A framework for revitalizing declining and dead brands.

1. A Brand is forever ! A framework for
revitalizing declining and dead brands.
A Harvard Business School case
(Sunil Thomas, Chiranjeev Kohli )

2. Let us analyze the case…
What is the present situation?

3. Numerous Brands have met untimely deaths
over the years. Many more have steadily
declined into oblivion, while others have been
revived.

4. Unfortunately, even the strongest brands with high net
worth are not immune from brand decline and subsequent
death….
THE CONSEQUENCES
BEING..

5. Significant investments that were made to build the
brand are also lost.
And In today’s market, new product introductions are both
expensive and risky.
Hi. I am “old
brand”. It is my
time to retire !
I am the “New Brand”.
Yahoo!

6. Now, The questions we Face..
Is it worthwhile to evaluate brands
that are declining and invest in
revitalizing them?
Why do brands decline and die?
How to highlight signs of an
impending decline?
What are the various approaches that
can strengthen a brand and give it a
second life?

7. For a more Practical look on the
problem addressed, Let us First look at
the revival of two famous brands that
almost died…

8. Ford’s Taurus became one of the company’s top
selling models and was the best selling car in the
U.S. For 3 years in a row !
However, Intense
competition from two Japanese
brands- the Honda Accord and Toyota Camry-
weakened the brand, so much so that Ford
decided to pull the plug on Taurus in 2006..

9. Consider Harley-Davidson…
After Decades of Market dominance, the brand started bleeding in the early 1970s
upon the advent of smaller Japanese Motor bikes..
To counter this action, they took a hasty decision of
launching it’s own line of smaller vehicles…
But, these were perceived by loyal Harley customers to
be of Poor quality and the sales
continued to drop. The company faced huge losses and
it looked like…..
Death was Certain for the brand !!

10. But sometimes dying or dead brands may still have
significant Brand equity (which is addressed later on in
detail) in terms of high brand awareness and a strong
brand image….
Ford realized that instead of trying to use another brand name that meant
little to the market, it would be better off utilizing the Taurus brand name and thus did
an about-face and reintroduced the Taurus brand into the market

11. On the other hand, Harley decided to make
a significant investment in its
Quality and distinctive styling..
It is now once again a well-known and revered
American Brand !

12. It is defined as “the differential effect that consumer
knowledge about a brand has on the customer’s
response to marketing activity”.
The Brand Equity may decline with the
passage of time, sometimes leading to a
Brand’s demise….

13. Decline and
Death of
Brands
Pan American Airways was one of the oldest airlines in north
America and the most trusted one..
Two major Reasons for It’s death :
Rise of Intense Competition over the years .
Tarnished Brand Image due to Significant amount
of Negative Publicity regarding The 1988 PanAm air
crash in Scotland.

14. A brand of GM, the iconic Oldsmobile was known for
its pioneering designs and innovations
Its Brand
Image. It was
perceived as an
“old Brand”
among
consumers
The Uniformity in
design across GM’s
different Brands made
Oldsmobile lose its
unique identity as an
innovator

15. Why do Brands decline?

16. Brand’s Success or Decline is affected
by Three forces , just like Organisms..
1. Generative Forces : Managerial and
Entrepreneurial activities.
2. Selective Forces : The market
environment.
3. Mediative Forces : Competitor’s
actions and responses to marketing
initiatives .
THE PEC
FRAMEWORK

17. 1. When Management…
Bad management can significantly impact brand
health, even when the environmental factors and
competitive actions remain static.
Such actions can be qualified into five categories :
eaks
D.

18. 1.1 Product Quality
The brand starts to decline when Compromises in product
quality for cost cutting reasons Bring about a dissatisfaction
among the customers..

19. 1.2 Price Increases
If a company continues to raise prices without offering a
corresponding increase in benefits, sooner or late the
customers will start to abandon the brand.
Volkswagen was unable to control
the costs and had to keep raising
prices of the new model Golf GTI ,
Until it effectively drove itself out of
the market.

20. 1.3 Price cuts
Desperation drives the companies to cut prices to
increase sales. It can damage the brand.
In 1980s, when sales began to decline for Lacoste, a popular brand in the U.S. , They
hastily lowered prices.
The company was
forced to use
cheaper material.
This proved
disastrous and the
Brand’s image
took a major hit !

21. 1.4 Brand Neglect
Managers get wrapped up in the inertia of
a brand and begin to miss changes in the
market. Black & Decker's DeWalt brand
was ignored until it virtually ceased to
exist.
Organizational Shake-ups can also
result in less attention being paid to a strong brand
associated with earlier management.
Ovaltine suffered from corporate neglect
because it wasn’t a core brand of the
acquiring pharm company Sandoz.

22. 1.5 Inability to stay with the Target
Market
As the companies start to shift their focus mid way and position
themselves according to a more promising younger audience, The
brand runs the risk of alienating its core customer base. Example :
GAP, St. John

23. GAP ads became
too edgy for its key
target market.
ST.JOHN’s decision to chose Angelina Jolie as the
face of the brand was aimed at appealing to the
less conservative rebellious younger audience.
Unfortunately, consumers were not buying its
message. Ultimately, they stopped using her to
promote its products.

