A brand is forever! A framework for revitalizing declining and dead brands

A brand is forever! A framework for revitalizing declining and dead brands.

What is a Brand ?.......

A brand is a product, service, or concept that is publicly distinguished from other products, services, or concepts so that it can be easily communicated and usually marketed.

Then what is Brand Decline ?

When a brand has high awareness and consumers ‘‘hold strong, favorable, and unique brand associations,’’ it is considered to have strong equity. However, brand equity may declinewith the passage of time, sometimes leading to a brand’s decline.

What are the causes of Brand Decline ?

To understand why brands decline theories on brand evolution are being made, using Product Life Cycle (PLC)

Forces and their role in brand decline…

1. Managerial Action

1. Managerial Action

Brands oftendecline because of

‘‘leadership, management, and

employees making excuses rather than acting with

integrity’’

5 Types of managerial actions

5 Types of managerial actions Price

Increases

Inability to stay

with the target market

Product Quality

Price Cuts

Brand Neglect

a. Product Quality

When companies compromises in product quality for cost-cutting reasons it do not impact brand loyalty in the short run, but then managers mistakenly conclude that consumers are willing to accept or live with the change. At some point whencustomers’ experiences with the brand do not live up to their expectations, however, the brand will start to decline

Wrong

b. Price Increase

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

Rabbit

Golf

After Volkswagen failed with its Rabbit model in theUnited States, it replaced the Rabbit with a newermodel, the Golf. However, Volkswagen was unableto control costs and had to keep raising prices, untilit effectively drove itself out of the entry-levelsegment where it had once been a leader.

Replaced by

c. Price Cuts

Conversely, when a company cuts prices in desperationto increase sales, it can also damage the brand.

d. Brand Neglect

When a brand becomes popular, inaction creeps in.Even successful brands need constant nurturing.

This is well illustrated by Black & Decker’s handling of the popular DeWalt brand, which the company ignored until it virtually ceased to exist.

e. Inability to stay with Target Market

When the target market moves away from thebrand, the brand can move into decline.

2. Environmental Factors

Markets are dynamic in nature and can be significantlyInfluenced by the larger environment in which they operate. They can undergo major transformations, which in turn have an impact on the various companies in an industry and their brands.

Kodak a leading photography brand faced an Environmental change when its old camera model started declining due to arrival of digital era.

Soon Kodak realized the implications of thisenvironmental factor, and made necessary investments in the future. Kodak’s actions helped it to maintain a leading role in the new market.

3. Competitive Actions

In most markets today, a brand faces relentlessonslaught from its competitors. This can become particularly problematic if the competitors havedeep pockets.

Initially there were four brands in USA for sporty apparels.

Puma and Adidas are good examples of brands that declined in the face of intense competition. While very strong in Europe, both were almost completely squeezed out of the U.S. market by Nike and Reebok, which were more in tune with the trends in the American market.

How to know Brand is declini-ng ?

The ultimate 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 prolongeddecline is a clear warning.

To avoid damaging outcomes focus on three equity features……..

1.Differential Effect2.Brand Knowledge3.Customer Response

1.Differential Effect

Consumers must be provided with a compelling argument as to why they should choose a particular brand from the number of alternative available ? It is also important to ensure that consumers have sufficient exposure to such a message, so that they are knowledgeable about the brand’s assertions. If marketers are successful in accomplishing this, they can hope to see a differential effect of this brand knowledge on consumers’ behavior toward their brand.

2.For a brand to be successful, consumers should be knowledgeable about it. It is imperative that they understand why it is a more compelling choice than the other alternative ?

2.1. 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. High brands which spend much on brand awareness has the result in the form of their omnipresent band name. Customer recalls their brand name very easily.

2.2. Brand Image

The image of a brand can change over time. It isimportant for a brand to maintain ‘‘strong, favorable, and unique brand associations’’. However, it is not uncommon to see an innovativebrand losing its well-defined and focused image.

Even a giant brand like Volkswagen and Levis faced a devastating declining in their brand name when they failed to maintain their brand image.

