A BRAND IS FOREVER! A FRAMEWORK FOR REVITALIZING DECLINING AND DEAD BRANDS

M.KannanACCET, Karaikudi

keywords

Brand Equity: The differential effect that consumer knowledge about a brand has on the customer’s response to marketing activity.

Brand Decline: Failure of a brand due to many factors like change in technology, lack of brand awareness etc. It is a reversible process.

Brand Death: Becomes imaginary, have significant brand equity in terms of high brand awareness and a strong brand image.

Brand Revival: Reviving is not a feasible, as it needs a more attractivestrategy than launching a new brand. Less costly, more risky than new brand.

Revival of a dead brand

1

“While the ‘‘death’’ of a brand is a complex and sometimes controversial issue, there is ample evidence to show that neither the lifespan of a brand nor its ultimate destiny is predetermined.”

“Brand decline is a reversible process.”

• Ford’s model Taurus was weakened due to the intense competition from Honda Accord and Toyota Camry.

• Ford did an about face and reintroduced the Taurus brand.

• The firm reasoned that is was clearly a better option in comparison to an entirely new and unknown brand.

• The brand suffered a huge setback upon the advent of smaller Japanese motor-bikes.

• The company started facing financial losses.

• Harley decided to make a significant investment in its quality and distinctive styling.

• As a result, it is now once again a well-known and revered American brand.

Decline and death of brands

2

Brand equity is defined as ‘‘the differential effect that consumer knowledge about a brand has on the customer’s response to marketing activity,’’ and ‘‘consumer brand knowledge can be characterized in terms of brand awareness and brand image dimensions’’ .

• Pan Am ,“The World’s Most Experienced Airline” , faced intense competition which impacted its bottom line.

• It’s brand equity declined when one of its airliners was bombed .

• This was because of the amount of negative publicity associated with the plane crash.

• Today the brand is extinct.

• Oldsmobile was known for its pioneering designs and innovations.

• Over time its sales declined because it was considered as a “old brand” among consumers.

• Oldsmobile lost its unique identity as innovator.

• Leading to the death of the brand.

causes

Causes of brand decline

3

To understand why brands decline, we draw upon theories of brand evolution

• Product life cycle (PLC)• Product evolutionary cycle (PEC)

Product Life Cycle

Product life cycle

It ‘‘uses sales to define the stages of the life cycle, which in turn are used to predict sales’’

Product evolutionary cycle

Three forces of PEC

“Managerial and entrepreneurial activities constitute the generative force, the market environment acts as the selective force, and competitors’ actions and responses to marketing initiatives constitute the mediative force.”

Managerial actions

• Brands often decline because of “leadership, management, and employees making excuses rather than acting with integrity”.• Managerial actions are classified into 5 categories

1.Product quality2.Price increases3.Price cuts4.Brand neglect5.Inability to stay with the target market

1

Product quality

“If a company continues to raise prices without offering a corresponding increase in benefits, sooner or later consumers will start to abandon the brand.”

Price increases

Price cuts

“Conversely, when a company cuts prices in desperation to increase sales, it can also damage the brand.”

Brand neglect

“ When a brand becomes popular, inaction creeps in. Even successful brands need constant nurturing. However, management can lose sight of this, start looking at its core brands as cash cows, and neglect to invest in them.”

Inability to stay with target market

“When the target market moves away from the brand, the brand can move into decline.”

Environmental factors

“Markets are dynamic in nature and can undergo major transformations, which in turn have an impact on the various companies and their brands.”

2

• Polaroid has been a household name since it popularized instant photography.

• With its unique product offering, polaroid quickly gained prominence.

• But the company spiraled into decline and went bankrupt as the environment changed and digital imaging became popular.

Competitive actions

• In most markets today, a brand faces relentless onslaught from its competitors.

• Newer competitors are particularly nimble.

• They are able to use new technologies or marketing approaches to their advantages to challenge well established market leaders.

3

Deconstructing brand decline

There are 3 key elements of brand’s equity, and a change in one of these can signal brand decline:

1. Decline in brand knowledge.2. Blurring of differential effect.3. Lackluster customer response.

4

Differential effect

• Consumers must be provided with a compelling argument as to why they should choose a particular brand from a wide variety of alternatives available to them.• It is also important to ensure that consumers have

sufficient exposure to such a message, so that they are knowledgeable about the brand’s assertions.

1

Brand knowledge

• For a brand to be successful, consumers should be knowledgeable about it .• Two components of brand knowledge

1.Brand awareness2.Brand image

2

• Brand awareness is the most widely used gauge of brand knowledge.

• If brand awareness is falling, this

could be a serious long-term problem.

Brand image

• The image of a brand can change over time. • It is important for a brand to maintain ‘‘strong, favorable,

and unique brand associations’’

Customer response should be monitored continuously along with the three elements of brand equity to be successful in the long-run.

3

Revitalizing brands

5

Is it worth reviving?

Three critical questions need to be pondered when considering revitalization of a brand: (1)Can the brand regain some of its former glory (brand

knowledge)?(2) (2) Can its old equity be enhanced through new

positioning that is relevant and will stand out (differential effect)?

(3) Can the company effectively deal with logistical issues (put plans in place that will get an appropriate customer response)?

1

Is it worth reviving?

“In other words, brands that commanded a premium in the recent past, and had a singular focus with a well-defined differentiation, can be revitalized.”

Take a long-term perspective

• Branding is an exercise in patience. • Most brands take a long time to build, and a long time

to die. • Reviving a brand is also a long-term initiative, typically

taking more than a year or two. • This is a challenge in a corporate system which rewards

managers based on short-term performance, often measured on a quarterly or annual basis.

2

Carefully reposition the brand, investin it, and educate the market• A brand’s promise plays a major role in differentiating

the brand from its competitors.

• If a brand is not viewed as unique as compared to others in the market, its future growth is questionable.

• Many brands such as Oldsmobile, Pan Am perished because of intense competition and lack of uniqueness compared to others.

3

Correct mismanagement of the brand• Three ways to address some consistent themes that

have emerged in declining brands are

1. Rebuild quality2. Resist temptation to “milk” the brand3. Pursue a carefully defined target market

4

Rebuild quality

• In the short run, compromises on quality may go unnoticed, and customers may stick to the brand out of fondness or loyalty.• At some point customers will begin to abandon the brand.

Resist temptation to “milk” the brand

• If a brand is to be revived, management must invest in the brand.

• An aggressive form of ‘‘milking’’ entails cutting prices steadily, a reflection of the brand’s weakened position.

Pursue a carefully defined target market

• Levi’s successfully used its brand name to launch Dockers and enter a new market.

• Once Dockers became well-known, Levi’s removed its name.

Let the revitalization begin!

Recap

Disclaimer

These slides were created by M.Kannan, as part of an internship done under the guidance of prof. Sameer Mathur(www.IIMInternship.com)”