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From Brand Acquisitions To Brand Rationalization
From Brand Acquisitions To Brand Rationalization
to Brand Rationalization
Dhanashree Borse
Roshni Shewakramani
Sourav Saraf
Vipul Sharma
Introduction
Shift in how value of firms is determined
Tangible assets (factories, inventories) -> Intangible
assets (competencies, customer base, distribution,
employees, brands)
HUL- manufacturing company -> brand marketing group
Branding- the differentiator, helps escape the
commodity magnet, greater sales, price premiums
Brands can be bought or built
Large brand portfolios- top some percentage of brands
generate the maximum sales and profits for the
company
Brand portfolio rationalization becomes important
Brand Proliferation- A costly affair
Managing mammoth brand portfolios presents the following
problems:
Insufficient Differentiation: Leads to cannibalization and duplication
of efforts
Inefficiency: Large brand portfolio -> lower sales volume for
individual brands.
Inadequate resources -> product platform sharing -> increased efficiency
but lowered perception of product variety. E.g. Volkswagen beetle and Audi
TT
Minimum amount required for marketing and advertisng a brand has
increased manifold
Lower market power weaker brands vs private labels. It has
triggered brand consolidation
Management Complexity: Tensions between marginal brands and
country managers. Focus on internal allocation than fighting
competitors
Brand Rationalization: Challenges
Retaining market share , sales volume and
customers of the doomed brands
To stem this- two brands are often merged instead of
deleting one. Only one out of 8 such attempts succeed
Failures:
Kal Kan and Crave -> Whiskas -> Kal Kan
Hilton and UK based Stakis -> Hilton.