Brand Failures

by Matt Haig

Table of Contents
Brand Failures
Chapter 1 - Introduction
Chapter 2 - Classic failures
Chapter 3 - Idea failures
Chapter 4 - !tension failures
Chapter " - #$ Failures
Chapter % - Culture failures
Chapter & - #eople failures
Chapter ' - $ebranding failures
Chapter ( - Internet and ne) technology failures
Chapter 1* - Tired brands
$eferences
Inde!
+ist of ,idebars
Brand Failures
Matt Haig
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Chapter 1: Introduction
Overview
The process of branding )as de2eloped to protect products fro0 failure5 This is easy to
see if )e trace this process bac9 to its 1(th-century origins5 In the 1''*s3 co0panies such
as Ca0pbell?s3 HeinA and 8ua9er Bats )ere gro)ing e2er 0ore concerned about the
consu0er?s reaction to 0ass-produced products5 Brand identities )ere designed not only
to help these products stand out3 but also to reassure a public an!ious about the )hole
concept of factory-produced goods5
By adding a Chu0an? ele0ent to the product3 branding put the 1(th- century shoppers?
0inds at rest5 They 0ay ha2e once placed their trust in their friendly shop9eeper3 but no)
they could place it in the brands the0sel2es3 and the s0iling faces of .ncle Ben or 1unt
;e0i0a )hich bea0ed do)n fro0 the shop shel2es5
The failure of 0ass-produced ite0s that the factory o)ners had dreaded ne2er happened5
The brands had sa2ed the day5
Fast-for)ard to the 21st century and a different picture e0erges5 :o) it is the brands
the0sel2es that are in trouble5 They ha2e beco0e a 2icti0 of their o)n success5 If a
product fails3 it?s the brand that?s at fault5
They 0ay ha2e helped co0panies such as Mc4onald?s3 :i9e3 Coca-Cola and Microsoft
build global e0pires3 but brands ha2e also transfor0ed the process of 0ar9eting into one
of perception-building5 That is to say3 i0age is no) e2erything5 Consu0ers 0a9e buying
decisions based around the perception of the brand rather than the reality of the product5
@hile this 0eans brands can beco0e 0ore 2aluable than their physical assets3 it also
0eans they can lose this 2alue o2ernight5 1fter all3 perception is a fragile thing5
If the brand i0age beco0es tarnished through a 0edia scandal or contro2ersial incident
or e2en a ru0our spread 2ia the Internet3 then the co0pany as a )hole can find itself in
deep trouble5 Det co0panies cannot opt out of this situation5 They cannot turn the cloc9
bac9 to an age )hen branding didn?t 0atter5 1nd besides3 they can gro) faster than e2er
before through the creation of a strong brand identity5
,o branding is no longer si0ply a )ay of a2erting failure5 It is e2erything5 Co0panies
li2e or die on the strength of their brand5
Det despite the fact that branding is 0ore i0portant than at any pre2ious ti0e3 co0panies
are still getting it )rong5 In fact3 they are )orse at it than e2er before5 Brands are failing
e2ery single day and the co0pany e!ecuti2es are left scratching their heads in baffle0ent5
The purpose of this boo9 is to loo9 at a )ide 2ariety of these brand failures3 and brands
)hich ha2e so far 0anaged to narro)ly escape death3 in order to e!plore the 2arious
)ays in )hich co0panies can get it )rong5
1s the e!a0ples sho)3 brand failure is not the preser2e of one certain type of business5
-lobal giants such as Coca-Cola and Mc4onald?s ha2e pro2ed Eust as li9ely to create
brand flops as s0aller and younger co0panies )ith little 0ar9eting e!perience5
It )ill also beco0e clear that co0panies do not learn fro0 each other?s 0ista9es5 In fact3
the opposite see0s to happen5 Failure is an epide0ic5 It is contagious5 Brands )atch each
other and replicate their 0ista9es5 For instance3 )hen the the0ed restaurant #lanet
Holly)ood )as still struggling to 0a9e a profit3 a group of super0odels thought they
should follo) the for0ula )ith their o)n Fashion CafF5
Co0panies are starting to suffer fro0 Cle00ing syndro0e?5 They are so busy follo)ing
the co0petition that they don?t realiAe )hen they are heading to)ards the cliff-edge5
They see ri2al co0panies apply their brand na0e to ne) products3 so they decide to do
the sa0e5 They see others di2e into ne) untested 0ar9ets3 so they do too5
@hile Coca-Cola and Mc4onald?s 0ay be able to afford the odd costly branding 0ista9e3
s0aller co0panies cannot5 For the03 failure can be fatal5 The branding process )hich
)as once designed to protect products is no) itself filled )ith danger5 @hile this danger
can ne2er be co0pletely eli0inated3 by learning fro0 the bad e!a0ples of others it is at
least possible to identify )here the 0ain threats lie5
Why brands fail
1 long3 long ti0e ago in a gala!y far a)ay3 products )ere responsible for the fate of a
co0pany5 @hen a co0pany noticed that its sales )ere flagging3 it )ould co0e to one
conclusion7 its product )as starting to fail5 :o) things ha2e changed5 Co0panies don?t
bla0e the product3 they bla0e the brand5
It isn?t the physical ite0 sitting on the shop shelf at fault3 but rather )hat that ite0
represents3 )hat it conEures up in the buyer?s 0ind5 This shift in thin9ing3 fro0 product-
bla0e to brand-bla0e3 is therefore related to the )ay buyer beha2iour has changed5
CToday 0ost products are bought3 not sold3? )rite 1l and +aura $ies in The 22
Immutable Laws of Branding5 CBranding GpresellsH the product or ser2ice to the user5
Branding is si0ply a 0ore efficient )ay to sell things5? 1lthough this is true3 this ne)
focus 0eans that perfectly good products can fail as a result of bad branding5 ,o )hile
branding raises the re)ards3 it also heightens the ris9s5
,cott Bedbury3 ,tarbuc9s? for0er 2ice-president of 0ar9eting3 contro2ersially ad0itted
that Cconsu0ers don?t truly belie2e there?s a huge difference bet)een products3? )hich
0eans brands ha2e to establish Ce0otional ties? )ith their custo0ers5
Ho)e2er3 e0otions aren?t to be 0essed )ith5 Bnce a brand has created that necessary
bond3 it has to handle it )ith care5 Bne step out of line and the custo0er 0ay not be
)illing to forgi2e5
This is ulti0ately )hy all brands fail5 ,o0ething happens to brea9 the bond bet)een the
custo0er and the brand5 This is not al)ays the fault of the co0pany3 as so0e things
really are beyond their i00ediate control Iglobal recession3 technological ad2ances3
international disasters etcJ5 Ho)e2er3 0ore often than not3 )hen brands struggle or fail it
is usually do)n to a distorted perception of either the brand3 the co0petition or the
0ar9et5 This altered 2ie) is a result of one of the follo)ing se2en deadly sins of
branding7
Brand amnesia5 For old brands3 as for old people3 0e0ory beco0es an increasing
issue5 @hen a brand forgets )hat it is supposed to stand for3 it runs into trouble5
The 0ost ob2ious case of brand a0nesia occurs )hen a 2enerable3 long-standing
brand tries to create a radical ne) identity3 such as )hen Coca-Cola tried to
replace its original for0ula )ith :e) Co9e5 The results )ere disastrous5
Brand ego5 Brands so0eti0es de2elop a tendency for o2er-esti0ating their o)n
i0portance3 and their o)n capability5 This is e2ident )hen a brand belie2es it can
support a 0ar9et single-handedly3 as #olaroid did )ith the instant photography
0ar9et5 It is also apparent )hen a brand enters a ne) 0ar9et for )hich it is
clearly ill-suited3 such as Harley 4a2idson trying to sell perfu0e5
Brand megalomania5 gotis0 can lead to 0egalo0ania5 @hen this happens3
brands )ant to ta9e o2er the )orld by e!panding into e2ery product category
i0aginable5 ,o0e3 such as <irgin3 get a)ay )ith it5 Most lesser brands3 ho)e2er3
do not5
Brand deception5 CHu0an 9ind cannot bear 2ery 0uch reality3? )rote T , liot5
:either can brands5 Indeed3 so0e brands see the )hole 0ar9eting process as an
act of co2ering up the reality of their product5 In e!tre0e cases3 the trend to)ards
brand fiction can lead to do)nright lies5 For e!a0ple3 in an atte0pt to pro0ote
the fil0 A Knights Tale one ,ony 0ar9eting e!ecuti2e in2ented a critic3 and a
suitable 6uote3 to put onto the pro0otional poster5 In an age )here 0ar9ets are
increasingly connected3 2ia the Internet and other technologies3 consu0ers can no
longer be decei2ed5
Brand fatigue5 ,o0e co0panies get bored )ith their o)n brands5 Dou can see this
happening to products )hich ha2e been on the shel2es for 0any years3 collecting
dust5 @hen brand fatigue sets in creati2ity suffers3 and so do sales5
Brand paranoia5 This is the opposite of brand ego and is 0ost li9ely to occur
)hen a brand faces increased co0petition5 Typical sy0pto0s include7 a tendency
to file la)suits against ri2al co0panies3 a )illingness to rein2ent the brand e2ery
si! 0onths3 and a longing to i0itate co0petitors5
Brand irrelevance5 @hen a 0ar9et radically e2ol2es3 the brands associated )ith it
ris9 beco0ing irrele2ant and obsolete5 Brand 0anagers 0ust stri2e to 0aintain
rele2ance by staying ahead of the category3 as /oda9 is trying to do )ith digital
photography5
Brand myths
@hen their brands fail co0panies are al)ays ta9en by surprise5 This is because they ha2e
had faith in their brand fro0 the start3 other)ise it )ould ne2er ha2e been launched in the
first place5 Ho)e2er3 this brand faith often ste0s fro0 an obscured attitude to)ards
branding3 based around one or a co0bination of the follo)ing brand 0yths7
If a product is good it will succeed5 This is blatantly untrue5 In fact3 good
products are as li9ely to fail as bad products5 Beta0a!3 for instance3 had better
picture and audio 6uality than <H, 2ideo recorders5 But it failed disastrously5
Brands are more likel! to succeed than fail5 @rong5 Brands fail e2ery single day5
1ccording to so0e esti0ates3 '* per cent of all ne) products fail upon
introduction3 and a further 1* per cent die )ithin fi2e years5 By launching a
product you are ta9ing a one in ten chance of long-ter0 success5 1s $obert
McMath3 a for0er #rocter K -a0ble 0ar9eting e!ecuti2e3 once put it7 Cit?s easier
for a product to fail than it is to sur2i2e5?
Big companies will alwa!s have brand success5 This 0yth can be dis0antled )ith
t)o )ords7 :e) Co9e5 1s this boo9 )ill sho)3 big co0panies ha2e 0anaged to
ha2e at least as 0uch failure as success5 :o co0pany is big enough to be i00une
to brand disaster5 In fact3 0any of the e!a0ples in this boo9 highlight one of the
0ain parado!es of branding L na0ely3 that as brands get bigger and 0ore
successful3 they also beco0e 0ore 2ulnerable and e!posed5
"trong brands are built on advertising5 1d2ertising can support brands3 but it
can?t build the0 fro0 scratch5 Many of the )orld?s biggest brand failures
acco0panied e!tre0ely e!pensi2e ad2ertising ca0paigns5
If its something new its going to sell5 There 0ay be a gap in the 0ar9et3 but it
doesn?t 0ean it has to be filled5 This lesson )as learnt the hard )ay for $;$
:abisco Holdings )hen they decided to launch a Cs0o9eless? cigarette5 CIt too9
the0 a )hile to figure out that s0o9ers actually li9e the s0o9e part of s0o9ing3?
one co00entator said at the ti0e5
"trong brands protect products5 This 0ay ha2e once been the case3 but no) the
situation is re2ersed5 ,trong products no) help to protect brands5 1s the cases
sho)3 the product has beco0e the a0bassador of the brand and e2en the slightest
decrease in 6uality or a hint of trouble )ill affect the brand identity as a )hole5
The consu0er can cause the 0ost elaborate brand strategy to end in failure5
Why focus on failure?
The ai0 of this boo9 is to pro2ide Cho) not to? ad2ice by dra)ing on so0e of the largest
branding blunders of all ti0e5 Brands )hich set sail )ith the help of 0ulti-0illion dollar
ad2ertising ca0paigns shortly before sin9ing)ithout trace are clear contenders5 Ho)e2er3
the boo9 )ill also loo9 at ac9no)ledged brand 0ista9es 0ade by usually successful
co0panies such as <irgin3 Mc4onald?s3 IBM3 Coca-Cola3 -eneral Motors and 0any
others5
@elco0e3 then3 to the brand gra2eyard )here co0panies ha2e either put their flagging
brand to rest or ha2e allo)ed it to stagger around )ith no direction in a state of li0bo5
@hile these branding Chorror stories? 0ay suggest that failure is ine2itable3 their e!a0ple
has helped to identify the 9ey danger areas5 It is hoped then3 that this boo9 )ill pro2ide
an illu0inating3 if rather frightening read5
4on?t ha2e night0ares5
Chapter : Classic failures
Overview
,o0e brand failures ha2e pro2ed so illu0inating they ha2e been discussed and dissected
by 0ar9eting e!perts since they first happened5 These Cclassic? failures help to illustrate
the fact that a product does not ha2e to be particularly bad in order to flop5
Indeed3 in the case of :e) Co9e3 the first failure )e?ll co2er3 the product )as actually an
enhance0ent of the for0ula it replaced5 The reason it bo0bed )as do)n to branding
alone5 Coca-Cola had forgotten )hat its core brand )as 0eant to stand for5 It nai2ely
thought that taste )as the only factor consu0ers cared about5 It )as )rong5
In fact3 all the e!a0ples in this chapter highlight funda0ental 0ar9eting errors )hich
0any other brands ha2e replicated since5 These errors include such basic 0ista9es as
setting the )rong price3 choosing the )rong na0e3 and getting too paranoid about the
co0petition5
Ho)e2er3 these failures also illustrate the general unpredictability of all 0ar9eting
practices5 :o 0atter ho) strong a brand beco0es3 the 0ar9et al)ays re0ains elusi2e5
The best any brand 0anager can hope for is to loo9 out for any li9ely pitfalls )hich could
catch the0 out5 It is in the interest of identifying these pitfalls3 rather than for the sa9e of
schadenfreude3 that the follo)ing classic failures are e!plored in so0e depth5
1 New Coke
Thin9 of a brand success story3 and you 0ay )ell thin9 of Coca-Cola5 Indeed3 )ith nearly
1 billion Coca-Cola drin9s sold e2ery single day3 it is the )orld?s 0ost recogniAed brand5
Det in 1('" the Coca-Cola Co0pany decided to ter0inate its 0ost popular soft drin9 and
replace it )ith a for0ula it )ould 0ar9et as :e) Co9e5 To understand )hy this
potentially disastrous decision )as 0ade3 it is necessary to appreciate )hat )as
happening in the soft drin9s 0ar9etplace5 In particular3 )e 0ust ta9e a closer loo9 at the
gro)ing co0petition bet)een Coca-Cola and #epsi-Cola in the years and e2en decades
prior to the launch of :e) Co9e5
The relationship bet)een the arch-ri2als had not been a healthy one5 1lthough 0ar9eting
e!perts ha2e belie2ed for a long ti0e that the co0petition bet)een the t)o co0panies
had 0ade consu0ers 0ore cola-conscious3 the fir0s the0sel2es rarely sa) it li9e that5
Indeed3 the Coca-Cola co0pany had e2en fought #epsi-Cola in a legal battle o2er the use
of the )ord Ccola? in its na0e3 and lost5
Butside the courts though3 Coca-Cola had al)ays been ahead5 ,hortly after @orld @ar II3
Time 0agaAine )as already celebrating Co9e?s Cpeaceful near-con6uest of the )orld5? In
the late 1("*s3 Co9e outsold #epsi by a ratio of 0ore than fi2e to one5 Ho)e2er3 during
the ne!t decade #epsi repositioned itself as a youth brand5
This strategy )as a ris9y one as it 0eant sacrificing its older custo0ers to Coca-Cola3 but
ulti0ately it pro2ed successful5 By narro)ing its focus3 #epsi )as able to position its
brand against the old and classic i0age of its co0petitor5 1s it beca0e increasingly seen
as Cthe drin9 of youth? #epsi 0anaged to narro) the gap5
In the 1(&*s3 Co9e?s chief ri2al raised the sta9es e2en further by introducing the #epsi
Challenge L testing consu0ers blind on the difference bet)een its o)n brand and Cthe
real thing?5 To the horror of Coca-Cola?s longstanding co0pany president3 $obert
@oodruff3 0ost of those )ho participated preferred #epsi?s s)eeter for0ula5
In the 1('*s #epsi continued its offensi2e3 ta9ing the #epsi Challenge around the globe
and heralding the arri2al of the C#epsi -eneration?5 It also signed up celebrities li9ely to
appeal to its target 0ar9et such as 4on ;ohnson and Michael ;ac9son Ithis tactic has
sur2i2ed into the ne) 0illenniu03 )ith figures li9e Britney ,pears and $obbie @illia0s
pro2iding 0ore recent endorse0entsJ5
By the ti0e $oberto -oiAueta beca0e chair0an in 1('13 Co9e?s nu0ber one status )as
starting to loo9 2ulnerable5 It )as losing 0ar9et share not only to #epsi but also to so0e
of the drin9s produced by the Coca-Cola co0pany itself3 such as Fanta and ,prite5 In
particular the runa)ay success of 4iet Co9e )as a double-edged s)ord3 as it helped to
shrin9 the sugar cola 0ar9et5 In 1('33 the year 4iet Co9e 0o2ed into the nu0ber three
position behind standard Co9e and #epsi3 Co9e?s 0ar9et share had slipped to an all-ti0e
lo) of Eust under 24 per cent5
,o0ething clearly had to be done to secure Co9e?s supre0acy5 -oiAueta?s first response
to the C#epsi Challenge? pheno0enon )as to launch an ad2ertising ca0paign in 1('43
praising Co9e for being less s)eet than #epsi5 The tele2ision ads )ere fronted by Bill
Cosby3 at that ti0e one of the 0ost fa0iliar faces on the planet3 and clearly so0eone )ho
)as too old to be part of the #epsi -eneration5
The i0pact of such efforts to set Coca-Cola apart fro0 its ri2al )as li0ited5 Co9e?s share
of the 0ar9et re0ained the sa0e )hile #epsi )as catching up5 1nother )orry )as that
)hen shoppers had the choice3 such as in their local super0ar9et3 they tended to plu0p
for #epsi5 It )as only Co9e?s 0ore effecti2e distribution )hich 9ept it ahead5 For
instance3 there )ere still considerably 0ore 2ending 0achines selling Co9e than #epsi5
2en so3 there )as no getting a)ay fro0 the fact that despite the proliferation of soft
drin9 brands3 #epsi )as )inning ne) custo0ers5 Ha2ing already lost on taste3 the last
thing Coca-Cola could afford )as to lose its nu0ber one status5
The proble03 as Coca-Cola percei2ed it3 ca0e do)n to the product itself5 1s the #epsi
Challenge had highlighted 0illions of ti0es o2er3 Co9e could al)ays be defeated )hen it
ca0e do)n to taste5 This see0ed to be confir0ed by the success of 4iet Co9e )hich )as
closer to #epsi in ter0s of fla2our5
,o in )hat 0ust ha2e been seen as a logical step3 Coca-Cola started )or9ing on a ne)
for0ula5 1 year later they had arri2ed at :e) Co9e5 Ha2ing produced its ne) for0ula3
the 1tlanta-based co0pany conducted 2**3*** taste tests to see ho) it fared5 The results
)ere o2er)hel0ing5 :ot only did it taste better than the original3 but people preferred it
to #epsi-Cola as )ell5
Ho)e2er3 if Coca-Cola )as to stay ahead of #epsi-Cola it couldn?t ha2e t)o directly
co0peting products on the shel2es at the sa0e ti0e5 It therefore decided to scrap the
original Coca-Cola and introduced :e) Co9e in its place5
The trouble )as that the Coca-Cola co0pany had se2erely underesti0ated the po)er of
its first brand5 1s soon as the decision )as announced3 a large percentage of the .,
population i00ediately decided to boycott the ne) product5 Bn 23 1pril 1('" :e) Co9e
)as introduced and a fe) days later the production of original Co9e )as stopped5 This
Eoint decision has since been referred to as Cthe biggest 0ar9eting blunder of all ti0e?5
,ales of :e) Co9e )ere lo) and public outrage )as high at the fact that the original )as
no longer a2ailable5
It soon beca0e clear that Coca-Cola had little choice but to bring bac9 its original brand
and for0ula5 C@e ha2e heard you3? said -oiAueta at a press conference on 11 ;uly 1('"5
He then left it to the co0pany?s chief operating officer 4onald /eough to announce the
return of the product5
/eough ad0itted7
The si0ple fact is that all the ti0e and 0oney and s9ill poured into consu0er research on
the ne) Coca-Cola could not 0easure or re2eal the deep and abiding e0otional
attach0ent to original Coca-Cola felt by so 0any people5 The passion for original Coca-
Cola L and that is the )ord for it3 passion L )as so0ething that caught us by surprise5 It is
a )onderful 10erican 0ystery3 a lo2ely 10erican enig0a3 and you cannot 0easure it
any 0ore than you can 0easure lo2e3 pride or patriotis05
In other )ords3 Coca-Cola had learnt that 0ar9eting is about 0uch 0ore than the product
itself5 The 0aEority of the tests had been carried out blind3 and therefore taste )as the
only factor under assess0ent5 The co0pany had finally ta9en #epsi?s bait and3 in doing
so3 conceded its 9ey brand asset7 originality5
@hen Coca-Cola )as launched in the 1''*s it )as the only product in the 0ar9et5 1s
such3 it in2ented a ne) category and the brand na0e beca0e the na0e of the product
itself5 Throughout 0ost of the last century3 Coca- Cola capitaliAed on its Coriginal? status
in 2arious ad2ertising ca0paigns5 In 1(423 0agaAine ad2erts appeared across the .nited
,tates declaring7 CThe only thing li9e Coca-Cola is Coca-Cola itself5 It?s the real thing5?
By launching :e) Co9e3 Coca-Cola )as therefore contradicting its pre2ious 0ar9eting
efforts5 Its central product hadn?t been called ne) since the 2ery first ad2ert appeared in
the Atlanta #ournal in 1''%3 billing Coca- Cola as CThe :e) #op ,oda Fountain 4rin93
containing the properties of the )onderful Coca-plant and the fa0ous Cola nuts5?
In 1('"3 a century after the product launched3 the last )ord people associated )ith Coca-
Cola )as Cne)?5 This )as the co0pany )ith 0ore allusions to ., heritage than any
other5 Fifty years pre2iously3 the #ulitAer #riAe )inning editor of a /ansas ne)spaper3
@illia0 1llen @hite had referred to the soft drin9 as the Csubli0ated essence of all
10erica stands for L a decent thing3 honestly 0ade3 uni2ersally distributed3
conscientiously i0pro2ed )ith the years5? Coca-Cola had e2en been in2ol2ed )ith the
history of ., space tra2el3 fa0ously greeting 1pollo astronauts )ith a sign reading
C@elco0e bac9 to earth3 ho0e of Coca-Cola5?
