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A Dynamic Approach to Brand Portfolio Audit and Brand Architecture Strategy

Article  in  European Business Review · April 2020

DOI: 10.1108/EBR-12-2018-0206

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Brand
A dynamic approach to brand portfolio audit
portfolio audit and brand
architecture strategy
Amélia Brandão and Jose Carlos C. Sousa
Universidade do Porto, Faculdade de Economia, Porto, Portugal, and
Received 4 December 2018
Clarinda Rodrigues Revised 19 March 2019
29 May 2019
Linnaeus University, Vaxjo, Sweden Accepted 17 June 2019

Abstract
Purpose – This paper aims to propose a dynamic and holistic framework that combines the brand portfolio
audit with the brand architecture redesign.
Design/methodology/approach – Depicting from an extensive review on the frameworks of brand
audit and brand architecture, a dynamic approach to brand portfolio audit and brand architecture strategy
was developed, and later applied and tested in three B2B and B2C companies.
Findings – The paper suggests an eight-step framework to guide practitioners when auditing a specific
brand portfolio and designing a revised brand architecture strategy. Additionally, a Brand Audit Scorecard
was developed to enable and sustain brand portfolio audits, divided into three dimensions (brand equity,
brand contribution and strategic options).
Research limitations/implications – Further research should aim at testing the proposed framework
in different types of companies and countries.
Originality/value – This paper contributes to the brand audit and brand architecture literature by
proposing a holistic framework that is not static.
Keywords Brand architecture, Brand audit
Paper type Research paper

1. Introduction
In a highly competitive arena, brands are striving to stay innovative and agile at the same
time they grow through the development of new products or services, or via acquisitions
and mergers. Research in branding and marketing suggest that brands are dynamic and
require that brand strategies to be adaptable in the long-term perspective (Freire, 2016). This
assumption is grounded on the idea that brands are living abstract entities that need to be
sustained in a long-term perspective to stay relevant and avoid erosion (Kapferer, 2008).
Moreover, different types of branding strategies are associated with different effects on the
intangible corporate value (Rao et al., 2004). Consequently, it is argued that the manner that
brands are deployed and structured affects the way the companies and their products are
perceived by consumers (Laforet, 2015). In this context, a brand audit is pointed out as a
holistic management exercise that allows marketers to gain a fundamental understanding of
how a brand is currently performing compared to its stated goals (Aaker, 2004b; Hill et al.,
2005). Indeed, by performing a brand audit companies can to take a step back and look at the
wider landscape to inform longer term brand strategy. Moreover, brand audits help European Business Review
managers to identify the strengths and weaknesses of their businesses; at the same time, it © Emerald Publishing Limited
0955-534X
creates opportunities for improvement (Kumar, 2003). DOI 10.1108/EBR-12-2018-0206
EBR In the field of brand management, brand audits have been mainly undertaken by
consulting agencies to rebrand, to benchmark against competitors or simply to get a broader
overview of performance and positioning of brands. Nevertheless, a brand audit to the
existing brand architecture is gaining interest among scholars and practitioners, as a
comprehensive organization of services and products can help organizations to grow, evolve
and transform itself over time. More specifically, brand portfolio audits entail a powerful
and useful strategic tool to assess each brand contribution to the portfolio, therefore
allowing companies to prioritize their brands and to allocate resources toward the areas of
greater opportunity (Hill et al., 2005; Serota and Bhargava, 2010). It is also commonly agreed
that brand audits allow companies to identify the weakest brands and to implement
strategic actions, such as merging, selling, milking, and eliminating brands (Kumar, 2003;
Shah, 2015, 2017).
In this context, different methodologies were proposed throughout the years to assess the
brand portfolio (Lederer and Hill, 2001; Kumar, 2003; Aaker, 2004a, 2004b; Hill et al., 2005;
Rajagopal, 2008). However, and although not contradictory, such frameworks are not
exhaustive regarding the criteria that should be used to audit brands and do not suggest
criteria that combine supply-side and demand-side measures of brands. Indeed, the existent
literature on brand portfolio audits does not present any application of the methodologies
proposed to real business case studies, neither it shows evidence on their implications in
practice.
It worth noting that brand architecture frameworks (Murphy, 1987; Olins, 1989; Laforet
and Saunders, 1994; Aaker and Joachimsthaler, 2000; Riezebos, 2003; Strebinger, 2004;
Kapferer, 2008; de Chernatony, 2010) focus on different classification systems of brand
architecture strategies, without thoroughly describing the way companies should choose
among them or design their own strategy (Serota and Bhargava, 2010). More importantly,
the extant research conducted in the field of brand audit and brand architecture does not
investigate the relationship between both concepts, which opens interesting avenues of
future research in the field of brand management. Indeed, to assess and (re)design the brand
architecture of a given organization is crucial to perform a brand portfolio audit which is not
static as the previous frameworks and consider a holistic perspective. Consequently, the
purpose of this paper is to propose a dynamic and integrated framework that combines the
brand portfolio audit with the brand architecture redesign. More specifically, the eight-step
framework aims to guide practitioners when auditing a specific brand portfolio and
designing a revised brand architecture strategy. Moreover, an innovative Brand Audit
Scorecard was developed to enable and sustain brand portfolio audits, divided into three
dimensions, i.e. brand equity, brand contribution and strategic options. This scorecard’s
main goal aims at prioritizing brands within the portfolio to better allocate resources and to
determine areas for brand improvement.
The main contributions of this research are threefold. Firstly, it depicts from existing
literature on brand audit and brand architecture to propose a new framework that combines
the supply-side and demand-side measures of brands. Secondly, it describes thoroughly all
the eight steps that brand auditors should undertake to audit a brand and to redesign its
brand architecture. Lastly, the proposed framework differs from the previous ones as it
proposes an overall analysis of brands within the portfolio using a brand scorecard.
Additionally, it provides a basis for periodical brand audit as part of the overall brand
management of the firm, reinforcing that such exercise should be made frequently and
analysis must be compared throughout the years.
The structure of the paper is as follows. First, Section 2 reviews the relevant
literature on brand portfolio strategy, brand audit and brand architecture. Section 3
describes the method used in the development and testing of a new dynamic approach Brand
to brand portfolio audit and Brand Architecture Strategy. Section 4 discusses the pilot portfolio audit
case study DouroAzul and its results. Finally, Sections 5 and 6 conclude the paper with
a discussion on academic and managerial implications, directions for future research
and limitations.

2. Theoretical framework
Due to the growing recognition of brands as key strategic assets (Laforet and Saunders,
2005; Kapferer, 2008; Keller and Lehmann, 2009), branding emerged as a top management
priority among both to academics and practitioners (Aaker, 1991; Laforet and Saunders,
1994; Louro and Cunha, 2001; Keller and Lehmann, 2009; Chailan, 2009). In that sense, the
brand management strategy, which “involves the design and implementation of marketing
programs and activities to build, measure, and manage brand equity” (Keller, 2013, p. 58),
shifted from a customer-based approach to a more balanced perspective (Shultz and de
Chernatony, 2002) including the companies’ stakeholders, ranging from shareholders and
staff to even competitors. Notably, a recent study highlights the role of the CEO and the
marketing department in both optimizing brand equity and managing across product and
corporate brands. Furthermore, employees are said to play a critical role by acting as
recipients and expressers of brand identity (Sevel et al., 2018).
Additionally, while traditional brand management settings focused on individual
brands, today’s reality is a little bit different as the attention is more focused on the
initiatives designed to enhance the value of the entire brand portfolios of companies
(Petromilli et al., 2002). Consequently, and although its notion is not new in marketing, the
issue of brand portfolio management has attracted very little attention from researchers up
to now (Riezebos, 2003; Chailan, 2009). In fact, managers are starting to recognize the need to
integrate business and brand strategy due to the constant pressure on brands to deliver
shareholder value, the growing number of brand mergers and acquisitions (Strebinger,
2004), the proliferation of products, brands and sub-brands (Petromilli et al., 2002; Aaker,
2004c), the aggressive market extensions and complex sub-brand structures within
companies’ portfolios (Laforet and Saunders, 2005), the huge market fragmentation,
evolving channel dynamics and global realities (Aaker and Joachimsthaler, 2000; Devlin,
2003), the shorter product life cycles (Louro and Cunha, 2001), as well as the increasingly
opinionated, savvy, connected and diverse customers demanding clarity and simplicity
in their buying decisions (Abraham and Taylor, 2011). Hence, previous research have
noted that the branding strategies adopted by a firm (corporate branding, house of
brands or mixed branding) differently impacts on the intangible value of a corporation,
since they differ in their essential structure and in their potential costs and benefits to the
firm (Rao et al., 2004). Additionally, the relationship and the impact of brand portfolio
strategy on the firm performance was further analysed by Hsu et al. (2016) by assessing
the impact of five brand architecture strategies on abnormal returns and risks.
By maximizing brand equity across all the different brands and products they offer,
companies can build strong brands (Aaker, 1991; Keller, 2015), which can provide value
both to the firm and the customer and sustain long-lasting competitive advantages. On
the companies’ side, strong brands can perform differentiated positionings, increase the
efficiency of marketing communications, protect and achieve a higher market share, create
shareholder value, recruit high talented people and support growth and innovation. On the
customers’ side, strong brands can simplify the buying decision, promise a particular
quality level, reduce the perceived risk, set expectations, engender trust of invisible products
or services, achieve a higher customer loyalty, enable the attribution of responsibility to the
EBR producer or distributor and provide emotional, hedonic and symbolic benefits (Doyle, 1989;
Aaker, 1991; Berry, 2000; Louro and Cunha, 2001; Chailan, 2008; Rajagopal, 2008; Morgan
and Rego, 2009; Keller, 2013) .

