Since among the most relevant problems when referring to brands are those related to the management of a multi-brand system (Hill et al., 2005), a company must formulate its basic strategic brand principles in view of two central themes, which are:   Brand Architecture; and a Brand Portfolio.

1. Brand Portfolios &
Competitive Advantage:
An Empirical Study

2. Purpose
The research focuses on two questions:
what reasons lead companies to develop, or not, a brand
portfolio strategy,
how brand portfolio management can create a higher and
stronger level of competitive advantage that is harder to
grasp and imitate.

3. The paper seeks to contribute to the
understanding of brand portfolio
management by examining the brand
portfolio strategies of three leading luxury
groups.
LVMH; Richemont; Genesis Luxury
Purpose

4. Introduction
Since among the most relevant
problems when referring to
brands are those related to the
management of a multi-brand
system (Hill et al., 2005), a
company must formulate its basic
strategic brand principles in view
of two central themes, which are:
brand architecture; and
a brand portfolio.

5. Brand architecture defines the way in which a brand signs a
product, and whether it does so independently of another brand
(Rao et al., 2004).
corporate branding (one name for all
products);
endorsed brands/mixed branding (two brands
associated with one product);
branded products/house of brands (each
product has its own brand).

6. Riezebos (2003, p. 184) defines a brand portfolio as “a set of brands owned by one
company”
Dawar (2004, p. 34) states, “brands are not superstars but members of a team”
Kapferer (2000, p. 157), asks “how many brands must we offer to consumers within
the same product category? [. . .] brand portfolio optimization is a strategic issue
because the chosen answer will have a profound and permanent impact on the
outcome.
The issue of brand portfolios concerns the
number of brands a company should manage
and how to organize the “rules of the game”
between these brands.
This raises the questions of the need for
positioning those brands in connection to each
other and of the strategic equilibrium of brands
in a portfolio (Riezebos, 2003; Hill et al.,
2005).

7. Carlotti et al. (2004) asserted that the brand
portfolio is not only critical for financial
reasons, but because a brand portfolio allows
companies to
establish a strategy for every brand,
determine the need for repositioning,
identify underperforming brands and,
avoid the exposure risks for the company
related to a single brand strategy.

8. Brand portfolio management
may change the focus of
marketing to a superior,
strategic decision-making level
(Brown, 2005), as it implicitly
involves focusing on the whole
instead of on individual brands
(Hill et al., 2005).

9. The paper utilizes an exploratory approach by
means of case studies.
Data was collected from the following companies:
Moet Hennessy Louis Vuitton (LVMH), Genesis
Luxury & Richemont.
The research involved in-depth interviews with
company officials.
Methodology

10. Moet Hennessy Louis Vuitton
(LVMH)
A world leader in luxury, LVMH Moët Hennessy - Louis Vuitton
possesses a unique portfolio of over 60 prestigious brands. The
Group is active in five different sectors:
Wines & Spirits; Fashion & Leather Goods; Perfumes & Cosmetics;
Watches & Jewelry; Selective retailing
In Euro
Millions
LVMH
Turnover (2011) 23659
Profit 3065
Turnover by
region:
Europe
Asia Pacific
Americas
Japan
33%
27%
32%
8%
Source www.lvmh.com

11. Richemont
Richemont owns several of the world's leading companies in the field of
luxury goods, with particular strengths in jewellery, luxury watches and
writing instruments.
In Euro Millions Richemont
Turnover (2011) 6 892
Profit 1079
Turnover by region:
Europe
Asia Pacific
Americas
Japan
2588
2569
998
737
Source www.richemont.com

12. Genesis Luxury
The essence of Genesis Luxury lies in their
philosophy that luxury brands are an experience
above all. The splendid mix of designer labels from
across the globe ensures that the Indian market is
spoilt for choice, from opulent to effervescent, by
brands par excellence, both in quality and design.

13. Results/Findings
The process is done in the following steps:
1. Identify the different steps that
characterize the brand portfolio building
process.
2. Present both the expected and
produced effects, and the key factors
for transforming a brand group into a
brand portfolio.
3. Based on this data, propose a model
that helps to clarify the acquisition
process of specific skills by the
companies at the time of brand portfolio
creation, and also the link between a
sustainable competitive advantage and
a brand portfolio.

