26-07-2012, 02:18 PM
BRAND FAILURE
Brand Failure.docx (Size: 102.46 KB / Downloads: 17)
INRODUCTION
The process of branding was developed to protect products from failure. This is easy to see if we trace this process back to its 19th-century origins. In the 1880s, companies such as Campbell’s, Heinz and Quaker Oats were growing ever more concerned about the consumer’s reaction to mass-produced products. Brand identities were designed not only to help these products stand out, but also to reassure a public anxious about the whole concept of factory-produced goods.
By adding a ‘human’ element to the product, branding put the 19th- century shoppers’ minds at rest. They may have once placed their trust in their friendly shopkeeper, but now they could place it in the brands them- selves, and the smiling faces of Uncle Ben or Aunt Jemima which beamed down from the shop shelves.
The failure of mass-produced items that the factory owners had dreaded never happened. The brands had saved the day.Fast-forward to the 21st century and a different picture emerges. Now it is the brands themselves that are in trouble. They have become a victim of their own success. If a product fails, it’s the brand that’s at fault. They may have helped companies such as McDonald’s, Nike, Coca-Cola and Microsoft build global empires, but brands have also transformed the process of marketing into one of perception-building. That is to say, image is now everything.
Consumers make buying decisions based around the perception of the brand rather than the reality of the product. While this means brands can become more valuable than their physical assets, it also means they can lose this value overnight. After all, perception is a fragile thing. If the brand image becomes tarnished through a media scandal or controversial incident or even a rumor spread via the Internet, then the company as a whole can find itself in deep trouble. Yet companies cannot opt out of this situation. They cannot turn the clock back to an age when branding didn’t matter. And besides, they can grow faster than ever before through the creation of a strong brand identity. So branding is no longer simply a way of averting failure. It is everything. Companies live or die on the strength of their brand. Yet despite the fact that branding is more important than at any previous time, companies are still getting it wrong. In fact, they are worse at it than ever before. Brands are failing every single day and the company executives are left scratching their heads in bafflement. The purpose of this book is to look at a wide variety of these brand failures, and brands which have so far managed to narrowly escape death, in order to explore the various ways in which companies can get it wrong. As the examples show, brand failure is not the preserve of one certain type of business. Global giants such as Coca-Cola and McDonald’s have proved just as likely to create brand flops as smaller and younger companies with little marketing experience.
It will also become clear that companies do not learn from each other’s mistakes. In fact, the opposite seems to happen. Failure is an epidemic. It is contagious. Brands watch each other and
replicate their mistakes. For instance, when the themed restaurant Planet Hollywood was still struggling to make a profit, a group of supermodels thought they should follow the formula with their own Fashion Café. Companies are starting to suffer from ‘lemming syndrome’. They are so busy following the competition that they don’t realize when they are heading towards the cliff-edge. They see rival companies apply their brand name to new products, so they decide to do the same. They see others dive into new untested markets, so they do too.
While Coca-Cola and McDonald’s may be able to afford the odd costly branding mistake, smaller companies cannot. For them, failure can be fatal. The branding process which was once designed to protect products is now it filled with danger. While this danger can never be completely eliminated, by learning from the bad examples of others it is at least possible to identify where the main threats lie.
WHY BRAND FAILS
A long, long time ago in a galaxy far away, products were responsible for the fate of a company. When a company noticed that its sales were flagging, it would come to one conclusion: its product was starting to fail. Now things have changed. Companies don’t blame the product, they blame the brand. It isn’t the physical item sitting on the shop shelf at fault, but rather what that item represents, what it conjures up in the buyer’s mind. This shift in thinking, from product-blame to brand-blame, is therefore related to the way buyer behavior has changed. ‘Today most products are bought, not sold,’ write Al and Laura Ries in The 22 Immutable Laws of Branding. ‘Branding “presells” the product or service to the user. Branding is simply a more efficient way to sell things.’ Although this is true, this new focus means that perfectly good products can fail as a result of bad branding. So while branding raises the rewards, it also heightens the risks.
Scott Bedbury, Starbucks’ former vice-president of marketing, controversially admitted that ‘consumers don’t truly believe there’s a huge difference between products,’ which means brands have to establish ‘emotional ties’ with their customers.
However, emotions aren’t to be messed with. Once a brand has created that necessary bond, it has to handle it with care. One step out of line and the customer may not be willing to forgive. This is ultimately why all brands fail. Something happens to break the bond between the customer and the brand. This is not always the fault of the company, as some things really are beyond their immediate control (global recession, technological advances, international disasters etc). However, more often than not, when brands struggle or fail it is usually down to a distorted perception of the brand, the competition or the market. This altered view is a result of one of the following seven deadly sins of branding:
Brand amnesia. For old brands, as for old people, memory becomes an increasing issue. When a brand forgets what it is supposed to stand for, it runs into trouble. The most obvious case of brand amnesia occurs when a venerable, long-standing brand tries to create a radical new identity, such as when Coca-Cola tried to replace its original formula with New Coke. The results were disastrous.