2.1 Brand portfolios strategy

Brand portfolio strategy is becoming a field of growing interest in the business world (Rao
et al., 2004; Laforet, 2017; Nguyen et al., 2018; Åsberg, 2018) as the natural tendency during
the growth of companies has been to add new brands to their portfolios to better meet the
demands of segmented markets or penetrate new distribution channels (Kapferer, 2008;
Fang and Wang, 2018). In so doing, brand portfolios are increasing in number and
extensibility, in an attempt to leverage brands as intangible assets (Dacin and Smith, 1994).
Henceforth, today’s competitive landscape is not just about creating strong brands, but
rather how to best manage and leverage strategies within complex brand portfolios (Laforet
and Saunders, 1999; Uggla and Filipsson, 2009). In other words, it is suggested that a brand
portfolio strategy should meet marketing and business objectives in a harmonious manner
(Uggla, 2015) and that is aligned with the consumers¨ perceptions (Nguyen et al., 2018;
Åsberg, 2018). Hopefully, a brand portfolio can provide an answer to a variety of companies’
concerns and leanings and result in a strong competitive advantage, especially in cross-
border acquisition due to the enhancement of the brand image of the acquirer brand
(Fang and Wang, 2018). In brief, brand portfolios afford growth relay, by reaching
and targeting different customer segments and new markets, allow corporate balanced
strategies, by counterbalancing the success or failure of one brand with another and
providing flexibility, reach the critical size more easily and rapidly than with few
brands, and provide synergies, by sharing costs for communication, innovation or
industry or stimulating cross-selling within the portfolio (Chailan, 2008). Bearing in
mind these advantages, it is important to understand what a brand portfolio strategy
stands for and what elements it embraces. More specifically, it is argued that companies
should strive for coherence in their brand portfolio, by sharing an underlying logic of
features in their (sub)brands such as design, personality and status (Nguyen et al.,
2018). In that sense, the brand portfolio strategy determines the structure of the brand
portfolio and the scope, roles and interrelationships of the portfolio brands (Aaker,
2004a) to make then manageable, meaningful and more valuable (Nguyen et al., 2018).
Notably, an effective brand orientation will facilitate brand focus, coordination, share
vision and the long-term orientation (Laforet, 2017).

2.2 Brand portfolio audit

Brand audit is conceptualized as:
[. . .] a comprehensive, systematic, independent and periodic examination of the brand. The
purpose of a brand audit is to detect problem areas and opportunities, and to recommend a plan of
action for the improvement of brand performance (Baumgarth et al., 2016, p. 55).
The brand portfolio audit provides a diagnosis of the current brand portfolio situation and
the identification of problems and issues to be addressed (Aaker, 2004b; Hill et al., 2005).
While common brand audits focus on the individual analysis and evaluation of brands (cf.
Baumgarth et al., 2016), the brand portfolio audit contributes to the overall assessment of the
portfolio. Accordingly, it entails a powerful and useful strategic tool to assess each brand
contribution to the overall portfolio, intended to prioritize the brands and to reallocate
resources toward the areas of greater opportunity (Hill et al., 2005; Serota and Bhargava,
2010). Moreover, brand portfolio audits can allow companies to identify weaker brands and
to take strategic actions, such as, merging, selling, milking or eliminating brands (Kumar, Brand
2003). Nevertheless, the factors influencing the brand retain-or-discard decisions vary portfolio audit
among companies and sometimes brand managers might be encouraged to retain weak
brands in their brand portfolio for strategic reasons (Shah, 2015, 2017). In summary, the
brand portfolio audit determines whether the current structure of the portfolio is suitable,
should be changed or adapted. It should be noted however.
In terms of its composition, a balanced brand portfolio may be:
[. . .] conceived like a brand network made up of mature brands and brands in development,
highly profitable brands and brands in an investment phase, and finally, brands that are either
potentially or already global (Chailan, 2008, p. 258).
Therefore, a balanced brand portfolio might not be the largest, but one with different and
diversified types of brands. In fact, an overbranded portfolio can starve strategic brands,
create debilitating confusion (Aaker, 2004b; Keller, 2015), generate diseconomies of scale
(Kumar, 2003), result in inefficiency, waste, misdirected resources and paralysis in
managing the portfolio, and incite the loss of brand equity and market share (Aaker, 2004b).
Nevertheless, some researchers suggest that large brand portfolios can enable a firm to
achieve greater power than other channel members; deter the entry of brands from rivals
(Morgan and Rego, 2009); and reduce the portfolio’s risk (Chailan, 2009).
Nevertheless, anecdotal evidence shows that many companies started to eliminate
brands or rationalize the firms’ resources on just a few brands. Researchers argue that that
might be a response to globalization, investment focus, market position consolidation,
operational rationalization or increased profitability for shareholders (Petromilli et al., 2002;
Rajagopal and Rajagopal, 2007; Chailan, 2009; Uggla and Lashgari, 2012; Keller, 2015). In
fact, market research stresses that most brands do not make money for companies and 80 to
90 per cent of their profits come from fewer than 20 per cent of the brands they sell (Kumar,
2003).
To sum up, it can be observed that there are two opposite trends in what concerns to
brand portfolios. On the one hand, some researchers suggest that companies are enlarging
their brand portfolios with more brands to better meet market demands by having a more
diversified offer range. Yet, others state that companies are trying to rationalize their
portfolios to concentrate resources and consolidate the market share of their biggest brands.
It is worth noting however that brand portfolio audits are valuable to make a diagnosis and
to determine future paths for companies¨ brand portfolios whether to extend or rationalize
them.

2.3 Brand portfolio audit methodologies

To assess the brand portfolio, different methodologies were proposed by several authors
(Lederer and Hill, 2001; Kumar, 2003; Aaker, 2004a, 2004b; Hill et al., 2005; Rajagopal, 2008).
Although not contradictory, those frameworks are not exhaustive and present different
ways to assess brand portfolios according to the multiple brand definitions, complementing
each other. Moreover, in the marketing and branding literature, there is no evidence of the
application of those methodologies in the business context.
The “Brand Portfolio Molecule” (Lederer and Hill, 2001), although not intended to audit
the brand portfolio, indirectly contributes to examining the relative importance and
contribution of brands to the portfolio. This framework is a graphical representation of a
brand portfolio, where brands take the form of atoms and are clustered in ways that reflect
how customers perceive them. In practice, this procedure includes three main steps.
Specifically:
EBR (1) taking inventory of brands, to determine which should or should not be included in the
portfolio, using brainstorming, managers’ knowledge or existing market research;
(2) classifying those brands, i.e. grouping them into “lead”, “strategic” or “support”
brands, and measuring their importance to purchase, influence on purchase,
positioning, connections and degree of control; and
(3) mapping the molecule by designing the actual structure and organization of the
portfolio using a molecule.

A more complete and functional approach to brand auditing is “The Brand Audit Sheet”
(Kumar, 2003), as it includes some financial dimensions to measure brands’ performance and
is simpler to create. This work sheet aims to rationalize the brand portfolio and involves the
following steps:

listing all the brands in the company’s portfolio, their global market shares, annual
sales and profits and market positioning;

evaluating each brand’s market position as “dominant”, “strong”, “weak” or “not
present”;

classifying the brand positioning using a word, such as, “value”, “upscale” or “fun”; and

debating each brand’s cash status, indicating whether it is a “cash generator”, “cash
neutral” or “cash user”.

Nevertheless, despite its simplicity of application and broader analysis than the previous
methodology, this framework lacks in what respects to studying and representing brand
relationships.
Likewise, the “Strategic Brand Consolidation Process” (Aaker, 2004a, 2004b) also
intends to create a comprehensive and objective method to systematically review the
strength and utility of the brands within the portfolio to rationalize its composition. The
concept of “Brand Portfolio Audit” is used by this author to another end, in which it is
included an assortment of questions to be addressed when designing the brand portfolio
strategy (Aaker, 2004a). This six-step approach encompasses the:
(1) identification of the relevant brand set, including all brands and sub-brands of the
portfolio;
(2) establishment of the assessment criteria, which is dependent on the context, such
as, brand equity (awareness, reputation, differentiation, relevance and loyalty),
business strength (sales, share/market position, profit margin and growth),
strategic fit (extendibility and business fit) and branding options (brand equity
transferability and the potential to merge with other brands);
(3) evaluation of the brands, using the criteria defined, and scored based on the market
knowledge of the brand team;
(4) prioritization of the brands, as “strategic” “power”, “flanker”, “silver bullet” or
“cash cow”;
(5) development of a revised brand portfolio strategy, including the brand architecture
strategy definition; and
(6) the migration of the strategy, either abruptly or gradually to a target strategy.

