INTRODUCTION:

Prior research on the brand consolidation indicate that marketing efforts fail expensively. To overcome this; it is critical to select the right branding strategy to manage the brand portfolio. In this line, study indicates the facet of brand consolidation while handling the brand portfolio. During this process ; there is possibility that there is a deviation from frame of reference. While aggregating brands in product categories leading to mergers and acquisition.During this point in time,it is important to remember that there should be clear about strong brand architecture which brings you on track and have better control in business with customers goodwill.

Theoretical Background:

Brand consolidation should be given due consideration as it requires consistent effort in research, formulating strategy and execution in the process, Big brands have failed for the various reasons such as communicating the company value.

Various brand reports indicated that internal interviews to discern what subject experts and key stakeholders talk about after which communication audit to be carried out and most important the competitors strategies. Researcher opine that brands may go wrong either internally or externally in communication if it is not in sync with strategies due to over estimation of the product/brand which has happened with Big Conglomerates in FMCG segment especially in beverages, food and related one. Marketer should play strategic game within the framework of business with due consideration to brand architecture ¹¹

Business Consolidation? ¹or Brand Consolidation?¹:

Businesses seeking to integrate multiple business units into either a single brand new company which can be an expensive affair or merge with existent brand which is less risky as one of the merging companies will have strong foothold in market though may carry additional costs associated with creating a new brand. Precisely this process is called ‘Brand Consolidation’ which contradicts the study made by (Mckinsey ,1997) ¹⁰ which states it is the powerful lever but then it doesn’t necessarily arise out of mergers and acquisitions. During this process marketers can phase out weak brands and possibility of going to newer brand. ably quickly change to single brand which is the result of two or more brands via co-branding which wouldn’t have worked out as a strategy across brands due to deviation from brand architecture that means irrespective of the size of organization, rather than mitigating risk; it got trapped by overestimating the individual brand positioning or brand identity during this process resulted in Brand consolidation. Marketers overlooked during this process by ignoring the Brand architecture itself

Although this study is preliminary in nature it is noteworthy to mention that in Mckinsey 2004, Quarterly report indicate three key steps depending on the magnitude and urgency of the task, they can be implemented one by one or in parallel. First, streamline ranges and harmonize products in portfolio which is connected and balanced so that without consolidating names of brand can make less distinctive in terms of value proposition for instance one large European maker of consumer durable maintained a large number of brands, but sharply streamlined the ranges. In the end, there was no longer any real distinction between the brands offering and retailers declined to stock the full line. Second, harmonize pack design and logotypes conveying the visual to prospective customers. In this way, consumers strict to brands Finally, diligent activity is that when you merge the brands; the brand positioning should be maintained for individual brands but joint strategic brand position should be developed at the same time as there is different message may be conveyed to consumers in terms of brand proposition (Knudsen et al,1997)

Brand Consolidation Strategy Defined ²:

It is defined as the strategic formulation process of merging one or more brands into a single resulting in either of the following. They are to keep both brands: Retaining the brand identity of individual brand after merging of which products made by same plant; they appear to be separate to consumers. Brand Fusion-Brand identities are fused together. Stronger House: The strongest brand survives which has high reputation and weak brands may be discontinued. New Brand- The merged brands are discontinued and new brand emerge. For example Verizon emerged when GTE merged with Bell Atlantic.

LITERATURE REVIEW:

Brand Consolidation:

Brand consolidation plays a vital role in strategic business development as it is evident from the fact that Amazon purchased Niche Fashion retailer Zappos and Quirky e-tailer voot. (Knudsen et al, 1997) Big Brands claimed that acquisitions were made to prevent competitors from snapping up successful small companies³which may deviate from brand architecture tends to fail. Different business strategies requires different brand architecture in which marketers should maximize by emphasizing stock of portfolio wide thinking and stock from customers perspective of brand oriented decisions. It is believed that strategic brand consolidation takes place to exploit the market opportunity with innovative strategies developed by either of the marketer and anticipate future business in sync with brand architecture and business strategy to optimize growth and brand value otherwise there is a tendency of brand value diminishing. (Petromilli M et al,2002)

