You have to be Idiot for your brand to fail.
5 common causes of brand failures. Here are some of the most “popular”, ranked in the order of “fix-ability”, starting with situations that can be easily corrected, and ending with the ones that are almost impossible to recover from.
Building a Product, Not a Brand
There are many companies that offer an exceptional product but fail to build the brand around it. The Management team that runs these companies invariably believes in the “we offer a great product at the right price” selling strategy. best product doesn’t always win.
Lack of Brand Communication
marketing budget for building the brand is not nearly enough to achieve anything meaningful. In reality, management believes that marketing is purely ego-building and a waste of money, and what really sells is product and price. Consistent communication of the brand message is key to getting into the minds of consumers. Brands that are not on the radar do not exist. In order to become a player, the brand communication budget has to be on par with the competitive brands you are trying to displace.
Being Stuck in the Middle
A brand is “stuck in the middle” when it holds no defined positioning in the marketplace. These brands usually struggle to remain profitable and eventually die. Gap was launched in 1969 and quickly became synonym with cool, affordable American-style apparel. In recent years Gap is struggling to define its identity, both internally (stuck between Old Navy and Banana Republic), and externally, facing competition from more focused brands such as H & M and Zara.
Brand Cannibalization
Changes in the marketplace require bold strategic moves that affect a company’s brand portfolio. Such moves include launching new brands to fight newly emerged competition, or meant to capture a new market segment. These strategic moves have to be carefully planned in order to avoid cannibalization of the existing brand(s).
Consider a common scenario: an established premium brand decides to launch a lower cost alternative to capture a new market segment consisting of consumers who currently cannot afford it. Many companies choose the shortest way to market: strip the existing product of some of its premium features, and market it under a very similar brand name, that would create an obvious connection with the premium brand.
Great strategy, at least on paper. In reality, these companies run the risk of alienating their core customers who currently pay a premium for the premium brand. In order to avoid cannibalization, enough separation has to exist between the two brands in order to keep them both relevant to appealing to different consumer groups.
Not Keeping Up With The Competition
Competitive advantages are very difficult to preserve. Harvard Business School Professor Youngme Moon talks about “augmentation-by-addition”: differentiated features are quickly copied by competition and become points of parity, something all consumers expect to get. Brand survival requires constant innovation. The first mistake companies such as Blackberry, and Blockbuster made is not acknowledging that the market is changing. Blackberry believed for a long time that the touchscreen phone is just a marketing fad. Management also failed to see the evolution of the smartphone from a communication device to a full entertainment hub. Not being able to keep up with the competition (even if you invented the category) invariably leads to brand failure, especially in fast chancing categories, where it’s almost impossible to catch up.