Making Better Choices for Brand Portfolio Strategy and Brand Extension Strategy
Brand strategy consulting shines a spotlight on making strategic brand choices that are often deferred or overlooked in busy organizations.
Do either of these situations sound familiar?
- You’ve purchased another brand and added the acquired brand to your company portfolio. The brand strategy and role of the new brand and the existing brand or brands is not defined. Overlap and duplication exist in marketing, customer targets and sales. The brand synergies that were used to justify the acquisition are unlikely to materialize if there is not clear strategy for each brand.
- You’ve expanded your brand into new service and product categories without clear guidelines. Because of this, the brand equity may be undermined, for example, a premium brand may appear with a value price.
Both situations mean that the brand strategy is unclear and working with a brand strategy consulting firm may be helpful to move forward with clarity.
Brand Strategy Consulting: Portfolio Case Example of 6 Food Brands
Companies often acquire brands, and the initial focus may be on supply chain rationalization. However, there are other cases where a brand strategy for customers is required in the near-term.
In 2020, we worked with a leading foodservice manufacturer who has acquired a number of brands over the years, and now has a total of six different brands, far more than are needed to address the market segments and customers. Each of these brands was acquired and added to the company sales portfolio, without integrating the brand strategy. In fact, it was difficult even to get business financials for some of the brands, as the accounting platform had not been integrated. While it’s easy to look at this in a summary case example, the reality is that getting this information took weeks of work.
Looking at the business, we see the following mix:
- Brand A drives half of the gross margin dollars and one third of the unit volume, with an index of 146. The index is calculated by dividing the brand gross margin percentage (numerator) into the volume percentage (denominator), and multiplying by 100. It is a quick measure of whether the brand is contributing its fair share of profit to the organization. Brand A has been part of the company portfolio for many years and is a recognized, premium market leader. This brand receives ongoing innovation support from the company, but has some limitations with its mainstream positioning that are addressed by Brand D.
- Brand B drives roughly 20% of the gross margin dollars and its fair share of volume, with an index of 98. Brand B has been underrecognized and has not received much support despite its good performance.
- Brand C is much less profitable, driving only 12% of the gross margin dollars and 22% of the volume, with an index of 53. This brand is dominant in its product category, but is more of a value, commodity player. This brand will be the most challenging to rationalize over time.
- Brand D is similar to Brand B, but slightly less profitable. It drives 17% of the gross margin dollars and 20% of the volume, with an index of 84. The company has invested in innovation to create Brand D and drive it apart from more mainstream Brand A to appeal to different channels and different target consumers.
- Brands E and F are much smaller and sub-par profit contributors. Both of them are value players, acquired in less profitable channels. Brand E contributes 2% of gross margin and 3% of unit volume for an index of 69; while Brand F contributes 0% of gross margin and 1% of unit volume for an index of 42. Brand E is an acquisition that lacks a clearly defined brand strategy while Brand F is an expansion of the corporate brand that has underperformed in the market.
The brand strategy recommendation was to clarify and focus the brand portfolio going forward from six brands to three brands. Brands C, E, and F will be eliminated over time (several years), and their products will be offered under Brands A, B and D.
Brand A remains the premium price brand with channel targets of family restaurants and QSRs. Brand B focuses on a moderate price position with channel targets including c-store foodservice, deli foodservice and retail foodservice. Brand D is also a premium brand with channel targets of beer bar and grill. Product and innovation strategies and priorities were also determined.
Brand Strategy Consulting: Banana Boat and Hawaiian Tropic Brand Portfolio Case Examples
In a different brand positioning case example, the Insight to Action team was working with the executive team from the Banana Boat sunscreen business on a brand strategy, including defining the target customer and the brand positioning. In the competitive sunscreen category, Banana Boat competes with strong brands like Neutrogena (owned by Johnson and Johnson) and Coppertone (owned by Bayer).
While we were in the field working with consumers on the Banana Boat brand strategy, the company acquired the Hawaiian Tropic brand. The timing was urgent to define a clear brand strategy for each brand, and to bring this strategy both to end consumers and to retail trade customers, like Kroger and Walmart.
As a starting point, both Banana Boat and Hawaiian Tropic appear to have tropical, island brand equities. Given this starting similarity, it was critical to demonstrate clear and distinct consumer targets for each brand, as well as a distinct positioning.
Let’s look at how these examples compare on the classic brand positioning framework as follows:
- To target [specific audience],
- For [defined] frame of reference,
- Brand X is the [functional/emotional] point of differentiation
- Because [attributes] reasons to believe
The brand strategy, target and positioning statements were translated into advertising execution that reflected the different targets and brand positioning.
