« Marketing in a Downturn | Main | OBAMA - from dream to reality »
One management lever brand owners have in tough economic times is to look at brand portfolio rationalization. Of course, that is already on the table for the US auto industry. Between them, General Motors, Ford Motor and Chrysler sell 112 different car and truck models through 15 brands in the United States. While the top three Japanese automakers — Toyota, Honda and Nissan — offer 58 models combined sold through seven brands. Brand rationalization will be a key part of any auto bailout plan - up there with executive compensation and union concessions. Retail brand formats, consumer product extensions will be examined, the latter because of production, packaging, and shipping costs. Value will trump variety in the majority of categories and that will mean making smart decisions in the portfolio not only short-term but for when the economic cycle reverses itself.
Jeff Swystun, Chief Communications Officer, DDB Worldwide
This page contains a single entry from the blog posted on December 8, 2008 9:00 AM.
The previous post in this blog was Marketing in a Downturn.
The next post in this blog is OBAMA - from dream to reality.
Many more can be found on the main index page or by looking through the archives.
RSS
Feed
Comments (5)
Vicky Renwick
I agree with this and have long thought that brand extensions were a lazy form of innovation. It will be very interesting to see what Unilever and P&G do as bellweathers for the consumer products industry.
Posted by Vicky Renwick | December 9, 2008 2:01 PM
John Hansel
I worked as a brand manager and was apalled by the duplication of effort and the cannibalization of consumer segments. Lets get back to true differentiation.
Posted by John Hansel | December 13, 2008 1:09 PM
Petra Smythe
I have a funny story about brand extensions. I was working in marketing for a car accessories company - wax, air freshners, mats, etc. We hit a bad quarter and an innovation meeting was called. Brand extensions consumed 90% of the meeting. I knew I had to do something else with my life when someone I was working with suggested new car wax with cherry flavor! I could only picture mid-life crisis men (a key demographic) waxing up there hot rods and taking the occasional bite.
Posted by Petra Smythe | December 14, 2008 1:35 PM
Rachel
I have to agree with John's comment about true differentiation.
It is really important now to ask the question: "so what is it that keeps our exisiting customers coming back to us over and over again." If you can't find one single reason, then you risk the possibility of being a replacable brand.
If there is a demographic with an unfilled need in a new category that your brand could "extend" into which is currently not fulfilled by any other brands, brand extension could work.
Posted by Rachel | December 30, 2008 11:20 PM
Rachel
I agree with John, let's get back to true differentiation.
It is really important now to ask the question: "so what is it about our brand that keeps our existing customers coming back to us over and over again?"
If there is a demographic out there in a new category that has an unfilled need that is currently not fulfilled by any other brand, then brand extension could work.
Posted by Rachel | December 30, 2008 11:23 PM