A FRAMEWORK FOR REVITALISING DECLINING AND DEAD BRANDS

1. Case Analysis

2. A BRAND IS FOREVER!
A FRAMEWORK FOR
REVITALISING
DECLINING AND DEAD BRANDS

3. What this case study
is about?

4. Position of a Brand in market is not constant!
Over the time, even a high valued brand
may tend to decline and death subsequently,
if proper attention is not given.
Situation analysis

5. But they say..
Decline is Reversible!
Situation analysis

6. Even dead brands may have significant brand
equity!
Also, revitalization of brand is less costly and
risky than introducing a new brand.
Brand declination: Gradual process
Situation analysis

7. Brand evolution theory is used to determine
causes of brand decline.
Situation analysis

8. Why this case study?

9. To evaluate the Causes of brand decline,
Preventive steps to avoid impending decline,
Cures to revive a declining or dead brand.
Objective

10. What is at stake
if a brand dies?
Investment made in
brand building.

11. Key concept:
Brand Equity
Differential effect that customers’ knowledge about a brand
has on customers’ response to its marketing activity.
Consumer brand knowledge can be characterized in terms
of brand awareness and brand image.
May decline with passage of time.

12. Examples of Brand decline and revival

13. Ford’s Taurus
Launched in 1985, Ford’s Taurus quickly became one of the
company’s top selling models
However, intense competition from two Japanese brands
the Honda Accord and the Toyota Camry weakened the
brand.
Ford decided to pull the plug on the Taurus in 2006
Soon after, Ford did an about-face and reintroduced the
Taurus brand.

14. Harley-Davidson
Early days of the post-World War II period, the brand gained popularity as its motorcycles
became known for their unique designs and engineering.
The brand started bleeding in the early 1970s upon the advent of smaller Japanese
motorbikes.
Created its own line of smaller vehicles; unfortunately, these were perceived by loyal Harley
customers to
be of poor quality, failed.
Harley decided to make a significant investment in its quality and distinctive styling.
Revived again.

15. Causes of Brand Decline

16. Three main causes of Brand decline
1. Managerial actions (Generative force)
2. Environment action (Selective force)
3. Competitors’ action (Mediative force)

17. 1. Managerial Actions

18. Product quality
Compromises in
quality for
cutting cost
Successful in
short run due to
customer loyalty
Bad customer
experience
Decline

19. Price increase
Increase in price
without offering
corresponding
benefits
Brand abandoned
by customers
Example : Volkswagan’s Rabbit model was replaced by Golf model

20. Price cuts
Cutting price
Perceived as lowering
of quality
And eventually Brands
have to compromise in
quality to keep price
low in long run
Example: Lacoste, when sales began to decline, it lowered
prices and expanded distribution. To maintain low prices, the company
had to in turn use cheaper material, Negative Image

21. Brand neglect
Popularity Inaction
Organizational
shakeups
Less attention to strong
brand associated with
earlier management
Example: Ovaltive, wasn’t a core brand of the acquiring pharmaceutical company, Sandoz

22. Inability to stay with the target market
When the target
market moves away
from the brand
Decline
Examples: GAP and St. John

23. GAP
In the 1990s, Gap decided to do more to reach out to teenagers and young adults
because they represented a growth segment which offered better rewards.
The company started to position itself to appeal to this audience but
in the process alienated its core customers, who
felt neglected as the product strived to become youthful and trendy.

24. 2. Environment action
Market is dynamic and influenced by the changes that happens in
its proximity.
It may include Changes in legal environment, Technological
advancements, economic and political conditions etc.
Examples:
Cigarette brands- R.J. Reynold, Polaroid: negative adaptaion
Kodak: Positive adaptaion

25. Polaroid
A household name since it popularized instant photography
Even today, it retains high brand awareness, but the company spiralled into decline and went
bankrupt as the environment changed and digital imaging became popular
Kodak
For the next 90 years or so, films were the standard platform for photography
Emergence of digital cameras posed challenge to Kodak
The firm was quick to realize the implications of this environmental factor, and made necessary
Investments in the future.
Today, it maintains a 16% market share.

