Case study

Construction of international brand portfolios:

impact on local brands
Bruno Godey and Chantal Lai
Marketing Department, Rouen Business School, Mont Saint Aignan, France

Abstract
Purpose – In the literature, the question of how the strategies of brand portfolios affect performance remains open and subject to contradictory
developments. This paper aims to highlight the various steps involved in the analysis of international brand portfolios as well as issues specific to each
of these phases.
Design/methodology/approach – This article relies on the results of a longitudinal case study conducted in collaboration with the marketing
direction of Procter & Gamble’s European Business Unit “Laundry and Fabric Care” from 2004 to 2009.
Findings – The authors present the strategic and operational movements that led to the reduction of the P&G brand portfolio in the laundry category.
The authors then compare them with the current results of the company in this market to assess the performance of this strategy of rationalization.
Originality/value – While the best way forward to construct international brand portfolios has not yet been specifically defined and many questions
remain, this article provides an illustration of a methodology tested by an international company.

Keywords Brand portfolios, Brand management, International, Reduction, Global, Local, P&G, International business

Paper type Case study

Introduction This article highlights the various steps involved in the

process (identification, classification, implementation and
Marketers have traditionally focused on managing their
assessment) as well as issues specific to each of these phases. It
brands individually. Most recently however the emphasis has
relies in particular on the results of a longitudinal case study
shifted and with a tendency for companies to consider these
conducted in collaboration with the marketing direction of the
issues in the context of more generalised brand portfolio
Procter & Gamble’s European Business Unit “Laundry and
management.
After several decades of exponential growth of their Fabric Care” from 2004 to 2009.
international brands portfolios, many multinationals firms
today are leaning more towards rationalization and reduction.
They usually choose a “top-down”, approach consisting of
taking decisions at the level of the international portfolio that 1. The evolution of international brand portfolios
impact on the local portfolios. The brand portfolio of a company consists of all brand names
Thus, since the early 2000s, Unilever has embarked on the
of products or services that this company offers worldwide.
disposal of 1,200 brands from its original international
The concept of the international brand portfolio is therefore
portfolio of 1,600, L’Oreal has built its success on only 17
positioned at the intersection of, on the one hand, markets
international brands and Procter & Gamble has reduced its
portfolio to 300 brands of which 17 earn $1 billion or more. where the company operates, and on the other hand products/
Whilst this practice of rationalization seems to be justified brands offered by it together with the countries in which the
by the profound changes taking place in the economic brands are present. Reflections on international brand
environment, it must be conducted with care to avoid risks. portfolios are therefore based on both the analysis of
In the literature, the question of how the strategies of brand strategic business units within the company, the markets/
portfolios affect performance remains open and subject to brand dimension and the international deployment thereof.
contradictory developments (Bordley, 2003; Kumar, 2003). A historical analysis of international brand portfolios of
large multinational organisations, based on the work of
The current issue and full text archive of this journal is available at Kapferer (2004), leads to the conclusion that two major
www.emeraldinsight.com/1061-0421.htm periods followed one another: their growth and their
reduction.

Journal of Product & Brand Management

20/5 (2011) 402– 407 The authors would like to thank Noémie Ganem, the Senior Brand
q Emerald Group Publishing Limited [ISSN 1061-0421] Manager in charge of restructuring Procter & Gamble’s detergent brand
[DOI 10.1108/10610421111157928] portfolio in France.

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Bruno Godey and Chantal Lai Volume 20 · Number 5 · 2011 · 402 –407

