JOURNAL OF

MARKETINGMANAGEMENT

How Brand Portfolios Have Changed:A Study of Grocery Suppliers Brandsfrom 1994 to 2004

Sylvie Laforet, University of Sheffield, UK*John Saunders, Aston University, UK

Abstract This study examines the changes in brand structures based on a repeataudit of brand portfolios by leading grocery product suppliers. It compares resultsfrom content analyses of four hundred leading suppliers' brands sold to Tesco andSainsbury's in 1994 and 2004. The brand structures used have changed althoughnot uniformly in extent or direction. There is now more complexity in the waybrand names are used. An extended typology of brand structures is incorporated.Propositions drawn from latest thinking on the use of brand portfolios arecompared with the findings implications discussed.

Keywords Brand structures, FMCG, Brand portfolios. Research paper.

INTRODUCTION

Emerging market complexities, competitive pressures, channel dynamics, globalisation,acquisitions, multiple and aggressive brand extensions have left companies with anincreasingly complex portfolio of brands to manage. Furthermore, the diverse natureof consumers as well as stakeholders, the power of new media (such as the Internet)and public opinion add complexity to today companies' branding activity (Simoesand Dibb 2001) and brand portfolios.

The popularity of brand extensions and umbrella branding in the 90s led a wealthof research (Aaker and Keller 1990, 1993; Keller and Aaker 1992; Boush 1993;

'Correspondence details and biographies for the authors are located at the end of the article, p. 58.

JOURNAL OF MARKETING MANAGEMENT, 2007, VoL 23, No. 1 -2, pp.39-58ISSN0267-257X print /ISSNU72-1376 online Westburn Publishers Ltd. DOI 10.1362/026725707X178549

40 m y Journalof Marketing Management, Volume 23

Sundie and Brodie 1993; Nijssen and Hartmann 1994; Kim and Lavack 1996; Glynnand Brodie 1998; Pryor and Brodie 1998, Sheinin 1998; Nijssen 1999; Swaminathan2003). Another strong research strand focuses on the concept and value of corporatebrand (Bickerton 2000; Simoes and Dibb 2001; Balmer and Gray 2003; Leitch andRichardson 2003; Knox and Bickerton, 2003; Knox 2004). The value of a clearcorporate identity is widely accepted but how this relates to product brands andwithin a portfolio of brands is not well understood. This is because much of this workis in service industries or is concerned with companies that sell directly to consumers.This contrasts with Christopher's (1998) observation that much competition is basedin the supply chains and among companies' product portfolios rather than amongindividual companies.

Based on ideas from the literature of design and corporate identity (Olins, 1989and Murphy, 1987), Laforet and Saunders' (1994) study of suppliers' brands in thegrocery sector found a great diversity in the way that companies managed their brandportfolios, even when operating in the same market. Moreover, firms usually mixedand matched corporate, house (division or subsidiary) and individual brand nameson their products. The interplay between brand names captured in Laforet andSaunders' study stimulated further research into the brand linkages and relationships(Jevons et al. 2001), the leverage of secondary brand associations (Uggla 2002), brandarchitecture and relationships within product categories (Rajagopal and Sanchez2004), consumers' reactions to brand naming strategies across durables and services(Bhat et al. 1998) and the benefits of using two or more names or more on a pack(Speed 1998). Strebinger (2002) proposed a strategy for brand architecture embracingthree fields of theory - the brand concept, consumer information processing and atypology of brand architecture while Douglas et al. (1999) extended the work tointernational brand structures.

The study of brand portfolios has grown over the last decade but there aresuggestions that the pressures now facing competitors is changing the way brandportfolios are used. This study seeks to find if the brand structures uncovered in themid 1990s persist. Are companies changing their emphasis in their use of variousbranding options and are there new patterns in the use of brand portfolios? Itcompares the results from content analyses of four hundred leading suppliers' brandssold at Tesco and Sainsbury's supermarkets in 1994 and 2004. The paper starts byexamining current thoughts on how brand structures are changing. Companies' brandstrategies were then surveyed and compared with the results of the last study (Laforetand Saunders 1994), the findings are discussed and conclusions drawn.

CURRENT THOUGHTS ON BRAND STRUCTURES

There is a conflict in the current academic debate on where brands are going. Aakerand Joachimstahler (2000) suggest a trend from individual brands, through overendorsed and sub brands, towards corporate branding structures driven by emergingmarket complexities, competitive pressures, channel dynamics, and globalisation. Tothese are added markets confused by multiple brands, aggressive brand extensionsand complex, sub-brand structures. Consequently, cost effective leveraged corporatebrands are replacing individual portfolio brands. Furthermore, Balmer and Gray(2003) argue corporate brands, if successful, would be more sustainable and a valuablestrategic resource to companies than individual brands. This is because, according tothe latter, corporate brands are best at communicating the brand's value and promise.

Laforet and Saunders How Brand Portfolios Have Changed

they are seen as a means of differentiation and enhance the esteem and loyalty inwhich the organisation is held. These authors suggest companies use the corporatebrand through six corporate branding categories: familial, shared, surrogate, supra,multiplex and federal. If the above arguments for corporate brands are correct,corporate branding should be more dominant now than ten years ago.

