The world's oldest automotive brand still going strong
Forever Young! - Rites for Defying the Passage of Time
Brands have a life. They pass through different stages of development like a living organism; with the exception that their life cycles need not to follow a predefined pattern, nor come to a premature end. Brand plateaus can be avoided, and a brand's life cycle can repeatedly be enhanced and prolonged to pass through ever new stages of growth and consolidation while defying the stage of aging. If managed properly, a brand can have an infinite life and become a company's most valuable asset which appreciates rather than depreciates in value over time. Stretching the brand life cycle successfully over and over again by keeping the trademark fresh and exciting, requires insight into a brand's anatomy and its ever-changing market dynamics by brand and top management, as well as marketing imagination, strategic skills, and a consistent level of support for the brand.
The Product Life Cycle Concept
The product life cycle (PLC) concept is a useful marketing model in understanding and managing brands over time. However, it is easily misunderstood and can lead to the wrong conclusions if not used with care. One reason for confusion lies in the generic definition of the PLC itself. The classic PLC concept – based on the theory of the diffusion of innovations over time – describes an S-shaped (unit) sales curve representing the four basic stages in the life of a product: (1) Introduction, (2) Growth, (3) Maturity, and (4) Aging or Decline. The PLC concept can and must be applied to different though interrelated sales phenomena of which the brand life cycle is just one manifestation. There are at least four basic types of product life cycles which need to be analyzed in conjunction.
The PLC concept helps interpret product and competitive dynamics of (1) a market or product category (such as non-alcoholic beverages), (2) a product form (e.g. colas), (3) a brand (e.g. Coca-Cola), and (4) the underlying product (service) formula, technoloy, design (e.g. the secret Coke formula). The observation that product life cycles are getting shorter refers to the underlying product or service type in the first place. Monitoring and knowing this type of PLC (relative to the industry's state-of-the-art techology PLC) is of vital importance for detecting inherent or latent weaknesses in the brand, planning ahead in time for an improved or new product version, and drawing the right conclusions from the brand's performance at any point in time.
Life is not Linear, nor necessarily S-shaped
A brand can have a long or infinite life while its underlying product may change, and will change, many times over for market, cost and other reasons. In fact, this is the fate of most branded products. Hardly any of today's brands in consumer goods, for example, will come with exactly the same product formula, technology or design it was sold with say, three years ago.
The assertion of the PLC concept – i.e. products (brands) have a limited life, and consequently they must age – needs not to hold true for a specific brand if managed with intelligence. Many brands in all types of markets enjoy a kind of eternal youth irrespective of their actual age and the maturity of their category - because their owners have understood to defy the passage of time and the PLC concept through constant innovation. Even the decline of a category, or the exit from it, must not mean the end of a brand's life. Consider BMW, the powerful automotive brand of "the ultimate driving machine". As the corporate brand name Bayerische Motorenwerke (Bavarian Engine Plants) and brand logo (a stylized propeller in motion) still suggest, BMW was originally founded as a manufacturer of heavy-duty aircraft engines, not fast and elegant cars.
Most markets have reached maturity today, with slowing or no growth, or first signs of negative growth. Depending on the type of industry, the maturity stage can last decades or much longer, or just a few years or months. This is one of the drawbacks of the PLC theory. The duration of the individual stages of the PLC cannot universally be defined such as in a living organism. In practice, it is almost impossible to forecast the exact length of a certain stage for a given industry or brand, and it is equally hard to determine which stage of the PLC a market or brand truly is in at any given point in time. Also, in reality PLCs come in a great variety of shapes which can markedly deviate from the idealized S-curve.
Markets which already seemed to be deep in their maturity, or even on the brink of decline, may all of a sudden show new life and upward movements due to shifts in user attitudes or preferences, new competitive entries, breakthroughs in marketing and technology, or governmental influences such as a new legislation which favours the industry or renews the interest in it. The opposite also holds true, with booming markets breaking down virtually overnight and remaining in the doldrums for an unforeseeable long time, or shrinking further, or vanishing altogether (think Internet boom, for example).
