Dead and Declining Brands A framework for revitalizing declining and dead brands

By

Sunil Thomas, Chiranjeev Kohli

Some brands meet an untimely death

like

Oldsmobile

Pan Am

However, Brand Decline is a reversible process. And can prove to be more feasible than launching a new brand.

like Harley-Davidson

After decades of market dominance,

brand was badly hurt by small

Japanese motorbikes.

It then made investments

in quality and distinctive styling.

It is once again a highly revered

Brand.

Decline and death of Brands

Familiar brands like Coca-Cola, Microsoft, Apple and GE have a strong

brand equity.

However, Brand equity may decline with the passage of time, sometimes leading to the brand demise

like Pan Am

Pan Am faced intense

competition which began to

impact its bottom line.

In 1988, the company faced a

devastating crisis when one of

its airliners was

bombed and crashed

Shortly afterward, Pan Am went

out of business

Causes of Brand Decline

Managerial actions Marketing Environment Competitive actions

Managerial actions • Product quality, when consumers experience does not match their

expectations over time, due to managerial lethargy.

• Price rise, without appreciable increase in quality , like Volkswagen s price rise with its Golf brand.

• Desperate price cuts to increase sales.

• Neglecting brand and using it as a cash cow , missing market

opportunities.

• Inability to stay with the target market, like “ap in the 0 s

Environmental factors

Markets are dynamic and are influenced by the broad

environment

in which they operate . Eg. cigarette companies are influenced

by

the legal environment.

Polaroid , Kodak and RJ Reynolds Camel have been negatively

affected the changing environment.

Polaroid Polaroid has been a household

name since it popularized instant

photography

But the company spiralled into

decline and went bankrupt as

digital imaging became popular

The very foundation of its appeal,

instant results, was no longer

Competitive actions

In today s markets , a brand faces

relentless onslaught from its

competitors.

This can become particularly

problematic if the competitors have

deep pockets, like Adidas and Puma

declined in the presence of Nike and

Reebok in North America

KMart Retailing giant Kmart anchored itself

to being a low-priced merchant.

In the 0 s , Wal-Mart proved a formidable

challenger

It made cost cutting a daily practice and

ventured on it.

Inability to compete lead to its

merger with Sears Roebuck

Deconstructing Brand Decline

The ultimate sign of impending brand death is a significant drop in unit sales over a sustained period. To avoid (or reverse) a damaging outcome, it is important to deconstruct the decline in terms of reliable precursors to sales. To do so, we revisit the aforementioned concept of brand equity: the differential effect that consumer brand knowledge has on the customer’s response to marketing activity.

Differential effect

Consumers must be

provided with a

compelling argument

as to why they should

choose a particular

brand.

Marketers can pursue

two different

approaches toward this

goal.

I method

Often, consumers feel

that many brands in a

product category are

very similar. In such

situations , a strong

case can be made to

the consumers to

choose a particular

brand if it is value priced ; that is, the brand offers good

quality at a low or

competitive price.

A second approach

that is commonly

used is to create

differentiation from

other brands. This

can be done on the

basis of superior

quality , physical

attributes, or

intangible benefits

Chevron Chevron emphasizes its trademarked addi- tive, Techron. Techron is a detergent that reduces accumulation of deposits in fuel injectors and intake valves. All major brands of gasoline have detergents in them; Chevron has just seized on it as a source of differentiation.

Brand Knowledge

Brand Awareness

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

It is important for a

brand to maintain strong , favourable ,

and unique brand associations.

Companies need to

monitor brand image

and look for changes

in consumer

perceptions.

Customer Response

Sales figures are considered the golden standard

Managers may look towards

purchase intentions and

brand loyalty measures

Customer Response

Sales figures are considered the golden standard

Managers may look towards

purchase intentions and

brand loyalty measures

For non-durable products, brand

switching behaviour can be

monitored.

Revitalising Brands

In most cases there is a significant amount of equity

in declining brands, and with

proper diagnosis, strategy, and

execution, a brand can be

revived

Is the brand worth reviving?

A brand may be worth reviving if

there is significant residual value in one or more of the components of

brand equity.

It is important to determine the

realistic amount of investment that

is needed to truly revive the brand

Is the brand worth reviving?

Most brands can be revived, some

may just not be worth the effort.

This is particularly true for brands

that suffer from low awareness and

a negative image

Take a Long-term perspective

The brand revitalization process

can be kick-started by addressing

the causes of the decline;

understanding the brand s promise

, and why it may have failed to

maintain its relevance.

like

Blockbuster The movie rental industry

environment market

was relying increasingly on the Internet

Blockbuster, a retailer, used its physical store locations

to benefit its Total Access online rental program

Subscribers were given the option of either

mailing back a rented movie, or dropping it off

at the local store in return for a free movie rental.

Subscribers increased from approximately 3

million

in 2006 to 4 million in 2007

Carefully reposition the brand, invest in 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

Correct mismanagement of the brand

One of the major problems is failure to clearly

understand brand decline and the commitment to

do what is necessary to reverse the trend,and

Change strategies that weakened the brand in the

first place

Correct mismanagement of the brand

Resist temptation

to milk the brand If a brand is to be

revived,

management must

invest in the brand .

Like Apple

did with its iPod

Pursue a carefully

defined target market

Target markets can

mature or shrink

over time . It is also

very difficult to appeal to divergent

targets with the

same brand.

Managers must

decide if they want

to switch to another

target

Rebuild quality

Poor quality rarely

goes unnoticed for

long, and at some

point customers

will begin to

abandon the brand.

If poor quality is a

problem, this needs

to be fixed

Let the revitalization begin!

Given the high cost of launching new brands, companies are increasingly looking to revitalize dying or dead brands in their

portfolio.

History shows that this is possible

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