We use a number of branded products in our day-to-day life. But what you may not realize is that many of the commonly used brands—(such as Crest toothpaste, Pantene shampoo, Gillette shaving cream, Pringles chips and Duracell batteries) are in fact products of a single company, such as Proctor & Gamble (P&G). This case is not an exception it’s the norm. There are many more CPG/FMCG giants out there who maintain multi-brand portfolios within their product chain.
In theory, managing multiple brands is a good strategy for a CPG/FMCG/Retail company or any business in the B2C space. A varied product portfolio across different price brackets can reduce investments in overlapping product development and marketing efforts. Having a multi-brand portfolio can prevent competition from attaining a higher market share for the same type of products. This strategy can also increase healthy competition between various brand managers, leading to growth in sales figures.
Companies can also experiment with different brands in the portfolio by killing off weaker or ill-fitting components from the product range, thus freeing marketers to focus resources on stronger brands. Such brands will be positioned strategically compared to competition. This effectively reduces the complexity of marketing effort, and counteracts decreasing efficiency of traditional distribution channels.
However in practice, B2C companies today face a tough challenge. Sustaining multiple brands in a demanding market with fragmented customer needs is not easy. Many brand managers today feel the need to cut down on their brand portfolio. This is easier said than done. Most companies and managers who work for them often react to this pressure by expanding rather than pruning their brand portfolios.
Role of Brand Managers
Brand managers play a very crucial role in deciding which brands to cull and which to promote. If a manager kills off an unproductive brand, it would mean the remaining brands in his portfolio must capture the affected brand’s volume in order to break even! The worst fear of businesses therefore, is making the wrong call and losing important market presence. This is apart from the fact that companies can punish brand managers for missing out on an emerging market-opportunity.
Technology Solutions to Portfolio Management
Many B2C giants in the recent past have reversed their traditional cautious approach and used the latest technology solutions for brand portfolio management. For example, Procter & Gamble has rolled out a successful global corporate strategy shift over the past few years that is also combined with digital power. They had a shake-up of their product portfolio, where they consolidated some product portfolios while others were pruned. Several other companies such as PepsiCo, Unilever and Nestlé have achieved rates of revenue growth two to five times greater than historic norms and saved 20% of overall marketing expenditure by managing brand portfolios much more effectively using digital innovation.
As per an article that was published by Huawei recently, customers now have new methods to communicate with companies and agile businesses can take advantage of opportunities to create new engagement platforms and expand the types of services they offer. Procter & Gamble has taken complete advantage of this situation. P&G is one of the largest B2C companies in the world, with annual sales of US$65 billion and operations across the globe. Despite being in business for 180 years, mobile has created one of the largest disruptions the company has experienced. (Read More)
How did these companies accomplish it?
They did it in part by establishing clear roles, relationships, and boundaries for their brands and then, within these guidelines, giving individual brand managers autonomy over not just branding and marketing but also over auxiliary activities such as product quality, packaging and even creating a memorable unboxing experience. Only Portfolio managers responsible for the portfolio as a whole would supervise these brand managers.
In addition to this, since new portfolio strategies frequently prompt reactions from competitors, in order to mitigate any unanticipated consequences, companies have opted for a robust data analytics system that highlight unexpected shifts in real time.
Of late, mobile technology has transformed everything from logistics to marketing. The advantage of mobile technology lies in its capability to expand reach of products among the target market. Moreover, the prevalence of internet makes it easier for the field sales staff to use applications that can collate market data, which can then be used to draw insights.
As per a recent report by BCG, “Demand-centric insights can help companies identify which of their smaller brands, if properly repositioned, enhanced, and extended, have growth headroom. In our experience, many small brands have an avid following that can be expanded by more clearly targeting them at attractive demand spaces. For these, added complexity is worthwhile. Brands lacking demand headroom are candidates for complexity reduction or divestiture.” (Read More)
Solutions that help Brand Managers
FMCG companies often focus on innovating the existing product portfolio while developing new ones. And brand managers have to be updated in real-time with all the vital market data and dashboards 24X7. For brand managers to succeed, they must master the technique of launching new products into the market at the right time.
“Large FMCG businesses are increasingly using data insights to manufacture better products, improve sales and the revenue per customer.”
This entails that brand managers adopt newer methods of data consolidation and visualization to understand, predict and prescribe new products that can sell. Technologies such as BI Analytics can be leveraged to find gaps in the market that will help launch or prune products.
Role of Mobile SFA in Brand Portfolio Management
Technology plays a huge role in successful product portfolio management. All key decisions that are going to be game changers are taken only after careful and in-depth analysis of several months of collated market data, trends, parameters, and demographic data among other metrics.
A major requirement/tool in the hands of the brand manager would be however, a centralized information system (CIS) that can analyze market data from various sources. Any modern Sales Force Automation System (SFA) can be used to collate such important data. Such a system would be a combination of a mobile-based information collection application to be used to collect data from the field, and a web/desktop based system with Business Intelligence capabilities that can analyse the data collected.
Mobile SFAs can act as the windows through which brand managers extract vital data from the field related to brand performance. They can also monitor resource performances from a grass roots level. SFAs feed valuable information such as sales promotion results, customer feedback, dispatch delays/mismatches, and so on to the support team working for the brand. This data can then be analysed with historical sales and production data to make quick decisions/actions. In addition, SFA systems help brand managers monitor demographic data with which they can align regional teams towards overall brand goals.
Many new Mobile SFA solutions providers are adding Business Intelligence, Machine Learning and other such AI-based applications into their product portfolio. It has become easier for managers to collect and analyse data using such advanced solutions that can provide a 360 degree view of all their brands, as well as monitor market performance of each brand real-time. In future, we would be able to use solutions that provide predictive or even prescriptive analysis of data.
Brand Portfolio management is always a rigorous and continuous process for any FMCG/CPG organization. For companies to succeed, setting the right portfolio strategy is absolutely crucial. Adding correct technology aids will help portfolio managers at the right time (the earlier the better) and can pay big dividends into the company’s bottom-line in the medium and long term.
Lastly, it has to be remembered that getting strategy and technology right is only part of the battle; companies must also make organizational changes if they are to adapt their brand portfolios quickly to match shifting trends, competitive responses, mergers, and new-product launches, while also managing the natural lifecycle of their existing brands. Since taking action with one often means doing so with another, companies must look into employing a skilled brand portfolio manager who can lead individual brand teams. This will be a person who can collect, understand, analyse data from different sources and create coherent logical solutions from them.
Experion has been working with world-class businesses in the FMCG/CPG sector to help them grow sales, engage field sales teams, grow market reach and enhance connection with the retailer. To know more about how Experion uses digital technologies to boost FMCG sales, write to us today at firstname.lastname@example.org