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Managing brand portfolios: how strategies have changed.

The stock market response to corporate scandals and the use of the internet by pressure groups have sensitized boards to the risk of reputation loss. Particularly at risk are companies using corporate brands whose fame and spread makes them particularly vulnerable. This study looks at these and other pressures on branding and investigates if and how leading companies have responded in the deployment of their brand portfolios. A repeat audit of the use of brand portfolios by leading companies using exactly the same method used over a decade ago reveals much change. Brand structures of the 20 companies investigated have indeed changed but not uniformly in extent or direction.

INTRODUCTION</p> <pre> "Safeguard the brand and corporate reputation." Niall Edgecliffe-Johnson, Reuters chairman, on board priorities </pre> <p>AT LAST, BRANDS are a boardroom issue! The reason for this elevation is the revelation that a firm's reputation has the same risk and returns as its financial situation. A recent survey by a U.S. insurance company of 2,000 public and private companies found reputation risk as the single biggest business hazard (Aon, 2001). One leading bank, Barclays, has responded by forming a Brand and Reputation Committee that puts reputation on a par with financial and operational risk (Maitland, 2004). Chaired by the group vice chairman, the committee's role is to think "about our worst nightmares and seeking to position to prevent them happening."

Two developments have brought reputation risk to the fore. First, financial scandals, such as Martha Stewart and Enron, show how having a globally recognized brand name can endanger a whole organization. Before the news breaking of the financial scandal concerning Martha Stewart the person, the Martha Stewart brand was one of America's strongest with a Brand Keys index of 120. Following her conviction, the index fell to 62, lower than even Enron (Stein, 2004). The use of the Martha Stewart corporate brand name across a huge array of businesses was an advantage until the bad news broke. Then the bad reputations stretched across the whole range.

Arthur Andersen, Enron's accountants, faced a similar problem on a global scale. The use of their corporate name across the world helped them serve global clients until the partnerships involvement in Enron's collapse. The failure of the company in America made Arthur Andersen untouchable in all their markets.

The internet is the second development that has awakened companies to reputation risk. Using the internet virtual pressure groups or disgruntled customers spread ideas so quickly that a local problem can suddenly become a global disaster (Murray, 2003). These conflagrations typically occur when a global brand meets a destructive idea that is as sweet and simple as the brand itself. In 1999, Coca-Cola Beverages suddenly faced declining sales all across Europe when a number of Belgian consumers became sick after drinking contaminated Coke (Murray, 2004). Perrier faced a similar problem a few years earlier when some consumers found traces of benzene in their premium priced mineral water. Reputation risk does not depend upon there actually being an error or a misdemeanor. Despite imposing a gold standard in their offshore suppliers, Nike is still having trouble shaking off the image of running sweatshops in Asia--a problem they share with Manchester United, the world's favorite soccer team (Murray, 2003).

Successful brands increase returns and, like Arthur Andersen and Martha Stewart, many companies turn to corporate or house brands because of the communications and financial benefits of a shared reputation (Laforet and Saunders, 1999). Now companies realize that risk accompanies return. Corporate branders, like Kellogg's and Nestle, who use their corporate names to endorse their range, face reputation risk across their whole business if bad news hits. In contrast, Unilever and Mars' use of mono brands gives firebreaks that can limit reputation loss across a whole business. Unilever benefited from this when they launched Omo Power in The Netherlands, Persil Power in the United Kingdom and Skip Power in France. These powerful detergents contained a catalyst that dissolved cloths along with dirt (Kotler, Armstrong, Saunders, and Wong, 2001, pp. 149-151).

Here we look at how leading companies are responding to the new environment they face. First, we look at the latest thinking on the use of brand portfolios. From these we draw hypotheses. We then survey the brand strategies of leading companies using the same method and sampling used a decade ago (Laforet and Saunders, 1994). Many changes have occurred in the way companies deploy their brand portfolios, and some new strategies have emerged. Finally, we compare the findings with the hypotheses and suggest implications.

BRAND PORTFOLIOS--PAST

Firms use a variety of brand strategies: their mix and match of corporate, house, and individual brand names on their products. Few products have only one brand name on them and directly competing firms vary in the strategies they use. The interplay between brand names has stimulated studies into the brand linkages and relationships (Jevons, Gabbott, and de Chernatony, 2001) and leverage of secondary brand associations (Uggla, 2002). There are now conceptualizations of brand architecture and relationships within product categories (Rajagopal and Sanchez, 2004) and a strategy for brand architecture embracing three fields of theory--the brand concept, consumer information processing, and a typology of brand architecture (Strebinger, 2002). However, the mass of work (e.g., Swaminathan, 2003) continues Aaker and Keller's (1990) pioneering work on brand and line extension, with a single variations covering second brand strategies (Speed, 1998) and several works investigating corporate branding decisions (Bristol, 2002).

