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A Brand is
Forever
A framew
ork to
revita
lize de
clining
and
dead
bran
ds
The Situation
Over the years
numerous brands
have met their
untimely death
Over the years
numerous brands
have met their
untimely death
While many have
declined into oblivion
In today’s market new product introductions are both expensive and risky
In today’s market new product introductions are both expensive and risky
So it may be worthwhile to revitalize
declining brands
Questions?
What are some of the examples of brand revival and brand death ?
What are the causes of brand decline?
What are the signs that are precursors to impending decline?
What are some guidelines to revitalize brands?
Revival of a dead
brand
e.g. Ford Taurus
Taurus, which was one of Ford’s top selling models in the United States faced brand decline due to intense competition from Honda Accord and Toyota Camry
Taurus, which was one of Ford’s top selling models in the United States faced brand decline due to intense competition from Honda Accord and Toyota Camry
Ford pulled the plug on it in 2006 and soon reintroduced the Taurus brand
Taurus, which was one of Ford’s top selling models in the United States faced brand decline due to intense competition from Honda Accord and Toyota Camry
Ford pulled the plug on it in 2006 and soon reintroduced the Taurus brand
This move worked because Ford still had a lot of brand equity in the United States over foreign brands like Toyota and Honda
Brand
Death
e.g. GM’s Oldsmobile
General Motors’ iconic Oldsmobile which was known for its innovative design stopped production in 2004
General Motors’ iconic Oldsmobile which was known for its innovative design stopped production in 2004
There were two primary reasons for this.
First, Oldsmobile was perceived as an “old brand”. Even with new marketing efforts firm was unable to shake its staid positioning.
Second, as GM strived for uniformity across its brands Oldsmobile lost its identity as an innovator
Causes of Brand
Decline
Causes of Brand
Decline
To understand why brands decline we must look at brand evolution theories
Sales are used to predict life cycle, which in turn are used to predict sales
Sales are used to predict life cycle, which in turn are used to predict sales
When sales decline management decides that a brand no longer needs investment and begins to milk the
brand
Product Evolution CycleAccording to PEC the evolution (and decline)
of brands depends on three forces
Generative (Managerial actions)
Selective (Environmental factors)
Mediative (Competitor's actions)
Managerial
Actions
Leads to brand decline when
management makes excuses rather than acting with integrity
Manager
ial Actio
ns
Produ
ct Qua
lity
Compromise in quality for cost cutting reasons leads to brand decline in the
long run
Manager
ial Actio
ns
Price
Increa
ses
Increasing prices without increasing corresponding
benefits
Manager
ial Actio
ns
Price
CutsSlashing prices to increase
sales can be lethal
Manager
ial Actio
ns
Price
CutsSlashing prices to increase
sales can be lethal
Damages brand imageReliance on low quality
products
Manager
ial Actio
ns
Brand N
eglec
t
Strong brands sometimes face neglect and are
seen as cash cows
Manager
ial Actio
ns
Inabili
ty to
stay w
ith
the ta
rget m
arket When companies reach out
to other markets, it may lose its appeal to its target markets
Environmental Factors
Environmental Factors
Legal Environment
The legal regulations on a product may cause strong negative publicity
Environmental Factors
Change in product
environment
Polaroid spiraled into decline when
digital imaging became popular
Competitive Actio
nsMost brands face
relentless onslaught from its competitors
Competitive Actio
nsMost brands face
relentless onslaught from its competitors
Puma and Adidas were squeezed out
of the US market by Nike and Reebok
Deconst
ructin
g Bran
d
Decline
The ultimate sign of brand decline is
significant drop in sales
over a prolonged time
The ultimate sign of brand decline is
significant drop in sales
over a prolonged time
Managers apply quick fix
solutions by raising prices or
introducing brand extensions
But such solutions may often mask the
real problem
The power of a brand lies in its
Brand Equity
is defined as the differential effect that consumer
knowledge about a brand has on the customer’s response to marketing activity
Differential Effect
Differential Effect
Consumers must be provided with a compelling argument as to why they
should choose a particular brand over the others
Differential Effect
Consumers must be provided with a compelling argument as to why they
should choose a particular brand over the others
Two approaches can be used
towards that goal
Differential
Effect
Value
Pricing
Feasible when different
brands in a product
category are similar
Differential
Effect
Increa
sed
Benefits
Superior Quality, Physical Attributes or Intangible Benefits
Differential
Effect
Increa
sed
Benefits
Superior Quality, Physical Attributes or Intangible Benefits
If a brand is successful in creating this differentiation , they can charge a premium price for their products
Brand KnowledgeFor a brand to be
successful, consumers should be knowledgeable
about it
There are two components of Brand Knowledge
Brand KnowledgeAided Recall
Top of the mind recall
Often , managers are lulled into complacency
by a brand’s past success.
Brand Knowledge
The brand’s products should be in line with the brand image
Brand Image
Customer
response
Sales figures are considered the gold standard of measuring customer
response
Customer
response
Sales figures are considered the gold standard of measuring customer
response
Additionally managers can look to other indicators such as
purchase decisions or brand switching
Revitalizin
g
Brands
In most cases even declining brands have
significant brand equity
With proper diagnosis,
strategy and execution, a brand can be
revived
Guidelines to revitalizing
brands
Is the brand worth reviving ?
Is there any significant residual value in one
or more components of brand equity ?
Is the brand worth reviving ?
Is there any significant residual value in one
or more components of brand equity ?
Is the amount needed to revive
the brand realistic ?
Is the brand worth reviving ?
Is there any significant residual value in one
or more components of brand equity ?
Is the amount needed to revive
the brand realistic ?
Even if the brand can be revived , it may not be worth the effort
Is the brand worth reviving ?
Is there any significant residual value in one
or more components of brand equity ?
Is the amount needed to revive
the brand realistic ?
Even if the brand can be revived , it may not be worth the effort
For brands that are suffering from low awareness or negative image,
death may be a better option
Take a long term perspective
Reviving a brand is a long term initiative
The revitalization can be kick started by
addressing the cause of decline
Take a long term perspective
Market research should be an
integral part of brand revival
Carefully
reposi
tion
the bran
d,
invest in
it and
educate the m
arket
If a brand is not viewed as
unique, its future growth
is questionable
Correct mismanagement of the
brand
Correct mismanagement
of the brandRebuild Quality
Poor quality rarely goes unnoticed for long
Correct mismanagement
of the brandRebuild Quality
Poor quality rarely goes unnoticed for long
If poor quality is the problem and the decision to
revive the brand has been made
then expensive as it may be, quality issues need to be
addressed
Correct mismanagement
of the brand
Resist temptation to
milk the brand
If a brand is to be revived,
management must invest in it
Correct mismanagement
of the brandPursue a carefully
defined target market
Critically assess the brand’s target
marketsIt is very difficult to
appeal divergent targets with the same brand
Correct mismanagement
of the brandPursue a carefully
defined target market
Critically assess the brand’s target
marketsIt is very difficult to
appeal divergent targets with the same brand
An effective strategy to cater different targets
is to introduce a line extension with a sub brand
All done ?
then let the revitalizatio
n begin
Created by Ronak Jain, NIT Surat, during an internship by Prof. Sameer Mathur,
IIM Lucknow.
www.IIMInternship.com