Strategic formulation of Brand Consolidation:

Uggla (2015) has highlighted that four approaches are adopted to align brand portfolio with business strategy by aligning Brand portfolio objectives with business objectives in expansion through brand acquisition; brand alliances as catalyzing the business strategy. Here, when business expansion takes place through brand acquisition; there is possibility of mistake while consolidating brands as the business models differ and takes long time to align as CEO’s should understand the implication of brand portfolio to make sense for acquisition; during which there is a chance that their frame of reference is lost as similar to the study made by Dwivedi A et al, 2010 which specifies holistic framework in which it is precondition for launching a brand extension which should fit with the parent brand using appropriate brand elements. Positive attitudes towards the extension per se should be developed to create added value perceptions to consumers.

Findings from Isberg and Pitta (2013) indicate that two distinct Brand equity growth strategies exist in which one is growth by acquisition and other by organic brand development. Further, it indicates that using financial analysis techniques which is focused on return on equity and return on assets .Finally, organic brand development resulted in higher brand equity.

Muzellec and Lambkin (2009) examines the relationships between product and corporate branding in context of different brand architecture which was analyzed through past strategic decisions for the purpose of rebranding keeping in mind the strategy of integration of alignment of corporate and product brands and other strategy seeking different images among stakeholders within purview of brand architecture in prioritizing the brand extensions which leverages the strong image of the corporate brand to heighten the image and credibility of both. Further, this study proposed three types of corporate branding strategy within brand architecture framework. First the trade name which is essential identity over a house of brands; second business brand which is consciously nurtured and is aimed primarily at attracting stakeholders other than consumers and, finally, the holistic corporate brand a fully developed corporate brand, extending across all target audiences.

Chang (2009) indicates in the case of Sony Ericsson’s co-branding joint efforts,two companies have the same responsibility for both profits and liabilities and transition cost will be symmetric whereas in other case when Benq merged with Siemens in which BenQ had taken responsibility to provide constant financial support but weren’t deep enough to absorb the cost of turning around the profit-losing Siemens unit which is asymmetric. Hence, co-branding may take on one of two essential operational types: joint-venture or merger. In Joint venture both companies restructure the capital structures of the original corporations i.e., each member corporation is responsible for the new joint-venture company. In the merger situation, after merging of companies, dominant should be responsible for the gain and loss. It is noteworthy to mention that capital structure of BenQ was reorganized after it merged with Siemens and this resulted in a reduced brand value from 7 billion to 2 billion. Adequate capital for two companies is critical before they even start evaluating each other and organizing a co-branding plan which indicates in the study made by Morgan and Rego (2009) where in decision of adding or removing brands has certain criteria namely competition i.e., fight against other firms to secure market share of complement of brands within the same brand portfolio leading to right brand positioning in terms of consumers perception about quality and price ; assessment of financial performance in terms of profit, margin, marketing expenses towards market share, consumer preferences and brand extension in which expansion of brand in different product categories or in international market increasing consumer awareness and potentially reducing marketing costs (Morgan and Rego, 2009)

Okonkwo (2009) indicates that luxury brand management has generated much interest and discussions in academic fraternity and business circles. It is evident that debates related to challenges and paradoxes are resulted in consolidated economic sector in late 1990’s which led to vision of Conglomerates such as LVMH, Gucci Group and Richemont. It is evident from the fact that unprecedented growth was seen US$20 billion in 1985 to $180 billion worth due to various factors such as globalisation, wealth-creation opportunities, new market segments, digital communications, international travel and culture convergence leading to array of business challenges that luxury practitioners have never known. Besides, expansion of the luxury client base and the subsequent lowering of the entry barriers to the industry have resulted in rise of both offerings and competition across all luxury categories be it fashion or accessories and leather products, cosmetics, wines jewellery, automobiles, private jets, home decor products etc., Louis Vuittion has 360 bouties in more than 50 countries a d Rolex, Cartier leading the penetration of luxury in new markets such as China and Russia. Additionally, issues such as counterfeiting is major concern in luxury brand strategies and production outsourcing, country-of-origin effects and the extension of product ranges have all led to a mixed and expanded offering of luxury goods to a wider market, with accompanying complexities and expectations.During this process, marketers routinely check allocation of existing financial and human resources among brands to increase shareholders value. Marketers have options of brand relationships with portfolio which is described as Branded House architecture in which single brands has number of sub brands and House of Brands architecture in which each brands is stand-alone: the sum of performance of brands is greater than if they align to master brand.Some companies use blend of both which can deviate from the brand portfolio of which possibility of lesser profit margin during consolidation and they have to be cautious (Petromilli et al,2002)