Despite these advances, the focus of branding research and thought is on individual products--at the level of brand management rather than the boardroom. Nor do recent ideas challenge the conceptual frameworks of Murphy (1987) and Olins (1989a, 1989b) that the empirical findings of Laforet and Saunders (1994) embroidered. This revealed a range of brand styles: mono brands, corporate brands, house brands, and family brands (referred to as dual and endorsed brands) as well the brand-dominant approaches. The house names also appeared more often than the corporate identities, and many companies chose not to identify themselves. The corporate dominance styles were scarce, and most companies did not adhere to one approach. A subsequent study of brand architecture for international markets (Douglas, Craig, and Nijssen, 1999) revealed a similar but simpler pattern of the corporate dominant, product dominant, and hybrid or mixed structures.

BRAND PORTFOLIOS--FUTURE

Just as branding is breaking into the boardroom, or maybe because it is breaking into the boardroom, there is conflicting advice on where brands are going. These reflect opposing force of the return from cost-efficiency and the risk of reputation loss.

Increasing returns

Aaker and Joachimstahler (2000) predicted a trend from individual brands, through over endorsed and sub-brands, toward corporate branding structures. A number of reinforcing factors drive this trend: emerging market complexities, competitive pressures, channel dynamics, and globalization. To these are added markets confused by multiple brands, aggressive brand extensions, and complex sub-brand structures. Consequently, cost-effectively leveraged corporate brands are replacing portfolio individual brands. As Kellogg's executive explains:</p> <pre> "Given the support of brands is very costly, we never have enough money to do what we need to do. That's why you're building what you advertise the brand stand for ... Kellogg's Nutrigrain Eleventh brings all the brand values--will not be trusted if did not have the K name on it. K helps position it in certain ways." </pre> <p>If these views are correct, corporate branding will be more dominant now than 10 years ago:

H1: The corporate brand dominant structures are increasingly used.

The efficiency of "pooling" and "trading" strategy also points to a financial gain from using brand names together (Petromilli, Morrison, and Million, 2002). "Pooling" captures more shelf-space and market share by use of individual brand names to differentiate products. Simultaneously, two or more brand names that are used together "trade" off each other's values. The need to move quickly also propels companies to stretch existing brand names. As a Colgate Palmolive executive observed:</p> <pre> "We are in an era of taking the brand equity and stretching it and these have not been significant new product launches in FMCG--huge

risks, v. expensive, difficult to develop something that really that

cannot be copied or much easier to take a brand that has got an established equity and build that equity than try and establish a new brand because that will take time. We don't have much time now." </pre> <p>Thus, each sub-brand gains from "pooling" and benefits from "trading" on the halo effect of master brand associations and saves time. In the view of a Mars executive, "Consumers will buy what brand stands for in various product formats." This opportunity propels a search for the efficiency of using brand names together:

H2: Mixed brands are increasingly used.

In contrast to Hypthesis H2, Kapferer (2001) suggests that individual brands are becoming more common as companies de-capitalize. There are three reasons for this occurring. First, the use of market segmentation and differentiation to create barriers to cannibalization and to avoid distribution channel conflicts. Second, decapitalization is a logical response as markets fragment into increasingly small segments. Third, companies turn to the individual brands after failing to find the synergies anticipated from corporate brand management.

A number of companies are using individual brand strategy to grow vertically in a highly segmented market. Vijayraghavan (2003) explains that in intensely competitive markets, individual branding offers more character and allows more accurate positioning. The forces driving this are increasing market segmentation, as well as falling customer loyalty and competitively priced alternatives. In price-sensitive markets, value-for-money brands (possibly own labels) are often volume pullers. In these segments umbrella branding did not necessarily help and conflicted with the umbrella brand's use in less price-sensitive segments. Similarly, Pierce and Mouskanas (2002) noted that individual brand names within a portfolio became more powerful when they were interrelated. They further suggested successful companies concentrate on a small group of powerful brands.

Separating identities

The second group of pressures pushing companies away from corporate brands and toward stand-alone identities are related to the broader business environment rather than marketing. In antiglobalization movements, global brands attract protesters as well as customers (Held, 2002; Notes from Nowhere, 2003). Best selling books, such as No Logo (Klein, 2000) and Fast Food Nation (Schlosser, 2001), have helped focused activists and the wider market on brands and corporate brands in particular. It is noticeable that in Europe it is corporate branded Cadburys that is targeted in the "obesity debate" rather than Mars, whose market uses stand-alone brands (Mesure, 2004). The sensitivity of corporate brands to "attack" in the antiglobalization protest is now increased by the activist's use of the internet (Murray, 2003).

A final pressure on corporate brand comes from the reputation risk associated with financial scandals that Arthur Andersen and Martha Stewart suffered (Stein, 2004). The need for more precise positioning and creating firewalls between brands at risks suggests an increase in the use of individual brands:

H3: Single brands are increasingly used.

Most intensive users of individual brands, such as Unilever, Mars, or Procter & Gamble, still disclose the identity somewhere on their packs, in either an address or a small logo. For a long time companies have been careful not to expose the interrelationships between their ranges when their joint ownership is unappealing, in the case of Mars confectionery and Pedigree pet foods, or where a company dominates a category in many of the world's market, as do Unilever in yellow fats. By using furtive brands that do not disclose corporate ownership, marketers minimize the chance of consumers or activists remembering or communicating who owns what. This leads to a final hypothesis:

H4: Furtive brands are increasingly used.

