What value propositions and price points meet the needs of attractive customer segments? Do the value propositions and price points vary in different geographic target markets, say in Europe and Asia?
The challenge for European companies with a globally known and strong brand is to be global and local in their value propositions and offerings. For emerging markets with lower spending power, they often need to create a considerably cheaper product line that still manifests the values and benefits of the global brand.
What kind of brands are needed to connect with the target segments? If business growth in different geographic target markets requires different price points for the same product, how can strong European brands in Asian markets be leveraged without diluting the brand value in the home market?
Companies should protect and leverage all accumulated brand equity while having as few brands as possible. The sheer cost of maintaining brands is forcing to look for simplicity. The challenge is to acknowledge which of the brands in the combined brand portfolio truly have growth potential, either as-is or after their repositioning. Another challenge is to manage risk. Even if the brand did not have significant growth potential, it needs to be phased out without confusing existing high-value customers. The answer lies in creating a coherent ecosystem between all the brands needed for stability and growth.
What products and services are offered under each brand? How to ensure that every product and service meets the expectations arising from past experiences and new brand promises?
When defining optimal product and service portfolios for each brand, it is essential to remember that a brand is the face towards its target segments and should have not be tied to organisational structures or business models. In times of rapid change, a modern brand should be designed to embrace change and facilitate different business models.
Getting it right
The first criterion in a successful growth-oriented deal is whether the companies have solid data available and an ambitious yet realistic view of their market challenges and new opportunities by customer segment, product, region or brand. The second is whether the management succeeds in formulating an exciting joint vision, which is backed up by a realistic roadmap and supported by the board and shareholders. The third one is whether they succeed in transforming the business to capture that growth. The challenge is to get all three right.
This post is the first of three-piece series about business growth and brand architecture related issues. In the second post, I will look at the acquisitions of non-equals. In these cases, the main goal is to transform the acquiring company, not to grow revenues fast. In the third post, I will examine what kind of B2B branding architecture models and brands best support the growth of B2B brands.