How Beloved Brands Fall From Grace

November2012Very few Beloved Brands stay on top for long. 

Beloved Brands like DisneyMcDonald’s and Coke have stayed at the top across many generations of consumers helping to deepen their connectivity and solidifying their power as a brand.  But these brands are rare.  Instead, most of the brands that reach beloved status stay at the top for one generation at best.  These brands get to the top and think they are invincible. They fail to recognize the decline before it’s too late because as they are in denial of the underlying problems which could be a result of fear, arrogance, not listening or making the wrong choices.  They fail to attack themselves which opens the door to an attack from others.

The 5 ways that Beloved Brands fall from grace
  1. Beloved Brands forget who they are and what it was that made them famous.  Benetton is great example of a brand who forgot what made them famous.   In 1990, Benetton could do no wrong.  Business schools wrote case studies of their success and Ad Agencies held them up as the brand of envy for all clients to learn from.  They hadshock-value advertising campaigns that people talked about at the lunch table and there was a Benetton store in every mall.  Their colorful and stylish fashion was the desire of the core teenage crowd.  Benetton’s brand promise was providing European fashions at an affordable price.  But the arrogance of the “can do no wrong” brand quickly faded.  While they were so busy creating shock-value advertising and arrogantly talking of their brand as it were art itself they forgot about the fashion part of the business.  Benetton started to look like a hollow promise of cool ads with not-so-cool clothing.  Also, Benetton expanded so broadly and so fast, they opted for franchises instead of maintaining ownership over the distribution.  The managing of the large franchise network became a drain on the company and there’s a belief that not being close to the consumers in the stores hurt their ability to listen to what teenagers were saying and wearing.  With a fickle teenage target, Benetton quickly went from a must-have to a has-been brand.
  2. Struggle to keep up with the times.   The Beloved Brands of General Motors–Cadillac, Oldsmobile and Corvette–not only peaked in the 1970′s, but found themselves stuck their as well.  The 70′s were one of those decades with such a distinct look with Disco, perms, gold chains and the 3-piece suit, that most things connected to the 70′s were completely rejected in the 1980′s.  A brand likeCadillac was the ultimate luxury brand, so revered that people would describe the best brand of any category as “it’s the Cadillac of….” but that has since been replaced by “it’s the Mercedes of…..”   Cadillac’s unit sales peaked in 1973 just as gas prices began to rise and the look of those huge gas-guzzlers. It no longer fit the desires of the Yuppies of the 1980′s who were now opting for sleeker luxury with Mercedes and BMW.  The Corvette brand had done a nice job transitioning from the 50′s of James Dean through the 60′s and 70′s, always remaining as an icon of sophisticated American cool.   But Corvette failed to update their 1970′s brand look until 1984, which was too late to escape the stigma and giggles of those who looked at the drivers as having a “mid-life crisis”.  Consumers of the 80′s were now driving smaller and sleeker sports cars like the RX7, 280Z and later on the Miata.  And finally, theOldsmobile was a classic American family car who sales soared through the 1970′s.  By the mid-80′s, in an effort to try to capture a new generation, they used the infamous tagline of “Not your father’s Oldsmobile” which only re-enforced that it WAS your father’s Oldsmobile.  I believe that the near-bankruptcy of General Motors can be traced back to the 1970′s when the brands peaked and yet felt stuck in a time-warp forever.  GM failed to keep up in design, and failed to change as gas prices rose dramatically.  They found themselves attacked on the lower end from the Japanese cars like Toyota and Honda and at the higher end from German brands like Mercedes, Porsche, Audi and BMW.
  3. They make the wrong strategic choices because they think of themselves before the consumer.   Gap Clothing got greedy and forgot what made them great: trendy American fashion for a stylish generation at a reasonable price. And who is the spokesperson for fashion:  the coolest people on earth:  TEENAGERS of course.   Every generation of Teens believes they are the most important people on earth and they want products that speak for their generation.  It’s all about them.   They influence Music, Movies, TV Shows and Clothing and believe each has to speak directly to them and for them.   Imagine being 15 in the late 90′s, you’re walking in your favorite mall, trying to be as cool as can be, heading for your favorite clothing store.  All of a sudden, you look up and your favorite clothing brand is now flanked by BABY GAP on one side and GAP MATERNITY on the other side.   