REVIVING WEAK AND DEAD BRANDS: INSIGHTS FROM THEORY AND PRACTICE
REVIVING WEAK AND DEAD BRANDS: INSIGHTS FROM THEORY AND PRACTICE
Thursday, 07 October 2010 13:28
ABSTRACT
Over the years, many brands such as Oldsmobile, PanAm, and Woolworth have met
untimely deaths. Many more have steadily declined into oblivion, while others have been
revived. When a brand dies, significant investments that were made to build the brand are
also lost. Unfortunately, even the strongest brands with high net worth are not immune from
brand decline and subsequent death. In today’s market, where new product introductions
are both expensive and risky, it may be worthwhile to evaluate brands that are declining,
and invest in them to revitalize them. However, there is a dearth of studies that focus on
declining brands. In this paper, we use findings from academic literature, detailed case
studies, and interviews with marketing executives to provide guidelines to deal with
declining brands. We study the conditions that lead to brand decline and brand death,
highlight signs that may suggest an impending decline, offer insights into assessing the
viability of reviving a brand, and suggest various approaches that can be used to
strengthen the brand and give it a second life.
Keywords: brand decline; brand death; brand demise; brand revival; brand equity
Sunil Thomas, Ph.D. + Chiranjeev Kohli, Ph.D.
Sunil Thomas is Associate Professor of Marketing and Chiranjeev Kohli is Professor of
Marketing at Mahaylo College of Business and Economics, California State University
Fullerton, Fullerton, CA 92834. All correspondence should be directed to Chiranjeev Kohli at
714. 278.3796 or via email at This e-mail address is being protected from spambots. You need JavaScript enabled to view it . This paper is under review at Business
Horizons.
REVIVAL OF A “DEAD BRAND”
Say goodbye to the Taurus. After 21 years and sales of nearly 7 million
cars, Ford Motor Co. is giving up on what some call the most influential
automobile since Henry Ford's Model T.
Associated Press Online, 2006
(By withdrawing Taurus) Ford may have wasted 20 years of investment
in a brand name (so we have decided to resurrect the brand name).
Alan Mulally, CEO, Ford Motor Company,
2007
The Taurus was one of Ford’s most successful cars. The brand was launched in 1985 and
quickly became one of the company’s top selling models (Krisher, 2006). For three years in
a row, the Taurus had the enviable record of being the bestselling car in the country (Jaroff,
1995). However, intense competition from two Japanese brands—Honda Accord and
Toyota Camry—weakened the brand. When Ford pulled the plug on the brand in 2006,
many news reports mourned the passing of an era. But, soon after that, Ford did a
turnabout, and reintroduced the Taurus brand. It felt that the brand name Taurus still had a
lot to offer, and was clearly a better choice in comparison to an entirely new, and therefore
unknown brand.
The “death” of a brand is a complex and sometimes controversial issue, but there is ample
evidence to show that neither the lifespan of a brand, nor its ultimate destiny, is
predetermined. In fact, brand decline is a reversible process. Harley Davidson suffered a
significant decline, only to be revived in recent years. In the early days of the post World
War II period, the brand gained popularity, as its motorcycles became known for their
unique designs and engineering (Wells, 2001). After decades of dominance, the brand
started bleeding in early 1970’s. The advent of smaller Japanese motorbikes started
creating a dent in the brand’s sales. To counter its Japanese competitors, Harley
introduced smaller motorbikes. Unfortunately, they were perceived by Harley’s loyal
customers to be of poor quality, and sales continued to drop. Soon the company was
facing huge financial losses, and it looked like death was certain for the brand (Hoovers,
2007). However, Harley decided to make a significant investment in its quality and
distinctive styling. It is now—once again—a well-known and revered American brand.
Reviving a brand is not just feasible; it may very well be a more attractive strategy than
launching a new brand. As Aaker (1991) pointed out, “the revitalization of a brand is usually
less costly and risky than introducing a new brand, which can cost tens of millions and will
more likely fail than succeed” (p. 242). Sometimes dying or dead brands may still have
significant brand equity in terms of high brand awareness and a strong brand image. It was
this thinking that motivated Ford’s to revive the Taurus brand; and the brand’s equity was
the driving force in this decision. Ford realized that instead of trying to use another brand
name that meant little to the market, it would be better off using the Taurus brand name
that had 90% name recognition and a positive image (Kiley, 2007). Thus, shortly after its
death, the Taurus is reborn.
