Good brands are living
entities. They change and evolve with
changing market conditions so that they grow and continue to deliver value to
both their owners and the consumers they serve.
If a brand is fundamentally
an identifiable entity that makes some specific promise of value, then the
promises made by healthy brands will continually communicate and deliver
significant and relevant value to consumers.
All brands must be
managed, not just healthy ones
Much of today’s contemporary
information on branding focuses on creating new brands. The plethora of self-proclaimed branding experts
like to tell us their views on the best ways to establish a brand, how to
create awareness, how to help brands connect with consumers, how to position
brands and how to create brand strategy so brands enjoy strong positions in
their markets.
Often these experts fail to acknowledge
that not all brands are strong or healthy.
Not all brands are able to
successfully adjust to changing market conditions and remain relevant. Not all brands can continue to promise
significant value and actually deliver that value. Not all brands continue to resonate and
remain relevant in an ever-changing society.
The truth of the matter is,
according to research conducted by Nirmalya Kumar, professor of marketing at
IMD, Lausanne, Switzerland, most brands do not
make money for their companies. Kumar
found that year after year companies make most of their money on very few
brands. Significantly less than 20% of
the brands in the world deliver the majority of sales and profits.
The logical issue that arises
then is not how to create and maintain a new brand, but how to navigate the
much more likely -- and much less enjoyable -- decline or death of an existing
brand. How do we know when to put a
brand on life support in order to nurse it back to health or allowed it to fade
away or actively kill it?
The best way to understand
how and when to retire or kill a brand is to understand what a valuable brand
should look like and then explore the warning signs that indicate when your
brand is in trouble.
What strong brands
look like
Strong, valuable brands
promise value that cannot be found anywhere else. These brands are highly differentiated from
competing brands, deliver higher profits than competing brands, and create an
aura of superiority that surrounds the brand name, symbol or mark. Valuable, powerhouse brands also enjoy
strategic awareness in the market such that not only do people understand how
and why they are different, but those same people understand that those
differences make the brand superior and a wiser choice than other offerings. Powerful and valuable brands influence buying
decisions, shape the ownership experience, command a premium price, deliver
healthy profits and create trust and emotional attachments with consumers.
As I outlined in my Top EndAlignment™ branding process back in 2003 when I was still consulting, the best brands also tap the guiding vision of the
organization and foster the mission of the organization in some way. These aligned brands not only communicate the
unique selling proposition of the brand but also foster the guiding principles
of the company or organization.
Such brand leadership must be
driven by a strong organizational leader who recognizes the importance of
living the brand and ensuring that all levels of his or her organization act in
accordance with brand promises. These
visionary leaders also understand that a brand is ultimately controlled by and
shaped by consumers and that brands are not just defined by a few people within
the marketing department but by the entire organization and its alliance with
consumers.
Now that we know what strong
and powerful brands should look like, it is important to understand how to
recognize when a brand starts to falter.
Monitor your brand’s
pulse
Whether you own a single
brand or manage a multi-brand portfolio, conducting periodic brand audits is
critical to understanding the health of your brand or brands.
A brand audit is a
comprehensive examination of a brand that assesses the health of the brand
while uncovering its sources of equity.
Through brand audits, you will construct snapshots of the overall health
of your brand at any given time while uncovering possible new sources of equity
upon which to build.
Consumers’ perceptions about
your brand will change over time and you must periodically explore those
perceptions through routine audits so you can understand what needs to be done
to help your brand evolve and remain relevant while continuing to promise and
deliver compelling value.
The warning signs of
a faltering brand
The brand audit will result
in tangible data to help you assess the health of your brands. Sometimes your audits will uncover an
unhealthy brand.
Some warning signs of an
unhealthy brand are:
- Your brand’s sources of equity have vanished
- Through the course of natural evolution and growth
of your organization, certain brands in your portfolio no longer foster
the organizational mission or fit in with overall business strategy
- The investments you make in your brand cannot be
justified based upon the level of revenue and profit those brands return
to your organization
- Nobody within your organization can seem to
succinctly articulate your brand’s core values or concisely state its
unique selling proposition
- Your brand is promising more than your
organization can deliver
- Your brand has gotten a bad reputation and new,
unwanted associations have been made by consumers
- Your brand’s identity seems dated or
old-fashioned
- Competing brands now hold the leadership
positions in the category
- Your brand is not reaching out to new, younger
consumers and your brand is aging right along with your customers
- The promises of value your brand makes no longer
resonate or remain relevant
- Your market has moved beyond your brand
- You do not understand who your brand’s most
valuable customers are or why they choose your brand
- Sales are slumping and so are profits
When you recognize these
warning signs you must then analyze if you can and should invest in
reinvigorating your brand so that it returns healthy revenue and profit once
again, if you should let it fade away, or if you should actively kill it.
When to kill a brand
Building and maintaining
brands requires significant investment of effort, time and money. Sometimes the diminishing returns from the
brand no longer make sense to fully support.
If it has been decided that
supporting a brand no longer makes sense for your organization then there are
several options available to effectively retire or kill the brand.
The brand life cycle
The life of a brand mirrors
the product life cycle from introduction to growth, maturity, decline and
withdrawal. While the maturity and
decline stages can be significantly extended through innovation, proper brand
management and rebranding efforts, ultimately the brand will enter into decline
and a decision might be made to retire or kill the brand rather than invest in
it.
How to kill a brand
There are four main approaches
to killing a brand.
1) Merge it
In
this approach, managers find a closely-related, healthy brand that can be
merged with the unhealthy one. While the
unhealthy brand is being dropped, the healthy, surviving brand is
simultaneously reengineering to add the old brand’s desirable product features,
sources of equity and promises of value that had previously been embraced by
the retiring brand’s consumers. The
surviving brand can then boast of new attributes while providing a safe,
comfortable place for consumers to migrate.
This approach is often implemented when the retiring brand still has a
significant number of customers or when the market has future growth potential.
2) Milk the
cash cow
Cash
cow brands return a superior profit to the organization. Often during the maturity stage, profit
numbers slowly start to decline but can often be boosted to desirable levels by
slowly withdrawing investment in the brand and reducing the expenses associated
with supporting it. Marketing and
advertising activities can be scaled back, brand extensions can be eliminated
to reduce management costs, distribution can be changed to cut costs, and all
but the bare minimum investment in the brand eliminated. The company then tries to maximize profits
for as long as possible until sales drop to the point where there brand is sold
or killed.
3) Sell it
Sometimes
the market value of a brand is greater than the value the brand represents to
its own organization. When this happens,
wise brand managers consider selling the brand to an organization who can fully
capitalize on the equity of the brand.
If the brand seller is retreating from the category altogether, then
selling the brand is much easier than if the company wishes to remain in the
category with other brands. In the
latter case, legal safeguards should be put in place so you do not end up with
your old brand as a new competitor that damages your remaining brands.
4) Kill it now
The
way you kill or retire a brand might be just as important as creating and
building it in the first place. You may
simply drop the brand by eliminating it.
Remain fully aware, however, of the state of ownership of brand names in
order to protect yourself from allowing a competitor to buy and resurrect the
brand. Some brands that are killed still
have enough equity to be highly lucrative to other organizations. You must protect yourself from your own
brands coming back to haunt you.
Managing
brands involves more than just creating and launching them. Brands in their declining stages must also be
properly managed to respect the dignity of both the brand and its
consumers. Only through analysis can you
determine whether or not it is better to help a brand return to full health or
simply let it die or fade away.
Copyright 2014. All rights reserved.
# #
#