METHODOLOGY

A decade ago, a study of the use of brand portfolios examined a random sample of 20 brands sold by the 20 top suppliers to each of Britain's leading grocery retailers: Tesco and Sainsbury (Laforet and Saunders, 1994). This included most of the western world's leading suppliers of grocery products but with a bias toward European firms. This content analysis helped develop a classification scheme, and a brand grid was developed to show how individual products are branded and a range of corporate brand strategies.

This study, conducted in 2004, follows the same sampling procedure although, since Wal-Mart acquired Asda, Sainsbury's has fallen to the third ranking grocery retailer in the United Kingdom. The top 20 leading grocery suppliers are the same companies, except for two companies having merged and another pulling out of the grocery market. As in the earlier study, an incremental process developed typology. First, brands from one manufacturer were examined and the interplay between their brands and corporate identities recorded. Brands from other suppliers were then analyzed until a classification scheme described all the 400 brands sampled. Finally, marketing and brand managers in 12 of the companies audited were interviewed to gain an explanation of the brand strategies they adopted.

RESULTS

Corporate and house brands

The content analysis showed a drop of corporate and house brands and in the number of companies adopting this approach. In 1994 the proportion of corporate (5 percent) and house branded (11 percent) products was already low, but the corresponding figures have now dropped significantly (<0.000 level) to 3 percent and 6 percent, respectively (Table 1). Although the 20 percent of companies using corporate brands has not changed, Kellogg's, Cadbury, and Heinz use them much less than they used to (Table 2). Corporate brands would never completely disappear because some leading products are synonymous with a corporate identity, for example, Kellogg's Corn Flakes and Cadbury's Dairy Milk. Heinz in particular is a strong adherent of corporate branding with its name appearing on many new products (e.g., Heinz Easy Squeeze and Heinz Easy Squirt). These results show a trend in the opposite direction to Hypothesis H1 that corporate brand dominant structures are increasingly used.

Mergers and acquisitions and house brands

Brand structures are driven by company history as much as markets (Laforet and Saunders, 1999). This earlier finding is reinforced by the decline in the use of house brands following mergers, acquisitions, and the restructuring activities. Half of the companies surveyed used house-branded products less than they did 10 years ago, one of which dropped these altogether (Table 2). Mergers, acquisitions, and restructuring activities were behind Allied Domecq and Uniq's drop of their house brands. For example, after merging with Carlsberg-Tetley, Allied Domecq dropped the Lyons' food maker brand. However, despite the overall decline in the use of house brands, a small band of British companies who adhere to the approach are Associated British Foods, Northern Foods, and Rank Hovis McDougall.

Mono and furtive brands

The content analysis shows a significant increase in the use of mono brands from 19 percent to 26 percent (Table 1). Furthermore, now all the companies audited used mono brands to some extent. This is a significant increase from the 75 percent of companies adopting the approach in 1994. Both these findings support Hypothesis H3 that single brands are increasingly used.

In contrast, there is a significant decline in the use of furtive brands from 13 percent to 6 percent (Table 1). Half the companies surveyed have furtive brands, but the number has dropped from 65 percent in 1994. These findings do not support Hypothesis H4 that furtive brands are increasingly used. Companies are reducing their corporate visibility by reducing their use of corporate and house-brand names but make less effort to hide their identity completely.

Mixed brands

The 1994 content analysis showed mixed brands making up 53 percent of the products surveyed. The proportion has now significantly increased to 61 percent (Table 1). This supports Hypothesis H2 that mixed brands are increasingly used. Furthermore, all the companies surveyed now use mixed branding.

However, the growth in the use of mixed brands is not uniform. Although all the companies audited have dual brands in their portfolios, there is a slight decline in the proportion of dual brands. This contrasts with a significant increase in endorsed brands from 14 percent to 26 percent now.

Endorsed brands are getting more complicated than they were. In the cookie, confectionery/snack, and cereal category, United Biscuits, Quaker, and Nestle favor family endorsements, though Nestle retains many corporate endorsed brands (Table 2). Companies generally use the super or family brands more than they used to. For instance, Cadbury Schweppes, Kellogg's, Procter & Gamble, Mars, and United Biscuits use 35-45 percent more of super brands than they did a decade ago (Table 2).

Mixed brands used to be associated with a vertical hierarchy of brands where, for example, a family name would appear with a brand. Dual branding is now getting more complicated. Often the relationship between the names appearing on a dual brand is horizontal. Cadbury is an enthusiastic user of horizontal dual branding with line extensions, such as Cadbury Dairy Milk Crunchie. This is a variation of Cadbury Dairy Milk countline, already a dual brand that uses the name and ingredients of Crunchie. Another confectionery example is Maltesers Teasers from Celebrations. In some cases the dual brands are part of a licensing agreement, such as Flapjack by McVitie's, that combines United Biscuits and Mars brands.

EMERGENT BRAND STRUCTURES

An extended typology incorporates the new brand strategy that the audit revealed in a new typology (Table 3).