Muzellec and Lambkin (2009) examines the relationships between product and corporate branding in context of different brand architecture. Further, it states that through the re-branding strategies decisions, brand architecture is analyzed as an evolutionary approach in which two broad strategies are identified an integration strategy which seeks to achieve image alignment between corporate and product brands and a separation strategy which seeks to shape different images for different stakeholders. Implementing these strategies within the context of the brand architecture which leverage the strong image of corporate brand to enhance the credibility of product brand and vice versa

OBJECTIVES OF THE STUDY:

In broader sense, to identify the mistakes which tends to happen in consolidating brands by CEO’s in strategic decision-making confusing customers in brand portfolio. The question arises is that what you are suppose to do when consolidation of brand takes place. Having this backdrop the specific objective is

· To identify the misconception of consolidating brands by CEO’s in strategic decision-making.

· To outline the challenges faced by Brand strategist while consolidating the Brands

METHODOLOGY:

The Study Methodology incorporated is qualitative in nature and secondary sources of scholarly contributions on the academic research in foreign context and market reports. Having this backdrop; the primary objective is to outline the facets of brand consolidation and probable mistakes CEO tend to do. In this line, semi-structured interview schedule was prepared and sent to experts for their valuable insights to arrive at findings indicating the challenges after brand consolidation.

The Sample: Interview schedule was prepared and send to fifty (50) experts each 10 from from different locations of New Delhi, Bangalore, Chennai, Mumbai, Hyderabad.

Tools for Data Collection: Interview schedule was prepared and mailed to experts which added value to the study to arrive at valuable findings. At the same time, one snippet from web sources was linked to the study. Further, responses from secondary sources available in web have been outlined and due importance is given to the scholarly contribution on brand consolidation in various journals comprising of white papers, research papers, articles through search engines of electronic databases using Google Scholar, Google search and abstract using search strings namely Brand consolidation, Business, mergers, acquisitions, Brand architecture across industries related to brands market reports, snippets from web sources. The search has been made in various journals as presented in Appendix 1 out of which few journals were reviewed from the year 1997 to 2019 pertaining to Brand consolidation strategies of Big Brands.

APPENDIX 1

List of Journals Randomly selected during Literature Review

Name of the Journal

Emerald Publishing, 2002

International Journal of Hospitality Management, 2007 - Elsevier

Journal of Marketing, 2010 - journals.sagepub.com

Revista Científica" Visión de , 2013 - redalyc.org

MJ Louro, PV Cunha - Journal of marketing management, 2001 - Taylor and Francis

A Dwivedi, B Merrilees, A Sweeney - Journal of Brand Management, 2010 - Springer

U Okonkwo - Journal of Brand management, 2009 - Springer

L Wu - Innovation, 2014 - en.cnki.com.cn

D Vrontis, I Papasolomou - Journal of Product and Brand Management, 2007 - emerald.com

Journal of International , 2001 - journals.sagepub.com

J Fernie, CM Moore, SA Doyle - International Journal of Retail and , 2010 - emerald.com

CM Heilman, D Bowman - Journal of Marketing , 2000 - journals.sagepub.com

L Sulkowski, R Seliga, A Wozniak - International Conference on Applied , 2019 - Springer

