BRANDS CAN LIVE INDEFINITELY
BRANDS CAN LIVE INDEFINITELY
Thursday, 16 July 2009 07:09
Products tend to have defined life cycles governed by external forces like technological advancements, legislation and change in consumer habits over time. Brands on the other hand do not have a defined life cycle and in theory, they can live for ever. However, this is not automatic, meaning that if left to survive on their own without custodianship, most brands inevitably find themselves in a state of decline as they loose relevance or competitors steal their market share. Hence, the ultimate purpose of brand management is to carefully control and nurture brands in line with a brand strategy, so as to protect them from decline and spur them to continuous growth.
There is retained value even in brands that are thought to be dead. This retained value at times in the form of nostalgia can translate into a bankable purchase. At times a brand may fail simply because it was targeted at the wrong consumer even though all other fundamentals like product innovation, identity design and name are strategically sound.
A case in point is Iridium, a global satellite telephone system launched in the 1990’s. Iridium introduced innovative technology that would be able to provide phone services for otherwise unserviceable areas, and was targeted at international business travelers’. Millions of dollars were spent on advertising and other marketing communications campaigns globally. Unfortunately it turned out that the business model was not viable as there wasn’t sufficient demand for the services to cover the costs.
The brand was sold off as a failure in December 2000 at a throw away price. The new owners repositioned the brand to target industrial users such as; shipping lines, commercial fisheries, and the oil industry as its core consumers. Other than that they made no change to the other brand attributes like name and visual identity. They also maintained the brand proposition of satellite voice and data service to every corner of the Earth including oceans, arctic regions and airways.
In doing so they capitalized on the former marketing efforts that had largely succeeded in gaining recognition for the brand name and visual identity, which people remembered, with no negative connotations. By July 2004 the new Iridium was posting a profit and had a subscriber base of 100,000 customers, a substantial number for this niche service.
This make you wonder what would have been the outcome if Uchumi had been sold off during its shutdown crisis last year. Most likely it would have been sold for a song and the new investor would have made a killing, by acquiring a strong brand, cheap.
The writer is the Chief Executive Officer of Interbrand Sampson East Africa, a strategic brand consultancy firm.
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