What should you do if you are head of a losing brand? No matter of the size of your company you tend to overlook loss making brands and therefore your portfolio is filled with low profit or loss making brands. The hesitance to kill a brand lies in the fact that you do not want to lose out on the existing customer base. Only if you there was a way to kill the brand at the same time retain all your customers.
The thumb rule says that businesses make almost 80% of their money from few selected brands. You may be of the opinion that just by ignoring a brand it may die a natural death as the customers will stop buying the product. However if you antagonize customers in a clumsy way you may lose the customer forever. Therefore if you need to kill a brand you must exercise caution in the way you do it.
Your first step should be to identify the loss making brands. To calculate the profitability of a brand you need to allocate the fixed and shared cost to it. You need to exercise caution while you are determining the loss brands because you should not let your personal perspective mix alter the facts. There is no scope for brand retention because of emotional attachment. You will find that while some of your brands have differentiated themselves on a global or regional scale depending on the size of your business there are other companies which are struggling for existence. Then you need to define your parameters on the basis of which you will decide on which brands to retain. After you have decided on which brands to retain you need to take a systematic approach while killing your brand. You need to identify the niche market which the brand is catering to. Once you have done that you may extend one of your existing brands to serve the needs of that segment of the market or you may come up with a new brand. Killing the brand cannot be hurried and a slow migration of customers should be ensured.
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