List
  • General Motors deleted Hummer, Oldsmobile, Saturn, and Pontiac in the last decade.
  • Unilever trimmed its brand portfolio from 1,600 to 400 brands in early 2000s.
  • Procter & Gamble deleted more than half its brands recently.

We frequently learn about firms culling their brand portfolios. However, do we wonder, “why do firms delete brands?” My empirical research attempts to address this important question based on findings from qualitative analysis of in-depth interviews with fifteen brand professionals from diverse countries and industries.

Brands can produce a competitive advantage for the firm and thereby superior financial performance. Brand managers regularly tackle strategic challenges related to brand portfolio management, such as what brands to create or acquire, which ones to modify, and which ones to leverage. However, managers typically devote relatively less managerial time, attention and effort to the strategic decision of discontinuing or deleting a brand from the portfolio. This is because brand deletion is a not only a complex strategic choice but also an emotionally charged controversial decision in a firm.

Many firms own bulky brand portfolios in which generally only 20% of the brands contribute 80% of profits. It makes logical sense to delete weak brands that do not contribute to a firm’s financial performance. The resources freed from the deleted brands can then be redeployed to grow the stronger brands in the portfolio. However, this research found that in addition to financial factors, firms also consider three non-financial strategic factors while deleting brands.

  • A brand that is not able to meet changing needs of consumers, does not offer value to the consumers, or does not keep up to the market trends is considered for deletion.
  • Firms delete brands that are not in synchronization with other brands in the portfolio. Reducing complexity and redundancy from a huge brand portfolio is very important to protect the power brands’ image from diluting, to ensure optimum allocation of resources, and to avoid consumer confusion.
  • Brands that are not strategically aligned with their firm’s strategic direction and goals are deleted.

A firm that does not ignore this crucial and complex decision of brand deletion is geared for growth and profitability.

 

 

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  Posts

March 27th, 2017

Why do Firms Delete Brands?

General Motors deleted Hummer, Oldsmobile, Saturn, and Pontiac in the last decade. Unilever trimmed its brand portfolio from 1,600 to […]

July 13th, 2012

Panel Discussion – An Active Learning Tool

In the real business environment, activities are not conducted in water-tight compartments. Different business functions are interdependent and interact with each other on a regular basis. But students in a marketing classroom (without any prior work experience) would neither know much about cross functionality nor would they understand the importance of working together with other functions. Thus, a cross-functional integration in the marketing curriculum would enable students to have a broader perspective about business issues and activities and would convey the mutually dependent roles in business decision making.

July 13th, 2012

Blog – A Technology for Active Learning

The blog area on the Blackboard site of various courses is rarely used for teaching and learning. The blog has a great potential to initiate discussion, exchange knowledge and information in a fun way, communicate one’s views and opinions, network, and build relationships. Even if a university is not using Blackboard, the Professor can still have a blog on the course website.

July 12th, 2012

Enhancing Marketing Thought…

Empirical advances have outpaced the increased research on conceptualizations that enhance marketing thought. There is a decline in conceptual papers and this is a detrimental trend for our field’s growth because conceptual articles not only provide new ideas but also are more influential (in terms of citations and awards) than empirical papers.

July 12th, 2012

Pink and Blue…

The term stereotype derives from the Greek words στερεός (stereos), “firm, solid” and τύπος (typos), “impression,” hence “solid impression”. Since we have been infants, we have seen stereotyping all around us and interestingly it has been influencing us since then.

June 26th, 2012

Be Yourself!

Try to be yourself! This is the most common advice we receive from our friends, family, teachers, and well wishers. But unless you understand and accept yourself first, you cannot be yourself. It is of utmost importance for you to identify the real you and be true to your self. Then, people around you will start seeing you in that light and accept you, understand you, and love you the way you are.

June 21st, 2012

Think!

So, what are thoughts? Why do we think?

Thinking starts when we face a problem and ends when we have a solution for the problem. They say that thinking is the highest human mental activity which is also the reason behind all human accomplishments and progress. This is because thought precedes action. Anything before being actually done, is first imagined in the human mind. Thus, action and thought are inseparable. As Einstein very emphatically puts it,

The whole of Science is nothing more than a refinement of everyday thinking.

June 21st, 2012

My Experience With Life In The United States Of America

Our first two learning sources are our parents and teachers. True! But our best teacher is experience and what we learn from the world contradicts most of what we learned from the first two teachers. When this thought ran across my mind, I decided to write about my life in the USA. So, here I am, seated in a small coffee shop of a small town in the US pouring my thoughts on paper.