How to Prioritize your Portfolio of Brands

Posted on Posted in How to Guide for Marketers

BBI Learning LogoWhen you have a group of brands and you need to sort through the focus, the temptation is to try to hedge your bets and spread a little love to each brand.  As I managed 15 brands at Johnson and Johnson, I finally came up with a very simple rule that I affectionately called “a third, a third, a third”.  No matter how good the year was, a third of the brands would do amazing, a third would do ok and a third would struggle.  To win in the market, and hit my plan, I had to make sure the third that did amazing out-paced the third that struggled.

Some leaders would see that situation and want to spread their resources to that bottom performing brands, just in case the high performing brands didn’t come through.  But hedging your bet just means you never fully realize the full potential of those high performers.  Here’s the rule:  Focus your resources on those brands that can offer the fastest growth and allow them to outpace those that are slower growth.  

First Look Externally at the Market

For decades, people used the BCG priority grid, BCG-Matrixa simple two by two matrix with market growth on one axis and market share on the other.  The simplicity of the grid works:  how healthy is where you play and what is the opportunity to win where you play?  Stars are where you want to invest and dogs are you want to divest.

A very simple improvement on this grid was to go to a 3×3 version of the grid that gives you more flexibility in choices.  Plus calling it market attractiveness goes beyond just growth and competitive strength goes beyond just market share.  If you want to go deep, I’d encourage you to come up with 3-5 criteria for what each axes can mean.  Market Attractiveness can be a combination of growth, size, profitability, ease of servicing, future growth, manageable barriers to entry.  Your competitive strength could be a combination of growth, size, aligned resources and assets, competitive advantage (technology, patents, positioning), brand loyalty and strength of the connection to consumers.  Each of the 9 boxes has a recommendation for either increasing the market attractiveness or increasing your own brand power.  

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From the grid, you can see three green investment boxes.  Where you have high competitive strength but in a moderately attractive category, it might be worth your while to invest to grow the category.  Conversely, where you have moderate strength in a highly attractive category, you want to invest to strengthen your brand.   The yellow boxes are moderate investment options and the red boxes represent minimal investment or divest situation.  

Then Look Internally at the Market

Once you feel comfortable with how the brands line up externally, it might be worth a second look to compare how they look internally.  As you line up your portfolio, the goal is to maximize the longer term profitability of those brands.  Here you want to look at Brand Growth rates and Margin percentages.  And for each box, there is a recommended action.  For instance if you are a high growth brand with lower margins you want to find a way to take the power associated with the growth and look to increase prices where possible either through a price increase or by trading them up to a premium version of the offering.  Conversely, a medium growth brand in the same low margin box might have less brand power to warrant the price increase, so you should be looking at reducing COGs or marketing spend.  Slide1

You’ll see the same colour combinations, greening meaning invest in growth, yellow is maintain and red means divest.  Each of the 9 boxes has a recommendation of how to optimize the P&L for that brand and the overall portfolio.

To read more about Brand Analysis, I’d encourage you read: How to Go Deeper on Analysis

Focus on the growth Brands and they’ll outpace the decline of the weaker brands

To read more on How to Analyze Your Brand, read the presentation below:

 
 

email-Logo copyABOUT BELOVED BRANDS INC.:  At Beloved Brands, we are only focused on making brands better and making brand leaders better.Our motivation is that we love knowing we were part of helping someone to unleash their full potential.  We promise to challenge you to Think Different.  We believe the thinking that got you here, will not get you where you want to go.  grOur President and Chief Marketing Officer, Graham Robertson is a brand leader at heart, who loves everything about brands.  He comes with 20 years of experience at companies such as Johnson and Johnson, Pfizer Consumer, General Mills and Coke, where he was always able to find and drive growth.  Graham has won numerous new product and advertising awards. Graham brings his experience to your table, strong on leadership and facilitation at very high levels and training of Brand Leaders around the world.  To reach out directly, email me at graham@beloved-brands.com 

At Beloved Brands, we love to see Brand Leaders reach their full potential.  Here are the most popular article “How to” articles.  We can offer specific training programs dedicated to each topic.  Click on any of these most read articles:

 Ask Beloved Brands to run a deep dive brand analysis or ask how we can help train you to be a better brand leader 

Six Key Principles of Good Analytics for Brand Leaders to Follow

Posted on Posted in How to Guide for Marketers

BBI Learning LogoFor Brand Leaders to keep moving up, you need to be good at all parts of marketing.  When I’m assessing talent, I break it up into skills, behaviors and experiences.  As you manage your career, try to close gaps in each.  Yes, we all end up with leader behavior gaps even as we make the highest levels, but you can’t or at least you shouldn’t have a skill gap.  You have to be solid in all aspects of strategic thinking and planning, all types of implementation whether thats advertising, new product innovation or working through the sales channels, you have to be able to manage and run your business including budgeting, forecasting and running the projects.  

People generally advance in marketing careers through one of four means: 

      1. great at thinking 
      2. great at doing 
      3. great at presenting their thinking or doing 
      4. great at leading others to think, do or present. 

