REVITALIZING BRANDS

Akash C.MathapatiAsst Professor – Marketing Area

Kirloskar Institute of Advanced Management Studiesakashcm@gmail.com

REVITALIZING THE BRAND

• In virtually every product category, there are examples of once prominent brands that have fallen on hard times and in some cases even completely disappeared.

• Some of these Brands manage to turnaround and come back – --- Readers Digest, Kelvinator, Cuticura

• Brands sometime have to return to their roots to recapture its lost source of brand equity. Akash C.Mathapati

REVITALIZING THE BRAND

• Reversing a fading brand’s fortunes require either recapturing the lost sources of brand equity or bringing in new sources of brand equity.

• Brand on the comeback trail needs revolutionary changes rather than evolutionary changes.

• Brands most likely to respond to revitalization efforts are those that have clear and relevant values that have been left dormant for a long time.

• They still have lot of Brand equity left in them.Akash C.Mathapati

REVITALIZING THE BRAND

• Revitalizing - deals with such brands which are old but if redirected may have plenty of life.

• This can be substantially less costly and risky than introducing a new brand.

• Seven Avenues for Brand Revitalization.

BrandRevitalization

1. Increasing Usage

2. Finding new uses

3. Entering new markets

4. Repositioning

5. Augmenting the Product/services

6. Obsoleting Existing Products

7. Extending the BrandAkash C.Mathapati

Increasing the Frequency of Use

• Reminder Communications• Position for frequent / regular use (clinic

shampoo)• Make the use easier (Araldite)• Provide Incentives (frequent flier plans)• Address any undesirable consequences

attached with frequent use.• Use at Different Occasions / Locations

(Coffee, Cola instead of Coffee/tea; soft drinks at home)

Akash C.Mathapati

Increasing The Quantity Used• Insurance customer reminded to cover

more items (household). • Positive associations with use (Frito-Lay

“You just can’t eat one”).• Incentives can be used to increase the

quantity used / bought (quantity discounts)

• Communication efforts to change attitudes related to usage quantity.

2.Finding New Uses: Milkmaid. Arm & Hammer Baking Soda (to deodorizer).Akash C.Mathapati

3.Entering New Markets• The target market for a particular

brand may not comprise of all the market segments.

• If firm may not have other Brands for these target segments, then they become potential areas for the brand to expand.

• Johnson & Johnson baby shampoo promoted on gentleness plank, taken to adults as a shampoo that can be used every day.

Akash C.Mathapati

• Texas Instruments looked for previously neglected women’s market

• A proposed caffeine-laden Diet Pepsi, named Pepsi A.M represented an entry into the breakfast market– “The great-tasting cola that beats coffee

cold!”

• Small refrigerators Akash C.Mathapati

• P&G’s Ivory soap was revived by promoting it as a pure and simple product for adults than just babies.

• Van Heusen gained the edge over Arrow in the US markets by targeting 50% of its ad budget to women.

• Women buy an estimated 60% to 70% of men’s shirts.

• Arrow followed by retracing their strategy to brand its shirts especially with women. (Selling bolder colors and busier patterns at higher prices)

Akash C.Mathapati

4. Repositioning

• One strategic option for revitalizing a fading brand is simply to abandon the consumer group that supported the brand in the past to target a completely new segment.

• Brylcream – slicked-back look of 1960’s, saw its sales go limp in the 1970’s, when the Beatles popularized “mop-top” look

• To revive – Brylcream Gel was launched, a clear gel with newer packaging enlisting soccer stars (now Beckham) to endorse --- younger audience.

Akash C.Mathapati

5.Changing Associations

• A Positioning Strategy can become in-appropriate as the target market ages, the association becomes less appealing as tastes and fashions change.

• A positioning strategy can simply wear out as the target segment becomes saturated

• New associations and associated segments are needed to generate growth.

Akash C.Mathapati

New Associations – Add Value by Differentiation• Sometimes, as it matures a product becomes

a commodity and the price pressure makes the product unprofitable.

• One approach is to attempt to reposition the commodity.

• 1960’s saw Frank Perdue, tired of being in the commodity business, completely repositioned it as a high quality branded product ----

• “It takes a tough man to make a tender chicken”.

Akash C.Mathapati

6.AUGMENTING THE PRODUCT

• As product categories mature • Once strong brand associations which

differentiated your product are now matched by most of competition.

• Customers seem more and more concerned about price and most are not willing to pay premium price for a brand.

• The temptation is to become resigned to a very competitive environment.

Akash C.Mathapati

Augmenting The Product

• Theodore Levitt: When the product is close to becoming a commodity, consider augmenting it by providing services or features not expected by the customer as they go beyond anything being offered.

