Brand Portfolio Strategy and Brand Architecture

Jill  Avery

Background Note | HBS Case Collection | August 2016 (Revised July 2017)

Brand Portfolio Strategy and Brand Architecture

Abstract

While companies choose to brand their products and services in many different ways, there are some central tenets that help define an optimal brand portfolio and associated brand architecture. Brand portfolio strategy involves the design, deployment, and management of multiple brands as a coordinated portfolio of meaning-based assets that address the needs of diverse customers in a marketplace and maximize return while minimizing risk. It specifies the optimal portfolio of brands a company should maintain for comprehensive market coverage with minimal overlap, determines the role and scope of each brand in the portfolio, and designs a strategic, logical, and efficient brand architecture that knits the brands together into an interdependent system. Done well, it informs the allocation of investment across brands, identifies underperforming brands as candidates for pruning or revitalization, and pinpoints gaps in the portfolio that indicate growth opportunities for new brands.

Keywords: marketing; marketing strategy; brands and branding; brand management; brand portfolio; brand extension; brand portfolio strategy; brand architecture; consumer behavior; Marketing; Brands and Branding; Marketing Strategy;

Language: English

Format: Print

25 pages

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Citation:

Avery, Jill. "Brand Portfolio Strategy and Brand Architecture." Harvard Business School Background Note 517-021, August 2016. (Revised July 2017.)

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Case | HBS Case Collection | April 2019 (Revised July 2019)

Kraft Heinz: The $8 Billion Brand Write-Down

Jill Avery

On Friday, February 22, 2019, following an unexpected and disappointing earnings report, The Kraft Heinz Company’s stock price fell 27%, wiping out $16 billion in market value. CEO Bernardo Hees had announced that the company had taken a $15.4 billion asset write-down, that the company would be cutting its annual dividend from $2.50 to $1.60 and that it was under SEC investigation for accounting irregularities related to its procurement process. $8.3 billion of the asset write-down was related to a loss in value of the firm’s intangible assets, specifically its Kraft and Oscar Mayer brands. As Kraft Heinz looked ahead to the future, it was time to recalibrate its brand management strategies. With $50 billion in brand assets remaining on its balance sheet, effectively managing its brands going forward was critical to avoiding another brand asset write-down and to regaining the $8 billion brand value the company had just lost. Was Kraft Heinz's brand asset write-down the beginning of the end of the market dominance of "Big Food" brands across the board or was it idiosyncratic and a result of the firm's brand management resources, capabilities, and strategies?

Keywords: brand management; Brand Value; Brand equity; marketing ROI; brand storytelling; Intangible assets; brand valuation; Marketing; Marketing Strategy; Brands and Branding; Management; Corporate Strategy; Consumer Behavior; Food; Marketing Communications; Advertising; Private Equity; Consumer Products Industry; Food and Beverage Industry; United States; North America;