14. Adopting a brand portfolio: a progressive process
A brand portfolio is therefore more than
just the sum of its parts. A brand
portfolio is built around a group of
brands, management criteria, and key
skills combined with the accumulated
experience of the company.
Phase Aggregation Phase (Phase
1)
Reformation Phase ( Phase
2)
Theorisation Phase ( Phase
3)
Descriptio
n
Main objective is to
answer to
customers’ very different
needs
Competing against
oneself in many segment
in order to grow
Opportunistic acquisitions
Reformation is first a
strategy of brand reduction
Brands are considered as
part of a whole
Definition of criteria for
operating the group of
brands and making
a competitive advantage of
this management
Main
Drivers
Limits within existing
brands
Market segmentation
Concentration of the
distribution
Globalization
Cutback in the number of
brands
Integration of the concept
of diversity in the
marketing policy
Economic and industrial
optimization
Research
Organizational
optimization

15. A brand portfolio’s expected & produced effects
More than 60% students wish to pursue the course from
fashion institutes like NIFD, NIFT, YWCA and Pearl
Academy of Fashion
Remaining 40% wish to pursue the course from Amity,
DU, etc
Product effects Advantages
Growth Relay To grow and move into other segments, to master new
markets
To reach and appeal to different generations of customers
Balancing Funds Harmonious growth
To counterbalance the success or failure of one brand or
another
To provide flexibility
Critical Size Effect of size in relation to distribution
Presence within different distribution circuits
Speeding up globalization
Sharing costs for research and
industry
Synergies
Easier amortization

16. Proposition Of A Model

17. Luxury in India (CII-AT Kearney
report 2011)
Luxury consumption starts by consumers who
have an income of INR 10 lakhs and becomes
serious by those who have an income of INR 1
crore and above.

18. Luxury in India (CII-AT Kearney
report 2011)
Indian luxury market has grown 13% in the past three years. It
is currently at 4.76 billion USD.
It is expected that the market will grow three times by 2015.
But even then there will be significant latent demand.

19. The barriers to the growth
of Indian luxury industry
Difficulty to reach the consumer since the target population is scattered.
Consumer’s reservations about luxury purchases (there is a low penetration
among rupee millionaires and there is reservation about lesser known brands)
Lack of talent in the industry (low experience and lack of training)
100% FDI awaited

20. Rationale….
Many leading Global Luxury
brands in India desperately
need professionals
Not even a single focused
Luxury course in India
We can have ‘First –Mover-
Advantage’.
It is proposed to fill the need
gap by launching Luxury
Course.

21. PLXR – Luxury Goods and Services
At the end of the programme, a student
should be able to demonstrate:
Comprehensive understanding of the
world of Luxury, its concepts,
evolution, structure, dynamics & the
environment in domestic & international
market.
Sound understanding of Luxury
consumer behavior & dynamics of
decision making process of high net
worth individuals
Appreciation of demand for Luxury
brands, its commercial value, how it is
generated, merchandised,
communicated and promoted

22. At the end of the programme, a
student should be able to
demonstrate:
Comprehensive understanding of
Luxury boutique/store operations,
customer service parameters, supply
side commerce, logistics and legal
issues
Good understanding of Luxury
brand management, marketing,
customer relationship management
and visual merchandising.
Sound and comprehensive
understanding of E- Luxury and
digital marketing and ICT in Luxury
business
PLXR – Luxury Goods and
Services

23. Skills, Qualities and Attributes
At the end of the programme, a student should be able to:
Use apt selection and application of communication and computing
skills method and technique situation ally
Display reflective capability and self-awareness, and self-
management skills, time and sensitivity to social and cultural
diversity
Act and conduct oneself with responsibility, initiative, maturity,
integrity, professionalism, ethics and commitment
Demonstrate professional attitude, integrity, ethic , commitment ,
ability to work and cooperate in a team and people management.
Multi tasking capabilities for managing independently
Prudent in identifying for convertibility.

24. Conformity to Attributes of Graduate Profile
The programme will enable and facilitate a student of Luxury to
achieve the diverse attributes of PAF graduate awardees:
extensive knowledge of the discipline
informed respect for the chosen values and ethics of the
profession
confident oral as well as written expression and communication
skilled in analysis and problem-solving
skilled in visualization
proficient in contemporary technology and software
capable of critical thought, rational enquiry and self-directed
learning
able to work in a planned manner with sound time management
able to work collaboratively
open and intellectually curious

25. Thank You