To confine the brand?s significance to a 6uestion of taste )as therefore co0pletely
0isguided5 1s )ith 0any big brands3 the representation )as 0ore significant than the
thing represented3 and if any soft drin9 represented Cne)? it )as #epsi3 not Coca-Cola
Ie2en though #epsi is a 0ere decade youngerJ5
If you tell the )orld you ha2e the Creal thing? you cannot then co0e up )ith a Cne) real
thing?5 To borro) the co0parison of 0ar9eting guru 1l $ies it?s Cli9e introducing a :e)
-od?5 This contradictory 0ar9eting 0essage )as accentuated by the fact that3 since 1('23
Co9e?s strap line had been CCo9e is it?5 :o) it )as telling consu0ers that they had got it
)rong3 as if they had disco2ered Co9e wasnt it3 but rather :e) Co9e )as instead5
,o despite the tre0endous a0ount of hype )hich surrounded the launch of :e) Co9e
Ione esti0ate puts the 2alue of :e) Co9e?s free publicity at o2er ., M1* 0illionJ3 it )as
destined to fail5 1lthough Coca-Cola?s 0ar9et researchers 9ne) enough about branding
to understand that consu0ers )ould go )ith their brand preference if the taste tests
)eren?t blind3 they failed to 0a9e the connection that these brand preferences )ould still
e!ist once the product )as launched5
#epsi )as3 perhaps unsurprisingly3 the first to recogniAe Coca-Cola?s 0ista9e5 @ithin
)ee9s of the launch3 it ran a T< ad )ith an old 0an sitting on a par9 bench3 staring at the
can in his hand5 CThey changed 0y Co9e3? he said3 clearly distressed5 CI can?t belie2e it5?
Ho)e2er3 )hen Coca-Cola relaunched its original co9e3 redubbed CClassic Co9e? for the
., 0ar9et3 the 0edia interest s)ung bac9 in the brand?s fa2our5 It )as considered a
significant enough e2ent to )arrant a ne)sflash on 1BC :e)s and other ., net)or9s5
@ithin 0onths Co9e had returned to the nu0ber one spot and :e) Co9e had all but
faded a)ay5
Ironically3 through the brand failure of :e) Co9e loyalty to Cthe real thing? intensified5 In
fact3 certain conspiracy theorists ha2e e2en gone so far as to say the )hole thing had been
planned as a deliberate 0ar9eting ploy to reaffir0 public affection for Coca-Cola5 1fter
all3 )hat better )ay to 0a9e so0eone appreciate the 2alue of your global brand than to
)ithdra) it co0pletelyN
Bf course3 Coca-Cola has denied that this )as the co0pany?s intention5 C,o0e critics )ill
say Coca-Cola 0ade a 0ar9eting 0ista9e3 so0e cynics )ill say that )e planned the
)hole thing3? said 4onald /eough at the ti0e5 CThe truth is )e are not that du0b3 and )e
are not that s0art5? But 2ie)ed in the conte!t of its co0petition )ith #epsi3 the decision
to launch :e) Co9e )as understandable5 For years3 #epsi?s 9ey )eapon had been the
taste of its product5 By launching :e) Co9e3 the Coca-Cola co0pany clearly hoped to
)ea9en its 0ain ri2al?s 0ar9eting offensi2e5
,o )hat )as #epsi?s 2erdict on the )hole episodeN In his boo93 The $ther %u! Blinked3
#epsi?s CB $oger nrico belie2es the error of :e) Co9e pro2ed to be a 2aluable lesson
for Coca-Cola5 CI thin93 by the end of their night0are3 they figured out )ho they really
are5 Careta9ers5 They can?t change the taste of their flagship brand5 They can?t change its
i0agery5 1ll they can do is defend the heritage they nearly abandoned in 1('"5?
Lessons from New Coke
&oncentrate on the brands perception5 In the )ords of ;ac9 Trout3 author of
'ifferentiate or 'ie3 C0ar9eting is a battle of perceptions3 not products?5
'ont clone !our rivals5 In creating :e) Co9e3 Coca-Cola )as re2ersing its brand
i0age to o2erlap )ith that of #epsi5 The co0pany has 0ade si0ilar 0ista9es both
before and after3 launching Mr #ibb to ri2al 4r #epper and Fruitopia to co0pete
)ith ,napple5
(eel the love5 1ccording to ,aatchi and ,aatchi?s )orld)ide chief e!ecuti2e
officer3 /e2in $oberts3 successful brands don?t ha2e Ctrade0ar9s?5 They ha2e
Clo2e0ar9s? instead5 In building brand loyalty3 co0panies are also creating an
e0otional attach0ent that often has little to do )ith the 6uality of the product5
'ont be scared to )*turn5 By going bac9 on its decision to scrap original Co9e3
the co0pany ended up creating an e2en stronger bond bet)een the product and
the consu0er5
'o the right market research. 4espite the thousands of taste tests Coca-Cola
carried out on its ne) for0ula3 it failed to conduct ade6uate research into the
public perception of the original brand
2 The Ford dsel
10ong 0any ., 0ar9eting professors3 the story of the dsel car is considered the
classic brand failure of all ti0e5 4ubbed Cthe Titanic of auto0obiles?3 the dsel is
certainly one of the biggest branding disasters to afflict the Ford Motor Co0pany5
1s )ith other3 0ore recent brand failures featured in the boo9 Isee :e) Co9e3 @1# and
boo5co0 for three e!a0plesJ3 the dsel car )as launched a0id a 2ast a0ount of hype5
1lthough the car didn?t appear in sho)roo0s until ,epte0ber 1("&3 ads pro0oting it had
begun to appear 0onths pre2iously bearing the teaser slogan7 CThe dsel is Co0ing?5
Ford decided though3 to fuel public interest3 the car itself should not be seen in the ads3
and e2en )hen Ford dealers started stoc9ing the car in their sho)roo0s3 they )ere told
they had to 9eep the 2ehicles underco2er5 If they did not they ris9ed a fine and the loss of
their franchise )ith the co0pany5
1s Ford hoped3 interest )as fuelled5 The co0pany did not thin9 for one 0o0ent that the
product )ould not be able to 0atch the hype3 and )ould lead to a consu0er bac9lash5
1fter all3 0ore )or9 and research had gone into the de2elop0ent of this car than al0ost
any pre2iously5
Ho)e2er3 so0e of the research had already pro2en futile by the ti0e of the launch5 For
instance3 part of the 0ar9et research process had been to find a suitable na0e for the ne)
car5 This should ha2e been a good idea5 1fter all3 the highly popular Ford Thunderbird
car3 )hich had been launched in 1("43 had gained its e2ocati2e na0e as a result of
0ar9et research findings5 This ti0e3 research tea0s )ere sent out to :e) Dor93 Chicago
and Michigan3 )here 0e0bers of the public )ere as9ed )hat they thought of certain
na0es and to co0e up )ith their o)n suggestions5 There )as also a co0petition a0ong
e0ployees to co0e up )ith the best na0e3 and the co0pany e2en contacted the popular
poet Marianne Moore5 Her brief )as to find a na0e )hich )ould signify a C2isceral
feeling of elegance3 fleetness3 ad2anced features and design5? Her rather eccentric
suggestions included Mongoose Ci2i6ue3 $esilient Bullet3 .topian Turtletop and the
<arsity ,tro9e5
1ltogether3 the co0pany no) had a pool of 1*3*** na0es to choose fro05 Too 0any3
according to co0pany chair0an3 rnest Breech3 as he scanned through the na0es during
a 0eeting of the Ford !ecuti2e Co00ittee in :o2e0ber 1("%5 C@hy don?t )e Eust call
it dselN? he as9ed3 e!asperated5 Henry Ford II3 the grandson of Henry Ford3 agreed5
dsel )as the na0e of his father3 and the Ford founder?s only son5
:ot e2eryone held the sa0e opinion though5 The #$ director3 C -ayle @arnoc93 9ne)
that dsel )as not the right na0e5 It had been an early suggestion3 and had not been li9ed
by those 0e0bers of the public )ho had ta9en part in the 0ar9et research Iin )ord-
association tests3 it had been associated )ith C)easel? and CpretAel? L hardly the best
associations for a dyna0ic ne) carJ5 @arnoc9 had preferred other na0es on the list3 such
as #acer3 $anger3 Corsair or Citation5 @hen the decision )as 0ade3 @arnoc9 0ade his
feelings perfectly clear5 1ccording to $obert +acey in his boo9 (ord+ The ,en and the
,achine3 @arnoc9 responded to the ne) dsel na0e by declaring7 C@e ha2e Eust lost
2**3*** sales5? For @arnoc93 a rose by any other na0e clearly didn?t s0ell as s)eet5
1s it turned out3 the na0e )as the least of the dsel?s proble0s5 There )as also the
design5
The first blueprint for the dsel loo9ed truly i0pressi2e3 as $obert +acey )rites in his
boo9 on Ford5 C@ith concealed airscoops belo) the bu0pers3 this first 2ersion of the car
)as original and dra0atic L a drea0li9e3 ethereal creation )hich struc9 those )ho sa) it
as the 2ery e0bodi0ent of the future5? Ho)e2er3 this 0agnificent design ne2er got to see
the light of day5 The people )ho held onto the purse strings at Ford decided it )ould
si0ply be too e!pensi2e to 0anufacture5
The design that e2entually e0erged )as certainly uni6ue5 dsel?s chief designer3 $oy
Bro)n ;r had al)ays set out to design a car that )ould be recogniAable instantly3 fro0
any direction5 1nd indeed3 there is no denying that the first dsels to e0erge in 1("&
fulfilled this obEecti2e5 In particular3 the car?s front-end bonnet and grille co00anded the
0ost attention5 CThe front end design )as the 0ost pro0inent feature3? confir0s #hil
,9inner3 a respected dsel historian3 CIf you consider other cars fro0 the 0id-1("*s3 they
all loo9ed so0e)hat ali9e5 Basically it )as t)o headlights and a horiAontal grille5 By
ha2ing the big i0pact ring in the 0iddle L )hat )e no) call a horse collar L it really set
the dsel apart5?
1lthough so0e 0e0bers of the auto0oti2e press co00ended this distincti2e loo93 0ost
)ere unappreciati2e5 Bne re2ie)er fa0ously re0ar9ed that it loo9ed Cli9e an Blds0obile
suc9ing a le0on5? @hile another thought the front-end grille )as less li9e a horse collar3
and 0ore li9e a toilet seat5 IThe custo0er co00ents later pro2ed to be e2en )orse )ith
so0e saying that the grille loo9ed li9e a C2agina )ith teeth?5
Ho)e2er3 Ford had good relations )ith the press and @arnoc93 the #$ director3 )as
deter0ined to 0a!i0iAe the 0edia co2erage i00ediately before and after the launch
date5 1rticles subse6uently appeared in both Time and Life 0agaAines heralding the dsel
as a brea9through and e!plaining ho) it had been planned for o2er a decade L a blatant
e!aggeration on the part of @arnoc9 as $oy Bro)n had only begun designing the car in
1("45 The pro0otional brochure to 0ar9 the ,epte0ber launch of the dsel also
pro0ised a great deal5 CThere has ne2er been a car li9e the dsel3? it pro0ised5 This )as a
big clai03 but Ford had e6ually big a0bitions5 The co0pany e!pected to produce
2**3*** units in the car?s first year5 This constituted around fi2e per cent of the entire
0ar9et5
1ny)ay3 the pre-publicity had initially see0ed to )or95 Car sho)roo0s beca0e pac9ed
)ith curious 2isitors3 desperately see9ing their first glance of the car5 In the first )ee9 of
its launch3 al0ost three 0illion 0e0bers of the ., public 2isited dsel sho)roo0s5 The
dsels they sa) had a nu0ber of distinct features3 in addition to the Clo2e-it-or-hate-it?
front-end grille5 For instance3 the car )as the first e2er to ha2e self-adEusting bra9es and
an electronic hood release5 It also had a 2ery po)erful engine for a 0ediu0- range car5
Ho)e2er3 these features )eren?t enough5
In the 0inds of the public3 the car si0ply didn?t li2e up to the hype5 1nd unfortunately
for Ford3 neither did the sales5 dsel sold only %43*** units in its first year3 )ay belo)
the nu0ber anticipated5 Ford launched 1("( and 1(%* dsel 0odels but sales fell e2en
further Ito 443'(1 and 23'4% respecti2elyJ5 In :o2e0ber 1("( Ford printed the last e2er
ad for the car and halted production5
,o )hat had gone )rongN In the case of dsel there are al0ost too 0any reasons to
identify5 In fact3 it )ould be easier to as97 )hat hadnt gone )rongN
The 0ar9eting ca0paign )as certainly a 9ey factor5 In si0ple ter0s3 Ford had o2erstated
its case5 Buoyed by the success of the Thunderbird only a fe) years pre2iously the
co0pany 0ust ha2e felt in2incible3 and this )as reflected in the rather too self-assured
ad2ertising 0aterial5
Ho)e2er3 no-one can e!cuse Ford of undere!posure5 Bn 13 Bctober 1("& the 0ar9eting
ca0paign for dsel too9 product pro0otion to ne) heights )hen Ford Eoined forces )ith
the CB, tele2ision net)or93 to run a one-hour special called The -dsel "how5 The sho)3
a parody of 1("*s fa2ourite The -d "ullivan "how featured celebrities such as Fran9
,inatra and Bing Crosby5 But e2en )ith such pri0e-ti0e pro0otion Ford )as unable to
shift any)here near enough units of the car5 Consu0ers didn?t care )hether it )as
Cre2olutionary? or not5 1ll they 9ne) )as that it loo9ed ugly and had a na0e that
sounded li9e C)easel?5 Further0ore3 in an age )hen all the successful cars had tailfins3
the dsel )as finless5 1ccording to Bob Casey3 curator of transportation at the Henry
Ford Museu03 this fact 0eant that the dsel Cdidn?t 6uite fit into people?s 2ision of a
car?5
In addition to 0isguided ad2ertising3 bad loo9s and a stupid na0e3 dsel faced a further
proble0 L it )as too e!pensi2e5 1s ,heila Mello e!plains in her infor0ati2e boo93
&ustomer &entric .roduct 'efinition3 the launch of the dsel coincided )ith a 0o2e
to)ards cheaper 0odels7
Ford?s decision to highlight the dsel?s po)erful engine during a period )hen the buying
public )as gra2itating to)ard s0aller3 0ore fuel- efficient cars alienated potential
custo0ers5 The first 0odels in the sho)roo0 )ere the 0ost e!pensi2e3 top-of-the-line
0odels3 resulting in )hat )e refer to today as stic9er shoc95 .nfortunately3 too3 )hile
so0e dsel 0odels )ere 0ore e!pensi2e than co0parable cars3 they had an e6ui2alent or
greater nu0ber of 6uality proble0s5 Bften parts did not fit properly or )ere si0ply
0issing3 since Ford fre6uently built dsels bet)een Fords and Mercurys on the sa0e
asse0bly line5 Many dealers )ere ill e6uipped to replace these parts or add accessories5
The car ended up loo9ing 0ore e!pensi2e than it actually )as because of poor ti0ing5 In
the 1("*s3 ., ne) car 0odels typically appeared in :o2e0ber for the follo)ing year5
For instance3 a 1("% Thunderbird )ould ha2e co0e out in :o2e0ber 1(""5 Ho)e2er3
dsel )as launched in ,epte0ber3 t)o 0onths before the other ne) 0odels arri2ed5 It
)as therefore a 1("' car co0peting against 1("& 0odels L and 0ore i0portantly3 1("&
prices5
In fact3 the situation )as e2en )orse than that5 :ot only had dsel decided to push its
0ost e!pensi2e 0odels first3 but the 1("& 0odels it )as co0peting )ith )ere being
offered at a discounted price in order to sell the0 before ne!t year?s 0odels )ere
)heeled into the sho)roo05
1 high price 0ay ha2e been acceptable if it had been )orth paying5 Ho)e2er3 the
e!perience of those fe) early dsel custo0ers 6uic9ly ga2e the car a reputation for
0echanical proble0s5 dsel no) popularly stood for 2ery 4ay ,o0ething lse +ea9s5
Bne thing though )as co0pletely beyond Ford?s control5 1fter a boo0 period for the .,
car industry during the 0id-1("*s3 the end of 1("& sa) the start of a recession5 In 1("'
al0ost all car 0odels sa) a drop in sales3 so0e by as 0uch as "* per cent5 Ironically3 one
of the 2ery fe) 0odels to )itness an increase in sales that year )as the Ford
Thunderbird5
In a ,epte0ber 1('( article for The (reeman3 a publication of The Foundation for
cono0ic ducation3 car industry Eournalist 1nthony Doung e!plained ho) Ford had
paid little attention to 0ar9et research3 and that this )as the true reason )hy the dsel
failed7
The dsel ser2es as a te!tboo9 e!a0ple of corporate presu0ption and disregard for
0ar9et realities5 It also de0onstrates that ad2ertising and pre-deli2ery hype ha2e their
li0its in inducing consu0ers to buy a ne) and unpro2en car5 In a free 0ar9et econo0y3 it
is the car-buying public3 not the 0anufacturer3 that deter0ines the success or failure of an
auto0obile5 1 0anufacturer shouldn?t o2ersell a ne) car3 or unrealistic e!pectations )ill
be built up in the 0inds of consu0ers5 If the ne)ly introduced car doesn?t li2e up to
e!pectations3 it is practically doo0ed on the sho)roo0 floor5
Ho)e2er3 Ford 6uic9ly learnt its lesson5 1 fe) years later the spectacular failure of the
dsel )as counterbalanced by the e6ually spectacular success of the Ford Mustang5
+aunched in 1(%43 the Mustang sold half a 0illion 2ehicles in its first year of production5
:ot only did it ha2e a better na0e and a good-loo9ing bonnet3 the Mustang had one
further ad2antage o2er its predecessor L it )as affordable5
1s ,heila Mello points out3 bet)een 1(%* I)hen the dsel )as phased outJ and 1(%4
I)hen the Mustang )as launchedJ Ford3 along )ith 0ost of the car industry3 had shifted
its focus to)ards )hat the consu0er actually )anted5 CThe success of the Mustang
de0onstrates that Ford Motor Co0pany did learn fro0 the dsel e!perience3? she )rites5
CThe 9ey difference bet)een the ill-fated de2elop0ent of the dsel and the roaring
success of the Mustang )as the shift fro0 a product-centric focus to a custo0er-centric
one5?
This 2ie) is supported by +ee Iacocca3 )ho o2ersa) the creation of the Mustang as Ford
president3 before ta9ing o2er the reins at Chrysler5 In his autobiography3 Iacocca e!plains
the approach behind the Mustang7 C@hereas the dsel had been a car in search of a
0ar9et it ne2er found3 here )as a 0ar9et in search of a car5 The nor0al procedure in
4etroit )as to build a car and then try to identify its buyers5 But )e )ere in a position to
0o2e in the opposite direction L and tailor a ne) product for a hungry ne) 0ar9et5? 1s a
result3 the Mustang )ent fro0 strength to strength and is still in production today5
,o )hile the )hole dsel episode 0ay ha2e been a costly e0barrass0ent for Ford in the
short ter03 it helped the co0pany learn so0e 2aluable lessons )hich it has carried )ith it
to this day5
Lessons from Edsel
/!ping an untested product is a mistake5 CI learned that a co0pany should ne2er
allo) its spo9espersons to build up enthusias0 for an unseen3 unpro2en product3?
confessed C -ayle @arnoc93 the #$ director responsible for the publicity
surrounding the dsel launch5
0our name matters5 1t the 0ost basic le2el3 your brand is your na0e5 It doesn?t
0atter ho) i0portant the brand na0e is to the co0pany3 it?s )hat it 0eans to the
public that counts5 If the na0e conEures up i0ages of )easels and pretAels it
0ight be a good ti0e to scrap it5
Looks count5 <isual appearance is a 9ey factor in creating a brand identity for
0ost products5 It )as the distincti2e shape of Coca-Cola bottles )hich helped that
brand beco0e so big5 In the car industry3 loo9s are particularly i0portant and as
dsel pro2ed3 ugly duc9lings don?t al)ays beco0e s)ans5
.rice is important5 #roducts can be too e!pensi2e or too cheap5 @hen so0e
brands price the0sel2es too lo)3 they lose their prestige5 Ho)e2er3 )ith a car
such as the dsel3 the high price couldn?t be Eustified in the 0inds of the public5
The right research is important5 Ford spent ti0e and 0oney carrying out the
)rong 9ind of 0ar9et research5 Instead of hunting for na0es3 the co0pany should
ha2e been concentrating on )hether there )as a 0ar9et for its ne) car in the first
place5 1s it turned out3 the 0ar9et it spent 0illions trying to reach didn?t e2en
e!ist5
1ualit! is important5 Bf course3 product 6uality is al)ays i0portant but )hen it
co0es to cars it is a 0atter of life and death5 Bad 6uality control pro2ed an e!tra
nail in dsel?s coffin5
! "ony Betama#
1ccording to recei2ed branding )isdo03 the best )ay to beco0e a strong brand is to be
first in a ne) category5 This theory has been repeatedly e0phasiAed by the )orld-
reno)ned brand guru 1l $ies5
CCusto0ers don?t really care about ne) brands3 they care about ne) categories3? he
)rites in The 22 Immutable Laws of Branding5 CBy first pree0pting the category and then
aggressi2ely pro0oting the category3 you create both a po)erful brand and a rapidly
escalating 0ar9et5?
There are indeed a nu0ber of cases to support this point5 4o0ino?s )as the first co0pany
to offer ho0e-deli2ered piAAa and re0ains the leader in that particular 0ar9et5 Coca-
Cola3 the )orld?s 0ost popular and financially successful brand3 )as the first in the cola
category5
1s Chapter ( )ill 0a9e clear3 this theory brea9s do)n3 ho)e2er3 in technology 0ar9ets5
B)ing to the fact that consu0er beha2iour tends to be appro!i0ately fi2e years behind
technological brea9throughs3 the first 0o2er ad2antage is often lost5 Further0ore3
co0panies ha2e often pro2ed to be 2ery bad at predicting ho) ne) technologies )ill be
used5 For e!a0ple3 0ost of the uropean 0obile phone co0panies )ere caught
co0pletely una)are by the rapid rise of te!t 0essaging3 a facility )hich so0e didn?t e2en
bother to e!plain in their instructions boo9lets5
The all-ti0e classic a0ong technology brand failures )as ,ony?s Beta0a! 2ideo
recorders5 4uring the 1(&*s3 ,ony de2eloped a 0achine designed to deli2er ho0e 2ideo-
taping e6uip0ent5 The 0achine used Beta0a! technology3 and hit the stores in 1(&"5 In
its first year3 3*3*** Beta0a! 2ideo recorders Ior <C$sJ )ere sold in the .nited ,tates
alone5 But a year later ,ony?s ri2al ;<C ca0e out )ith the <H, L short for C2ideo ho0e
syste0? L for0at <C$5 By ;anuary 1(&&3 there )ere four 0ore ;apanese electronics
co0panies 0anufacturing and 0ar9eting <H,-based 0achines5
@hereas ,ony had either been un)illing or unable to license Beta0a! technology
Idepending on )hich account you belie2eJ3 ;<C had been 0ore than happy sharing their
<H, for0at5 This )ould later pro2e a critical factor in the de0ise of Beta0a!5
1lthough ,ony pioneered 0ost of the ad2ance0ents3 ;<C and the other <H,
0anufacturers )ere not slo) to catch up5 For instance3 ;<C and #anasonic introduced
<H, hi-fi for0ats only )ee9s after ,ony?s introduction of Beta0a! hi-fi5 Ho)e2er3 0ost
e!perts agree that the tape 6uality on Beta0a! )as superior to that of its ri2al5
1s the t)o for0ats )ere inco0patible3 consu0ers )ere forced to decide bet)een the05
#retty soon ,ony )as feeling under pressure as its co0petitors started to drop prices to as
0uch as ., M3** belo) ,ony?s 0achines5 By 1('2 the price )ar )as in full s)ing and
,ony reluctantly Eoined in3 offering a ., M"* rebate as a CHo0e I0pro2e0ent -rant?5
There )ere other 0ar9eting proble0s too5 .p until the early 1('*s the )ord CBeta0a!?
