The brand portfolio today

Brand portfolio is about deception through alias brands — and purpose as a 'strategic determinant'

Late December 2014. My colleague Alexander receives two letters.

The first lands on his doormat on the 29th of December:

*"Dear Mr Koene,

This letter contains your health insurance card and, if applicable, the cards for people you have co-insured."*

With a 'kind regards!' from Petra van Holst, director of health insurance at Ditzo.

Good — the last-minute switch to a new health insurer is confirmed. It is a bit odd that Ditzo isn't sure whether Alexander has co-insured anyone else, but never mind. It's a semi-personalised letter, after all. You can't really expect Petra to personally know every customer, check every letter and sign each one by hand.

On the 31st of December, the second letter arrives.

"Dear Mr Koene, please find enclosed your new combined card."

Sender: Petra van Holst, director of health insurance at De Amersfoortse. This time with a more formal kind regards.

Apart from the fact that De Amersfoortse was precisely the insurer he had tried to leave, I found it a fascinating phenomenon.

Ditzo is part of a.s.r., as is De Amersfoortse and a handful of other insurance brands: Europeesche Verzekeringen, Ardanta and a.s.r. itself (the market brand, not to be confused with the corporate brand that sits as an umbrella above the rest).

Quite confusing, all those brands. Not just for unsuspecting customers, but apparently internally too.

Now, it's absolutely not my intention to 'bash' a.s.r. here — I consider a.s.r. one of the better players in the financial market — but isn't it strange that Petra, wearing her Ditzo hat, suddenly adopts a different tone of voice and addresses the same customer informally, while in her Amersfoortse hat she addresses that same person formally?

Does Petra have multiple personality disorder, or is something else going on?

As it happens, I completed my PhD on the subject of brand portfolio management, so I should know.

Many organisations have such a collection of brands, often targeting different audiences or markets, each with specific product-market combinations.

Ardanta, for instance, focuses via advisors and the internet on private individuals with various types of funeral insurance.

While De Amersfoortse targets the business market via intermediaries, primarily with income and health insurance.

a.s.r. then offers private individuals a complete range of insurance products.

And Ditzo — well, in the a.s.r. organisational chart it sits in the 'marketing' box. It offers a growing range of products, with an emphasis on constantly questioning 'whether what they or others in the insurance world are doing actually makes sense'.

Shouldn't all insurers be asking themselves that continuously?

And is it really so logical to offer largely the same products and services under different brand names? Without explicitly stating that these brands belong to one and the same organisation, they start to look like 'alias brands'.

We find these brand portfolios in every market — food, household, retail, recruitment agencies, cosmetics, beer, energy — usually not as clearly segmented as in the case of a.s.r.

In the 1990s, these portfolios grew extremely and uncontrollably through mergers and acquisitions, through the introduction of new products and services under new brands, and through the purchase of brands from other portfolios.

Only to discover that those historically grown portfolios had become too expensive and unwieldy to manage. That is, maintaining all those brands became untenable — and the portfolios themselves weren't being managed at all during that period.

Not to mention the illogical coherence of the portfolios.

During my research, it became clear that many brand portfolios had never been viewed from a bird's-eye perspective, and that from that perspective, earlier decision-making had been rather ad hoc and non-strategic.

Understandable — no one was responsible for the overall picture, and new brands had emerged here and there throughout organisations.

The main reasons driving certain decisions (which I scientifically termed 'strategic determinants' at the time) were the strength of egos and the size of budgets.

The problem with alias brands is that the public, of course, has long since figured out who's really behind them.

One of my research conclusions at the time was that while an organisation can encourage brand association transfer between brands and their parent company through clear endorsement, you cannot prevent it by concealing the link.

Our modern world is far too transparent for that, and modern consumers are far too critical.

We are increasingly interested in the organisations behind brands. And in particular, whether those organisations are actually operating responsibly.

Whether they are taking responsibility and fulfilling their role in our lives with integrity.

Whether they have a purpose that goes beyond making profit.

Because we have thoroughly had enough of all the profiteering. We want brands and products that make our lives more beautiful, easier, happier.

From organisations that have set themselves exactly those kinds of goals.

We see straight through 'empty shell brands' in droves.

Unfortunately, many organisations have no compelling purpose whatsoever. They are money-making machines built and driven on efficiency, not on the happiness of customers and employees.

By repeatedly introducing new brands — rarely for genuinely innovative products that add real value — they try to make the organisation more attractive and successful.

But at their core, they are often deeply dull and perhaps just barely attractive enough for a dying demographic, but not for modern people.

The solution is then sought in brands like Hi, energiedirect.nl and Ditzo.

They offer largely the same products and services as their parent companies, but with a different marketing veneer and a different (usually lower) price point.

But sooner or later, both the public and management arrive at the conclusion that such brands have no real right to exist.

And it doesn't help when the right to exist of the organisations behind them is equally unclear.

Organisations that know and take their purpose seriously would do well to scrutinise their brand portfolio.

There is simply no place in it for alias brands.

There is, however, a place for brands, products and services that make a visible contribution to the corporate purpose.

In that context, I'm curious to see how Unilever handles this going forward.

Unilever — whatever you may think of it — is one of the better examples of an organisation with a clear purpose.

Concretely activated through the Sustainable Living Plan.

The Unilever brand is the vehicle through which the sustainability story is communicated across more than 400 brands simultaneously — hence the increasingly strong endorsement on those brands.

The plan enforces that all Unilever brands meet strict sustainability targets.

According to CMO Keith Weed, the brands most focused on this are growing the fastest.

But will some Unilever brands eventually be axed because of those strict sustainability targets?

Can Magnum shake off its 'tub of butter' image and meet the objective of 'improving health and wellbeing'?

Will Lipton stop adding sugar to supposedly pure green tea?

If organisations now also start taking their brand portfolio management seriously, purpose might well become the most important strategic determinant.

I intend to research this again.

How do the brand portfolios of the major corporates look in 2015? What drives the decision-making?

I hope to conduct my first interview with the director of health insurance at Ditzo, euh… De Amersfoortse. Or perhaps better with the CMO of a.s.r.

If anyone has suggestions for which organisations I should research or which people I should speak to — bring them on!

Kim Cramer

BR-ND People