Brand ego. Brands sometimes develop a tendency for over-estimating their own importance, and their own capability. This is evident when a brand believes it can support a market single-handedly, as Polaroid did with the instant photography market. It is also apparent when a brand enters a new market for which it is clearly ill-suited, such as Harley Davidson trying to sell perfume.
Brand megalomania. Egotism can lead to megalomania. When this happens, brands want to take over the world by expanding into every product category imaginable. Some, such as Virgin, get away with it. Most lesser brands, however, do not.
Brand deception. ‘Human kind cannot bear very much reality,’ wrote T S Eliot. Neither can brands. Indeed, some brands see the whole marketing process as an act of covering up the reality of their product. In extreme cases, the trend towards brand fiction can lead to downright lies. For example, in an attempt to promote the film A Knight’s Tale one Sony marketing executive invented a critic, and a suitable quote, to put onto the promotional poster. In an age where markets are increasingly connected, via the Internet and other technologies, consumers can no longer be deceived.
Brand fatigue. Some companies get bored with their own brands. You can see this happening to products which have been on the shelves for many years, collecting dust. When brand fatigue sets in creativity suffers, and so do sales.
Brand paranoia. This is the opposite of brand ego and is most likely to occur when a brand faces increased competition. Typical symptoms include: a tendency to file lawsuits against rival companies, a willingness to reinvent the brand every six months, and a longing to imitate competitors.
Brand irrelevance. When a market radically evolves, the brands associated with it risk becoming irrelevant and obsolete. Brand managers must strive to maintain relevance by staying ahead of the category, as Kodak is trying to do with digital photography.
BRAND MYTHS
When their brands fail companies are always taken by surprise. This is because they have had faith in their brand from the start, otherwise it would never have been launched in the first place. However, this brand faith often stems from an obscured attitude towards branding, based around one or a combination of the following brand myths:
If a product is good, it will succeed. This is blatantly untrue. In fact, good products are as likely to fail as bad products. Betamax, for instance, had better picture and audio quality than VHS video recorders. But it failed disastrously.
Brands are more likely to succeed than fail. Wrong. Brands fail every single day. According to some estimates, 80 per cent of all new products fail upon introduction, and a further 10 per cent die within five years. By launching a product you are taking a one in ten chance of long-term success. As Robert McMath, a former Procter & Gamble marketing executive, once put it: ‘it’s easier for a product to fail than it is to survive.’
Big companies will always have brand success. This myth can be dismantled with two words: New Coke. As this book will show, big companies have managed to have at least as much failure as success. No company is big enough to be immune to brand disaster. In fact, many of the examples in this book highlight one of the main paradoxes of branding – namely, that as brands get bigger and more successful, they also become more vulnerable and exposed.
Strong brands are built on advertising. Advertising can support brands, but it can’t build them from scratch. Many of the world’s biggest brand failures accompanied extremely expensive advertising campaigns.
If it’s something new, it’s going to sell. There may be a gap in the market, but it doesn’t mean it has to be filled. This lesson was learnt the hard way for RJR Nabisco Holdings when they decided to launch a ‘smokeless’ cigarette. ‘It took them a while to figure out that smokers actually like the smoke part of smoking,’ one commentator said at the time.
Strong brands protect products. This may have once been the case, but now the situation is p;reversed. Strong products now help to protect brands. As the cases show, the product has become the ambassador of the brand and even the slightest decrease in quality or a hint of trouble will affect the brand identity as a whole. The consumer can cause the most elaborate brand strategy to end in failure.
WHY FOCUS ON FAILURE?
The aim of this book is to provide ‘how not to’ advice by drawing on some of the largest branding blunders of all time. Brands which set sail with the help of multi-million dollar advertising campaigns shortly before sinking without trace are clear contenders. However, the book will also look at acknowledged brand mistakes made by usually successful companies such as Virgin, McDonald’s, IBM,
Coca-Cola, General Motors and many others. Welcome, then, to the brand graveyard where companies have either put their flagging brand to rest or have allowed it to stagger around with no direction in a state of limbo. While these branding ‘horror stories’ may suggest that failure is inevitable, their example has helped to identify the key danger areas. It is hoped then, that this book will provide an illuminating, if rather frightening read.
After the opening up of the Indian Markets, the past four or five years have seen an influx of
foreign brands into India in every conceivable sphere of business activity, more so in the
consumer goods & durable sector. The cry of Indian Indus” those days was that the days of Indian goods are numbered and most of the Indian ventures would be crushed under the MNC juggernaut. On the contrary, it was observed that success didn’t come easily to most of the MNC’S. In cases 1 they were utter flops or have remained in the category of non starters. The list of victims seems to grow day by day -Kellogg’s, Nike, Reebok, Mercedes, Mobil, Henkel, Bata, Hiram Walker, Nestlé’s chocolates etc. The scope of this dissertation would be to find what went wrong in these products which were backed by the financial as well as the intellectual muscle of the Global Corporations. Did they fail to read the Indian Consumer? The study would base on the consumer feedback’s on these products i.e. what made the consumers reject these brands and what association does an average Indian Consumer have with the equity of these international brands. After the primary data analysis, attempt will be made to chalk out a model entry strategy concerning the 4P’s for a multinational setting up shop in India.