26. 3. Competitive action
Puma and Adidas in Europe were in strong position but in USA were squeezed
out by Nike and Reebok
Dell started Direct–to-customer distribution system, resulted in considerably lower
markups for Dell, creating a savings which the company was able to pass along
to its customers in the form of low prices

27. Prevention
Deconstructing Brand Decline

28. To avoid (or reverse) a damaging outcome,
it is important to deconstruct the decline in
terms of reliable precursors to sales
Elements of
Brand Equity

29. 1. Differential effect
Why Customer choose a particular brand among all other options?
Differentiation
approaches
Value Priced
Additional or
different feature

30. 2. Brand Knowledge
Communicating Values
Components
Brand
Awareness
Brand Image

31. Brand Awareness
• Falling brand awareness Serious long term problem
• Indicators of brand awareness:
1. Aided recall: Tend to decline more gradually
2. Unaided recall: better indicator of brand’s health

32. Brand Image
Need to maintain “Strong, favorable, and unique
brand association “.
Monitor the brand image is done by
monitoring changes in customer perception

33. 3. Customer response
Determination
by monitoring
Sales
Purchase
intension
Brand loyalty
measures
Brand switching
behavior

34. Reasons for brand switching
:
Negative
publicity
Entry of new
competitors in
market
Increase in the
price of the
brand

35. Revitalizing Brands

36. Is the brand worth reviving?

37. Examining three elements of brand equity:
(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 issues (put plans
in place that will get an appropriate customer response)?

38. Brand Audit
Realistic
investment in
reviving a brand
Cost of replacing
a brand with a
new brand

39. Brands with
negative image and
low awareness are
better to kill.
Brands having commanded a
premium in recent past and
has singular focus with
well defined differentiation
can be revived .

40. Take a long term perspective

41. Revitalization can be started
1. Addressing the cause of decline
2. Understanding the brand promise
3. Why it may have failed to maintain its relevance
4. Adjusting this
5. Educating market about it
Example: Blockbuster
Long term perspective may
causes losses in the interim.

42. Marketing research
Integral part of exercise to assess and track brand awareness
Examples: Nutri-grain , used research to reinforce its
image as a maker ‘‘of healthy breakfast and snack
foods’’ through brand extensions

43. Repositioning, Investing in Brand and
Educating the market

44. Strong brand differentiation can be re-established
with a focus on the right positioning ,
and then emphasizing that consistently
in the brand’s communication.
Managers faced with a declining brand must find what’s
unique about their product and hammer it home throughout
all aspects of the transaction–‘‘before, during, and
after the sale’’

45. Example: GM’s Cadillac brand
Cadillac experienced a steady decline, while competing Japanese and German
brands gained strength
Cadillac was committed to going head-to-head with the competition
and repositioning itself as providing a driving experience as good as any offered
by rival brands,
while undercutting them on pricing.

46. Correct mismanagement of Brands

47. Rebuild quality
Example: Harley-Davidson

48. Resist temptation to “milk”
Cost cutting: An aggressive form of milking
Example: Levi’s Signature brand
Once a market
leader, Levi’s entry into Wal-Mart with its lowerquality
Signature jeans has hurt the image of the
brand’s entire line. Such actions should be avoided.

49. Pursue carefully defined target market
Target markets: Shrinks or matures
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
Line extensions with a sub-brand can be a very effective strategy.

50. Example : Levi’s Docker
During the 1980s–when it was still a strong brand–Levi’s adopted such a strategy.
It successfully used the strength of its brand name to launch Dockers and enter
a new market; that is, business casual clothing.
Once Dockers became well-known, Levi’s removed its name, and
Dockers became a stand-alone brand.

51. Disclaimer
Created by Namrata Yadav, IIT Roorkee, during an internship by
Prof. Sameer Mathur, IIM Lucknow.
www.IIMinternship.com

52. Thank you!