In 1995, Royal Caribbean Cruises Ltd. acquired Celebrity Cruises Inc., an award-winning pioneer in premium cruise travel. Over the next five years, RCCL poured over a billion dollars into new vessels and advertising to support Celebrity, which seemed like the perfect complement to RCCL’s Royal Caribbean brand. But the acquisition foundered, as the larger, successful Royal Caribbean brand simply overwhelmed the less-established Celebrity. As Royal grew stronger, Celebrity grew weaker and evolved away from its successful roots.
Brand blurring is a common problem at many companies, but it’s not the only one. Brand portfolios often bloat, fragmenting marketing resources and destroying economies of scale. Management time is frequently eaten up with refereeing brand usage. And brands sometimes get lost in large portfolios —sometimes literally, as the Procter & Gamble Co. discovered when it lost the rights to the White Cloud trademark after the company retired the brand and left it unprotected. Moreover, cluttered portfolios create marketplace confusion.
The challenge is that the processes for managing brand portfolios have not grown at the same pace as people’s enthusiasm for creating and expanding those portfolios. The techniques are essentially the same as those that were in place when the typical portfolio was a tenth of the size that it is today. In particular, few companies have a formal methodology that enables them to clear away the debris from earlier, less successful branding efforts. What firms need is a structured and straightforward approach for streamlining their brands into a more powerful and effective portfolio. (See “About the Research.”)
A New Framework
Portfolio planning is to brand management as strategic planning is to budgeting.
1. H. Mintzberg, B. Ahlstrand and J. Lampel, “Strategic Safari: A Guided Tour Through the Wilds of Strategic Management” (New York: Free Press, 1998).
2. D.A. Aaker, “Brand Portfolio Strategy: Creating Relevance, Differentiation, Energy, Leverage and Clarity” (New York: Free Press, 2004).
3. A detailed discussion of the brand-portfolio renewal framework, including access to a working tool with a full set of templates, is available at www.heliosconsulting.com/brandportfolio and www.thunderbird.edu/smrexhibits.
4. For a discussion of the definition of “brand,” see S. Hill and C. Lederer, “The Infinite Asset: Managing Brands to Build New Value” (Boston: Harvard Business School Press, 2001).
5. Some experts have contended that even black holes can eventually be turned around, but that argument is not particularly compelling because few companies can afford the decades of investment required to achieve that kind of transformation.