The Hidden Persuader

THE RIGHT WAY TO KILL A BRAND

Nirmalya Kumar Harvard Working Knowledge » "Diageo, the world's largest spirits company, sold 35 brands of liquor in some 170 countries in 1999. Just eight of those brands—Baileys liqueur, Captain Morgan rum, Cuervo tequila, Smirnoff vodka, Tanqueray gin, Guinness stout, and J&B and Johnnie Walker whiskeys—provided the company with more than 50 percent of its sales and 70 percent of its profits. Nestlé marketed more than 8,000 brands in 190 countries in 1996. Around 55 of them were global brands, 140-odd were regional brands, and the remaining 7,800 or so were local brands. The bulk of the company's profits came from around 200 brands, or 2.5 percent of the portfolio. Procter & Gamble had a portfolio of over 250 brands that it sold in more than 160 countries. Yet the company's ten biggest brands—which include Pampers diapers, Tide detergent, and Bounty paper products—accounted for 50 percent of the company's sales, more than 50 percent of its profits, and 66 percent of its sales growth between 1992 and 2002. Unilever had 1,600 brands in its portfolio in 1999, when it did business in some 150 countries. More than 90 percent of its profits came from 400 brands. Most of the other 1,200 brands made losses or, at best, marginal profits."