RK Trond, L Finskud, R Tornblom, E Hogna - The McKinsey Quarterly, 1997

N Kumar - 2007 - books.google.com

G Birtwistle, CM Moore - International Journal of Retail and Distribution , 2005 - emerald.com

P Štrach, AM Everett - Journal of Product and Brand Management, 2006 - emerald.com

T Lantieri, L Chiagouris - Journal of Consumer Marketing, 2009 - emerald.com

RK Srivastava - Marketing Intelligence and Planning, 2011 - emerald.com

RESULTS AND DISCUSSIONS:

Revisiting the objective 1 and objective 2 in this study the results reveal the consolidated facts from the interview presented in Appendix 2, Table 1 and literature during Brand consolidation i.e., Mergers and Acquisitions. Due to busy schedule of experts in diverse field of management; only 20 experts were able to get access through mails (12 respondents) and 4 respondent over telephone and 4 in person. Remaining 30 respondents this was sent through mail to gather the information pertaining to Brand consolidation. Enlisted below were recorded after collating the views of respondents.

APPENDIX 2

Table 1 Interview Schedule on Brand Consolidation i.e., Mergers and Acquisitions (Sent to 50 People)

S No	Description	Response
Q1	What drives you to consider for brand consolidation	Its a way to grow market share; opens avenue for improvements in product quality; They help in access to new technology and growth
Q2	What is the unique issues related to Brand consolidation	Parent and child brand can deviate while consolidating brands
Q3	What is the major misconception of Brand consolidation?	POor due diligence; improper planning; Paying more value than fair value
Q4	What are key risk areas do you experience while consolidating the brands	Loss of focus on customers Low Employee morale Risk of losing knowledge knowledgeable capital
Q5	In your opinion, what are the top 3 aspects that Big Brands should focus in brand consolidation strategy	Big Brands look for 3 things which are at most vital a) Market share b) Growth c) Sustainability
Q6	What are the key issues in supply chain management	Fragmented Warehousing in India suffers from low levels of technology and and lack of skilled labour
Q7	What suitable metrics you use for Brand performance in brand consolidation	Brand Funnel Perception metric Performance metrics
Q8	Do CEO’s tend to do strategic mistake in decision-making	CEO may not choose right org structure Preference to one culture irrespective of origin Forgetting the cultural aspects and failing to get the people issues right
Q9	Production and operations Realignment	After a merger, team should make decisions about combined assets of the two companies to make your product work. For example, one production plant might be able to produce more units, but its location will raise shipping costs to the new territory served. A more productive production group might be less efficient, costing the company more per unit. After a merger, shutting down a production facility can provide the new company with cash from the sale of assets the business can use to reduce debt, lower interest payments and increase profits.
Q10	Economies of Scale	It creates huge profits even if you don’t increase sales

Q1. Driving force for Brand Consolidation

Out of 50 respondents; 24 of them said that Market share is the driving force for venturing into Brand Consolidation I.e, Mergers and Acquisitions and it opens new avenue for Product quality and helps in access to new growth altogether

Q2. Unique issues related to Brand Consolidation

Out of experts who are respondents; 6 were under the opinion that every time MandA takes place it is not necessary to look for increasing market share as it depends on economic conditions prevailing but rest of respondents were not able to say clearly as it requires clear understanding the market potential. Further, marketers have to focus on sustainable ecosystem strategies.

Q3. What is the major misconception of Brand Consolidation

78-percent of Respondents (39) wont agree to the fact that mistakes can happen. But then, 22-percent of them I.e, 11 of them mentioned that three aspects namely Poor due diligence, Improper Planning and Paying more value than fair value are the facts about brand consolidation going wrong.