Banana Boat targets the personas of “Alicia” and “Alex” who are adult women and men with active outdoor lifestyles and a commitment to prevent sunburns and sun damage for themselves and their families.
Hawaiian Tropic targets “Angelique,” an indulgent sun and beauty single woman.
Banana Boat’s product line includes Sport and Kids products that are relevant for “Alicia” and “Alex,” while Hawaiian Tropic’s product line is focused on adult women’s needs.
The Banana Boat point of differentiation was “unbeatable protection that fits your active lifestyle.” The reason to believe was “three-way protection with patented AVO Triplex.”
By comparison, Hawaiian Tropic’s point of differentiation was “makes your sun care more indulgent with natural conditioning and light, warm tropical scent.” Hawaiian Tropic’s reason to believe was “unique botanical formula tested in the sun (instead of just in the lab like other products).”
This brand strategy was directly translated into advertising as illustrated here. Banana Boat’s tagline was “There’s no better way to protect from the sun.” Hawaiian Tropic’s tagline was “Sun protection you can indulge in.”
The brand strategy was also important in working with retail customers to demonstrate the role of each of these brands in the store, with their distinct targets. Quantitative customer segmentation research added credibility and a robust factbase to support the brand strategy.
While an effective brand strategy should be applicable and relevant for several years, in this case we expect that Banana Boat and Hawaiian Tropic have made changes since this work was completed. In 2021, Banana Boat, Neutrogena and Coppertone sunscreen brands came under scrutiny for possibly containing carcinogen. In response, J&J recalled Neutrogena and Aveeno sunscreen brands after detecting benzene. Similarly, we expect that Banana Boat and Hawaiian Tropic are also making any product changes needed to address concerns.
Brand Strategy Consulting: McDonald’s Mac Snack Wrap Brand Strategy Expansion Case Example
McDonald’s is currently focusing on its core menu items, including Big Mac, World Famous Fries, Quarter Pounder and McNuggets. The brand strategy work that we led with McDonald’s was focused on these core items, and two others: Happy Meal and Egg McMuffin.
The focus was on the brand strategy pillars for expansion. For instance, what is appropriate for a product extension bearing the Big Mac name? Currently the Big Mac name is on the Big Mac Combo Meal, which includes a medium drink and medium World-Famous Fries. This seems pretty straightforward, as it is a combination of the Big Mac hamburger itself along with fries and a drink.
A more interesting example is the Mac Snack Wrap. Traditionally, the Big Mac jingle promises that the Big Mac will contain seven ingredients: “two all-beef patties, special sauce, lettuce, cheese, pickles, and onions on a sesame seed bun.” Notably, a wrap does not have a sesame seed bun. Instead, the bread is a wrap/burrito.
The Mac Snack Wrap was introduced in 2010, building upon success that McDonald’s had with other Snack Wrap items. Brand advertising promised the Mac Snack Wrap as the “son of the classic,” promising the traditional ingredients on a “flour tortilla” instead of a sesame seed bun. This brand extension and marketing stayed close to the original brand strategy.
Brand Strategy Consulting: Quaker Brand Strategy Expansion Case Example
The Quaker brand is one of the strongest healthy brands in the supermarket, and highly extendible to a range of food and beverage categories. PepsiCo has expanded the brand from its origins in oatmeal, Quaker Chewy granola snack bars, and breakfast cereals to categories such as yogurt and oat beverage.
The Quaker name adds appeal to a wide range of products, including more indulgent products like cookies, donuts and cakes, along with healthier items.
The Quaker brand is generally a mainstream, quality price brand within its categories. That means it is neither super premium nor a value brand. Since the brand is so extendible, it’s possible to put the name on product categories where there is a need for a value brand in the PepsiCo portfolio, such as bottled water.
In bottled water, PepsiCo markets mainstream priced Aquafina and premium LIFEWTR. Market research shows that the Quaker name can be used on a line of bottled water, and this fits with the healthy imagery of Quaker. The issue is that for the PepsiCo portfolio, the gap is in value water, so that there was interest in using the Quaker name on a value water brand. This is a brand strategy disconnect for Quaker with its mainstream value proposition and for that reason was not pursued.
If any of these situations sound familiar to your organization, a brand strategy consulting firm can guide your executive team to making clear choices. When choosing a brand strategy consulting firm, we suggest using four criteria:
- Relevant industry experience
- Disciplined approach to addressing and solving business question – this will ensure that the team stays on track and delivers on outcomes
- Analytic and pragmatic – this is important, because recommendations should be fact-based but also layer in business judgement
- Agile and collaborative – can effectively lead a diverse cross-functional team and pivot work approach to ensure alignment and executive buy-in