1.1 The growth of international brands portfolios We will present in this part the strategic and operational
Three main reasons explain the extreme growth of movements that led to the reduction of the P&G European
international brands portfolios of multinationals, particularly brand portfolio in the laundry category. We will then compare
European ones, up to the 1990s. them with the current results of the company in this market.
Firstly, the fact that these companies were often fairly At the initial stage of thinking about its brand portfolio in
decentralized organization and a multidomestic marketing the laundry detergent category, Procter & Gamble had seven
approach. Furthermore, legal aspects also explain the brands in France. Starting from a base of four brands (Ariel,
inflation of brand names. Many brands have in fact been Dash 2en1, Vizir and Bonux) the group purchased two
initiated locally without checking the availability of their name additional brands from Colgate-Palmolive in late 2003 (Axion
abroad and therefore without filing and protection of the and Gama) and then, in late 2004, added one further brand
name outside the country or pioneer area. Finally, major (Mr. Propre) which had been extended into the detergent
groups have been aggressive external growth since the 1980s. category (Figure 1).
The numerous mergers and acquisitions have also led to the
exponential development of portfolios. 2.1 Identification
The first step is to identify the international brand portfolio
within the global strategy of the company and in particular the
1.2 The reduction of international brands portfolios high priority strategic business units.
In the late 1990s, because of profound changes in the This involves, first listing, and counting, all the brands
economic environment, companies had to focus on belonging to the group or company. This action is a
profitability, to move towards a more holistic approach in prerequisite before undertaking any analysis. It is usually
their marketing and reduce their international brand based on official documents including price listings used in
portfolios. different countries. Secondly, each brand portfolio must be
Initially companies noticed different changes in the evaluated according to specific relevant criteria. Based on the
economic environment (strong increase in advertising costs practices of multinational companies and academic
and R&D, increasing competition, strengthening of retailer researchers (Aaker, 2004; Kapferer, 2004; Keller, 1993,
power, consumer trends). 2004), we can identify two major dimensions of criteria to
Faced with these difficult conditions and the inability to consider: the performance of the brand and its strategic role.
effectively support all the brands in this new context,
companies have been forced to question their business 2.1.1 Brand performance
model to maintain profitability, to give more importance to The performance of a brand can be understood from both its
financial indicators and measures of return on investment and brand equity (customer-based brand equity or customer
reduce their international brands portfolios, focusing on a few equity) and strength (competitive advantage of the brand in
mega-brands. its markets). Brand equity is assessed primarily in companies
As a result, companies have decided to reduce brand based on awareness and image, which are considered as
portfolios at two levels, strategic level (redefinition of SBU antecedents of preference, loyalty and, in some cases, the
priority) and operational level (restructuring of brand price premium paid for the brand. The strength of the brand
portfolios by market). is mainly estimated by turnover, ranking in the market,
If the reduction of international brands portfolios seems market share and profit. In particular, the ability of brands to
necessary, it raises questions and debates about its impact on fund a sufficient level of communication support is examined,
the overall performance of the company (Morgan and Rego, taking into account the minimum levels of media investment
2009). Indeed, cultural differences that had previously led to that may be determined by country.
local adaptations of brand names, their positioning and their 2.1.2 The strategic role of the brand
marketing mix, have often been ignored. The reduction has The strategic role of the brand is assessed firstly in terms of its
also taken less account of differences in local competitive fit within the strategic business units defined as priorities by
structure and the need for specifically tailored responses. As the company. It also takes into account the potential for the
Schuiling and Kapferer (2004) have shown, it often leads to brand to be extended into other categories or geographical
the elimination of local brands in favour of global brands, areas. Finally, it takes into account the extent to which the
which is not always justified and appropriate. It also creates a brand may legitimately claim to have a unique positioning,
requirement to maximise the highest priority global brands in relative to other brands within the international portfolio.
the portfolios at the risk of losing these brands’ souls and Whilst it appears to be necessary to first evaluate brands in
make them confusing to consumers. order to compare them, this initial phase already reveals some
To explain how we arrived at these potentially harmful organizational and measurement difficulties.
consequences, we present the different steps followed in the 2.1.3 Organizational problems
reduction of international brand portfolios. Companies continue to reflect on the best type of organization
to implement: should there be an international project team
2. The analysis of international brand portfolios charged with carrying out a “top down” approach, conducting
a comprehensive global analysis, taking decisions at the
Based on recently completed projects in large multinational international portfolio level and enforcing these decisions
and research studies that have been conducted (Kumar, 2003; locally, with the risk that these may not be supported at
Aaker, 2004), analysis of international brand portfolios can be country level during the implementation? Or is it better to
presented as an iterative process which is accomplished in invite local project teams to create “bottom up” analysis based
several steps: identification, classification, implementation on country data and consolidate these at the global level, with
and assessment. the risk of obtaining inconsistent local decisions?

