Unveiling the corporate brand: the role of portfolio composition

Abstract

PurposeThis paper aims to investigate the effects on corporate brand equity when a company moves from a house of brand strategy to a branded house. In fact, recently, most of large companies (Procter & Gamble, Unilever) are managing this swift in order to simplify and optimize their efforts.Design/methodology/approachA total of 433 consumers participated in a between-subject experimental design completing a questionnaire. Each respondent was exposed to one of eight hypothetical scenarios with real-existing brands. A moderated-mediation model was tested.FindingsThe number of individual brands interacts with the variety of product categories within the portfolio to define its internal consistency which, in turn, exerts a significant mediation effect on corporate brand equity.Research limitations/implicationsThe study supports the mental accounting process (subtyping vs bookkeeping), demonstrating how this psychological framework is applicable within brand management.Practical implicationsThe study unveils a strong dichotomy: consumers award very small portfolios focused on a single product category or, conversely, they appreciate a wide and highly diversified brand portfolio. No chances for intermediate and hybrid solutions. Findings demonstrate that a brand architecture shift might be a flexible opportunity to manage an on-going diversification strategy.Originality/valueThe study is the first to analyse the importance of internal consistency within a brand portfolio in case of a shift in the portfolio strategy. Moreover, it investigates the effects since the first announcement of a linkage between the individual brands and the corporate one.