How Beloved Brands Fall From Grace

Very few Beloved Brands stay on top for long. 

Beloved Brands like Disney, McDonald’s and Coke have stayed at the top across many generations of consumers helping to deepen their connectivity and solidifying their power as a brand.  But these brands are rare.  Instead, most of the brands that reach beloved status stay at the top for one generation at best.  These brands get to the top and think they are invincible. They fail to recognize the decline before it’s too late because as they are in denial of the underlying problems which could be a result of fear, arrogance, not listening or making the wrong choices.  They fail to attack themselves which opens the door to an attack from others.

The 5 ways that Beloved Brands fall from grace
  1. Beloved Brands forget who they are and what it was that made them famous. Benetton is great example of a brand who forgot what made them famous.   In 1990, Benetton could do no wrong.  Business schools wrote case studies of their success and Ad Agencies held them up as the brand of envy for all clients to learn from.  They had shock-value advertising campaigns that people talked about at the lunch table and there was a Benetton store in every mall. Their colorful and stylish fashion was the desire of the core teenage crowd.  Benetton’s brand promise was providing European fashions at an affordable price.  But the arrogance of the “can do no wrong” brand quickly faded.  While they were so busy creating shock-value advertising and arrogantly talking of their brand as it were art itself they forgot about the fashion part of the business.  Benetton started to look like a hollow promise of cool ads with not-so-cool clothing.  Also, Benetton expanded so broadly and so fast, they opted for franchises instead of maintaining ownership over the distribution.  The managing of the large franchise network became a drain on the company and there’s a belief that not being close to the consumers in the stores hurt their ability to listen to what teenagers were saying and wearing.  With a fickle teenage target, Benetton quickly went from a must-have to a has-been brand.
  2. Struggle to keep up with the times.   The Beloved Brands of General Motors–Cadillac, Oldsmobile and Corvette–not only peaked in the 1970′s, but found themselves stuck their as well.  The 70′s were one of those decades with such a distinct look with Disco, perms, gold chains and the 3-piece suit, that most things connected to the 70′s were completely rejected in the 1980′s.  A brand like Cadillac was the ultimate luxury brand, so revered that people would describe the best brand of any category as “it’s the Cadillac of….” but that has since been replaced by “it’s the Mercedes of…..”   Cadillac’s unit sales peaked in 1973 just as gas prices began to rise and the look of those huge gas-guzzlers. It no longer fit the desires of the Yuppies of the 1980′s who were now opting for sleeker luxury with Mercedes and BMW.  The Corvette brand had done a nice job transitioning from the 50′s of James Dean through the 60′s and 70′s, always remaining as an icon of sophisticated American cool.   But Corvette failed to update their 1970′s brand look until 1984, which was too late to escape the stigma and giggles of those who looked at the drivers as having a “mid-life crisis”.  Consumers of the 80′s were now driving smaller and sleeker sports cars like the RX7, 280Z and later on the Miata.  And finally, the Oldsmobile was a classic American family car who sales soared through the 1970′s.  By the mid-80′s, in an effort to try to capture a new generation, they used the infamous tagline of “Not your father’s Oldsmobile”  which only re-enforced that it WAS your father’s Oldsmobile.  I believe that the near-bankruptcy of General Motors can be traced back to the 1970′s when the brands peaked and yet felt stuck in a time-warp forever.  GM failed to keep up in design, and failed to change as gas prices rose dramatically. They found themselves attacked on the lower end from the Japanese cars like Toyota and Honda and at the higher end from German brands like Mercedes, Porsche, Audi and BMW.
  3. They make the wrong strategic choices because they think of themselves before the consumer.   Gap Clothing got greedy and forgot what made them great: trendy American fashion for a stylish generation at a reasonable price. And who is the spokesperson for fashion:  the coolest people on earth: TEENAGERS of course.   Every generation of Teens believes they are the most important people on earth and they want products that speak for their generation.  It’s all about them.   