In this paper, we highlight some examples of brand decline, investigate leading causes of
brand decline, identify signs that are precursors to impending decline, and suggest
guidelines to revitalize brands. To accomplish this, we reviewed the academic literature
and trade publications on this topic, examined case studies of brands that died or were
revitalized, and conducted in-depth interviews with practitioners who were knowledgeable
about these brands.
DECLINE AND DEATH OF BRANDS
Branding has been used since ancient times to distinguish products from different sellers
(Aaker, 1991). Today, the power of a brand lies in its equity with its customers, and over the
years, a more customer based brand equity framework has been developed. Accordingly,
brand equity has been defined as “the differential impact of brand knowledge, which
comprises of brand awareness and brand image, on customer response.” Thus, when a
brand has high awareness, and consumers “hold strong, favorable, and unique brand
associations,” it is considered to have strong equity (Keller, 1999, p.102).
Familiar brands that have demonstrated strong brand equity include Coca Cola, Microsoft,
IBM, and GE (Kiley, 2007). However, brand equity may decline with the passage of time,
some times leading to a brand’s demise. Pan American World Airways, more commonly
known as PanAm, was an iconic American brand. It was one of the oldest airlines in North
America, and the first American airline to operate international flights. For this reason, it was
promoted as “The World’s Most Experienced Airline” (Reed, 2006). Over the years, PanAm
faced intense competition, which began to impact it’s bottom-line. In 1988 it faced a
major crisis when one of its airliners was hijacked and crashed (Hoovers, 2007). Shortly
afterwards, PanAm went out of business. One of the main reasons for PanAm’s death was
the significant amount of negative publicity associated with the plane crash. It created a
confidence crisis among its customers (Haig, 2003). Today, the brand is dead except for
some nostalgic memories in the minds of former employees and customers. The PanAm
case is an example of death, which followed an extended period of struggle.
Oldsmobile, another icon, was one of the flagship brands for General Motors. It was known
for its pioneering designs. Some of its innovations included chrome plating, fully automatic
transmission, and front wheel drive. Over time, sales started declining and GM decided to
stop production of Oldsmobile cars in 2004. There were two primary reasons for the decline
of the brand. Oldsmobile was perceived as an “old brand” among consumers (Haig, 2003).
As much as GM tried to fight with “It’s not your father’s Oldsmobile” campaign, it was
unable to shake its staid positioning. Another reason was that as GM strived for uniformity in
design across its different brands, Oldsmobile lost its unique identity over time, and followed
a route of steady decline over a rather long duration because of chronic issues that were
not addressed.
The above examples illustrate that even well known brands can decline—a result of a wide
variety of factors. While the ultimate death of a brand typically receives a lot of attention, it
is often preceded by a slow, debilitating decline over a prolonged period (Semans, 2004).
The academic literature is particularly sparse in addressing this, and it is a perplexing issue
for the practitioners. To address this, we now explain the leading causes of brand decline.
CAUSES OF BRAND DECLINE
To understand why brands decline, we draw upon the theories of brand evolution. The
popular product life cycle (PLC) framework identifies four stages—introduction, growth,
maturity, and decline. The simplicity of the framework is appealing. However, several
scholars point to some of its major drawbacks, including its tautological nature for managers
(Hunt, 1976). It “uses sales to define the stages of the life cycle, which in turn are used to
predict sales” (Tellis & Crawford, 1981 p.125). In fact, the Managing Partner & President of
Baumwoll International Consulting suggests that excessive reliance on PLC creates a selffulfilling
prophecy because, when sales decline, “management decides that a brand no
longer needs investment and begins to milk the brand” (J. Baumwoll, personal
communication, January 23, 2006).
A more evolved form of the PLC framework—the product evolutionary cycle (PEC),
proposed by Tellis and Crawford (1981)—offers additional insights into how a brand grows.
