How do you evaluate brand portfolio changes?

1 Brand portfolio matrix

The brand portfolio matrix is a visual tool that helps you map your existing and potential brands according to two dimensions: market attractiveness and brand strength. Market attractiveness reflects the size, growth, profitability, and competitiveness of the market segments that your brands target. Brand strength reflects the awareness, loyalty, associations, and quality perceptions that your brands have among customers and stakeholders. By plotting your brands on the matrix, you can identify the strategic roles and goals of each brand, as well as the gaps and overlaps in your portfolio. For example, you can see which brands are cash cows, stars, question marks, or dogs, and decide whether to invest, harvest, or divest them.

2 Brand relationship spectrum

The brand relationship spectrum is a conceptual tool that helps you define the type and degree of connection between your parent brand and your sub-brands or extensions. The spectrum ranges from branded house to house of brands, with various hybrid options in between. Branded house means that all your offerings share the same name and identity, such as Virgin or Google. House of brands means that each of your offerings has a distinct name and identity, such as Procter & Gamble or Unilever. Hybrid options include sub-branding, endorsement, and dual branding, which involve different combinations of names and logos. By choosing the appropriate level of brand relationship, you can leverage the equity of your parent brand, create differentiation and clarity for your sub-brands or extensions, and avoid cannibalization or dilution.

3 Brand equity model

The brand equity model is a measurement tool that helps you evaluate the value and performance of your brands from the perspective of customers and consumers. The model consists of four dimensions: brand awareness, brand associations, perceived quality, and brand loyalty. Brand awareness refers to the extent to which customers recognize and recall your brand. Brand associations refer to the attributes, benefits, and emotions that customers associate with your brand. Perceived quality refers to the degree to which customers perceive your brand as superior or inferior to competitors. Brand loyalty refers to the extent to which customers prefer and repurchase your brand. By measuring these dimensions, you can assess the strengths and weaknesses of your brands, as well as the opportunities and threats for improvement or growth.

4 Brand value chain

The brand value chain is a financial tool that helps you estimate the economic impact of your brands on your business results. The chain consists of four stages: brand investment, brand strength, brand value, and brand profitability. Brand investment refers to the amount and quality of resources that you allocate to create and support your brands, such as research, development, design, communication, and distribution. Brand strength refers to the outcome of your brand investment in terms of the brand equity dimensions discussed above. Brand value refers to the financial return that your brand strength generates in terms of market share, price premium, customer lifetime value, and customer equity. Brand profitability refers to the net profit that your brand value contributes to your bottom line, after deducting the costs of your brand investment. By calculating these stages, you can determine the return on investment of your brands, as well as the drivers and barriers of brand value creation.

5 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?