Corporate branded

At the top of the hierarchy, corporate or house names are used with a description, such as Heinz tomato ketchup or L'Oreal kid's shampoo. A company using this approach for all their products range has a corporate dominant strategy. However, none of the companies studied used this approach dominantly so we use the less emphatic term "corporate branded" to refer to a product that displayed their company's name or house name prominently.

Endorsed

The next level of the hierarchy is the endorsed structure, where a company or house name endorses a brand, such as L'Oreal Elvive or Lipton Tchae. The content analysis shows in addition that the family or super brand is now used to endorse the product brand name; for example, with Always Alldays Black panty liners, Always is shown in small print and Alldays, the product brand name, is prominent.

Dual brand

Dual brands give equal prominence to either a corporate, house, super brand, or another product brand name together with the product's own brand, such as Nestle (corporate name) Blue Riband (brand name), Twinings (house name) Lady Grey (brand name), or Airwick (super brand) Haze (brand name). All companies now use the dual brand approach, and this style occurs on 34.5 percent of products surveyed (Table 1).

Multi-branded

In these cases, both the endorsed and dual brand styles are a combined format on a product pack. Friskies Winalot Reward pet food is an example of an endorsed multi-brand where Friskies is an endorsement while Winalot and Reward have almost equal prominence. Another is triple branded Cadbury's Wispa Toppers hot chocolate, Cadbury's (corporate name) Wispa (brand name) are prominent endorsements but Toppers (brand name) is more prominent. This new multi-brand is used by Nestle, Cadbury, Kellogg's, United Biscuits, and Mars.

Branded

Only 32 percent of the products sampled use a single brand name product compared with a dominant 61 percent using some form of mixed brands (Table 1), although all companies used mono brands to some degree (Table 2).

BRAND STRENGTH VERSUS BRAND USAGE

Two statistics represent (1) the "frequency" of brand types used and (2) the "strength" of the prominence of brand types. The strength of a brand's presentation ranges from 1 through 4: 1, when a name appears inconspicuously some-where on a pack, usually at the back; 2, representing a small endorsement; 3, an inferior size; and 4, representing a predominant name. When used together the brand usage and strength statistics reveal the brand strategy of companies (Table 2). The corporate name now has an average strength of 1.25 compared with 2.23 in 1994. Similarly, the average strength for house brands is 1.23 compared with 2.06 in 1994. House brands are also used less now than before. The family or super brand name is equally shown slightly less prominently than before (from 3.3 strength, it has gone down to 3.18) whereas for mono brands, these have been shown more prominently on product packs now (from strength of 3.65 to 3.76).

THE STRATEGIES OF MAJOR PLAYERS

Over the past 10 years, few companies remained the same. Eight out of 20 companies surveyed (40 percent) have changed significantly in their overall brand strategy (Figures 1 and 2): Allied Domecq, Cadbury, GSK, Kellogg's, Reckitt Benckinser, Unilever, United Biscuits, and Uniq. Even those who stayed most constant in their overall brand approaches have had some variations in the branding styles used.

Cadbury and Kellogg's have moved from a mixed corporate brand approach to a corporate dual brand dominant approach (Table 2 and Figure 2). This shift away from corporate brands is not driven by risk avoidance or a grand corporate strategy. According to one GSK executive, marketing managers:</p> <pre> "Don't have control of the position they want. Don't have rules about where it [the corporate name] appears on pack. They'll go where it works best with what works best for the designer." </pre> <p>Comments from a manager in another company suggest that brand strategies emerge from isolated brand decisions rather than there being a grand design:</p> <pre> "We always do consumer research--test out several brand names and researched to find out which ones can be communicated and most are distinctive." </pre> <p>United Biscuits and Uniq have moved from a house-branded approach to a super or family brand dominant. In contrast, Unilever, Reckitt Benckinser, and Allied Domecq have moved in the opposite direction and become brand dominant by dropping their super brands and opting for mono brands. Table 2 shows Unilever dropped 60 percent of its super brands over the last 10 years and used single brands on every occasion. Unilever explain their rationalization:</p> <pre> "We will continue to focus on portfolio of core brands and the marketing efforts will go behind those nominating brands. Then there are those we call the tails, we can first help those by promotions and managing decline." </pre> <p>Reckitt Benckinser betrays a similar concentration:</p> <pre> "We've got our priority drive brands by doing portfolio priorisation to determine which are the brands that we want to build and grow and then develop plans around that brand." </pre> <p>[FIGURE 1 OMITTED]

GSK has also moved from one end of the brand hierarchy spectrum to another, from a mixed corporate endorsed brand strategy to a mono branded strategy (Table 4). Because GSK is the culmination of a merger between Smith Kline Beecham and Glaxowellcome to form GSK, whose names were already littered with corporate names from earlier mergers, the need to remove a confusing clutter of corporate names from their packs is clear. GSK explains:</p> <pre> "For medicine it's different. Companies don't develop the brand hierarchy the same way than in FMCG ... you hardly ever get Glaxowellcome bla bla i.e. with a product brand." </pre> <p>Other than those discussed above, the companies studied remained almost constant in their overall branding strategy.

