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Over the years, numerous brands have met
untimely deaths. Some have steadily declined
into oblivion while others have been revived.
Significant investments made to build the
brand also lost.
New product introductions are both expensive
and risky.
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Objective 2/5
Causes of Brand decline
Product Evolutionary Cycle
Generative
Force
Managerial and
Entrepreneurial
activities.
Selective
Force
Market
Environment.
Meditative
Force
Competitors
actions and
responses to
marketing
initiatives.
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2.1 Managerial Actions
• Compromises in product
quality for cost-cutting.
• Customers’ experience with
the brand do not live up to
expectations.
• E.g. Cardillac’s steady
decline over two decades.
1.Product
Quality
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2.1 Managerial Actions
• Raising prices without offering a
corresponding increase in
benefits.
• E.g. Volkswagen was unable to
control costs and kept raising
prices, until it drove itself out of
the entry-level segment where it
had been a world leader.
2.Price
Increases
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2.1 Managerial Actions
• Cutting prices in desperation to
increase sales also damages the
brand.
• E.g. Lacoste. When sales declined, it
lowered prices and expanded
distribution. In turn, company used
cheaper material to maintain costs.
This move resulted in brand’s image
taking a major hit.
3.Price
Cuts
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2.1 Managerial Actions
• When management starts looking
at its core brands as cash cows
and neglect to invest in them.
• E.g. Black and Decker’s handling
of the popular DeWalt brand, until
it virtually ceased to exist.
• Neglect due to organizational
shake-ups.
4.Brand
Neglect
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2.1 Managerial Actions
• When target market drifts away
from the brand, brand can decline.
• E.g. Gap, in an effort to reach out
to teenagers and young adults
alienated its core customers who
felt neglected.
• Fashion brand St.John faces a
similar dilemma.
5.Inability
to stay
with the
Target
Market
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Brand Awareness
If brand awareness
is falling, its market
share drops and
company reduces
advertising forcing it
in a Catch22
situation.
Brand Image
Companies need to
monitor brand image
and look for changes in
consumer perceptions.
It is the facet of brand’s
equity most likely to get
hit in the case of a
decline.
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Address the cause of decline.
Understand brand’s promise
and why it may have failed to
maintain its relevance.
Adjust this, and educate the
market if necessary.