Petromilli et al. (2002) argue that there is an increasing financial gain in usingbrand names together due to the efficiency of 'pooling' and "trading' strategy.'Pooling' captures more shelf-space and market share using individual brandnames to differentiate products. For example. Proctor and Gamble has leveragedits manufacturing capabilities to develop a host of laundry detergent brands. Eachtargets a different segment of the market and offers different benefits, but Proctorand Gamble has 'pooled' them together by presenting the entire portfolio to thetrade in order to capture more shelf space and gain additional market share. Two ormore simultaneously used brand names can 'trade' off each other's values. Each sub-brand can thus gain from 'pooling' and benefit from 'trading' on the halo effect ofmaster brand associations. This suggests that, in search for efficiency, mixed brandsare increasingly used.

In contrast, Kapferer (2001) suggests that individual brands have become morecommon as companies decentralise. The reasons for this demutualisation are, firstly,the use of market segmentation and differentiation to create barriers to cannibalisationand to avoid distribution channel conflicts. Secondly, individual brands are a logicalresponse to market fragmentation into increasingly small segments. Kapferer alsonotes companies turn to individual brands often after failing to find the synergiesanticipated from the corporate brand.

A number of companies also use individual brand strategy to grow vertically in ahighly segmented market. Vijayraghavan (2003) pointed out that individual brandsoffer more character and allow accurate positioning in intensely competitive markets.In price-sensitive markets, value-for-money brands (possibly own labels) are oftenvolume pullers. In these segments umbrella branding does not necessarily help andconflict with the umbrella brand's use in less prices sensitive segments. SimilarlyPierce and Mouskanas (2002), note that individual brand names within a portfoliobecome more powerful when they are interrelated. They suggest use of individualbrands to that successful companies should concentrate on a small group of powerfulbrands and position more precisely.

Brands and corporate brands are sensitive to external threats. In anti-globalisationmovements, global brands attract protestors as well as customers (Held 2002; Notesfrom Nowhere 2003). Best selling books, such as No Logo (Klein 2000) and Fast FoodNation (Schlosser 2001) have helped focus activists and the wider market on brandsand corporate brands in particular. The power of the media and public opinion addsfurther complexity to companies' branding activity (Simoes and Dibb 2001). Badpubhcity can influence pubUc opinion about a brand which can pose serious threatsto companies' reputations and their entire business, especially if the company is alsoa brand. For example, following Arthur Andersen's recent corporate scandal, thecompany went out of business (Stein 2004). This case highlights the vulnerability ofcorporate brands. In the grocery market, once corporate branders like Kellogg's andNestle who used their corporate names to endorse their product range could facereputation risk across the whole business if bad news hits. In contrast, Unilever'suse of mono brands gives firebreaks that can limit reputation loss across a wholebusiness. The Internet is now an instrument that can be used by activists to attackcorporate brands or used by disgruntled customers spreading ideas so quickly that a

42 ^ ^ 1 Journalof Marketing Management, Volume 23

local problem can suddenly become a global disaster (Murray 2003). Therefore, itis probable that companies are moving away from corporate brands to limiting theirexposure to reputation risk

Most intensive users of individual brands, such as Unilever, Procter & Gamble,still disclose their company's identity somewhere on their packs, by either an addressor a small logo. But in some cases, suppliers have been careful not to expose theinterrelationships between their ranges when their joint ownership is unappealing,for instance, in the case of Mars confectionery and Pedigree pet foods (these twobusinesses belong to the same company Mars Inc.), or where a company dominatesa category in many of the world's market, as does Unilever in yellow fats. By usingfurtive brands (i.e. where companies do not disclose the company's identity anywhereon product packs (Laforet and Saunders' 1994), that do not disclose corporateownership, marketers minimise the chance of consumers or activists rememberingor communicating who owns what. The heightened sensitivity of companies toreputation risk therefore suggests an increased used of furtive brands.

BRAND STRUCTURES

Using a content analysis of 400 grocery brands sold at Tesco and Sainsbury'ssupermarkets and personal interviews with senior managers (Laforet and Saunders1994), revealed a more complete brand structure (Table 1) than the monolithic,endorsed and branded structure proposed by Olins (1989) and Murphy's (1987):

Corporate dominant - companies that use corporate brand names on all of itsproduct range were rare. Heinz is the closest to being corporate dominant but, evenin the study then, 60 percent of its products were found to be dual branded (i.e. twoor more names with equal prominence used). Acquisitions have caused compositecorporate dominant firms to emerge such as Cadbury Schweppes and Colgate-Palmolive and parts of the corporate name associated with product classes, forexample, Cadbury with chocolate and Schweppes with mixers (Laforet and Saunders1994, p. 68).

House brands (divisions or subsidiaries) structures were found to be more commonthan corporate ones. For example. Mars used its corporate branded products forhuman consumption but Pedigree on pet foods and Thomas's on pet accessories(Laforet and Saunders 1994, p.68).

Dual brands - many products were found to be mixed brands, carrying two or morebrand names. Dual brands gave the brands roughly equal prominence. Examples ofdual brands are Cadbury's Dairy Milk uses a corporate name with a mono brandname, while Rowntree's Chocolite has a family brand and mono brand name. Theuse of brand leverage in launching new brands was resulting in an increasing numberof mixed brands of all types (Laforet and Saunders 1994, p.68-69).