This methodology represents an evolution of the previous approaches as it captures all the
brand equity dimensions and prioritizes brands, allowing companies to take corrective
actions. Moreover, it goes further by including the migration step of the brand portfolio Brand
strategy, which was not considered by the previous frameworks. portfolio audit
Alternatively, the “Brand-Portfolio Renewal Framework” (Hill et al., 2005) was also
developed aiming to rationalize the brand portfolio and comprises a five-step approach. In
that regard, it includes:
(1) the understanding of the brand portfolio composition, with both owned and
partner brands;
(2) assessment of the brand contribution (annual revenues, direct marketing expenses
and other hidden benefits and costs) and ranking of each brand into “top third”,
“middle third” and “bottom third”;
(3) assessment of the market position of each brand, with both the current market
performance (brand traction) and future prospects (brand momentum);
(4) identification of problems and opportunities and classification of brands into
“power”, “sleeper”, “slider”, “soldier”, “black hole”, “rocket”, “wallflower” or
“discard” brands; and
(5) the development of the Brand-Portfolio Renewal Plan, embracing strategic options
and recommendations for each brand and for the overall brand portfolio.

Whilst the “Strategic Brand Consolidation Process” (Aaker, 2004a, 2004b) is more complete
in terms of dimensions and criteria of analysis, the “Brand-Portfolio Renewal Framework”
(Hill et al., 2005) is stronger in terms of recommendations and classification of brands, with
specific advices and corrective actions.
Finally, the Five A’s of Brand Metrics’ methodology was proposed by Rajagopal (2008)
and it is focused on the evaluation of individual brands. This brand audit framework differs
from the previous ones as it proposes an overall analysis of brands within the portfolio
using a brand scorecard. Additionally, it provides a basis for periodical brand audit as part
of the overall brand management of the firm, reinforcing that such exercise should be made
frequently, and analysis must be compared throughout the years. As such, this framework
encompasses:

perception metrics, including awareness and acquaintance (e.g. customer preference,
customer value and loyalty);

financial metrics, reflecting the appraisal (e.g. market share, share trend, market
demand, aggregate demand and demand elasticity); and

performance metrics, including association and allegiance (e.g. brand revenue and
investment on brand).

In summary, the existing brand portfolio audits frameworks are mainly focused on the
rationalization of brand portfolios, rather than on their extension. Furthermore, those
frameworks reveal a greater focus on the classification of brands into categories but miss to
analyze the brand interrelationships. Lastly, those frameworks also lack applicability, as
their authors barely explain how companies can implement such methodologies in their
businesses. Therefore, a clear gap is identified in terms of how to develop a framework for
auditing brands that depicts from the existing literature and focus both on the
categorization of brands and analyze its brand interrelationships as the overall assessment
of the portfolio.
So, this paper aims to fill this gap providing assessment criteria that should be used to
audit the brand portfolio. Moreover, interesting avenues of research are identified in terms of
EBR testing and describing thoroughly all the steps of auditing brands both in business-to-
business and business-to-consumer companies.

2.4 Brand architecture

The brand architecture concept has gained considerable attention in the last decades among
practitioners, despite the lack of academic studies conducted in field (Devlin, 2003;
Rajagopal and Sanchez, 2004; Hsu et al., 2016; Uggla, 2017; Spry et al., 2018). The earliest
literature that can be linked to this concept is as recent as 1987, even though it was only
introduced afterwards. In fact, extant research in the field of brand architecture proposes
different terminologies representing barely the same, namely corporate identity (Murphy,
1987; Olins, 1989), brand system (Aaker, 1996), brand architecture (Kapferer, 1992; Aaker and
Joachimsthaler, 2000; Petromilli et al., 2002; Devlin, 2003; Rajagopal and Sanchez, 2004;
Strebinger, 2004; Chailan, 2008; Harish, 2008; Muzellec and Lambkin, 2009; Muylle et al.,
2012), brand structures (Laforet and Saunders, 1999) brand hierarchy (Laforet and Saunders,
1994) or Brand Portfolio Strategy (Aaker, 2004a; Filipsson, 2008). Nevertheless, and despite
these multiple definitions that exist nowadays, there is consensus and complementarity
between them which is shown in Table I.
In line with Aaker and Joachimsthaler (2000, p. 8), we have defined brand architecture as
an “organizing structure of the brand portfolio that specifies brand roles and the nature of
relationships between brands”. In that regard, it is claimed that by establishing the roles and
interrelationships between the portfolio’s brands, the brand architecture allows those brands
to stretch further and to build and support each other in new and hopefully more cost-
effective ways (Filipsson, 2008). Furthermore, a structured brand architecture creates
synergies, clarity and leverage (Aaker, 2004a), thus increasing the value of individual
brands and of the overall portfolio (Petromilli et al., 2002).
Accordingly, brand architecture goes beyond the naming, visual or graphic
representation of brands (Abraham and Taylor, 2011) by having a twofold role. Firstly, to
clarify since it improves the consumer understanding and communicate similarities and
differences between individual products and services (brand awareness). Secondly, to

Brand architecture definitions Authors

“Brand architecture is an organizing structure of the brand Aaker and Joachimsthaler (2000, p. 8)
portfolio that specifies brand roles and the nature of relationships
between brands.”
“We define brand architecture as the way in which companies Petromilli et al. (2002, p. 23)
organize, manage and go to market with their brands.”
“Brand architecture refers to the relationships among and Balmer and Gray (2003, p. 983)
between corporate, company (subsidiary), and product brands.”
“The term brand architecture refers to an organization’s approach Devlin (2003, p. 1043)
to the design and management of its brand portfolio.”
“Brand architecture may be defined as an integrated process of Rajagopal and Sanchez (2004, p. 233)
brand building through establishing brand relationships among
branding options in the competitive environment.”
“Brand architecture refers to the structuring and organization of a Harish (2008, p. 51)
company’s product/brand portfolio [. . .] it establishes a
Table I. hierarchical relationship among a company’s brands.”
Definitions of brand “A firm’s brand architecture is its collection of brands and their Muylle et al. (2012, p. 59)
architecture interrelationships.”
motivate by maximizing the transfer of equity to/from the brand to individual products and Brand
services (brand image). As Brexendorf and Keller (2017, p. 1543) note: portfolio audit
[. . .] corporate brands can create overarching values and implement activities that have the
ability to transfer from the corporate level to the product level. These can have the potential to
carburize the boundaries of the brand but also to expand its boundaries.
Ultimately, a well-designed brand architecture strategy, whether explicitly written down,
can provide a product roadmap to the future for a brand, by clarifying where it can go and
how it can get there (Keller, 2013, 2015; Sarabia-Sanchez and Cerda-Bertomeu, 2017).
However, as simple and straightforward as it may appear, competing companies are
inconsistent in the way they brand their products (Saunders and Guoqun, 1997; Laforet and
Saunders, 2005) and services (Spry et al., 2018). Interestingly, consumer durables and service
companies lean more towards corporate branding as compared to consumer nondurables
(Strebinger, 2014). To address the inconsistency on how to brand products and services,
researchers suggested numerous forces that can shape the design of brand architecture
(Laforet and Saunders, 1999; Rajagopal and Sanchez, 2004; Muylle et al., 2012). Specifically,
the definition of a brand architecture can be linked to the company’s history (ownership of
brands, traditions or growth strategy); the company structure; the company philosophy
(historic associations, held values and beliefs, company pride or policies); the company’s
strategic decisions (mergers and acquisitions), market leadership, corporate reputation,
product quality or customer loyalty; the market structure and segmentation; the company’s
product range; and the products and services’ life cycles.

2.5 Brand architecture strategies

Different terminologies and systems of brand architecture strategies were proposed in the
literature of the past two decades (Murphy, 1987; Olins, 1989; Kapferer, 1992; Laforet and
Saunders, 1994; Aaker and Joachimsthaler, 2000; Riezebos, 2003; Strebinger, 2004; Kapferer,
2008; de Chernatony, 2010). Despite the similarity of those approaches in terms of the way
they address the relationships between brands and the advantages and disadvantages of
each strategy, they differ in terminology and level of detail. Nevertheless, it must be stated
that the frameworks proposed by the literature have been evolving throughout the years,
with more strategies and different ways to design brand architecture being introduced, such
as co-branding architecture, ingredient branding architecture, endorsement perspective and
vertical brand perspective (Uggla, 2017). The brand architecture strategy adopted by a firm
really matters on the strengths and weakness of the different brand architecture since have
impact in different risk/return profiles (Hsu et al., 2016).
One of the first frameworks proposed, and which was used as a basis for the construction
of the most recent frameworks, was the “Corporate Identity Structure” (Olins, 1989). This
visual identity system was divided into three levels, including the monolithic (one single
name and visual identity), the endorsed (corporate identity in visual association with
subsidiary names) and the branded (different names and appearance). Because of its
simplicity, this system missed the complexity of brand structures (Laforet and Saunders,
1994), later recognized by a similar and very close corporate identity framework, which
included corporate-dominant, balanced, mixed and brand-dominant systems (Murphy, 1987).
Nevertheless, both approaches were originally intended to understand corporate identities
and not as a means of managing brand structures and portfolios (Filipsson, 2008).
Some years later, (Kapferer, 1992, 2008) introduced the concept of brand architecture
with six main strategies. Specifically:
EBR (1) the umbrella brand (a single brand that covers several product categories – flexible
umbrella, or a single brand with sub-brands with descriptive names – masterbrand);
(2) range brand (one brand for each brand concept and area of competence);
(3) line brand (one brand for each line of products);
(4) source brand (similar to the umbrella brand, but products have their own name
instead of generic names);
(5) endorsing brand (the endorsing brand acts as a guarantor of the endorsed one,
including, for instance, the maker’s seal to create a recognition sign of the producer –
maker’s mark); and
(6) product brand (one brand and positioning for each product).

