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  1. 1. strategy+business The Innovator's Prescription: The Relevance of Brand Relevance by David A. Aaker from strategy+business issue 35, Summer 2004 reprint number 04207 Reprint
  2. 2. T H E I N N OVATO R ’ S P R E S C R I P T I O N The Relevance of Brand Relevance content special report New product categories can subvert incumbent brands — or give them a new lease on life. by David A. Aaker 1 Business revolutions once had a bit of continuity To succeed in this fast-moving environment, man- Illustration © Dan Page, 2004 to them. The Industrial Revolution lasted for decades, agement must pay attention to a new — and, for most, the postindustrial revolution had a solid 20-year run, unfamiliar — attribute of the company’s products, ser- and even the dot-com revolution persevered for a good vices, and brands: their relevance. five years. But business and consumer marketers in 2004 Relevance is fundamentally different from the char- don’t seem to have even that much luxury. From bever- acteristics conventionally associated with a brand’s ages and snack foods to computers and consulting, the potency. All too often, a brand seems strong because marketplace for nearly every product or service today is tracking studies show that it retains a high level of trust, undergoing continuous change. Consumers and corpo- esteem, perceived quality, and maybe even perceived rate buyers, more mobile and better informed than ever innovativeness. Customers remain satisfied and loyal. before, are increasingly able to get precisely what they However, its market share may be slipping — perhaps strategy + business issue 35 want when they want it, at the price they’re willing to significantly — and fewer customers, particularly new pay. To meet these exacting desires, new and different customers, are considering it. Conventional marketing products and services appear unceasingly. Entirely new theory and practice have difficulty explaining this para- categories and subcategories come into existence almost dox. Experience and research are now showing that a overnight, as existing ones change or fade. brand in decline often is in trouble not because of an
  3. 3. content special report 61
  4. 4. David A. Aaker This article is adapted from ( is the David A. Aaker’s latest book, vice chairman of Prophet, a Brand Portfolio Strategy: brand strategy consultancy; Creating Relevance, professor emeritus of market- Differentiation, Energy, ing strategy at the Haas Leverage and Clarity (Free School of Business at the Press, 2004). University of California, Berkeley; and an advisor to Dentsu Inc. intrinsic problem, but because the product category or an SUV subbrand, because customers interested in the subcategory with which it is associated is fading — new category will not consider brands that have not content special report undermined, augmented, replaced, or subsumed by a developed interest and credibility within that category. new, faster-growing category. Older brands may actually The challenge of brand relevance is akin to the chal- be inappropriate for the new category. lenge of innovation articulated by Clayton M. Brand management in the past focused on achiev- Christensen in The Innovator’s Dilemma: When New ing preference on the basis of differentiation, benefits, Technologies Cause Great Firms to Fail (Harvard Business and customer satisfaction within a set of brands under School Press, 1997). Professor Christensen showed how consideration for a given application. But in today’s industry leaders often are caught unawares by disruptive environment, unless a brand can maintain its relevance innovations precisely because they focus too closely on as categories emerge, change, and fade, narrow applica- their most profitable customers and businesses, ignoring tion preference may not be sufficient. AOL faces a rele- niche offerings for low-value subordinate segments that vance challenge with seasoned Internet users in the have the ability to grow in strength and value. Brand broadband category because of its legacy as a friendly managers, likewise, are often blindsided by changing interface for new users in the dialup category. Hardware, product categories precisely because they focus too paint, and flooring stores have struggled to remain rele- closely on the traditional attributes of brands within vant as The Home Depot and Lowe’s, with their broad their old categories. Their ultimate tragedy is to achieve 3 selection of products and services, have subsumed exist- brilliance in creating preference and differentiation, only ing categories and, in effect, created a new kind of to have that effort wasted because of a relevance problem. brand. “Brand relevance” is an oft-used phrase, but it gen- The relevance problem is apparent in categories as erally has not been well defined or explained. “soft” as fashion and as “hard” as manufacturing. Fortunately, there is a simple model that executives can Imagine you were an automaker 15 years ago with a use to assess their brands’ relevance, and to evaluate leading brand in the minivan category. As the category emerging product categories and subcategories. After of sport utility vehicles (SUVs) emerged, it attracted a presenting this model, this article will examine seven segment of buyers who previously might have consid- important product class dynamics that drive brand rele- ered buying a minivan. These potential SUV buyers still vance. Finally, it will offer a framework by which com- respected your minivan and believed it offered the best panies can develop strategies for adapting their brands to quality and value on the market; they may even have changing trends in the marketplace. Companies have strategy + business issue 35 loved it and recommended it to friends interested in a three options: to be trend neglecters, trend drivers, or minivan. But because this segment’s changing needs trend responders. Neglecting trends is a risky road that prompted its interest in an SUV, your brand, so identi- often leads to oblivion; trend driving, with its huge fied with minivans, was irrelevant to it. This may have upside, is certainly attractive, but rarely a real option. been true even if your company also made SUVs or had Most firms need to learn to be good trend responders,
