FOREVER BRANDED

REVITALIZING DEAD OR DECLINING

BRANDS

IS IT WORTH IT?WHAT ARE THE ESSENTIALS?

A DETAILED ANALYSIS BASED ON A HARVARD CASE STUDY

AN ANALYSIS OF THE VARIOUS FACTORS WHICH LEAD UP TO BRAND DECLINE AND HOW TO

PREVENT OR REVERSE IT.

REVIVAL OF A DECLINING BRAND

• SOMETIMES EVEN DEAD BRANDS HAVE SIGNINFICANT BRAND EQUITY IN TERMS OF BRAND AWARENESS AND KNOWLEDGE.

• THE COST OF REVIVING A BRAND IS MUCH LESSER THAN CREATING A NEW ONE.

SOME CLASSIC EXAMPLES OF BRAND DECLINE

PAN AM – MOST POPULAR AIRLINES IN NORTH AMERICA DECLINED DUE TO NEGATIVE PUBLICITY

POST A BOMBING IN 1988

OLDSMOBILE- DID NOT KEEP UP WITH THE NEW GENERATION.

WHAT IS BRAND EQUITY?

THE DIFFERENTIAL EFFECT THAT CONSUMER KNOWLEDGE ABOUT A BRAND HAS ON THE

CUSTOMER’S RESPONSE TO MARKETING ACTIVITY.

WHY DOES A BRAND DECLINE?

A LOOK AT THEORIES OF BRAND EVOLUTION

PRODUCT LIFE CYCLE

APPEALING BECAUSE OF SIMPLICITY.

MAJOR DRAWBACK IS ITS TAUTOLOGICAL NATURE.

PRODUCT EVOLUTIONARY CYCLE

GENERATIVE FORCE

MANAGERIAL ACTIONS

SELECTIVE FORCE

MARKET ENVIRONMENT

MEDIATIVE FORCE

COMPETITORS’ ACTIONS

MANAGERIAL ACTIONSGENERATIVE FORCE

1. PRODUCT QUALITY

COMPROMISES IN QUALITY DO NOT AFFECT BRAND LOYALTY IN SHORT RUN.

BUT, LOYAL CUSTOMERS ARE NOT WILLING TO LIVE WITH THE CHANGE

2. PRICE INCREASESIF THE BRAND IS TO RETAIN CUSTOMERS, PRICES

HAVE TO BE INCREASED WITH AN INCREASE IN PERCEIVED BENEFITS.

3. PRICE CUTS

NOT A VIABLE METHOD TO INCREASE SALES.

DAMAGES A BRANDS REPUTATION.

4. BRAND NEGLECT

MANAGERS MAY BECOME COMPLACENT AND NEGLECT THEIR CORE BRANDS.

ALL BRANDS, NO MATTER HOW ESTABLISHED, NEED NURTURING.

5.INABILITY TO STAY WITH THE TARGET MARKETS

ENVIRONMENTAL FACTORS

MARKETS ARE DYNAMIC.THEY CAN UNDERGO MAJOR TRANFORMATIONS AND THUS AFFECT THE

BRANDS.

ADAPTED WELL TO THE CHANGING ENVIRONMENT BY INTRODUCING THE DIGITAL CAMERA AND HENCE

MAINTAINED ITS HOLD.

THE CIGARETTE BRAND RECEIVED A LOT OF FLAK FOR PROMOTING THEIR PRODUCT USING A

CARTOON CHARACTER.

SUFFERED HUGE LOSSES DUE TO MARKET REGULATIONS.

COMPETITORS’ ACTIONS

ANY BRAND TODAY IS FACED WITH RELENTLESS COMPETITION FROM OTHER BRANDS.

THE TACTICS OF OTHERS HAVE A SIGNIFICANT EFFECT ON THE STANDING OF A BRAND.

LOST OUT TO NIKE AND REEBOK IN THE US MARKET BECAUSE THEY

WERE MORE IN TUNE WITH THE CUSTOMERS

CHUCKED OUT OF THE MARKET BECAUSE OF DELL

WHICH OFFERED LOWER PRICES BY INTRODUCING

DIRECT TO CUSTOMER SYSTEM.