Endorsed brands - whereby the brand was endorsed by either the corporate orhouse name.

The brand dominant included the mono brands i.e. single brand names used and,furtive brands i.e. single brand names used but the corporate identity was undisclosedor not found anywhere on product packs. For example, Unilever was found to bea brand-dominant company whose product ranges were dominated by a series ofmono brands. While pet-food makers often disclosed their names on product packsto reduce the link between food for pets and that for humans, similarly, Unilever used

Laforet and Saunders How Brand Portfolios Have Changed 43

to identify their detergents (Radion, Persil, etc) as made by Lever Brothers and theirmargarine (I can't believe it's not butter! Stork, etc.) from Van Den Bergh (Laforetand Saunders 1994, p.69).

The suppliers also used five brand strategies: mixed corporate branded strategy,mixed house branded, mixed family branded, mixed corporate endorsed and monobranded strategies (Table 7). For instance, the mixed corporate branded strategyrecognised that unlike the traditional view of Kellogg and Heinz as corporatebranders, the companies also used other branding approaches. Kellogg used theircorporate identity with mono brand names, e.g. Kellogg Rice Krispies.

METHODOLOGY

This study examines changes in the use of brand portfolios over the last decade. Itfollows the same sampling procedure and method used by Laforet and Saunders(1994). Four hundred leading grocery brands - twenty brands from each of thetwenty major suppliers to Tesco and Sainsbury's - were analysed. The brands wererandomly selected from the supermarket shelves and were not selected based on anyspecific criteria, other than they must come from the same leading grocery suppliersas in the last study. The exceptions are two companies that merged and anotherthat is withdrawing from grocery market. Thus in the analysis, merged companieshave the same status as old companies and those added to replace the one that waswithdrawn, are considered as new companies. These included most of the westernworld's leading suppliers of grocery products but with a bias towards Furopean firms(Tables 3 to 6).

As in the 1994 study, brands from the first of the twenty suppliers were examinedand the interplay between that supplier's brands and corporate identities recorded.Next, brands from a second supplier were analysed and so on, until a classificationscheme described all the 400 brands sampled. Types of brand mark were identifiedand the relative priority given to them on each sample package was noted. Thebrand types suggest a way of classifying the branding of individual products and howcompanies use their portfolio of brand identities (Tables 1 and 2).

Suppliers' brand strategies are described, based on how often they used a brandtype (or the frequency of a brand type used), refers to brand 'usage' and the relativeprominence given to the brand type used, known as brand 'strength'. For instance.Table 3 shows Proctor and Gamble used their corporate identity and a mono brandname on 100 percent of the products studied in 2004 but the prominence of theircorporate identity on the products sampled was 1, meaning the brand type is not inthe front of the package but appears somewhere, often at the back of the productpack. In contrast the mono brand name's prominence on all the products sampledwas 4, meaning the brand type is given a predominant position on the package andit usually appears in front of the product pack in large print. 2 represents a smallendorsement and 3 an inferior size name. The derivation of brand strength score isshown in Table 3 and further explained in Laforet and Saunders (1994). In addition,companies were ranked in terms of how strongly they adhered to a brand type orstyle. The 'heavy users' were those that used more than 67% of a brand type; 'mediumusers' 66% to 33%; 'light users' less than 32% and 'non users' were those companieswho did not use any of the brand type shown (Tables 3 to 6). Companies using amixture of branding approaches appear more than once on a table.

Q^m Journal of Marketing Management, Volume 23

Table 7 sums up the strategies used by the twenty suppliers. For instance, Heinzis now a mixed corporate branded company because Tables 3 to 6 show although itis a heavy user of corporate brand (in terms of frequency), it also uses mono (single)brands (refer Table 4 which indicates that Heinz is a medium user of mono brands)and super (family) brands (refer Table 5 which indicates that Heinz is a light userof super brands). Recorded personal interviews with managers refined the brandstructure and gained an insight into why brand strategies were used.

RESULTS

The 2004 study revealed that brand structures are more complex than in 1994 (Tables1 &2).

Corporate branded. At the top of the hierarchy, corporate or house names (divisionsor subsidiaries) are used with a description, such as Heinz tomato ketchup or L'Orealkid's shampoo (Table 2). A company using this approach for all their products rangehas a corporate dominant strategy. However, none of the companies studied now

TABLE 1 Brand Structures 1994-2004

1994

BrandStructure

CorporateDominant

MixedBrands

BrandDonninant

Brand Type

- CorporateBrands

- HouseBrands

-DualBrands

- EndorsedBrands

- MonoBrands

- FurtiveBrands

2006

Brand Structure

CorporateBranded

Endorsed

Dual Brand(Horizontalrelationship)

Multi Branded(Mixed of vertical& horizontalrelationshipsbetween names)Branded

Brand Type

- Corporate Name- House Brands

- Corporate Name (endorsing aproduct brand)

- House Name (endorsing aproduct brand)

- Family/Super Brand [endorsing aproduct brand)

- Corporate, House, Family Brand+ product

- Product brand 1 + Product brand2

- Endorsed multi Brand (Familyname endorsing two productbrand names)

- Triple Brand (corporatename+brandl+brand2)

- Mono Brand- Furtive Brand

Laforet and Saunders How Brand Portfolios Have Changed

used this approach dominantly (Table 3) so 'corporate branded' is used to refer toproducts displaying their company's name or house name prominently.