  5. 5. Exhibit 1: Customer–Brand Interaction Brand Relevance Brand Preference Identify problem Select product Select brands Select brand from Usage experience or opportunity category or to consider consideration (A car is needed) subcategory (Audi, BMW, group (Cadillac) (luxury sports Lexus, Cadillac) sedan) Key Questions What is the What is the What brands are What are the Does the brand customer’s customer’s relevant to the brands’ satisfy/exceed motivation? perception of the categories? Which differentiated expectations? product category meet minimal attributes, or subcategory? requirements? features, or content special report relationships? Source: David A. Aaker and build the organizational skills to detect, evaluate, tion, the consumer selects one brand from the consider- and react to change, and to develop a well-conceived ation set. Finally, the product is acquired, and the brand portfolio strategy. process culminates in a usage experience that may influ- ence the next cycle. Defining Relevance Brand relevance involves stages two and three of the Relevance for a brand occurs when three conditions framework — whether the product category or sub- are met: category is deemed to meet the customer’s need, and • A product or service category or subcategory — whether a brand is associated with the particular prod- defined by some combination of attributes, applications, uct category or subcategory. A brand’s relevance depends user groups, or other distinguishing characteristics — on both. Although preference based on a differentiated exists or emerges. offering and a positive use experience can help to 4 • There is a perceived need or desire on the part of enhance a brand’s relevance, if the need or category asso- a customer segment for the category or subcategory. ciation is missing, the brand lacks relevance, and no dif- • The brand is in the set that segment considers to ferentiation, attitude, or relationship will help. be material to the product category or subcategory. A distinction should be made between categories To better understand relevance and the concept of associated with a brand and brands associated with a cat- product categories and subcategories, consider a simple egory. Knowing which categories are associated with the model of customer–brand interaction. (See Exhibit 1.) brand is actually not very important. The key is deter- Customer choice takes place in five stages. First, the cus- mining which brands are associated with the product tomer is motivated by a problem, need, or opportunity category or subcategory. Those are the brands that pass — in this example, the need for personal transportation. the relevance test. To be relevant, a brand should at least Second, the customer selects a product category or sub- be recalled without aid. Simple recognition — when a category perceived to be relevant to the problem or customer identifies from a provided list brands associ- opportunity; he or she may decide to buy a luxury sports ated with a particular product category or subcategory sedan rather than a compact or an SUV. Third, the cus- — is generally too weak a measure. (In fact, brands with tomer determines which brands to consider — in this high recognition and low recall are often termed grave- case, the choice might include Audi, BMW, Lexus, and yard brands.) Cadillac. In the fourth stage, perhaps after some evalua- However prominent a brand might be, though, vis-
  6. 6. Home Depot and Lowe’s created a new kind of brand; hardware and paint stores have struggled to remain relevant ever since. ibility is not enough to keep it relevant. Thanks to the example, recognized a new application — heart-attack rapid pace of global technology transfer, capital flows, prevention — and created a subcategory with its Aspirin content special report and communications streams, product categories and Regimen Bayer Adult Low Strength 81mg, which has an subcategories can come into existence and disappear enteric safety coating to prevent stomach upset. with startling speed. Because new categories can repre- 3. A new competitor devises a way to bundle existing sent strategically important threats or opportunities, categories into a supercategory. In the late 1990s, Siebel marketers have to be very attentive to the forces that created Internet-based customer relationship manage- drive their emergence. There are seven such dynamics. ment software by pulling together a host of applications, 1. A new product or service dimension expands the including customer loyalty programs, customer acquisi- boundaries of an existing category. By personalizing and tion, call centers, customer service, customer contact, improving service, the Saturn and Lexus automotive and sales force automation. In doing so, Siebel rendered brands changed the way customers interacted with car irrelevant, for some customers, the more specialized dealers, creating a new product subcategory that made application programs of competitors. other brands less relevant to a segment of