According to PEC, in a biological context, evolution of organisms is affected by three
forces—generative (their genetics), selective (the environment), and mediative
(intervention by other species; specifically, humans). The PEC framework is equally
applicable to brands (Tellis and Crawford 1981; Holak & Tang, 1990). This framework implies
that a brand can evolve, and is not predestined to die.
Managerial actions, both strategic and tactical, play a vital role in determining a brand’s
future. These actions act as a generative force in the brand’s evolutionary growth.
However, managerial actions do not take place in isolation. The market environment serves
as a selective force, affecting brands in certain industries. Finally, for most brands, the
effectiveness of management actions will be impacted by the intervening actions of
competitors. In other words, competitors’ actions act as a mediative force in a brand’s
evolution. Thus, in the context of brands, managerial and entrepreneurial activities
constitute the generative force, the market environment acts as the selective force, and
competitors’ actions and responses to marketing initiatives constitute the mediative force.
This is an intuitive and insightful approach of categorizing the key factors in a brand’s
success or decline. We now elaborate on each of these forces, and explain their role in
brand decline.
1. Managerial Actions
Ron Strauss at Brandzone suggests that brands often decline because of “leadership,
management, and employees making excuses rather than acting with integrity” (R. Strauss,
personal communication, January 24, 2006). Even when environmental factors and
competitive actions remain static, managerial actions can significantly impact brand
health. In our investigations, we found that such actions can be classified into five
categories.
i. Product Quality: A successful brand sometimes can lull its management into
complacence. The sheer success of a brand becomes its own undoing. 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” it. However, when the customers’ experience with the brand does not
live up to their expectations, the brand eventually starts to decline. Cadillac’s
steady decline over two decades exemplifies this. Today, it is in the midst of a
turnaround (additional discussion on Cadillac’s efforts appears later). The Harley-
Davidson example, discussed earlier in the paper, also illustrates this mindset. Harley
Davidson was getting competition at the lower end of the market from the
Japanese brands. Harley responded by producing smaller (and presumably lower
quality) motorbikes of its own, which hurt the entire franchise of Harley brands
(Hoovers, 2007).
ii. 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. After Volkswagen failed with its Rabbit model in the United States, it
replaced Rabbit with a newer model, Golf. However, Volkswagen 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 (Serafin, 1993).
iii. Price Cuts: Conversely, when a company cuts prices in desperation to increase sales,
it can also damage the brand. Lacoste was a popular brand in the United States till
the 1980’s, when sales began to decline. The owner, General Mills, reacted by
lowering the price and expanding distribution (Dell, 2005). To maintain the low prices
the company had to use cheaper material. This proved disastrous and the brand’s
image took a major hit (Bloom, 2005).
iv. Brand Neglect: When a brand becomes popular, inaction creeps in. Even successful
brands need constant nurturing. However, management can lose sight of this, start
looking at its core brands as cash cows, and neglect to invest in them (Aaker, 1991).
This is illustrated in Black & Decker’s handling of the popular DeWalt brand, which the
company ignored till it virtually ceased to exist (Paley, 1995). As the brand manager
of DeWalt put it, “managers get wrapped up in the inertia of a brand and begin to
miss changes in the market,” (S. Wiercinski, personal communication, November 2,
2005). A brand could also face neglect when organizational shake-ups result in less
attention being paid to a strong brand associated with the earlier management.
One of the reasons for the decline of the popular milk-flavoring product Ovaltine was
corporate neglect. As the Chairman and CEO of The Himmel Group bluntly put it,
“Ovaltine died due to neglect,” primarily “because it wasn’t a core brand of the
pharmaceutical company, Sandoz,” (J. Himmel, personal communication, October
19, 2005).
v. Inability to Stay with the Target Market: When the target market moves away from
the brand, the brand can move into decline. In the 1990’s Gap decided to do more
to reach out to teenagers and young adults, because it was a growth segment and
offered better rewards (Hoovers, 2007). The company started to position itself to
appeal to this audience, but in the process alienated its core customers who felt
neglected as the product strived to become youthful and trendy (Palmiere, 2004 ).
Paul Pressler, President and CEO of Gap, acknowledged—in hindsight—that its ads
had become “too edgy” for its key target market (Sellers, 2003).
