Marketing Execs Learn Strategies to Leverage Brands at AMA Current Issues Briefing

Today’s corporations juggle a record number of brands and sub-brands. So the marketing executives who gathered at AMA’s recent Current Issues Breakfast Briefing face unprecedented challenges in making sure their products break through the clutter and make their way into consumers’ hearts and wallets. David Aaker, known as the “guru of branding,” told his audience, “While there’s a lot of progress being made on building brands, the reality is that most companies don’t manage their portfolios of brands very well.”

What are the secrets to successful brand portfolio strategy? Mr. Aaker, vice chairman of Prophet, a global management consulting firm, and author of 11 books on the subject, listed 5 key elements: clarity/focus, leverage, energy, differentiation and relevance. He presented corporate case studies to illustrate each key brand driver. For example, Unilever brought more clarity to its portfolio by consolidating its 1,600 separate brands into a more manageable 400 brands, including 40 core global brands. Because of the restructuring, the company was able to increase its number of billion-dollar brands from 4 to 12.

To show the power of effective brand leverage, Aaker discussed the genesis of Dove beauty soap into a successful portfolio of products that includes body wash, deodorant, body refreshers and a shampoo/conditioner—increasing revenue from $200-million in 1994 to an incredible $2-billion in 2004.

Perhaps the most critical element in brand portfolio management, according to Aaker, is relevance. He explained, “We spend way too much time on brand preference and way too little time on brand relevance. A customer may love your minivan to the point where that’s the only minivan he’ll buy. But if his needs change—say, he wants to buy an SUV—he’ll go elsewhere, because your minivan is no longer relevant to him.”

One way companies maintain relevance is by adapting their products to follow a trend—for example, the recent consumer preference for healthier fast food. Taco Bell has responded by offering lower-fat choices known as “fresco style,” Wendy’s developed a Garden Sensations sub-brand and McDonald’s partnered with Newman’s Own salad dressing to appeal to its health-conscious customers. Another effective tactic is to develop a separate brand, as McDonald’s has done with its Boston Market and Pret brands, which consumers won’t associate with the core brand name.

The event ended with a spirited audience discussion of the problems branding professionals face today and the solutions the participants have used to overcome those challenges.

Learn more about brand management as well at these AMA seminars:

• Competitive Strategy: How to Develop Winning Marketing Plans and Breakthrough Strategies
• Successful Product Management
• Managing Your Marketing Communications Mix