Why brands fail?

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 behaviour 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 either 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 6 Brand failures 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. Forexample, 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.

Branding errors: why focus on failure?

The aim of this blog 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 blog 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 blog will provide an illuminating, if rather frightening read.

Don’t have nightmares.

Popular 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 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.