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Bruno Godey and Chantal Lai Volume 20 · Number 5 · 2011 · 402 –407

Figure 1 The different steps in the analysis of international brand portfolios: application to the P&G European brand portfolio in the laundry detergent
category

Multinationals may also face problems in the collection of the Furthermore, certain measurements are not easy to
information necessary for analysis. They often seek to implement: how best to assess the future ability of a brand
standardize the process by conducting studies on the same to generate profit within its own market and elsewhere (brand
brands at the same time. extensions and geographical extensions)?
In addition, the measurements are not independent of each
2.1.4 Measurement problems
other. It is therefore necessary to have synthetic measures in
The measurement of customer-based brand equity and brand
order to take decisions on trade-offs. This, in turn, leads to
strength remains the subject of much discussion and
issues of criteria weighting and subjectivity. The objective
questioning. On the one hand, there are many consultants
offering measurement models for overall brand evaluation. must be to avoid penalizing local brands that may have strong
On the other hand, many brand equity evaluation models customer-based equity and positioning uniqueness (Schuiling
have also been developed in the academic literature. They are and Kapferer, 2004), but remain weak in terms of brand
based on different approaches: perceptual approaches strength, especially total turnover and profit.
(Krishnan, 1996; Keller, 2004), approaches based on the Finally, the performance of brands and their strategic role
preference and choice of branded product (Kamakura and are often apprehended by rational measures. However, human
Russel, 1993; Swait et al., 1993; Park and Srinivasan, 1994; aspects are also very important in addressing the problem of
Jourdan, 2001) or on the price premium or turnover international brands portfolios (Laforêt and Saunders, 1994).
(Ailawadi et al., 2003) of a branded product. These models How should non-rational aspects (corporate history,
are heterogeneous, sometimes complex and are mostly all structure, philosophy) be integrated into the analysis, in
subject to criticism (Swait et al., 1993; Jourdan, 2001; Czellar order to prevent resistance from local marketing teams and
and Denis, 2002; Ailawadi et al., 2003). As a result, in the sales forces?
absence of a universally accepted model or measurement Regarding the case of Procter & Gamble and its portfolio of
system, each company resorts to developing its own tools and laundry brands, the restructuring decision was taken in 2004-
inevitably encounters difficulties in the process. 2005 on the basis of four initial observations. The French
Indeed, the selection of indicators to be adopted is the detergent market was large, but had been in the maturity
primary concern and leads to trade-offs within companies that phase since the early 2000s. It was crowded and complex
can distort the debate, with a tendancy towards excessive with, on average twice as many product references as in other
emphasis on global brands at the expense of local brands. European countries. It had become even more competitive

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Bruno Godey and Chantal Lai Volume 20 · Number 5 · 2011 · 402 –407

