Brand Failures

1. Brand failures often stem from misunderstanding market dynamics

"If a consumer doesn't know he [or she] has a need, it's hard to offer a solution."

Market research is crucial. Many brand failures occur because companies fail to understand their target market's needs, desires, and behaviors. For example, Pepsi AM, a breakfast cola, flopped because consumers didn't realize they needed a morning-specific soft drink. Similarly, Gerber's attempt to sell baby food for adults misunderstood the psychological barriers adults might have to eating pureed food from jars.

Timing is everything. Brands must also be aware of broader market trends and timing. The VoicePod digital recorder failed because it entered the market too early, before consumers were ready for such technology. Conversely, Polaroid's decline was partly due to its slow response to the digital photography revolution, clinging too long to its outdated instant film technology.

2. Extending brands into unrelated categories can lead to disaster

"The further it moved away from this original focus, the further it got into trouble."

Stay true to your core. Brand extensions can be successful when they align with the brand's core identity and values. However, venturing too far from the brand's established expertise often leads to failure. Harley Davidson's attempt to sell perfume and Bic's foray into underwear are prime examples of misguided brand extensions that confused and alienated customers.

Leverage existing strengths. Successful brand extensions build on the company's existing resources, distribution channels, and brand associations. For instance, Gillette's expansion from razors to shaving cream made sense to consumers and utilized the company's existing manufacturing and distribution capabilities. In contrast, Colgate's attempt to launch kitchen entrees failed because it strayed too far from the brand's oral care expertise.

3. Cultural differences can make or break international brand expansion

"You can alienate me a bit from my culture, but you cannot make me a stranger to my culture."

Adapt to local tastes. When expanding internationally, brands must be sensitive to cultural differences and adapt their products and marketing strategies accordingly. Kellogg's struggled in India because it failed to understand local breakfast habits and preferences. Similarly, Home Depot's initial failure in China was due to misunderstanding the local DIY culture.

Language matters. Many brands have suffered embarrassing translation blunders when expanding globally. Chevrolet's Nova failed in Spanish-speaking markets because "no va" means "doesn't go" in Spanish. Careful research and localization of brand names, slogans, and marketing materials are essential for success in new markets.

4. PR crises require swift, honest, and empathetic responses

"95 per cent of respondents were more offended by a company lying about a crisis than about the crisis itself."

Transparency is key. When facing a PR crisis, brands must respond quickly and honestly. Attempting to cover up or downplay issues often backfires, as seen in the Exxon Valdez oil spill case. Exxon's slow and inadequate response to the environmental disaster severely damaged its reputation.

Show empathy and take responsibility. Brands that demonstrate genuine concern for those affected by a crisis and take responsibility for their actions are more likely to recover. Johnson & Johnson's handling of the Tylenol tampering crisis is often cited as an exemplary response, as the company prioritized consumer safety over short-term profits.

5. People behind the brand can be its greatest asset or liability

"The fish rots from the head."

Leadership matters. The actions and words of company leaders can significantly impact brand perception. Gerald Ratner's infamous comment that his company's products were "total crap" led to the near-collapse of his jewelry business. Conversely, strong leadership can help navigate a brand through crises and drive innovation.

Employee behavior affects brand perception. Every employee is a brand ambassador, and their actions can impact the brand's reputation. This is particularly true in service industries where employees interact directly with customers. Brands must invest in training and creating a strong corporate culture that aligns with their values.

6. Economic cycles and market shifts can render brands obsolete

"Cycles are not, like tonsils, separable things that might be treated by themselves, but are, like the beat of the heart, of the essence of the organism that displays them."

Adapt or die. Brands must be prepared to evolve with changing market conditions and consumer preferences. Kodak's struggle to adapt to the digital photography revolution is a classic example of a once-dominant brand failing to keep pace with technological change.

Diversification can be a double-edged sword. While diversification can help brands weather economic downturns, it can also lead to a loss of focus and brand dilution. Lehman Brothers' expansion into risky financial products ultimately contributed to its downfall during the 2008 financial crisis.

7. Rebranding efforts must align with core brand values and customer perceptions

"Be sure to use research to consult your customers, as marketers are often so close to the brand that at times they can see a problem where there isn't one."

Understand your brand's essence. Successful rebranding efforts build on the brand's core values and strengths while addressing changing market conditions. Tommy Hilfiger's attempt to rebrand as a high-fashion label failed because it strayed too far from its preppy, all-American roots.

Consider customer perception. Rebranding efforts must take into account how customers perceive the brand. The UK Post Office's rebranding as "Consignia" failed because it ignored the strong emotional connection customers had with the original name and identity.

8. Internet and technology brands face unique challenges in a fast-paced digital landscape

"On the internet, brand failure has become the norm."

Adapt quickly. The fast-paced nature of the digital world requires brands to be agile and responsive to changing trends and technologies. Brands that fail to keep up, like Myspace in social networking, can quickly become irrelevant.

Focus on user experience. In the digital realm, user experience is paramount. Brands like Pets.com failed not because of their core idea, but due to poor website functionality and customer experience.

9. Even strong brands can become tired and irrelevant over time

"All brands will eventually fail. There is no such thing as a brand that can last forever."

Continuous innovation is essential. Even strong, established brands can become stale and lose relevance if they fail to innovate and adapt to changing consumer preferences. Woolworth's decline in the UK was partly due to its failure to modernize its retail concept and product offerings.

Monitor changing consumer behavior. Brands must stay attuned to shifts in consumer behavior and preferences. Ovaltine's decline was partly due to changing beverage consumption habits and the brand's inability to shake off its old-fashioned image.

10. Successful brands must continuously innovate and adapt to changing consumer needs

"Whatever made you successful in the past, won't in the future."

Embrace change. Successful brands are those that can anticipate and adapt to changing market conditions and consumer preferences. Apple's transformation from a computer company to a consumer electronics and lifestyle brand is a prime example of successful adaptation.

Maintain relevance. Brands must continually reinvent themselves to stay relevant to new generations of consumers. Lego's ability to embrace digital technology and partnerships with popular franchises has helped it remain relevant in the age of video games and smartphones.

Last updated: July 29, 2024