)as used as a synony0 for C2ideo recorder?5 This association had negati2e as )ell as
positi2e conse6uences because in 1(&(3 .ni2ersal ,tudios and 4isney too9 legal action
against ,ony3 clai0ing <C$s )ere infringing the copyrights of 0o2ie producers5
1lthough ,ony e0erged apparently unscathed fro0 the la)suit3 se2eral co00entators
ha2e suggested that the case had a detri0ental i0pact on the )ay ,ony 0ar9eted its
Beta0a! products5
Bne thing is for sure3 fro0 1('1 on)ards Beta0a!-based 0achines )ere rapidly losing
popular fa2our5 In 1('23 the year of the price )ar3 Beta0a! <C$s accounted for a paltry
2" per cent of the entire 0ar9et and the public )ere being )arned that the selection of
2ideo rentals a2ailable for Beta0a! o)ners )ould be slightly s0aller than that for <H,
o)ners5
Further0ore3 )hile ,ony continued to clai0 that Beta0a! )as a technically superior
for0at3 2ideo o)ners )ere beco0ing increasingly a)are of one serious failing5 @hereas
<H, 0achines could record for a considerable length of ti0e3 Beta0a! 0achines could
only record for one hour L 0eaning that 0ost fil0s and football 0atches couldn?t be
recorded in one go5 This )as the price ,ony paid for enhanced sound and picture 6uality5
To deli2er that better standard3 ,ony used a bigger3 slo)er 0o2ing tape5 1s a result3 it
so0eti0es too9 as 0any as three cassettes to sho) an entire 0o2ie5 This caused
frustration both a0ong 2ideo o)ners3 )ho had to s)ap tapes o2er3 and retailers3 )ho had
to supply 0ore cassettes5 The proble0 is e!plained by one anony0ous <H, fan on the
bloc9info5co0 @eb site7 C@hat 0ade <H, succeed )as that you could get a )hole
0o2ie on a tape5 B9ay3 0aybe the picture and sound )eren?t as good as BetaO but )hat
the hec93 you didn?t ha2e to get up in the 0iddle and s)itch cassettes5 <H, deli2ered
2alue on a di0ension that 0attered to consu0ers5 Beta deli2ered e!cellent 2alue on
di0ensions that did not5? ,ony refused to bite the bullet though5 Indeed3 it 0ay ha2e been
losing 0ar9et share but the nu0ber of units sold still continued to rise3 pea9ing )ith
global sales of 253 0illion units in 1('45
Ho)e2er3 three years later <H, had gone )ay beyond the tipping point )ith a (" per
cent share of the 0ar9et5 In 1('&3 2olling "tone 0agaAine ran an article on Beta0a!
Ientitled CFor0at @ars?J and declared Cthe battle is o2er?5 Bn 1* ;anuary 1('' ,ony
finally s)allo)ed its pride and announced plans for a <H, line of 2ideo recorders5
1lthough ,ony )as ada0ant that the press should not see this as the Cdeath? of Beta0a!3
the press )eren?t listening5 Bn 2" ;anuary3 only a fortnight after ,ony?s announce0ent3
Time 0agaAine published a eulogy to the brand )ith the headline3 C-oodbye Beta?5
The sa0e article also argued that Beta0a! had failed because it had refused to license the
for0at to other fir0s5 C@hile at first ,ony 9ept its Beta technology 0ostly to itself3 ;<C3
the ;apanese in2entor of <H,3 shared its secret )ith a raft of other fir0s5? This clai0 has
since been hotly disputed by the defenders of Beta0a!5 For instance3 one 1F. I1lt
Fol9lore .rbanJ )hite paper on The 'ecline and (all of Betama3 refers to the state0ent
as Cblatantly untrue?5 1ccording to ;a0es +ardner3 author of (ast (orward3 ,ony in2ited
;<C and Matsushita to license the Beta0a! technology in 4ece0ber 1(&43 but both
co0panies declined the offer5
ither )ay3 the fact that Beta0a! 2ideo recorders )ere only 0anufactured by ,ony
0eant that it couldn?t co0pete against the gro)ing nu0ber of co0panies pushing <H,5
Ho)e2er3 e2en )hen ,ony started to 0a9e <H, 0achines it didn?t abandon Beta0a!5
B2erseas production of Beta0a! hobbled on until 1(('3 and in ,ony?s ho0e territory3
;apan3 0achines )ere still being 0ade until 2**23 although not in huge nu0bers I,ony
produced Eust 23'** units in 2**1J5
Bn 22 1ugust 2**2 ,ony finally announced it )ould be discontinuing Beta0a! products5
C@ith digital 0achines and other ne) recording for0ats ta9ing hold in the 0ar9et3
de0and has continued to decline and it has beco0e difficult to secure parts3? the
co0pany said in a state0ent5
:o)3 of course3 <H, itself is under threat fro0 the rapid rise in digital 2ersatile disc
I4<4J players3 and 0ay not be able to sur2i2e into the long ter05 @hile 4<4 has finally
dra)n a line under the battle bet)een Beta0a! and <H,3 it has also 0anaged to create its
o)n destructi2e )ar bet)een different 4<4 for0ats3 and therefore delayed the ta9e-off
of that 0ar9et5
Ho)e2er3 at least so0e of the lessons of Beta0a! ha2e been learnt5 ,ony and eight of its
co0petitors e2entually Eoined forces in 2**2 to create a co00on for0at for 4<43
0eaning this ti0e ,ony )ill not be left on the sidelines5
Lessons from Betamax
'ont go it alone5 CContrary to popular belief3 )hat )ould help e2ery category
pioneer is co0petition3? says 1l $ies5 True3 pro2iding the co0petition isn?t
pushing a for0at inco0patible )ith your o)n5
Let others in5 @hether ,ony refused to license its for0at or not3 there is no
6uestion that the co0pany )ould ha2e had a better chance if its ri2als had adopted
Beta0a!5
&ut !our losses5 ,ony?s decision to ignore <H, until 1('& )as3 )ith hindsight3 an
undeniable 0ista9e5
"uppl! e4uals demand5 @hen the 0anufacturers of pre-recorded tapes decreased
their supply of Beta for0at tapes3 de0and for ,ony?s Beta0a! recorders
ine2itably )aned5
$ %c&onald's (rch &elu#e
1s )ell as the Mc+ibel Trial Ico2ered in Chapter "J3 Mc4onald?s has also e!perienced a
nu0ber of 0ore con2entional 0ar9eting proble0s in recent years5 Most of these
proble0s ha2e been ne) products that ha2e failed to inspire consu0ers5 Mc+ean 4elu!e
Ian atte0pt to cater for the health- conscious custo0erJ and Mc,oup are t)o ob2ious
e!a0ples3 but it )as )ith the 1rch 4elu!e burger that Mc4onald?s e!perienced its 0ost
e0barrassing flop5
Mar9eted as the CBurger )ith the -ro)n-up Taste?3 the idea )as to ha2e a burger )hich
)asn?t associated )ith children5 Indeed3 the ad2ertising ca0paign for the 1rch 4elu!e
ra00ed the 0essage ho0e )ith 2arious i0ages of 9ids shunning the Csophisticated?
product5
The trouble )as that nobody goes to Mc4onald?s for sophistication3 they go for
con2enience5 #art of this con2enience is 9no)ing e!actly )hat to e!pect5 Mc4onald?s
restaurants 0ay ser2e up gaApacho in ,pain and la0b burgers in India3 but on the )hole
they are the sa0e the )orld o2er5 Most people )ho )al9 into a Mc4onald?s restaurant
9no) )hat they are going to order before they reach the counter5 They don?t )ant to be
bo0barded )ith a 0illion and one 2ariations on )hat is essentially the sa0e product L a
ha0burger5
The other proble0 )ith the 1rch 4elu!e )as the fact that it )as sold on taste5 2erybody
9no)s that Mc4onald?s is ne2er going to be a)arded a Michelin star3 yet e2erybody still
co0es bac95 In an article headlined CMc4onald?s Missing the Mar93? )hich appeared in
Brand 5eek on 12 :o2e0ber 2**13 4a2e Miller attac9ed the Cco0pete on taste? strategy
apparent in the pro0otion of the 1rch 4elu!e7
@e don?t co0e to the -olden 1rches on the 0erits of taste and tantaliAation and culinary
delight5 @e priAe your brand on friendliness3 cleanliness3 consistency and con2enience5
They are 2alue propositions that you?2e abdicated in recent years and L luc9ily L
co0petitors ha2e neglected to capture5 !actly ho) 0any failed 0enu concepts does it
ta9e before all of those de2elop0ent dollars are instead ploughed into the 2alue
propositionN
Ho)e2er3 the proble0s encountered )ith the 1rch 4elu!e are sy0pto0atic of an e2en
bigger proble05 1s )ith other brands of such an enor0ous scale3 Mc4onald?s has been
accused of losing touch )ith its custo0ers and being too far behind the 0ar9et5
Indeed3 this is a proble0 ac9no)ledged by the co0pany?s CB3 ;ac9 -reenberg3 )ho
arri2ed in 1(('5 C@e ha2e been ta9ing 0uch too long to de2elop an idea and get it to the
0ar9et3 then too long to decide )hether )e )ant to do it or not3? he told The (inancial
Times in that sa0e year Iin an article entitled C1 0ission to buff up the golden arches?J5
1s you )ould e!pect )ith a brand that has built its na0e through unifor0ity3
Mc4onald?s is hea2ily centraliAed5 Most branding and 0ar9eting decisions need to go
through the co0pany?s head6uarters in Ba9 Broo93 Illinois5 The recipe for the 1rch
4elu!e itself ca0e fro0 the Ba9 Broo9 9itchen5 This contrasts )ith Mc4onald?s 0aEor
product successes such as the Big Mac3 the Hot 1pple #ie3 the gg McMuffin and the
Filet o? Fish3 )hich )ere all in2ented in operators? 9itchens out in the field I)hereas
other flops such as the Mc+ean burger and Mc#iAAa )ere also conEured up at the Ba9
Broo9 head6uartersJ5
1nother interesting aspect of the 1rch 4elu!e failure is that the product )as )ell
researched5 1fter conducting 0asses of 0ar9et research3 it e0erged that people )ould
lo2e to eat a burger designed specifically for adults5 .nfortunately3 these people see0ed
to be in short supply )hen the product )as finally launched5
Lessons from Arch Deluxe
%o for what !ou know5 #art of Mc4onald?s brand identity is si0plicity5 1nother
part is its child-friendly approach5 1 Csophisticated? burger designed to e!clude
children )as therefore destined to 0isfire5
Avoid customer confusion5 CMc4onald?s is not cogniti2e3 it is refle!i2e3? says
4a2e Miller in the :o2e0ber 2**1 Brand 5eek article5 C@e treasure not ha2ing
to thin9 about it5 It Eust GisH5? By e!tending its range )ith products such as the
1rch 4elu!e3 Brat)ursts3 McTacos and McMussels3 Mc4onald?s )as creating a
need to thin95
Be sceptical of research5 Mar9et research has its place )hen carefully conducted3
but it should ne2er be ta9en as gospel truth5
Chapter !: Idea failures
Overview
1s the e!a0ples in this boo9 illustrate3 there are nu0erous reasons )hy brands fail5
,o0eti0es it is because the 0ar9et they are associated )ith has beco0e obsolete5 Bther
ti0es it is as a result of e!tending into an unsuitable product category5 In so0e3 dra0atic
cases it is the result of a high-profile scandal )hich causes the public to boycott the
brand5
Bften though3 the reason for failure is 0ore straightfor)ard5 Many brands fail because
they are si0ply bad ideas that ha2en?t been properly researched5 Bccasionally these
failures are the result of strong3 established brands co0ing up )ith a ne) 2ariation of
their product5 .nderstanding that ne) product categories should be a2oided3 brands stay
)ithin their original category but co0e up )ith a biAarre t)ist on the for0ula5 But )hy
should that 0atterN 1fter all3 branding isn?t about products3 it is about perception5 This is
the ne) 0ar9eting 0antra5 1nd yet3 there is no escaping the fact that at least part of this
perception centres around the product itself5
The cle2erest brand strategy in the )orld cannot 0a9e consu0ers buy a product they
don?t )ant5 Br at least3 it can?t 0a9e the0 buy it 0ore than once5 @hile it is true that the
0ar9et leader is not al)ays the best in ter0s of 6uality3 it is e6ually true that if a product
is truly bad or truly pointless it )ill be unable to find eager custo0ers5
The real 6uestion is3 ho) do bad products appear in the first placeN If the consu0er
doesn?t )ant the03 )hy in2ent the0N Because co0panies still insist that they 9no) better
than their custo0ers5 It is certainly true that 0ar9et research has failings of its o)n5 1s
Henry Ford re0ar9ed on the launch of his Model T3 Cif I had as9ed the custo0er3 he
)ould ha2e as9ed for a faster horse5?
The proble0 is that )hat co0panies consider subli0e3 the custo0er all too often treats as
ridiculous5 Bottled 0ineral )ater for dogsN -reat idea3 says the co0pany5 1 Eo9e3
responds the custo0er5
2en so0e of the )orld?s 0ost successful brands ha2e been guilty of introducing
incredibly bad products5 For instance3 in 1((" Microsoft ca0e up )ith the idea of a
Csocial interface? called Bob5 The idea )as that Bob3 a helpful ani0ated 0an )ith glasses
Iloo9ing not dissi0ilar to Bill -atesJ3 )ould pro2ide help and infor0ation in a
Ccon2ersational3 social style5? To add to Bob?s personality3 he )as gi2en a nu0ber of
Cfriends? such as $o2er the dog3 ,cuAA the se)er rat and a Cfriendly dragon?5 The product
)as ai0ed at adults3 yet no-one old enough to tie their o)n shoelaces )anted to use it5
Throughout this chapter si0ilar failures are dra)n upon in order to sho) that branding is
futile if the consu0er doesn?t li9e the product
) *ello++'s Cereal %ates
Warm milk, frosty reception
/ellogg?s 0ay ha2e had proble0s )hen 0ar9eting in certain foreign territories such as
India Isee Chapter %J3 but the co0pany has also co0e unstuc9 on its ho0e turf3 0ost
notably )ith its Cereal Mates product5
The idea )as si0ple5 Cereal Mates )ere s0all bo!es of /ellogg?s cereal pac9ed )ith a
container of 0il9 and a plastic spoon5 The ad2antage of the product )as e6ually
straightfor)ard5 :a0ely3 con2enience5 1n increase in )or9ing hours in the .nited
,tates3 co0bined )ith the rise in fast-food chains3 led /ellogg?s to belie2e that there )as
a de0and for an Call-in-one? brea9fast product5 To 0a!i0iAe Cereal Mates? chances of
success3 the line included the four 0ost po)erful /ellogg?s brands in the ., L na0ely
Corn Fla9es3 Frosted Fla9es IFrostiesJ3 Fruit +oops3 and Mini @heats5
Ho)e2er3 despite /ellogg?s best efforts3 the Cereal Mates brand pro2ed a 0aEor flop3 and
in 1(((3 the year /ellogg?s ri2al -eneral Mills too9 o2er as the .nited ,tates? nu0ber
one cereal 0a9er3 the product )as pulled fro0 the shel2es5
The reasons )hy Cereal Mates failed to )in o2er consu0ers are 2arious3 and ha2e been
dissected by 2arious Eournalists and 0ar9eting professionals5 Here are so0e of the 0ain
factors behind Cereal Mates? brand failure7
(actor one+ warm milk5 1s each container of 0il9 )as Caseptically pac9aged3? it
didn?t need refrigeration5 Ho)e2er3 consu0ers didn?t li9e the idea of )ar0 0il95
(actor two7 cool milk5 In order to acco00odate for the consu0er?s preference for
cool 0il93 /ellogg?s e2entually decided to place Cereal Mates in refrigerators to
i0ply that consu0ers should ha2e the 0il9 cold5 Ho)e2er3 as $obert McMath3
president of :e) #roduct @or9s and author of 5hat 5ere The! Thinking63 has
obser2ed3 this led to e2en 0ore confusion5 CThis decision ine2itably caused a
proble0 in that Cereal Mates )as not in a location )here you )ould generally
e!pect to find brea9fast cereal5 The e!pense of trying to re-educate the consu0er
to loo9 for cereal in the dairy case pro2ed too enor0ous L )ay beyond3
apparently3 )hat /ellogg?s )anted to spend on selling the ne) line3? )rites
McMath5
(actor three7 advertising5 1s if the consu0er )asn?t confused enough3 /ellogg?s
co0plicated 0atters further )ith the ad2ertising ca0paign for Cereal Mates5 The
T< ads featured young 9ids helping the0sel2es to the product3 )hile their parents
lay snoring contentedly in bed5 Ho)e2er3 the pac9aging of the product )as far
fro0 child-friendly3 and if they left their 9ids to help the0sel2es3 the parents
)ould ha2e probably been crying Ior at least getting crossJ o2er spilt 0il95
(actor four7 the taste5 2en )hen pic9ed up fro0 a refrigerator3 the product )as
often consu0ed at )or9 or a)ay fro0 ho0e5 In other )ords3 )hen the 0il9 )as
)ar0 and tasted terrible5
(actor five7 the price5 $etailing at )ay o2er a dollar3 Cereal Mates )as
considered too e!pensi2e by 0any consu0ers5
These factors3 )or9ing in conEunction3 caused the Cereal Mates brand to fail5 1nd so3
after t)o years on the shel2es Ior in refrigeratorsJ3 /ellogg?s pulled the plug on the
product5
Ho)e2er3 there 0ay be one 0ore reason )hy Cereal Mates failed to spar9 a re2olution in
brea9fast habits5 1s a con2enience food3 it si0ply )asn?t con2enient enough5 1 February
2*** article in 7ewsweek ICCrunch ti0e at /ellogg?J3 loo9ed at the changing de0ands for
brea9fast products3 and the conse6uences for the cereal co0pany5
10ericans? hectic ne) 0orning routine is )rea9ing ha2oc on /ellogg Co5 /iller
co00utes Inearly an hour round trip in 0any citiesJ lea2e no ti0e to fi! e2en the
si0plest brea9fast5 -etting out the door is e6ually challenging for the %4 percent of
fa0ilies in )hich both parents )or95 More 10ericans than e2er si0ply s9ip brea9fast3
according to ne) data fro0 :#4 -roup3 an eating-habits researcher5 C#eople )ish they
could Eust get brea9fast inEected into the0 on the run3? says -erald Celente3 editor of the
Trends #ournal3 a 0ar9eting-industry ne)sletter5
Cereal Mates 0ay ha2e enabled people to ta9e their cereal )ith the03 but they still had to
pour the 0il9 o2er it3 and spend 2aluable ti0e eating the cereal )ith a s0all spoon5 1s
/eith :aughton concluded in the article abo2e3 Brea9fast Mates Cfailed to catch on
because it )as i0possible to eat )hile dri2ing5?
Indeed3 )here /ellogg?s has had success in the con2enience food 0ar9et it is )ith
brea9fast bars such as :utri-grain5 .nli9e Cereal Mates3 these bars can be consu0ed in
seconds3 and on the 0o2e5 Moreo2er3 they don?t in2ol2e )ar0 0il95
Lessons from Kello!s Cereal "ates
&onsumers dont like warm milk on their cereal5 B/3 I thin9 )e?2e established
that one5
'ont mi3 !our messages5 Bn the one hand3 Cereal Mates )as an Ceat any)here?
product5 Bn the other3 /ellogg?s )as i0plying it needed to be stored in a
refrigerator5
"ell the brand in the right place. Cereal Mates )as3 essentially3 a cereal rather
than a 0il9 product5 Consu0ers )ould ha2e therefore e!pected to see it on the
shel2es ne!t to the other cereal products5
Be the best in at least one thing. 1s a cereal product Cereal Mates failed because
there )ere tastier and e6ually healthy alternati2es5 1s a con2enience product it
failed because brea9fast bars pro2ed to be a faster3 0ore fle!ible option5
'ont price too high. Consu0ers did not e!pect to pay as 0uch as they did for a
four ounce bo! of cereal5
, "ony's -od.illa
A monster flop
If one )ord saturates the brand consultant?s 2ocabulary 0ore than any other3 it is
Csynergy?5 @hen big co0panies for0ulate a brand strategy they increasingly try to
s!nergi8e their 0ar9eting efforts5 In other )ords3 the ai0 is to e!tend the brand into other
rele2ant product categories5
In recent ti0es3 cross-pro0otional tie-ins ha2e beco0e all the rage and ha2e pro2en3 if
indeed proof )as needed3 that brands ha2e beco0e larger than the specific products they
represent5 This trend is particularly ob2ious )ithin the entertain0ent industry5
Ta9e pop 0usic5 -one are the days )hen all that 0attered )as )hat a pop group sounded
li9e5 :o)3 it is all about branding5 1s Michael ; @olf tells us in The -ntertainment
-conom!3 Cbrands and stars ha2e beco0e the sa0e thing?5 2er since the ,pice -irls
pheno0enon3 record e!ecuti2es ha2e been spending as 0uch ti0e thin9ing of )ays to
stri9e deals )ith toy 0anufacturers3 tele2ision e!ecuti2es and fast-food chains as they
ha2e about pushing singles and albu0s5 In the case of a band li9e ,Club&3 the brand
e!tensions )ere planned right fro0 the start3 )ith the ,Club?s debut single and T< sho)
appearing si0ultaneously5 T< series such as the ./?s .opstars and the ., series
American Idol3 )here popstars are created through the sho) itself3 also e!e0plify this
ne) )ay to cross-publiciAe an entertain0ent brand 2ia different 0edia5
:o)here3 ho)e2er3 is brand synergy 0ore apparent than in the )orld of 0o2ies5 -eorge
+ucas? "tar 5ars franchise )as the first to e!ploit the full possibilities of brand
e!tension5 1s )ell as through 0o2ies3 consu0ers ha2e been able to interact )ith the "tar
5ars brand in nu0erous other )ays5 They ha2e bought "tar 5ars action figures3 read
"tar 5ars no2els3 played the "tar 5ars co0puter ga0e and )orn "tar 5ars pyEa0as5
:o) of course3 )e are used to the C0o2ie as brand? concept5 ,en in Black The Lord of
the 2ings /arr! .otter To! "tor! ,onsters Inc. and nu0erous others ha2e replicated
"tar 5ars cross-branded success5 @hile this 0eans the Holly)ood studios can 0a9e
potentially 0ore 0oney than e2er before fro0 a 0o2ie3 it also 0eans they ha2e 0ore to
lose if things don?t go to plan5 ;ust as9 ,ony5
@ith the 1((' release of %od8illa3 ,ony belie2ed it had created a 0onster 0o2ie hit5
Indeed3 it is difficult to thin9 of a 0o2ie that loo9ed 0ore li9ely to beco0e a bloc9buster5
,ony had spent ., M%* 0illion i0ple0enting the teaser ca0paign5 They had #uff 4addy
rapping his )ay through one of the 0ost e!pensi2e pro0o 2ideos e2er 0ade for the
%od8illa the0e tune5 Further0ore3 a replica of the star of the 0o2ie L a s9yscraper-high
green 0onster L )as guaranteed to 0a9e a fantastic toy5
Most significantly3 o)ing to ,ony?s ne)ly consolidated cine0a holdings3 the fil0 )as
sho)n on 0ore screens in its opening )ee9end than any other in 0o2ie history5 Bn the
day of its launch3 one in fi2e cine0a screens )ere playing %od8illa.