On The Lighter
Every company venturing into a new international market has to tread very carefully. In a bid to rush into uncharted territories, they often commit grave errors which prove very difficult to undo later on. Some of these errors are absolutely unwarranted and provide no logic as to why the best marketing companies across the world committed them.
A few examples...
Scandinavian vacuum manufacturer Electrolux used the following in an American ad campaign: “Nothing sucks like an Electrolux.”
The name Coca-Cola in China was first rendered as Ke-kou-ke-la. Unfortunately, the Coke company did not discover until after thousands of signs had been printed that the phrase means “bite the wax tadpole” or “female horse stuffed with wax” depending on the dialect.
Coke then researched 40,000 Chinese characters and found a close phonetic equivalent, kokou- ko-le, which can be loosely translated as “happiness in the mouth.”
In Taiwan, the translation of the Pepsi slogan “Come alive with the Pepsi Generation” cameout as “Pepsi will bring your ancestors back from the dead.”
Also in Chinese, the Kentucky Fried Chicken slogan “finger-lickin’good” came out as “eat your fingers off.”
The American slogan for Salem cigarettes, “Salem - Feeling Free,” got translated in the Japanese market into “When smoking Salem, you feel so refreshed that your mind seems to
be free and empty.”
When General Motors introduced the Chevy Nova in South America, it was apparently
unaware that “no va” means “it won’t go.” After the company figured out why it wasn’t
selling any cars, it renamed the car in its Spanish markets to the Caribe.
Ford had a similar problem in Brazil when the Pinto flopped. The company found out that
Pinto was Brazilian slang for “tiny male genitals”. Ford pried all the nameplates off and
substituted Corcel, which means horse.
When Parker Pen marketed a ball-point pen in Mexico, its ads were supposed to say “It
won’t leak in your pocket and embarrass you.” However, the company mistakenly thought
the Spanish word “embarazar” meant embarrass. Instead the ads said that “It wont leak in
your pocket and make you pregnant.”
An American T-shirt maker in Miami printed shirts for the Spanish market which promoted
the Pope’s visit. Instead of the desired “I Saw the Pope” in Spanish, the shirts proclaimed
“I Saw the Potato.”
Chicken-Man Frank Perdue’s slogan, “It takes a tough man to make a tender chicken,” got
terribly mangled in another Spanish translation. A photo of Perdue with one of his birds
appeared on billboards all over Mexico with a caption that explained “It takes a hard man
to get a chicken aroused.”
Hunt-Wesson introduced its Big John products in French Canada as Gros Jos before finding
out that the phrase, in slang, means “big breasts.” In this case, however, the name problem
did not have a noticeable effect on sales.
Colgate introduced a toothpaste in France called Cue, the name of a notorious porno mag.
In Italy, a campaign for Schweppes Tonic Water translated the name into Schweppes Toilet
Water.
Japan’s second-largest tourist agency was mystified when it entered English-speaking
markets and began receiving requests for unusual sex tours. Upon finding out why, the
owners of Kinki Nippon Tourist Company changed its name.
In International Marketing
SOURCES OF ERRORS IN INTERNATIONAL MARKETING
Inability To Read Cultural Cues Properly :
Multinational Companies sometimes fail to read the cultural foundations as they move
from country to country selling their products. They feel that the strategy which had
delivered them success in other countries & their home turf would be replicated in most of
the countries but sadly this is not so. A few cases will illustrate the folly in this line of
thinking. Procter & gamble blundered while trying to sell Camay in Japan. It aired a
popular European advertisement showing a woman bathing. In the ad the husband
entered the bathroom and touched her approvingly. The Japanese however considered
such behaviour to be very inappropriate and in poor taste for television.
Again, Revlon tried to launch a perfume in Brazil that smelt of Camelia flowers. It
overlooked the fact that in Brazil , Camellia flowers are funeral flowers. Predictably the
brand failed.
Procter & Gamble , when it launched the “Cheer” laundry detergent in Japan, overlooked
the fact that Japanese wash their clothes in cold water & the advertising campaign that
Cheer washed clothes at all temperature seemed rather meaningless.
Closer home , there are also cases of reading the cultural cues wrongly. IFB Bosch decided
to go ahead with its front loading washing machines ignoring the fact that in India , most of
the washing is done in buckets & using the top loading washing machines resembled the
act of putting clothes in a bucket. Result, IFB Bosch lags sales & recently the company has
decided to hang up its boots.
When Kothari Foods in India decide to launch the Block Buster American brand, Tang from
General Foods, USA, it ran into rough weather because the breakfast habits of Indian
people are rather diverse and the scope of a fruit juice.