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A Bra
nd is
Fore
ver
A fram
ewor
k to
revita
lize
decli
ning
and
dead
bra
nds
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 Cycle
According 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
Man
ager
ial A
ctio
ns
Prod
uct Q
ualit
y
Compromise in quality for cost cutting reasons leads to brand decline in the
long run
Man
ager
ial A
ctio
ns
Price
Incr
ease
s
Increasing prices without increasing corresponding
benefits
Man
ager
ial A
ctio
ns
Price
Cut
sSlashing prices to increase
sales can be lethal
Man
ager
ial A
ctio
ns
Price
Cut
sSlashing prices to increase
sales can be lethal
Damages brand imageReliance on low quality
products
Man
ager
ial A
ctio
ns
Brand
Neg
lect
Strong brands sometimes face neglect and are
seen as cash cows
Man
ager
ial A
ctio
ns
Inab
ility
to st
ay w
ith
the
targ
et m
arke
tWhen companies reach out to other markets, it may lose its appeal to its target markets
Environmental Fa
ctors
Environmental Fa
ctors
Legal E
nvironment
The legal regulations on a product may cause strong negative publicity
Environmental Fa
ctors
Change in product
environment
Polaroid spiraled into decline when
digital imaging became popular
Competitive Acti
ons
Most brands face relentless onslaught from its competitors
Competitive Acti
ons
Most brands face relentless onslaught from its competitors
Puma and Adidas were squeezed out
of the US market by Nike and Reebok
Decon
stru
ctin
g Bra
nd
Declin
e
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 E
ffect
Differential E
ffect
Consumers must be provided with a compelling argument as to why they
should choose a particular brand over the others
Differential E
ffect
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
Differe
ntial E
ffect
Valu
e Pr
icing
Feasible when different
brands in a product
category are similar
Differe
ntial E
ffect
Incr
ease
d
Benefi
ts
Superior Quality, Physical Attributes or Intangible Benefits
Differe
ntial E
ffect
Incr
ease
d
Benefi
ts
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 Knowledge
For a brand to be successful, consumers
should be knowledgeable about it
There are two components of Brand Knowledge
Brand Knowledge
Aided RecallTop 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 Im
age
Custom
er
resp
onse
Sales figures are considered the gold standard of measuring customer
response
Custom
er
resp
onse
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
Revitaliz
ing
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
Caref
ully re
positi
on
the
brand,
inve
st in
it a
nd
educa
te th
e m
arke
t
If a brand is not viewed as
unique, its future growth
is questionable
Correct mismanagement of the
brand
Correct mismanagement
of the brand
Rebuild Quality
Poor quality rarely goes unnoticed for long
Correct mismanagement
of the brand
Rebuild 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 brand
Pursue a carefully
defined target market
Critically assess the brand’s target
markets
It is very difficult to appeal divergent targets
with the same brand
Correct mismanagement
of the brand
Pursue a carefully
defined target market
Critically assess the brand’s target
markets
It 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