The only trouble )as that for all the 0oney spent on a slic9 ad ca0paign3 the )ord of
0outh publicity surrounding the fil0 )as pretty bad5 2en before the 0o2ie launched3
ne)s )as spreading on the Internet of Eust ho) terrible it )as5 Ho)e2er3 ,ony )as
deter0ined to get the online re2ie)ers on side5 The co0pany e2en paid for Harry
/no)les3 the o)ner of the highly influential site 1intItCool:e)s3 to fly out for the
pre0iere in :e) Dor95 But nothing could stop the gro)ing nu0ber of terrible re2ie)s5
Here is an e!tract fro0 ;a0es Berardinelli?s one star re2ie) )hich appeared on the
0o2ie- re2ie)s5net site on the day the fil0 opened7
-odAilla is the ulti0ate cul0ination of the C)ho cares about plot? su00er 0o2ie5 1 loose
re0a9e of the 1("4 Cclassic? ;apanese 0onster 0o2ie3 -odAilla3 /ing of the Monsters3
$oland 00erich and 4ean 4e2lin?s big-budget liAard-sto0ps-Manhattan disaster flic9
has been )ritten )ith the brain dead in 0ind5 The script isn?t Cdu0bed do)n?3 it?s
loboto0ised5 P5 5 5Q @orst of all3 -odAilla isn?t e2en e!citing5 @ith the possible e!ception
of a 0ildly enEoyable car chase near the end3 there isn?t a se6uence in this fil0 that raises
the pulse5 2en the scenes )ith doAens of aircraft attac9ing the 0onster are so de2oid of
tension and suspense that they are ya)n-pro2o9ing5 Independence 4ay 0ay ha2e been
du0b3 but it )as full of Cadrenaline 0o0ents? capable of getting the audience in2ol2ed in
the action5 In this aspect of its production3 as in so 0any others3 -odAilla is lac9ing5
1ctually3 part of the proble0 is that )e?re ne2er sure )ho )e?re supposed to be rooting
for7 the green 0onster )ith an attitude or the paper-thin hu0ans trying to stop hi05
To)ards the end of the re2ie)3 Berardinelli e0phasiAed the insignificance of his opinion7
.lti0ately3 it doesn?t really 0atter )hat I Ior any other critic3 for that 0atterJ ha2e to say
about the 0o2ie5 ,ony?s Tri,tar has assu0ed that -odAilla3 li9e all self-proclai0ed
su00er e2ent 0otion pictures3 is pretty 0uch critic-proof5 It 0ay also be )ord-of-0outh-
proof5 Those )ho )ant to see the 0o2ie )ill see it no 0atter )hat I )rite or their friends
say5 ,o3 )hen I go on record to assert that -odAilla is one of the 0ost idiotic bloc9buster
0o2ies of all ti0e3 it?s li9e spitting into the )ind5
Maybe if Berardinelli?s had been the only bad re2ie) he )ould ha2e had a point5 But
)hen there )ere thousands of other e2eryday 0o2iegoers L not high-0inded ne)spaper
critics L 2enting their negati2e opinions3 the -odAilla brand )as soon losing its bite5 Bne
online discussion group e2en included a list of %3 funda0ental fla)s )ithin the 0o2ie
Itypical e!a0ple7 C-odAilla can outrun helicopters but he can?t 9eep up )ith a ta!icab?J5
1((' )as the year the 0o2ie industry finally realiAed the influential po)er of the Internet
had o2er the 0o2ie-going public5 :ot only did it play a funda0ental role in 0a9ing sure
%od8illa?s e!cessi2e 0ar9eting budget had been a )aste of 0oney3 but it )as also
pro2ing Ithrough the e!a0ple of the Blair 5itch .ro9ect and its cult online follo)ingJ
that large 0ar9eting budgets )eren?t al)ays necessary in the first place5
-i2en the critical 0auling %od8illa recei2ed3 it is interesting to note that three years later
,ony )as recei2ing 0uch 0ore positi2e re2ie)s for its su00er bloc9busters5 8uotes
fro0 4a2id Manning3 the re2ie)er fro0 the 2idgefield .ress3 )ere included on posters
pro0oting the co0edies A Knights Tale and The Animal. Manning referred to Heath
+edger3 star of A Knights Tale3 as Cthis year?s hottest ne) star?3 and clai0ed The Animal
)as Canother )inner?5
Ho)e2er3 in ;une 2**1 7ewsweek 0agaAine re2ealed that 4a2id Manning didn?t e!ist3
and had been in2ented by an unidentified ,ony 0ar9eting e!ecuti2e the su00er before to
put a bit of positi2e spin on the hit-star2ed studio?s fil0s5 Manning?s Cre2ie)s? had also
0ade their )ay onto posters pro0oting ,ony?s /ollow ,an and :ertical Limit 0o2ies5
CIt )as an incredibly foolish decision3 and )e?re horrified3? a ,ony spo9es)o0an said at
the ti0e5 ,adly3 4a2id Manning?s opinion of %od8illa )ill re0ain un9no)n5
Lessons from -od.illa
2emember that bigger isnt alwa!s better5 2erything about the 0o2ie had been
big L the star3 the special effects3 the 0ar9eting budget3 the brand tieins L but it
hadn?t been enough5 Ironically3 the slogan for the fil0 )as C,iAe 0atters?5 In this
case3 it clearly didn?t5
'ont over*market !our brand. The e!cessi2e a0ount of hype and brand
e!tensions ,ony had created for %od8illa ended up )or9ing against it5 1s
branding guru To0 #eters has put it3 Cle2erage is good3 too 0uch le2erage is bad?5
This 2ie) is supported and e!panded by anti-brand guru :ao0i /lein )ho
predicts in 7o Logo that Cthe current 0ania for synergy )ill collapse under the
)eight of its unfulfilled pro0ises5?
&oncentrate on the end product. It is true that branding is often 0ore about
perception than reality3 but if your end product is truly a)ful the brand perception
)ill al)ays be negati2e5
/ 0ersil 0ower
#ne stu$$orn stain on %nile&er!s reputation
In the 0id-1((*s3 the total ./ 0ar9et for soaps and detergents )as )orth R1542 billion
I., M25% billionJ3 and the largest sector )as fabric )ashing3 )orth R(%* 0illion and %&5"
per cent of the total sector5 The co0petition bet)een the t)o leading co0panies )ithin
the sector3 .nile2er and #rocter K -a0ble3 )as intense and led to a 6uest for 0ore and
0ore and 0ore inno2ati2e brand offerings5
@hen .nile2er?s star brand #ersil announced the launch of a po)erful ne) for0ula3
aptly called #ersil #o)er3 0any consu0ers got e!cited by the product?s apparent ability
to fight any stain5 Ho)e2er3 )hen the product hit the 0ar9et place in May 1((43 it pro2ed
so po)erful that under certain conditions it didn?t only destroy stains3 it destroyed clothes
as )ell5
For the first fe) )ee9s though3 #ersil #o)er pro2ed successful5 Indeed3 for a brief period3
the product o2ertoo9 its 0ain ri2al 1riel5 Indeed3 .nile2er stated that #ersil #o)er
represented a Cre2olutionary? brea9through in detergents3 and )as Cthe 0ost significant
thing )e?2e e2er done5?
The only proble0 )as3 the brand?s 9ey asset L a patented 0anganese co0ponent called
an Caccelerator? )hich )as put in the po)der L also pro2ed to be its fatal fla)5 1s soon as
stories of disintegrated clothes started to e0erge3 #rocter K -a0ble ploughed their
resources into an accusation-laden publicity ca0paign )hich not only da0aged #ersil
#o)er3 but also had i0plications for .nile2er itself5 Consu0ers soon understood that the
product could da0age 0aterials at high te0peratures3 and that if they bought #ersil
#o)er they ris9ed destroying their clothes5
:iall FitAgerald3 )ho introduced #ersil #o)er Iand is no) .nile2er?s chair0anJ
e!plained the brand da0age to the )hole 1nglo-4utch co0pany in an inter2ie) )ith
The "unda! Times5 CCo00unications had e2ol2ed so fast that )ithin seconds this )asn?t
a brand issue3 this )as a corporate issue3? he said5 C,o e2en if )e had )anted to ring-
fence our product3 )e couldn?t ha2e5? Most retailers 6uic9ly too9 the product fro0 their
shel2es3 and .nile2er e0bar9ed on a 0assi2e crisis 0anage0ent progra00e3 together
)ith a co0plete o2erhaul of the co0pany procedures that had resulted in the product
e0erging on the 0ar9et5
1t the start of 1((" .nile2er replaced #ersil #o)er )ith #ersil :e) -eneration5 The
o2erall cost )as esti0ated at 0ore than R2** 0illion5
:o)3 ho)e2er3 the )hole episode is al0ost forgotten in the ./ custo0er?s 0ind3 and
.nile2er has bounced bac9 )ith its launch of detergent tablets5 Indeed3 the #ersil brand
has no) regained leadership fro0 #rocter K -a0ble?s top brand 1riel5
.lti0ately3 .nile2er has been preser2ed by its heritage5 1fter all3 this is the co0pany
)hich produced the )orld?s first pac9aged3 branded laundry soap3 ,unlight3 o2er 1**
years ago5 Its brands 0ay co0e and go3 but .nile2er itself has stayed strong5
@hether this )ill al)ays be the case is another 0atter5 In 2**23 the co0pany announced
that it )as considering branding so0e of its products3 such as #ersil3 under its o)n na0e5
In other )ords3 the product )ould be branded as C#ersil fro0 .nile2er?3 instead of si0ply
C#ersil?5 In an article in the %uardian Eournalist ;ulia 4ay e!plained the logic behind the
0o2e7
The idea is to create consu0er-friendly brand 2alues L such as a co00it0ent to the
en2iron0ent L for .nile2er to use )hen 0ar9eting its products5
:iall FitAgerald3 the chief e!ecuti2e of .nile2er3 said the co0pany belie2ed the ti0e 0ay
be right to de2elop .nile2er as an Cu0brella brand? for its indi2idual products5
The co0pany has a2oided ta9ing this route in the past because of the high ris9 in2ol2ed5
If one product encounters a proble0 the i0age of other products could be da0aged P5 5 5Q
But the ad2antages for .nile2er are that it could de2elop .nile2er as a brand )ith
C2alues? that could be applied to all brands5
Bne e!a0ple :iall FitAgerald gi2es in the article )as establishing .nile2er?s
en2iron0ental credentials5 CThe cost of doing that for indi2idual brands is i00ense3? he
said5
1s the #ersil #o)er episode illustrates3 this is a ris9y 0o2e5 If3 in 1((43 the ne) brand
had been branded clearly as C#ersil #o)er fro0 .nile2er?3 it )ould ha2e tarnished all
.nile2er brands3 and the da0age )ould ha2e been e2en greater5
Lessons from 'ersil 'ower
'ont fuel !our competitors publicit!5 #rocter K -a0ble?s negati2e ca0paign
against #ersil #o)er helped to boost its 1riel brand of detergent5
Test products in all conditions5 #roducts need to be tested in e2ery en2iron0ent or
conte!t they are li9ely to be used5 If .nile2er had been able to spot the
funda0ental fla) )ith the product it )ould ha2e pre2ented )hat the then
.nile2er chair0an ,ir Michael #erry referred to as Cthe greatest 0ar9eting
setbac9 )e ha2e seen5?
Accept that no brand is an island5 C2en if )e had )anted to ring-fence our
product3 )e couldn?t ha2e3? ad0itted .nile2er chief e!ecuti2e :iall FitAgerald5
1 0e2si
(n pursuit of purity
Coca-Cola 0ay ha2e one of the 0ost fa0ous brand failures of all ti0e3 but its long-
standing ri2al has also had its fair share of 0ar9eting 0ishaps5
For instance3 in 1((2 #epsi spotted )hat it considered to be a gap in the 0ar9et5 @hat the
)orld )as )aiting for3 the co0pany decided3 )as a clear cola5 1fter all3 there had already
been a 2ariety of diet colas3 cherry colas3 sugar-free colas3 caffeine-free colas3 caffeine-
enhanced colas3 and all had achie2ed at least so0e for0 of success5 ,o )hy not a clear
colaN
1fter 0onths of tests and e!peri0ents the co0pany arri2ed at its ne)3 clear for0ula and
decided to call it Crystal #epsi5 They also produced a diet 2ersion L 4iet Crystal #epsi5
Both products3 #epsi belie2ed3 ans)ered the Cne) consu0er de0and for purity5? 1fter all3
this )as a ti0e )hen consu0ers )ere starting to opt for a bottle of 2ian or #errier Eust
as often as they )ere pic9ing up a bottle of Co9e or #epsi5
The only proble0 )as that a product )ith the )ord C#epsi? in its na0e )as e!pected to
taste li9e3 )ell3 #epsi5 But it didn?t5 In fact3 nobody see0ed to 9no) what it tasted of5
1ny)ay3 after a little 0ore than a year3 #epsi halted the production of Crystal #epsi and
started )or9 on a ne) clear for0ula5 In 1((43 the re)or9ed product appeared on the
shel2es3 branded si0ply as Crystal3 and a2ailable only in regular5 Ho)e2er3 the negati2e
associations persisted and Crystal 0ar9 t)o did e2en )orse than its unpopular
predecessor5 #epsi e2entually ad0itted defeat and scrapped the )hole concept of clear
cola5 But ne2er one to gi2e in easily3 #epsi re0ained a)are of the Cne) consu0er
de0and for purity5? In 1((43 the sa0e year it launched Crystal3 #epsi decided it )anted a
piece of the gro)ing bottled )ater 0ar9et5 It therefore launched its o)n bottled )ater
product3 entitled 16uafina3 )hich had considerably 0ore success than Crystal in the .,
0ar9et5
In addition to Crystal3 there ha2e been other3 0ore general 0ar9eting proble0s for #epsi
o2er the years5 In particular3 it has had trouble differentiating its brand identity fro0
Coca-Cola5 1s it )asn?t the first to 0ar9et the cola category3 #epsi )as ne2er going to be
the generic na0e5 #eople rarely say3 CI?0 going to ha2e a #epsi?5 2en )hen they ha2e a
#epsi bottle in their fridge they )ould be 0ore li9ely to say3 CI?0 going to ha2e a Co9e5?
Ho)e2er3 although this situation couldn?t be a2oided3 #epsi?s branding for 0any years
failed to gi2e the product a stand-alone identity5 Crucially3 #epsi breached )hat 1l and
+aura $ies refer to as CThe +a) of the Color3? one of their 22 Immutable Laws of
Branding in the boo9 of the sa0e na0e5 1s they state7
There is a po)erful logic for selecting a color that is the opposite of your 0aEor
co0petitors P5 5 5Q Cola is a reddish-bro)n li6uid so the logical color for a cola brand is
red5 @hich is one reason )hy Coca-Cola has been using red for 0ore than a hundred
years5
#epsi-Cola 0ade a poor choice5 It pic9ed red and blue as the brand?s colours5 $ed to
sy0bolise cola and blue to differentiate the brand fro0 Coca-Cola5 For years #epsi has
struggled )ith a less-than-ideal response to Co9e?s colour strategy5
$ecently3 though3 #epsi has sacrificed red for 0ainly blue to create a stronger distinction
bet)een the t)o leading brands5 :o) Coca-Cola e6uals red and #epsi e6uals blue5
Lessons from 'epsi
'ont assume that gaps should alwa!s be filled5 If you spot a hole in the 0ar9et3 it
doesn?t 0ean that you should fill it5 ;ust because clear cola didn?t e!ist3 it didn?t
0ean it had to be in2ented5 Ho)e2er3 the pre2ious success
the co0pany had )ith its 4iet #epsi product Ithe first cola of its 9indJ had con2inced
#epsi that there )ere 0ore gaps to fill5
'ont relaunch a failed product5 Crystal failed once3 but #epsi still belie2ed the
)orld )as crying out for a clear cola5 The second 2ersion fared e2en )orse than
the first5
'ifferentiate !ourself from !our main competitor5 For years #epsi?s 2isual identity
)as diluted through its red and blue branding5
3 arrin+ %a+ic *en
When Bar$ie!s $oyfriend came out of the closet
10ong toys3 Mattel?s Barbie is so0ething of a legend5 ,ince her arri2al on the scene at
the annual Toy Fair in :e) Dor9 in 1("(3 Barbie has appealed to se2eral different
generations of girls5 Bne of the 9eys to her longe2ity has been her ability to 0o2e )ith
the ti0es5 In the 1('*s3 for instance3 Barbie )ore shoulder pads and beca0e an aerobics
instructor5 1ccording to the Barbie @eb site3 she has al)ays set a successful e!a0ple7
C,he has been a role 0odel to )o0en as an astronaut3 a college graduate3 a surgeon3 a
business e!ecuti2e3 an airline pilot3 a presidential candidate and a dentist5?
Ho)e2er3 on her road to international superstardo0 Barbie has e!perienced a nu0ber of
setbac9s5 For instance3 )hen the doll launched in ;apan sales )ere poor o)ing to the fact
that ;apanese parents thought her breasts )ere too large5 Mattel addressed the proble0
and a year later a flatter-chested 2ersion e0erged5
Then there?s /en3 Barbie?s per0a-tanned boyfriend5 +i9e Barbie herself3 /en has been
0ade o2er a nu0ber of ti0es since his Cbirth? in 1(%15 The 0ost contro2ersial of these
incarnations occurred in 1((3 )ith the arri2al of Carring Magic /en? or3 as he beca0e
publicly 9no)n3 C:e) /en5? This )as3 to put it 0ildly3 a radical ne) loo9 for the doll5
-one )ere the tu!edos of old3 and in ca0e a 0esh t-shirt3 a purple leather 2est and a left-
side earring5 CIt )ould see0 Mattel?s crac9 /en redesign tea0 spent a )ee9end in +1 or
:e) Dor93 dashing fro0 ra2e to ra2e3 ta9ing notes and #olaroids3? one Eournalist )rote at
the ti0e of the launch5
Mattel e!plained that the ne) loo9 )as an effort to bring /en up to date5 C@e did a
sur2ey )here )e as9ed girls if Barbie should get a ne) boyfriend or stic9 )ith /en3?
e!plained +isa Mc/endall3 Mattel?s 0anager of 0ar9eting and co00unications5 CThey
)anted her to stay )ith /en3 but )anted hi0 to loo95 5 5 cooler5?
Ho)e2er3 pretty soon C:e) /en? )as being dubbed C-ay /en?5 The 7ew 0ork Times3
C::3 .eople 0agaAine and tal9-sho) host ;ay +eno sa) the doll as a sy0bol of shifting
gender and se!ual identities and 2alues5 /en3 )hose apparent purpose in life )as to help
define the con2entional ideal of 0asculinity for generations of young girls3 had
apparently co0e out of the closet5
This hadn?t been Mattel?s intention5 C/en and Barbie both reflect 0ainstrea0 society3?
said +isa Mc/endall5 CThey reflect )hat little girls see in their )orld L )hat they see
their dads3 brothers and uncles )earing they )ant /en to )ear5?
Bf course3 Mattel )as no) positioned Cbet)een a roc9 and a hard place?5 1 Cgay? doll
ai0ed at children )as not going to do the0 any fa2ours a0ong 0iddle 10erica5
Ho)e2er3 if they acted too appalled by the associations they ris9ed being accused of
ho0ophobia5
Crunch-ti0e ca0e )hen colu0nist 4an ,a2age published an article for gay-oriented
ne)spaper The "tranger3 )hich said that Carring Magic /en? included too 0any
signifiers of gay culture for it to be coincidental5 C$e0e0ber the sudden appearance of
1frican-10erican Barbie-style dolls after the full i0pact of the ci2il rights 0o2e0ent
began to be feltN? ,a2age as9ed his readers5 C8ueer /en is the high-)ater 0ar9 of3
depending on your point of 2ie)3 either 6ueer infiltration into popular culture or the
thoughtless appropriation of 6ueer culture by heterose!uals5?
,a2age )ent e2en further3 sla00ing Mattel?s state0ent that /en )as representati2e of
the relati2es of the little girls )ho too9 part in the research7 C@hat the little girls )ere
seeing3 and telling Mattel )as cool3 )asn?t )hat their relations )ere )earing L unless
they had hip-6ueer relati2es L but the ho0oerotic fashions and i0agery they )ere seeing
on MT<3 )hat they sa) Madonna?s dancers )earing in her concerts and fil0s and3 as it
happens3 )hat gay rights acti2ists )ere )earing to de0os and ra2es3? he )rote5
Follo)ing this article3 and the interest it caused3 Mattel discontinued the /en dolls and
recalled as 0any as they could fro0 the shel2es5 /en?s brush )ith contro2ersy )as no)
o2er and Barbie could sleep easier 9no)ing her boyfriend )as still interested in her5
Lesson from Earrin "aic Ken
2esearch childrens markets carefull!. Mattel as9ed fi2e-years-olds ho) they
)anted /en to loo95 1nd they told the05 But that didn?t 0ean parents )ere going
to buy the ne)-loo9 /en dolls )hen they finally e0erged5
14 The 5ot Wheels com2uter
)tereotypin the market
1 co0puter ai0ed specifically at children 0ay see0 li9e a good idea5 #atriot Co0puters
certainly thought so3 )hich is )hy they ca0e up )ith the Hot @heels #C in 1(((5 These
co0puters3 )hich ca0e )ith Intel chips and @indo)s (' soft)are3 )ere targeted
pri0arily at the boys? 0ar9et and the hard)are )as decorated )ith racing car i0agery
including the Hot @heels fla0e logo5 In addition3 #atriot Co0puters had 0ade a deal
)ith Mattel to produce a Barbie co0puter ai0ed at girls5 The boys? co0puter )as blue3
the girls? )as pin9 )ith a flo)ery pattern5
Both products flopped5 Bne of the reasons3 according to analysts3 )as the crude atte0pt
at gender 0ar9eting5 #a0ela Haag3 director of research at the 10erican 1ssociation of
.ni2ersity @o0en?s ducational Foundation3 told the 5all "treet #ournal that this type
of 0ar9eting )as C2ery out of step )ith )hat adult 0en and )o0en are doing3 and
therefore )ith )hat children )ant L it really is anachronistic5?
;ustine Cassel3 professor at the MIT Media +ab and co-author of (rom Barbie to ,ortal
Kombat3 also thought the co0puters )ere crudely concei2ed5 C;ust because you co2er a
traditionally boy product )ith girlish clichFs doesn?t guarantee girls )ill li9e it3? she said5
The co0puters )ere also criticiAed as bad cases of surface design trying to sa2e a
standard product5 CIt )as Eust a des9top co0puter )ith so0e stic9ers on it3? )rote
Business 2.;. ,hortly after)ards the products flopped5 #atriot Co0puters )ent ban9rupt5
Lessons from the *ot Wheels computer
'ont resort to stereot!pes5 4ressing up a co0puter )ith stereotypical gender
specific i0agery )as not enough to entice children or their parents5
%et designers involved at the start5 CTo a2oid such costly fla0eouts3 designers
should be in2ol2ed )ith proEects fro0 the outset3 gi2ing engineers input on
product usability and interface issues3? ad2ised Business 2.;5
11 Corfam
+he leather su$stitute
In the 0id-1(%*s3 che0ical giant 4u#ont in2ested 0illions in the pro0otion of Corfa03 a
synthetic substitute for leather5 But although Corfa0 )as launched in 1(%33 it had been
concei2ed 0any years before5 Indeed3 in the late 1(3*s researchers at 4u#ont had
disco2ered )ays to 0a9e leather-li9e 0aterials and had e!peri0ented )ith 2arious
possible uses5 Bne of the 0ost ob2ious uses )as for foot)ear5 4e0ographic trends )ere
starting to indicate that the global population )as increasing at such a rate that there
)ould soon be a de0and for foot)ear fro0 non-ani0al sources5
4u#ont therefore belie2ed the )orld )ould greet the arri2al of their hard- )earing3 shine-
preser2ing3 )ater-repelling leather loo9-a-li9e5 1nd indeed3 )hen the product 0ade its
first public appearance at the Chicago ,hoe ,ho) in the autu0n of 1(%33 it )as greeted
enthusiastically5
1ll 4u#ont had to do no) )as to find out )here e!actly Corfa0?s place in the foot)ear
0ar9et )ould be5 The co0pany had predicted that by 1('43 a 6uarter of ., shoes )ould
be 0ade fro0 Corfa03 but to do that it )ould first need to car2e a niche for itself5 In the
.nited ,tates of 1(%33 the foot)ear 0ar9et could be di2ided into the follo)ing
percentages7
4& per cent @o0en?s shoes
2* per cent Children?s shoes
1' per cent Men?s shoes
1" per cent 1thletic foot)ear>Bther
Clearly if Corfa0 )as to beco0e as big as it could be3 it )ould need to be used by
0anufacturers of )o0en?s shoes5 It soon beca0e clear3 ho)e2er3 that the fe0ale shoe
0ar9et )as itself di2ided L bet)een co0fy3 e2eryday shoes and Cfashion? shoes 0ade for
special occasions5
For all Corfa0?s strengths3 it )as not as fle!ible or Cs9in-li9e? as ordinary leather3 and
therefore )as not suited for those shoes designed for co0fort or e2eryday use5 ,o fashion
shoes see0ed to be the solution5 1nd yet3 e2en here there )as a proble05 1 synthetic
0aterial called poly2inyl chloride Ino) 9no)n to us as #<CJ )as fast beco0ing popular
o)ing to its e!tre0e lo) cost5 <inyl shoes3 )hich could be coloured or e0bossed 2ery
easily3 )ere perfect for )o0en loo9ing for a Cthro)a)ay? pair )hich 0ay be )orn once
or t)ice at special occasions before being discarded5
Further0ore3 the leather industry )as 9een to da0pen the appeal of Corfa0 by lo)ering
its prices and i0pro2ing 6uality5 This factor3 co0bined )ith the gro)ing popularity of
2inyl shoes3 led to 4u#ont?s announce0ent in March 1(&1 that they )ere to )ithdra)
Corfa05 Bn 11 1pril 1(&13 the 7ew 0ork Times referred to Corfa0 as C4u #ont?s M1**
0illion dsel5?