The decline in the use of individual corporate and house-branded products is changing the overall profile of how each company uses brands. Table 4 shows that Heinz is now the only company studied that uses a mixed corporate branding. Cadbury Schweppes and Kellogg's have both moved away from corporate branding toward using more dual brands. While there is a large increase in the proportion of products carrying corporate endorsements (Table 1), the number of companies strongly adhering to that style of branding has reduced from three to two: Nestle and Colgate Palmolive (Table 4). This divergence occurs because of the use of corporate endorsements by companies switching away from corporate branding and a growth in organizations now choosing from a wider range of mixed styles (Table 3).

The heavy users of mono branded companies have changed little over the decade, although Allied Domecq, Reckitt Benckinser, and Unilever (Table 2) has increased to the point that they are now best described as brand dominant (Table 4). The overall trend shown in Table 4 is the drift from corporate branding to an increase in individual brands sprinkled with an increased mixing and matching with other brand names.

DISCUSSION

There is evidence that risk avoidance (Aaker and Joachimstahler, 2000), the need for precise targeting (Vijayraghavan, 2003), and the benefits of dual branding (Petromilli, Morrison, and Million, 2002) may have led companies to move away from corporate branding. However, the decrease in corporate and house brands used is offset by an increased tendency of companies to reveal their identities, hence a decline in the occurrence of furtive brands. Interviews with managers revealed that the reason for disclosing the origin was not to provide information to consumers, but to help with communications with the trade and shareholders.

[FIGURE 2 OMITTED]

Some companies are dropping corporate branding in favor of mono brands. They follow the view that there is little synergistic gain from corporate branding (Kapferer, 2001) or corporate brands have less character than stand-alone brands (Vijayraghavan, 2003). Furthermore, there is a limit to how far corporate or house brands can stretch. Companies often use brand extensions to bolster short-term profits (Ambler and Styles, 1997) although they sometimes know this is dangerous:</p> <pre> "Maltesers Teasers Celebrations is a Christmas pack--the company takes

product and discovers that people like the Maltesers and decide to do a special edition. It's quite dangerous--because this changes

Maltesers' proposition--although the company did seize the opportunity

at the time." </pre> <p>In contrast, managers now realize the cost of building leveraged brands that limit the damage to the core brands by keeping a sufficient psychological distance between the two products concerned (Kim and Lavack, 1996).

However, the decline of broadcasting and the fragmentation of communication and distribution channel are increasing the cost of branding. With corporate brands declining, brand leverage is sought in other ways as United Biscuits explains:</p> <pre> "By licensing the brand you bring all the awareness--we do not have to explain what the brand stands for. It is much more cost effective way to stretch the brands into different areas, e.g., Snickers McVitie's flapjack--we get the recognition that Mars built." </pre> <p>Managers now see endorsed and dual brands as giving an economic edge over stand-alone brands. Using another brand for endorsement does not expose companies to reputation risk and provides a greater variety of positioning alternatives than if corporate branding were the only option considered. An example is Kellogg's Rice Krispies Treats. In this case, Treats feed off Rice Krispies' heritage of quality and break-fast cereal while Treats help position Rice Krispies as a product that kids enjoy.

When dual branding using an established brand, producers hope to appeal to existing loyal consumers who are already attracted by the brand proposition. The established brand gives immediate recognition and awareness of the new product. The consumer knows what to expect. Two established brands can transmit an even stronger signal. Cadbury Schweppes and Mars are now heavy users of dual branding. Mars uses the Bounty brand name from their confectionery line as a flavor signifier in their Bisc & Bounty cookies:</p> <pre> "We use brands as signifier and texture descriptor--e.g., Cadbury Dairy Crunchy Bubly which is a texture descriptor. Something with Bounty in will be good for their loyal consumers. Bounty will have a core of consumer loyal to the brand and love Bounty therefore it would be more interesting to have. Bisc & Bounty than Bisc & coconut flavour." </pre> <p>Besides providing the opportunity to launch new lines, companies believe that brand endorsements, dual brands, and mixed brands increase a brand's visibility and saliency (Leuthesser, Kohli, and Suri, 2003). Consumers will buy into the brand more frequently if there is a range of products that suit different occasions and fulfill different needs. It is also hoped to increase consumers' curiosity and reduce the chance of consumers tiring of a brand that only appears in one format. Finally, brand extensions can help attract nonusers of the core brand (Swaminathan, 2003).

Consistent with Euromonitor's (2003) report, this study found mixed brands most common in breakfast cereals, confectionery, snacks, and cookies. Kellogg's uses mixed brands to help it move from traditional "sit down" breakfast cereal into the breakfast bars eaten on the go. This contrasts with confectionery, snack, and cookie lines of Nestle, Cadbury, and United Biscuits who aim to maintain their customers' interest by segmenting along age and gender lines. For instance, the Nestle's Milky Bar Munchies are for adults and Nestle's Milky Bar Choos are for children. Similarly, in the processed food sector, Heinz and Rank Hovis McDougall have used dual branding to give their ranges appeal to children. Examples are Heinz Pokemon baked beans and McDougall Tweenies biscuits.

