Why Bring Clarity to Your Brand Portfolio?

6 Benefits to Small Businesses

Brand Architecture

Brand Portfolio management isn’t just for Fortune 500 companies. Companies like Proctor and Gamble need a sophisticated portfolio strategy to manage the breadth of their products. Corporations like Apple, GE, FedEx, and many others rely on a portfolio strategy to ensure their customers can find the products they want. But these are large multi-national businesses. They have the resources to support and manage more complex strategies. However small businesses can benefit from portfolio management too, even though they may not have the same complexity of products and services. The basic principles of brand architecture and portfolio management still apply. But what do we mean by portfolio management and brand architecture?

What Value Does Brand Architecture Bring to Small Business?

Brand Architecture can be a competitive advantage. And small businesses should not underestimate the benefits. Brand architecture can be a big help in connecting the right product to the right customer. The benefits are clear:

1. Establishes Product and Service Distinction

Businesses that have multiple products and services need to clearly differentiate between them. This is crucial when the features, benefits, value, and price points vary across the portfolio. Customers need clarity about how to navigate the offer. They need to understand what their choices are. This will enable them to make an informed decision on which products and services will best fit their needs.

Customers rely on product distinction to make intelligent choices.

2. Positions Against Competitor Offers

Every product and service in a portfolio competes with like products and services in someone else’s portfolio. The easier it is to navigate through the choices available the greater likelihood that a customer will choose clarity over confusion. It’s human nature. The more you understand the more comfortable in making a choice. Brand architecture helps them assess choices within the portfolio. And, equally important, make choices within the context of a competitive market.

Clarity of choice leads to confidence in selection.

3. Creates Perceived Value

Branding products and services in a portfolio can build perceived value for those products and services. It’s also a way to differentiate value as well as elevate perceptions. Customers prefer a good, better, and best choice. Brand architecture is a logical and efficient way to promote value alternatives.

Value perceptions add clarity to portfolio alternatives.

4. Leverages Brand Equity

The portfolio parent brand may have high brand awareness, recognition, and equity. This may also be true of any product or service within the portfolio. A brand architecture strategy will provide a framework for sharing equity and recognition through a “halo” effect. The “halo” will extend any branding advantages to other brands that may not have the same degree of recognition. A linkage strategy across the portfolio will define the relationships between brands. It’s this relationship connection that facilitates the halo advantage.

Portfolio synergy creates shared equity that every brand will benefit from.

5. Targets Customers More Effectively

One of the most important benefits of brand architecture is to more effectively target customer segments. It’s a way to match those products and services with a segment that they would appeal to. Resources and marketing investments can then be allocated in a more targeted way. Brand architecture essentially reflects a customer segmentation strategy.

Segmentation connects the best product with the best customer.

6. Order, Structure and Hierarchy Matters

One of the goals of brand architecture is to establish order, structure, and hierarchy across a diverse offer. But structure should make sense to customers. Many businesses make the mistake of creating a brand architecture strategy based on the company’s business unit organizational structure. That may not necessarily reflect how customers look at the product and service offers. In brand architecture, it’s the customer’s perspective that’s most essential. It is also important to remember that not all products and services are equal. Over-branding is one of the most common mistakes. It may not be necessary to brand everything in the portfolio. Every brand requires support and with limited resources, it’s wise to be judicious. Therefore it’s prudent to decide which products and services will “lead” the portfolio. Those are the ones that should be featured and invested in.

Organize the portfolio around the customer, not the CEO.

An Investment Worth Making

Every small business should consider the competitive advantage that brand architecture could provide. Not every business needs it. But for those who have multiple products and services, it’s an investment that will pay dividends. Many small businesses overlook the opportunity. However, this is not a DIY undertaking. Getting professional help will be worth it.

The goal of How Brand Works is to share our experience, perspectives and philosophy on the different facets of branding intended to enable an effective brand management strategy.