ABSTRACT
This chapter focuses on why it is important to engage the Board in choosing which brands and products to support, and reviews marketing strategies that in recent years have increasingly interested Boards in their drive for growth through reduced complexity. Many companies earn the majority share of their profits from just a small number of brands – some as much as 80 percent to 90 percent of their profits from fewer than 20 percent of their brands – while they lose money or barely break even on many of the other brands in their portfolios. Intuitively, marketers are likely to be concerned that fewer products will mean that some customers will be unhappy at not being able to buy the product they want, triggering a decline in sales. As with large brand portfolios, the cost of supporting all brands and products is high, particularly if all are being supported with the expectation of growth.
