A BRAND IS FOREVER! A FRAMEWORK FOR REVITALIZINGDECLINING AND DEAD BRANDS

REVIVAL OF A DEAD BRAND

The revitalization of a brand is usually less costly and riskythan introducing a new brand, which can cost tens of millions and will more likely fail than succeed

-Aaker(1991)

REVIVAL OF A DEAD BRAND neither the lifespan of a brand nor its

ultimate destiny is predetermined But, brand decline is a reversible process Ex: Harley Davidson and ford after facing

great competition lost their hold still regained their status because of their brand value.

REVIVAL OF A DEAD BRAND

The revitalization of a brand is usually less costly and riskythan introducing a new brand, which can cost tens of millions and will more likely fail than succeed

-Aaker(1991)

DECLINE AND DEATH OF BRANDS

Brand equity framework: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

A brand with strong equity has high awareness and consumers hold strong, favourable, and unique brand associations

DECLINE AND DEATH OF BRANDS

Pan am and Oldsmobile (general electrical) examples illustrate thateven well-known brands can decline as a result ofa wide variety of factors.

CAUSES OF BRAND DECLINE

Product life cycle (PLC) framework: identifies four stages:introduction, growth, maturity, and decline.

It uses sales to define the stages of the life cycle, which in turn are used to predict sales.Different forces leads to brand’s evolution• Managerial actions• Environmental factors• Competitive actions

CAUSES OF BRAND DECLINE MANAGERIAL ACTIONS

Brands oftendecline because of leadership, management, and employees making excuses rather than acting withintegrity

Managerial actions which can cause this are:product quality, priceincreases, price cuts, brand neglect, and inability tostay with the target market.

CAUSES OF BRAND DECLINE MANAGERIAL ACTIONS

Product quality:

When compromises in product quality for cost-cutting reasons • do not impact brand loyalty in the short run,• managers mistakenly conclude that consumers are willing to accept or live with the change. • At some point when customers’ experiences with the brand do not live up to their expectations, • the brand starts to decline.

CAUSES OF BRAND DECLINE MANAGERIAL ACTIONS

Price increases :

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

Volkswagen launched golf but was unable to control costs and had to keep raising prices, until it effectively drove itself out of the entry-level segment where it had once been a leader

CAUSES OF BRAND DECLINE MANAGERIAL ACTIONS

Price cuts:

When a company cuts prices in desperation to increase sales.To maintain low prices, the companyhas to in turn use cheaper material. This move ends brand’s image.Ex: Lacoste (United states)

CAUSES OF BRAND DECLINE MANAGERIAL ACTIONS

Brand neglect :

Managers get wrapped up in the inertia of a brand and begin to miss changes in the market stated by brand manager of DeWalt which once was a popular brand and ignorance lead brand to virtually cease to exist.

CAUSES OF BRAND DECLINE MANAGERIAL ACTIONS

Inability to stay with the target market :Gap popular startedto position itself to appeal to young and teenage audience but in the process alienated its core customers, whofelt neglected as the product strived to become youthful and trendy henceforth lost their target market and core customers.

CAUSES OF BRAND DECLINE ENVIRONMENTAL FACTORS

Cigarette brands have, forexample, been affected by changes in the legal environment. The industry is facing an increasing number of regulations and strong negative publicity.

CAUSES OF BRAND DECLINE COMPETITIVE ACTIONS

Companies loose their grip over market due to immense competitionEx:Kmart lost their market over WalmartAddidas was nearly swiped off in U.S. by Nike.

Blockbuster a leading brand in its market lost over relatively newer brand Netflix

DECONSTRUCTING BRAND DECLINE• The sign of impending brand death is a significant drop in unit sales over a sustained period.• While sales can fluctuate in response to market dynamics and competitors’ actions, a prolonged decline is a clear warning.• Managers counter this by employing quick-fix solutions, including raising prices or introducing brand extensions.•Such actions may push up revenues, but can often mask the real problems.