consumers. In 4. A new competitor repositions existing products or both cases, GM (Saturn’s owner) and Toyota (creator of services to create an original category. Starbucks Lexus) felt that new brand names were needed to sup- reshaped the coffee retail experience by positioning its port the novel dealer experience that in part defined the outlets as the third place (after home and office) to 5 subcategory. In the yogurt business, the “eat-on-the-go” define a person’s day. The use experience involved trend led Yoplait to develop Go-Gurt, delivered in a aroma, a break from routine, an affordable luxury, social colorful nine-inch tube designed to enhance portability interaction, and some self-expressive benefit from the and to appeal to kids. Go-Gurt helped Yoplait forge appreciation of great coffee. In the U.K., Ford positioned ahead of Danone’s Dannon, a brand it had trailed for its Galaxy minivan in relation to first-class air travel — decades. A new subcategory had been created in which comfortable enough to be suitable for busy executives. Dannon was not relevant. By highlighting attributes far different from those that 2. A new product or set of products carves out a fresh would appeal to a buyer looking for a family vehicle, the niche in an existing category. The energy-bar market cre- automaker created a new minivan subcategory. ated by PowerBar ultimately fragmented into a variety of 5. Customer needs propel a new product category or subcategories, including those directed at specific seg- subcategory. Dual trends — wellness and the use of ments (e.g., Luna bars for women) and some possessing herbs and natural supplements — have supported a strategy + business issue 35 specific attributes (such as the protein-associated huge new beverage category, healthy refreshment bever- Balance and the calorie-control bar Pria). Each repre- ages. It now contains a host of subcategories, including sented a subcategory for which the original PowerBar enhanced teas, fruit drinks, soy-based drinks, and spe- was not relevant. New subcategories can also be defined cialty waters. The pioneer and category leader is SoBe, by new and distinct applications. Bayer Aspirin, for which started in 1996 with SoBe Black Tea 3G with gin-
  7. 7. seng, ginkgo, and guarna, and now has an extensive line among market dominance, continuing viability, and of teas, juices, and energy drinks. slow death. Experience and logic indicate that, when it content special report 6. A new technology leads the development of a prod- comes to brand disruption, firms come in three flavors: uct category or subcategory. Asahi reshaped the Japanese trend neglecters, trend drivers, and trend responders. beer market by introducing an innovative brewing Trend neglecters fall into three categories. “Stick to process that reduced “body” and bitterness while your knitting” firms are not motivated to stay informed increasing alcohol content. Its new product, Asahi Super about market trends. They are committed to and Dry, had a very different taste from that of other focused on their own model and believe that operational Japanese lagers, and generated a new category, dry beer. excellence will overcome market dynamics — or they As a result, Kirin, for decades the leading brand, with a lack the resources to change strategies. They also feel, dominant 60 percent share of market, suddenly was not sometimes with justification, that chasing apparent relevant for the many customers attracted to the new trends will waste resources. The “any color as long as it’s category. Asahi’s market share — 8 percent when Super black” Ford strategy of the 1920s — which allowed Dry was launched in 1986 — rose continually until it General Motors to overtake permanently the pioneering took share leadership in 1998. automaker — is a legendary case. Tunnel vision may be 7. A company exploits changing technologies to defensible and may even result in superior performance invent a new category. EBay Inc. created the online auc- for certain firms in specific markets, but it is risky. 6 tion category by envisioning a service impossible until Trends tend eventually to overwhelm the static, inflex- the advent of the World Wide Web — a national (and ible firm. Such firms must make sure that they do what subsequently global) real-time auction market for myr- they do well, and that disappointing growth and finan- iad types of goods, from used guitars to new houses. cial strains do not lead to cost cutting that affects the Although imitators have cropped up, they have had dif- customer experience, undercutting their position with ficulty positioning themselves as acceptable alternatives the customer base for which they are still relevant. because of eBay’s operational performance, its critical The second type of trend neglecter mistakes trends mass of users, and its authenticity as the original catego- for fads. In 1977, Ken Olson, founder and CEO of the ry leader. TiVo Inc. created a new category for home tel- Digital Equipment Corporation, then the leading maker evision viewing by combining the personal video player, of minicomputers, said, famously, “There is no reason a computer hard drive, and an electronic program guide, anyone would want a computer in their home.” As PCs changing the way people watch television. Any new caught on, Digital rapidly went from market leader to entrant has to define itself with respect to TiVo. struggling also-ran; eventually, it was acquired by Compaq. In addition to needing a periodic arrogance Structuring Responses check, this type of company usually needs to improve its How a firm responds to emerging categories and sub- ability to understand competitor capabilities. categories in its field of endeavor can be the difference The final type of trend neglecter is the firm that