24. 2. The Market environmental Factors
Markets are dynamic in nature and can
undergo major transformations, which in
turn have an impact on the various
companies in an industry and their brands

25. For example, Cigarette brands in the US have
been affected by changes in the legal
environment. R.J. Reynolds Camel has been
accused of using communication tactics to
attract children.
This led to lawsuits
against the company
and A lot of negative
publicity which
damaged the Brand’s
image

26. Another good example is Polaroid..
With it’s unique
product offering i.e.
instant results ,
Polaroid quickly
gained popularity.
But, the company spiraled into
decline as the environment
changed and digital imaging
became popular.

27. Kodak Faced a similar situation..
Moral of the story : Kodak, never allowed the transformation
of the market to derail its Brand and thus avoided possible
death.
But, the company was
quick to realize the
implications of this
digital environmental
factor and made
necessary investments
in the future!
It was one of the first companies to introduce digital
camera, the DCS-100 in 1991 and thus continued to take
lead in digital technology !

28. 3.Competitive Actions :
In most markets
today, a brand
faces relentless
onslaught from
its competitors.

29. Brands that declined in the face of
intense competition :
Nike and Reebok which were more in tune with the trends in the American
market completely squeezed adidas and puma out of the U.S. markets.

30. Wal-mart proved as a formidable
challenger in this arena and crushed
the then retail giant Kmart by making
cost cutting a science and its
operations became brutally efficient.

31. Newer competitors are frequently nimble and are
able to leverage novel technologies and
marketing approaches to their advantage.

32. Like Dell’s Innovative
lower prices and direct-
to-customer method of
distribution system
crushed Competitors like
Compaq.
And Netflix’s offering of
video rentals via postal mail
to the comfort of the clients
homes forced Blockbuster, A
giant in the Video rental
business to close 300 stores
in one year.

33. How to highlight the signs of an
impending decline?

34. Let us revisit the definition of Brand
Equity :
It is defined as “the differential effect
that consumer knowledge about a brand
has on the customer’s response to
marketing activity”.
These are three highlighted key elements of a brand’s
equity and a change in one or more of these can signal
a brand’s impending decline.

35. 1. The Differential Effect.
Marketers must provide an evidence so that consumers
believe their product is more appealing than
competing brands. Only then can see a differential
effect of this brand knowledge on consumers behavior
towards their brand. This can be pursued in two
different approaches…

36. Firstly by focusing on the value the
brand provides to the consumers.
A strong case can be made if it is “value priced’ . i.e. if the
brand offers good quality at a low or competitive price.

37. The second approach is by creating
differentiation from other brands on
the basis of superior quality, physical
attributes, or intangible benefits.
“Brands must offer something different; they cannot
just be another flavor of vanilla !”- Volkswagen P.R.
Manager.

38. Managers should not only monitor
differentiation. They should carefully
articulate it.
Chevron emphasizes its trademarked additive,
Techron, A kind of Detergent.
What many customers do not
know is that, all major brands of
gasoline have detergents in them !
Chevron has just seized on it
as a source of differentiation !

39. 2. Brand Knowledge and Awareness
For a Brand to be successful,
consumers should be
knowledgeable about it. They ought
to know why it is more compelling
choice than the other alternatives.

40. Aided Recall Unaided recall
Two major indicators of Brand
awareness :
Both levels of Recall drop drastically when the
brand awareness is falling. This could be a
serious, long-term Problem.
Often managers are lulled into complacency by past success
and continues high awareness levels, prompting them to cut
back on advertising even when a brand begins to struggle.

41. Also, The company must make sure
they protect the Brand’s Image.
It is not
uncommon to
see an innovative
brand losing its
well defined and
focused image.
Strong, favorable,
and Unique brand
associations can help
maintain a company’s
Brand image.

42. Volkswagenhad failed in the past when they used marketing strategies or
introduced new products that strayed from the company’s image of being
approachable, friendly, and a German brand.
Levisbegan to lose its leadership as the jeans market moved towards new styles.
It failed to follow this shift and stuck to its classic image. Sales declined
sharply and in a desperate attempt, it sold it’s signature brand through Wal-
Martat 35% less prices. This association with an arguable
low-end retailer pushed the image further down-market.

43. 3. Customer response.
Sales Figures
Purchase
intentions and
brand loyalty
measures
Brand Switching
Behavior
Three simple and standard
indicators to measure
customer response and
monitor Brand decline.

44. Now let us recap the definition of
brand equity…
It is defined as “the differential effect that consumer
knowledge about a brand has on the customer’s response to
marketing activity”.
The aforementioned signs of decline must be detected
quickly if corrective action is to be taken. All three aspects
of EQUITY need to be considered since they are linked to
each other !

