BUS631 Study Guide
Unit 4: Brand Portfolio Management
4a. Evaluate the BCG analysis of a brand portfolio
- What is the BCG analysis of a brand portfolio?
- How can you conduct a BCG analysis?
- Why is it important to conduct a BCG portfolio?
The Boston Consulting Group (BCG) matrix was developed to help companies evaluate each business section to assist in increasing market growth rate and market share. The BCG will assist brand managers in determining which products or brands are productive and which are not. It is important to understand the BCG matrix and apply it to any brands that should be analyzed for productivity.
A BCG analysis can be conducted by reviewing low and high market share and growth and where they fall on the matrix, a brand manager can determine which products should be continued and which might need to be discontinued. This analysis is important when reviewing current products or brands' usefulness and overall productivity.
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4b. Analyze brand stretching at a multi-tiered global company
- What is brand stretching?
- How might brand stretching be used between brands?
- Why is it important to understand how to use brand stretching at a multi-tiered global company?
Brand stretching occurs when a company attempts to use an existing brand name to promote a new product or service that may or may not be related. The company is trying to capitalize on a successful product and hopes that success extends to the new product. Apple is a great example of a multi-tiered global company using brand stretching. They have released numerous unrelated products from their initial computer and used that success to sell new products to loyal consumers.
It is important to understand this process because, as a brand manager, you may be able to capitalize on the success of products your company already promotes. This alignment may help to create additional products that are accepted by consumers because they are familiar with the products already being promoted.
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4c. Evaluate brand architecture strategies
- What are brand architecture strategies?
- How might a brand manager use brand architecture strategies to promote products?
- Why is it important to understand brand architecture strategies?
Brand architecture strategies may include the association between other brands in the same house, a parent brand, sub-brands, or products or product lines. This association is important for any brand manager to consider so that associated marketing might be used to promote new products or services.
A few things to consider with brand architecture strategies are four components that include auditing of the architecture, portfolio principles for all brands, hierarchy framework for all brands, and naming of products. These four strategies may help in evaluating the brand architecture strategies and determining which products should remain or be eliminated.
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4d. Evaluate brand growth potential using the product/growth model
- What is brand growth potential?
- How can brand growth potential be used in the product/growth model?
- Why is it important to understand brand growth potential?
The brand growth potential is one way to determine how many consumers a brand might acquire in a specific market. This information will help to determine marketing costs and potential product or service growth and may assist a brand manager in developing a strategy for marketing for the brand. A brand potential index (BPI) uses a calculation to help estimate this information.
By evaluating the BPI and brand growth potential, a marketing manager will gain a better understanding of what it will take to promote a product or service in each market. This will also include financial information that can then be compared to marketing costs for the same product or service. It can then be determined if the product or service may be successful or how successful it might be.
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4e. Analyze a value optimization study on a consumer brand
- What is customer value optimization?
- How can customer value optimization be used to better understand a brand?
- Why is it important to analyze a value optimization study on a consumer brand?
Customer value optimization (CVO) assists a company in creating the best customer experience. CVO works with the ROI to ensure that the cost of marketing is appropriate to sales. The CVO attempts to connect with customers and create a better path to customer loyalty. By reviewing companies who have completed a value optimization study of their progress in this area, a brand manager can gain a better understanding of the products and brands they promote.
By creating a better customer experience, a company is inviting customers to purchase their products and experience what life is like with those products. This may result in a higher level of customer loyalty. Starbucks is a great example of this because it focuses on ensuring customers have a great experience in its stores and with its products. As a result, Starbucks has gained loyalty with customers around the world.
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Unit 4 Vocabulary
This vocabulary list includes terms you will need to know to successfully complete the final exam.
- Boston Consulting Group (BCG) matrix
- brand architecture strategies
- brand growth potential
- brand potential index (BPI)
- brand stretching
- customer value optimization (CVO)
- multi-tiered global company