• Two ways – Do something better or do something extra / different.

• With a mature product it is more feasible to do something extra than better.

• Improving or innovations in packaging is a way to provide this differentiating extra.

Akash C.Mathapati

• Improving package -- Nestle packaged its chocolates in tiny tubs, so that children can use it to make chocolate fudge or sundaes in a microwave oven.

• Clinic shampoo’s special packaging for children which provided the right quantity per squeeze (meant for five rinses).

• A new package can solve a customer problem. Eg: sachets enabled packing of shampoos, tooth paste, coconut oil to be packed for the use of traveling lot and also for rural population.

Akash C.Mathapati

• McKesson Inc., in drug wholesaling or Baxter in Hospital supplies built computer based information system for their retail / customers

• Virtually taking over inventory management, reorder decisions.

• McKesson could reduce its sales force engaged in store level sales by a small force which serviced the systems(1975)

• McKesson grew from $1 billion in 1978 to $5 billion in 10 years.

Akash C.Mathapati

7.Customer Involvement

• Involving customer can be key to the process of finding ways to augment the product or service.

• Customer involvement not only helps to identify the most appropriate areas to work on but also makes the effort visible to the consumer.

• The US textile firm Millikin, using Customer Action Teams (CAT’s), started making creative solutions to both current customers (in better serving them) and to new customers (in developing them).

Akash C.Mathapati

• A series of CAT’s launched every year has turned Millikin’s industrial towel business from a commodity to a value added service business.

• Millikin now virtually runs the business of their client’s industrial laundries.

• They provide computerized ordering and logic systems, market research assistance , leads from trade shows, audio visual sales aids etc.

Akash C.Mathapati

• OBSOLETING EXISTING PRODUCT WITH NEW-GENERATION TECHNOLOGIES

• Sometimes a sleepy industry segment can be revitalized by a product which obsoletes the existing installed base and accelerates the replacement cycle.

• Yamaha Disklavier, FM-radio are eg.’s. • Introduction of CD’s virtually saw a rebirth

for the audio and video entertainment industry with the sales of audio & video systems surging.

Akash C.Mathapati

• Market leader who has vested interest in the old technology, faces competitive threat and will opt for a delay strategy.

• Gillette (1960’s) resisted the stainless steel technology knowing the durability of the new material will reduce the volumes and also the cost to change over its manufacturing.

• Small player such as Wilkinson(UK) made permanent inroads into the market. Gillette’s share fell from 70% to 55% and ROI from 40% to 30%.

Akash C.Mathapati

ALTERNATIVES TO REVITALIZATION: END

GAME • In a declining industry there are

substantial risks in investing especially if your brand starts to show weakness.

• At this point it may not be possible to provide equal access to resources for all the brands in any multi brand organization.

• Options are: • 1. Milking the brand • 2. Exit the market. Akash C.Mathapati

ALTERNATIVES TO REVITALIZATION-END GAME

• The Milking Option• Avoiding investment in the brand, attempting

instead to generate additional cash flow from it.• Milking strategy will accept a decline in sales

and profits and the risk that the brand will eventually go under.

• A variant to milking strategy is ‘hold’ or ‘maintain’, where enough investment to maintain the brand.---No growth.

• A fast milking: sharp reductions in operating expenses, increase in price to maximize short term cash flow.

Akash C.Mathapati

Situational characteristics that lead to milking strategy rather than exit:

• 1. Industry decline rate is not exceedingly steep. Pockets of demand exist.

• 2. Price structure will be stable allowing efficient firms to make profits.

• 3. Brand has enough customer loyalty in certain pockets, to generate enough sales /profits. Risk of losing relative position due to milking is low.

• 4. Milking strategy can be successfully managed.

Akash C.Mathapati

Difficulties in Implementing strategy

• Suspicion that milking strategy is implemented can upset the plan.

• Customers may lose faith in the brand.• Competitors may attack more

vigorously• Most managers will not be experience

or orientation to handle the situation.• To minimize such effects it is better to

keep the milking route inconspicuous.Akash C.Mathapati

Divestment or Liquidation

• When prospects for the brand are bad and a milking strategy doe not seem feasible, the final alternative – divestment or liquidation is considered. Conditions that suggest an exit than a milking decision are:

1. Decline rate is rapid and accelerating. (no pockets of enduring demand).

2. Price pressures are anticipated to be extreme. (lack of Brand loyalty, differentiation and competitive pressures from those who have exit barriers).

Akash C.Mathapati

3. The brand position is weak and there are more than one competitor who hold dominant position.

4. Firm’s mission has changed and the business is becoming non related.

5. Exit barriers if any can be overcome, such as specialized machines, long term contracts with suppliers etc.

Akash C.Mathapati