SALES FELL DRAMATICALLY AFTER NETFLIX STARTED OFFERING DELIVERY OF DISCS VIA

POSTAL MAIL.

HAD TO SHUT DOWN A LOT OF STORES TO TACKLE LOSSES.

WAS AN ESTABLISHED GIANT IN THE RETAIL SECTOR

WAL-MART, A NEW ENTRANT GAVE IT STIFF COMPETITIONS WITH ‘EVERYDAY LOW PRICING’

DISSECTING DECLINE

BRAND EQUITYGENERALLY RELATED TO AWARENESS.

IF A BRAND HAS HIGH AWARENESS AND CUSTOMERS HAVE STRONG, FAVOURABLE

OPINIONS, IT HAS A STRONG EQUITY.

DIFFERENTIAL EFFECT

VOLVO’S MARKETERS HAVE CREATED ITS IMAGE AS THE SAFEST CAR.

THUS, THEY PROVIDE A COMPELLING ARGUMENT TO BUYERS TO PURCHASE A VOLVO INSTEAD OF ANOTHER BRAND.

DIFFERENTIATION

CHEVRON EMPHASIZED ITS TRADEMARK GASOLINE ADDITIVE, TECHRON TO DIFFERTIATE ITSELF FROM

OTHER BRANDS LIKE SHELL.

VALUE PRICED

BRANDS CAN OFFER GOOD QUALITY AT A LOWER PRICE.

BRAND KNOWLEDGE

IT IS IMPERATIVE THAT THE CUSTOMER UNDERSTANDS WHY A BRAND IS A BETTER CHOICE THAN OTHERS.

1.BRAND AWARENESS

A POPULAR BRAND HAS A VERY HIGH AIDED RECALL AND TOP OF THE MIND(UNAIDED) RECALL.

TOP OF THE MIND RECALL IS A GOOD INDICATOR OF THE BRAND’S HEALTH.

STILL HAS A HIGH LEVEL OF AIDED RECALL BUT LOW TOP OF THE MIND RECALL.

2.BRAND IMAGE

IT IS IMPORTANT THAT THE CONSUMERS REMEMBER THE BRAND FOR A GOOD REASON.

IT IS NECESSARY FOR A BRAND TO MAINTAIN POSITIVE AND UNIQUE BRAND ASSOCIATIONS.

LEVI’S SALES STARTED DECLINING STEEPLY SO THEY STARTED SELLING VIA WAL-MART. THIS ASSOCIATION

RUINED THEIR IMAGE AS AN EXCLUSIVE BRAND.

CUSTOMER RESPONSE

APART FROM SALES, MARKETERS NEED TO TAKE REGULAR SURVEYS TO GATHER INFORMATION ABOUT HOW CONSUMERS PERCEIVE THEIR BRAND AND TAKE

CORRECTIVE ACTIONS.

BRAND SWITCHINGBEFORE DESERTING A BRAND, CUSTOMERS USUALLY TRY A NEW BRAND BEFORE ULTIMATELY SETTLING FOR THEIR

NEXT CHOICE.

REASONS FOR SWITCHING ARE INCREASE IN PRICE, NEW COMPETITOR OR NEGATIVE PUBLICITY.

BRAND SWITCHING METRICS ARE CRUCIAL AND HAVE TO BE MONITORED TO PROVIDE EARLY WARNINGS.

HOW TO REVITALIZE A BRAND?

SOME FACETS OF THE BRAND’S EQUITY MAY TAKE A HIT.

IT IS THE MARKETERS RESPONSIBILITY TO ADDRESS THE WEAK ELEMENT TO CAPTURE THE EQUITY THAT WOULD

BE LOST OTHERWISE.

FOR EXAMPLE, EVEN WHEN A BRAND’S IMAGE IS HIT, IT MAY HAVE HIGH AWARENESS LEVELS. IT IS IMPERATIVE

TO RECTIFY THE IMAGE TO REVIVIFY THE BRAND.