Lessons from Corfam
Improve on the original5 For a substitute product to )or9 it needs to be better than
the original in the 0inds of consu0ers5 1lthough Corfa0 )as long-lasting3 it
lac9ed the fle!ibility and Cbreathability? of leather5 It also pro2ed too e!pensi2e5
2emember that theres no such thing as a certain success5 Corfa0 )as3 )ithout
doubt3 one of the 0ost thoroughly researched and de2eloped products of all ti0e5
1s such3 4u#ont felt that its prediction that by 1('43 2" per cent of ., shoes
)ould be 0ade of Corfa03 )as a Eustifiable one5 1nd yet3 Corfa0 )asn?t e2en
around to see 1('43 ha2ing failed after Eust se2en years5
&ompete on 4ualit! or value5 @hen a product is unable to be the best in ter0s of
either 6uality or 2alue it faces an uphill struggle to con2ince consu0ers of its
0erits5
12 67 6eynolds' smokeless ci+arettes
+he ultimate $ad idea
Cigarette 0anufacturers ha2e often thought that the best )ay to build 0ar9et share is to
co0e up )ith ne) t)ists on the standard cigarette for0ula5 For instance3 Marlboro has
had doAens of different 2arieties in its history3 including Marlboro Menthol3 Marlboro
+ights and Marlboro Mediu05
:or0ally3 cigarettes produce ne) 2arieties based on different le2els of tar5 For instance3
in the ./ the ,il9 Cut brand produced 2arious lo)-tar 2arieties L Mild3 +o) and .ltra
+o)5 The popularities of such lo)-tar brands has caused cigarette co0panies to thin9 of
e2er 0ore )ays to try and con2ince consu0ers that their unhealthy and anti-social
products aren?t as unhealthy or as anti-social as they 0ight ha2e thought5 ,i0ilar
strategies ha2e been deployed in the beer 0ar9et3 )ith brands such as Bud +ight3 Coors
+ight and Miller +ite5
Ho)e2er3 so0e of these strategies ta9e an e!tre0e for05 For instance3 in the alcohol
0ar9et there )as the case of the beer brand )hich tried to sell beer-branded 0ineral
)ater5 The brand )as Coors5 The )ater it produced )as called Coors $oc9y Mountain
,pring @ater5 It )as launched in 1((* and sur2i2ed only t)o years5
In the cigarette industry3 the e!tre0e strategy belonged to $; $eynolds Tobacco
Co0pany 9no)n for brands such as Ca0el3 @inston3 ,ale0 and 4oral5 In 1(''3 )hen
the anti-s0o9ing lobbyists could finally clai0 the 0aEority of public opinion )as behind
the03 and )hen passi2e s0o9ing had been officially recogniAed as a serious danger to
health3 the co0pany decided to conduct trials on a s0o9eless cigarette5 In total3 $;
$eynolds spent ., M32" 0illion on creating a s0o9eless cigarette )hich it branded as
C#re0ier?5
Ho)e2er3 proble0s beca0e apparent straighta)ay5 First3 there )as the taste issue5 Bne
person )ho Cs0o9ed? #re0ier co0plained that it Ctasted li9e shit?5 1nd he )as $;
$eynolds? chief e!ecuti2e5
Then there )as the difficulty of using the product in the first place3 as 2eporter ,aga8ine
I)))5rob0agaAine5co0J e!plains7 CInhaling the #re0ier re6uired 2acuu0-po)ered
lungs3 lighting it 2irtually re6uired a blo)torch3 and3 if successfully lit )ith a 0atch3 the
sulphur reaction produced a s0ell and a fla2our that left users retching5?
In addition3 there )as the da0aging ru0our that the s0o9eless cigarette could be used as
a deli2ery de2ice for crac9 cocaine5 Hardly the 9ind of brand association $; $eynolds
had )anted to create5
Bne of the 0aEor for0s of contro2ersy )as the brand?s possible appeal a0ong younger
people5 Here is an e!tract fro0 a state0ent by 0any leading ., health organiAations
shortly after $; $eynolds announced the ne) proEect7
The 10erican Cancer ,ociety3 10erican Heart 1ssociation3 and 10erican +ung
1ssociation ha2e filed a petition )ith the ., Food and 4rug 1d0inistration IF41J3
as9ing that #re0ier be regulated as a drug5 In filing this petition3 )e are not calling for an
outright ban on #re0ier5 @e )ant si0ply for it to be properly tested before people use it5
@e are especially concerned that #re0ier?s intriguing high-tech design )ill lure children
and teenagers into the )eb of nicotine addiction5 $;$?s 0ar9eting e0phasis on Cclean
enEoy0ent? also 0ay lull people )ho already s0o9e into a decepti2e sense of safety
)hen they really ought to gi2e up the habit altogether5
1ccording to the F413 any product 0ar9eted that clai0s that it is healthier or safer3 0ust
be regulated by the F415 Con2entional cigarettes escape F41 scrutiny because they are
pro0oted for the sheer pleasure of s0o9ing and because the F41 does not consider the0
to be drugs or food5
In introducing #re0ier3 $;$ is stepping beyond that loophole5 The $;$ clai0 that
#re0ier is Ccleaner? is a poorly disguised )ay to i0ply Csafer? to thousands of people
concerned about the health ris9s of s0o9ing5 $;$ 9no)s that if their ads said Csafer? in
place of Ccleaner? the F41 )ould step in5
In the 0eanti0e3 $;$ pro0ises that #re0ier is an i0pro2e0ent o2er con2entional
cigarettes that burn )ith foul-s0elling s0o9e5 But3 )e are sceptical5 Ho) can )e trust
the sa0e industry that still refuses to ad0it that cigarette s0o9ing is har0fulN
The real proble0 though )as that s0o9ers didn?t enEoy using the s0o9e-free product3
and non-s0o9ers didn?t ha2e a reason to5 In short3 there )as no 0ar9et5 1fter four
0onths of 2ery slo) sales3 $; $eynolds cut their losses and #re0ier )as )ithdra)n5
But the story doesn?t end there5 By the 0id-1((*s3 concerns about passi2e s0o9ing led
the co0pany to belie2e there )as still a 0ar9et for s0o9eless cigarettes5 In 1((% it
therefore spent a further ., M12" 0illion on de2eloping an updated 2ersion3 this ti0e
called clipse5
In a press state0ent3 a co0pany spo9es0an announced the potential appeal of the brand5
CI thin9 )e can all agree that for 0any non-s0o9ers and for 0any s0o9ers3 second-hand
s0o9e is an annoyance3 and to be able to reduce and al0ost eli0inate that annoyance is a
2ery positi2e step in the right direction5?
The ne) cigarette 0ade less s0o9e than standard cigarettes because it didn?t burn5
Instead charcoal )as used to heat the tobacco5 The user dre) heated air o2er the tobacco
to release a tobacco and nicotine 2apour5 1s a result3 the clipse cigarette caused only 1*
per cent of the nor0al le2el of cigarette s0o9e3 and pro0ised lo)er le2els of tar and
nicotine5
Ho)e2er3 )hether the cigarette actually lo)ered the health ris9 of s0o9ing L either for
deliberate or passi2e inhalers L re0ains 6uestionable5 ,orrell ,ch)artA3 a phar0acologist
fro0 -eorgeto)n .ni2ersity )ho researched the tobacco industry3 belie2ed the cigarettes
could be good ne)s5 CIf it is as s0o9e- free as it?s clai0ed to be3 then clearly the
indi2idual?s ris9 of lung cancer3 e0physe0a3 bronchitis )ould be reduced3? ,ch)artA told
C::5 But ,ch)artA?s -eorgeto)n colleague3 4r :aiyer $iA2i3 )as 0ore sceptical5
CThere are ris9s that 0ay be related to increasing carbon 0ono!ide in this cigarette and
heart disease3? he told the C:: reporters5
1n independent study co00issioned by the Massachusetts 4epart0ent of #ublic Health
found that )hen it )as co0pared to ultra-lo) tar cigarettes3 the clipse cigarette had
higher le2els of se2eral to!ins3 especially )hen the charcoal tip burned 2ery hot fro0
hea2y s0o9ing5
This infor0ation )as clearly da0aging to the clipse brand3 because fro0 the start the
0ar9eting acti2ity )as designed to accentuate the health angle5 Indeed3 the original
ca0paign )as to include this pitch5 CThe best choice for s0o9ers )ho )orry about their
health is to 6uit5 But clipse is the ne!t best choice for those )ho ha2e decided to
continue s0o9ing5?
This 0ar9eting 0essage pro2o9ed opposition fro0 0any leading ., health
organiAations5 The 10erican +ung 1ssociation issued a state0ent saying3 C)e fear that
$;$?s health clai0s that this de2ice is GsafeH or Gsafer than cigarettesH 0ay discourage
s0o9ers fro0 6uitting5?
The Ca0paign for Tobacco-Free /ids Eoined the attac93 )ith the organiAation?s
president3 Matthe) + Myers releasing the follo)ing state0ent7 C$;$?s announce0ent
that it plans to 0ar9et a safer clipse cigarette is ta9ing ad2antage of the regulation gap
created by the ., ,upre0e Court?s decision to re0o2e F41 authority to regulate
tobacco5 @ithout F41 o2ersight3 there is no scientific corroboration of these clai0s by
an independent go2ern0ent agency5?
#articularly contro2ersial )as the fact that 0any of the 0edical e!perts )ho had
suggested that these cigarettes )ere less dangerous than standard brands had been doing
research paid for by the tobacco co0pany itself5 Further0ore3 independent 0edical
analysts soon disco2ered that clipse cigarettes presented one health ris9 )hich )as
actually )orse than standard cigarettes L glass fibres5 ;ohn #auly3 fro0 the 4epart0ent of
Molecular I00unology at the $os)ell #ar9 Cancer Institute in Buffalo3 :e) Dor93
disco2ered that (( out of e2ery 1** clipse cigarettes ha2e glass fibres )ithin their
filters5 These fibres3 he told 1BC :e)s3 )ere Cin2ariably? inhaled or ingested )hen
s0o9ers too9 a drag fro0 an clipse5
Ho)e2er3 despite this 0assi2e outcry fro0 health authorities3 including the ., ,urgeon
-eneral3 the real reason clipse failed to ignite the 0ar9et )as because consu0ers still
felt absolutely no desire for a s0o9eless cigarette5
Lessons from smokeless ciarettes
'ont baffle consumers with research5 $; $eynolds spent a great deal of 0oney
researching the health aspects of its t)o brands of s0o9eless cigarettes5 Ho)e2er3
this only resulted in 0i!ed 0essages5 1lthough $; $eynolds? research concluded
that in 0any )ays the brands )ere safer3 they couldn?t be considered entirely
safe5 C1s )e all 9no)3 no cigarette is safe3? ad0itted $; $eynolds? CB 1ndre)
; ,chindler5 Further0ore3 $; $eynolds? research pro0pted opposition fro0 other
health authorities )ho published their o)n independent findings5 $ather than end
up loo9ing as if it )as acting in the public?s health interests3 the tobacco fir0 only
ended up loo9ing 0anipulati2e5
'ont sell ice cubes to cocker spaniels5 ,0o9eless cigarettes appealed to people
)ho didn?t li9e the s0ell of s0o9e5 These people are called non-s0o9ers3 and
generally tend not to buy cigarettes5 $obert McMath in Business 2.; li9ened this
approach to Ctrying to sell ice cubes to coc9er spaniels3? and as9ed the see0ingly
ob2ious 6uestion7 C@hy create a product for a consu0er )ho )ants nothing to do
)ith youN?
2eali8e that if it has failed once it will fail again5 $; $eynolds should ha2e
abandoned the )hole idea once the #re0ier cigarette failed5
1! Oran8olt
+he drink that lost its cool
$asna +i0ited is one of the leading soft drin9s co0panies in India3 and 0ade its na0e in
the concentrate 0ar9et5 Ho)e2er3 )hen it has tried to stray fro0 its specialiAed niche3 it
hasn?t had 0uch success5 @hen $asna e!peri0ented )ith a fiAAy fruit drin9 called
BranEolt3 the brand bo0bed e2en before it could ta9e off5 BranEolt )as a fruit drin9 in
)hich carbonation )as used as a preser2ati2e5 CIt )as ne2er 0eant to be a fiAAy drin93?
says $asna?s founder #iraA /ha0batta5 He e!plained that gi2en the threat of foreign
co0petition it )as i0portant to try out ne) things5 CIf you don?t try ne) initiati2es3 you
are stuc93? he says5 ,o )hy did it failN Because it )as out of sync )ith retail practices5
To last3 BranEolt needed to be refrigerated5 The proble0 )as that Indian retailers tend to
s)itch off their shop refrigerators at night5 1s a result3 BranEolt faced 6uality proble0s5
The product has a shelf life of three to four )ee9s )here other soft drin9s )ere assured a
shelf life of o2er fi2e 0onths5
,er2icing outlets )as also a proble05 C@e didn?t ha2e a distribution structure that could
allo) us to replace the product e2ery three to four )ee9s3? ad0its /ha0batta5 2en Co9e
and #epsi 0a9e replace0ents only once in three 0onths5 BranEolt )as therefore launched
in select outlets and could not e!pand rapidly5
That )as the only effort by $asna +i0ited to try its hand beyond its bread- and-butter
seg0ent )here it still enEoys o2er '* per cent of the concentrated soft drin9 0ar9et share5
C:o) )e are trying to rein2ent the category ande!pand it3? says /ha0batta5 C1nd )e
)ant to be one up o2er our co0petition on all para0eters5?
Lesson from #ran,olt
&over all bases5 $asna failed to anticipate the 6uality proble0s it faced as a result
of retail practices5
1$ 9a Femme
Where are the pink ladies-
In the 1("*s3 ., car 0anufacturers disco2ered a ne) target custo0er3 the fe0ale car
buyer5 .p until that point3 cars had been 2ie)ed as a 0ale preser2e5 Ho)e2er3 an increase
in prosperity co0bined )ith the le2elling of the se!es that occurred in the years follo)ing
@orld @ar II 0anaged to change all that5
@o0en )ouldn?t )ant any old car though5 Bh no5 They?d )ant a car that appealed to
their fe0inine interests5 They?d )ant flo)ers5 They?d )ant a girly na0e5 They?d )ant
accessories5 But 0ost of all3 they?d )ant pin95
1t least3 that is )hat car 0anufacturers Chrysler belie2ed after researching this
apparently strange and e!otic creature5 The end result )as +a Fe00e3 part of the 4odge
di2ision and the first car designed specifically for )o0en5 The car )as pin9 and )hite3
and the seats )ere decorated )ith a tapestry style cloth depicting a pattern of pin9
rosebuds on a pin9 bac9ground5 The carpeting )as dar9 burgundy colour5 In the publicity
0aterial +a Fe00e )as said to be Cdesigned for Her $oyal Highness L the 10erican
@o0an5?
In 1("" 4odge sent the follo)ing letter3 e!pressing the co0pany?s enthusias0 for +a
Fe00e3 to all 4odge 4ealers across the .nited ,tates7
"# $LL D#D%& DI'&C" D&$L&'(:
The enclosed folder )ill introduce you to the +a Fe00e3 by 4odge3 the first car e2er
e!clusi2ely designed for the )o0an 0otorist5
1t the Chicago 1uto ,ho)3 the +a Fe00e recei2ed e!ceptionally enthusiastic response
and it is enEoying si0ilar response at special sho)s and e!hibits in other parts of the
country5
!terior color sche0e of the car is Heather $ose o2er ,apphire @hite3 and there is a gold
+a Fe00e na0eplate on each front fender3 replacing the $oyal +ancer na0eplate5 The
interior consists of specially designed Heather $ose ;ac6uard Fabrics and Heather $ose
Cordagrain bolster and tri05 The 0aterials used3 of course3 possess the usual 6ualities of
durability3 beauty3 econo0y3 and ease of cleaning5
The cro)ning touches )hich personaliAe the +a Fe00e are its special fe0inine
accessories5 T)o co0part0ents located on the bac9s of the front seats are upholstered in
Heather $ose Cordagrain5 The co0part0ent on the dri2er?s side contains a stylish rain
cape3 fisher0an?s style rain hat and u0brella )hich carry out the ;ac6uard 0otif5 The
other co0part0ent holds a stunning shoulder bag in soft rose leather5 It is fitted )ith
co0pact3 lighter3 lipstic9 and cigarette case5
12ailable only in the Custo0 $oyal +ancer 0odel3 the +a Fe00e can no) be ordered for
March deli2ery5 :aturally3 a 0odel of this type )ill initially be built in li0ited 6uantities
and )ill be handled on first co0e3 first ser2ed basis5 Co0plete price infor0ation can be
obtained fro0 a Confidential #rice Bulletin3 )hich you )ill be recei2ing )ithin the ne!t
fe) days5
I hope you )ill endea2or to see the +a Fe00e at your earliest opportunity5 I belie2e you
)ill agree that this unusual car has great appeal to )o0en3 and that it gi2es 4odge
dealers a Cdra)ing card? enEoyed by no other dealer group5
<ery truly yours3
+ F 4es0ond3 -eneral ,ales Manager 4odge 4i2ision
The e!peri0ent )as a co0plete failure5 The dealers that decided to order +a Fe00e
found that the cars sat unsold in the sho)roo05
.nperturbed3 4odge tried again the follo)ing year5 But still it had no ta9ers5 @o0en
found the crude atte0pts to attract their attention rather patroniAing5 This )as3 after all3
appealing to a classic 0ale ideal of fe0ininity3 rather than ho) the 1("*s )o0an actually
sa) herself5 There si0ply )eren?t enough )o0en )ho )anted a pin9 and purple car )ith
0atching lipstic9 holders and co0bs5
Lesson from La .emme
'ont patroni8e !our customers. It didn?t )or9 in the 1("*s3 and it certainly
doesn?t )or9 no)5
1) 6adion
Briht orane $oxes aren!t enouh
Many of the brands in this section ha2e failed because they )ere too far a)ay fro0 )hat
the consu0er )anted3 but so0eti0es products fail because they aren?t different enough
fro0 other popular products5 This is certainly the case of $adion )ashing po)der5 1long
)ith #ear?s ,oap3 $adion )as one of the 0any .nile2er brands for the chop )hen the
1nglo-4utch conglo0erate announced it )ould be narro)ing its scope on 4** Cpo)er?
brands5
+aunched 1* years before the February 2*** announce0ent3 $adion had struggled to
capture Eust o2er 2 per cent of the ./ detergent 0ar9et5 Bne of the reasons for this3 as
)ith 0ost brand failures3 is that the public?s perception of the brand )as far fro0 clear5
1lthough the product?s 2ibrant design I$adion ca0e in shoc9ing orange pac9etsJ 0eant
that the brand )as easily identifiable on super0ar9et shel2es3 consu0ers )ere less than
sure )hy they should buy it5 It )asn?t the cheapest3 it )asn?t considered the best 6uality3
it )asn?t the oldest or the original5 It )as si0ply the brand )ith the brightest pac9aging5
1nd that3 in the end3 is rarely enough5
.nile2er?s final decision )as to a0alga0ate $adion into its brand3 and it continues under
the banner ,urf Fun Fresh5
Lesson from /adion
Be different. Brands need to ha2e a strong point of difference fro0 their
co0petition5 1fter all3 this is the 2ery point of branding in the first place5 -arish
pac9aging )as not enough to )in o2er consu0ers
1, Clairol's :Touch of ;o+hurt' sham2oo
+aunched in 1(&(3 Clairol?s yoghurt-based sha0poo failed to attract custo0ers largely
because nobody li9ed the idea of )ashing their hair )ith yoghurt5 Bf those )ho did buy
the product3 there )ere e2en so0e cases of people 0ista9enly eating it3 and getting 2ery
ill as a result5 The CTouch of Doghurt? concept is 0ade e2en 0ore re0ar9able by the
introduction three years earlier by Clairol of a si0ilar sha0poo called the C+oo9 of
Butter0il95? This product had instantly bo0bed in test 0ar9ets )here consu0ers )ere
left as9ing7 )hat e!actly is the Cloo9 of butter0il9? and )hy should I )ant itN
1/ 0e2si (%
In the late 1('*s3 #epsi spotted a pre2iously une!ploited consu0er7 the brea9fast cola
drin9er5 1lthough #epsi hadn?t conducted 0uch co0prehensi2e 0ar9et research into this
area3 the co0pany realiAed that 0any young adults )ere drin9ing caffeinated cola rather
than coffee for brea9fast5 They therefore ca0e up )ith #epsi 1M3 a drin9 C)ith all the
sugar and t)ice the caffeine5?
.nfortunately3 #epsi had failed to appreciate that although so0e people dran9 #epsi for
brea9fast3 there )as no specific de0and for a ne) sub-brand centred around that usage5
CIf a consu0er doesn?t 9no) he Por sheQ has a need3 it?s hard to offer a solution3? says
brand e!pert and 0ar9eting author $obert McMath5 C,o0eti0es a co0pany can
0anufacture a need L but it?s e!pensi2e that )ay5?
:obody 9ne) they )anted #epsi 1M3 so nobody bought it5 Further0ore3 0any
0ar9eting e!perts ha2e successfully argued that because its na0e dictated )hen the
product should be consu0ed3 the 0ar9et siAe )as restricted to specific-occasion usage5
1nother bad idea3 another flop
11 %a#well 5ouse ready<to<drink coffee
-eneral Foods launched cartons of Ma!)ell House ready-to-drin9 coffee in 1((*5 The
cartons3 )hich appeared in the refrigerated sections of super- 0ar9ets3 declared the
product represented Ca con2enient ne) )ay to enEoy the rich taste of Ma!)ell House
Coffee5? The pac9aging stated that the coffee )as bre)ed )ith Ccrystal clear )ater3? and
pro0ised that the Cfresh bre)ed fla2our and aro0a are loc9ed in this e!clusi2e foil-lined
fresh-pac95? The cartons also had a con2enient scre)-on plug to aid ease of use5 The only
trouble )as the product couldn?t be 0icro)a2ed in its original container5 Therefore the
9ey incenti2e to buy ready-to-drin9 coffee L con2enience L )as ta9en a)ay5 1s no-one
fancied drin9ing cold coffee3 the product failed
13 Cam2bell's "ou2er Combo
1nother atte0pt at 0a9ing life 0ore con2enient )as soup 0anufacturer Ca0pbell?s
C,ouper Co0bo? idea3 consisting of a co0bination froAen soup and sand)ich5 4esigned
for people )ith 0icro)a2es at the office or Clatch- 9ey 9ids? coo9ing for the0sel2es on
their o)n at ho0e3 the product apparently fared )ell in tests5
The co0pany spent 0illions on generating a)areness for the C,ouper Co0bo? sub-brand3
and the initial sales results )ere 6uite encouraging5 Ho)e2er3 it soon beca0e clear that
these )ere fro0 people 0a9ing one-off purchases3 trying the product out of sheer
curiosity5 Consu0ers realiAed that despite the clai0s of increased con2enience3 it )as
actually 6uic9er and easier to open a can of soup and 0a9e your o)n sand)ich than
prepare a ,ouper Co0bo5 They therefore didn?t buy the product again5
24 Thirsty Cat= and Thirsty &o+=
Bottled water for pets
The )orst of all bad ideas 0ust surely be the Thirsty CatS and Thirsty 4ogS brands of
bottled )ater designed for pa0pered pets5 1lthough the )ater ca0e in such Cthirst-
6uenching? fla2ours as Crispy Beef and Tangy Fish3 pets and their o)ners re0ained
uni0pressed5
Chapter ): &*tension failures
Overview
Barron?s 'ictionar! of Business Terms defines brand e!tension as Cthe addition of a ne)
product to an already established line of products under the sa0e na0e5?
