In 1999, Proctor and Gamble, the prototypical House of Brands, decided to shake up its portfolio. It chose a leading brand wherever it had similar products (it has more than 250 brands), then enhanced those chosen brands with line extensions and sold off the also-rans.

Thats why you can now find Tide -- selected as the leading detergent brand -- in multiple variations. Oxydol, on the other hand, has been a bit harder to find since it was sold.

Brand managers the world over took notice. P&G is credited with inventing the discipline of brand management, and whatever the company does is widely, perhaps reflexively, copied. Its strategy seemed to make sense: It is much more efficient and less expensive to focus on one brand than on multiple brands.

Interestingly, even if companies didnt have multiple brands to consolidate, they nonetheless embraced the concept of brand expansion. In fact, it became conventional wisdom that, given the choice, it was preferable to extend an existing brand rather than launch a new one.

But, recently, Ive noticed a few deviations from this conventional wisdom, at least among travel-related companies. And the reasoning behind this apparent shift in the brandscape may have as big an impact as the P&G branding revolution.

P&Gs thinking about line expansion can be seen in the trend of luxury fashion brands moving into the hotel industry. Bulgari, Armani, Versace and Missoni have launched hotels as extensions of their style brands.

But a prime example of the new brandscape thinking is also in this sector. The most successful among the fashion-house hoteliers is arguably the Salvatore Ferragamo Group. If youre not familiar with the Ferragamo hotels, it may be because they arent branded with the name Ferragamo.

Ferragamo makes no secret that it created and manages the five hotels branded Lungarno (two more are under construction), but it is not keen to promote the connection. In fact, none of the hotels even has a Ferragamo boutique on premises.

We look for operational synergies with the rest of Ferragamo, but our goals are different from the other style houses that are opening hotels, Lungarnos CEO, Fabrizio Gaggio, told me. They thought, How do we expand our brand? We thought, How do we diversify? We wanted a new business, a new asset.

When you stretch a brand, you risk blurring it, he said. We knew using Ferragamo would have given us a quick start, but we asked ourselves, What would it really mean to guests for a hotel to be a Ferragamo hotel? A hotels identity is unique, influenced primarily by location.

A different path to a similar branding conclusion occurred at the consumer publishing house Conde Nast. Its travel Web site launched in 1999, not as, but as

Initially, it was a placeholder name because the site contained information from Fodors, which we also owned, and Conde Nast Traveler, said Jamie Pallot, editorial director of CondeNet, the division that runs the publishing groups Web sites.

Last month, CondeNet relaunched its travel Web site with a new look, new feel and a new editorial direction. With Fodors no longer a consideration, P&Gs approach would hold that here was an opportunity to rebrand the site as

But CondeNet had discovered along the way that with it had built a brand that has its own distinctive audience.

Theres only 20% overlap between print readers of Conde Nast Traveler and users of, Pallot said.

In other words, Conde Nast now has a new audience to sell to online advertisers.

Though brand diversification and brand consolidation seem to be polar opposites, theyre perhaps better thought of as different points on the continuum of a companys life cycle. Brand consolidation increases profits through thoughtful cutting. Brand diversification increases profits through thoughtful additions.

The only companies that are truly likely to make the wrong branding decisions are those who conclude that one or the other of these philosophies holds the Ultimate Truth, and that brandscapes do not evolve.


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