IS THE EXERCISE WORTH IT?

THE BASE IS WHETHER ONE OF THE COMPONENTS OF BRAND EQUITY HAS A SIGNIFICANT RESIDUAL

VALUE.

?IMPORTANT QUESTIONS?

1. CAN THE BRAND REGAIN SOME OF ITS FORMER GLORY?

2. CAN ITS OLD EQUITY BE ENHANCED THROUGH NEW POSITIONING?

3. CAN THE COMPANY DEAL WITH LOGISTICAL ISSUES?

THE ANSWER TO THESE, IF POSITIVE, MEANS THAT THE BRAND CAN BE SUCCESFULLY REVIVED OR NOT.

IT IS ALSO ESSENTIAL TO CALCULATE THE REALISTIC AMOUNT OF INVESTMENT NEEDED.

LONG TERM PERSPECTIVE

REVIVING A BRAND IS AN EXERCISE IN PATIENCE. IT WILL TAKE TIME.

REVIVING A BRAND TYPICALLY TAKES AN YEAR OR TWO, SO MANAGERS SHOULD BE READY FOR INTERIM LOSSES. THINK

LONG TERM.

IT CAN BE KICK-STARTED BY LOOKING AT THE CAUSES OF DECLINE, UNDERSTANDING THE BRAND’S PROMISE AND THEN

EDUCATING THE MARKET ABOUT IT.

REPOSITIONING, INVESTMENT AND EDUCATION

A BRAND HAS TO BE VIEWED AS UNIQUE. THUS POSITIONING, INVESTING IN THE PROPER AREAS AND

ADVERTISING PLAY A HUGE ROLE IN REVIVING THE BRAND.

‘FIND WHAT’S UNIQUE ABOUT THE PRODUCT AND HAMMER IT HOME THROUGHOUT THE TRANSACTION’

GM SPENT $4 BILLION ON THE

CADILLAC, COMPLETELY

OVERHAULED THE BRAND AND

REPOSITIONED ITSELF AS A

GLOBAL BRAND

CORRECT MISMANAGEMENT

MANAGERIAL ACTIONS ARE PROBABLY THE MOST COMMON CAUSES OF BRAND DECLINE.

ONE OF THE MAIN CAUSES IS FAILURE TO IDENTIFY DECLINE AND TAKE MEASURES TO REVERSE THE

TREND.

CAN BE DONE IN FOLLOWING THREE WAYS:

1. REBUILD QUALITY

CUSTOMERS MAY STICK TO THE BRAND OUT OF LOYALTY FOR A SHORT WHILE DESPITE

COMPROMISED QUALITY, BUT NOT FOR LONG.

HARLEY DAVIDSON USED JAPANESE TECHNOLOGY AND REVERSED ITS COST CUTTING TO IMPROVE

QUALITY. IT CURRENTLY SELLS IN THE HIGH END SEGMENT

2. RESIST TEMPTATION TO “MILK”

IF A BRAND IS TO BE REVIVED, DO NOT ATTEMPT TO EXTRACT MONEY FROM IT BY OFFERING EXCESSIVE

DISCOUNTS AS THIS CAN HURT THE IMAGE BY REVEALING ITS WEAKENED POSITION.

INSTEAD, INVEST IN THE BRAND.

3. PURSUE A DEFINED TARGET MARKET

DEFINE A TARGET MARKET BY CRITICAL ASSESSMENT AND DELVE INTO IT.IN CASE OF DIVERGENT TARGETS, A SUB BRAND CAN BE OPENED AND THEN

ASSOCIATION CAN BE REMOVED TO CREATE A NEW SUCCESSFUL BRAND.

TO APPEAL TO A DIFFERENT SEGMENT, LEVI’S LAUNCHED ‘DOCKERS’ AND WHEN THE BRAND BECAME SUCCESSFUL, LEVI’S REMOVED IT’S OWN NAME.

DISCLAIMER

Created by Abhigyan Singh, NIT Allahabad, during an internship by Prof. Sameer Mathur, IIM Lucknow.