They influence Music, Movies, TV Shows and Clothing and believe each has to speak directly to them and for them. Imagine being 15 in the late 90′s, you’re walking in your favorite mall, trying to be as cool as can be, heading for your favorite clothing store. All of a sudden, you look up and your favorite clothing brand is now flanked by BABY GAP on one side and GAP MATERNITY on the other side. How could this brand speak for the teen generation, when your 2-year-old nephews are wearing a mini-version of what you’re wearing or your pregnant Aunt is wearing the stretchy version? GAP made the mistake of putting their name on all their line extensions, which most fans of Master Brands thinks strengthens the brand but it actually runs the risk of actually weakening the brand. GAP also forgot about feeding that desire for leading edge, trendy clothing–the whole reason for that “8 seasons” rotation of inventory.  Go into a GAP store this year, and you’ll realize how boring and drab the products have become.  No teenager today loves GAP or even thinks much about GAP.  They are totally indifferent. Fast forward to 2011, GAP Clothing sales are down 19% this year and down over 25% since the peak of 2005. And they have just announced the closing of 200 stores–which will continue the downward spiral.
  4. If you are Afraid to attack yourself, expect an attack from someone else.   Kodak was such a revered brand for so long, but their refusal to attack themselves opened up so many windows of attack from others.  The first attack came in the traditional film business from low-priced Fuji film.   Kodak did nothing to stop Fuji for fear of eroding their margin, letting Fuji gain a 17% share of the film market.   The second attack came from new entrants into the digital camera market before Kodak was ready to enter.    Even though Kodak had the first digital camera as early as 1975,  the product was dropped internally for fear it would threaten Kodak’s photographic film business.   In 1990 Kodak finally laid out a plan to enter the digital camera market but took another decade to enter the market.  The world was changing, yet Kodak executives still could not fathom a world without traditional film which gave them little incentive to deviate into the digital camera space.  The third attack came once Kodak entered the digital camera space.  Kodak entered at the high-end of the market and for a brief moment was the #1 digital camera.  But Kodak failed to recognize how quickly the digital camera market would become commoditized. They did cut their prices, but couldn’t lower their cost of goods fast enough to keep up with the Japanese manufacturers.  Kodak was losing $60 for every camera sold at the same time as their traditional film business was dying. The result: Bankruptcy. Interestingly enough, at the time of their bankruptcy, Kodak released 1000′s of patents for sale. It’s not a question of innovation that killed Kodak, it’s a refusal to act on the right innovation in a timely fashion. They failed to attack themselves only to let others attack and ultimately destroy them.
  5. Lose focus and let the experience slide.   A recent case study in a brand experience not living up to expectations is the Blackberry.  It’s a classic case where they grabbed early share as the category innovator and then forgot to keep making improvements to the overall experience. The list of problems for blackberry is long: major service outages, keyboard that sticks, small screen size, bad cameras, poor quality speaker-phone, slow internet browser and when the screen freezes you have to take the battery out and re-boot.  In my last few months as an angry blackberry user, I was taking the battery out 5x a day.  The leaders at RIM believed they were invincible almost laughing when Apple launched the iPhone.  These guys would next launch a tablet without any Apps on it.  Oh man!  What I think Blackberry’s biggest failure is not mapping out the customer experience and attacking every possible weakness.   It’s a classic case of technology first and then thrust it into the marketplace and hope it sells. The blackberry experience has just not kept pace with Android and Apple. As a result, the RIM share price is down 95% since its peak of 2008.
Maintaining Beloved Brand Status
  1. Keep the brand’s promise front and center on who you are.  You need to be either better, different or cheaper.   Challenge yourself to stay relevant, simple and compelling.
  2. Keep challenging the status quo to maintain an experience that over-delivers the promise.  Create a culture that attacks the brand’s weaknesses and fixes them before the competition can attack.  With a Beloved Brand, the culture and brand become one.
  3. Make focused strategic choices that starts with being honest with yourself.  Find a way to listen to your consumers and stay ahead of the trends.  Watch for dramatic shifts because they can really open a door for a competitor.  It’s easier said than done, but don’t be afraid to attack yourself even if it means cannibalizing your current business.  A good defense starts with a good offense.
  4. The most beloved brands have a freshness of innovation, staying one-step ahead of the consumers.  The idea of the brand helps acting as an internal beacon to help frame the R&D.  Every new product has to back that idea. .
  5. Keep the brand story clear and simple through great advertising in paid media, but also through earned media either in the mainstream press or through social media.