  8. 8. Focus: Charles Schwab — Five Times a Trend Driver Charles Schwab & Co. has been a in addition to its discount brokerage one of the first brokerages to be “trend driver” — a firm that defines service, an innovative vehicle for buy- defined as an “e-company” for securi- new product or service categories or ing and managing a large variety of ties trading. In the process, Schwab subcategories — several times in its mutual funds with no transaction fees, again helped define a new category in history. In the 1970s, Schwab was an under the subbrand OneSource. For which it became a dominant brand. early entrant in the discount broker investors, this meant there was now After 2000, Schwab again moved to category, which served to make full- little motivation to search multiple create a new category by becoming a service brokers less relevant to an brokerage firms for mutual fund full-service brokerage that nonethe- important market segment. During options and do cross-firm analysis. less lacked the investment banking the 1980s, Schwab expanded the Data on mutual funds was all conve- business that many megamerged boundaries of the discount broker niently packaged by Schwab and financial-services companies had — a category by repositioning itself as a supported by a comprehensive infor- conflation of interests giving rise to discount broker that also had state- mation system. perceived, and sometimes real, con- of-the-art computer systems, reliable In 1997, Schwab, after several flicts at traditional brokers. The com- content special report execution and service, and exceptional unsuccessful efforts at providing com- pany’s aim was to offer advice that reporting tools. In doing so, Schwab puter-based transaction options for appeared objective, uncomplicated, made many of its discount broker customers, made a commitment to and, importantly, not driven by com- competitors — especially those com- offer trading over the Internet, even missions. The effort follows from the peting more narrowly on price — less though this meant risking much of the Schwab vision “to provide our clients relevant. company’s commission income, which with the most useful and ethical finan- In 1992, Schwab again changed the at the time came from telephone cial services in the world.” The new boundaries of the category by offering, orders. As a result, the firm became position was supported with a host of wants to identify, evaluate, and respond to market first-mover advantage into a sustainable position by dynamics, but is not very good at it. Such a firm is usu- actively managing customers’ perceptions of the new ally characterized by an inadequate external sensing sys- category or subcategory and asserting a dominant brand tem, executives who are not customer-driven, and an position in the new arena. That requires not only 7 inflexible organization. Many corporate disaster stories resources and recognition of the expanded brand-build- can be traced to these organizational limitations. This ing task, but also competence in brand building. sort of trend neglecter will benefit from investing in the IBM was a trend driver during the latter half of the missing capabilities. 1990s. At the time, many firms were attempting to show Trend drivers participate in the creation of new their relevance in the emerging world of networked product categories or subcategories — a terrific capabil- business. Although terms such as “network computers” ity that, unfortunately, few firms have. Even companies and “information superhighway” lacked the traction to that possess the requisite skills to drive trends have only create a new business category, IBM succeeded with occasional windows of opportunity. A premature effort “e-business.” After introducing it in late 1996, IBM to create a category can fail because the underlying tech- ultimately spent more than $5 billion building the nology is not ready or the potential market has not e-business label and positioning its business units with- reached the tipping point. Witness Apple Computer in that context. strategy + business issue 35 Inc.’s failure to create the PDA category with its Newton Trend responders closely track the emergence of trends organizer, only to see Palm Inc. succeed a few years later. and the evolution of subcategories, and take responsive To succeed as a trend driver, a company must have action to keep their offerings current and relevant. real ammunition; a breakthrough product wouldn’t Because neglecting a trend is risky and driving a trend is hurt. Further, the firm needs to be capable of turning a rarely an option, developing trend responsiveness capa-
  9. 9. innovative branded products and ser- 2. Creating a product category does short lived if it is not supported by vices for individual and institutional not necessarily make the existing cat- resources and innovation, or actively investors, such as Schwab Advisor egory irrelevant. Schwab’s strategic managed over time. Schwab One- Network (a service that refers clients position as a discount broker was not Source was a moving target for com- to fee-based independent advisors), eliminated or even scaled back when petitors. Mutual funds were added Schwab Equity Ratings (an objective it stepped into new categories, but periodically. A method to screen funds rating system for more than 3,000 rather was augmented so the brand was created. The Schwab Select List, publicly traded stocks), and Schwab became richer and deeper rather than a concise roster of the prescreened Personal Choice (which matches different. The firm remained true to its mutual fund picks by category, pro- resources, advice, and support to the heritage as it expanded the scope of vided the ultimate aid. needs, style, and goals of the its brand. 