with the strong growth of private brands and hard discounters different names but identical positioning and a global
that were developing fast due to the fundamental changes in marketing-mix, and are designed to be managed as globally
consumption patterns. Finally, Procter & Gamble’s as possible. Some local or regional brands that originally had a
“traditional” competitors had smaller portfolios with four similar positioning, but have been developed to have a unique
brands for Henkel and three for Unilever. positioning, are also included in this category.
An example of this situation can be found within Procter &
2.2 Classification Gamble with the brand named Dash 2en1, sold mainly in
The second step is to determine, firstly, the number of brands France, Germany, Austria, Holland and Switzerland, and as
to keep and, secondly, to classify brands in different Bold 2in1 in Great Britain, Spain and Bolt 2in1 in Italy.
categories.
To set the target size of the overall brand portfolio, a dual 2.2.3 Local or regional brands
approach is often used: a portfolio approach and a They have a very strong position and are considered real
segmentation approach. The portfolio approach is to keep jewels, even if they are not intended to or able to become
only those brands that meet certain criteria. The global brands. They play the important tactical roles of
complementary segmentation approach makes it possible, “flanker brands”, “fighter brands” and “prestige brands” in
once relevant segmentation criteria have been identified the portfolio of a country or zone alongside global or glocal
(quality, type of use, benefit offered to consumers, type of brands that are most often “bastion brands”. They respond
distribution channel . . .), to determine the number of brands better to local needs than any regional or global brand in the
required to cover the various segments in the different portfolio (Schuiling and Kapferer, 2004). They increase the
markets. barriers to entry for competitors and generate profit and
At the international level and before its merger with Gillette growth in the countries concerned.
in 2005, Procter & Gamble had set itself the target of In France, during the process of restructuring the Procter &
reducing its portfolio to 300 brands and concentrated its Gamble brand portfolio, the brand Bonux was identified as
efforts on 16 “dollar billionaire brands”. This objective was part of these “jewels”. It is not, in fact, intended to be
established from both a portfolio analysis and a revision of the developed internationally, even if it also exists in some Eastern
segmentation approach, market by market. Thus, a European countries.
segmentation by price tier and a behavioural segmentation
were conducted in the detergent market. In a context of 2.2.4 Non-strategic brands
increasing price sensitivity and demand for entry-level and By difference, other brands are considered non-strategic.
private label products, a segmentation based on prices seemed There are mainly:
relevant in order to determine the number of brands to be
.
brands inconsistent with the general strategy of the
retained in the portfolio. Behavioural segmentation had also company and its priority strategic business units;
been conducted in Europe (the UK, France, The
.
brands, often local, with low performance (including
Netherlands, Italy, Spain) in 2004 by TNS Infratest profit) and/or a limited strategic role (positioning
Marketingforschung to measure the mechanisms, both redundant, low ability to brand or geographical
implicit and explicit, that condition women’s behaviour extension); and
regarding detergents (expectations, attitudes, background,
.
in some companies, brands whose sole weakness is being
motivation and “reward”). Each detergent brand was then local.
placed by the consumer on a matrix, according to attributes For Procter & Gamble, three of the seven brands in the initial
(performance, brand, price and use). portfolio have been considered as non-strategic, albeit for
Once the size of the overall portfolio has been determined, different reasons. These are Mr. Propre, Vizir and Axion. The
the strategic brands to be retained are organized into Mr. Propre brand had been extended to the category of
categories. The designations differ between companies but detergents in France in November 2004 following the
generally, we find the following groups. behavioural segmentation study. It was intended to meet the
2.2.1 Global brands expectations of consumers not covered by the other Procter &
These are the priority brands which seek international Gamble brands. However, the results have never attained the
presence and are to be managed in the most standardized desired objectives.
way possible (unique name, unique positioning, marketing The same segmentation study revealed that the Axion
mix as global as possible). They benefit from the innovations brand, which was bought in 2003, duplicated Dash 2en1 in
and are the main vehicle for business growth. terms of consumer expectations.
Procter & Gamble had identified 16 strategic billionaire Finally, Vizir was also one of the non-strategic brands. This
brands (Pampers, Charmin, Bounty, Always, Tide, Ariel, brand is known in France almost exclusively for its product
Downy, Pantene, Wella, Head & Shoulders, Crest, Olay, references in liquid detergents, which limits its potential for
Pringles, Folgers, Iams, Actonel), which were already overall performance.
generating nearly 60 per cent of its global sales at the At this crucial stage of classification, many new questions
beginning of the process of restructuring. This group includes arise concerning the size of the brand portfolio and the
Ariel, that is sold everywhere in Europe but also in Brazil, potential trade-offs.
India, Japan, Mexico, Panama, Pakistan, Peru, Philippines,
2.2.5 Size of brands portfolio
Turkey and Venezuela.
To our knowledge there has been no reflection on this area.
2.2.2 Glocal brands Should it be compared to competitors? Should it be based on
These are local brands based on a global positioning. These the total turnover of the company? How best to take into
are also priority brands, which, for historical reasons, have account the non-rational factors such as history, company

