Recently, Coca-Cola Company announced that it would discontinue production of its coconut water brand Zico due to the epidemic. In fact, the epidemic is not the only catalyst for brands to implement "downsizing strategies." In recent years, many consumer goods giants have been gradually promoting "brand optimization" strategies.

Recently, The Coca-Cola Company announced that it will discontinue its coconut water brand Zico and is considering canceling some of the less popular Coca-Cola and Diet Coke beverage types.

According to reports, Coca-Cola has 500 wholly or partially owned brands around the world, and the company has previously stated that it plans to cut this number by more than half.

This is not the first time Coca-Cola has given up on its brands. Over the past two years, the company has been "identifying and eliminating zombie" brands, products, flavors and packaging that are underperforming other products.

In the first half of 2019, Coca-Cola canceled more than 275 products.

A spokesperson for Coca-Cola said that the company is currently highly focused on meeting the needs and demands of consumers, and it is against this background that it has decided to discontinue Zico before the end of this year. Brands now at risk include Diet Coke Feisty Cherry, Coke Life, Northern Neck Ginger Ale and Delaware Punch, which are all "under review," the spokesperson said. The company is sifting through and streamlining its number of brands and will retain those that can achieve scale.

The move is part of a broad restructuring triggered by the coronavirus pandemic, including job cuts and revamped marketing strategies.

However, the epidemic is not the only catalyst for brands to implement "slimming strategies." In fact, in recent years, consumer goods giants such as Unilever, Procter & Gamble, and Moutai have been gradually promoting "brand optimization" strategies. .

Nestlé has also been undergoing strategic contraction in recent years and has sold off many businesses. In August this year, the Nestlé China Group Affairs Department publicly stated: "Nestlé has begun to explore the best solutions for the future of our water business in China, including potential sales." In fact, since Schneider took office, Nestlé has been divesting non-profit companies. The core business continues to slim down. In January 2018, Nestlé sold its U.S. confectionery business to Ferrero for US$2.8 billion (approximately 19.6 billion yuan); in May 2019, Nestlé sold it for approximately 10.3 billion Swiss francs (approximately 69.8 billion yuan). Before that, Nestle sold the Gerber Life insurance business for US$1.55 billion (approximately 10.8 billion yuan); in December last year, Nestle sold another US$4 billion (approximately 10.8 billion yuan). to sell its U.S. ice cream business to Froneri for a total of 28 billion yuan). So far, Nestlé has carried out more than 20 asset "downsizings", covering multiple business sectors, with a total value of more than 100 billion yuan.

The businesses sold by Nestlé are basically sectors with limited profits. For example, Yinlu, which is currently on sale, has been experiencing unsatisfactory performance since 2015, even experiencing double-digit declines.

Behind the continuous selling, Nestlé is also continuing to increase its investment in new businesses. In just half a year in 2020, Nestlé invested as many as three times in the health science business.

Unilever has operated in about 150 countries around the world and has as many as 1,600 brands. It is one of the largest consumer goods companies in the world.

But later, Unilever conducted an internal audit and found that more than 90% of profits were created by the group's 400 brands, while most of the other 1,200 brands were at a loss or making small profits. So starting in 1999, Unilever began to implement a divestment strategy globally.

First of all, it withdrew from its non-main business and specialized in advantageous series of products such as household and personal care products, food and beverages; secondly, it merged its 14 independent joint ventures into 4 holding companies and reduced its plans. The 55 factories established have greatly reduced operating costs; finally, in order to allow the company to focus more on core brands rather than loss-making and low-profit brands, Unilever slimmed down its brands, and finally had 1,600 brands 400 core brands have been selected and retained.

Since 2015, three-quarters of Unilever’s transactions have been acquisitions in the beauty and personal care field. At the same time, it has also sold 8 billion euros in assets, mainly divesting parts of its slow-growing food business, such as spreads and margarine.

P&G has also been reducing brands in the past to cope with changes in the fast-moving consumer goods market and alleviate slow performance growth.

In recent years, the company has successively sold Nanfu batteries, Duracell, Lams pet food and other brands, and packaged 43 brands at once, including Vassoon, Wella, Max Factor and the perfume business. Sold to Coty Group.

The number of brands under the company has been reduced from more than 200 to less than 70 today.

While losing weight, P&G has also launched more than a dozen new brands, such as SK-II, Oral-b, and Meta MUCIL. Many consumers do not know that they are P&G products, but these small and The Midea brand contributed 80% of P&G's growth.

Moutai Group also implements brand shrinkage management, eliminates low-end products with poor image, and compresses existing product barcodes. Beginning in 2019, Moutai Group has implemented the "Double Five" brand plan, which will reduce the number of subsidiary brands to about 5 and control the total number of products within 50.

The specific subsidiaries that have stopped using the group logo include: Xijiu Company, Technology Development Company, Health Wine Company, Health Industry Company, Wine Company, Ecological Agriculture Company, Maotai-flavor Wine Company and other subsidiaries.

Also a wine giant, Constellation Group’s weight-loss plan is to launch a “sell, sell, sell” model and frequently divest its brands. In fact, this protracted "slimming plan" can be traced back to 12 years ago. In 2008, Constellation Group sold wine assets valued at approximately $209 million to Eight Estates Fine Wines, LLC. In 2016, the group also sold its Canadian wine business to the Ontario Teachers' Pension Fund for approximately CAD 1.03 billion.