Even though this framework is one of the most cited in the literature, it has also been
criticized due to the subtle distinctions between some of its categories that makes it difficult
to understand where one ends and the other starts (Filipsson, 2008).
Consequently, as a matter of clarification and to capture the way brands were actually
deployed by companies, the concept of brand hierarchy was introduced by Laforet and
Saunders in 1994. This brand architecture framework includes three main levels, namely:
(1) corporate dominant, including corporate brands (corporate name used) and house
brands (subsidiary’s name used);
(2) mixed brands, including dual brands (two or more names given equal prominence)
and Endorsed Brands (brand endorsed by corporate or house identity); and
(3) brand dominant, including mono brands (single brand name used) and furtive
brands (single brand name used and corporate identity undisclosed).

This framework combines the brand design approach proposed by Murphy (1987) and Olins
(1989) and the multiple brand functions approach introduced by Laforet and Saunders (1994).
Following the previous approach, the “Brand Relationship Spectrum” introduced four
main strategic options to organize brand portfolios (Aaker and Joachimsthaler, 2000). This
model introduced a new concept in the brand architecture literature – the brand’s driver role,
which denotes the power that a brand will have to command the decision of each customer.
Moreover, it is also one of the most important and cited frameworks among the brand
architecture literature, due its holistic approach and applicability, as well as the clear
organization and hierarchy of strategies, based on the brand’s driver role. Nevertheless,
some authors have criticized the model arguing that firstly it suffers from a lock-in effect
and potential, and fails to capture the semiotic dynamics in between brands (Filipsson, 2008;
Uggla and Nyberg, 2014); secondly it focuses on brand relationships within the firm,
disregarding co-branding, i.e. it targets brand systems rather than brand portfolios
(Filipsson, 2008); thirdly, it is a static model that fails to capture the dynamics movement (or
brand migration process) along the brand portfolio spectrum (Filipsson, 2008); and, finally, it
assumes that brand architecture is predominantly influenced by a company’s intended
strategy (Dooley and Bowie, 2005). Despite its critics, it is worth noting that this framework
remains as the most complete one in the field of brand architecture. Afterwards, other
frameworks were developed (Riezebos, 2003; Strebinger, 2004; de Chernatony, 2010),
following fairly the same directions of the ones presented previously.
To conclude, although the above-mentioned brand architecture strategies allow brand
marketers to structure their brand portfolio in an organizing manner, it misses to detail the
process of redesigning the brand architecture in a given context. This lack of detail in terms of
the steps to implement in a company after auditing brands, entails interesting avenues of future Brand
research. In other words, it is crucial to fill the gap between academia and business by portfolio audit
developing strategic tools that allows brand marketers to both audit and revise brand
architectures to efficiently manage their brand portfolio. Consequently, this paper aims to
bridge this gap developing a new and dynamic framework to audit the brand portfolio and to
design brand architecture.

3. Method
Depicting from an extensive review on the brand audit and the brand architecture, we have
developed an integrated and dynamic approach to Brand Portfolio Audit and Brand
Architecture Strategy. The proposed framework combines “the Strategic Brand Consolidation
Process” (Aaker, 2004b), “the Brand-Portfolio Renewal Framework” (Hill et al., 2005), “the
Brand Portfolio Strategy” (Aaker, 2004a) and “the Brand Relationship Spectrum” (Aaker and
Joachimsthaler, 2000) models. Moreover, the criteria behind the choice of these models were:

their business-reality applicability;

acknowledgment and discussion among academic researchers;

comprehensive and user-friendly procedures; and

their potential for integration.

The order in which the framework should be applied respects the existing literature in the
case of the Brand Portfolio Audit [cf. Strategic Brand Consolidation Process (Aaker, 2004b)],
while it proposes a managerial way of implementation for the Brand Architecture part.
To implement and test the proposed framework, we have used a qualitative research
approach. A case study design was chosen as there is a lack of empirical research on
addressing the questions developed (Yin, 2009). The selected methodology follows an
abductive approach. The search for companies with multiple brands within the B2B and
B2C segment resulted in the selection of the three units of analysis, namely, DouroAzul,
Onebiz and Valente and Lopes. The three Portuguese companies were selected purposively
(Yin, 2009) as we had direct access to the companies¨ facilities, key informants and archives.
The new framework on brand portfolio and brand architecture strategy was initially
implemented and tested in DouroAzul between September 2014 and March 2015. DouroAzul is
a Portuguese company and the corporate brand of the Mystic Invest – SGPS group. At the time
of the audit, DouroAzul comprised a portfolio of nine service trademarks and other services,
which included river cruises, helicopter tours, river and city sightseeing tours, a theme park
and restaurant, and many other services linked to the tourism industry. The same framework
was later tested in two other Portuguese companies: Onebiz (the biggest service franchising
group in Portugal that owns 18 brands in different market segments) and Valente and Lopes (a
business to business company whose core business is industrial cover structures and that owns
9 brands in different market segments). The test was conducted in 2016 and 2017. In the next
sections, we present the theoretical framework followed by a detailed description and
discussion of the new and dynamic approach to brand portfolio audit and brand architecture
strategy based on the DouroAzul pilot case study.

3.1 Theoretical framework

Based on the literature reviewed and the gaps previously identified, a new framework was
proposed. Such framework, which aims to present a new and dynamic way to link the brand
portfolio audit and the brand architecture topics, is divided into these two main subjects,
namely, the “Brand Portfolio Audit” and the “Brand Architecture” (Figure 1).
EBR

Figure 1.
Theoretical
framework

The brand portfolio audit in our framework aims to assess the overall brand portfolio of
a certain company. Henceforth, the main goal is not to evaluate each brand individually,
but rather to prioritize brands within the portfolio, as well as make comparisons
between them.
To conduct the brand portfolio audit, a new Brand Audit Scorecard was created, which
aims to be a practical and simple tool to help practitioners as brand managers. Moreover, the
new Brand Audit Scorecard includes both supply and demand-side measures (Figure 2).
To achieve such goal and to complete the Brand Audit Scorecard designed, we conducted
a four-step brand portfolio audit which includes:
(1) relevant brand set;
(2) assessment criteria;
(3) brand evaluation; and
(4) brand prioritization.

The order and the criterious selected were adapted from Aaker (2004b) and Hill et al. (2005),
as follows.

3.2 Brand portfolio audit

3.2.1 Relevant brand set. The relevant brand set includes the brands to be evaluated and
prioritized within the company’s brand portfolio. Accordingly, criteria have to be
established in the first place to select those brands (e.g. sales contribution to the portfolio,
number of employees or launch year). Then, it is suggested that the auditor enumerates all
the brands, sub-brands and co-brands of the company starting, for instance, in the legal
department, and analyzes all the offer and communication of the company. The last stage of
this step consists in checking what brands respect the criteria defined in the first place,
therefore electing the relevant brand set.
3.2.2 Assessment criteria. The second step of the brand portfolio audit consists of the
definition of the criteria that should be analyzed to compare the brands listed in the
relevant brand set. According to the literature, brands should be examined from both
 Brand
portfolio audit

Figure 2.
Brand audit
scorecard

demand (Serota and Bhargava, 2010) and supply sides (Lederer and Hill, 2001), therefore
including three dimensions. Specifically:
(1) the brand equity, measuring the brands from a market perspective;
(2) the brand contribution to the overall portfolio; and
(3) the strategic options for each brand.

Henceforth, it is proposed that the auditor should firstly define the specific criteria within each
of these three dimensions, bearing in mind the brand portfolio characteristics, the available
data and the aim of the audit. Secondly, a weight should be attributed to each criterion,
considering its relative importance to the analysis, as well as the accuracy of the data used to
evaluate that criterion. Nevertheless, the weights are case-dependent and, therefore there is no
EBR ideal distribution. The weights given to these three dimensions, as well as to each criterion,
reflected both the number of topics under evaluation in each of them, and the company’s
management areas of focus, revealed during the interviews. Moreover, the sum of the weights
should preferably totalize 100 points to allow easier comparisons of the results.
3.2.3 Brand evaluation. The third step of the brand portfolio audit consists of the
evaluation of the relevant brand set in the criteria defined in the previous step. To achieve
this goal, diversified sources of data can be used, ranging from questionnaires, archives and
company’s databases, interviews, market research or even participant observation. Hence, to
fill the Brand Audit Scorecard, we propose that all the data collected from the multiple
sources should converted into a seven-point scale (or other suitable scale) aiming to quantify
the evaluation and to establish comparisons between the brands. Preferably, for the brand
equity dimension, market research should be used to capture the market perspective of the
brands being analyzed. However, when that is not possible, questionnaires to the brand
team and other internal staff can be used to the same end (Aaker, 2004b). Secondly, for the
brand contribution dimension, as it captures the internal perspective of brands, archives and
company databases are considered the best way to make such evaluation. Nonetheless, other
type of data can be used to evaluate criteria that do not have quantification in practice.
3.2.4 Brand prioritization. The last step of the brand portfolio audit consists of making
the weighted sum of all the scores of each brand, using each criterion’s weight and the score
of the given brand. Hence, the prioritization of the brands is the one that results from the
ranking of the weighted sum, i.e. the brand with the highest weighted sum is the top brand
in the prioritization, whilst the one with the lowest weighted sum represents the bottom
brand in the prioritization.