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Bruno Godey and Chantal Lai Volume 20 · Number 5 · 2011 · 402 –407

structure and philosophy that influence the choice of firms gradually, considering it as a “cash cow” at the end of its life
(Laforêt and Saunders, 1994)? cycle, and therefore stopping all investment in marketing and
advertising. Finally, with Axion, because of the proximity of
2.2.6 Trade-offs
its positioning with that of Dash 2en1, it was decided to carry
On the one hand, how to arbitrate between the choice of a
out a conversion plan to bring consumers from Axion to
single global brand and the management of glocal brands with
Dash.
different names and identical positioning?
On the other hand, how to ensure that the choice of 2.3.2 Strategic brand decisions
managing brands on a glocal level (different names, unique The main objective for strategic brands is to develop. If the
positioning) will be more efficient than the previous model status quo solution is the minimum option, the more ambitious
(different names, different positioning)? solution of brand extension is often preferred.
How to arbitrate between global brands and local brands The extension may be geographic, launching the brand in
with close positioning? new countries. It can also be a brand extension in terms of
Finally, how to find the right balance in the portfolio new range or product categories.
between global and local brands? How to avoid sacrificing The extension of global brands in terms of countries, or
local well performing brands? range, or product categories can be direct. It may also be
Firms are still searching for methods and analysis based on more indirect, through substitution of brands that have been
previous case studies to help make these trade-offs abandoned or sold or through the endorsement of brands at a
appropriately. lower level (global or local).
In terms of implementation, the brand Bonux can be
2.3 Implementation classified as status quo, insofar as it has only been relaunched
The third step is to make strategic decisions at the global level operationally, with a reworking of the product mix through
and then implement those decisions at the local level. the logo, the packaging and a gift partnership with Universal
The extension may be geographic and consist of Music.
introducing the brand in new countries. It may also consist For the other three brands (Ariel, Dash 2en1 and Gama)
of a brand extension in terms of range or new product changes were much more strategic. The Ariel range has been
categories. gradually extended over time, via a continuous series of
2.3.1 Decisions on non-strategic brands innovations. It is also the case for Dash 2en1 which, in
The non-strategic brands are affected by two major decisions: addition to the merger with Axion, has undergone a series of
“brand disposal” and “brand retirement”. launches to repositioning the brand upwards. Finally, Gama
has been repositioned in the “entry level” tier with a new
2.3.1.1 Brand disposal. The objective is to find a buyer in the economic model based on “everyday low price”. This
market for those brands not selected as priorities but with a repositioning was important insofar as Procter & Gamble
marketable value. Buyers may be international groups had no brand in this tier which is the only one of the
interested in enhancing their brand portfolios within a detergents market to grow steadily. This new model has led to
strategic business unit or SMEs interested in strong local an exclusive focus on the price (lower price and trade
brands. marketing operations) and the abandonment of support
It is important to distinguish between cases where brands media.
are sold together with their products and where only the
brands are sold. The brands are usually sold together with
2.4 Assessment
their products when they are not the primary strategic
Having reviewed the various phases of the process and
business defined by the firms. Brands can be sold without
implemented the decisions, the companies engage in an
their products (or just a portion of their products) when
assessment process of their new brand portfolio.
companies feel they are too weak in terms of performance or
They can decide, if necessary, to complete it. Having
simply too local and that another brand within the portfolio
redefined their strategy, prioritised the different strategic
has a higher priority. In this case, the products are retained
business units together with analysis and classification of the
and are subject to brand name changes.
brands in their portfolio, they may indeed seek to expand it to
2.3.1.2 Brand retirement. Brands, with such poor strengthen their global position in their priority markets.
performance and/or low strategic importance that they have Finally, the analysis of international brands portfolio is an
no market value, are abandoned. ongoing process. Indeed, the development of international
Again, these brands may be discontinued at the same time markets, changes in competition, and the opportunities for
as their products or independently. The company may acquisition of brands require companies to continually
abandon the brands and their products either immediately develop and evaluate their international brand portfolios.
or gradually, giving them minimal support, the objective being Regular analysis is therefore recommended (Douglas et al.,
the maximization of the margin and profit. The company may 2001). The periodic audit provides the opportunity to take
abandon the brands but keep their products. These are then stock of the situation following the decisions taken, and to
also subject to a brand name change. In this case, the brand is take new decisions that reflect the changing environment.
often abandoned after several steps. The brand begins by a The long-term results of this restructuring are difficult to
change of status, becoming endorsed by a more strategic assess, all things being equal, since the detergents market has
brand. Then it is finally abandoned. changed considerably over this period. After experiencing a
Procter & Gamble abandoned the Mr. Propre detergent quasi-mechanical loss in its global market share, related to the
brand overnight in France, and it now exists only in Germany abandonment of three brands, Procter & Gamble was able to
and Switzerland. The group abandoned the brand Vizir regain market share growth with its remaining four strategic