Endorsed structure is the next level of the hierarchy where a company or housename endorses a brand (Table 2), such as L'Oreal Elvive or Lipton Tchae. The contentanalysis shows in addition the family or super brand is now used to endorse theproduct brand name, for example. Always Alldays Black panty liners - Always areshown in small prints and Alldays, the product brand name, is prominent.

Dual brands give equal prominence to either a corporate, house, super brand oranother product brand name together with the product's own brand (Table 2), suchas Nestle (corporate name) Blue Riband (brand name), Twinings (house name) LadyGrey (brand name) or Airwick (super brand) Haze (brand name). All companies nowuse the dual brand approach (Table 5) and this style occurs on 34.5% of productssurveyed.

Mult i branded cases use both the endorsed and dual brand styles in a combinedformat on a product pack (Table 2). Eriskies Winalot Reward pet food is an exampleof an endorsed multi brand where Eriskies is an endorsement while Winalot andReward have almost equal prominence. Another is triple branded Cadbury's WispaToppers hot chocolate, Cadbury's (corporate name) Wispa (brand name) areendorsements but Toppers (brand name) is more prominent. This strategy is used byNestle, Cadbury, Kellogg's, United Biscuits and Mars.

TABLE 2 200A Extended Typology of Brand Structures (with examples)

Brand Structure

CorporateBranded

Endorsed

Dual Brand(Horizontalrelationship)

Multi Branded(Mixed of vertical& horizontalrelationshipsbetween names)

Branded

Brand Type

- Corporate Name- House Brands

- Corporate Name (endorsing aproduct brand)

- House Name [endorsing aproduct brand)

- Family/Super Brand(endorsing a product brand)

- Corporate, House, FamilyBrand + product

- Product brand 1 + Productbrand 2

- Endorsed multi Brand (Familyname endorsing two productbrand names)

- Triple Brand (corporatename+brand1+brand2)

- Mono Brand- Furtive Brand

Examples

- Heinz Tomato Ketchup- L'Oreal Kids Shampoo

- Nestle Kit Kat- L'Oreal Elvive- Always Alldays Black panty

liners

- Nestle Blue Riband,Twinings Lady Grey

- Airwick Haze

- Friskies Winalot Reward petfood

- Maltesers Teasers fromCelebrations

- Cadbury's Dairy MilkCrunchie

- Cadbury's Wispa Toppers hotchocolate

- Persil, Ribena- lams (P&G undisclosed)

Journal of Marketing Management. Volume 23

Branded describes only 32% of the products sampled which were a single brandname product (Table 2). This compares with a dominant 61% using some form ofmixed brands, although all companies used mono brands to some degree (Table 4).

The results show few companies' strategies remained the same over the last decade.Eight out of twenty companies surveyed (40%) have changed significantly in theiroverall brand strategy (Table 7): Allied Domecq, Cadbury, GSK, Kellogg's, ReckittBenckinser, Unilever, United Biscuits and Uniq. Even those who stayed most constantin their overall brand approaches have had some variations in the branding styles.

TABLE 3 Ranking of Corporate Branders 1994-2004

Heavy Users

Gillette **

Colgate Palmolive

Sara Lee **

Kraft General Foods *

Proctor &Gamble

Uniq Pic (Dairy Crest & St Ivel) *

Glaxo Smithkline Pic *

Heinz Corp

Reckitt Benckinser*

United Biscuits Pic

Kellogg Corp

Quaker Oats Ltd

Nestle SA

Cadbury Schweppes

Mars Ltd

Medium usersAllied Domecq *

Frequency and Priority in

UsageStrength'UsageStrengthUsageStrengthUsageStrengthUsageStrengthUsageStrengthUsageStrengthUsageStrengthUsageStrengthUsageStrengthUsageStrengthUsageStrengthUsageStrengthUsageStrengthUsageStrength

UsageStrength

1994

802

1003.91001

102

1002

1004851

651

1004502.7801.41003

1

0

use

2006

1002

1001.51001.51001.21001

1001900.9852.8851

851

802.180

1.25752702.8701

301.4

Cont'd...

Laforet and Saunders How Brand Portfolios Have Changed 47

Frequency and Priority in use1994 2004

None Users

Associated British Foods Pic UsageStrength

Northern Foods Pic UsageStrength

Rank Hovis McDougail UsageStrength

Unilever Pic UsageStrength

Companies in bold increased their use of corporate brands while those in italicsdecreased the use over time period.* Companies that have been merged since the last time this survey was conducted** Companies added to the list since the last time this survey was conducted.

Nc

' brand strength scores is calculated: Sc,t = ^Pc, t, n /(Nc-Mc,t)

Where: Sc,t = strength of the display of brand type t by company cPc,t,n = the prominence given to brand type c on product nNc = number of brands surveyedMc,t = number of products on which brand type t is not used.

Over the last decade, heavy users of mono brand, Allied Domecq, Reckitt Benckinserand Unilever (Table 4), have increased their usage to the point that they are now bestdescribed as brand dominant companies (Table 7). Tables 3 to 6 show Allied Domecqas a light user of corporate and super (or dual) brand but a heavy user of monobrands. In addition, the large decline of their house brands is offset by an increasein mono brand to 100% by 2004, from 80% a decade earlier. Similarly, ReckittBenckinser has increased their use of mono brand to 100% compared with 20% adecade ago (Table 4). Unilever's large decline of super brand also emphasises theirposition as a brand dominant company (Table 1).