Kotler et al. (2001) identifies corporate brand licensing as the fastest growing trend today. Its adoption is particularly strong for packaged goods (Martensen, 2002). This study found evidence of this trend with dual brands where one brand name was licensed from another company. An example marketed by Mars is Snickers (a Mars confectionery) flapjack baked by McVitie's (a United Biscuits brand). Although McVitie's could gain financially from merely baking the product, McVitie's managers think it also important to have their name on the pack. Both brands and companies gain from the dual branding. McVitie's is known for its baking and represents an endorsement of cake quality for which Mars is not known; McVitie's benefits from using the established Snickers brand to build their presence, range, and offerings in a market where they do not normally operate. The anticipated benefits of brand licensing are many: immediate consumer recognition and product awareness, cost-effectiveness by minimizing companies' costs of supporting brands, increased awareness of the licensee's other brands, building a company's presence in terms of the company's range and offerings, and stretching brands into different fixtures.

Brand licensing has risks. Different promotions of the two or more independent companies could dilute a brand's identity. There is also the risk of dispute if brand positions diverge or contagion if the reputation of one company is damaged. However, brand licensing is successful in several product categories.

Some mixed branding is transient or opportunistic rather than long term. Mars Maltesers Teasers from Celebrations was an opportunistic one-off product launched before Christmas. The company's managers explain that McVitie's McV Hob Nobs is transient for another reason. With the new style McV, they hope to give a more contemporary appearance to the product by entering the young market segment. Another example is Dettol Dettox where the long-term aim is to extend its antibacterial surface cleaning products from liquids to wipes. At times, Dettol Dettox appears on the wipes packaging while on others the pack explains, "Dettol is the new name for Dettox." Veet Immac hair remover is another example of a name change. In this case local name Immac will disappear as the company standardizes on Veet across the world.

The frequency of managers explaining dual brands as transient suggests that their increased occurrence has as much to do with companies tidying up their brand portfolio as aiming to lever the equity of two or more brands names. The move from corporate brands to individual brands is clear, and some of this has occurred because of the clutter left after acquisitions, as with GSK, or, as with Veet, to standardize across global markets. The wider use of licensed dual brands indicates that companies are seeking mutual leverage, but not as much as the raw statistics in Table 1 suggests.

CONCLUSIONS

The content analysis of the latest brand packaging sold in supermarkets showed a significant change in strategies in the past 10 years. A revised representation and framework for brand structures reflect these changes. The results indicate more branding styles and approaches were deployed with a decline in corporate brands. There is fuzziness around the use of mixed, endorsed, and dual brand structures. The mixed structures now recognize both the endorsed and dual brand styles applied simultaneously on product packs. Two new approaches exist: (1) A collection of powerful brands is used in a combined format to communicate component parts of a product. (2) The licensee and licensor brands appear in a combined format on product packs. The ultimate goal is shared branding. In this way, brands can be fed off each other and use each other's values and goodwill. Stronger communications can also be achieved with the consumer in terms of trust and immediate awareness of the new product. On the other hand, managers explained that many of the dual brands were transient as they changed from using one brand name to another.

Overall, few manufacturers remained constant in their overall brand strategies; some have switched their brand strategies altogether. Mergers, acquisitions, and companies' re-structuring activities were part of the change in strategies, and environmental factors such as consumption trend, competition, and transition have further impact on these. However, spreading risks and moving away from corporate branding are part of the new rationale behind corporate brand strategies. This study's contribution is to record and track changed brand strategies over time, revise and develop a framework for emerging brand structures as well as explore the further rationale of mixed brands. The next stage of the research will focus on the risks and returns from using mixed brands.

In a time of increased technological change in products and media, the brand, that apparently most ephemeral of things, is the one constant link between marketer and customer. Factories may move across the world in search of low costs, product life cycles reduce to months rather than years, while even the media for communications split generations. Products can be developed, launched, and deleted in a matter of months but brands can take generations to build. Brands figure among the most valuable asset of a company yet recent scandals show that asset to be highly vulnerable. Reputations that take years to build can be lost in days. When brands fail, branding becomes a boardroom issue. The evidence from this audit suggests that many companies are taking those risks seriously and seeking ways of leveraging their brand equity while limiting their exposure to reputation risk.

There is a disconnect between the realization that brand and reputation risk are board level issues and the reality of brands being mixed, matched, lent, and adapted to achieve short-term gains. Sometimes the way brands are used is up to a designer or the result of market research for one product rather than part of a strategy to conserve one of a company's greatest assets. What should the smart managers and boards of directors do to resolve this conflict between quick gains and the threat to its reputation? There are three suggestions:

1. Get branding on the board. Brand and reputation risk are major threats facing a company. That being so, the way leading brands are managed and the standing of brands in the marketplace are leading indicators of a company's future performance. Brands should be a board level issue and have appropriate representation. Arguably, this representation should be a non-executive director who provides an independent view of how brand assets are performing.