The high end fashion brand, St. John, is in a similar position. St. John is known for its
signature knit and traditional styling, with simple silhouettes and unique wrinkle-free
fabric that holds its shape for decades, and rarely shows any signs of wear. As its
target market matured, so did the brand. St. John’s is a classic dilemma, where
aging with its target market will ultimately lead the brand to its grave. On the other
hand, shifting its focus midway to a more promising younger audience runs the risk of
damaging the very essence of its “upscale conservative” image. Its decision to
replace its iconic model, Kelly Gray (the daughter of the founder Bob Gray) as the
face of the brand, with a more rebellious actor-model Angelina Jolie, was aimed at
appealing to a younger, less conservative, audience. Unfortunately, the consumers
are not buying its message and have started to turn away from the brand (Wilson,
2006).
2. Environmental Factors
Markets are dynamic in nature and can be significantly influenced by the larger
environment they operate in. They can undergo major transformations, which in turn, have
an impact on the various companies in an industry and their brands. Cigarette brands in
the United States have been affected by changes in the (legal) environment. The industry is
facing an increasing number of regulations and strong negative publicity. One brand in
particular, RJ Reynold’s Camel, has been accused of using a cartoon character called Joe
Camel, and other communication tactics, to attract children. This led to lawsuits against
the company, and the subsequent negative publicity severely dented the brand’s image,
forced it to scale back its promotions, and impacted its sales (Haig, 2003).
Polaroid has been a houselhold name since it popularized instant photography. With its
unique product offering, Polaroid quickly gained prominence. Even today, it retains high
brand awareness, but the company spiraled into decline and went bankrupt as the
environment changed and digital imaging became popular (Hoovers, 2008). The very
foundation of its appeal—instant results—was no longer appealing in an age of digital
cameras and printers.
Kodak, another leading brand faced similar environmental changes. George Eastman had
pioneered film cameras in 1885. His first camera called “Kodak” started selling in 1888
(Hoovers, 2008). For the next 90 years or so, films were the standard platform for
photography. However, in late 1980’s digital cameras started appearing in the market. This
was a major challenge for Kodak, which had staked its dominance on film in the camera
market; but it was quick to realize this “environmental factor,” and made the necessary
investment in the future. This helped it in maintaining a leading role in the “new market.” It
was one of the first companies to introduce digital cameras to the commercial market—the
DCS-100, with a 1.3 megapixel sensor and priced at $13,000. Kodak continued to take the
lead in the digital technology. While other “digital companies,” such as Hewlett Packard,
Sony, and Casio entered the digital camera market and made significant strides, Kodak
never allowed the transformation of the market to derail its brand, and avoided possible
death. Today, it maintains a 16% market share.
3. Competitive Actions
In most markets today, a brand has to face the relentless onslaught of its competitors. This
can become particularly problematic if the competitors have deep pockets. Puma and
Adidas are good examples of brands that declined in the face of intense competition.
Both these brands were very strong in Europe, but 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. In fact, Nike almost wiped out Adidas in the United States causing its
market share to drop from 60% to less than 3% in the early 1990s (Smit, 2008). Only recently,
have Puma and Adidas regained their footing in the North American market, with Puma
gaining a presence in the active lifestyle gear market, and Adidas making inroads in the
footwear segment.
Similarly, the retailing giant, Kmart had anchored itself to being a low priced retailer.
However, Wal-Mart, a new competitor, proved to be formidable in this game. While the
original Wal-Mart store dates back to 1950, its real growth came in 1980’s, when in a short
time span of 5 years it went from 330 stores in 1980 ($1.2 billion in sales) to 1,114 stores in 1985
($6.4 billion sales). Wal-Mart made cost-cutting a science. Its operations were brutally
efficient. It also offered “Everday Low Prices,” as opposed to periodic discounting by its
competitors. Today, it has sales of over $378 billion. K-Mart was unable to compete, and
was forced into a merger with Sears Roebuck in 2004, in the hopes of leveraging their
combined strength to fight Wal-mart (Bhatnagar, 2004; Hoovers, 2008).
