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

Neither the lifespan of a brand not its ultimate destiny is predetermined.Brand decline is a reversible process.In fact reviving a brand may be a more attractive strategy than launching a new brand.

Example- Ford decided to relaunch Taurus (its old brand) instead of launching a completely new brand

Revival of brands

Decline and Death of brands

PanAm was an iconic american brand but negative publicity associated with 1988 plane crash lead to its death

Oldsmobile was another iconic brand but the customer perception of it as an old brand marked its decline

Causes of brand Decline

There are two major theories to understand the reasons for brand decline.1)Product Life Cycle2)Product Evolutionary Cycle

Product Life Cycle

This framework identifies four stages-1)Introduction2)Growth3)Maturity4)DeclineIt uses sales as a measure to define the stages of life cycle

Product evolutionary cycle

The evolution of a brand is affected by three forces1)Generative2)Selective 3)Mediative

This framework implies that a brand can evolve and is not predestined to die

Generative forces - Managerial actions

1) Product Quality-Compromising the quality for cost cutting may not have an impact on brand loyalty in the short run but the brand will start declining when it does not live up to the expectations of consumers

Generative forces - Managerial actions

2)Price increases- If a company continues to raise price without offering a corresponding increase in benefits then the consumers will start to abandon the brand

Example-Volkswagen failed with its model the Golf because it could not control costs and kept increasing the prices.

Generative forces - Managerial actions

3) Price Cuts-when a company decreases price in desperation to increase sales,it can also damage the brand

Example-Lacoste-the company lowered its prices to increase sales but to afford lower prices it had to use cheaper material this affected its image badly.

Generative forces - Managerial actions

4) Brand Neglect- even successful brand needs constant nurturing.However sometimes management may lose this sight and neglect investing in its core brand.

Example-Black and Decker’s dewalt brand - the company ignored it until it almost ceased to exist

Generative forces - Managerial actions

5)Inability to stay with the target market-When the target market moves away from the brand the brand starts to decline.Example-In 1990s GAP decided to position itself to appeal teenagers and young audience but this alienated its core customers who felt neglected as the brand strived to become more youthful and trendy.

Selective forces - Environmental Factors

Markets are dynamic in nature and are significantly influenced by the larger environment in which they operate.They can undergo major transformation which in turn can affect various companies in the industry and their brands.Example-1)Cigarette brand in united states have been affected by the changes in legal environment2) Polaroid-the company was a household name since it popularized instant photography but the company spiraled into decline and went bankrupt as the environment changed and digital imaging became popular

Mediative forces -Competitive actions

A brand faces relentless onslaught from its competitors.Major factors-1)Smart use of technology2)innovation3)Change in market dynamics4) Acquisition and mergers

Example-Puma and Adidas declined in the face of extreme competition from Nike and Reebok

Deconstructing brand decline

The ultimate sign of brand decline is the significant drop of unit sales over a sustained period of time.To deconstruct brand decline we must increase or maintain the brand equity.Lets look at the important factors affecting brand equity

Differential Effect

The consumers must be provided with compelling argument as why they should choose a particular brand from the large variety of brand available in the market.There are two methods to do that

1) value priced-the brand offer a good quality at a low or competitive price.

2) Creating differentiation from other brands-by giving superior quality,physical attributes or intangible benefits.

Example- Even some makers of gasoline,often considered a commodity product have succeeded in creating differentiation.Chevron by emphasizing on its trademarked additive techron has successfully differentiated itself from others.

Brand Knowledge

Brand Awareness Brand Image

It is the most widely used gauge of brand knowledge.falling brand awareness could lead to long term problems

It is important for a brand to maintain strong,favourable and unique brand association

customer response

Sales,customer's purchasing intentions and brand loyalty measures are used to measure customer response.Brand switching behaviour is a leading indicator of brand decline.Brand switching may be triggered due to following reasons-Increase in price ,entry of a new brand or negative news about the brand.

Revitalising Brand

In most of the cases there is a significant amount of equity left in declining brand and with proper diagnosis,strategy and execution a brand can be revived

The first step in assessing whether the brand is worth reviving entails examining all the three elements of brand equity.The three critical questions need to be pondered when considering revitalization of a brand-1)Can brand regain some of its former glory(brand knowledge)?2)Can its old equity be enhanced by new positioning(differential effect)?3)Can a company effectively deal the logistical issues(put plans in place that will get an appropriate customer response)?

Is the brand worth reviving?

Revival of a brand is a long term initiative,typically taking more than a year or two.Vision of revival needs to be followed by well thought out strategy and execution.

Example-When the movie rental industry environment changed due to internet, Blockbuster had to redefine its existing offerings with long term perspective.It closed unprofitable stores and used its profitable physical locations to benefit its total online rental program which had a more promising future.

Taking a long term perspective

Sustainability factors for a brand are-1)Differentiation2)Proper positioning3) Brand awareness.

Carefully reposition the brand,Invest in it and educate the market

Some of the major reasons for the failure in reviving a brand are-1)Failure in clearly understanding the reasons for brand decline2)Inability to come up with good strategies 3)Lack of commitment to revitalize a brand

Correct mismanagement of the brand

Ways to address consistent themes that have emerged in declining brands

Correct mismanagement of the brand

Rebuild qualityResist temptation to milk the brand

Pursue a carefully defined target market

If poor quality is a problem then it must be fixed.Management needs to determine if it is worthwhile exercise.

Example-Harley-Davidson used Japanese managementprinciples to improve quality, extended its productline, and subsequently achieved a complete turn-around. It reversed its strategy of cost-cutting.

Rebuild quality

An aggressive form of ‘‘milk-ing’’ entails cutting prices steadily, a reflection ofthe brand’s weakened position.

Example- Once a marketleader, Levi’s entry into Wal-Mart with its lower-quality Signature jeans has hurt the image of thebrand’s entire line. Such actions should be avoided.

Resist temptation to milk the brand

Carefully defining a target market canbe a challenging task.It is also difficult to appeal to divergent tagets with the same brand.In such cases a line extention with a sub brand can be very effective.Example-During the 1980s Levi’s successfullyused the strength of its brand name to launchDockers and enter a new market; that is, businesscasual clothing. Once Dockers became well-known,Levi’s removed its name, and Dockers became astand-alone brand.

Pursue a carefully defined target market

Let the Revitalization Begin!

Thank You

Created by Rishabh Salgia,IIT Bombay,during an internship by Prof.Sameer Mathur,IIM Lucknow

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