3. Customer response

While sales figures are considered the gold standard for measuring customer response or lack there of to a brand, managers may look to other leading indicators such as purchase intentions and brand loyalty measures.

Revitalizing Brand

A brand’s equity is often the single most valuable asset for a company.

Even when a specific facet of a brand’s equity is not managed well, and it sets the brand into a declining course.

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.

Key question…Is the brand worth reviving ?

Our basic premise is that a brand may be worthreviving if there is significant residual value in one ormore of the components of brand equity. Therefore,the first step in assessing whether the brand is worthreviving entails examining all three elements ofbrand equity. Differential effect, Brand knowledge and Customer response.

Are all brands worth reviving ?

While we feel that 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, resulting in a lack of motivation for

consumers to choose that brand. In such a case, it may

be better to kill the brand than to invest in it.

Take a long-term perspectiveBranding is an exercise in patience. Most brands take a long time to build, and a long time to die. Revivinga brand is also a long-term initiative, typically taking more than a year or two.

Marketing research should be an integral part ofthis exercise to assess and track brand awarenessand brand image, as suggested earlier.

Are the consumers needs fulfilled by the brand ? Is it keeping up the promise ? How much market and consumers are aware about the brand ?

Are the consumers needs fulfilled by the brand ? Is it keeping up the promise ? How much market and consumers are aware about the brand ?

A brand’s promise plays a major role in differentiatingthe brand from its competitors. If a brand isnot viewed as unique as compared to others in themarket, its future growth is questionable.

What causes did study identified for the declining of brand ?

As previously mentioned, managerial actions areprobably the most common cause of brand decline.One of the main problems that our study identified,however, is the failure to clearly understand branddecline and the commitment to do what is necessary , to reverse the trend, and change strategies that weakened the brand in the first place.

Three ways to

overcome declining

brand

Rebuild quality

Three ways to

overcome declining

brand

Resist temptation to milk the brand

Pursue a defined target market

When it is time to rebuild quality ?

In the short run, compromises on quality may gounnoticed, and customers may stick to the brand outof fondness or loyalty. Poor quality rarely goesunnoticed for long, though, and at some point customerswill begin to abandon the brand.

Example: Harley Davidson

Old designed bike of poor quality

Bike rebuild with improved quality

Launched new model with improved quality

Korean car maker Hyundai also undertook a significantfinancial investment in quality, and backed this with a 100,000 mile service warranty to overcome persistent negative consumer perceptions regarding the same. In 2006, Hyundai was rated above Mercedes Benz in J.D. Power and Associates’ initial quality survey

Resist temptation to milk the brand……….

If a brand is to be revived,

management must invest in the brand.

What is the cause for Milking the brand ?Example: Levi’sOnce a market leader, Levi’s entry into Wal-Mart with its lower quality Signature jeans has hurt the image of the brand’s entire line. Such actions should be avoided.

Levi’s Brand

Levi’s Brand with its lower quality product

Launched it into Wal-mart, suffered declining image of brand

Pursue a carefully defined Target Market

Honing in on a carefully defined target market canbe a particularly challenging task. Target marketscan mature or shrink over time. When that happens, managers face a very difficult choice. Moving with the dwindling target market is not an appealing option, but neither is abruptly switching to another target market, as this risks alienating the core customer base;

Finally 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.

Managers need to constantly watch

for signs of brand decline, in the

form of problems with brand

knowledge, brand differentiation,

and customer response.

Numerous brands including Harley- Davidson, Apple, and Cadillac have demonstrated that brand death can be prevented using a brandequity framework.

So…..

Recap

1. What is Brand ?2. Brand Decline ?3. Causes for Brand Decline ?4. How to know brand is declining ?5. Revitalizing the brand.6. Is the brand worth reviving ?7. Are all brands worth reviving ?8. What causes did study identified for

the declining of brand ?

Created By-

Vishal Yadav, GHRCEM, Amravati

During an Internship by

Prof. Sameer Mathur, IIM Lucknow

www.IIMInternship.com