How to Assess a Brand Portfolio Merger
Combining two or more brand portfolios in one is not an easy task. The consolidation of the brands can be a result of the merger of the companies managing the brands, or a company may decide to combine two of its brands in order to free up resources or serve the company's consumers better. Whatever the context, a few important questions need to be answered to assess whether merging two brands is a good idea.
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Instructions
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Assess the positioning of each brand. Always start with the consumer. If the two brands are offering similar solutions to the same consumer need, they are cannibalizing each other. If the brands belong to the same company, consumers are probably confused about the difference between the two brands. In this case, a consolidation of the brands will benefit both the company and the consumers.
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Assess the competition. The value of some brands does not lie only in their market share and profitability but also in the fact that they are keeping the competition at bay. Consider what will happen if you consolidate a brand with another and lose the brand name. The brand loyalists may migrate to the new brand or they may be picked up by the competition. Be careful not to lose a "fighter" brand by merging it with another.
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Assess the brands' profitability margins. Even a brand that does not bring in a lot of business may still be very profitable. Sometimes the money a company makes off such brands makes it possible to pay for the marketing support behind the more popular brands. Before you merge your hard-working brand with another and, likely, discontinue many of the products in its portfolio, make sure the profitability of the new rationalized brand portfolio will be even better.
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Assess your use of resources. If the products in the two brand portfolios are similar but you have separate research and development, engineering and finance teams working on each of the brands, you are probably duplicating efforts. Merging the two brand portfolios into one will lead to more efficient use of your company resources.
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