Q4. What are key risk areas during Brand Consolidation

86-percent (43) of the respondents have mentioned that there is a) loss of focus on customers b) low employee morale c) Risk of losing knowledgeable capital. Further, companies have expressed that they have to develop strong relationship with customers due to changing business patterns

Q5. Three aspects which is considered vital during Brand Consolidation

Brands look for 3 things which are at most vital

A) Market share

B) Growth

C) Sustainability

Q6. Key issues in SCM

82-percent i.e., 41 respondents didn’t had clear idea about supply chain practices as new changes in global perspective but rest 9 respondents who are experts have opinion that fragmented warehousing in India suffer from low levels of technology and and lack of skilled labour

Q7. Suitable Metrics in Brand Performance

90-percent of them didn’t had clear idea about the metrics but then they said that it is not under their purview. Rest 10-percent of respondents mentioned that Brand Funnel, Perception metric and Performance metrics.

Q8. Does CEO makes Strategic mistake in decision-making

Perhaps CEO does strategic mistake in consolidation of brands because there can be many brands in portfolio. Failing to get right people on board as it is major issue in which CEO may not choose right organization structure

Q9. Production and operations Realignment

Respondents mentioned that after merger, decisions should be made on how to use the combined assets of two companies to align with production process which turn associated with supply chain planning and logistics issue for producing the number of units and selecting the location

Q10. Economies of scale

This question is interrelated to Q9 in which combining production process among mergers and acquisitions which lead to larger profit margins in turn huge profits can be incurred though decrease in sales

CONCLUSION:

The study reveals the fact that Brand consolidation is a risky business practice as results reveal that 86-percent of respondents say that there is huge loss of focus on customers;lower employee morale and high risk of losing knowledgeable capital whereas weaker brands have great potential to become strong as indicated in the study Trond Riiber Knudsen et al, 1997, pg.190 and other instance is that strong brands can suffering loss of market share can merge with marketer to revive their strategy. This study indicates through interview schedule about uniqueness of Brand consolidation that MandA to take place it requires clear understanding of market potential irrespective of market share as it depends on economic conditions prevailing. Further, marketers have to focus on sustainable ecosystem strategies.

Reviewed literature and responses from the interview conducted shows that Brand Consolidation is a risky process as there is a possibility that brand positioning can be deviated and consumers get perplexed. Big Brands have undergone this strategic process but then, some are successful in terms of profit point. At times, they simply for the purpose of cost saving or having joint venture or amalgamation they get trapped in the system. So, it becomes necessary for the brands to be proactive though it is established brands. As presented in Appendix 2, Table 1 ; it outlines the fact that CEO overlooks the issues in Human Resource team , cultural issues and may not choose right organization structure; preference given only to particular culture and failing to get the people issues right while acting upon it which is the core issue to be resolved during the entire process of brand consolidation. In marketing perspective as two different models coincide with each other it is good for longer term but it is an expensive affair in short term as indicated in interview schedule presented in Appendix 2, Table 1 and literature indicates the commonly found mistake ²⁵Besides, organization structure should not be blindly integrated with mergers and acquisition just for the sake of increase in market share as there is deviation from brand architecture. The study indicates that production and realignment and economies of scale is other major challenges faced by marketers especially in mergers and acquisitions.

MANAGERIAL IMPLICATION

This study unfolds the fact that during brand consolidation foraying into new brands requires better understanding of market potential. It resorts to key issues faced by brand managers during Mergers and Acquisition but uncovers various aspects in brand performance metrics as presented in Appendix 2, Table 1 as there was no clear idea or response from the interview schedule. Most of the experts didn’t go further though they were willing as there was limited time. This study has outlined that experts say that there is fragmented warehousing in India suffers from lack of skilled labour and lack of technology

Over and above, CEO’s should get the right people on board in restructuring the organization in mergers and acquisitions. Besides, improper planning and poor due diligence are the major concerns. Further, CEO have to understand that during major decision-making a coach can be hired for setting new directions and challenge and he should act as cheerleader involving everyone on board and reminds them the plan and implications to avoid distress within organization especially in Brand consolidation.

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Received on 05.02.2020 Modified on 21.02.2020

Asian Journal of Management. 2020;11(2):181-186.

DOI: 10.5958/2321-5763.2020.00028.1