Constellation Group sells its brandy brands

The frequent sales are related to the rapid development of the beer business. Constellation needs to use this to concentrate resources on the beer sector in exchange for greater Growth; on the other hand, it is also related to Constellation's own "high-end, high-quality" wine and spirits strategy.

Is the multi-brand strategy of "greedy for the big and seeking for the perfect" ineffective?

Almost all marketers dream of creating a hit product, but it is difficult to realize the dream of taking over the world with just one product.

Because companies face customers from different regions with different needs and purchasing preferences, it is objectively required that they must build a combination of products and services that can organically structure a variety of products. In order to effectively meet customer needs and maximize the company's profits.

As a result, many brands have implemented a diversified brand strategy, building a combination of products and services that can organically structure a variety of products to effectively meet customer needs.

There is nothing wrong with multi-brand strategy in itself, the question is just "how to make multi-brand strategy successful". Confirming that multi-brand strategy is the direction of development does not mean that companies can implement multi-brand strategy under any conditions, nor does it mean that adopting a multi-brand strategy will guarantee success.

Multi-brand building is not as simple as registering a trademark. The multi-brand products of many groups have either started to rise but have gone down, and no one cares about them, or they are fighting each other and fighting against each other. Not only have they failed to enter the mid-to-high-end market as planned, Instead, it resulted in a waste of resources. Multi-brand operation is a game for the strong. It requires strength and resources, including funds, talents, etc., and has little to do with the number of products.

Multi-brand strategy should be a step-by-step process.

First improve the quality of the product itself, and then segment the product sequence and brand after attracting mid- to high-end users. If this order is reversed, it will bring great negative effects. It is not advisable to enter a multi-brand strategy too early. Toyota launched its second sub-brand, the high-end luxury brand Lexus, 63 years after its founding. It took another 13 years before it launched its third sub-brand Scion for the North American market.

Focusing on the main business and cultivating a strong brand is the key.

According to the function and value positioning of the product, companies can divide their product portfolio into the following four categories.

Base product: The most important core product in the product portfolio. For example, every cosmetics company will have a main product. This product will cover the basic functions needed by its core customers, be affordable and acceptable to the public.

Value-added products: This type of product is usually accompanied by some value-added services related to product functions. For example, in addition to basic coffee drink services, Starbucks also provides value-added services such as office work, meetings, and music appreciation. It is a third space that integrates study, work, and life.

Enhanced products: Compared with value-added products, enhanced products do not provide much added value, but amplify and upgrade the core functions of the basic product. For example, a certain cosmetic product may have a basic sunscreen function and its SPF index may be 15. However, in some special circumstances, consumers may need a sunscreen product with an SPF index of above 50.

Extended products: These types of products are not directly related to the company's core products, but are closely related to the brand, customers and the cultivation of customer relationships.

In order to break the bottleneck of the "brand ceiling", many companies blindly launched multi-brand strategies. As a result, they suffered heavy losses and were forced to rationally shrink their front lines. Here is a typical case. Ford was originally a practitioner of the "multi-brand strategy"-at its peak, it owned multiple car brands such as Ford, Mazda, Lincoln, Mercury, Volvo, Jaguar, Aston Martin and Land Rover. The British luxury brand Aston-Martin and European luxury car brands such as Jaguar, Land Rover, and Volvo all once belonged to PAG, a high-end car group owned by Ford. Ford had expected that these high-end brands of PAG would be able to become a global leader by 2005 to 2006. It brought nearly 1/3 of operating profits, but it backfired and PAG suffered losses year after year.

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Internal products and innovation systems are the key to multi-brand strategy

P&G can be said to be an excellent practitioner of "multi-brand strategy". P&G's multi-brand strategy is the strategy of "one product, multiple brands". Specifically, Procter & Gamble does not name and promote its products under the P&G name, but operates around different brands for each type of product. The first feature of such a "one product, multiple brands" strategy is the wide variety. P&G's business scope covers multiple industries such as personal care, household cleaning, and food; the second feature is multiple brands of one type of product, such as laundry detergent. Hair serums are sold under five brands in China, including "Rejoice", "Head and Shoulders", "Pantene", "Vassoon" and "Clairol". P&G uses different functional features to establish differentiation between brands so that it can compete with specific competitor brands and meet different consumer needs.

P&G has a unique brand management system to protect its multi-brand strategy. More importantly, P&G has a market research system and a consumer database containing rich consumer opinions. This is communicated to other production operations departments to produce products that are more popular in the Chinese market.

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A brand management system that adapts to itself is a required course for multi-brand management companies

For Chinese companies, brand building, especially Multi-brand management is an aspect that needs to be improved. Chinese companies should think carefully about how to transform from Made in China to self-created brands.

Here we can look at an example of the failure of multi-brand strategy - "Wahaha". The failure of "Wahaha"'s multi-brand strategy is that its multiple product brands do not have their own unique market segments and customer groups.

The positioning of some product brands overlaps, such as "Apple", "Peach C" and "Orange" in juice drinks and "Very Apple", "Very Peach" and "Very Sweet Orange" in carbonated drinks; in Wahaha's "Yoyou" "In the series, 5 types are milk tea and milk coffee, and the other two are lemon tea and grapefruit tea. Such failed market segmentation leads to a chaotic brand portfolio, with different sub-brands competing for customers, which in turn creates a blurred and confusing corporate image and increases unnecessary losses.