45. Recap : The questions we Face..
Is it worthwhile to evaluate brands
that are declining and invest in
revitalizing them?
Why do brands decline and die?
How to highlight signs of an
impending decline?
What are the various approaches that
can strengthen a brand and give it a
second life?

46. REVITALIZING BRANDS !
Is the brand worth reviving??

47. A brand is worth reviving if there is significant
residual value in one or more of the
components of brand equity.
Significant amount of
equity
Proper diagnosis
strategy execution
Brand can be
revived !

48. Three critical questions need to be
pondered when considering
revitalization of a brand…
1. Can the brand regain some of its former glory? ( brand
Knowledge)
2. Can its old equity be enhanced through new positioning
that is relevant and will stand out? (differential effect)
3. Can the company effectively deal with logistical issue?
(put plans in place to get an appropriate customer response)

49. HOWEVER.
Some may just not be worth the effort. True for brands that
suffer from low awareness and a negative image. It may be
better to Kill the brand than to invest in it.

50. Take a Long term Perspective.
Most brands take a long
time to build, and a long
time to die. Reviving a
brand is also a long-term
initiative !
A long term perspective is imperative even if
that means taking losses in the interim.

51. Marketing research should be an integral part of this
exercise to assess and track brand awareness and brand
image.
Nutri –Grain understood this and used research to
reinforce its image as a “Healthy breakfast and snack
food” by fortifying its breakfast cereal bards with
‘calcium’ and ‘vitamins.’

52. Carefully reposition the brand, invest
in it, and educate the market.
Consider, General Motor’s Portfolio of Buick,
Chevrolet , Pontaic, Oldsmobile…
Chevrolet Entry-level segment
Buick Families
Pontaic Built for “excitement”

53. What about Oldsmobile?
The Brand did not invest sufficiently in quality
and was always playing catch up with the
competition. It suffered from a major lack
of Clear Positioning.

54. Lesson to be learnt : Strong Brand
differentiation can be re-
established with a focus on the
right positioning and then
emphasizing that consistently in
the brand’s communication.

55. Find that Unique Cloud/differential of your declining brand
and hammer it home throughout all aspects of the
transaction- “before, during and after the sale “.

56. Correct mismanagement of the brand
Failure to clearly understand
the cause of decline.
The lack of commitment to
do what is necessary to
reverse the trend.
No change in strategies
that weakened the brand
in the first place.
Leading and most common
causes for the death of a brand.

57. Let us look at the three consistent
themes that have emerged in declining
Brands..

58. • Rebuild the quality.
Poor quality rarely goes unnoticed for long, though, and at some point customers
will begin to abandon the brand. Once, a decision has been made to revive the
brand, expensive as his might prove, quality issues must be addressed.

59. Brands like Harley Davidson, Hyundai
subsequently achieved a complete
turn-around by significant financial
investment in quality.

60. • Resist temptation to “milk” the
brand
An aggressive form of “milking” entails cutting prices
steadily, a reflection of the brand’s weakened position.
Once a market leader, Levi’s entry into Wal-mart with its
lower quality signature jeans had hurt the image of the
brand’s entire line.

61. •Pursue a carefully defined target
market.
Target markets can mature or shrink
over time.
Moving with the dwindling target market is not an
appealing option, but neither is abruptly switching to
another target market, as this risks alienating the core
customer base.

62. In such situations ,a line extension with a sub-brand
can be a very effective strategy.
Levi’s adopted such a strategy and
successfully launched Dockers to enter a
new market of business-casual clothing
as opposed to it’s usual Denim youthful
rugged jeans.
Dockers became so
successful that Levi’s
removed it name and it
became a standalone brand !

63. LET THE REVITALIZATION BEGIN!
Given the high cost of launching new
brands, companies are increasingly
looking to revitalize dying or dead
brands in their portfolio. History shows
that this is possible….
Well, let us look at
an example .

64. During the latter quarter of the 20th century , Cadillac,
A flagship brand of GM experienced a steady decline
due to competition and various other factors.
However, the brand was determined to reposition itself as
providing a driving experience as good as any offered by rival
brands, while undercutting them on pricing.

65. Invested $4 Billion in the
quality of its cars and
redesigned them for the
global market.
So, What did they do ?

66. Offered more models like CTS,
the STS etc each positioned to
compete directly with the
bestsellers in their respective
categories.

67. GM came up with distinctive
and daring designs for Cadillac
and committed itself to
strengthen the Brand’s image.

68. And the results…
It was rated more favorable than
the best German or Japanese
Brands.

69. Recap : The questions we Face..
Is it worthwhile to evaluate brands
that are declining and invest in
revitalizing them?
Why do brands decline and die?
How to highlight signs of an
impending decline?
What are the various approaches that
can strengthen a brand and give it a
second life?

70. Managers need to constantly watch for signs of
brand decline. Using a Brand equity framework, we
suggest that most brands with high levels of
awareness or positive brand image are the
candidates for revival!

72. These slides were created by Kandukuri
Aishwarya, as part of an internship done under
the guidance of Prof. Sameer Mathur
(www.IIMInternship.com).