 

Here’s a presentation on what makes a Beloved Brand:

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http://beloved-brands.com

Graham is the voice of the modern Brand Leader. He started Beloved Brands, knowing he could “Make Brands better and Brand Leaders better™”. His Beloved Brands blog has 2 million views, and his public speaking appearances inspire Brand Leaders to love what they do. The idea behind Beloved Brands is the more love you can generate with your consumers, the more power you have in the market which drives higher growth and profits for your brand. As a brand coach, Graham helps to find growth where others couldn’t, creating Brand ideas consumers love and Brand Plans everyone can follow. For Brand Leaders wanting to reach their full potential The Brand Leadership Center offers workshops on strategic thinking, analytics, planning, positioning, creative briefs, judging advertising and media. Graham spent 20 years leading some of the world’s most beloved brands at Johnson and Johnson, Pfizer, General Mills and Coke, rising through the ranks up to VP Marketing. Graham played a major role in helping Pfizer win Marketing Magazine’s Marketer of the Year award. Beloved Brands has a robust Client list that includes NFL Players Inc, NFLPA, Pfizer Consumer Healthcare, Earls Kitchen + Bar, 3M, 649 Lottery, Sunlight, Carlsberg, Slimquick, Red Racer, Shagri-la Hotel, Canada’s Wildlife Health and Fluke.

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13 thoughts on “How Beloved Brands Fall From Grace
  1. Pam Morisse

    Talk about forgetting who the consumer is and not backing innovation! Yikes!

    “Even though Kodak had the first digital camera as early as 1975, the product was dropped internally for fear it would threaten Kodak’s photographic film business.” — Shame, shame, shame on those Kodak executives!! (shaking my head…)

    Thanks for the walk down memory lane. I enjoyed the article!

     
    Reply
  2. Sheila Matsubara

    Customer, customer, customer is KING (Queen). Enjoyed both the Gap and Blackberry examples – the latter’s “biggest failure is not mapping out the customer experience and attacking every possible weakness” something more brands need to remember.

    Great article Graham.

     
    Reply
  3. momversusmarketer

    Great article, Graham. Your Gap example hit home. The other day I was shopping with my 12 year old daughter and she refused to enter The Gap. Now I understand why! However, I still really like The Gap, in part because I loved Baby Gap and Gap Kids when my children were smaller (and less opinionated!). Perhaps The Gap chose to follow it’s target market as they entered a new stage of life. Unfortunately, you can’t do this forever can you? Where do you stop… And how?

    Makes me wonder about McDonalds. McCafe isn’t exactly the Mecca of teen hangouts that I remember from my youth. When tastes change the challenge for the Beloved Brand is how to evolve without losing the essence of the brand. And that’s when savvy marketers really earn their pay cheques!

     
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    1. beloved brands

      Gap is great if you don’t like crowds.

      It’s always difficult when you stretch a brand under a master brand, does it make you stronger or weaker? If the brand is based on “why”, then it has a lot easier time to move sideways. But if it’s based on “what” then it struggles. With Brands like Apple and Virgin, people buy into the brand and then they are more willing to purchase the products. It will be interesting to see where McDees fits in…they can’t let go of the moms and tots at 4-7pm or they might wake up 5 years from now without anyone in the place.

      Interestingly, I’m seeing lots of teens liking starbucks lattes…including my own.

       
      Reply
  4. CarlaAnne Communications, LLC

    Great article. All stuff us branding types know, but nicely organized and conveyed – clearly and concisely, and with some fun facts. I would have sent this earlier, but all my keys stuck on my Blackberry. I’ve got to run off now in my Snit or my new Huff since my Cadillac won’t start (And I gave my Oldsmobile back to my father), so I can take some Kodachrome slides of me in latest styles from the GAP.
    – Carla Anne Ernst

     
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  6. Carolyn

    An excellent post full of great examples! I particularly loved the Benetton example! Generating ‘love’ for a brand can be a challenge for marketers. Thanks for sharing!

     
    Reply
  7. LAgmata

    Great post! I definitely agree… Brands can’t become complacent just because they are at the top. As we’ve heard before, sometimes the easy part is getting to the top, the hard part is staying there. Brands not only have to continue to change with the times, but good management also ensures they are one step ahead of what’s next.

     
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  11. Jeff Halmos

    The GAP example is the biggie. The hope of slapping your brand name on whatever comes to mind (Baby Gap; Maternity Gap) and not thinking it will thin it out in the long run is mindnumbing. Those so-called “brand masters” and brand managers and AGENCIES are simply flat-out wrong. Any example shown to the contrary is too early an example.

     
    Reply
  12. JP Kuehlwein

    Graham – A lot of your observations ring very true. I am just careful when it comes to recommending to “listen to the consumer”, “stay current”, etc.. One could argue that Gap expanding to (now) mom customers was them listening to what their loyal users (now) told them. Maybe Oldsmobile tried too hard to be on trend. It might have been better to soul search and become the most desirable car among ‘senior citizens’ ? It’s certainly a big segment and quite under-served by the automibile industry. Better to be the trend than to follow it (was it Versace who said that?). JP at masstoclass.wordpress.com

     
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