3.3 Brand architecture: from current to revised strategy

After performing a brand portfolio audit (first part of the proposed theoretical framework),
we further conducted a thoroughly analysis of the current brand architecture and the
development of a revised strategy for the portfolio (second part of the theoretical
framework). Regarding the sequence, dependence and interconnectivity of these two
theoretical framework parts, the step numeration highlights this integration as each step
part of a whole and holistic framework.
Consequently, four steps were implemented:
(1) brand portfolio;
(2) portfolio roles;
(3) brand architecture strategy; and
(4) portfolio structure.

3.3.1 Brand portfolio. Whilst the brand audit exercise is based on a relevant brand set,
defined using the criteria explained in this section, the brand architecture analysis and
review is based on the entire brand portfolio. As such, the brand portfolio should include the
brands owned, or not owned but managed, by the company and that matter in the consumer
buying-decision (Aaker, 2004a). In so doing, the brand portfolio may not include all the
brands of the company and, conversely, include external or co-brands. To define the brands
to include in its brand portfolio, the company should preferably designate a shared principle,
such as the industry or sector where it operates.
3.3.2 Portfolio roles. The definition of the portfolio roles is particularly useful from a
managerial point of view to plan an efficient allocation of resources, and to better
understand the brand portfolio’s composition. One possible approach is to classify the
portfolio brands as strategic brand, branded energizer, silver bullet brand, flanker brand or Brand
cash cow brand (Aaker, 2004a). Alternatively, the BCG Matrix methodology can be used portfolio audit
(Johnson et al., 2008), therefore classifying brands as a question mark, star, cash cow or dog,
depending on their relative market share and growth rate.
3.3.3 Brand architecture strategy. The aim of this step is twofold. The first one
comprises the analysis of the current brand architecture strategy, and the second one relates
to the revised brand architecture design. Hence, different brand architecture terminologies
can be adopted and the current brand architecture strategy should be examined using
diversified data sources (e.g. interviews, archives or participant observation) to get a deep
understanding on the organization and relationships of brands. In this investigation, we
followed the “Brand Relationship Spectrum” proposed by Aaker and Joachimsthaler (2000).
After having analyzed the current brand architecture of the portfolio, the auditor should
design the most adequate strategy for the brand portfolio.
3.3.4 Portfolio structure. The portfolio structure is the most visible part of the brand
architecture and represents the concretization of the strategy defined in the previous step.
To design the portfolio’s organization, the product-defining roles (Aaker, 2004a) should
firstly be identified. Then, the design itself can be made using brand networks or brand
hierarchy trees to represent all the brand interrelationships.

4. Results and implications

4.1 DouroAzul case study
DouroAzul brand portfolio included thirteen brands at the time of the brand audit:
DouroAzul (luxury river cruises in hotel-ships and yacht); Helitours (helicopter tours);
Caminho das Estrelas (space tourism); Mystic Cruises (international luxury river cruises in
hotel-ships); Welcome Tourist and Business Center; BlueBus (bus sightseeing tours);
BlueBoats (river sightseeing tours); DouroAzul – Agência de Viagens (travel agency –
business still to be launched); World of Discoveries (interactive museum and theme park);
Mundo de Sabores (theme restaurant of World of Discoveries); Trafaria Praia (artwork and
river sightseeing tours); Monumental Palace Hotel (luxury hotel – business still to be
launched); and Douro Marina Hotel (health tourism hotel – business still to be launched).

4.2 DouroAzul brand portfolio audit

4.2.1 Relevant brand set. Regarding DouroAzul as the pilot case of this paper, three
conditions were established to select the relevant brand set of DouroAzul. Firstly, it was
defined that brands needed to be owned or managed by the company itself; secondly, only
the brands currently in operation and communicated to the market by the company were
considered, leading to the exclusion of DouroAzul – Agência de Viagens, Monumental
Palace Hotel and Douro Marina Hotel; and thirdly, only brands with recorded sales in the
last year, at least, were considered, whereby Mystic Cruises, Welcome Tourist and Business
Center and Mundo de Sabores were disregarded. Consequently, after the application of these
three criteria, the relevant brand set included seven brands, namely, “DouroAzul”,
“Helitours”, “Caminho das Estrelas”, “BlueBus”, “BlueBoats”, “Trafaria Praia” and “World
of Discoveries”. Table II summarizes the main characteristics of these brands, all of them
owned by the company.
After applying the Brand Audit Scorecard to DouroAzul, it was shown that the relevant
brand set corresponds to the one previously defined by the brand auditors but differs among
informants.
4.2.2 Assessment criteria. In our pilot case study, nine interviews were carried out,
between January and February 2015, with high and mid-level managers of DouroAzul to
EBR DouroAzul
brand set Date Characteristics

DouroAzul 1996DouroAzul is a Luxury river cruises in hotel-ships and yacht. Besides the role of
corporate brand, also represents the most important brand and offer of the company
and is the anchor brand of the company, therefore having a master brand role.
Besides being the corporate brand of the portfolio, also played a master brand
role as it was also used to be the primary indicator of the offering in the river cruises
segment. In addition, DouroAzul included several brands below, namely BlueBus,
BlueBoats, Trafaria Praia, Welcome Tourist and Business Center and DouroAzul –
Agência de Viagens.
Helitours 2000 Helitours (Helicopter tours), despite having a master brand role and independent
communication, was often linked with DouroAzul brand due to its heritage in the
company and customer associations. Despite the company intention was to keep
this brand separate, it still used DouroAzul as an endorser most of the times.
Caminho das 2007 Caminho das Estrelas is the unique master brand within the Space tourism
Estrelas segment, and without any type of relationship with the corporate brand
DouroAzul as it is not in the same segment (Space versus Cruises). It is aimed at a
different target; it does not have any opportunity of cross-selling; and it does not
have opportunities of communication synergies. This brand acted independently
of the others and did not use any brand in its communication.
BlueBus and 2012 and BlueBus (Bus sightseeing tours) and BlueBoats (River sightseeing tours), which
BlueBoats 2013 played the same role in the portfolio. Both brands share the same target, have
complementary offers (bus sightseeing and river sightseeing), have the same
communication strategy and even the same management team. Nevertheless, no
synergies have been gained in terms of communication with these brands
because of its separation.
BlueBus and BlueBoats were frequently communicated with the DouroAzul
endorsement, either as “DouroAzul sightseeing” or “DouroAzul BlueBus”, for instance.
World of 2014 World of Discoveries (Interactive museum and theme park) was also an
Discoveries independent brand in the portfolio, playing a master brand role. However, due to
its recent launch and frequent association with DouroAzul by the media, it still
lacked some independence. Nonetheless, World of Discoveries is supposed to
have no relationship with DouroAzul even though that does not always happen.
Trafaria 2014 Trafaria Praia (Artwork and river sightseeing tours) is also a master brand with
Praia DouroAzul as an endorser. Contrarily to the previous brands, DouroAzul played
a small driver role in the communication of Trafaria Praia, by placing its logo on
the end of the communication materials, for instance.
Table II. Though not a brand per si, presents itself as a brand for the market and is
DouroAzul brand set considered a strategic brand as it represents the first footprint of the company in
characteristics a new market – Lisbon

identify the criteria to analyze the relevant brand set. Moreover, 100 points were distributed
among the three dimensions above mentioned bearing in mind the need for a greater internal
analysis of the portfolio, evidenced by the interviews’ data, alongside with the lack of market
and external information of the selected brands. Consequently, we attributed 25 points to the
brand equity dimension, 60 points to the brand contribution dimension, and the remaining 15
points to the strategic options dimension.
Moreover, for the brand equity dimension, which reflects the demand and market
assessment of brands, five criteria were identified. Specifically:
(1) awareness – if the brand is well known in the marketplace;
(2) reputation – if the brand is well regarded in the marketplace and if it has a high
perceived quality;
 (3) differentiation – if the brand has a point of differentiation and a personality; Brand
(4) relevance – if the brand is relevant to today’s customers and applications; and portfolio audit
(5) loyalty – if the customers are loyal to the brand, according to Aaker (2004b).

