Brand proliferation is a business malady that afflicts certain kinds of entities, particularly global corporations, conglomerates and holding companies. It usually occurs as a consequence of healthy growth until the condition metastasizes in the corporate body, either through benign neglect or misguided thinking.
It generally burdens companies from a certain era that grew by acquisition in mature, consolidating industries. You can include Microsoft in that category along with GE, ITT, Comcast, and a number of healthcare companies and the old media companies that are being radically disrupted by digital technology.
They acquire, expand into new markets and adjacent industry verticals, and develop new products and services. Along with the acquisitions come business brands, product brands and product portfolios (that come with yet other names). Acquisition outpaces integration.
The perniciousness of this affliction is not to be underestimated. It happens gradually. Things still feel the same internally although the business itself is undergoing quite profound change.
The corporation, rather than being a coherent, unified entity, becomes an archipelago or confederacy of smaller, self-directed, self-justifying businesses. And this either stems from or results in a strategic vacuum at the top or center. Absent centralized executive leadership, branding becomes a small, unregulated business, with predictably chaotic results.
At a level or two below the C-Suite, brand proliferation takes hold because there is no central gatekeeper or mechanism to oversee, manage, evaluate and shape brands into a coherent portfolio of business assets. There are no systems to guide execution and monitor performance. There are no rules and no enforcers.
So, the corporation compiles, accrues and even hoards brands (while often neglecting its own)…until something happens: products cannibalize each other; customers get confused; market share drops; a business fails; a new CMO or CEO comes on board with a new mandate or strategy; a business is spun-off/a business is acquired; the corporation and its brand disappear behind a screen of sub-brands, its meaning—if not its strategic bearings—lost.
What is the antidote to this? It can be seen in the reverse image of this cautionary tale. The corporation must:
- Have a clear understanding of what a brand is (and is not), which includes knowing that brands need to be intentionally designed and continuously cultivated
- Follow the brand parsimony principle—create the smallest number of strong competitive brands that it can support and sustain with the necessary budget, resources and infrastructure
- Have a clear strategic business vision, that specifies the role that brands and branding serve in advancing that vision
- Demonstrate and communicate brand conviction: Leadership, especially, must evangelize and regularly promote from its bully pulpit (appointing intermediary deputies as part of the effort)
- Provide roles, rules and tools (e.g., Corporate Brand Manager; Corporate Brand Standards; and M&A protocols) for disciplined brand governance, measurement and maintenance
- Build lateral structures that facilitate open communication and cross-pollination of brand and business ideas across their silo-riven organizations
Brand proliferation is more than a marketing problem. It is often bad business. Managing it well can create real business opportunity, contributing to the bottom line through efficiencies and contributing to the top by effectively opening new doors to new markets and new doors within existing ones.