Cadbury and Kellogg have moved from a mixed corporate brand approach toa corporate dual brand dominant approach (Table 7 & Table 1), United Biscuitsand Uniq from a house branded approach to a super or family brand dominant.In contrast, as mentioned above, Unilever, Reckitt Benckinser and Allied Domecqhave moved in the opposite direction and become brand dominant by dropping theirsuper brands and opting for mono brands. Lastly, GSK has also moved from oneend of the brand hierarchy spectrum to another, from a mixed corporate endorsedbrand strategy to a mono branded strategy (Table 7 &c Table 1). Since GSK is theculmination of a merger between Smith Kline Beecham and Glaxowellcome to formGSK, whose names were already littered with corporate names from earlier mergers,there was a need to remove a confusing clutter of corporate names from their packs.Other companies remained relatively constant in their overall branding strategy.

The decline in the use of individual corporate and house branded styles is changingthe overall profile of how each company uses brands (Tables 3 to 6). Heinz is nowthe only company studied that uses a mixed corporate branded strategy (Table 7).Cadbury Schweppes and Kellogg have both moved away from corporate brandingtowards using more dual brands.

Journal of Marketing Management, Volume 23

TABLE 4 Ranking of Mono Branders 199A-2004

Heavy users

Allied Domecq

Cadbury Schweppes

Colgate Palmolive

GSK

Kellogg's Corporation

Kraft General Foods

Mars Ltd

Nestle SA

Proctor and Gamble

Rank Hovis McOougall

Reckitt Benckinser

Sara Lee

Unilever Pic

Uniq Pic (Dairy Crest & St Ivel)

United Biscuits Pic

Quaker Oats Ltd

Medium Users

Associated British Foods

Heinz Corporation

Northern Foods Pic

Light UsersGillette

UsageStrengthUsageStrengthUsageStrengthUsageStrengthUsageStrengthUsageStrengthUsageStrengthUsageStrengthUsageStrengthUsageStrengthUsageStrengthUsageStrengthUsageStrengthUsageStrengthUsageStrengthUsageStrength

UsageStrengthUsageStrengthUsageStrenqth

UsageStrength

Frequency and Priority in1994

80

80

953.8100A

1003953.91003.8100A

1003.9903.980

100A90A

85

653.6

454603.5654

use

2004

1004904

1004

100A903.9754954

100A

1003.9903.51003.975A

100A90A

1004754

584503.5604

20A

Companies In bold increased their use of mono brands while those in /'fa//cs decreasedthe less over time period.

Laforet and Saunders How Brand Portfolios Have Changed 49

TABLE 5 Ranking of Super Branders 1994-2004

Heavy users

Gillette

Unilever Pic

United Biscuits Pic

Medium usersCadbury Schweppes

Kraft General Foods

Mars Ltd

Nestle SA

Northern Foods Pic

Proctor and Gamble

Quaker Gats Ltd

Reckitt Benckinser

Uniq Pic

Kellogg's Corp

Sara Lee

Light usersAllied Domecq

Associated British FoodsPicColgate Palmolive

GSK

Heinz Corporation

Rank Hovis McDougail

Companies in bold increaseddecreased the less over time

UsageStrengthUsageStrengthUsageStrength

UsageStrengthUsageStrengthUsageStrengthUsageStrengthUsageStrengthUsageStrengthUsageStrengthUsageStrengthUsageStrengthUsageStrengthUsageStrength

UsageStrengthUsageStrengthUsageStrengthUsageStrengthUsageStrengthUsageStrength

their use ofperiod.

Frequency and Priority

1994

852352.6

0

254153.540

3.25103102.5553.53041030

153.620

3.751040

0

103.5

r in use

2004

854253

752.75

353352.5403

603403.3353553

403.9402.645340A

153

303.4203.8152.7153.3203.5

super brands v\/hile those in italics

50 Journal of Marketing Management, Volume 23

TABLE 6 Ranking of House Branders 1994-2004

Heavy UsersAllied Domecq

Associated British Foods Pic

Mars Ltd

Northern Foods Pic

Rank Hovis McDougail

Unilever Pic

Uniq Pic (Dairy Crest & St Iveli

United Biscuits Pic

Light usersCadbury Schweppes

Colgate Palmolive

Gillette

Kraft General Foods

Nestle SA

Quaker Oats Ltd

Reciiitt Benckinser

None usersGSK

Heinz Corporation

Kellogg's Corporation

Proctor and Gamble

Sara Lee

UsageStrengthUsageStrengthUsageStrengthUsageStrengthUsageStrengthUsageStrengthUsageStrengthUsageStrenqth

UsageStrengthUsageStrengthUsageStrengthUsageStrengthUsageStrengthUsageStrengthUsageStrength

