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