Introduction
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 contro versial incident or even a rumour 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 itself filled with danger. While this danger can never be completely elimin ated, by learning from the bad examples of others it is at least possible to identify where the main threats lie.
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, controver sially 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
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 vulner able 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' cigar ette. '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.
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.
Don't have nightmares.