Like markets, the majority of today's brands has reached maturity. But maturity does not equal maturity. Consider a 125-year old brand such as Coca-Cola which is a very vital, as well as a highly profitable and valuable brand. In fact, it has been the most valuable brand in the world for many years according to Interbrand's annual compilation of global brands which exceed $1 billion in brand value. Many a leading mature brand is in a position of relative youthfulness in its mature market. On the other hand, a new brand in its growth stage in a growth market may quickly look "very old" before its time, having to fight for its survival (e.g. Yahoo.com), or even dying a sudden death (e.g. Webvan.com). This fate is not limited to Internet brands, of course, but the rapid rise and fall of once great brands with global recognition (and supposedly almost unlimited growth opportunities) underline that the PLC concept has to be interpreted with care (and is of limited use as a forecasting tool).
Re-energizing Your Brand for Maximum Life
Nonetheless, marketing and brand managers face the fact that most of their brands are mature brands in mature markets. Their prime task is to find effective ways of constantly rejuvenating their brands and products relative to competition in order to remain relevant to their customers and gain new momentum, or at least preserve the status quo and protect profitability. If they miss the right timing, or fail with their attempts to re-energize the brand, real trouble looms. It will be a much riskier and more demanding task to rebuild a weakened or declining brand, if this can be achieved at all. Repeated failure will send the brand in a downward spiral which may be the beginning of the end, often favored by inconsistency in the management of the brand and increasing neglect due to frequent changes in the marketing personnel.
Many a company lacks a system for the identification and evaluation of weak and aging brands. Often it is not until a brand has declined significantly over a longer period of time that the alarm bells go off and a hectic last-minute rescue operation gets underway. It would be wiser to regularly monitor a company's portfolio for weak candidates before such an emergency occurs, and systematically assess these products and brands to decide whether the company should continue (with or without a change in strategy) or discontinue them. Industry attractiveness and a company's philosophy will play a major role in the decision making. Depending on the importance of the brand to the company's business, the characteristics of the brand's problems, the market environment, the company's capabilities, etc., the range of sensible and available rebuilding strategies may vary from offensive to defensive approaches, or a combination of both, including directions such as:
– Penetrate market via price, service, advertising or expanded product line
– Add, develop, or replace products and brands in current markets
– Rationalize market focus for profit, volume or geographic segments
– Rationalize for production standardization or subcontract
– Rationalize to profitable products and brands
– License products/technology/trademarks abroad
– Find and expand new market niche
– Enter new markets and regions
Rien ne va plus…Faîtes vos jeux
Most companies don't have a planned approach to eliminating weak brands and products. For reasons of sentiments or some irrational hopes for improvement in sales in the future, phasing-out decisions may be delayed or never made. This can cost the company dearly in the long run. As a neutral expert we can help manage the emotionally trying process of phasing out products and brands, and find the best way out, be it harvesting, be it immediate withdrawal. Clearing the way for an aggressive search for new replacement products – the lifeblood of any company, not only to survive but to thrive – might be the biggest gain from dropping those products and brands which have definitely passed the point of no return.
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Checklist for Action
Forever young! Brands have this potential. But only if all the signs are read correctly, if the needs and rites for an effective and timely change are clearly recognized, and if the chosen path to rejuvenating or rebuilding a brand combines competence and passion with that extra touch of creativity and excellence in execution.
We can help. We are familiar with the marketing rites of passage from one stage of the life of a brand to another. We are strong on coming up with the right ideas to help leverage, revitalize or rebuild your brand. And we know how to design, time and implement those strategies, tactics and programs that will re-energize your brand for maximum life.
If all of your brands are in good shape, you do not need us. Good luck!
If you feel that your brand could do better, you should think of calling us next week.
If your brand is falling behind competition, you should call us today.
If your brand has been declining for some time, and the rate of decline has accelerated recently, you should fix a meeting with us this very afternoon.
Impossible, but doable.
We thrive on true challenges and enjoy starting where others leave off, or left off in the past. Whether you have a brand in really deep trouble, a half-finished relaunch plan, a shelved pet idea, or a complex project nobody dares to touch: We will fix it. Finish it. Bring it to life. Take us by our word. You choose. We deliver.
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