The weights attributed to these criteria were dependent on the informants’ intents and the
portfolio brands’ specificities.
Secondly, the brand contribution dimension represented the most important part of the
brand audit, since it was the focus of the analysis according to company informants’
intentions. Henceforth, it was divided into three categories, namely:
(1) business strength (40 points) – analysis of the financial and business performance
of the brands;
(2) hidden costs (10 points) – costs that do not explicitly affect the brands’ business
performance, but negatively influence the overall brand portfolio; and
(3) hidden benefits (10 points) – similar to the hidden costs, but that positively impact
the brand portfolio.

Within the business strength category, six different criteria were defined, both capturing the
current – brand traction, and prospective – brand momentum regarding previous research
(Hill et al., 2005), contribution of the brands to the portfolio. Specifically, it was used the sales
contribution, profit contribution, current growth, projected growth, market position and
projected market position (Aaker, 2004b; Hill et al., 2005). The weights attributed to each of
these six criteria were dependent on the accuracy of the data used, as well as its relative
importance to the analysis. Therefore, the highest weight was attributed to the sales
contribution criterion, contrarily to the projected market position. Similarly, for the hidden
costs’ category, three criteria were selected. Namely, senior management time sink, number
of employees and customers’ complaints (Hill et al., 2005). Finally, for the hidden benefits
category, other three criteria were defined. Specifically, network/partnerships, current cross-
selling options and potential cross-selling options (Hill et al., 2005). The weights were
attributed based on the relative importance of each criterion within its category to the
analysis, as in the previous dimension.
Thirdly, for the strategic options dimension, four criteria were defined, based on the prior
literature (Aaker, 2004b). Specifically:
(1) extendibility – if the brand could be extended to other products either as a master
brand or endorser;
(2) business fit – if the brand drives a business that strategically fits with the direction
of the company;
(3) brand equity transferability – if the brand equity could be transferred to another
brand in the portfolio by reducing the brand to a sub-brand or by developing a
descriptor; and
(4) potential to merge – if the brand could be aggregated with other brands in the
portfolio to form one brand (Aaker, 2004b).

In this specific case, the weights were distributed based on the strategic options that the
company was considering at the time of the audit. Hence, the extendibility and business fit
received the highest weights.
Moreover, regarding the assessment criteria, the results demonstrate that most of
informants have chosen measures that combine both demand and supply side perspectives
EBR (Table III). Nevertheless, informants overall have chosen the supply side measures firstly
and only afterwards the demand side ones, which indicates a certain bias towards internal
analysis of brands. Therefore, greater emphasis was placed in the supply-side measures on
the Brand Audit Scorecard, by attributing them higher scores. Additionally, awareness
(demand side) and sales (supply side) were the most cited criteria by the informants. Such
results reveal that internal staff score highly on these two measures, which leads us to
conclude that the greater the awareness and sales of a certain brand, the stronger its position
in the Brand Audit Scorecard (Table IV).
Overall, the results of the Brand Portfolio Audit highlight that DouroAzul is undoubtedly
the most important brand in the portfolio in all the three audited dimensions, i.e. brand
equity, brand contribution and strategic options.
For the brand equity dimension, as the brands in analysis are mainly one-shot
experiences, the loyalty is relatively a minor source of brand equity, when compared to
brand awareness. Thus, seven points were attributed to brand awareness, contrarily to the
loyalty criterion, weighting four points.
4.2.3 Brand evaluation. Regarding the DouroAzul pilot case study, questionnaires were
handed out to 34 employees ranging from strategic (n = 4) to intermediate (n = 14), and
operational levels (n = 16). The self-administered questionnaires were delivered by hand to
each respondent and collected during January 2015. A seven-point scale was used to evaluate
the brand equity dimension so that no conversion was necessary to fill in the Brand Audit
Scorecard. Nevertheless, due to the lack of knowledge of several respondents, expressed during
the interviews, as well as the deeper knowledge of the research in what respects to the relevant
brand set under analysis, the final scores (Si,w) resulted from a weighted average between
respondents’ score (SQi,w) and the researcher’s score (SRi,w), where i represents the criterion
(i = 1, . . . , 5) and w represents the brand (w = 1, . . . , 7), as such:
X34
SQi;w
Si;w ¼ 0:5  1
þ 0:5  SRi;w
34

Additionally, for the brand contribution dimension, interviews, questionnaires and archival
secondary data was collected to evaluate the business strength category from group annual
reports; internal financial databases; group’s organizational chart; corporate and brand
brochures; corporate presentations; magazines and newspapers with company and brands’
information; and websites and social media webpages. All the data was collected directly
from the source, therefore ensuring its validity and accuracy (Filipsson, 2008). More

Informant Demand side Supply side

1. CEO and President Awareness N.A.

2. COO and Vice-President Awareness Brand contribution
3. CFO and Vice-President N.A Sales; Brand contribution
4. Strategic Advisor N.A Sales; Potential sales
5. Marketing and Communication Market position; Customer Financial situation; Growth
Director perception potential
6. Human Resources Director N.A Sales; Growth potential
Table III. 7. Sales Director Customer perception Sales; Profitability
Informants’ 8. Brand Manager Awareness Profitability
assessment criteria 9. Brand Manager Awareness N.A
 Brand score (1-7)
Brand
Douro World of Blue Blue Trafaria Caminho portfolio audit
Assessment criteria Weight Azul Discoveries Boats Bus Helitours Praia das Estrelas

Brand equity 25 138 118 71 67 84 78 60

Awareness 7 6 4 3 3 3 2 1
Reputation 5 6 5 3 3 3 4 3
Differentiation 4 5 6 3 2 4 4 5
Relevance 5 6 5 3 3 4 4 2
Loyalty 4 4 4 2 2 3 2 2
Brand contribution 60 347 171 171 159 123 121 89
Business strength
Sales contribution 10 7 1 1 1 1 1 1
Profit contribution 9 7 1 1 1 1 1 1
Current growth 7 5 4 7 5 1 4 1
Projected growth 6 2 4 4 3 3 3 5
Current market position 5 7 5 3 3 4 3 1
Projected market position 3 7 6 3 3 4 3 2
Hidden costs
Senior management time sink 2 5 2 1 1 1 1 1
Number of employees 5 7 3 2 2 1 2 1
Customer complaints 3 4 2 3 3 5 1 1
Hidden benefits
Network/partnerships 2 7 3 5 5 2 2 2
Current cross-selling options 3 5 2 3 4 2 1 1
Potential cross-selling options 5 5 4 3 4 3 2 1
Strategic options 15 92 51 57 57 48 35 44
Extendibility 5 6 3 2 3 3 1 4
Business fit 5 7 5 5 4 4 3 2
Band equity transferability 2 6 4 2 2 2 3 4 Table IV.
Potential to merge 3 5 1 6 6 3 3 2 Douro Azul brand
Total sum 100 577 340 299 283 255 234 193 portfolio audit
Brand prioritization – 1 2 3 4 5 6 7 scorecard

specifically, it was used the average of the share of sales of each brand in the total amount of
sales of the relevant brand set of the last three years (2012, 2013 and 2014) to analyze the
sales contribution. Similarly, the profit contribution only differed from the sales contribution
by using the EBITDA instead of the sales volumes. The current growth was analyzed using
the sales Compound Annual Growth Rate (CAGR) from 2012 to 2014. Likewise, the projected
growth used the sales CAGR from 2014 to 2016. The current market position was measured
using the average relative market share of each brand in the market between 2012 and 2014,
while the projected market position used the expected relative market share for the coming
three years as well. All the values were directly collected from the Management Control
Department of the company to assure their accuracy. Moreover, the conversion of the values
of the business strength category to the seven-point scale was made as follows: for the sales
and profit contribution, the brand with the highest contribution scored 7 and the other
brands scored in the proportion of the highest contribution; for the remaining four criteria,
score scales were created, as it is shown in Table V. In relation to the hidden costs’ category,
the senior management time sink corresponds to the estimated percentage of the time spent
by the Executive Board of the company with each brand. Its conversion was made in the
EBR same proportion of the original data (e.g. 7 points is equivalent to 100 per cent). The number
of employees was measured using the average annual number of employees of each brand,
which data was collected from the Human Resources department. Therefore, its conversion
was made in relation to the highest number of employees, as with the sales contribution.
Finally, the customer complaints were measured by the estimated amount of complaints the
company received, collected from the Legal and Marketing departments of DouroAzul.
Thirdly, regarding the hidden benefits category, the network/partnerships were
measured by the number of partnerships, whether commercial or not, of each brand. Its
conversion was made in the proportion of the highest value recorded, as with the sales
contribution. Additionally, the current cross-selling options were captured by the number of
combined products and services each brand had with the other brands within the portfolio.
Likewise, for the potential cross-selling options, an estimation was made based on the
possible combined products and services each brand could have with the other portfolio
brands. These last two criteria were scored using the seven-point scale, directly defined by
the marketing director of the company. Finally, for the strategic options dimension,
interviews were used to get mid and top-management insights regarding the brands’
strategic options, which were then translated to the seven-point scale.
Finally, for the strategic options dimension, interviews and direct observation are
considered the most effective way to evaluate the criteria as they are more subjective and
strategic than the previous ones and usually imply top management decisions.
4.2.4 Brand prioritization. It is worth noting that none of the remaining audited
brands achieved a top position in all the three dimensions as DouroAzul. Consequently,
this brand can be considered as the anchor brand of the portfolio as it drives and
represents the overall offering of the group with a huge difference from the second
brand, i.e. World of Discoveries. This position might be justified by the brand heritage
and history as the oldest of the portfolio, as well as the strong awareness created by
positive brand associations to international celebrities such as Michael Bolton, Sharon
Stone and Andie MacDowell, strongly reported by the national and international media.
Additionally, DouroAzul is the market leader within its segment (i.e. 80 per cent of
market share, sustained over the time) and its sales account for more than 95 per cent of
the portfolio revenues. Furthermore, when comparing the brands’ rankings in the brand
equity and brand contribution dimensions (Table VI), results demonstrate that the
brand equity of DouroAzul, World of Discoveries and Caminho das Estrelas was
converted in the same proportion to their contribution to the portfolio. On the other
hand, BlueBus and BlueBoats show brand contribution rankings higher that brand
equity rankings. In other words, these brands with a lower brand equity than the other
audited brands, present higher contributions for the portfolio, therefore revealing a
great brand potential, which can also be undertaken by the ranking achieved in the

