Pruning brands.

Unilever is not the only company to have embarked on a brand rationalisation program as the key to growth, but it is certainly the best known. Behind this critical strategic issue, often ignored by marketers, is the knowledge that most of a company's brands are either unprofitable or only marginally profitable. The 80-20 rule may even be overly generous in suggesting 20% of brands are the key brands. As well as facing up to this unpleasant reality, strategies are needed to delete brands without alienating customers.

The first step in any brand rationalisation program is to determine which brands are profitable and in which markets. Senior executives will have to …