Number 23: Summer 2003
The branding failures of tomorrow
By Nick Wreden
Editor's comment: Having a successful brand does not always ensure long-term success. There are many examples of brands that were once considered category leaders but are now viewed as nostalgia or even museum pieces. Where did these once-great brands go wrong? How can you ensure long-term brand survival and prosperity? Nick Wreden looks at a number of brands to provide some lessons in this area.
Remember Burma Shave, Brylcreem, Pepsodent, Lifebuoy, RC Cola, William's Lectric Shave, Breck and oh my goodness, this brings back memories Hi Karate cologne? Or how about Hayes, WordStar, dBase, Wang or DEC? At one time, all were brand powerhouses with impressive market shares. Today, they are cobwebbed objects of nostalgia.So what brands today represent tomorrow's nostalgic icons? What can be done to revitalize these brands before they become little more than trivia questions? What are the warning signs that indicate your brand is destined to become a footnote? Companies that focus on sales, and not usage, are especially prone to failure. A Gartner survey of 700 companies indicates that 42% have "shelfware" software that has been purchased, but not installed. Such shelfware represents brands at risk.
Brands are doomed when top executives drink the deadly Kool-Aid of complacency mixed with arrogance. When I worked at Hayes, the brand was mentioned in the same breath as Microsoft and Compaq. The brand was so strong that consumers sometimes bought a Hayes modem before they bought a computer. Competitors even tried to make inroads by selling "Haze" modems. But while markets demand pricing, technological and other flexibility, the company refused to budge, believing that what had brought them success in the past guaranteed dominance in the future.
Brands also fail when they base decisions on marketing theories instead of customer requirements. The Breck girl, once epitomized by such models as Kim Basinger, Brooke Shields and even Martha Stewart, is such an American icon that an exhibit is devoted to her in the Smithsonian. First, she was dumped because marketing managers tired of the advertising campaign. When sales plummeted, she was brought back as the "Breck woman." That didn't work, so managers desperately tried selling the once sophisticated brand for 99 cents. Then managers decided the answer was brand extension, so 35 varieties of Breck were deployed. Confused? Consumers were too. Breck sank into oblivion. So much for the supposed power of "brand equity."
Finally, brands fail because they fail to maintain the quality, trust and loyalty that must be at the heart of every brand. Think Pinto. Firestone. New Coke. Enron. However, failing brands can be revitalized. One strategy is to find new applications for an existing product. The classic example is Arm & Hammer. Sales were dropping because of a decline in home baking and the rise in packaged foods. So Arm & Hammer responded by promoting the product as a deodorizer for refrigerators and drains. Sales skyrocketed. Another strategy is to combine the power of nostalgia with increased promotion. The Himmel Group is a master at resuscitating lapsed brands. It brought Ovaltine back from the dead to a 30% market share in just 100 days. In one year, Himmel doubled the sales of Lavoris mouthwash. In three years, Doan's went from out-of-production to the market-leading cure for backache. Himmel's criteria for brand revival: "a high-margin, single SKU brand that can be contract- manufactured through multiple sources and which can be heavily advertised on radio or TV 52 weeks a year.
So what are the failed brands of tomorrow? My choices: CNN, Playboy and Overture. After its performance in the 1991 Gulf War, CNN ruled the cable roost. But in January, Fox News, which didn't exist until late 1996, drew more viewers than CNN despite being carried in fewer households. CNN is losing partly because the media paradigm is changing. For the last 50 years, broadcast media sought to operate in the public trust. For a variety of reasons, the public trust is no longer considered important. As a result, the media is evolving into apologists for political parties, much like they are in Britain or they were in the early days of U.S. history. Fox News brilliantly caught this shift; CNN coasted on its Gulf War reputation. Some CNN wounds were self-inflicted. It hired Connie Chung, who has as much to do with journalism as Anna Nicole Smith has to do with true love. It repeated Larry King interviews with guests who were dead. Instead of bolstering its news operation, which had been badly slashed when it was acquired by AOL, it tried to out-Fox Fox with flag graphics and other visual tricks.
On his 77th birthday recently, Hugh Hefner took the seven young women he dates out to dinner, accompanied by the media. He also hosted an A&E special that included lingering shots of blue Viagra in silver bowls by his bed. The publicity was meant to revive the brand, but actually it was an embarrassment. Playboy magazine, once the epitome of hip for such acts as publishing nude pictures of Marilyn Monroe in its first issue, is 50 years old and eligible for an AARP card. In an age of Internet porn, its foldout seems quaint. No wonder Playboy's lunch is being eaten by Maxim, which manages to be both brash and cool without total nudity.
In the late 1990s, GoTo.com created the market for pay-for-performance search ads. Now that banner ads, pop-up ads and unsolicited email have been proven to be either ineffective or anger a target audience, pay-for-performance search ads have risen to the top of the online marketing heap. Instead of enjoying its day in the sun, the firm which inexplicably changed its name from GoTo.com to Overture now has its neck in a noose. The main reason, of course, is Google, which has received the ultimate accolade of any brand by passing into everyday language as a noun or verb. Google leveraged its loyalty to launch AdWords, which had the effect of raising Overture's customer acquisition costs from $40 million to $120 million in its most recent quarter. Once Yahoo improves its search services, Overture is history.
Got your own idea about the failed brands of tomorrow? McDonald's? Sears? Rolling Stone? Siebel? Gap? Tommy Hilfiger? Chrysler? Let us know - nick@fusionbrand.com.
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Through the Loop Consulting Ltd 1998-2003