Newer competitors are often more nimble. They are able to leverage new technologies or
marketing approaches to their advantage to challenge well established market leaders,
who are often bound by their legacy. In the personal computer market, retail stores had
been the primary distribution channels. However, Dell made a fundamental change in this
model, and offered a direct-to-customer distribution system. This resulted in considerably
lower markups than its competitors, and Dell was able to pass these savings to its customers
in terms of low prices. It also made smart use of the Internet as a platform for its offerings,
allowing buyers to customize their PCs. As a result of these innovative changes, Dell
became the market leader, while its major competitors, including Compaq, suffered losses
in market share. Compaq subsequently merged with Hewlett Packard, and cost-cutting
was a significant motivation in this decision.
Blockbuster, a giant in the video rental business, was in a strong position with an enviable
network of retail stores nationwide. However, its fortunes began to slide when Netflix
threatened this set-up by offering video rentals via mail to the comfort of customers’ homes.
No more need for trips to the store to rent a movie, and no late fees! This business model
was very appealing to its patrons. As a result, Blockbuster was forced to close 300 stores in
2006 alone. It is now fighting back by investing in its own version of online rentals by mail,
under the name of Total Access (Internet Retailer, 2007).
DECONSTRUCTING BRAND DECLINE
The ultimate sign of an impending brand death is a significant drop in unit sales over a
sustained period. While sales can fluctuate in response to the market dynamics and
competitors’ actions, a prolonged decline is a clear warning sign. Some managers counter
it by quick-fix solutions such as raising prices or introducing brand extensions. Such solutions
may push up revenues, but can often mask and compound the real problems. Therefore,
to avoid (or reverse) a damaging outcome, it is important to deconstruct the decline in
terms of reliable precursors to sales. To do so, we revisit the concept of brand equity that
was outlined earlier in the paper: “the differential impact of brand knowledge, which
comprises of brand awareness and brand image, on customer response.” Thus, there are
three key elements of a brand’s equity (italicized above), and a change in one or more of
these can signal a brand’s impending decline. In the following paragraphs we examine
these in more detail.
1. Brand Differentiation
Differentiation is the anchor of a brand’s equity. Without differentiation, a company cannot
charge a premium, nor can it sustain a brand. After all, how a brand is differentiated is at
the core of any persuasive marketing message by a company to urge customers to buy its
brand. The Oldsmobile brand once stood for innovation, but by 1980’s customers did not
see much difference between the brand and other offerings from GM’s stable, such as
Buick, Chevrolet, and Pontiac (Brown, 1992; Haig, 2003). Similarly, Ovaltine experienced
stagnant sales in the 1980’s, because consumers failed to see significant differences
between the brand and its main competitor, Horlicks (Mason, 2000).
Lack of differentiation will likely lead to decline. As Volkswagen’s Public Relations Manager
stated, “brands must offer something different; they can’t just be another flavor of vanilla,”
(T. Fouladpour, personal communication, October 20, 2005). As such, marketing managers
should not only monitor differentiation, they should carefully articulate it. This may require
some creativity, but meaningful differentiation (that is appealing to customers) is necessary.
Even some makers of gasoline, often considered a commodity product, have succeeded in
creating differentiation. One notable example is Chevron, which emphasizes its
trademarked additive, Techron. Many consumers seem to have bought the idea, and base
their loyalty to Chevron because of Techron, a “detergent” that reduces accumulation of
deposits in fuel injectors and intake valves. Interestingly, all major brands of gasoline have
detergents in them. Chevron has just seized on it as a source of differentiation.
2. Brand Knowledge
Once a differentiation has been created for a brand, the market has to be informed about
it, for the differentiation to be of any practical value. We now discuss the two components
of brand knowledge.
a. 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.
Sometimes when a brand’s market share drops, the company reduces advertising,
and consequently finds itself in the proverbial catch 22 situation. Typically, a popular
brand will have very high aided recall and high top-of-the-mind (and unaided)
recall—both indicators of brand awareness. However, aided recall levels tend to
decline more gradually; so, managers’ reliance on (high level of) aided recall can
be misleading. Special attention, therefore, should be paid to the top-of-the-mind
recall. This is a better indicator of a brand’s health, as there is a shorter lag between
this measure and a brand’s true health. As an example, even today PanAm will still
have a respectable level of aided recall, although it may fail to show up entirely in
top-of-the-mind recall measures.
