The brand potofolio is the set of all brands and brand lines a particular company offers for sale to buyers in a particular category. Different brands may be designed and marketed to appeal to different market segments.
Multiple brands are often necessary to pursue multiple market segments. Any one brand is not viewed equally favorably by all the different market segments that the company would like to target.
Some other reason for introducing multiple brands in a category include:
- Taking on competitors for a brand-to-brand confrontation
- To attract consumers seeking variety who may otherwise have switched to another brand;
- Tapping new markets
- Limitations of extending an existing brand and offering different brands at different price-points within a single product category
- To yeld economies of scale in advertising, sales, mechandising and physical distribution.
Successful brand portfolio management involves leveraging the strengths of all the brands so that they complement one another and lend the corporate an overall strength.
Brand portfolio rationalization involves pruning the portfolio in such a way that the strategic corporate goals are not ignored while being in tune with the market realities.