UsageStrengthUsageStrengthUsageStrengthUsageStrengthUsageStrength

Frequency and Priority in

1994

901

WO2.7601.75903.3902

1001

652.5602

0

1010

0

251

104251

0

0

0

0

0

use

2004

453.870

2.75351

1002.41003.885

0.850

152

201.7102.5203253252.4202101

0

0

0

0

0

Laforet and Saunders How Brand Portfolios Have Changed 51

TABLE 7 Suppliers Brand Strategies

2004

Mixed Corporate BrandedCadbury Schweppes, Heinz, Kellogg's

Mixed House BrandedAssociated British Foods, NorthernFoods, Unigate, United Biscuits,Rank Hovis McDougail

Mixed Family BrandedQuaker, Kraft General Foods

Mixed Corporate EndorsedNestle, Colgate Palmolive,Smith Kline Beecham

Mixed Corporate BrandedHeinz

Mixed House BrandedAssociated British Foods*, NorthernFoods, Rank Hovis McDougail*

Mixed Family BrandedQuaker, Kraft General Foods

Family Brand DominantUnited Biscuits**, Uniq**

Mixed Corporate EndorsedNestle, Colgate PatmoUve

Mono BrandedAllied Lyons, Mars, Unilever,Proctor and Gamble, ReckittBenckinser, CPC, Dalgety

Mono BrandedProctor and Gamble*, Mars*,GSK**

Brand DominantAllied Domecq**, ReckittBenckinser**, Unilever**

Corporate Dual Brand DominantCadbury Schv\/eppes**, Kellogg's*Gillette, Sara Lee

Note: * Moderate changes; **Significant move

The number of companies using a corporate endorsed approach has reduced fromthree to two (Table 7). This divergence occurs because of the use of corporateendorsements by those switching away from corporate branding and a growth insuppliers now choosing from a wider range of mixed styles. Although companies havereduced their corporate visibility by hmiting the prominence of corporate and housebrand names, a significant decline in the use of furtive brands suggests a willingnessto disclose their identities. Overall, the trend shows a drift from corporate brandingto an increase in individual brands sprinkled with an increased mixing and matchingwith other brand names. Therefore, the proposal that mixed brands are on theincrease is supported while the proposal that corporate branding increases is not.

52 m j j Journalof Marketing Management, Volume 23

DISCUSSION AND CONCLUSION

Managers in the 1994 survey suggested history, company philosophy or companytradition drove branding structures. Corporate branding was associated with marketleadership and the advantage that it bestowed and dual brands were thought to be theresult of accident not design. Discussion with managers supported the capitalisationview, with suppliers focusing on a few core or 'drive' brands because of advertisingcosts and the increasing cost of branding due to the fragmentation of communicationand distribution channel. Unilever explain their rationalisation: "We will continueto focus on portfolio of core brands and the marketing efforts will go behind thosenominating brands. Then there are those we call the tails, we can first help those bypromotions and managing decline". United Biscuits has similar strategy: "We've gotour priority drive brands by doing a portfolio priorisation to determine which are thebrands that we want to build and grow and then develop plans around that brand".

Speed (1998) asserts that companies motivated by a defensive or maintenancefocus reason would tend to maintain the core brand and focus on resources. Inpractice, this partly reflects in a number of companies dropping some of their brandsin the last decade (Tables 3 to 6). However, the increase in mix brands shows thatbrand leverage is sought in other ways rather than through extending the corporatebrand. This is because few have found the promised synergistic gains from usingcorporate names (Kapferer 2001). For example. Mars uses the Bounty brand asa flavour signifier in their Bisc & Bounty cookies (Bounty is associated with thecoconut flavour found in Bounty): "We use brands as signifier and texture descriptor.Something with Bounty in will be good for our loyal customers. Bounty has a core ofconsumer loyal to the brand and love Bounty therefore it would be more interestingto have Bisc & Bounty than Bisc & coconut flavour". The Mars name does not appearon this new product. There was no synergistic gain from using the corporate name inthis case since the Mars name suggests chocolate and not biscuits. Another exampleis Cadbury with their Cadbury Dairy Milk Crunchie and Cadbury Dairy Milk Bubbly.As their Marketing Director explains: "Crunchie is used as a brand descriptor ofingredients and Bubbly acts as a texture brand descriptor". However, unlike Mars,Cadbury has left the corporate name on both of their count line products because:"Cadbury means chocolate similar to the products the company was selling". Thesecases highlight the extent to which a corporate brand can be stretched.

The literature suggests companies realizing the cost of building leveraged brandsand the need to keeping a sufficient psychological distance between products (Kim& Lavack 1996). The packaging design literature claims a product does not need tohave the corporate brand mark stamped on the front of its package for consumers toidentify as part of a particular company (Silayoi and Speece 2004). Similarly, researchon logos also shows visual expressions are more recognisable and more powerfullyremembered than names or words (Nelson 2002).

Managers see greater benefits in using endorsed and dual brand approachesover mono or single brands. In dual branding an established brand gives immediaterecognition and awareness of the new product. For instance, by having the Bountybrand name on Mars' new line of biscuits, customers who already like the Bountyare more likely to buy the new range of biscuits than if Bounty were omitted (Seethe manager's comment above). Similarly, two established brands names transmita stronger signal to consumers than a single identity. As in the previous example,Cadbury Dairy Milk Crunchie was thought to give a stronger signal to the consumerthan Cadbury Dairy Milk with honeycomb pieces. Crunchie acts as a brand descriptor

Laforet and Saunders How Brand Portfolios Have Changed 53

of ingredients while Cadbury Dairy Milk signals quality chocolate from CadburyDairy Milk which is fed off from Cadbury's heritage and value and vice versa.