When a brand’s top-of-the-mind recall starts slipping, it is likely getting pushed into
the background. Brands such as Brylcreem, Ovaltine, and Burma Shave once
enjoyed high top-of-mind recall, but over time lost this advantage (Wansink, 1997).
To spot brand decline quickly, a manager should constantly monitor brand
awareness levels, as they can be a strong signal of future problems.
b. Brand Image: The image of a brand could change over time. It is important for a
brand to maintain “strong, favorable, and unique brand associations” (Keller, 1999,
p.102). However, it is not uncommon to see an innovative brand losing its well
defined and focused image. Volkswagen’s public relations manager summarized
the brand’s experience by admitting that Volkswagen “had failed in the past when
they used marketing strategies or introduced new products that strayed from the
company’s image of being approachable, friendly, and a German brand,” (T.
Fouladpour, personal communication, October 20, 2005).
Levi’s is another brand that is facing image problems today. The brand was a
market leader in its category, and was once synonymous with high quality denim
jeans. However, over the years, it began to lose its image leadership. Its decision to
sell its Signature brand through Wal-Mart—arguably a low end retailer—pushed the
image further down-market because of this association. This concern was further
amplified because the Signature jeans were priced from $18 to $24 a pair, about
35% less than Levi’s most popular Red Tab jeans.
To prevent such situations, companies need to monitor brand image and look for
changes in consumer perceptions. Unlike (objective) awareness levels, however,
image is more challenging and expensive to track, because of its inherently abstract
nature. Unfortunately, this is also the facet of a brand’s equity that is most likely to
get hit in the case of a decline. So, managers are advised to make an extra effort—
especially if a brand seems to be in decline.
4. Customer Response
While the sales figures are the ultimate measure of customers’ lackluster response, there are
other leading indicators managers can examine, such as purchase intentions and brand
loyalty measures. These are often standard questions in survey panels maintained by
companies as part of their ongoing tracking efforts. Another indicator that is particularly
useful (and more easily monitored in the case of non-durable products) is brand switching
behavior. Decline is often preceded by heightened levels of brand switching behavior;
and, as such, it is a useful leading indicator of a brand’s performance. Before consumers
desert a brand, they start trying other brands, and then settle in on their next brand of
choice (or a portfolio of their preferred brands). Brand switching may be triggered for a
variety of reasons, such as an increase in the price of the brand, the entry of a new
competitor in the market, or negative news about the brand. None-the-less, it tends to
happen only when the bond that the brand has had with the consumer has already been
weakened. Thus, an increase in brand switching provides a meaningful metric and an early
warning system for monitoring brand decline (e.g., Semans, 2004).
The signs of decline mentioned above need to be detected quickly if corrective action is to
be taken. All three aspects of equity need to be considered, since they are linked to each
other. Measures focused solely on immediate customer response are not going to be
effective in the long run, unless problems related to brand knowledge and brand
differentiation have been addressed. For example, it may be easy to correct declining
sales with consumer promotions, but in the best case scenario, this may be a short term
solution; and in the worst case scenario, it may exacerbate a brand’s problems, and hasten
the brand’s demise.
REVITALIZING BRANDS
A brand’s equity is often the single most valuable asset for a company. The worth of the
leading brands, such as the Microsoft, Coca-Cola, and Disney, runs into tens of billion dollars
(Kiley, 2007). Lesser known brands can also be extremely valuable. So, even when a
specific facet of a brand’s equity is not managed well, and it sets the brand onto a
declining course, other elements of a brand’s equity often remain intact. For example, a
brand may maintain high awareness levels, even when its image may be taking a hit; e.g.,
PanAm. Similarly, some brands may not get proper response from the customers because
of ineffective marketing efforts, and may slide into a decline, even when brand awareness
and brand image numbers are favorable; 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. This is the central tenet of our assertion. We
conclude that in most cases, there is a significant amount of equity in declining brands; and
with proper diagnosis, strategy, and execution, a brand can be revived. In today’s
marketplace, where introducing a new brand costs tens of millions of dollars, revitalizing
existing brands is a worthwhile exercise. Our review of the literature and in-depth interviews
revealed some common themes, and lead to the following guidelines that should be
helpful to managers.
