5 Fixes For Under-Performing Brands

Mark Di SommaFebruary 18, 20166 min

Smart brand managers actively manage their brand portfolios for maximum collective and individual brand return. If you’ve recently re-assessed your brand portfolio and identified what appear to be one or a number of under-performers, there are a range of options you can pursue to fix that situation.

Before you make any decisions though, it’s important to establish the context. The first thing I would look to identify is how the brand(s) are under-performing (i.e. based on what criteria) and then why. The instinctive assessment is by the numbers. But the numbers of course are the proof of trouble rather than the trouble itself. The brand could be under-performing because it is not a good product, or the timing is wrong, competition in that part of the market is too intense or the pricing is out of sync with expected returns. So the under-performance in the numbers could be symptomatic of anything from lack of quality to lack of value, lack of interest, unavailability or overly aggressive discounting.

A simple way to assess this is to benchmark the performance of your brand against that of a parallel offer by your competitors. If their sales volumes have increased, for example, when did they start doing so, what were you doing to support your brand in market at the time and has the situation for your brand stabilized or continued to degrade?

The other factor I would consider is the impact of that under-performing brand in the wider portfolio. Is the presence of that brand inhibiting or enhancing the performance of other brands in the line-up? And if that brand was to be removed, would doing so open up a gap in your portfolio that a competitor could exploit? In other words, should you be valuing your brand based on its stand-alone sales and worth, or does it have a wider value in terms of building intrinsic value within the overall portfolio?

Armed with these insights, you are ready to make decisions about your brand allocation:

1. Retain – you may decide to leave the brand in market and give it more time to work through its issues. This is the least disruptive measure obviously. If, for example, the brand has been an historically strong performer and has only slipped relatively recently, that change could be an aberration or a temporary set-back (or it could be a sign that the brand is losing ground or relevance). Removing the brand could also be more trouble than it is worth (literally) in terms of changing supplier agreements and reorganizing teams. If you do decide to go down this track, set clear success metrics, a timeframe for turn around and provide the team with the resources they judge necessary to bring the brand back.

2. Remove – you could decide to take the brand out of the portfolio by shutting it down, selling it off, merging it with another brand or giving it stand-alone status outside the core portfolio. The key reason for doing this would be that the brand is diluting or confusing the effectiveness of the portfolio overall. By removing the under-performing brand, you can re-intensify the portfolio by spreading marketing resources over fewer, higher-performing brands. This is a powerful way of lifting the returns within a portfolio and concentrating your brands in specific market segments where you are best known and most likely to get more back from having a presence. Be aware that when you do this, you may at the same time make the portfolio more susceptible to counter-measures by competitors. If for example you remove your least expensive brand from the portfolio mix, a competitor may choose to undercut you. The best options therefore in my view for removal are middle market, middle of the portfolio brands that have not kept pace with the portfolio overall, because their removal can be quickly covered by the brands that were all around them in the portfolio.

3. Reposition – if you find that you have a number of brands closely bunched in a part of the market but the brands themselves are all well known and have strong brand equity, removing one brand or more would make no sense, and selling that brand would mean handing over all the work you’ve done to build that value to someone else. In such a circumstance, you might decide to shift the market positioning of one brand or more to give your portfolio a better spread and to prevent the risk of cannibalization. You might choose for example to focus one brand on a specific segment of the market and to close that segment off to other brands in your portfolio, or you may want to take the brand up, down or across the volume/value matrix. Be careful though that when you reposition a brand, the new positioning makes good sense to consumers, that there is clear continuity with what they know and that the shift provides strong story opportunities that your agency can draw on to give the repositioning energy and intent.

4. Relaunch – if you have a brand that simply has not received the success you think it deserves, you could look to relaunch or revive the brand to make it feel more relevant and interesting to buyers. This is a great strategy if you believe that the brand has inherent value that the market has missed, or something has happened in the wider world that renders the brand suddenly more valuable than it has been. Sometimes, companies drive these revivals themselves. On other occasions, the brands are “discovered” by consumers and the marketing team needs to act quickly to capitalize on the word-of-mouth that is being generated. Sometimes, the revived brand will align with the brand as the business intended. On other occasions, the brand can take on new meaning for consumers when they infuse their own interpretation into the brand meaning. The critical challenge in this situation is to take on-board those elements of the re-interpretation that are acceptable and to then coax consumers to follow the brand they feel they have found on its new journey. That journey may be from within the portfolio, or it may require the brand to be removed or even sold to another party, depending on how compatible the new meaning is with what the company feels comfortable with.

5. Revise – if the brand is inherently strong but is susceptible in specific ways, it would be irresponsible to discard the brand altogether. Instead look for ways to upgrade or amend the brand’s positioning, story, marketing or look and feel to add freshness and vitality. Today’s consumers expect brands to constantly freshen, and sometimes that’s all that’s required to bring a brand up to speed. If you choose to pursue this course, do so within the context of the wider portfolio. Don’t revise the brand in such a way that it impinges on another brand in the portfolio. On the other hand, if you have a brand that is flourishing, you may be able to apply some of the broad learnings from that brand’s success to add new oomph to the brand that is under-performing.

Finally, while decisiveness is necessary, don’t be too quick to judge a situation. Challenging the presence of a brand in a portfolio is a big call and one that should only be made when there has been a sustained period of under-performance. To me, that would mean a brand that had been drifting downward by volumes and margins over a period of years. I would also take a hard look, accompanied by some tough questions, at a brand that had required increasing investment and had nothing to show for that investment after a period of six to 12 months.

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