2. Keep the firewalls clear. Firewalls in forests look like dead space until fires break out. Similarly, it seems a shame not to make the short-term gains from opportunistically mixing and matching brands with strong identities. To reduce the risk to the corporate reputation as well as to retain clear, separate brand identities, de-capitalize by keeping the corporate name separate from individual brands.

3. Concentrate. A board cannot keep track of all brands but most businesses own a few brands that define a company's wealth. That group of key brands needs managing and exploiting with great care. A company's lesser brands can then be mixed and matched to achieve the short-term gains so beloved of marketers.

SILVIE LAFORET is a lecturer in marketing at The University of Sheffield Management School. Before that she was a lecturer and ESRC Research Fellow at business schools in London and Birmingham. She has expertise in branding, marketing innovation, and strategy. Her current projects are complex brand structures, portfolio management, and innovation and strategy in small- and medium-sized manufacturing enterprises. She is also a referee for a number of papers and textbooks in brand management and consumer behavior, referee of ESRC-related research proposals in innovation and sustained innovation, and guest speaker on a number of practitioners' packaging news conferences.

JOHN SAUNDERS is professor of marketing, head of the Aston Business School, and pro-vice chancellor of Aston University. He is also dean of the Academic Senate of the Chartered Institute of Marketing, and fellow of the European Marketing Academy, British Academy of Management, and the Chartered Institute of Marketing. He has published widely in U.S. and European management science, international business, and marketing journals on complex brand structures, market modeling, and international competitiveness. His current studies are in business incompetence and evolutionary marketing.

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SYLVIE LAFORET

University of Sheffield, Management School

s.laforet@sheffield.ac.uk

JOHN SAUNDERS

Aston Business School, Aston University

j.a.saunders@aston.ac.uk
TABLE 1 Occurrence of Branding Styles 1994-2004

                    Products      Companies (a)
                    1994  2004    1994  2004
Brand Style         %     %       %     %

Corporate dominant
  Corporate brands   5     3      20     20
  House brands      11     6      65     40
Mixed brands
  Dual brands       39    35 (b)  95
  Endorsed brands   14    26 (b)  50     55
Brand dominant
  Mono brands       19    26      75    100
  Furtive brands    13     6      65     50

(a) Percentages do not add up to 100% because all firms use more than
one strategy.
(b) Double branding is used on 19% of products surveyed, triple branding
is used on 12% of products surveyed, and composite branding is used on
1% of products surveyed.

TABLE 2 Corporate Branding Profiles 1994-2004

                      Frequency and    Corporate      Division/House
Company               Priority in Use  1994   2004    1994    2004

Allied Domecq*        Usage              0     30      90      45
                      Strength                  1.4     1       3.8
Associated British    Usage              0      0     100      70
  Foods Plc           Strength                          2.7     2.5
Cadbury Shweppes      Usage            100     70       0      20
                      Strength           3      2.8             1.7
Colgate Palmolive     Usage             80    100      10      10
                      Strength           2      1.5     1       2.5
Gillette**            Usage                   100              20
                      Strength                  2               3
GSK*                  Usage            100     90       0       0
                      Strength           2      0.9
Heinz Corp            Usage            100     85       0       0
                      Strength           4      2.8
Kellogg's Corp        Usage            100     80       0       0
                      Strength           4      2.1
Kraft General Foods*  Usage            100    100       0      25
                      Strength           3.9    1.2             3
Mars Ltd              Usage             40     70      60      35
                      Strength           1      1       1.75    1
Nestle SA             Usage             80     75      25      25
                      Strength           1.4    2       1       2.4
Northern Foods Plc    Usage              0      0      90     100
                      Strength                          3.3     2.4
Procter & Gamble      Usage            100    100       0       0
                      Strength           1      1
Quaker Oats Ltd       Usage             50     80      10      20
                      Strength           2.7    1.25    4       2
Rank Hovis McDougall  Usage              0      0      90     100
                      Strength                          2       3.8
Reckitt Benckinser*   Usage             85     85      25      10
                      Strength           1      1       1       1
Sara Lee**            Usage                   100               0
                      Strength                  1.5
Unilever Plc          Usage              0      0     100      85
                      Strength                          1       0.85
Uniq Plc (Dairy       Usage             10    100      65       0
  Crest & St Ivel)*   Strength           2      1       2.5
United Biscuits Plc   Usage             65     85      60      15
                      Strength           1      1       2       2

                      Frequency and     Super Brand    Brand
Company               Priority in Use   1994    2004   1994   2004