B9ay3 so that?s the definition L but )hat?s the incenti2eN Many co0panies belie2e that
once they ha2e created a successful brand3 they should e!tend it into other product
categories5 1fter all3 it is not the product that 0a9es a brand3 but rather an association5
For instance3 IBM doesn?t si0ply 0a9e co0puters3 it offers Csolutions?5 1s such3 it has
been able to enter related categories such as soft)are and net)or9s5
Ho)e2er3 although brand e!tension 0ay increase sales in the short ter03 it can de2alue
the identity of the brand in the long ter05 1nd )hen that happens3 e2ery product that falls
under the brand na0e starts to suffer5 1s 0ar9eting e!perts ;ac9 Trout and 1l $ies ha2e
argued throughout 0ost of their )riting careers3 line e!tensions cost 0ar9et share5 In the
.nited ,tates3 &-.p cut its share of the 0ar9et in half )hen it added brand 2ariations
such as &-.p -old5 CIn2ariably3 the category leader is the brand that is not line e!tended3?
argues ;ac9 Trout5 Ho)e2er3 if properly e!ecuted3 e!tensions can )or95 For instance3 in
1('2 Coca-Cola launched 4iet Co9e5 Today3 it?s the third 0ost popular cola drin9 and
boasts o2er a billion dollars )orth of sales e2ery year5 -illette raAors and sha2ing crea0
are a further e!a0ple of a successful e!tension5 But )hen co0panies fail to understand
the true nature of their brand the results can be disastrous5
Bf course3 the reasons for brand e!tension are ob2ious5 @hen a co0pany has saturated a
0ar9et )ith one product3 it has t)o options for gro)th5 ither it can e!pand into a ne)
0ar9et or launch a ne) product5 If it goes for the latter option3 there are econo0ic
reasons for using the sa0e brand na0e5 1fter all3 the e!tension results in i00ediate
consu0er recognition3 less 0oney spent on ad2ertising Ire6uired to generate a)areness of
the na0eJ3 and increased 2isibility of the parent brand5 Costs are sa2ed further if
e!tension can use the sa0e distribution net)or9 as the original product5
Then there are the e!a0ples of successful brand e!tensions that encourage other brands
to follo) suit5 Bf these3 <irgin is the 0ost ob2ious5 CBrands are built around reputation3
not products3? says $ichard Branson5 Det e2en <irgin has pro2ed considerably 0ore
successful in so0e categories than others5 <irgin Cola3 for instance3 pro2ed a co0plete
flop5 Further0ore3 <irgin has built its reputation as the consu0er?s cha0pion3 entering
significantly different 0ar9ets Ibridal )ear and pensions3 for e!a0pleJ )ithout diluting
its identity5 The consu0ers? perception of <irgin is also unified by the charis0atic figure
of $ichard Branson hi0self5 Thin9 <irgin3 and it?s not too long before you thin9 of
Branson5 ,o )hile the <irgin product and ser2ice offerings broaden year by year3 the
brand identity re0ains coherent5
Most other brands3 ho)e2er3 do not ha2e such 2ersatility5 For instance3 <ol2o has built
up its reputation around the notion of Csafety?5 If it )as suddenly to launch a car )ithout
airbags3 it )ould contradict its established brand identity5
1nd yet3 despite the danger in2ol2ed3 brand e!tensions are e2ery)here5 :ine out of ten
ne) grocery products are line e!tensions5 Thin9 also of the beer 0ar9et5 ., beer drin9ers
2" years ago had a choice of three 0aEor brands L Miller3 Coors and Bud)eiser5 Today
there are o2er 3* 2arieties of these sa0e brands3 yet the nu0ber of beer drin9ers re0ains
roughly the sa0e5
Ha2ing said that3 0ost of the brands )hich boast successful e!tensions ha2e 0o2ed into
related categories5 Coca-Cola had a global hit )hen it launched 4iet Co9e5 It )as less
successful ho)e2er )hen it introduced its o)n range of clothing5 -illette is often
celebrated as a great Cho) to? 0odel for brand e!tension5 It 0o2ed s0oothly fro0 selling
raAors to selling sha2ing crea05 @ith such co0patible products the success of one
product feeds the success of the other3 and the brand as a )hole feels the benefit5
Bften ho)e2er3 e!tensions ha2e been 0ade by co0panies )ith no apparent
understanding of )hat their brand is about5 Many belie2e they can ha2e their ca9e and eat
it3 that ha2ing built a strong brand perception based around one product category3 they
can transfer it to unrelated products and increase sales on the bac9 of the sa0e brand
na0e5 Bther co0panies that 0ay ha2e a better understanding of their brand identity 0ay
still )ea9en their brand assets by launching products so si0ilar that they cannibaliAe their
original 0ar9et5 1s the e!a0ples o2er the ne!t fe) pages ser2e to illustrate3 both
approaches result in failure5
21 5arley &avidson 2erfume
+he sweet smell of failure
In 2arious 0agaAines3 at 2arious conferences3 and in his online ne)sletter3 ,aatchi and
,aatchi?s )orld)ide chief e!ecuti2e officer3 /e2in $oberts3 has tal9ed of the C0ythology
of the brand?5 The 0ost po)erful brands3 according to $oberts3 are those that ha2e built
their o)n 0ythology3 or rather3 that ha2e helped their loyal custo0ers to build this
0ythology5 The one brand )ith perhaps 0ore 0ythology attached to it than any other is3
)ithout doubt3 Harley 4a2idson5
Harley 4a2idson o)ners aren?t Eust loyal5 They love the brand5 They do not care that the
0otorcycles they ride are not the best in ter0s of technology or that they 0ay be prone to
the occasional oil lea9age5 @hat 0atters is the bi9er 0yth L the freedo0 of the open road3
and all its 0acho connotations5
This 0yth is 2i2idly conEured up in the boo9 /ells Angel+ The Life and Times of "onn!
Barger and The /ells Angels ,otorc!cle &lub by ,onny Barger Ithe original Hell?s
1ngelJ5 In a chapter entitled3 CHarleys3 Choppers3 Full 4ressers and ,tolen @heels3?
Barger )rites7
@hat it?s really about )ith a Harley 4a2idson is the sound5 5 5 e2erybody lo2es that
ru0ble5 1nother thing Harley o)ners really cra2e about their bi9es is the lo)-end tor6ue3
the ra) po)er co0ing out of the gate5 It runs out pretty 6uic9 once you get up past ninety
0iles an hour5 Most
Harley riders don?t care about high speed3 they?d rather ha2e that lo)end tor6ue3 the one
that gurgles do)n in your groin and gi2es you the feeling of po)er5 The ;apanese bi9es3
)hile they have the po)er3 they don?t 6uite ha2e the feeling of po)er5
The appeal of the Harley 4a2idson is essentially 0asculine and its custo0ers ta9e brand
loyalty to e!tre0e le2els5 Indeed3 0any testosterone-charged Harley o)ners e2en tattoo
the Harley 4a2idson na0e and i0agery onto their bodies5
The co0pany has atte0pted to capitaliAe on this uni6ue strength of feeling to)ards the
brand3 by pushing the Harley 4a2idson chain of shops selling a )ide 2ariety of branded
0erchandise L Harley 4a2idson T-shirts3 soc9s3 cigarette lighters and orna0ents5 @hile
Harley 4a2idson?s core fans 0ay ha2e accused the co0pany of C4isneyfying? the brand3
the real proble0 occurred )hen Harley 4a2idson attached its na0e to a range of
aftersha2e and perfu0e5 For lo2ers of the 0otorcycle3 this )as an e!tension too far5
Harley 4a2idson had fallen into the trap of thin9ing that 0ore products e6uals 0ore
sales5 1nd it usually does3 at least in the short ter05 But as 1l and +aura $ies )rite in
The 22 Immutable Laws of Branding3 this type of strategy can ha2e negati2e
conse6uences in the long ter07
4o you build the brand today in order to 0o2e 0erchandise to0orro)N Br do you
e!pand the brand today in order to 0o2e the goods today and see it decline to0orro)N P5 5
5Q
+ine e!tension3 0egabranding3 2ariable pricing and a host of other sophisticated
0ar9eting techni6ues are being used to 0il9 brands rather than build the05 @hile
0il9ing 0ay bring in easy 0oney in the short ter03 in the long ter0 it )ears do)n the
brand until it no longer stands for anything5
Ironically3 though3 this 6uest for 0ore products and to broaden the Harley 4a2idson line
)ent against the )ay the co0pany had built the brand in the first place5 In /ells Angel3
Barger )rites7
Harley has enEoyed a huge share of the large bi9e 0ar9et for decades5 They control about
fifty percent of cruiser sales3 )ith ;apanese bi9es0a9ing up the other half5 1s a result3
they often act a little high and 0ighty to)ard their custo0ers5
1n official at Harley 4a2idson )as once 6uoted as saying3 Cnough bi9es is too 0any3
and if )e 0a9e enough3 )e lose 0ysti6ue5? @hile they 9eep saying they?re building 0ore
and 0ore each year3 up until a couple of years ago I belie2e Harley 4a2idson
intentionally held bac9 production to stir up de0and5
The i0plication is that Harley 4a2idson originally understood that its custo0ers could
ha2e too 0uch of a good thing5 :ot only had it stayed focused on 0otorbi9es3 but the
co0pany 0ay ha2e also li0ited their a2ailability in order to generate the Harley
4a2idson C0ysti6ue?5
By the 1((*s3 ho)e2er3 the brand )as clearly heading in the other direction5 1longside
aftersha2e and perfu0e3 the co0pany also launched Harley 4a2idson )ine coolers5 1s
you )ould e!pect3 the bi9ers )ere not i0pressed5
Bn her Internet ho0epage3 one bi9er girl3 )ho calls herself CTin9er?3 recounted her
e!perience of seeing all these inappropriate ite0s on sale in a Harley 4a2idson chain
store7
4rifting closer3 I found 0yself daAAled by the see0ingly infinite 2ariety of stuff5 Man3
they had e2erything under the sunS There )ere H-4 soc9s3 perfu0es3 infant clothes3 an
entire line of 9ids )ear3 tons of orna0ents and collectables3 e2en ties3 all sta0ped )ith
the official H4 license logo5 2erything3 fro0 the truly nice to the fran9ly ugly3 )as on
display5 2erything that is e!cept an actual Harley 4a2idson 0otorcycle5 :o parts3 e2en5
There )as a Buell Pa Harley 4a2idson 0odelQ in the )indo)3 )ith a C4o :ot Touch? sign
on it5
1 salesperson )andered o2er5 CCan I help you find so0ethingN? she as9ed brightly5
C,ure3? I said5 CHa2e you got the official licensed Harley 4a2idson sha0pooN?
C,ha0pooN? she as9ed3 a little uncertain5
CBh absolutely3? I said5 CIt loo9s and s0ells Eust li9e 0otor oil3 but it 0a9es 0y hair so
0anageableS? I s0iled as I 0ade 0y escape3 but I 9no) it?s Eust a 0atter of ti0e5
Tin9er )as not alone in her criticis05 1nd pretty soon3 it beca0e clear that the
0otorcycle giant )as alienating its core custo0ers5
CHarley 4a2idson 2alues are strong3 0asculine3 2ery rugged 2alues3? says Charles
Bry0er3 chief e!ecuti2e officer of the Interbrand -roup3 a branding consultancy based in
:e) Dor95 CFor Harley 4a2idson to go into a sector that doesn?t li2e up to )hat those
2alues are )ould be disastrous5?
Ho)e2er3 the disaster )as a relati2ely li0ited one5 The co0pany has no) ad0itted its
0ista9e3 and stopped producing perfu0es and other inappropriate products5
In an inter2ie) for The Business Knowledge 7etwork3 ;oe :ice3 the director of corporate
co00unications for Harley 4a2idson3 spo9e candidly of the co0pany?s branding
failures5 CB2er the years3? he said3 C)e?re tried a nu0ber of different approaches to
0erchandising and put the Harley 4a2idson brand on so0e things that3 in retrospect3 )e
0ay not ha2e been )ell-ad2ised to do5 The co0pany is 0uch 0ore selecti2e today about
)ho )e )or9 )ith and ho) )e go about e!tending the brand5?
Lessons from *arley Da&idson
(ocus on !our brand values5 If your 2alues are Cstrong3 0asculine and 2ery
rugged3? you shouldn?t be selling perfu0e or )ine coolers5 1 range of baby
clothes 0ay also be a bad idea5
'ont alienate !our core customers5 For brands that inspire strong loyalty3 the
te0ptation is to test that loyalty to its li0its by stretching the brand into other
product categories5 Ho)e2er3 this is a dangerous strategy and can lead to )hat
0ar9eting e!perts refer to as Cbrand dilution? L in other )ords3 a )atered-do)n
brand5
2emember that more is less5 C@hen you study categories o2er a long period3 you
can see that adding 0ore can )ea9en gro)th3 not help it3? )rites ;ac9 Trout in his
boo93 Big Brands Big Trouble+ Lessons Learned the /ard 5a!5 CThe 0ore you
add3 the 0ore you ris9 under0ining your basic differentiating idea3 )hich is the
essence of your brand5?
Keep it tight. Harley 4a2idson built its brands by staying true to )hat it does best3
na0ely 0a9ing big3 classic3 ., 0otorbi9es5 The further it 0o2ed a)ay fro0 this
original focus3 the further it got into trouble5 1ny brand )hich atte0pts to be a
C;ac9 of all trades? )ill ulti0ately fail to car2e a strong identity in any category5
/andle <lovemarks with care. 1ccording to ad2ertising guru /e2in $oberts3 truly
successful brands don?t ha2e Ctrade0ar9s?5 They ha2e Clo2e0ar9s?5 In a no)
fa0ous article for (ast &ompan! 0agaAine?s ,epte0ber 2*** issue3 $oberts cited
Harley 4a2idson as a supre0e e!a0ple of a lo2e0ar9 and co00ended the
co0pany for not follo)ing the 0ar9eting ruleboo95 1lthough $oberts says that
the 0otorbi9es the0sel2es are Cactually pretty a2erage?3 the nature of the brand
has 0eant that the 0otorbi9es don?t ha2e to be co0pared to others in ter0s of
perfor0ance5 $oberts says7
1s a lo2e0ar93 Harley 4a2idson has t)o things5 Bne is its signature ru0bling sound5 The
other is that you can?t go 2ery fast on a Harley3 so you ha2e to ride in a pac9 P5 5 5Q The
0ystery of the Harley isn?t in its perfor0ance3 and it isn?t in any of the )ords that end in
Cer?5 Most brands are built on Cer? )ords L faster3 bigger3 better3 cleaner5 Mystery doesn?t
need those )ords5 Mystery also doesn?t need hundreds of the0ed stores to push its brand
e!tensions5 In fact3 such an approach tends to erode the 0ystery altogether5
22 -erber "in+les
When $randin oes a a
Baby-food 0anufacturer -erber is responsible for one of the 0ost fre6uently referenced
brand failures of all ti0e5 1longside Coca-Cola?s :e) Co9e and Harley 4a2idson?s
perfu0e3 -erber?s atte0pt to crac9 the adult food 0ar9et is certainly one of the 0ain
entrants in the branding Hall of ,ha0e5
The idea )as to produce s0all ser2ings of food for single adults L such as fruits3
2egetables3 starters and desserts L in the sa0e Ears used for baby food5 Ho)e2er3 )hen
-erber?s adult range )as launched in 1(&43 the co0pany soon disco2ered that the idea of
eating products such as CCrea0ed Beef? out of a s0all Ear )as not 0ost people?s idea of a
good night in5
Further0ore3 the product )as called -erber ,ingles5 1ccording to ,usan Casey in the
Bctober 2*** issue of Business 2.;3 Cthey 0ight as )ell ha2e called it I +i2e 1lone and
at My Meals Fro0 a ;ar5?
@hether the product had been 0ar9et researched is anybody?s guess L and it is certainly
hard to get a co00ent fro0 -erber itself5 Bne thing is certain3 ho)e2er5 Baby food for
gro)n-up loners failed spectacularly5
Lesson from 0er$er )inles
Think from the consumers perspective5 1lthough -erber ,ingles 0ade sense
fro0 -erber?s perspecti2e Iafter all3 the co0pany could sa2e 0anufacturing costs
by using the sa0e Ears as for its baby foodJ3 no consu0er )as interested in buying
a product )hich not only told the )orld that he or she couldn?t find a partner3 but
also ga2e the reason )hy Ibecause the person )as a big babyJ5
2! Crest
)tretchin a $rand to its limit
Born in 1(""3 Crest )as the first fluoride toothpaste brand5 .p until that point3 the
Colgate brand had a stranglehold on the 0ar9et5
Ho)e2er3 Crest?s parent co0pany #rocter K -a0ble realiAed that Colgate had a
)ea9ness5 :o fluoride5 This 0eant 0ore ca2ities and 0ore tooth decay5 Further0ore3
Crest could bac9 up 0iraculous ca2ity-reducing clai0s )ith e!tensi2e research3 )hich
had been conducted by #rocter K -a0ble scientists at Indiana .ni2ersity5 ndorse0ents
by the 10erican 4ental 1ssociation3 )hich co00ended Crest?s Ceffecti2e decay-
pre2enting 6ualities3? helped the brand gain ground on its ri2al3 Colgate3 and e2entually
sa) it slide ahead5
Ho)e2er3 the 1('*s )itnessed the frag0entation of the toothpaste 0ar9et5 1ll of a
sudden3 consu0ers )ere presented )ith an array of choice as ne) brands e0erged5 There
)ere brands for s0o9ers3 tooth-)hitening brands3 0int-gel brands3 ba9ing-soda brands3
natural brands3 children?s brands3 fla2oured brands3 brands for the elderly5 Further0ore3
fluoride )as no longer such a big selling point5 1fter all3 in 0any parts of urope and the
.nited ,tates it )as no) included in tap )ater5 Ca2ities )eren?t the issue they )ere in
the 1("*s5
-radually3 Crest launched 0ore and 0ore 2arieties5 Most significantly3 it released a tartar
control toothpaste in 1('"5 1lthough this )as the first toothpaste of its 9ind on the 0ar9et
it didn?t ha2e the sa0e i0pact as the introduction of fluoride had 3* years pre2iously5
Bne of the reasons for this )as that Crest no) had so 0any different toothpastes5 The
anti-tartar 2ariety )as Eust one Crest a0ong 0any5 1lso3 Colgate )as 6uic9 off the 0ar95
:ot only did it launch its o)n tartar-control toothpaste3 but it also started )or9 on a
toothpaste )hich )ould co2er all of the percei2ed tooth care needs5
@hereas Crest 9ept on offering ne) 2ariations on the sa0e the0e3 thereby confusing the
toothpaste-buying public3 Colgate launched Colgate Total5 This ca0e )ith fluoride3 tartar
control and gu0 protection5 In other )ords it pro2ided e2erything )ithin one product5
,oon after its triu0phant launch3 Colgate )as bac9 on top of the 0ar9et and eating into
Crest?s sales5
,o )hat happenedN @hy )asn?t Crest able to offer a Crest Total or Crest Co0plete
before its ri2al?s productN
There are a nu0ber of possible reasons3 and one relates to #rocter K -a0ble?s 0ethod of
branding5 #rocter K -a0ble?s brand strategy in the 1('*s see0ed to be7 )hy launch one
product3 )hen "* )ill doN Indeed3 at one point there )ere "2 2ersions of Crest on the
0ar9et5 The belief )as7 the higher nu0ber of sub-brands the higher nu0ber of sales5 ,o
)hy ris9 threatening this scenario by telling consu0ers there is no) one Crest toothpaste
)hich caters for all their dental re6uire0entsN
Ho)e2er3 increased choice e6ualled increased confusion5 1s a result3 Crest lost 0ar9et
share5 Indeed3 true to the la) of di0inishing returns the 0ore products Crest had on offer3
the lo)er its o2erall share of the 0ar9et5 @hen Crest had one product3 its share soared
abo2e "* per cent5 By the ti0e Crest had 3' products it )as do)n to 3% per cent of the
0ar9et5 1s soon as there )ere "* Crest toothpastes3 its 0ar9et share dipped to 2" per cent
and fell behind Colgate5
These proble0s )ere not uni6ue to the Crest brand5 For instance3 #rocter K -a0ble had
seen the sa0e thing happen )ith its Head K ,houlders brand5 4id consu0ers really need
31 2arieties of anti-dandruff sha0pooN
@hen the 0ar9eting strategy fir0 $ies K $ies )ent to )or9 for Crest3 they identified this
proble05 In The 22 Immutable Laws of Branding 1l and +aura $ies recount the
e!perience7
@hen )e )or9ed for Crest3 the 0ar9eting 0anager as9ed us3 CCrest has thirty-eight
stoc9-9eeping units5 4o you thin9 that?s too 0any or too fe)N?
CHo) 0any teeth do you ha2e in your 0outhN? )e as9ed5
CThirty-t)o5?
C:o toothpaste should ha2e 0ore stoc9-9eeping units than teeth in one?s 0outh3? )e
responded5
1lthough for so0e ti0e #rocter K -a0ble 9ept on repeating the 0isguided Crest
strategy L launch 0ore brands3 lose 0ore 0ar9et share L the co0pany e2entually decided
to tac9le the proble0 it had created5
1n article entitled3 CMa9e it ,i0ple?3 Business 5eek 0agaAine I( ,epte0ber 1((%J
su00ed up the decisi2e shift )ithin #rocter K -a0ble7 C1fter decades of spinning out
ne)-and-i0pro2ed this3 le0on-freshened that3 and e!tra- Eu0bo-siAe the other thing3
#rocter K -a0ble has decided that it sells too 0any different 9inds of stuff5 :o) it has
started to do the unthin9able7 it?s cutting bac95 #rocter?s product roster is a third shorter
today than it )as at the start of the decade5?
Before it cut the nu0ber of Crest products3 #rocter K -a0ble tri00ed bac9 on hair care5
Ha2ing slashed the nu0ber of its hair care ite0s in half it sa) an increase in sales5
Ho)e2er3 according to #rocter K -a0ble?s chief e!ecuti2e of hair care $obert ,
Matteucci3 the strategy )as unpopular at first7 CThe 0o2es 0et so0e resistance fro0
#rocter K -a0ble?s brand honchos )ho thought3 GBh 0y -od3 )e?re going to lose sales
because )e?re going to ha2e fe)er ite0s3H? he said at the ti0e the decision to tri0 bac9
)as 0ade5 CThere?s a huge scepticis0 that this is the right thing to do3 and that it?s
doable5?
1s )ell as reducing the nu0ber of Crest toothpaste 2arieties3 #rocter K -a0ble also
altered the Crest pac9age design to 0a9e it si0pler to find your fa2ourite 2ersion of the
product5 The 0o2e )as considered an intelligent one a0ong 0ar9eting e!perts5 In a 1(('
Ithaca American 'emographics sur2ey3 Marcia Mogelons9y applauded the ne) strategy7
CThis reduces the nu0ber of e!traneous siAes3 fla2ours3 and other 2ariants3 0a9ing it
easier for consu0ers to find )hat they )ant5 1t the sa0e ti0e3 the 0anufacturer can ha2e
0ore of its allotted space in the store filled )ith its best-selling products5 ,hoppers ha2e
less choice3 but they are less confused3 and the 0anufacturer 0a9es 0ore 0oney5?