1. Is the Brand Worth Reviving?
Our basic premise is that a brand may be worth reviving if there is significant residual value
in one or more of the components of brand equity. Therefore, the first step in assessing if the
brand is worth reviving is to examine all three elements of brand equity—knowledge
(awareness and image), differentiation, and customer response—to pinpoint where help is
needed. The Chairman and CEO of the Himmel Group felt that three critical questions
need to be answered when deciding to revitalize a brand: (1) Can the brand regain some
of its former glory (brand knowledge)? (2) Can its old equity be enhanced through new
positioning that is relevant and will stand out (differentiation)? (3) Can the company
effectively deal with logistical issues (put plans in place that will get an appropriate
customer response)?” (J. Himmel, personal communication, October 19, 2005). A brand
audit can help answer these questions. However, it is equally important to determine the
amount of realistic 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). As such,
this is both a marketing and financial exercise; and it needs to be thorough.
While we feel that most brands can be revived, some brands may just not be worth the
effort. This is particularly true for brands that suffer from lack of relevant differentiation, low
awareness, and a negative image. In such a case, it may be better to kill the brand, than
to invest in it. However, most brands that were strong at one point of time tend not to fall in
this unfortunate position, and can be salvaged. It is interesting to note that many of the
brands that have been successfully revitalized were medium to high-priced, with relatively
high profit margins, and had a limited number of shelf keeping units (Wansink, 1997); in other
words, brands that commanded a premium in the recent past, and had a singular focus
with a well defined differentiation.
3. Take a Long Term Perspective
Branding is a long term exercise. Most brands take a long time to build, and a long time to
die. Reviving a brand is also a long term exercise, typically lasting more than a year or two.
This is a challenge in a corporate system that rewards managers on short term performance,
often measured on a quarterly or annual basis. However, a long term perspective is
imperative, even if that means taking losses in the interim. This long term vision then has to
be followed by a well thought-out strategy and its execution. The brand revitalization
process can be kick-started by addressing the causes of the decline, understanding the
brand’s promise (and why it may have failed to maintain its relevance), adjusting it if
necessary, and educating the market about it.
When Blockbuster was under attack from 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 to thrive in the market. This meant redefining
its existing offering with a long term perspective. Blockbuster closed unprofitable stores that
were in close proximity to others. It then used its profitable physical store locations to
benefit its Total Access online rental program, which had a more promising future.
Subscribers were given the option of either mailing back the movie, or dropping it off at the
local store in return for a free movie rental. Blockbuster also invested heavily in Total Access
program in 2007, and saw favorable results. The number of subscribers increased from
approximately 3 million in 2006 to 4 million in 2007, although still trailing Netflix’s subscriber
base of about 7 million. The online program reached 10.4% of Blockbuster’s total movie
rental revenue, compared to 4.9% of in the prior year. Finally, the online program also
helped generate more cross-channel sales and increased store traffic (Internet Retailer,
2007).
Marketing research should be an integral part of this exercise to assess and track brand
awareness and brand image, as suggested earlier. Nutri-Grain understood this, and
reinforced its image as a maker “of healthy breakfast and snack foods” through brand
extensions, including ginger and cappuccino flavored varieties; and subsequently fortified
its breakfast cereal bars with calcium and vitamins, as well as zinc and iron. Similarly,
DeWalt studied its weaknesses, and successfully created an image of heavy duty tools for
professionals. The brand manager for DeWalt affirmed that “Research was the primary tool
used to revive the DeWalt brand,” after it suffered years of neglect (S. Wiercinski, personal
communication, November 2, 2005).
4. Carefully Differentiate and Reposition the Brand, and Educate the Market
A brand’s promise plays a major role in differentiating the brand from the competitors. If a
brand is not viewed as different from others in the market, then its future growth is likely to
be in question. Oldsmobile, Buick, and other GM brands suffered because of this lack of
differentiation. However, it is encouraging to know that strong brand differentiation can be
re-established with a focus on the right positioning, and then emphasizing that consistently
in its communication. To quote the public relations manager of Volkswagen—another
leading automobile manufacturer that has seen ups and downs—“brand managers faced
with a declining brand must find what’s unique about their product and hammer it home
throughout all aspects of the transaction—before, during, and after the sale” (T.