Score Sales growth (%) Relative market share

1 <0 <0.2
2 [0; 10] [0.2; 0.4]
3 [10; 20] [0.4; 0.7]
4 [20; 35] [0.7; 1]
Table V. 5 [35; 50] [1; 1.5]
Growth and market 6 [50; 80] [1.5; 2]
position score scales 7 >80 >2
strategic options dimensions (2 out of 7). Conversely, Helitours and Trafaria Praia have Brand
brand equity rankings higher than brand contribution rankings. In such case, the portfolio audit
investment in those brands is not being converted into proportional brand contribution
for the overall portfolio, i.e. even with higher brand equity than the other brands,
Helitours and Trafaria Praia are not delivering higher contributions, which is also
reflected in these brands’ weak positions in terms of strategic options (5 and 7 out of 7,
respectively).
One other important aspect to highlight in the brand audit process is the positive
relationship between the business fit, the awareness, the brand contribution, and the final
ranking of the brands. Apparently, there is a strong relationship between these variables, i.e.
the brands with the highest business fit score are the ones with higher awareness scores,
with higher brand contribution scores and with higher final rankings. One possible
explanation is that the higher the brands’ business fit with the portfolio, the more financial
and marketing resources they will get from top management. Therefore, brands with higher
investments will benefit from upper brand awareness levels, which leads to higher brand
contribution scores and upper prioritizations in the Brand Audit Scorecard.
Concerning the questionnaire respondents’ perception about the brands’ prioritization
within the portfolio, the results show that 100 per cent of the respondents confirm the top
position of DouroAzul, whereas 62 per cent agree with World of Discoveries prioritization,
therefore confirming the results of the brand portfolio audit (Table VII). Nevertheless, the
results demonstrate that 44 per cent of the respondents would rather select BlueBus as the
most relevant brand within the portfolio, instead of BlueBoats, as resulted in the Brand
Audit Scorecard. This inconsistency may be justified by the fact that the company staff is
underestimating BlueBoats’ brand potential, as they do not consider that brand a top
priority within the portfolio, whilst the Brand Audit Scorecard concludes that that brand is
the third most important. As a result, this misperception may impact the investment of the
company in this brand, in terms of communication and/or cross-selling.

World of Trafaria Caminho

Dimension DouroAzul Discoveries BlueBoats BlueBus Helitours Praia das Estrelas

Brand equity 1 2 5 6 3 4 7
Brand contribution 1 2 2 4 5 6 7 Table VI.
Strategic options 1 4 2 2 5 7 6 Brand audit ranking
Brand prioritization 1 2 3 4 5 6 7 by dimension

Brand Top 1[1] Top 2[2] Top 3[3]

DouroAzul 34 0 0
World of discoveries 0 21 10
BlueBus 0 6 15
Helitours 0 3 6
BlueBoats 0 2 1
Trafaria Praia 0 1 1
Caminho das Estrelas 0 0 0 Table VII.
N.A. 0 1 1 Respondents’ brand
Total 34 33 33 prioritization
EBR 4.3 DouroAzul brand architecture redesign
4.3.1 Brand portfolio. Hence, in the pilot case study, the tourism sector was the elected
principle used to select brands of DouroAzul. In the next phase, the overall portfolio was
segmented according to the brands’ market channel, target, type of service/product, or other
suitable criterion to cluster the brands (Aaker, 2004a). Consequently, five segments were
identified for the first time, specifically the Cruises segment (DouroAzul and Mystic
Cruises); the Sightseeing segment (BlueBus, BlueBoats, Helitours and Trafaria Praia); the
Attractions segment (World of Discoveries, Mundo de Sabores and the Welcome Tourist
and Business Center); the Space segment (Caminho das Estrelas); and the Hotels segment
(Monumental Palace Hotel and Douro Marina Hotel). Moreover, it should be stressed that the
DouroAzul – Agência de Viagens brand was not included in none of these segments as this
brand’s offer is transversal to the five segments. Moreover, colors were attributed to each of
those segments to clearly understand which brands belong to each segment. As such, Gold
for “Cruises”, light blue for “Sightseeing”, dark blue for “Attractions”, brown for “Space”,
and orange for “hotels”.
4.3.2 Portfolio roles. In this pilot case study, the BCG Matrix was applied to understand
the brands’ role and positioning within the portfolio. However, in addition to the traditional
methodology, another dimension was included, i.e. the sales’ volume of each brand,
represented by the bubbles’ size in the matrix (Figure 3). The data used to complete the BCG
Matrix was collected directly from archives of the Management Control department of the
company. Following the BCG Matrix analysis, it was possible to categorize brands in the
four dimensions, i.e. DouroAzul (Star brand), BlueBus and BlueBoats (Question Mark
brands), World of Discoveries (Cash Cow brand), and finally Trafaria Praia, Helitours, and
Caminho das Estrelas (Dog brands) (Figure 3).
These classifications show that DouroAzul has a diversified brand portfolio, with a
strong and powerful brand, DouroAzul, which drives the business of the company and other
brands that entail growth potential.
4.3.3 Brand archuitecture strategy. For the analysis of the current DouroAzul brand
architecture, multisource data analysis was used. In fact, as the company did not have any
formal structure of its portfolio, participant observation was the most effective way to
understand the brand architecture employed by the company. Additionally, archives
(including organizational chart, brands’ brochures, press releases and other communication
materials) were also crucial to understand the brand communication strategy used by the
company.

130%
BlueBoats
100%
DouroAzul
70%
BlueBus
Market Growth

40%

10%
World of Trafaria Praia
–20% Helitours
Discoveries
–50%

–80%
Figure 3.
BCG Matrix of the –110%
DouroAzul brand –140%
portfolio (2012-2014) 10 1 0
Relative Market Share
To redesign the brand architecture of DouroAzul, interviews were used to analyze the staff Brand
perception on the ideal brand portfolio organization and brands’ relationships. portfolio audit
Consequently, different logos were shown to informants, including the ones of the existent
brands (logos B, D, F, I, J, K, L, M and S), of future brands or projects (logos P, R and H), of an
extinct brand (logo A), of companies that did not represent brands (logos C, N, O and Q) and
of external brands (logos E and G). All the logos were mixed aiming to understand whether
informants could easily define what brands should be included in the portfolio. Afterwards,
informants were asked to design the ideal portfolio structure using those logos, and thus
establishing the brand interrelationships.
The results of interviews, questionnaires and participant observation reflect the internal
disagreement on the current brand architecture employed by DouroAzul which mainly due
to the inexistence of a clear and well-defined brand architecture. Furthermore, when
informants were asked to map the ideal brand hierarchy of the company using the brands’
logos, some of them did not recognize some of the logos or included an extinct brand instead
in the brand. informants were asked to map the ideal brand hierarchy of the company using
the brands’ logos. Nevertheless, some informants did not recognize some of the logos or
included an extinct brand instead in the brand portfolio. It is worth noting that the company
used a hybrid brand architecture strategy with different approaches depending on the type
of brand. Nevertheless, the predominant brand architecture strategy of DouroAzul is the
House of Brands strategy (Aaker and Joachimsthaler, 2000), once different designations are
used to different products or services and the link between them and the corporate brand is
barely inexistent. Furthermore, it should be stressed that the strategies pursued by the
company to brand a new product or service were never planned and never bear in the
advantages or disadvantages of a specific brand architecture strategy.
4.3.4 Portfolio structure. In the DouroAzul case study, it was used the brand hierarchy
tree methodology as it allows a better and easier understanding of the relationships between
the corporate brand, brands and products.
Following these results, the auditor has proposed a revised brand architecture for the
DouroAzul brand portfolio, which is presented in Figure 4. Firstly, it was proposed that
DouroAzul should remain as the corporate brand, both internally and externally. This
proposal is highly supported with the results of the brand portfolio audit, where DouroAzul
recorded the highest scores in all the three audited dimensions. Therefore, this brand should
be leveraged and understood as the corporate brand of the portfolio, although different
architecture strategies might be applied for the specific master brands below it, ranging
from a completely not connected role to an endorser, or even a sub-brand role. Secondly, five
different segments were designed, i.e. Space, Cruises, Hotels, Sightseeing and Attractions.
Nevertheless, DouroAzul – Agência de Viagens remained separate from these segments, as
its offer is transversal to the five segments. Finally, considering each brand in particular and
the relationships between them and the corporate brand, several strategies were proposed as
follows: master brand as driver strategy (DouroAzul – Agência de Viagens), House of
Brands – Not Connected (Caminho das Estrelas, Monumental Palace Hotel, Douro Marina
Hotel, and World of Discoveries), House of Brands – Shadow Endorser (Mystic Cruises,
BlueTours, Helitours, Endorsed Brands – Strong Endorsement (Trafaria Praia and Mundo
dos Sabores) and finally Endorsed Brands – Token Endorsement (Welcome Tourist and
Business Center).

