Research purpose. The aim of the paper is to create a model that allows building an optimal brand portfolio, allowing an organisation to achieve its goals. The created model is based on the bivalent programming theory. A mathematical model of optimum brand portfolio is created based on linear programming with restricting conditions being the maximum acceptable risk level and budget. The basic types of resources and basic types of relations between brands are explained, which are part of the process of brand portfolio optimization.
Design / Methodology / Approach. Knowledge and many years of experience of mainly economic disciplines were used for the selection of characteristics for brand portfolio specified in this article. Our assumptions were based mainly on project portfolio management, operational analysis and linear programming as well as tools and methods of graph theory.
Findings. Brand portfolio management such as creating, planning, organising and then maintaining a successful brand is a costly and long-term process involving effective marketing strategies and decisions. The prerequisite for brand portfolio creation is deciding on the number and type of brands. A properly constructed brand portfolio is a prerequisite for achieving business goals.
Originality / Value / Practical implications. Brand portfolio optimisation requires sufficient attention; however, rather than the selection of the highest number of brands, it should be based on compilation of a set, according to pre-defined priorities, which would provide the best possible means to meet the company’s goals for the current limitations. It should be implemented upon objective rules (in our case maximum allowable risk level and available budget). Frequent changes in the brand portfolio structure are not beneficial since they reduce the ability for the company to achieve its targets and represent excessive use of resources. In addition, qualitative brand characteristics have to be respected in the brand portfolio management, but this was not covered in our research.
If the inline PDF is not rendering correctly, you can download the PDF file here.
Aaker D. A. (1996). Measuring brand equity across products and markets.California Management Review 38(3) 102–120.
Aaker D. A. & Joachimsthaler E. (2000). The brand relationship spectrum:The key to the brand architecture challenge. California Management Review 42(4) 8-23.
Åsberg P. (2015). Perceived brand portfolios: How individual views hamper efficiency. The Journal of Product and Brand Management 24(6) 610–620.
Chailan C. (2008). Brands portfolios and competitive advantage: An empirical study.Journal of Product & Brand Management 17(4) 254–264.
Dacin Peter A. & Daniel C. Smith. (1994). The Effect of Brand Portfolio Characteristics on Consumer Evaluations of Brand Extensions. Journal of Marketing Research 31(2) 229–242.
DelVecchio D. (2000). Moving beyond fit: The role of brand portfolio characteristics in consumer evaluations of brand reliability. The Journal of Product and Brand Management 9(7) 457-471.
Hill S. Ettenson R. and Tyson D. (2005) “Achieving the Ideal Brand Portfolio” Sloan Management Review 46 (2) 85–90.
Hsu L. Fournier S. & Srnivasan S. (2010). Brand portfolio strategy effects on firm value and risks (Working Paper) 74–89.Boston MA: Boston University School of Management.
Kayande U. Roberts J. H. Lilien G. L. & Fong D. K. (2007). Mapping the bounds of incoherence: How far can you go and how does it affect your brand? Marketing Science 26(4) 504–513.
Keller K. L. (2012). Strategic brand management: Building measuring and managing brand equity (4th ed.).Prentice Hall Inc.
Kliestikova J. Kovacova M. (2017). Motion to innovation: Brand value sources have (not) changed over time. Innovative economic symposium 2017 (IES2017): Strategic Partnership in international trade. DOI:10.1051/shsconf/20173901010
Kral P. Bartosova V. (2017). Selected Characteristics in the Brand Portfolio Management. Proceedings of the International Scientific Conference – Finance and Performance of Firms in Science Education and Practice.
Krizanova A. Majerova J. Kliestik T. Majercak P. (2013). Theoretical Aspects of Brand Building in Seafood Industry. Nase More 60 (5-6) 105-112.
Majerova J. and Kliestik T. (2015). Brand valuation as an immanent component of brand value building and managing. Procedia Economics and Finance 26. pp. 546 – 552.
Morgan N. A. & Rego L. L. (2009). Brand portfolio strategy and firm performance. Journal of Marketing 73(1) 59–74.
Nguyen H.T. Zhang Y.F. Calantone R.J.(2018). Brand portfolio coherence: Scale development and empirical demonstration. International Journal of Research in Marketing 35 (1) 60–80.DOI:10.1016/j.ijresmar.2017.11.003
Santos E.C.S. (2018). Brand portfolio strategy and brand architecture: A comparative study. COGENT BUSINESS & MANAGEMEN vol.5 Issue:1.30 p. 1-10.
Varadrajan R. DeFanti M.P. and Busch P.S.(2006) Brand portfolio corporate image and reputation: Managing brand deletions. Journal of the Academy of Marketing Science 34(2) 195–205.