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Construction of international brand portfolios: impact on local brands Journal of Product & Brand Management
Bruno Godey and Chantal Lai Volume 20 · Number 5 · 2011 · 402 –407

brands. The portfolio is also more responsive to recent Kamakura, W.A. and Russel, G.J. (1993), “Measuring brand
changes in the category since the development of the “entry value with scanner data”, International Journal of Research in
level” tier has continued to increase in recent years. Thus, Marketing, Vol. 10 No. 1, pp. 9-22.
over the period 2004-2009, the private label brands rose by Kapferer, J.-N. (2004), The New Strategic Brand Management,
nearly 10 market share points in value at the expense of Kogan Page, London.
national brands. Through this process of rationalization of its Keller, K.L. (1993), “Conceptualizing, measuring and
portfolio, Procter & Gamble still accounts for one-third of the managing customer-based brand equity”, Journal of
total detergent market by value. Marketing, January, pp. 1-22.
Keller, K.L. (2004), Strategic Brand Management: Building,
Measuring and Managing Brand Equity, Prentice Hall,
Conclusion Upper Saddle River, NJ.
The article highlighted the fact that following a period of Krishnan, H.S. (1996), “Characteristics of memory
relatively uncontrolled development of their international associations: a consumer-based brand equity perspective”,
brands portfolios, companies then decided to take a much International Journal of Research in Marketing, Vol. 13
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References About the authors

Aaker, D.A. (2004), Brand Portfolio Strategy, Free Press, New Bruno Godey is Associate Professor of Marketing at the
York, NY. Rouen School of Management. His research interests include
Ailawadi, K.L., Lehman, D.R. and Neslin, S.A. (2003), consumer behaviour, retail, brand and luxury marketing. He
“Revenue premium as an outcome measure of brand is an active member of an international research group in
equity”, Journal of Marketing, Vol. 67, pp. 1-17. partnership with scholars in Italy, Germany, USA, Japan,
Bordley, R. (2003), “Determining the appropriate depth and Russia, China and India. He is a member of the Association
breadth of a firm’s product portfolio”, Journal of Marketing, Française du Marketing (AFM) and the European Marketing
Vol. 40, pp. 39-53. Academy (EMAC) and a regular participant at international
Czellar, S. and Denis, J.-E. (2002), “Un modèle intégrateur marketing conferences. He is the author of numerous case
du capital-client de la marque: une perspective psycho- studies and publishes regular articles on consumer behaviour
cognitive”, Recherche et Applications en Marketing, Vol. 17 in the luxury sector. Bruno Godey is the corresponding
No. 1, pp. 43-55. author and can be contacted at: Bruno.Godey@rouenbs.fr
Douglas, S.P., Craig, C.S. and Nijssen, E.J. (2001), Chantal Lai is Associate Professor of Marketing at the
“Integrating branding strategy across markets: building Rouen Business School and former Director of Marketing for
international brand architecture”, Journal of International the cosmetics and detergents divisions within the Henkel
Marketing, Vol. 9 No. 2, pp. 97-114. Group. Her research focuses on managing brands and brand
Jourdan (2001), “Le capital-marque: proposition d’une portfolios, especially on brand extensions and changes of
mesure individuelle et essai de validation”, Recherche et brand names. Chantal Lai has published several articles and
Applications en Marketing, Vol. 16 No. 4, pp. 3-24. numerous case studies on these subjects.

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