Brand Portfolio Strategy

Strategic Direction

ISSN: 0258-0543

Article publication date: 1 October 2006

20623

Citation

Aaker, D.A. (2006), "Brand Portfolio Strategy", Strategic Direction, Vol. 22 No. 10. https://doi.org/10.1108/sd.2006.05622jae.001

Publisher

:

Emerald Group Publishing Limited

Copyright © 2006, Emerald Group Publishing Limited


Brand Portfolio Strategy

Brand Portfolio Strategy

David A. Aaker,Free Press/Simon & Schuster, New York, NY, 2004

At first glance, Aaker’s book appears to have limited application, being of interest only to very large, multi-brand marketers such as Procter & Gamble or Kraft/General Foods. There is a complex diagram in both the inside front and inside back covers which shows the components and terms of Aaker’s brand portfolio strategy, a very few of which are master brands, endorser brands, sub-brands, strategic brands, and branded energizers. It would appear from scanning six whole diagrammatic boxes of such terminology that a firm has to have so many brands in the stable that each of the roles can be assigned to one or more of those brands. Not so. In examples defining and discussing each item in all six diagrammatic boxes, the author shows that there may be supportive roles for as few as one or two brands which trail in importance one’s “major” brand.

For example: let’s look at Aaker’s discussion of endorser brands and driver roles. An endorser might be a brand or entity outside the company’s own brands (e.g. a movie company “endorsing” a brand through product placement), or the endorser could be the corporation sanctioning a brand within it (e.g. Toyota endorsing its Corolla brand by calling it the “Toyota Corolla”). In this case, however, the name “Toyota” also becomes the driver of the Corolla brand, since most owners would say they drive a Toyota, not necessarily a Corolla.

Aaker begins his book with an explanation of brand portfolio strategy, which importantly ends with the brand portfolio objectives: synergy, leverage, relevance, strong brands, and clarity of image. In chapter 2, he puts the myriad elements into what he calls a “relationship spectrum,” wherein lies most of the important definitions a reader will need in the remainder of the book, and he follows it with a rather heavy chapter on “inputs to brand portfolio decisions.” Then we are off to the races!

In part 2, the dynamics begin to appear: brand relevance (chapter 3), energizing and differentiating the brand (chapter 4), and accessing strategic assets (chapter 5). Chapter 5 is the most vital portion of the book, wherein Aaker shows us, through use of the Eddie Bauer Ford Explorer introduction, how “co-master brands” (in this case Eddie Bauer sporting goods and Ford’s Explorer) can be combined to enhance the Explorer brand. It is also through this analysis that Aaker teaches us how to use external brands as differentiators and/or as energizers. Brand management executives should focus on this chapter, in my opinion.

Part 3 is a wide-ranging discussion of leveraging brand assets – what you can do with the brand itself, in addition to the outside forces you can bring to bear on it, as was the stuff of part 2. In the two chapters in part 3, Aaker discusses leveraging the brand into new markets (“will the brand enhance the extension? Will the extension enhance the brand?”), and he puts the extension risks into perspective. He uses Dove (Unilever calls it a “beauty bar” but to most of us its just plain “soap”!) as the illustrative brand saga, journaling its step-by-step brand extension: its failure as a dishwashing liquid, since its “cleansing cream” benefit implies unclean dishes; its being blindsided by P&G’s Olay body wash, when Dove should have owned the moisturizer body wash position; its rejuvenation as a body wash with added nutrients; and, finally, the salutary effect of that product on the tired, old bar soap itself. The saga continues with explanations of Dove branded successes and failures in the deodorant and hair care product lines.

In an additional chapter in part 3, he uses GE Appliances and the Marriott experience to illustrate vertical brand extension – moving the brand up- or down-market with the introduction of flanker concepts (GE’s “Monogram,” “Profile,” and “Hotpoint” range of brand names – sorry, no pun intended!) and Marriott’s array from Ritz Carlton to Fairfield Inn.

Part 4 ties it all together, especially a relatively short but pithy chapter 10 (chapter 9 is devoted to leveraging the corporate brand, and while it is interesting and valuable, most brand management concentrates on individual brands within the corporation, in my experience). In chapter 10, Aaker goes back to Ford and Unilever (as well as to BMW) to discuss focus and clarity – two major brand portfolio strategic objectives. The Ford/BMW comparison provides perhaps the clearest illustration of focus (again, no pun intended!):

Ford is a brand that has real strength in terms of quality and innovation credibility but may lack distinctiveness and personality, at least in some segments. Thus, it is unlikely that the Ford line of vehicles would be as strong without subbrands … . In contrast, the BMW brand follows a rather classic branded house strategy, with the master brand supported by a set of descriptor brands (300 series, 500 series, 700 series, M series, X5 SUV, Z4 convertible – parentheses mine) (p. 292).

This is a complex book, with a great deal for the reader to assimilate. Aaker’s extensive use of real brand examples makes the going much easier and the retention greater. He has done an excellent job of setting out a wide range of actions management can take to capitalize on brand strengths. In this light, chapter 7 (“Leveraging the brand into new product-markets”) is alone worth the price of the book. This wisdom will be useful to any brand manager, but in my opinion, it should be required reading for all marketing managers senior to the individual brand manager. This is top-level stuff, too important to entrust only to a brand manager whose days are made up of worrying about commercial wearout or the next packaging change.

A version of this review was originally published in the Journal of Product & Brand Management, Volume 14 Number 7, 2005.

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