Goodbye Seems to be the Hardest Word: Investigating Why, When, and How to Delete Brands

Branding dates back to centuries ago when traders were trying to distinguish their products from others in order to promise a higher quality to their consumers. Today, brands are considered as intangible resources that can have a significant contribution to the firm performance. Based on the Resource-Based Theory (RBT), valuable, rare, inimitable, and non-substitutable brands are strategic resources that create superior value and play a key role in achieving a sustainable competitive advantage over rivals. In the process of developing and maintaining strong brands, brand managers constantly need to make multiple decisions. Whether to add, delete or retail brands are among the routine decisions that brand managers face in managing their brand portfolios. Brand managers need to regularly assess their brand portfolios in order to make sure they are not selling redundant brands. Through brand portfolio assessment, brand managers can recognize weak brands and delete the unprofitable brands from the portfolio in order to free up resources and reinvest them in their stronger and more successful brands to gain competitive advantage in the market. This admonition is in line with the RBT of competitive advantage. This dissertation builds upon and extends previous literature on RBT in the context of brand deletion to achieve three main objectives. The first objective is to find the answer to why companies decide to delete brands from their portfolios. Thus, the focus of the first objective is to identify the organizational (i.e., firm, managerial, and brand) factors that drive the brand deletion strategy in a company. The second goal is to find the answer to the when question through identifying the environmental (i.e., market) factors associated with brand deletion decision making in a company. Finally, the third objective is to go deeper and investigate the different types of brand deletion strategy (i.e., merge, sell, milk, and kill). In other words, the third objective seeks to find the answer to the how question. Deleting brands from the portfolio of a company, being the most sensitive issue in strategic brand portfolio management, is yet understudied in the brand portfolio management literature. This study adds to the literature of strategic brand portfolio management by a) applying the Resource-based Theory (RBT) in the context of brand deletion decision making and b) empirically testing the relationships among the drivers of brand deletion strategies. The findings of this dissertation provide a better understanding on how each of these factors are associated with the brand deletion decision making process in companies. The current dissertation provides practitioners with several managerial insights as well. First, the study identifies and empirically tests several organizational-level factors that drive brand deletion decisions in companies. This will help brand managers be familiar with factors that they need to consider when evaluating their poor-performing brands. Breaking these factors into internal (brand and firm) and external (market) drivers provides practitioners with a better understanding of the brand deletion decision making process. In addition, the findings of this study help managers realize their own role (in terms of their attitude toward deletion and their commitment to the brand) in the brand deletion process. Finally, the identification and discussion of the four types of brand deletion strategy help companies have a clearer picture of how they can remove brands from their portfolios.