5. Strength also creates vulnerabil- investor). 3. A firm that attempts to create a ity. As a firm’s position becomes The Schwab experience suggests new product category or subcategory stronger, it becomes harder to adapt five lessons. without the support of a subbrand to changing markets. At each evolu- content special report 1. Instead of resulting from a dis- has a difficult branding task because tion of its brand, Schwab has had to be tinct decision, business strategy often the scope of the master brand is mindful of its past. The evolution to a evolves. Schwab’s strategic position likely to be stretched. Subbrands such full-service firm may be the hardest of expanded over time and was not pre- as OneSource and Schwab Equity all because of Schwab’s legacy as a planned or deliberately executed. Ratings provided a way for the Schwab limited-service firm. Each step was part of a process that brand to go to new places without —D.A.A. only sometimes resulted in a water- damaging its original meaning. shed decision. 4. A first-mover advantage will be bilities is the best strategy for the majority of companies. company needs to develop a point of difference from Learning to be a trend responder is feasible for most competitors, with a unique take on the new product firms, but it is not easy. It involves two primary capabil- category or subcategory. ities. The first is to recognize and evaluate trends. The fast-food industry today is a good case study in 8 Organizations that do this well share several characteris- trend response and relevance. McDonald’s, Wendy’s, tics: an externally oriented, market-focused culture; an Burger King, Pizza Hut, Round Table Pizza, Taco Bell, information system that captures and distills intelli- KFC, and others make up the “traditional” fast-food gence; top management concerned with market dynam- category. Customers of these chains value upbeat, famil- ics; and solid business strategists who are empowered to iar, convenient, economical offerings. In recent years, act. Evaluating a trend can be more difficult than iden- the industry has seen the rise and rapid growth of a tifying it. Will it represent a worthwhile opportunity, or “healthy fast-food” subcategory, populated by such are competitive intensity and overcapacity already pre- brands as Subway, Souper Salad, and Sweet Tomato, dictable? Is it real and substantial, with a value proposi- attractive to customers who value the attributes of fast tion behind it? Can the firm realistically participate, food but who also are interested in healthy eating. The given its strategy, assets, and competencies? subcategory is driven by an overall trend toward health Trend responders must also be able to modify, repo- consciousness, evidenced by such phenomena as sition, and/or rebrand their offerings so they remain rel- increased interest in physical fitness, more health news evant despite the market’s evolution. Any repositioning coverage, legal attention to the problem of obesity, the or rebranding needs to be respectful of the brand’s her- popularity of diet plans, the growth of the organic foods itage and compatible with the ability of the brand and industry, and the success of health-oriented food retailers. the organization to deliver on the promise. The Augmented by the healthy fast-food subcategory,
  10. 10. which is drawing in customers for whom fast food pre- viously was not relevant, the total fast-food market is now larger. There is thus an opportunity for the incum- bents. But the new subcategory is also taking customer dollars away from traditional fast-food marketers, and transferring preference and spending to the newer, more relevant brands. The relevance challenge for incumbents is to respond both to the threat the new subcategory poses and to the opportunity it represents. They must analyze the new category’s components and dynamics; they must also analyze the forces behind the emerging sub- category and the customer segments it is attracting, and determine which niches they themselves can exploit. A variety of strategic responses is available to the traditional players. They could attempt to build sales mere acceptance, and, through the creation of strong and loyalty from their core customer group — by subbrands characterized by exceptional products, content special report improving product quality, enhancing the customer become a “destination brand” for the new consumer seg- experience, or attempting to inject energy into their ment. In the fast-food industry, Wendy’s Garden brand marketing. In this strategy, growth might not nec- Sensation Salads line has the potential to draw health- essarily be a priority. In fact, an “incumbent market” segment customers. It not only provides relevance for strategy could be accompanied by some downsizing and new customers but also protects the original brand from cost reduction to reflect the downward trend of the still being contaminated by the new initiatives — no cus- substantial market. tomer will confuse Wendy’s core offerings with the Four other potential response options address the branded salad offerings. To create such a category, how- challenge more aggressively. In the fast-food industry, ever, the company must hit a home run, creating a these are the ones the traditional chains, for the most branded product or line that generates buzz and a fol- part, are pursuing. lowing. It’s far from easy: A host of McDonald’s One is to use new products to