“A great empire and little minds go ill together” – Edmund Burke
Benjamin Franklin was a complex
American statesman. Born in America in the years when it was still a colony of Great
Britain, he achieved fame as a newspaper publisher, postmaster, inventor,
public affairs commentator and politician. It was he who helped define the very
concept of a middle class - shopkeepers and tradesmen who pulled themselves up
by their “bootstraps” - with his articles published in ‘Poor Richard’s Almanac’,
as well as several other articles he wrote in his name and under countless
pseudonyms.
In the series of events that
provoked the American people to demand their independence from the British
Crown, Benjamin Franklin wrote a piece that struck to the heart of British
imperialism. He questioned the propriety of the English Parliament passing laws
that sought to limit the establishment of manufacturing industries in the
Americas to ensure that goods produced in England would have a captive market. Britain’s policy would use America as a
source of raw materials and a market for finished goods. Benjamin Franklin said, “…therefore
Britain should not too much restrain manufactures in her colonies. A wise and
good mother will not do it. To distress is to weaken, and weakening the
children weakens the whole family”.
By seeking to keep America
dependent on the United Kingdom for fully manufactured goods, the English
parliament provoked a sleeping beast. In population, land mass and educational
advancement, America was already accelerating far ahead of its mother country.
Otherwise docile and willing subjects of the English crown began to doubt the
long term good intentions of their sovereign king to their welfare. Thus were
sown some of the seeds that eventually led American nationalists like Patrick
Henry, John Adams, Thomas Jefferson, George Washington and Benjamin Franklin to
fight for America’s independence in the Revolutionary War of 1775 – 1783.
What does this tale of wise mothers, weakened children and broken
empires have on brand portfolio management you may ask? In my brief
marketing career, I have been privy to many scenarios that highlight what can
go right or wrong when a company has more than one brand in its stable. No company
has unlimited funds to execute every plan it has to drive its marketing program. By implication, prioritization of one brand over
the other must occur. Which brand should have a TV commercial shot for it?
Which brands should be used for the large sponsorship inventory purchased on
the digital TV platform? Which brand should the sales team give priority during
sales calls?
These are the questions marketing
leaders grapple with under the watchful eyes of their marketing teams. Egos are
on the line, career trajectories are at stake and annual bonuses are in play
from the decisions made on what to do with the available resources.
In an ideal situation, a
professional would consult the Boston Consulting Group Matrix (define which is
a Star, The Dog, The Question Mark and the Cash Cow amongst the brands and
allocate resources accordingly).
Alternatively they could use the Arcus Portfolio performance matrix, defining
their Focus brand, Divestiture brand, Alignment brand or Investment brand and
allocate resources accordingly; or utilize any other structured way of making
these decisions.
Sadly this doesn't always happen.
Organizations are run by people, and despite their best intentions and professional
exposure; it is often the case that decisions are made on a whim, to manage
egos or to reward ‘loyalty’ – not always in the best interest of the company.
These actions, birthed and conceived
in irrational cocoons, are eventually defended by quasi-rational justifications.
“We don't want
brand X to outshine brand Y because Y is the current focus of the company”
“You know brand X
has always delivered 80% growth, so it can sit this quarter out. Let's put all resources to ensure brand Y
performs well”.
Don't get me wrong, many of these
justifications may have substance but it's the follow-on actions that make
their implementation ultimately detrimental to business performance. I believe decisions concerning
portfolio management should be openly discussed and a clear framework for
allocating resources based on a disciplined approach be adopted by marketing-focused
organizations. Decisions should be made in the open and the opportunity for
robust representation be made at all levels.
Ideally, every brand in a
portfolio should be focused on a differentiated segment of its own - with a
clear target audience, distinct route to market and unique product features - to
make it stand out in a crowd. However, what we often see is that brands slowly
begin to overlap as the struggle to make a struggling brand a winner, leads to a
cut-and-paste approach. A route to market appropriate mainly for brand X is
hijacked for brand Y just to "see if it will work". Slowly the
marketing organization begins to cannibalize itself for growth.
Weakening one child
(brand) in other to make another child strong is a recipe for civil war in the
marketing organization. A wise mother (marketing director/GM
Marketing) focuses quite intently on discovering all the things that make each
child unique and ensures none is starved for the other. Those requiring
immediate focus should be fully supported while those on the bench need to be
allowed to flourish while they wait their turn in the sun. This is the secret
to retaining an empire (multi-brand market dominance). I
believe this is possible: A situation where every brand in a portfolio is in a
market dominant position within its own competitive ecosystem.
Here is a special hat tip to my
friend whose struggles at work inspired this article. Hang in there bro, whatever
refuses to bend will break free….just ask America.
P.S: Here is an insightful report on brand portfolio management :
http://www.researchgate.net/
http://www.researchgate.net/