DECONSTRUCTING BRAND DECLINE

There are three key elements of a brand’s equity • decline in brand knowledge,• blurring of the differential effect, or• Lack of customer response

DECONSTRUCTING BRAND DECLINE DIFFERENTIAL EFFECT

• Why consumers should choose a particular brand from a wide variety of alternatives available to them.• Marketers can pursue two different approaches towards giving consumers knowledge about brands.1. When consumers feel that many brands in a product

category are similar. 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.

2. Is to create differentiation from other brands. This can be done on the basis of superior quality, physical attributes, or intangible benefits. If marketers are successful in creating this differentiation, they are in a position to charge a premium for their offering.

DECONSTRUCTING BRAND DECLINE BRAND KNOWLEDGE

For a brand to be successful, consumers should beknowledgeable about it.• Understand why it is a more compelling choice than the other alternatives, • whether because it is different from them or represents a better value.•We now discuss the two components of brand knowledge:-brand awareness, and-brand image.

DECONSTRUCTING BRAND DECLINE BRAND KNOWLEDGE

Brand awareness:A popular brand willhave very high aided recall and high top-of-mind recall.

Managers are get into complacency by past success prompting them to cut back on advertising even when a brand begins tostruggle.

DECONSTRUCTING BRAND DECLINE BRAND KNOWLEDGE

Brand image:It is important for a brand to maintain ‘‘strong, favourable, and unique brand associations’’.

Volkswagen manager declared that ‘‘ Volkswagen had failed in the past when we used marketingstrategies or introduced new products that strayed from the company’s image of being approachable, friendly, and a German brand’’

DECONSTRUCTING BRAND DECLINE CUSTOMER RESPONSE

• While sales figures are considered the gold standard for measuring customer responsemanagers may look to other leading indicators such as purchase intentions and brand loyalty measures.• Data are obtainable via standard questions which are often included in survey panels maintained by companies as part of ongoing tracking efforts.

DECONSTRUCTING BRAND DECLINE CUSTOMER RESPONSE

• While sales figures are considered the gold standard for measuring customer responsemanagers may look to other leading indicators such as purchase intentions and brand loyalty measures.• Data are obtainable via standard questions which are often included in survey panels maintained by companies as part of ongoing tracking efforts.

REVITALIZING BRANDSA brand may maintain high awareness levels even when its image has taken a hit (e.g.,Pan Am). Similarly, some brands may not get a proper response from customers because of ineffective marketing efforts and may slide into a decline,even when brand awareness and brand image numbers are favourable (e.g., St. John Knits).

Addressing the weak element in such cases can help capture the equity that remains in the brand that would otherwise be lost, put the brand in a leadership position, and get appropriate returns from this investment.

IS THE BRAND WORTH REVIVING?

Brand may be worth reviving if there is significant residual value in one or more of the components of brand equity.

examining all three elements of brand equity1. knowledge, 2. the differential effect of this knowledge, and3. customer response It is equally important, however, to

determine the realistic amount of investment that is needed to truly revive the brand and, where appropriate, compare that to the cost of replacing the brand with a new one.

TAKE A LONG-TERM PERSPECTIVE

Reviving a brand is also a long-term initiative When Blockbuster was under attack by Netflix

it was easy to see that the movie rental industry environment had changed to a market that was relying increasingly on the Internet, and Blockbuster had to adjust to this in order to thrive in the market.

Brands that commanded a premium in the recent past, and had a singular focus with a well-defined differentiation, can be revitalized.

Research was the primary tool used to revive the DeWalt brand

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 the brand did not invest sufficiently in quality, and always try catch-up with the competition. It suffers from negative image.

As part of its long-term strategy, the company has to plan to continue rebuilding the brand’s image.

LET THE REVITALIZATION BEGIN!

Many brands in today’s market have been referred to as ‘‘ghost brands,’’

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

Managers need to constantly watch for signs of brand decline, in the form of problems with brand knowledge, brand differentiation, and customer response.

THANK YOUCreated by Anuj Maingi,

IIT (BHU), Varanasi

during an internship

under Prof. Sameer Mathur, IIM Lucknow.

www.IIMInternship.com