Rhetorically and yet with practical implications, a famous brand researcher poses a pertinent question on brand portfolio management for the future: “How many brands should a company keep in a given product category? This is the problem faced by most corporations today” (Kapferer, 2001, p. 144).
The issue of extracting brand value has important global consequences, given the wave of mergers and acquisitions globally. The nature and scope of the brand portfolio is also connected to the corporate reputation of the firm. Every company should protect its corporate reputation, and this reputation may also be intimately aligned with the company’s brand portfolio. For example, when Ben & Jerry’s Homemade was still an independent brand, it deserved one of the highest corporate reputation figures in the United States; however, when it became part of Unilever International’s brand portfolio, the reputation decreased dramatically, probably because of the twist between the altruistic brand equity associations traditionally connected with the brand and the multinational brand associations with Unilever brand portfolio (Fombrun, 2001). Consequently, the result of the brand portfolio management process is based both on internal management of the portfolio and on external considerations and judgments as in the case of the subtle and imposed alignment of Ben & Jerry with Unilever. Broadly speaking, the brand portfolio management process has three phases: first, it is characterized by brand accumulation, then transition, and then reduction of brands. In step two, organization of relationships between brands takes place and finally, brand portfolios are developed and used as strategic tools to gain competitive advantage and as planning models, i.e., the way the company plans and develops itself for the future (Chailan, 2009; and LaForet, 2011).
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