Do you know how to have siblings, cousins, aunts and uncles? Well, brands do that too – just their co-brands aren’t likely to get too aggressive about the conspiracy theories they believe in while everyone is just trying to enjoy Thanksgiving dinner like someone’s Uncle Gary does every year.
While brands don’t go through this situation, which to me doesn’t apply at all, in general they are still related – they come under the umbrella of larger, overarching companies. And if we work with the whole family analogy, the family trees that set these umbrellas are called brand portfolios.
This is where we get a more thorough understanding of brand portfolios, look at the different types of brands that can make up one, and examine some great examples of brand portfolios.
What is a brand portfolio?
A brand portfolio is the collection of smaller brands that fall under a larger, overarching “brand umbrella” established by a company, firm or conglomerate. In addition to the flagship beverage, the Coca Cola Company’s brand portfolio also includes brands such as Sprite, Fanta and Powerade.
Companies generally create, expand, and maintain branded portfolios to gain a foothold in multiple markets and appeal to a wider variety of prospects. This trend is present in almost every industry. For example, imagine a company that runs a single fast food chain.
This flagship brand serves typical fast food dishes at bargain prices. This chain is doing well, but company executives are seeing a significant shift in consumer preferences. Now a solid segment of the chain is starting to err in the direction of healthier options.
The flagship brand’s identity has firmly established itself as a value-driven, if not as healthy, franchise – so much so that a healthier menu could alienate the majority of customers who are not interested in organic foods.
In that case, the company might consider creating a new restaurant – one with an emphasis on healthy options. If it chooses this route, it would add another brand to its brand portfolio.
The brands included in your average brand portfolio typically fall into four main roles: flanker brands, cash cow brands, low-end entry-level brands, and high-end prestige brands. Each category has a purpose and in many cases a company will create and maintain brands that serve different roles to complement one another.
Brand Portfolio Roles
- Flanker brand
- Cash Cow Brand
- Low-end entry-level brand
- High-end prestige brand
1. Flanker brand
A flanker mark is a mark that a company publishes in a product category in which an existing mark already exists. The hope is that the new brand will help increase the company’s market share within this product category and meet the needs of potential customers that the original brand may not cover.
For example, alcoholic beverage company Molson Coors is using a flanker branding strategy for its approach to the low calorie beer market. The company has launched several brands – including Miller Lite, Coors Light, and Keystone Light – all of which occupy a similar niche.
Still, brands are so different that they appeal to different consumers and suit different situations. Though technically competing, Flanker brands complement more than they cannibalize. They should help a company to improve its market presence and to displace competitors.
2. Cash cow brand
A cash cow brand is one that has reached a certain level of maturity in terms of its market presence and ability to make money. These brands can generate enough profit to essentially sustain themselves – and keep themselves afloat after companies reclaim their initial investment from them.
It is much cheaper to sit back and let these brands keep making money than it is to launch new products to replace them. As a result, they are rarely withdrawn from the market.
3. Low-end entry-level brand
A low-end entry-level brand is a brand that is added to a portfolio of brands in order to be offered at a lower price than the other products or services that the portfolio covers. The principle behind low-end entry-level brands has to do with customer loyalty.
The idea is for consumers to buy the entry-level, low-end brand first, thus effectively introducing it to that brand’s broader portfolio. Once a customer has studied and is impressed with the company behind the low-end entry-level brand, they will be inclined to explore the wider range of products in their portfolio.
4. High-end prestige brand
High-end prestige brands should give the impression of premium quality and luxury. The hope is that some of the appreciation the brand creates will carry over to the other brands in the company’s broader portfolio.
These types of brands are tailored in such a way that consumers think, “If this company can make a product of its caliber, the others may be of high quality themselves.”
Examples of brand portfolios
- Johnson and Johnson
1. Coca Cola
Image source: Coca Cola
The Coca Cola brand portfolio is as diverse and extensive as it gets – certainly when it comes to the food and beverage industry. The branded suite includes beverages and edible products that cover a variety of purposes, prices, qualities and regional markets.
Image source: Nestle
Nestle is the largest food and beverage company in the world, and the graphic above barely scratches the surface of its scales. The brand portfolio is diverse and includes brands that suit a wide variety of categories and needs.
3. General Electric
Image source: GE
GE’s brand portfolio is monolithic, which means that all brands that fall under its broader portfolio have a similar brand. They all have basically similar names and the same logo.
4. Johnson and Johnson
Image source: Johnson and Johnson
The Johnson and Johnson brand portfolio covers a variety of markets that fit under the broader umbrella of the healthcare industry.
Big brands generally don’t exist in a vacuum. Almost all of them are part of a broader brand portfolio, so virtually every brand has a company, firm, or conglomerate at the top of their line.
This is important when you take action such as: B. Try to be ethical with your dollar. Every brand you use starts somewhere. If you can navigate the portfolio of this product back to a company whose values and actions don’t suit you well, avoid doing that.