Fouladpour, personal communication, October 20, 2005)
While GM failed with Oldsmobile, it successfully turned around its Cadillac brand. Over the
last couple of decades, Cadillac had seen a steady decline, while Japanese and German
brands grew stronger. But Cadillac was committed to going head-on with the competition,
repositioning itself as providing a driving experience as good as any competitor’s, while
undercutting them on pricing. In the longer term, the company plans to continue
rebuilding the brand image. To accomplish this, it is offering more models like CTS, STS,
DTS—each positioned to compete directly with the bestsellers in the respective categories.
Cadillac invested heavily in the quality of these models, and designed the cars for the
global market. In early 2008, the efforts paid off, and Cadillac was rated more favorably
than the best Germany or Japan had to offer (Motor Authority, 2008).
4. Correct the Mismanagement of the Brand
As discussed earlier, managerial actions are probably the most common cause of brand
decline and this manifests itself in a variety of ways. One of the main problems that our
study identified, however, is the failure to clearly understand brand decline and the
commitment to do what is necessary to reverse the trend, and change strategies that
weakened the brand in the first place. We now outline ways to address some consistent
themes that have emerged in declining brands.
a. Rebuild Quality: In the short run, compromises on quality may go unnoticed, and
customers may stick to the brand out of fondness or loyalty. However, poor quality
rarely goes unnoticed, and at some point customers start to abandon the brand. If
poor quality is a problem, it needs to be fixed. The management will have to
determine if it is a worthwhile exercise. However, once the decision is made to
revive the brand, expensive as it may be, quality issues have to be addressed.
Harley Davidson used Japanese management principles to improve quality,
extended its product line, and subsequently achieved a complete turnaround. It
reversed its strategy of cost cutting. Today its motorcycles sell to the high end
market (Hoovers, 2007). Hyundai, which never led the US automobile market, also
made a significant financial investment in quality, and backed it with its 100K mile
service warranty, to overcome persistent negative consumer perceptions about its
quality, and in 2006 was rated above Mercedes in J.D. Power and Associates’ initial
quality survey (Praet, 2006)
b. Resist the Temptation to “Milk” the Brand: Once again, if a brand is to be revived, the
management has to invest in the brand. Consider Apple which, by the turn of the
century, had a positive image, but was losing top-of-mind awareness after its
struggles in the PC market. The company made significant investments in the MP3
technology and launched the iPod. The sleek design and features of the iPod struck
a chord with younger Americans and the Apple brand name came to the forefront
once more. An aggressive form of milking is cutting prices steadily to a level that
may be more acceptable to the market—a reflection of the brand’s weaker
position. Once a leading brand, Levi’s entry into Wal-Mart with its lower quality
Signature jeans has hurt the image of its entire line. Such actions should be avoided,
and investment needs to be made to strengthen the brand.
c. Have a Carefully Defined Target Market: This is particularly challenging. Target
markets can mature or shrink over time. When that happens, managers have a very
difficult choice. Moving with the target market that is shrinking is not appealing, nor
is switching to another target market, because of the risk of alienating the core
customer base. There is evidence in the literature (e.g. Munthree, Brick & Abratt,
2006) that, in such situations, a line extension with a sub-brand can be a very
effective strategy. For example, St. John can introduce Youth by St. John—to serve
as a bridge in the introduction of the Youth line. Once, the new brand is established,
the St. John name can be withdrawn from it. Care, however, has to be taken to
maintain St. John’s emphasis on quality in its new line.
CONCLUSIONS
Many brands in today’s market have been referred to as “ghost brands” because they
were once strong, but are now almost non-existent (Wansink, 1997). Given the high costs of
launching new brands, companies are increasingly looking to revitalize dying or dead
brands in their portfolio. History shows that this is possible. Numerous brands including
Harley-Davidson, Ovaltine, Puma, and Cadillac have demonstrated that brand death can
be prevented.
Managers need to constantly watch for signs of brand decline, in the form of problems with
brand knowledge, brand differentiation, and customer response. Using a brand equity
framework, we suggest that most brands with high levels of awareness or positive brand
image are candidates for revival; and we have provided guidelines that should be helpful
for managers in evaluating and revitalizing their invaluable brands.
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