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Seven Deadly Kinds of Branding FailuresKnow branding mistakes before you

make them!

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It’s established – brands do commit suicide or are killed.

O When the sales of a product are flagging, it’s not the product but the brand that is failing.

O So many brands meet an untimely death, often on an embarrassing note for the companies.

Just google “epic brand failures of all time” and you’ll see why.

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Every branding failure gives you

something to learn from.

In his illuminating book, Brand Failures, Matt Haig gathered some really big branding failures of the century and categorized them into eight types.

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1. Idea FailuresO Sometimes brands

fail simply because of a bad idea or an improperly thought out/not well-researched idea.

O Like Pepsi AM for instance.

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Pepsi found out that there are many consumers who drank colas for breakfast.

O Without comprehensive market research, Pepsi assumed that it has unearthed an unexploited consumer base that drank caffeinated cola for breakfast instead of coffee.

O That gave Pepsi an idea – a rather BAD IDEA.

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What Pepsi didn’t know was that although some consumers drank Pepsi in the morning, there was no special demand for a breakfast

sub-brand.

Customers simply didn’t think they needed it.

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Robert M. McMathBrand expert and writer

If a consumer doesn’t know he has a need, it’s hard to offer a solution.

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Pepsi learnt it the hard way.

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2. Extension Failures

Extension

the “addition of a new product to an already established line of products under the same name”

Often, companies try to leverage the reputation of their already well established brand name to sell a different product.

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For instance:Coca-Cola’s diet

coke Pond’s toothpaste

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It’s not necessary that the success of one product would guarantee

the success of another. Learn this from Harley Davidson.

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The powerful motorcycle brand thought that if so many people loved its motorcycles despite its

flaws, they will also love its perfumes.

It launched a perfume range that gave it the sweet smell of failure!

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The brand failed and the perfumes

simply had no takers.

O It’s hard for customers to accept a completely different kind of product under an already popular brand name.

Ponds toothpaste is yet another example.

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Al RiesMarketing writer

If you have a powerful perception for one class of product, it becomes almost

impossible to extend that perception to a different class.

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The sooner businesses realize this, the better!

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3. PR FailuresO It is taken that brands

will face at least one crisis during their run.

O Companies need to be ready with the right PR strategy and the right answers if at all their product or brand gets negative media attention.

O While some companies manage such crises gracefully, others simply make matters worse.

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Gerber, a German manufacturer of baby food had a PR debacle in 1986.

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Glass shreds were found in its products and rather

than recalling the products and apologizing, it chose to

stay tightlipped about it.O Its lack of public

response gave it a bad name. By refusing to talk, the

company projected the image that it had

something to hide.

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In these days of active communication and social media transparency, companies need to take responsibility for their products and strengthen their PR. Not doing so will only spell doom not only for the brand but also the company.

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4. Culture FailuresO In this era of globalization, it isn’t

necessary that what works in one culture will do so in another.

O Brands need to cater to the requirements of each market they enter.

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In the process of expansion,

if companies do not acknowledge

and accommodate

cultural differences, in their home

countries.

they may not be able to replicate the success they have met with

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Kellogg’s is the most consumed cereal brand

across the world. The company reached an all-time peak in 1980s in the US, with a 40% stake in the ready-to-eat market.

O With increasing competition, Kellogg’s sought expansion beyond its traditional US and European markets.

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With increasing competition, Kellogg’s sought expansion

beyond its traditional US and European markets.

O It soon decided that India is a suitable market and launched its subbrand Cornflakes with a US $65 million investment.

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But in India, breakfast cereal was an entirely new concept.

VS.

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Moreover, the product was pretty expensive for Indian

consumers when compared to homemade breakfast.

O Unwilling to accept failure, the company launched other products tailored to suit indigenous tastes.

O It has ever since had a tough ride in India.

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5. People FailuresO Planet Hollywood,

a hotel venture, was a unique brand with a grand launch.

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It is one of the most famous celebrity backed

ventures with high profile investors

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Soon after its launch, it opened 80 restaurants around the world and dreamt of having 300 branches by 2003.

O Within a decade of its launch, the brand was a failure. What went wrong?

However, the company went bankrupt in 1999.

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The Company’s FaultsO It was expanding too quickly

O It was launching new branches even before the already existing ones started making profits

O It didn’t advertise its food and was rather banking on the celebrity status of its investors

O It didn’t tie its theme to its core product and simply relied on celebrity

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Other such brand failures include Fashion

Café, Ratner’s and Hear’Say.

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6. Rebranding FailuresO British Airways is

one of the biggest rebranding failures.

O It started an expensive rebranding strategy in 1996.

O Soon afterwards it announced its cost-saving redundancies that contrasted with its costly makeover and rebranding.

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It redid the tail-fins of its airlines, abandoning the Union

Jack colors to give it a more international identity.

O The fact that the “British” airways didn’t look “British” anymore did not go well with customers!

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7. Internet and New Technology Failures

O A glitch was discovered in Intel’s Pentium Chip by a mathematics professor.

O This news spread like wildfire but Intel denied that its chips had a problem.

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It did not take responsibility for the chips and refused to

replace affected ones.

O Only after IBM declared that it will not use Intel chips that Intel agreed to replace the chips.

The issue magnified and the share value of Intel

dropped by more than 20 points!

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Intel’s inappropriate response (or the lack of it) to online criticism marred

its online reputation.

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It is imperative for companies to respond quickly, acknowledge online criticism, and monitor critics if they wish to maintain the

reputation of their brand.

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Centre for Innovation and Entrepreneurship

C-4, IIT-H Foundation, Gachibowli, Hyderabad

9618402751, 9000600247

Reach us at:prabha@accuprosys.com simplify@accuprosys.com anuradha@accuprosys.com

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