4.4 Case studies Onebiz and Valente & Lopes

The same framework was later tested in two other Portuguese companies: Onebiz (a B2C
and a B2B franchising group that owns 18 brands in different market segments) and Valente
EBR

Figure 4.
Revised DouroAzul
brand hierarchy tree
and Lopes (a B2B company that owns nine brands in different market segments). The Brand
results confirm that the framework can be applied to different contexts. portfolio audit
In all these companies, the results allowed to reinforce and leverage the relationship
between the brands of the same portfolio which validates the proposed framework, for
both product and service company context. Moreover, it has enabled the companies to
obtain an adequate and clearly strategy vis-à-vis the market, its competitors and its
customers.
In all companies, it was possible to conclude that previously this dynamic and integrated
framework application, the brand architecture of the companies was undefined, unclear,
with a bias in the roles of brands and relationships, evidencing a brand equity dilution.
Starting with the conclusions achieved by the brand portfolio audit, it was possible to
conclude that even the top and mid-level management staff of the companies did not have a
full understanding of the composition of the company’s brand portfolio, nor on the complete
offer range of the company due to the lack of strategy and definition when brands were
launched. Additionally, to the same sources of secondary data (group annual reports;
internal financial databases; group’s organizational chart; corporate and brand
brochures; corporate presentations; magazines and newspapers with company and
brands¨ information; and websites and social media webpages), primary sources were
equal explored for all these companies, such as interviews, questionnaires and
participant observation. For all these companies, we have observed a lack of consistency
among different informants. For example, not all the informants know what brands
should be included in the company’s brand portfolio. Hence, regarding the audit process
itself, the results showed that the demand and supply criteria analysis, namely sales and
profits, but also awareness and reputation, are given balanced importance for all the
companies.
Consequently, although there are authors that in their approaches essentially name
financial criteria, such as Kumar (2003) and Hill et al. (2005), the framework adopted in these
companies was the inclusion and integration of three types of domains: brand value, brand
contribution and strategic options. For all these companies, a new revised brand architecture
was proposed. This new brand architecture has positive implications for the management of
the Onebiz Group and Valente and Lopes as previously, for the DouroAzul group, as it
allows to rationalize brands of a multi-brand portfolio, which provides the allocation of
greater efforts and resources for the key brands, to leveraging the strategies created and
providing greater synergies across the portfolio. Consequently, it was possible to clarify the
image and organizational structure of all the companies vis-à-vis its internal and external
audiences, enabling them to obtain benefits that extend not only to one brand but also to the
whole group.
Finally, one should also bear in mind that both the criteria and weights which were used
in the DouroAzul case study are case-dependent and, therefore, the Brand Audit Scorecard
should be understood as a flexible and dynamic framework, rather than a standard or rigid
tool. So, for all the three companies, it was different the number of inquiries and interviews
realized according to the different contexts. Moreover, the relevant brand set criteria level
was adapted to each context. For example, regarding the Onebiz group, only brands with at
least 25 per cent of share capital in the group were selected to integrate the relevant brand
set.
The balance of similar vs. different points among the new framework across all these
three companies’ groups enhances the validation of the proposal framework for different
companies and contexts.
EBR 5. Discussion and managerial implications
The highly competitive arena in which brands are striving to stay innovative and agile
implies that brand marketers are able to audit the brands at a regular basis and redesign
companýs brand architecture to manage their brand portfolio effectively (Laforet, 2017;
Nguyen et al., 2018; Åsberg, 2018). Extant research has been conducted in the field of brand
portfolio and several methodologies have been proposed to assess it (Lederer and Hill, 2001;
Kumar, 2003; Aaker, 2004a, 2004b; Hill et al., 2005; Rajagopal, 2008). Nevertheless, most of
the studies on brand audits are merely theoretical and focus on the categorisation of brands
and its interrelationships. In other words, existent literature on brand portfolio audits does
not present any application of the methodologies proposed to real business case studies,
neither it shows evidence on their implications in practice. Additionally, the existing studies
do not propose diagnosis tools that allow brand auditors to conduct a comprehensive,
systematic, independent and periodic examination of the brand as proposed by Baumgarth
et al. (2016). Indeed, previous brand audit frameworks are not detailed and present different
ways to assess brand portfolios according to the multiple brand definitions, complementing
each other. Another important aspect to stress is that those methodologies neglect the
growing need to combine the supply-side and demand-side measures of brands. This dual
assessment is crucial especially considering that scholars suggest that a successful brand
portfolio strategy should be aligned with the business objectives (Uggla, 2015) and with the
consumers’ perceptions (Nguyen et al., 2018; Åsberg, 2018). Consequently, there is a growing
call for a detailed and updated framework for brand auditors to assess brand in a regular
basis and facilitate the process of retain-or-discard brand decisions (Shah, 2015, 2017).
Apart from diagnosing the current brand portfolio situation and the identification of
problems and issues to be addressed (Aaker, 2004b; Hill et al., 2005), it is also relevant to
recommend a plan of action that leads to brand performance (Baumgarth et al., 2016).
Extensive research has been conducted in the field of brand architecture and several brand
architecture strategies have been proposed to allow brand marketers to structure their brand
portfolio (Olins, 1989; Laforet and Saunders, 1994; Aaker and Joachimsthaler, 2000;
Kapferer, 2008; de Chernatony, 2010). Nevertheless, all the proposed frameworks miss to
describe thoroughly the steps to redesign brand architectures after a brand audit has been
conducted in a given context.
Hence, one of the most important contributions of our paper concerns the creation of a
dynamic and holistic approach to Brand Portfolio Audit and Brand Architecture Strategy
that combines four steps in the brand portfolio audit (relevant brand set, assessment criteria,
brand evaluation and brand priorisation) with four steps in the brand architecture redesign
process (brand portfolio, portfolio roles, brand architecture strategy and portfolio structure).
All of the eight steps are thoroughly detailed to guide practitioners when auditing a specific
brand portfolio and designing a revised brand architecture strategy. Additionally, a Brand
Audit Scorecard was developed to enable and sustain brand portfolio audits, divided into
three dimensions (brand equity, brand contribution and strategic options).
Finally, our framework has been applied and tested in three B2B and B2C companies,
thus addressing the need to test theoretical frameworks in real business settings. The results
demonstrate that proposed framework is applicable to different types of companies in terms
of size and sector. Moreover, the proposed framework is flexible as it allows the brand
auditor to define the criteria and weights according to the characteristics of the audited
companies. An important implication of our study for practice is that brand auditors can use
a tool which is not static, as it combines two dimensions (brand auditing and brand
architecture) which were previously addressed separately by scholars. Specifically, the
proposed framework allows brand auditors to assess their brand portfolio more
strategically, as they can rely on a holistic and dynamic assessment of the company’s brand Brand
portfolio. Inevitably, it allows the companies to audit brands using comprehensive and portfolio audit
strategic tools that allow brand marketers to make effective decisions for companies to be
agile, competitive and innovative.

6. Limitations and further research

Being one of the first studies to propose a holistic and dynamic framework in the field of
brand audit and brand architecture, our study bears some limitations. Firstly, the proposed
framework has only been applied and tested in three companies, two in the B2B segment
and one in the B2C segment. In this regard, the future research should aim to test the
proposed framework in different segments, such as fast-moving consumer goods, luxury,
retailing, industry, among many others. Testing the proposed framework in several
segments will allow scholars to validate all the steps proposed and/or the need to include
additional steps. Moreover, it could also identify the need to develop complementary tools
alike the Brand Audit Scorecard that might assist brand auditors in the process of auditing
and redesigning brand architectures. Secondly, the study was conducted in Portugal which
might create some bias in terms of generalization of the proposed framework. Hence,
additional empirical studies are required in different cultural settings. Another perspective
that might be of interest to both scholars and practitioners is to conduct a qualitative study
to gather insights of the benefits and difficulties that the proposed framework entails in real
business settings. Lastly, it might be interesting to conduct a longitudinal study to evaluate
if the measures undertaken after the brand audit and brand architecture redesign, using the
proposed tool, resulted in increased brand performance.

Notes
1. Number of respondents who selected a certain brand as Top 1 in the portfolio.
2. Number of respondents who selected a certain brand as Top 2 in the portfolio.
3. Number of respondents who selected a certain brand as Top 3 in the portfolio.

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Corresponding author
Amélia Brandão can be contacted at: ameliabrandao@fep.up.pt

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