Marketing & Branding Blog: 2014

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.

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I'm struck by the new media landscape and how social media shapes just about everything we take in as news and also our interactions with one another.

But this new social media landscape has a dark side.

One needs only to start reading the comments for just about any news story or article and they will quickly see (usually within 3 comments) how people resort to name calling, demagoguery, or just plain rudeness. Read the comments on just about any YouTube video and you will quickly see the dark side of human nature emerge, complete with cursing, name calling, and incivility. Most of these people who never speak or behave in such a manner in the virtual world if they were speaking to the person face-to-face or across the table from them. Why, then, does the illusion of anonymity bring out the worst in human behavior online?

Does social media actually elicit antisocial behavior?

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