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Less is More: Why Procter & Gamble is a Model for Other Holding Companies

Writers are occasionally reminded to “kill” their “darlings,” or ditch precious but unnecessary words or passages that weaken literary work. Similarly, in branding it is important for companies that want to build a strong house of brands to take a cold, hard look at their portfolio for brands that may not be pulling their weight.

Procter & Gamble is doing just that in announcing its plans to retire or sell more than half—close to 100--- of its existing brands. That move will leave the company, which sells Tide, Charmin, Pampers, and many other household goods, with up to 80 of its strongest, most profitable brands. P&G is a classic “house of brands” or “holding company:” a proliferation of strong product brands with no overt connection to their corporate parent brand. Its move, under chief A.G. Lafley is a reminder that it is important for all complex B2B and B2C companies to occasionally—yes---clean house.

Less is indeed more when it comes to supporting a huge number of brands that are expensive to maintain. By retiring or selling such a large number of brands, P&G will be able reallocate money, support its best brands, and, perhaps, invest in developing innovative products that help it build an even stronger house of brands.

Brandarchitecture Models 

Brand architecture is a hot topic in the B2B world today. Often, there is a mistaken assumption that flashy, exciting “brand names” for new products, services, or features of products will attract market attention and ultimately spur more sales. In reality, years of such a philosophy results in a proliferation of often confusing product names that is difficult for customers – or even salespeople – to fully understand.

The right brand architecture strategy for a particular organization depends on many different factors. The only certainty is that without clear guidelines and regular review, a company’s brand portfolio can become unruly very quickly.

While P&G has not yet unveiled the brands it intends to retire, the company has already stated that the remaining brands will comprise 90% of the company’s $83 billion in annual sales and more than 90% of its profit. If there’s any question about this move it should be: What took so long?

Less Is More

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