How could this brand speak for the teen generation, when your 2-year-old nephews are wearing a mini-version of what you’re wearing or your pregnant Aunt is wearing the stretchy version?  GAP made the mistake of putting their name on all their line extensions, which most fans of Master Brands thinks strengthens the brand but it actually runs the risk of actually weakening the brand.  GAP also forgot about feeding that desire for leading edge, trendy clothing–the whole reason for that “8 seasons” rotation of inventory.  Go into a GAP store this year, and you’ll realize how boring and drab the products have become.  No teenager today loves GAP or even thinks much about GAP.  They are totally indifferent.   Fast forward to 2011, GAP Clothing sales are down 19% this year and down over 25% since the peak of 2005.  And they have just announced the closing of 200 stores–which will continue the downward spiral.
  4. If you are Afraid to attack yourself, expect an attack from someone else.   Kodak was such a revered brand for so long, but their refusal to attack themselves opened up so many windows of attack from others.  The first attackcame in the traditional film business from low-priced Fuji film.   Kodak did nothing to stop Fuji for fear of eroding their margin, letting Fuji gain a 17% share of the film market.   The second attack came from new entrants into the digital camera market before Kodak was ready to enter.    Even though Kodak had the first digital camera as early as 1975,  the product was dropped internally for fear it would threaten Kodak’s photographic film business.   In 1990 Kodak finally laid out a plan to enter the digital camera market but took another decade to enter the market.  The world was changing, yet Kodak executives still could not fathom a world without traditional film which gave them little incentive to deviate into the digital camera space.  The third attack came once Kodak entered the digital camera space.  Kodak entered at the high-end of the market and for a brief moment was the #1 digital camera.  But Kodak failed to recognize how quickly the digital camera market would become commoditized.  They did cut their prices, but couldn’t lower their cost of goods fast enough to keep up with the Japanese manufacturers.  Kodak was losing $60 for every camera sold at the same time as their traditional film business was dying. The result: Bankruptcy.  Interestingly enough, at the time of their bankruptcy, Kodak released 1000′s of patents for sale.  It’s not a question of innovation that killed Kodak, it’s a refusal to act on the right innovation in a timely fashion. They failed to attack themselves only to let others attack and ultimately destroy them.
  5. Lose focus and let the experience slide.   A recent case study in a brand experience not living up to expectations is the Blackberry.  It’s a classic case where they grabbed early share as the category innovator and then forgot to keep making improvements to the overall experience.  The list of problems for blackberry is long: major service outages, keyboard that sticks, small screen size, bad cameras, poor quality speaker-phone, slow internet browser and when the screen freezes you have to take the battery out and re-boot.  In my last few months as an angry blackberry user, I was taking the battery out 5x a day.  The leaders at RIM believed they were invincible almost laughing when Apple launched the iPhone.  These guys would next launch a tablet without any Apps on it.  Oh man!  What I think Blackberry’s biggest failure is not mapping out the customer experience and attacking every possible weakness.   It’s a classic case of technology first and then thrust it into the marketplace and hope it sells.  The blackberry experience has just not kept pace with Android and Apple.  As a result, the RIM share price is down 95% since its peak of 2008.

Maintaining Beloved Brand Status

  1. Keep the brand’s promise front and center on who you are.  You need to be either better, different or cheaper.   Challenge yourself to stay relevant, simple and compelling.
  2. Keep challenging the status quo to maintain an experience that over-delivers the promise.  Create a culture that attacks the brand’s weaknesses and fixes them before the competition can attack.  With a Beloved Brand, the culture and brand become one.
  3. Make focused strategic choices that starts with being honest with yourself.  Find a way to listen to your consumers and stay ahead of the trends.  Watch for dramatic shifts because they can really open a door for a competitor.  It’s easier said than done, but don’t be afraid to attack yourself even if it means cannibalizing your current business.  A good defense starts with a good offense.
  4. The most beloved brands have a freshness of innovation, staying one-step ahead of the consumers.  The idea of the brand helps acting as an internal beacon to help frame the R&D.  Every new product has to back that idea. .
  5. Keep the brand story clear and simple through great advertising in paid media, but also through earned media either in the mainstream press or through social media.

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