Brand portfolio analysis involves a four-step process. When Procter & Gamble (P&G) ?sold two of its European toothpaste brands to Unilever in 2019, ?it was doing which of the following?
a. Pruning the portfolio
b. Growing core brands
c. Liquidating brands
d. Milking brands
The Correct Answer and Explanation is :
The correct answer is:
a. Pruning the portfolio
Explanation:
Brand portfolio analysis is a strategic process that helps companies manage their collection of brands to maximize profitability and market effectiveness. It generally involves four key steps: evaluating brand performance, deciding which brands to keep or divest, allocating resources efficiently, and ensuring brand alignment with business objectives.
In 2019, Procter & Gamble (P&G) sold two of its European toothpaste brands to Unilever. This action aligns with the strategy of pruning the portfolio, which refers to the process of eliminating underperforming, non-core, or redundant brands to focus on stronger, more profitable ones.
P&G is a global consumer goods giant with a vast portfolio of brands, including well-known oral care products like Crest and Oral-B. Selling off smaller or regional toothpaste brands allows P&G to concentrate on its core, high-growth brands and improve overall efficiency. Pruning a portfolio is a common practice for companies aiming to streamline operations, reduce complexity, and ensure that resources are directed toward brands with the highest potential for market leadership.
Why Not the Other Options?
- b. Growing core brands: While pruning the portfolio can indirectly support core brands, the act of selling brands itself is more about streamlining rather than expansion.
- c. Liquidating brands: Liquidation implies shutting down a brand entirely rather than selling it to another company. Since Unilever acquired the brands, this was not a liquidation.
- d. Milking brands: Milking (or harvesting) brands refers to reducing investment in a brand while still profiting from it. Selling a brand is a more definitive action than merely milking it.
Thus, P&G’s decision to sell the toothpaste brands to Unilever in 2019 represents pruning the portfolio, allowing the company to focus on its strongest and most profitable brands.