Ho)e2er3 co0petition re0ains tough5 :ot only fro0 Colgate3 but also 16uafresh3
Mentadent3 1r0 and Ha00er3 ,ensodyne and o)n-brand ranges such as those produced
by the ./ che0ist Boots5
1lthough #rocter K -a0ble has si0plified the Crest range to so0e degree3 and although
sales ha2e i0pro2ed3 so0e belie2e it isn?t enough to usurp Colgate5 Further0ore3
although #rocter K -a0ble has honed its range3 so0e critics clai0 that Crest?s brand
identity is still not sharp enough and that it has neglected its scientific origins5 For
instance3 in his boo9 Big Brands Big Trouble3 ;ac9 Trout 0a9es the follo)ing
obser2ation7
First and fore0ost3 Crest should al)ays be on the serious3 therapeutic side of the
toothpaste 0ar9et5 That?s )here they are in the 0inds of their prospects5 :o 0outh)ash3
no )hitening3 only serious tooth care technology5 The natural e2olution of Crest )ould
be to 0o2e fro0 Cca2ity pre2ention? to beco0ing the Cpioneer in tooth care?5
.nfortunately3 they ne2er 6uite sa) this as a )ay to go5 They continued to tin9er )ith
different for0s of Crest5
The fact that #rocter K -a0ble hasn?t al)ays been focusing on tooth decay has 0eant
that it has ine2itably suffered fro0 so0ething e2en )orse7 brand decay5 .nless the
co0pany can once again ta9e control of the scientific high ground and pro2ide consu0ers
)ith a single3 consistent 0essage Iassisted )ith a tightly-focused rangeJ3 Colgate )ill
ha2e )on the battle by 0ore than the s9in of its teeth5
Lessons from Crest
'ont confuse the customer5 #rocter K -a0ble no) realiAe that si0plicity is the
9ey to reassuring shoppers5 CIt?s 0ind-boggling ho) difficult )e?2e 0ade it for
the0 o2er the years3? ad0itted #rocter K -a0ble?s president 4ur9 I ;ager to
Business 5eek 0agaAine5
'ont offer too man! products5 ;ust &5% per cent of all personal care and
household products account for '45" per cent of sales3 according to research by
the consulting fir0 /urt ,al0on 1ssociates5 The sa0e research disco2ered that
al0ost a 6uarter of the products in a typical super0ar9et sell fe)er than one unit a
0onth5
2emove product duplicates5 1nother study3 published by @illia0 Bishop
Consulting3 found that )hen duplicati2e ite0s )ere re0o2ed3 '* per cent of
consu0ers sa) no difference5
Be transparent5 Brands should ai0 for Ctransparency?5 In other )ords3 they should
0a9e the choice on offer co0pletely clear5
2emember !our heritage5 C:e2er lose your corporate 0e0ory3? ad2ises ;ac9
Trout in Big Brands Big Trouble5 Crest suffered fro0 brand a0nesia by failing to
replicate the success of its CTriu0ph B2er Tartar? ca0paign of the 1("*s5
2$ 5ein. (ll Natural Cleanin+ >ine+ar
Confusin the customer
HeinA?s 1ll :atural Cleaning <inegar )as the food-0a9er?s first non-food ite05 The
co0pany3 )hich had been founded by Henry HeinA in 1'%(3 had 0ade its na0e selling its
C"& <arieties? L good 2alue3 pre-pac9aged food such as ba9ed beans3 soup and 9etchup L
and decided in the 1('*s to e!tend its brand into other household goods5
First off the 0ar9 )as the 1ll :atural Cleaning <inegar3 an eco-friendly3 all-purpose
2inegar carrying a red sy0bol )ith the )ords CHeloise?s Most Helpful Hint?5 Heloise is
the ., ne)spaper colu0nist responsible for the CHints fro0 Heloise? colu0n3 )hich is
syndicated across the globe5 It )as a logical endorse0ent as Heloise had long been an
ad2ocate of the 2arious and 0iraculous uses of 2inegar L as a rust re0o2er3 deodoriAer3
)indo) cleaner3 ant detergent3 )eed 9iller and defroster5 In addition to this support3 the
product also recei2ed a substantial a0ount of positi2e #$ fro0 the press3 )hich had
pic9ed up on the green angle of the product5
:one of this 0attered though5 The product )as a co0plete flop and ne2er appeared
beyond the .nited ,tates5
@hen 0ar9eting co00entators atte0pted to e!plain )hy the 2inegar had failed to ta9e
off3 they bla0ed the Calternati2e? perception of the ne) product5 In her 1((' boo93 %reen
,arketing+ $pportunit! for Innovation ;ac6uelyn Btt0an uses the case of the HeinA 1ll
:atural Cleaning <inegar to illustrate the changing 0ar9et attitudes to)ards
en2iron0entally-friendly products7
C@ith green a 0o2ing target3 planning gets tric9yO industry can only respond as 6uic9ly
as the 0ar9et de0ands5 This poses the ris9 of rushing greener products to 0ar9et to ser2e
the de0ands of influential custo0ers )hile 0ass consu0ers 0ay be una)are of the need
for change5 The green 0ar9etplace is rife )ith e!a0ples of less than perfect ti0ing5?
Btt0an then goes on in depth to e!plain )hy she belie2es the HeinA product failed7
Introduced in response to the ne)ly disco2ered need of che0ophobics3 HeinA?s Cleaning
<inegar3 a double-strength 2ersion of the nor0al product3 flopped )hen introduced into
super0ar9ets as an alternati2e cleaning aid5 The 0ass consu0er didn?t 9no) )hat to
0a9e of it5 @hile greater consu0er 0ar9eting and educational efforts no doubt )ould
ha2e helped enhance its chance of success3 the product opportunity 0ay ha2e been better
ser2ed by a niche strategy3 distributing the product in health-food stores and green-
product catalogs until enough of the 0ass 0ar9et )as prepared to s)itch to the
ecologically-conscious offering5
Ho)e2er3 there is another reason )hy consu0ers 0ay ha2e been )ary5 HeinA )as a food
brand5 If the co0pany produced a 2inegar3 consu0ers )ould e!pect to be able to pour it
o2er their 0eals5 They didn?t e!pect to find it sitting alongside the bottles of bleach and
household detergents5
Bf course3 for HeinA3 the decision to launch the product )as a thoroughly logical one5
1fter all3 the co0pany already produced 2inegar3 so )hy not intensify the strength of that
product to create a ne) oneN 1s Btt0an e!plains in her boo93 C0any green products on
the 0ar9et today represent s0all enhance0ents or t)ea9s to e!isting ones5?
But the Ct)ea9s? to HeinA?s original product had 0o2ed the brand a)ay fro0 its core
identity L na0ely3 that of a food 0anufacturer5 The fact that both 2inegar and HeinA are
nor0ally associated )ith things you can eat only 0ade the product 0ore confusing for
the custo0er5 In other )ords3 as 1ll :atural Cleaning <inegar )as based on an e!isting3
edible HeinA 2inegar3 the product only ser2ed to reaffir0 the perception of HeinA as a
producer of food5
The only trouble )as3 the cleaning 2inegar wasnt food5 1s a result3 it failed5
Lessons from *ein1
"tick to what !ou know5 But 0ore i0portantly3 stic9 to )hat your custo0ers
9no)5 If you?re a food brand that 0eans one thing5 If you can?t eat it3 you can?t
sell it5
-3pand within the limits of !our brand perception5 HeinA 0ay be 0ost associated
)ith 9etchup but it has nu0erous other brand successes3 and fre6uently launches
ne) products5 HeinA sho)s that you can e!tend your line as far as you )ant3
pro2iding you re0ain true to your core identity or brand perception5
Adopt a niche strateg! for a niche product5 HeinA 1ll :atural Cleaning <inegar
)as distributed and 0ar9eted as a 0ainstrea0 product3 although it only appealed
to a niche 0ar9et5
2) %iller
+he e&er2expandin $rand
In the 1(&*s Miller Bre)ing Co0pany faced so0ething of an i0age proble05 For years it
had been positioning its core brand3 Miller High +ife3 as Cthe cha0pagne of beers?5 ;aAA
0usicians had been used in ad2ertising ca0paigns to endorse the beer and to consolidate
its sophisticated i0age3 but the results )ere increasingly disappointing5
@hen Business 5eek profiled the co0pany in :o2e0ber 1(&%3 it e!plained the proble0
)ith Miller?s 0ar9eting strategy5 C,old for years as the cha0pagne of beers3 High +ife
)as attracting a disproportionate share of )o0en and upper-inco0e consu0ers )ho )ere
not big beer drin9ers P5 5 5Q 1 lot of people dran9 the beer3 but none dran9 it in 6uantity5?
In order to differentiate itself fro0 its 0acho ri2als3 Bud)eiser and Coors3 Miller had
fe0iniAed its core brand in a bid for )ider share of the 0ar9et5 Ho)e2er3 the co0pany
)as starting to learn )hat Marlboro had realiAed the decade before )hen it replaced
i0ages of fe0ale s0o9ers )ith the iconic Marlboro Man5 The lesson )as this7 in
reaching out to ne) custo0ers3 a brand ris9s alienating its core 0ar9et5 But help )as at
hand5 #hilip Morris3 the o)ners of the Marlboro brand3 had purchased Miller at the start
of the decade5 The co0pany no) realiAed )hat it had to do5
;ust as the Marlboro Man had been an e!aggerated i0age of 0asculinity3 so the ne)
ad2ertising for Miller High +ife )as designed to out-0acho its ri2als5 But )ent the
sophisticated EaAA 0usicians3 and in ca0e testosteronefuelled oil )or9ers glugging bac9
the beer li9e there )as no to0orro) abo2e the no-nonsense slogan3 C:o) Co0es Miller
Ti0e5? 1s the testosterone le2els rose3 so too did sales3 )ith High +ife beco0ing the
second 0ost popular beer by 1(&&5 Ho)e2er3 by that ti0e3 Miller had another success
story on its hands in the for0 of Miller +ite5
Miraculously3 Miller 0anaged to introduce this lo)-calorie beer )ithout tarnishing its
0acho i0age5 The ads3 featuring leading sports figures and the strap-line Ce2erything you
al)ays )anted in a beer L and less?3 )ere 2ery successful3 and by 1('3 Miller +ite )as
second only to Bud)eiser in the beer ran9ings5
+ess 0iraculously3 it soon beca0e apparent that the rising popularity of Miller +ite )as
offset by the declining popularity of High +ife5 @hile the introduction of the light beer in
1(&4 had led to increased o2erall sales in the short ter03 in the long ter0 it )as costing
the co0pany its original brand5 Ha2ing pea9ed in 1(&( )ith sales of o2er 2* 0illion
barrels3 High +ife )as no) in ter0inal decline5
@hat Miller should ha2e learnt fro0 this e!perience )as that the success of one Miller
brand )as at the cost of another5 1s 0ar9eting e!pert ;ac9 Trout fa0ously put it3 Cin the
0ind3 it?s one idea to a brand5? But Miller continued to e!tend its brand in further
directions3 and )ith si0ilar results5 In 1('%3 the co0pany launched a cold-filtered beer
called Miller -enuine 4raft5 1gain3 the beer )as a success5 1gain3 the other Miller
brands suffered5 By 1((13 sales of Miller +ite )ere starting to decline5
The incenti2e to launch ne) brands )as still strong3 though5 1fter all3 e2ery ne) Miller
beer )hich had e0erged on the 0ar9et increased sales for the co0pany in the short ter05
1nd short-ter0 trends )ere al)ays going to be easier to spot than those )hich happen
slo)ly3 o2er years and decades5
$ather than create co0pletely ne) brands3 the co0pany 9ept on launching sub-brands
under the Miller na0e5 ,o )hereas their 1(&*s counterparts )ere only offered Miller
High +ife3 Miller drin9ers in the 1((*s had considerably 0ore choice5 @al9ing into a bar
or super0ar9et3 they not only had to choose bet)een Miller3 Coors and Bud)eiser3 but
bet)een 2arious brands )ithin the Miller range itself5
There )as still Miller High +ife Ihanging on by a threadJ and Miller +ite3 but also Miller
+ite Ice3 Miller High +ife +ite3 Miller -enuine 4raft3 Miller -enuine 4raft +ite3 Miller
$eser2e3 Miller $eser2e +ite3 Miller $eser2e 10ber 1le and the 2ery short-li2ed Miller
Clear5 The trouble )as not so 0uch that there )ere too 0any Miller brands Ialthough that
)as indeed a proble0J but that they )ere 2ariations of each other3 rather than a 2ariation
of one core brand5 IIncidentally3 this theory e!plains )hy 4iet Co9e succeeded )here
:e) Co9e failed5 @hereas the for0er had supple0ented the original brand3 the latter had
eradicated it co0pletely5J
In 1((% Miller decided to address this situation3 adding yet another brand to the 0i!3
Miller $egular5 The co0pany had loo9ed at the success of its ri2als? regular beers and
)anted a piece of the action5 In other )ords3 they )anted a beer )hich )ould co0e to
represent e2erything Miller stood for3 )hich by that point )as rather a lot5
The only proble0 )as that )ith so 0any Miller brands already out there3 launching
another one Ie2en )ith a ., M"* 0illion 0ar9eting budgetJ )as al)ays going to be a
challenge3 especially )hen it had such an unassu0ing na0e5 @ith an apparently li0itless
array of Millers to choose fro03 0ost people assu0ed that Miller $egular had al)ays
been there5 1s a result3 the brand failed to 0a9e an i0pact and Miller e2entually decided
to )ithdra) it altogether5
The proble0 of identity3 ho)e2er3 still re0ained5 @hereas drin9ers could go into a bar
and say to the bartender3 CI?ll ha2e a Bud)eiser3? causing little confusion3 if they said3
CI?ll ha2e a Miller3? the bartender )ould ine2itably as93 C@hich MillerN?
1s ;ac9 Trout )rote in his e!cellent and influential boo93 The 7ew .ositioning3 Cthe 0ore
2ariations you attach to the brand3 the 0ore the 0ind loses focus5? Miller hadn?t Eust
alienated its core custo0ers3 it had co0pletely baffled the05 @hereas in the 1(&*s Miller
had achie2ed its success by tightening its focus3 by the ti0e the co0pany had reached the
ne) 0illenniu0 it had broadened itself beyond recognition5
@hile Miller?s long-standing ri2al3 Bud)eiser3 has no) ta9en its regular brand identity to
ne) le2els of si0plicity Ireflected in the one-)ord strap line3 CTrue?J3 Miller still suffers
fro0 a lac9 of coherence5 ,o3 although the beer itself 0ay taste great3 the brand has
definitely beco0e )atered do)n5
Lessons from "iller
'ont e3tend !our brand too far5 C+e2erage is good3 too 0uch le2erage is bad3?
says brand guru To0 #eters5 He is Eoined in this opinion by 1l $ies and ;ac9
Trout3 for )ho0 CThe +a) of +ine !tension? is one of CThe 22 I00utable +a)s
of Mar9eting5? This la) states3 Cif you )ant to be successful today3 you ha2e to
narro) the focus in order to build a position in the prospect?s 0ind5?
/ave a core brand5 @hile $ies and Trout are right to highlight the potential
proble0s of line e!tension3 it is i0portant to differentiate bet)een those
co0panies that can get a)ay )ith it3 and those that can?t5 Brand e!tensions aren?t
bad in the0sel2es5 For instance3 nobody in his or her right 0ind )ould call 'iet
&oke a bad branding decision5 2en Miller?s chief co0petitors ha2e played the
e!tension ga0e5 In so0e respects3 Bud)eiser is as guilty as Miller at broadening
its line Iconsider Bud +ight3 Bud 4ry and Bud Ice3 for e!a0pleJ3 but unli9e
Miller3 it has a core brand3 Bud)eiser itself5 Miller3 on the other hand3 has 0erely
beco0e the su0 of its 0any parts5 By the ti0e the co0pany tried to rectify the
situation3 )ith the launch of Miller $egular in 1((%3 it had left it too late5
Learn from !our mistakes5 Miller )as clearly too focused on the success of each
ne) brand it created to understand the negati2e i0pact these ne) brands )ere
ha2ing on its e!isting beers5
&hange !our brand name5 1lthough Miller )as launching ne) brands3 it 9ept
hold of the CMiller? na0e5 If the co0pany had created co0pletely ne) na0es for
each range3 there )ould ha2e been less consu0er confusion5
2, >ir+in Cola
A $rand too far
Many brands fail )hen they 0o2e into inappropriate categories5 For instance3 Harley
4a2idson perfu0e pro2ed to be an e!tension too far5
<irgin3 ho)e2er3 is one co0pany that see0s to be able to apply its brand na0e to
anything5 1lthough $ichard Branson?s e0pire began as a record label3 signing
groundbrea9ing acts such as the ,e! #istols3 it no) enco0passes 2irtually e2erything L
fro0 airlines to financial ser2ices5
1n article )hich appeared on 2& 1ugust 2*** in the ./ ne)spaper The $bserver
e!plained the )ay in )hich 0e0bers of the public can Cli2e a <irgin life?7
2ery 0orning you can )a9e up to <irgin $adio3 put on <irgin clothes and 0a9e-up3
dri2e to )or9 in a car bought through <irgin using 0oney fro0 your <irgin ban9
account5 Bn your )ay ho0e you can pop into a <irgin 1cti2e gy05 1t )ee9ends you can
use a <irgin 0obile phone or <irgin?s Internet ser2ice to find out )hat is on at the local
<irgin cine0a5 1s you head off on holiday on a <irgin train or plane3 you can play
<irgin 2ideo ga0es stopping only to buy your <irgin 2od9a in duty free5 If you 0eet
so0eone on the beach and one thing leads to another3 the <irgin condo0s are in the
<irgin hotel 0inibar5 @hen lo2e blosso0s3 you get 0arried )ith <irgin Brides and buy
your first house )ith a <irgin 0ortgage and get a Eoint <irgin pension5
In 0ost cases3 these brand e!tensions are successful5 Ho)e2er3 so0eti0es e2en Branson3
dubbed Cthe people?s capitalist?3 can stretch hi0self too far5
In the 0id-1((*s3 the scale of his a0bitions for the <irgin brand beca0e clear5 CI )ant
<irgin to be as )ell-9no)n around the )orld as Coca-Cola3? he )as 6uoted as saying5 ,o
)hat better )ay to achie2e this goal than to enter the cola 0ar9et itself5 He therefore
decided to Eoin forces )ith Cott Corporation3 a Canadian pri2ate-label soda 0a9er3 to
produce cola under the <irgin na0e5 In doing this3 he )as placing his brand )ith )hat he
referred to as the Ccola duopolists?5 :a0ely3 Coca-Cola and #epsi5
I00ediately3 the 0o2e raised eyebro)s a0ong those )ho 9ne) the 0ar9et )ell5 CIt
)ould be easier to 0a9e a sno)0an in ;uly in Florida than to ta9e on Co9e and #epsi3?
obser2ed ;ohn ,icher3 publisher of the ., trade publication3 Beverage 'igest. But
Branson see0ed to relish the challenge3 launching the drin9 to the ., 0ar9et in
spectacular style5 He rode a 2intage ,her0an tan9 through :e) Dor9?s Ti0es ,6uare3
ai0ing fire at a huge Coca-Cola billboard5 He also placed his o)n 4*-foot <irgin Cola
billboard right abo2e the Ti0es ,6uare <irgin Megastore5 CThe signage alone )as )orth
the rent of the entire building3? he Eo9ed at the ti0e5 CThe store is a bonus5?
Ho)e2er3 the ne) cola brand struggled on both sides of the 1tlantic5 1lthough it )as
priced 1"L2* per cent lo)er than the t)o leading brands3 not enough consu0ers )ere
being )on o2er5 #art of the proble0 )as distribution5 Coca Cola and #epsi 0anaged to
bloc9 <irgin fro0 getting crucial shelf space in half the ./?s super0ar9ets5 Mean)hile3
Co9e doubled its ad2ertising and pro0otion budget5 1s $ob Bas9in3 Coca-Cola .,1?s
spo9es0an said7 C@e ta9e all co0petition seriously5?
.lti0ately3 Coca Cola and #epsi?s hold on the 0ar9et has pro2en too strong and <irgin
Cola failed to 0a9e a serious dent in their )orld)ide sales5 2en on <irgin?s ho0e turf3
the ./3 the brand struggled to gain 3 per cent of the 0ar9et and it has ne2er 0ade a
profit5
Lessons from 3irin Cola
"trong brands depend on e3ploiting competitors weaknesses5 C@e often 0o2e
into areas )here the custo0er has traditionally recei2ed a poor deal3 and )here
the co0petition is co0placent3? Branson once said3 e!plaining <irgin?s brand
strategy5 Ho)e2er3 #epsi and Coca Cola are anything but co0placent5
'istribution is ever!thing5 If you can?t get the product on the shel2es3 it )ill ne2er
outsell its co0petitors5
2/ Bic underwear
)trane $ut true
Harley 4a2idson perfu0e5 Coors spring )ater5 Both of these )ere doo0ed to failure
because of the brand na0e?s attach0ent to an unrelated product5 Ho)e2er3 the priAe for
the 0ost biAarre brand e!tension 0ust go to Bic5
The co0pany3 best 9no)n for producing disposable pens3 thought its brand na0e )as
strong enough to be applied to other categories5 Indeed3 it had already achie2ed success
)ith disposable cigarette lighters and safety raAors5 The unifying factor here )as
Cdisposability?5 Bic pens3 lighters and raAors )ere all thro)-a)ay goods5 Further0ore3
Bic could e!ploit its )ell established distribution net)or9 and sell the lighters and raAors
in the sa0e outlets as its pens5
Ho)e2er3 )hen the Bic brand applied its na0e to )o0en?s under)ear3 consisting of a
line of Cdisposable pantyhose? they )ere unable to attract custo0ers5 B9ay3 so the
disposability ele0ent )as still there5 But that )as about it5 Consu0ers )ere unable to see
any lin9 bet)een Bic?s other products and under)ear3 because of course there )as no
lin95
The 0ain proble0 )as that the co0pany insisted on using the Bic na0e5 1s 0ar9eting
)riter 1l $ies has obser2ed3 using the sa0e na0e in unrelated categories can create
difficulties5 CIf you ha2e a po)erful perception for one class of product3 it beco0es
al0ost i0possible to e!tend that perception to a different class3? he argues5 C:a0es ha2e
po)er3 but only in the ca0p in )hich they ha2e credentials and )hen they get out of their
ca0p3 )hen they lose focus3 they also lose their po)er5? 1lthough this doesn?t hold true
for e2ery brand L <irgin is an ob2ious e!ception Iand one $ies rarely discussesJ L it
certainly holds true in this instance5
Further0ore3 Bic under)ear re6uired a co0pletely ne) distribution channel and re6uired
different production technology5 The lighters3 raAors and pens )ere all 0ade fro0
inEection-0oulded plastic3 and could therefore share resources5 #roduction and
distribution proble0s3 co0bined )ith the fact that the product?s function )as totally
unli9e that of the pre2ious products3 0eant that Bic under)ear 0et an early3 and not
0uch-0ourned death5
Lessons from Bic underwear
-3ploit e3isting resources5 The other Bic brand e!tensions 0ade sense because
the co0pany could e!ploit its e!isting sales force3 distribution channels and
production technology5 :one of )hich ca0e in handy for the range of under)ear5
Be fle3ible5 The brand association for Bic in the 0ind of the consu0er si0ply
)asn?t fle!ible enough for a 0o2e into an unrelated product category5
21 ?ero# &ata "ystems
"ore than copiers-
Tero! is one of the branding success stories of the 2*th century5 1s )ith 0any other
si0ilar successes3 the co0pany didn?t Eust create a product3 it in2ented a )hole ne)
category5 Indeed3 such is Tero!?s achie2e0ent that its brand na0e has beco0e a part of
e2eryday speech5 In the .nited ,tates3 !ero! is a 2erb3 used )hen people are copying
paper5
Chester Carlson )as the 0an )ho started it all5 In 1(2'3 he in2ented plain- paper
copying3 a process he referred to as C!erography? Ia ter0 based on the -ree9 )ords for
Cdry? and C)riting?J5 But it )asn?t until 1(4& that C!erography? beca0e a business3 as )ell
as a technological3 2enture5 That )as )hen the :e) Dor9-based Haloid Co0pany 0et
)ith Carlson and ac6uired the licence to de2elop a !erographic 0achine5 Bne year later
the )ords CTero!? and C!erography? had been patented5
1(4( sa) the launch of the first e2er Tero! 0achine3 called si0ply Model15 1 fe) years
later the Haloid co0pany had changed its na0e to Haloid Tero! and in 1("( it
introduced the product )hich )as to put Tero! on the 0ap5 The Tero! (14 )as the first
auto0atic plain-paper copier and3 as such3 attracted considerable 0edia attention5 Indeed3
)ithin 0onths of its launch (ortune 0agaAine )as )riting enthusiastically about this
0achine3 )hich could 0a9e o2er se2en copies a 0inute3 and referred to it as Cthe 0ost
successful product e2er 0ar9eted in 10erica5?