But eventually, at some level, you have to be good at all four. And that’s what makes you a great marketing leader.  

As people move up, the biggest skill gap I see is Analytics. They either don’t know how to dig in or when they dig in, they struggle to tell the story from all the data they’ve gathered.

To challenge you on your Analytical Skills, here are some key principles that might help you to close that gap.  

Principle #1:  Opinions without fact to back them up are just opinions and can leave a room divided.

A great tool to Ask yourself 5 times “so what does this mean” and you’ll get a little deeper and start to see the opinion turn into a fact based insight that can align a team and drive action. 

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Principle #2:  Absolute Numbers by themselves are Useless

 Back in the early 1900s, there was a famous baseball player whose name was Frank “Home Run” Baker.  Yet, oddly enough, the most Home Runs he ever hit in a year was 12.  So how the heck can he get the nickname “Home Run”.  Because in a relative dead ball era of baseball, he won the home run crown four consecutive seasons with 11 home runs in 1911, 10 in 1912, 12 in 1913 and nine in 1914.  Yes Babe Ruth would hit 54 and 60 home runs less than 10 years later but the ball had changed. The absolute number of home runs does not matter–relatively speaking, Frank Baker was the best home run hitter of his generation and deserves to be called “Home Run” Baker.  

Only when given a relative nature to something important do you find the data break that tells a story.  You have to ground the data with a comparison, whether that’s versus prior periods, competitors, norms or the category. Every time you talk about a number, you have to talk about in relative terms—comparing it to something that is grounded:  vs last year, vs last month, vs another brand, vs norm or vs England’s share.  Is it up down, or flat?  Never give a number without a relative nature—or your listener will not have a clue.

Principle #3: The analytical story comes to life when you see a break in the data.

Comparative indexes and cross tabulations can really bring out the data breaks and gaps that can really tell a story. 

Use the “so what” technique to dig around and twist the data in unique ways until you find the point in which the data actually breaks and clear meaningful differences start to show.   This is where the trend is exposed and you can draw a conclusion.

Example of Finding the point where the data breaks

  • Distribution overall held at 82% throughout the year.   At the macro level, it looks like there is no issue at distribution at all.
  • Distribution on 16 count fell only a little bit over the year going from 74% to 71%.  Even at one layer down—the count size—there’s still very little break in the data
  • Distribution on 16 count at Convenience stores went from 84% to 38% in the last 2 months.  As we are starting to twist the data, it shows a dramatic and quick drop at the Convenience channel.  As you start to dig around you might find out that the biggest Convenience Customer, 7-11, delisted the brand recently.

You need to keep breaking the data points down to see if they start to tell a story. 

Principle #4:  Like an Old School Reporter, two source of data help frame the story.
Avoid taking one piece of data and making it the basis of your entire brand strategy.  Make sure it’s a real trend.  Dig around until you can find a convergence of data that leads to an answer.  Look to find 2-3 facts that start to tell a story, and allows you to draw a conclusion.    The good pure logic in a philosophical argument they teach you is “premise, premise conclusion” so if you see one trend line, look for a second before drawing a conclusion. 
 
Principle #5:  Deep Analysis requires thinking time

One of the best ways to separate your analysis is to divide things into:

      1. What do we know?  This should be fact based and you know it for sure.
      2. What do we assume?  Your educated/knowledge based conclusion that helps us bridge between fact, and speculation.
      3. What we think?  Based on facts, and assumptions, you should be able to say what we think will happen.
      4. What do we need to find out?  There may be unknowns still.
      5. What are we going to do?  It’s the action that comes out of this thinking.

One of the best analysis you can do is the simple “where are we” page.  It has 5 simple questions that make you think:

      1. Where are we?
      2. Why are we  here? 
      3. Where could we be?
      4. How can we get there?
      5. What do we need to do to get there?
This page can be very useful at the start of your brand planning—while it forces your thinking, it also focuses your writing of the document.  My challenge to you:  update it every 3-6 months, or every time you do something major.  You’ll be surprised that doing something can actually alter where we are?
Principle #6: Use Tools that can help organize and force Deep Dive thinking in Key Areas. 

A Force Field analysis is best served for those brands in a sustaining position where marketing plays the role of driving innovation and creativity within a box.  Always keep in mind that Drivers and Inhibitors are happening now.  You can see the impact in the current year.   Anything in the future gets moved down to Opportunities and Threats which are not happening but could happen.  Invariably, people mix this up and things that could happen move up when they really shouldn’t.

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The best thing about the force field is you can easily take it into an action plan, because you want to keep the drivers going and overcome the inhibitors Then take advantage of the opportunities and minimize or eliminate any serious threats.  It’s a great simple management tool.

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To read more about Brand Analysis, i’d encourage you read: How to Go Deeper on Analysis

The Final Principle is that Good Analysis Only Gets you to the point “So what do you think”

 

To read more on How to Analyze Your Brand, read the presentation below:

 
At Beloved Brands, we love to see Brand Leaders reach their full potential.  Here are the most popular article “How to” articles.  We can offer specific training programs dedicated to each topic.  Click on any of these most read articles: