brands and which structure is to start with a single brand in a branded house structure and then ask: Do we need more?

During the creation of a brand, developing the brand’s positioning is a crucial step. Companies will go to great lengths to market and advertise a new brand to establish a unique and relevant position in the market. There simply isn’t enough time and resources to cultivate and support a long list of new brands all at once.

Companies need to create focused, relevant brands not just for the individual brand’s benefit, but for the impact on the corporate brand as well. When a company creates a solid, well-thought-out brand, it reflects well on that company as a whole. Conversely, when a company is attempting to market multiple new brands at once, they risk appearing unorganized – and the purpose of the company as a whole will be clouded. Consumers rely on brands to help them make purchase decisions, so companies must define and articulate clear and relevant roles for each brand they introduce to the market. Overall, success is more likely when your brand portfolio is more focused. Do the market (and your organization) a favor and don’t bite off more than you can chew.

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