Using a brand for endorsement does not expose companies to reputation risk andprovides a greater variety of positioning alternatives than if corporate branding werethe only option considered (Aaker and Joachimstahler 2000). The brand endorsementwould bring trust and value to the brand being endorsed without which the consumermay not see the new product as a trusted brand. As Kellogg's executive explains:"Given the support of brands is very costly, we never have enough money to do whatwe need to do. That's why you're building what you advertise the brand stand for...Kellogg's Nutri-grain Eleventh brings all the brand values - will not be trusted if itdid not have the K name on it. K helps position it in certain ways". Secondly, theendorsement helps position the new product, for example, Kellogg's Rice KrispiesTreats. In this case Treats feeds off Rice Krispies' heritage of quality and breakfastcereal while Treats help position Rice Krispies as a product that children enjoy.

Besides providing the opportunity to launch new lines, companies supportLeuthesser et al's (2003) view that brand endorsements, dual brands and mixed brandsincrease a brand's visibility and saliency. Managers also believe that consumers buybrands more frequently if there is a range of products that suit different occasionsand fulfil different needs. Equally, companies perceive a need to increase consumers'curiosity and reduce the chance of consumers tiring of a brand that only appears inone format.

Past research suggests that companies use brand extensions to bolster short-termprofits (Ambler and Styles 1997). Recent research also indicates that brand extensions,and multiple extensions in particular, help attract non-users of the core brand andthrough these, a company's brand equity can be built (Swaminathan 2003). Thefindings show some mixed brands were transient or opportunistic. Examples areMars Maltesers Teasers from Celebrations, McVitie's McV Hob Nobs, Dettol Dettoxand Veet Immac. Discussion with managers suggests that Mars Maltesers Teasersfrom Celebrations was a one-off (or seasonal) product launched before Christmaswhereas for mixed transient products such as McVitie's McV Hob Nobs, DettolDettox and Veet Immac the reason was because they entered a new market or theywent global. Thus United Biscuits' Marketing Manager explains: "McVitie's McVHob Nobs is transient for another reason. With the new style McV, we hope togive a more contemporary appearance to the product by entering the young marketsegment". With regard to Dettol Dettox, the company's long-term aim is to extendits antibacterial surface cleaning products from liquids to wipes. At times, DettolDettox appears on the wipes packaging, while on others the pack explains, "Dettolis the new name for Dettox". Veet Immac hair remover is another example of aname change. As the company's literature suggests, local name Immac will disappearas the company standardises on Veet across the world. The frequency of managersexplaining dual brands as transient suggests that their increased occurrence is as muchto do with companies tidying up their brand portfolio as aiming to lever the equity oftwo or more brands names.

Laforet and Saunders (1999) also found brand structures were driven by companyhistory as much as markets. This is consistent with Euromonitor's (2003) findingsthat show mixed brands were most common in the breakfast cereals, confectionery,snacks and cookies product categories and/or markets. According to the report,Kellogg uses mixed brands to help it move from the traditional "sit down" breakfastcereal into the breakfast bars eaten on the go. This contrasts with the confectionery,snack and cookie lines of Nestle, Cadbury and United Biscuits who aim to maintain

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their customers' interest by segmenting along age and gender lines. For instance,the Nestle's Milky Bar Munchies is for adults and Nestle's Milky Bar Choos forchildren. In the processed food sector, Heinz and Rank Hovis McDougail have useddual branding to allow their ranges to appeal to children. Other examples are HeinzPokemon baked beans and McDougail Tweenies biscuits. These cases suggest thatmixed brands help target market segments.

For some suppliers the move from corporate to individual brands occurs to removethe clutter left after acquisitions. Mergers, acquisitions and the restructuring activitiesof companies are also the cause of the present decline in the use of house (division orsubsidiary) brands. Examples are after merging with Carlsberg-Tetley, Allied Domecqdropped the Lyons' food maker brand, and Uniq did the same following their mergeractivities (Tables 6 and 7). This further explains the increase in mono brands acrossthe products sampled.

Finally, companies deploy their portfolios of brands faced with new environmentalthreats. In response to intense competition in the supply chains, suppliers searchedfor different ways of leveraging their brand equity that they believed would bringmore return and less risks of diluting the parent's image. Increasingly, this brandleverage is at the product level, through dual and mixed brands where the sharedbenefit among two or more brands is believed to outweigh that of mono brands.

Concern for reputation risk is a reason why companies should reduce corporatebranding. Changes in brand portfolios over the decade suggest such a move.

To conclude, the new audit of the suppliers' brands packaging showed a drift fromcorporate brands to an increase in individual brands sprinkled with an increase mixingand matching with other brand names. There are a number of reasons for this, somesuppliers have moved from corporate to individual brands because of the clutter leftafter acquisitions and when they operate in global markets. However, environmentalpressures (such as intense competition, cost of advertising and branding), publicopinion that can be influenced by the power of the media and the internet are threatsthat have led suppliers to spread risks and search for better returns from a few corebrands. Multiple brands are used especially in breakfast cereals, confectionery, snacksand cookies, where new markets can be captured through lifestyle, age and gendersegmentation and to communicate product ingredients. Managers believed the moreestablished brands could be used in a combined format, the stronger a signal wouldbe transmitted about the new product to the consumer. Similarly, consumers werethought to want the reassurance of established brands. In some cases, mixed brandsare transient when they enter a new market or go global. Most companies werefound to have used a mixed of strategies and no company adheres to one brandapproach. This study's contribution has been to record and track changes in brandstrategies over the last decade.