@ord spread about this a0aAing product3 and 2ery soon it )as beco0ing an office
essential5 The co0pany3 rechristened the Tero! Corporation in 1(%13 )as no) listed on
the :e) Dor9 ,toc9 !change5 By 1(%'3 co0pany sales rose to the ., M1 billion 0ar95
In 1(%(3 Tero! beca0e a 0aEority shareholder of the uropean operation3 $an9 Tero!3
and so the Tero! na0e )as no) a truly global brand5
The follo)ing year3 the co0pany strengthened its reputation as a technological inno2ator
by setting up the Tero! #alo 1lto $esearch Center3 abbre2iated as Tero! #1$C5
Ho)e2er3 the research centre )as also a testi0ony to Tero!?s broader a0bitions5 Fro0
1(&*3 the co0pany e!pressed its desire to stretch beyond copying into the field of
co0puter technology and data processing5 In 1(&" this desire beca0e a reality )ith the
launch of a co0puter product3 Tero! 4ata ,yste0s3 )hich had been researched at Tero!
#1$C5 It failed disastrously and Tero! lost ., M'" 0illion5 Four years later though3 the
co0pany )as still deter0ined to e!tend its brand beyond the copier 0ar9et3 this ti0e
)ith an early 2ersion of a fa! 0achine called a Telecopier5 1nother disastrous failure5
The proble0 )asn?t that Tero!?s brand na0e )as too )ea95 Bn the contrary3 the proble0
)as that Tero! )as a 2ery strong brand na0e3 but one associated al0ost e!clusi2ely )ith
copier 0achines5 Tero! )asn?t Eust a co0pany that 0ade photocopiers L it was
photocopiers5 It didn?t 0atter if the 0achine )as 0ade by Canon or /oda93 people still
referred to it as a Tero! 0achine5 Indeed3 this )as an i0pression enforced through
Tero!?s o)n 0ar9eting efforts5 Through 0uch of the 1(&*s and 1('*s Tero! ads used to
pose the 6uestion7 CHo) to tell the real Tero! fro0 a Tero! copyN? The i0plication )as
that if it )asn?t Tero!3 it )asn?t the real thing5 @hile this strategy helped to sell copiers3
it 0eant that it )as tied to that product category5 1fter all3 no one brand can clai0 to be
the only genuine article in 0ore than one category5
For years3 Tero! had co0peted on the superior 6uality of its copier products5 Then3 )hen
the co0pany?s ri2als had caught up3 it co0peted on the superior 6uality of its brand5 1nd
as soon as a co0pany 0a9es the transition fro0 a si0ple product 0anufacturer3 to a
global brand3 it has to li2e )ith the conse6uences5 It can?t Eust create a strong perception
and then under0ine that perception by e0bar9ing on other categories5 1s 1l $ies
0e0orably put it3 Cthe difference bet)een brands is not in the products3 but in the product
na0es5 Br rather the perception of the na0es5?
Ho)e2er3 Tero! didn?t gi2e up5 Instead3 it tried to tac9le the proble0 head on5 For
instance3 in a 0agaAine ad for Tero! Co0puter ,er2ices3 the strap line read7 CThis is not
about copiers5? But of course3 this only confir0ed the i0pression that Tero! was about
copiers5
4uring the 1('*s3 Tero! tried to reposition itself as a pro2ider of all technology-based
office products5 1t the start of the decade3 the co0pany launched a personal co0puter3 or
Ias Tero! preferred to ter0 itJ an Cinfor0ation processor?5 1gain3 there )as nothing
funda0entally )rong )ith the product3 at least for the ti0e5 But again3 the product failed5
,i0ilar failures occurred )hen Tero! tried to launch office net)or9s such as the TT:
net)or9 and the thernet office net)or93 )hich )ere designed to co0pete )ith IBM?s
,atellite Business net)or95 Both the Tero! net)or9s failed to 0a9e an i0pression5
4espite its best efforts to be associated )ith office technology3 the public re0ained
stubbornly un)illing to thin9 of Tero! in any ter0s other than office copier technology5
1lthough the co0pany had in2ested fortunes in creating office infor0ation syste0s3 this
)as an area steadfastly lin9ed to another technology brand L IBM5
,o )hy3 then3 did Tero! persist in trying to reposition its brand during the 1('*sN #art of
the ans)er 0ay lie in the co0pany?s ad0iration for ;apanese 0odels of business5 It had
close lin9s )ith FuEi3 and had a uni6ue insight into the ;apanese 0anage0ent style5 In
;apan3 brand e!tension )as3 and indeed re0ains3 the nor03 especially for technology
co0panies5 For instance3 there are fe) areas of ho0e entertain0ent )here the ,ony
brand doesn?t do0inate5 Da0aha is another e!a0ple of successful brand e!tension5
1lthough the co0pany started producing pianos in the 1(th century3 it has not been tied
do)n to 0usical instru0ents5 1fter %* years of piano-0a9ing3 the ;apanese co0pany
0o2ed into 2arious other product categories )ith 2ery little difficulty5 Thin9 Da0aha and
)hat do you thin9N #ianosN BrgansN Motor- bi9esN It is 0ost li9ely that you thin9 of all
three5
Bther @estern co0panies ha2e also been influenced by the ;apanese approach to
branding5 Ta9e <irgin3 for e!a0ple5 $ichard Branson has been fa0ous for criticiAing
brands such as Mars3 )hich refuse to attach the na0e to other types of products5
@hat I call CMars ,yndro0e? infects e2ery 0ar9eting depart0ent and ad2ertising agency
in the country5 They thin9 that brands only relate to products and that there is a li0ited
a0ount of stretch that is possible5 They see0 to ha2e forgotten that no-one has a proble0
playing a Da0aha piano3 ha2ing ridden a Da0aha 0otorbi9e that day3 or listening to a
Mitsubishi stereo in a Mitsubishi car3 dri2ing past a Mitsubishi ban95
Ho)e2er3 a0ong @estern co0panies Tero! re0ains 0ore typical than <irgin5 .nli9e
Tero!3 <irgin doesn?t ris9 brand dilution5 1s ;ohn Murphy3 chair0an of the international
branding consultancy Interbrand once obser2ed7 C.nless they poison so0eone or start
applying the brand to inappropriate products such as pension funds or photocopiers3 I
doubt )hether the <irgin brand )ill e2er be diluted5?
In 1((% Murphy had to eat his )ords )hen <irgin did start to 0o2e into pension funds5
Ho)e2er3 there is little sign that <irgin is about to co0pete )ith Tero! in the
photocopier 0ar9et5 2en $ichard Branson 0ight ha2e a proble0 re2ersing the intrinsic
association the Tero! na0e has )ith the product it in2ented5
The si0ple fact is that 0ost large brands are associated )ith one product or ser2ice
offering5 @ith Coca-Cola3 it?s cola5 @ith +e2i?s3 it?s blue Eeans5 @ith Mc4onald?s3 it?s
fast food5 1nd )ith Tero!3 it?s copiers5
Tero! )as ne2er going to be a <irgin or a Da0aha3 but it still 9ept trying5 $ecogniAing
this fact3 brand e!pert ;ac9 Trout3 president of Trout and #artners3 ad2ised Tero! to
concentrate on )hat it did best5 Trout realiAed that Tero! could re0ain )ithin the copier
0ar9et and still be at the forefront of technology5 The solutionN +aser technology5 1s
Trout has since )ritten about the e!perience7
There I )as3 facing a roo0 full of technical and 0ar9eting people )ho )ere dutifully
e!ecuting the office auto0ation strategy that had been in force for years5 I )as the
designated outside 0essenger bringing the bad ne)s that all their past efforts )ere in 2ain
and they should focus on the lo)ly laser printer instead of their glorious office 0achines5
This )as not a popular 0essage5
Indeed3 Trout soon realiAed that Tero! belie2ed the future lay in another direction7
To this day3 1" years later3 I ha2e a 2i2id 0e0ory of an interchange that ended this
0eeting5 1fter listening to 0y i0passioned plea about laser printing3 an engineer in the
bac9 of the roo0 stood up and said that laser printing )as Cold hat?5 Tero! had seen the
future and it )as about to be Cion deposition?5 I as9ed )hat that )as5 The reply )as that it
)as a little hard to e!plain to a layperson3 but it )as going to be fast and cheap5 My
response )ent so0ething li9e this3 C@hen that happens3 )e can 0o2e to ionography3 but
for no) let?s Eu0p on the laser and lasography5?
,o )hat happenedN 1ccording to Trout3 Cthe roo0 )ent icy cold3 the sale )as lost3 and
another prediction )as pursued that ne2er happened5?
Indeed3 the strategy )hich follo)ed that disastrous 0eeting cost Tero! billions5 1lthough
the co0pany no) see0s to accept its fate as a Ccopier brand?3 it spent years e!ploring
other3 profitless a2enues5 1s a result3 co0petitors such as Canon and IBM ha2e 0ade
serious inroads into the copier 0ar9et3 )ith their high-speed 0achines5 Ho)e2er3
pro2iding Tero! can 9eep its focus on copiers and direct its technological a0bitions
to)ards this narro)3 but still lucrati2e 0ar9et3 it could still do0inate in the future5
Lessons from 4erox
Its vital to know who !ou are5 Tero!?s 0aEor 0ista9e lay in trying to transfor0
itself into an IBM-style Cinfor0ation business?5 The rest of the )orld 9ept on
2ie)ing Tero! as a co0pany )hich 0ade photocopying 0achines5
7obod! knows the future5 -eorge Br)ell?s no2el =>?@ tells us 0ore about the
period it )as )ritten in than the year 1('45 +i9e)ise3 future business and
technological predictions rarely co0e true5 For instance3 no-one predicted the rise
of ,M, te!t 0essaging on 0obile phones5 Tero! spent too 0uch ti0e and energy
loo9ing into a future )hich didn?t e!ist5
Brands are bigger than products5 CThe 0ost 2aluable asset of the ., M1(5" billion
Tero! Corporation is the Tero! na0e itself3? says 1l $ies5 That na0e3 ho)e2er3
is e!clusi2ely and historically associated )ith copier 0achines5 It doesn?t 0atter
that Tero! #1$C has co0e up )ith so0e of the 0ost significant technological
de2elop0ents in co0puting3 such as the in2ention of the 0ouse5 1ll that 0atters
is the association of the brand na0e in the consu0er?s 0ind5
23 Chi@uita
(s there life $eyond $ananas-
Chi6uita has been associated )ith bananas since 1(443 the year the fruit supplier )as
founded5 Indeed3 this )as the brand?s original intention5 :ot only to get the public to eat
0ore bananas3 but to get the0 to )ant to buy only those )ith the Chi6uita stic9er on
the05
Ho)e2er3 in recent ti0es the banana association has been so0ething of a 0i!ed blessing3
to say the least5 1fter all3 bananas represent only a tiny fraction of the entire fresh
produce 0ar9et Iless than one per centJ5 Further0ore3 Chi6uita has )itnessed ri2al brands
successfully 0a9e the transition fro0 one type of fruit into other areas5 For instance3 after
years of careful 0ar9eting the 4ole brand has 0anaged to shift its core identity a)ay
fro0 the product category Cpineapple? to)ards the 0ore general attribute Cdelicious and
healthy?5 This has 0eant 4ole has achie2ed e6ual success )ith other categories of fruit
and 2egetables5
In recent years3 Chi6uita has also tried to 0o2e a)ay fro0 its core association3 by
0o2ing into related categories5 For instance3 in 1('& the co0pany launched Chi6uita
froAen Euice bars5 The e!peri0ent )as a co0plete disaster3 and according to Business
5eek 0agaAine cost the co0pany o2er ., M3* 0illion5
Ho)e2er3 Chi6uita hasn?t stopped trying5 1 decade later it launched a range of Ce!otic
Euices? )hich fared only 0arginally better5 The co0pany has also in2ested hea2ily in T<
ad ca0paigns across the .nited ,tates to infor0 people that it sells 0ore than Eust
bananas5 Indeed3 the Chi6uita range of fresh produce includes pears3 peaches3 plu0s3
grapefruits3 green 2egetables3 grapes and cantaloupe5 But e2en after the ca0paign 0ost
consu0ers and retailers still fir0ly associated the brand )ith bananas5
This )ouldn?t be so bad3 if the co0pany?s banana sales )ere boo0ing5 But Chi6uita )as
badly hurt to)ards the end of the 1((*s )ith a nu0ber of banana-related proble0s5 8uite
si0ply3 there )ere too 0any of the da0n things5 Banana production in cuador3 the
)orld?s leading banana producing nation3 0ore than doubled fro0 1((* to 1(((5 This
increased supply forced Chi6uita to charge lo)er prices5 1s a result3 the 0argin of profit
di0inished and debts 0ounted5
There )ere also other proble0s o2er )hich Chi6uita had no control5 For instance3
Hurricane Mitch de2astated Chi6uita?s banana plantations in Honduras and -uate0ala in
1(('3 forcing the co0pany to spend 0ore than ., M&" 0illion rebuilding the05
Chi6uita has also accused the uropean .nion of fa2ouritis0 to)ards Caribbean bananas
gro)n in for0er uropean colonies5 The long-running dispute hit Chi6uita hard and
according to ,tephen - @arsha)3 president and chief operating officer of Chi6uita3 the
co0pany had about a 4* per cent share of the uropean 0ar9et before 1((33 but that
d)indled to 2* per cent5 1lthough the . banana trade policies )ere changed in 2**13
@arsha) is sceptical that the co0pany )ill be able to regain the do0inant 0ar9et
position it once held5
The proble0s affecting the banana industry3 co0bined )ith unpaid debts resulting fro0
e!pansion and its 0any atte0pts to broaden its product offering3 0eans the Chi6uita
brand is no) in deep trouble5 @hether the brand?s fortunes )ill be able to cur2e bac9 up3
banana-style3 re0ains to be seen5
Lessons from Chi5uita
<&atch*22 situations should be avoided5 Chi6uita tried to stretch its brand )hen
banana sales )ere slipping5 This led the co0pany into debt3 because it )asn?t
selling enough bananas to co2er costs5 It needed to 0o2e beyond bananas to bring
in 0ore 0oney3 but 0ore 0oney )as needed to 0o2e beyond bananas5 1 classic
Ccatch-22?5
/istorical identities are hard to shake off5 The co0pany has been lin9ed )ith
bananas since the 1(4*s and that association has been difficult to undo5
A brand is never under total control5 The de2elop0ent of a brand is only e2er
predictable to a certain e!tent5 ,o0e factors )ill al)ays be beyond control5
Chi6uita?s e!pensi2e atte0pts at di2ersification left the brand illprepared to cope
)ith una2oidable situations such as Hurricane Mitch3 the e!cessi2e production of
bananas fro0 cuador and the uro?s )ea9ness against the dollar5
To understand the ris9s of brand e!tensions it is )orth ta9ing a brief loo9 at 1* 0ore
e!tension failures5
!4 Country Time Cider
Country Ti0e +e0onade 4rin9 )as launched in 1(&% by /raft foods as a po)der 0i!3
and soon beca0e the top-selling le0onade product sold through ., grocery and
con2enience stores5 It successfully e!tended its line )ith Country Ti0e #in9 +e0onade3
)hich )as introduced in 1(&&5 Ho)e2er3 )hen the decision )as 0ade to e!tend the )ell-
9no)n Country Ti0e brand to apple cider3 the brand e!perienced its first failure5
1lthough the brand 0anagers 0ay ha2e thought the brand )as chiefly associated )ith
Cgood old-fashioned taste? Ia Country Ti0e sloganJ L an attribute )hich could be applied
e6ually )ell to cider L the reality )as that the brand si0ply 0eant Cle0onade? to 0ost
custo0ers5
!1 Ben<-ay (s2irin
Ben--ay is another )ell-9no)n ., brand5 It is an analgesic crea0 used for the relief of
0inor arthritic pain3 0uscle aches and bac9 pain5 1gain3 its first brand e!tension L .ltra
,trength Ben--ay L )as a success3 as it )as essentially the sa0e product3 only
intensified5 @hen trying to thin9 of another logical e!tension3 the co0pany ca0e up )ith
Ben--ay 1spirin5 1fter all3 Ben--ay could use its e!isting distribution net)or9 and the
brand could still be associated )ith pain relief5 @ell3 that is )hat the co0pany thought5
The only trouble )as Ben--ay )as so strongly associated )ith the burning crea0 that it
)as unable to 0a9e the transition5 :obody li9ed the idea of s)allo)ing a Ben--ay
product5 1s a result3 the Ben--ay 1spirin failed
!2 Ca2ital 6adio restaurants
In :o2e0ber 1((%3 +ondon station Capital $adio ac6uired the My /inda To)n the0ed
restaurant co0pany5 $ather than 9eep the My /inda To)n na0e3 the co0pany decided to
set up a Capital $adio the0ed restaurant5 1s )ith #lanet Holly)ood and the Fashion
CafF3 these restaurants )ere ne2er able to generate enough return custo05 1lthough
Capital $adio could boast 0illions of listeners3 2ery fe) could see a logical connection
bet)een the station and food L because3 of course3 there )asn?t one5
!! "mith and Wesson mountain bikes
In the .nited ,tates3 gun 0anufacturer ,0ith and @esson is a )ell-9no)n brand5 @hen
it decided to capitaliAe on this )ide recognition by launching a range of ,0ith and
@esson 0ountain bi9es3 the co0pany clearly failed to grasp the golden rule of brand
e!tensions5 :a0ely3 that the e!tension 0ust lin9 )ith the core brand5 There needs to be
so0e 9ind of correlation bet)een the original product Iin this case gunsJ and the
e!tension5 -uns and bi9es 0ay both be 0ade out of 0etal3 but other than that it is hard to
percei2e a connection5
!$ Cosmo2olitan yo+hurt
Des3 that?s right5 &osmopolitan L the )orld?s biggest selling )o0en?s 0agaAine L
launched its o)n brand of yoghurt5 Ho)e2er3 although this e!tension failed Ithe yoghurts
)ere off the shel2es )ithin 1' 0onthsJ3 Cos0opolitan has had success )ith other
crosso2ers5 For instance3 Cos0opolitan is no) the ./?s second-biggest bed linen brand5
The connection in this instance is ob2ious5 :a0ely3 se!5 There are also plans for
Cos0opolitan cafFs3 )hich 0ay also fit )ithin Cos0opolitan?s Cse! and the city? identity5
CI?0 not surprised Cos0o yoghurts failed3? says ;ane @ent)orth3 a senior consultant )ith
the brand consultancy @olff Blins5 C1ny brand e!tension has to be credible for the
0other brand5 Co0panies use brand e!tensions to reach ne) audiences and to 0a9e the
0ost of their pro0otional spend L but the i0portant thing is not to tarnish the original
brand5?
!) 9yn# barbersho2
+e2er FabergF3 the .nile2er di2ision that o)ns the +yn! brand of 0ale deodorant3
opened its first +yn! hairdressing salon in 2***5 CTi0e and ti0e again3 )hen you as9
young chaps in research about +yn! it is the personality of the brand rather than the fact
that it is a deodorant that co0es out3? said +yn! barbershop proEect leader3 Eustifying the
e!tension5 #ro0oted as Cblo9e hea2en? the salons )ere a post-0odern cross bet)een an
old-fashioned barber shop and a 2ideo ga0es arcade Iarcade ga0es and MT< screens
)ere installed to pre2ent boredo0 setting in )hile custo0ers had their hair cutJ5 The
salons also carried a full range of +yn! products and branded 0erchandise5 1fter 14
0onths3 the salons )ere closed5
CBrand e!tensions are not si0ply a sideline for us L )e set aggressi2e targets for all our
initiati2es3? a .nile2er spo9es0an told the %uardian ne)spaper5 CThe barbershops
generated a lot of publicity3 but failed to 0eet the targets5?
!, Col+ate *itchen ntrees
In )hat 0ust be one of the 0ost biAarre brand e!tensions e2er Colgate decided to use its
na0e on a range of food products called Colgate?s /itchen ntrees5 :eedless to say3 the
range did not ta9e off and ne2er left ., soil5 The idea 0ust ha2e been that consu0ers
)ould eat their Colgate 0eal3 then brush their teeth )ith Colgate toothpaste5 The trouble
)as that for 0ost people the na0e Colgate does not e!actly get their taste buds tingling5
Colgate also 0ade a rather less-than-successful 0o2e into bath soaps5 This not only failed
to dra) custo0er attention3 but also reduced its sales of toothpaste5
!/ 9ife"avers "oda
In2ented in 1(123 +ife,a2ers are one of the fa2ourite brands of s)eet in the .nited
,tates5 Concentrating on different fla2ours of Chard roll candies?3 the fir0 produces nearly
3 0illion rolls e2ery day5 Their popularity is also e2idenced by the fact that 0ore than ''
0illion 0iniature rolls of +ife,a2ers are gi2en out each year to tric9-or-treaters on
Hallo)een5 Ho)e2er3 )hen the co0pany produced a fiAAy drin9 called +ife,a2ers ,oda3
the product failed e2en though it had fared )ell in taste tests5 1ccording to one brand
critic Cthe +ifesa2ers na0e ga2e consu0ers the i0pression they )ould be drin9ing li6uid
candy5?
!1 0ond's tooth2aste
#ond?s3 the popular brand of face crea03 didn?t pro2e to be 6uite so popular )hen it
applied its na0e to toothpaste5 In a blind test en2iron0ent3 people )ere not able to
differentiate #ond?s toothpaste fro0 that of Colgate5 Ho)e2er3 )hen the #ond?s na0e
and i0agery )ere attached to the toothpaste3 no-one )as interested5 1lthough #ond?s had
successfully e!tended its brand before Iinto soap products3 for instanceJ3 these e!tensions
had all been lin9ed by a si0ilar fragrance5 CThe 0ain attribute of a toothpaste is taste3 this
0is0atch bet)een taste and fragrance created a dissonance in the 0inds of consu0ers3?
says 4r M ; Ta2ier3 professor of 0ar9eting at the Indian Institute of Mar9eting5 CTo 0ost
people #onds )as so0ething to do )ith fragrance and freshness and used for e!ternal
application only5?
!3 Frito<9ay 9emonade
Frito-+ay is the leading brand of salty snac9s in the .nited ,tates5 1nd )hat do people
)ant to acco0pany a salty snac9N 1 soft3 thirst-6uenching drin95 ,o )hat could be a
better idea than Frito-+ay +e0onadeN 1lthough it 0ay ha2e been seen li9e a logical
brand e!tension Frito-+ay +e0onade bo0bed5 1fter all3 Frito-+ay )as a brand )hich
0ade people thirsty3 and therefore is the e!act opposite of le0onade5 Fro0 the
consu0er?s perspecti2e the fruity3 s)eet drin9 had little connection to other Frito-lay
products5
In the old days3 brands 9ne) their place5 Harley 4a2idson stuc9 to 0otorcycles3 Coca-
Cola stuc9 to soft drin9s3 and Colgate stuc9 to cleaning our teeth5 :o)3 of course3
e2erything is all 0i!ed up5 If 0odern life )asn?t already confusing enough3 brands are
trying to co0plicate 0atters further by creating 0ultiple identities5 ,o0eti0es this
)or9s5 For instance3 the Caterpillar clothing range has pro2ed a pheno0enal success5
.sually3 ho)e2er3 brands struggle )hen they 0o2e into unrelated categories5 Brand
schiAophrenia not only aggregates and be)ilders consu0ers3 it also de2alues the core
brand5