WHEN CONSUMERS BLOG
Companies are using new brands and new products to drive growth across a range of increasingly mature sectors. The rush to capture the latest trend often leads to an abundance of brands,witness GM’s 15 entries in the SUV category.
A third major force behind surging brand portfolios is the rapid increase of controlled or private-label brands across a range of categories. Most major apparel retailers have introduced privatelabel lines, and new store labels have become prominent in a range of other consumer categories such as hardware and tools. The final driver is manufacturers’ own hesitancy in pruning current brands to make way for new ones. Companies challenged to deliver both top-line and bottom-line growth view the consolidation or elimination of brands as too great an uncertainty. For these companies, the perceived risks of brand housekeeping outweigh the benefits of an easier-to-manage portfolio.
The trend toward brand proliferation has made life increasingly complex for consumers, retailers, and manufacturers alike.Consumers face a relentless barrage of products (the number ofbrands on grocery store shelves, for example, tripled in the 1990sfrom 15,000 to 45,000) along with the requisite pitches for them:the average American is exposed to 5,000 daily advertising messages, compared with 1,500 for the average citizen 40 years ago. Many retailers have become increasingly discerning about the brands that fill their space for two primary reasons: they are seeking to keep their own cost structures in check (sourcing from fewer manufacturers, for instance, will increase their purchasing power
and simplify their ability to manage categories), and they also want to carve out space for their own newly minted brands.