Allied Domecq*        Usage             15      15      80    100
                      Strength           3.6     3       4      4
Associated British    Usage             20      30      45     58
  Foods Plc           Strength           3.75    3.4     4      4
Cadbury Shweppes      Usage              0      35      80     90
                      Strength                   3       4      4
Colgate Palmolive     Usage             10      20      95    100
                      Strength           4       3.8     3.8    4
Gillette**            Usage                     85             20
                      Strength                   4              4
GSK*                  Usage              0      15     100    100
                      Strength                   2.7     4      4
Heinz Corp            Usage              0      15      60     50
                      Strength                   3.3     3.5    3.5
Kellogg's Corp        Usage              0      45     100     90
                      Strength                   3       3      3.9
Kraft General Foods*  Usage             25      35      95     75
                      Strength           4       2.5     3.9    4
Mars Ltd              Usage             15      40     100     95
                      Strength           3.5     3       3.8    4
Nestle SA             Usage             40      60     100    100
                      Strength           3.25    3       4      4
Northern Foods Plc    Usage             10      40      65     60
                      Strength           3       3.3     4      4
Procter & Gamble      Usage             10      35     100    100
                      Strength           2.5     3       3.9    3.9
Quaker Oats Ltd       Usage             55      55      65     75
                      Strength           3.5     3       3.6    4
Rank Hovis McDougall  Usage             10      20      90     90
                      Strength           3.5     3.5     3.9    3.5
Reckitt Benckinser*   Usage             30      40      80    100
                      Strength           4       3.9     4      3.9
Sara Lee**            Usage                     40             75
                      Strength                   4              4
Unilever Plc          Usage             85      25     100    100
                      Strength           2       3       4      4
Uniq Plc (Dairy       Usage             10      40      90     90
  Crest & St Ivel)*   Strength           3       2.6     4      4
United Biscuits Plc   Usage             35      75      85    100
                      Strength           2.6     2.75    4      4

                      Frequency and     Micro Brand
Company               Priority in Use   1994   2004

Allied Domecq*        Usage              0     10
                      Strength                  3.5
Associated British    Usage              0     10
  Foods Plc           Strength                  3.5
Cadbury Shweppes      Usage              5     45
                      Strength           4      3
Colgate Palmolive     Usage             20     25
                      Strength           3      3
Gillette**            Usage                    25
                      Strength                  4
GSK*                  Usage             10     20
                      Strength           3      3
Heinz Corp            Usage              0     15
                      Strength                  4
Kellogg's Corp        Usage             10     25
                      Strength           3      3
Kraft General Foods*  Usage              5     40
                      Strength           4      3.8
Mars Ltd              Usage              0     10
                      Strength                  3.5
Nestle SA             Usage             15     20
                      Strength           3.75   3.5
Northern Foods Plc    Usage              5     30
                      Strength           4      3.5
Procter & Gamble      Usage             30     15
                      Strength           4      4
Quaker Oats Ltd       Usage              5     20
                      Strength           4      3.5
Rank Hovis McDougall  Usage              0     40
                      Strength                  3.5
Reckitt Benckinser*   Usage              0      5
                      Strength                  4
Sara Lee**            Usage                    20
                      Strength                  3
Unilever Plc          Usage              0      0
                      Strength
Uniq Plc (Dairy       Usage             10     10
  Crest & St Ivel)*   Strength           4      4
United Biscuits Plc   Usage              5     30
                      Strength           4      4

*Companies that have been merged since the last time the survey was
conducted. **Companies added to the list since the last time this
survey was conducted.

TABLE 3 Emerging Brand Hierarchy

Corporate branded  Corporate name (endorsing a product brand)
                   House brands
Endorsed+          Corporate name (endorsing a product brand)
                   House name (endorsing a product brand)
                   Family/super brand name (endorsing a product brand)
Dual brand         Corporate, house, family brand + product brand
                   Product brand 1 + product brand 2
Multi-branded      Endorsed multi-brand (i.e., family endorsing two
                     product brand names)
                   Triple brand (corporate name + brand 1 + brand 2)
Branded            Mono brand
                   Furtive brand

TABLE 4 Brand Styles by Strength/Usage Compared for 1994 and 2004

1994                                    2004

Mixed corporate branded                 Mixed corporate branded
  Cadbury Schweppes,** Heinz,             Heinz
  Kellogg's**
Mixed house branded                     Mixed house branded
  Associated British Foods,* Northern     Associated British Foods,*
  Foods, Unigate,** United Biscuits,**    Northern Foods, Rank Hovis
  Rank Hovis McDougall*                   McDougall*
Mixed family branded                    Mixed family branded
  Quaker, Kraft General Foods             Quaker, Kraft General Foods
                                        Family brand dominant
                                          United Biscuits,** Uniq**
Mixed corporate endorsed                Mixed corporate endorsed
  Nestle, Colgate Palmolive,              Nestle, Colgate Palmolive
  Smith Kline Beecham**
Mono branded                            Mono branded
  Allied Lyons,** Mars,* Unilever,**      Proctor and Gamble,* Mars,*
  Proctor and Gamble,* Reckitt            GSK**
  Benckinser,** CPC, Dalgety
                                        Brand dominant
                                          Allied Domecq,** Reckitt
                                          Benckinser,** Unilever**
                                        Corporate dual brand dominant
                                          Cadbury Schweppes,**
                                          Kellogg's,** Gillette, Sara
                                          Lee

*Moderate changes; **significant move
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Comment:Managing brand portfolios: how strategies have changed.
Author:Laforet, Sylvie; Saunders, John
Publication:Journal of Advertising Research
Geographic Code:4EUUK
Date:Sep 1, 2005
Words:7880
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