Brands portfolios and competitive advantage: an empirical study
| Pages | 254-264 |
| Published date | 18 July 2008 |
| Date | 18 July 2008 |
| DOI | https://doi.org/10.1108/10610420810887608 |
| Author | Claude Chailan |
| Subject Matter | Marketing |
Brands portfolios and competitive advantage:
an empirical study
Claude Chailan
Instituto de Estudios Superiores de Monterey, Escuela de Graduado y Innovacio
´n, Puebla, Mexico
Abstract
Purpose – The paper seeks to contribute to the understanding of brand portfolio management by examining the brand portfolio strategies of four
leading cosmetics companies. The research focuses on two questions: what reasons lead companies to develop, or not, a brand portfolio strategy,and
how brand portfolio management can create a higher and stronger level of competitive advantage that is harder to grasp and imitate.
Design/methodology/approach – The paper utilises an exploratory approach by means of case studies. Data were collected from the following
companies: L’Ore
´al, Clarins, Este
´e Lauder and Wella. The research involved in-depth interviews with 33 company directors.
Findings – The research results show that an aggregation of brands is not in and of itself a brand portfolio. The juxtaposition of brands is one of the
elements, but not the sole element, necessary for the development of a brand portfolio, which is a combination of a brand ensemble and key factors
born out of organisational
savoir-faire
.
Research limitations/implications – The results validatethe existence of a link between brand portfolios and competitive advantage, a link based on
the existence of four key factors identified in the research.
Practical implications – A model is proposed to assist managers in better understanding and controlling brand regrouping, because the research
illustrates the benefits for a company that executes well-coordinated brand management.
Originality/value – This research fits into the complex context of strategic/marketing relationships and broadens the field of brand analysis, notably
its strategic dimension. The contribution of this research is to show how a brand portfolio can create a stronger and higher level of competitive
advantage, which is more difficult to copy.
Keywords Brands, Brand management, Strategic marketing, Competitive advantage
Paper type Research paper
An executive summary for managers and executive
readers can be found at the end of this article.
Introduction
Marketers are looking to create and maintain a competitive
advantage in a complex and changing environment (Shocker
et al., 1994; Mattsson et al., 2006) and as brands are viewed as
key value creating resources (Ponsonby-McCabe and Boyle,
2006), brand management and the building of brand equity
have become a major component of corporate strategies
(Aaker, 1992; Shocker et al., 1994; Keller, 2001). As brands
are recognised as inimitable superior value-creating resources
that can play a key role in achieving a sustained competitive
advantage over rivals (Ponsonby-McCabe and Boyle, 2006),
one of the main questions when establishing the different
sources of competitiveness for a company is whether it should
use one or several brands (Cravens et al., 2000; He and
Balmer, 2006). Choosing a mono- or pluri-brands strategy is
a focal point for several companies, both for multinational
groups and local companies (Douglas et al., 2001; Strebinger,
2002; Kumar, 2003; Schuiling and Kapferer, 2004) and
strategic choices may become brand choices, choices of brand
organisation or choices about the kind of relationships
between brands inside the company.
Because among the most relevant problems when referring
to brands are those related to the management of a multi-
brand system (Joa
˜o Louro and Vieira Cunha, 2001;
Strebinger, 2002; Hill et al ., 2005), a company must
formulate its basic strategic brand principles in view of two
central themes, which are:
1 brand architecture; and
2 a brand portfolio.
Brand architecture defines the way in which a brand signs a
product, and whether it does so independently of another
brand (Douglas et al., 2001; Rao et al., 2004). Olins (1989) or
Lafore
ˆt and Saunders (1994), for example, differentiate three
levels of brand architecture which are monolithic brands:
1 corporate branding (one name for all products);
2 endorsed brands/mixed branding (two brands associated
with one product); and
3 branded products/house of brands (each product has its
own brand).
Each of these strategies has its own benefits and shortcomings
for suppliers and customers, but in each case the focal point is
the link between the brand and the product.
Abrandportfoliogoesbeyondthisquestionofa
hierarchical or competitive relationship between one brand
with another, in order to examine ways of coexistence and the
balance between several brands that are incorporated within a
single company, whatever the brand architecture may be. The
focal point is the link between one brand and another.
Riezebos (2003, p. 184) defines a brand portfolio as “a set of
brands owned by one company” and Dawar (2004, p. 34)
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/1061-0421.htm
Journal of Product & Brand Management
17/4 (2008) 254–264
qEmerald Group Publishing Limited [ISSN 1061-0421]
[DOI 10.1108/10610420810887608]
254
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