Patterns are discemable when comparing the early brand structures proposed byOlins (1989), the more complex structure identified by Laforet and Saunders (1994)and the even more complicated structures need to explain brand portfolios in 2004.Corporate branding is declining as companies accumulate numerous brands andcompete over segments, where they need to differentiate their product and whereacquisitions, that initially produced complex brand structures, eventually led tobrand destruction as companies sought to standardise their offerings. Companies arefinding they can gain from sharing brand identities across a range of products andposition products by using multiple names to suggest ingredients or segment appeals.Still, although suppliers have found a value in mixing and matching brand names, theportfolio of identities from which they can choose exists more because history rather

Laforet and Saunders How Brand Portfolios Have Changed 55

than design. The danger is that through regular mixing and matching the brandheritage that is being mined will be depleted. The impression is one of opportunisticcombinations where product or segment needs drive action. This suggests a future ofever-complicated brand structures as brands are used in opportunistic way to squeezeout a little more value.

This study has implications for corporate and brand identity management asfollows: with regard to the former, our advice to smart managers will be - (1). Getbranding on the board. Non-executive directors can provide an independent viewof how brand assets are performing. (2). Keep the corporate name separate fromindividual brands although, it seems a shame not to make the short-term gainsfrom opportunistically mixing and matching brands with strong identities. Thereis suggestion from packaging literature that a strong and well-recognised corporatebrand is used if the product was to gain benefit from being associated with it. Eventhen, there is no guarantee of lesser risk of reputation loss. The alternative is tolimit the use of corporate name to the sector and market that suits companies (referfindings above). (3). Better still, concentrate on managing and exploiting with greatcare a group of key brands that define a company's wealth whilst mix and match thecompany's lesser brands to achieve short-term gains.

However, much remains unknown. Future research could concentrate on thefollowing: (1). In-depth studies conducted to understand patterns of influence onthe brand structures. (2). Brands can be examined in relation to share prices andbrand structures in the market. (3). Brand tracking/ marketing strategies' studies maybe conducted using panel data to look at the effects of these changes. (4). Researchthat can look at where the conflict of risk avoidance is and who has control in thebranding decisions. On a different note, this research has also implications for furtherresearch in corporate/ brand reputation building - whilst past academics have lookedat ways of building and maintaining brands, future researchers need to focus on howcorporate reputation can be built and sustained.

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ABOUT THE AUTHORS AND CORRESPONDENCE

Dr Sylvie Laforet is a Lecturer in Marketing at The University of Sheffield ManagementSchool. She has researched and published in the area of Branding/Advertising,Innovation Management in SMEs and has collaborated in a number of internationalstudies in the Marketing field. She has a book in-preparation in Strategic BrandManagement. She has been a referee for European journal of Marketing and otherinternational Marketing journals as well as the Academy of Marketing Science andAcademy of Marketing conferences. She is on the Editorial Board of the InternationalJournal of Management Practice & Contemporary Thought. She is an advisorymember of several international expert services groups. She has been an invitedguest speaker and has given presentations/seminars in branding, consumer behaviour,marketing and new technologies for innovative packaging.

Corresponding Author: Dr Sylvie Laforet, The University of Sheffield, ManagementSchool, 9 Mappin Street, Sheffield SI 4DT, UK.T -1-44 114 222 3341F -f44 114 222 3348E s.laforet@sheffield.ac.uk

Professor Johr) Saunders is Head of Aston Business School and Pro Vice Chancellorof Aston University. He is also a member of the Senate of the Chartered Instituteof Marketing (CIM). His research is centred on strategy and product managementand includes, branding, marketing communications, market models and business

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incompetence.He has been editor of the International Journal of Research in Marketing, and is

a past president of the European Marketing Academy. He is also a Fellow of theChartered Institute of Marketing (FCIM), the Royal Society of Arts (FRSA), the BritishAcademy of Management (FBAM), and the European Marketing Academy (FEMAC).He is on the fellowship committee of the British Academy of Management, Deans'Steering Committee of the European Foundation for Management Development(EFMD) and one of the twelve assessors of Business and Management in the BritishUniversities Research Assessment Exercise..

He also has industrial experience in sales, marketing and corporate planning in theaerospace industry (Hawker Siddeley and British Aerospace) and consulting experiencewith many major organisations including Nestle, Unilever, Rolls-Royce, Ford, theAsian Development Bank, the Cabinet Office and the Singapore Government.

Besides being a panel member for the QAA, EQUIS and AACSB, he has served onthe national research evaluation exercise of the United Kingdom, the Netherlandsand New Zealand. Along with marketing gurus Philip Kotler, Gary Armstrong andVeronica Wong, Professor Saunders has authored Europe's best-selling marketingtext. Principles of Marketing. The European edition now appears in seven languages.He has published in many leading academic journals.

Professor John Saunders, Aston University, Aston Business School, Aston Triangle,Birmingham, UK.