alter the current attempts, from McVeggie Flatbread to McPizza to Salad brand image and make it acceptable to the new sub- Shakers, have failed to gain acceptance. category’s customers. McDonald’s modified its menu to A third option for trend responders is to partner or appeal to consumers in search of healthy fast food. It cobrand with firms that have credibility in the new cat- 9 developed a way to make its signature fries with dra- egory, sharing some of the upside in order to save the matically reduced “bad” fat and eliminated some of its time, cost, and risks involved in creating a new brand. super-sized offerings; for several years it offered the McDonald’s successfully introduced a line of premium (since discontinued) McLean Deluxe burger. Burger salads complemented by “all natural” Newman’s Own King introduced the BK Veggie Burger, and Taco Bell dressings. The alliance with the actor Paul Newman’s launched reduced-fat “Fresco Style” offerings. Such a flourishing line of food products provided a boost by strategy, however, is like turning an ocean liner; there is generating interest, acceptance, and credibility. a lot of inertia to overcome. Overall, the traditional fast- Although cobranding is a powerful tool for food chains lack brand credibility in the new sub- responding to a relevance problem, it can be difficult to category. They are too strongly associated with tradi- find the right cobrand, generate an exclusive arrange- tional offerings such as the Big Mac and the Whopper, ment, and develop a product that will deliver against the which are not linked to healthy eating. Such brand emerging subcategory. Starbucks and Barnes & Noble strategy + business issue 35 strength can become a liability when a restaurant — which saw mutual benefits in linking the former’s attempts to adapt or change an image. In addition, the “third place” coffee experience with the latter’s develop- loyalty of the traditional customer segment can be put at ment of customer-friendly book superstores — went risk when the basic menu is altered. through several permutations of their relationship before A second trend-response option is to go beyond settling on the simple supplier–buyer affiliation.
  11. 11. The drive to maintain relevance can prompt a company to chase too many subcategories. Response must be guided by serious analyses. Furthermore, managing the relationship between two “broad brand” with its Road Runner high-speed organizations whose needs and priorities may change Internet access service. content special report over time can be tricky; among other things, customers But trend responsiveness carries its own set of risks. may develop a relationship with a cobrand whose long- The drive to maintain relevance can prompt a company term availability is uncertain. to chase too many subcategories, both real and imag- A fourth option for trend responders is to create or ined, resulting in a diffused, ineffective, and expensive buy an entirely new brand platform. Wendy’s has Baja strategy. Response must be guided by serious analyses. Is Fresh, a Mexican chain; McDonald’s invested in Boston the opportunity large enough to justify? Is it defensively Market, the Pret A Manger sandwich chain, and the necessary? Is the trend real, or is it a fad — is it MP3, or Chipotle chain of gourmet burrito restaurants. This merely eight-track? Does the firm have the ability to option recognizes that success in the new subcategory develop the skills needed to compete? Does it have the requires a brand that is on-market, is relevant in the new brand assets needed? category, has a sound value proposition, and requires no Companies need capabilities beyond the detection brand compromises. It is difficult, though, to find a con- and evaluation of emerging subcategories. They require cept that will resonate with customers and stand out creative, powerful new offerings; entering an emerging from competitors in a cluttered marketplace, while category without them is more likely to waste resources being scalable enough to make the business significant. than to create relevance. A brand strategy may require 10 McDonald’s, for example, needs concepts that can sup- developing a new brand, an endorsed brand, or a sub- port at least a thousand locations; anything smaller brand to carry the flag. If the necessary brand assets are won’t deliver appropriate shareholder returns, fit with not available, they need to be built or acquired. Finally, the firm’s operating skills, or benefit from its economies staying relevant in dynamic environments can require an of scale. organization to become more outward looking, cus- tomer focused, flexible, and nimble — perhaps the The Relevance Challenge toughest challenge of all. + Becoming a trend responder is within the range of most Reprint No. 04207 companies’ abilities. L.L. Bean has evolved its brand from its original base of hunters, fishermen, and campers to become relevant for hikers, mountain bikers, Resources cross-country skiers, and water-sports enthusiasts. Fuji John Gorham, “Charles Schwab, Version 4.0,” Forbes, January 8, 2001 Film was quick to becoming a leading digital-imaging brand with its Super CCD high-quality sensor for David A. Aaker and Erich Joachimsthaler, Brand Leadership: Building Assets in an Information Economy (Free Press, 2000) digital cameras. AOL may face challenges adapting its Clayton M. Christensen, The Innovator’s Dilemma: When New Technologies brand to the broadband era, but its even older corporate Cause Great Firms to Fail (Harvard Business School Press, 1997) sibling, Time Warner, has managed to become a top
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