Strategic Brand Management

Strategic Brand Management

This course contains the basics of Strategic Brand Management

Course introduction
Test Your Caliber
Interview Questions
Pragnya Meter Exam

Strategic Brand Management

Brand turnaround and rejuvenation

Because brands are assets, companies try to make them produce earnings as long as possible. They do not believe in the brand life cycle. This is why even though their sales may have come to a minimum, or even after a number of years of inactivity, it is frequent to witness efforts to relaunch this activity. Investment funds and business angels are fond of sleeping beauties, brands whose name still evokes resonance in our memory.

There are good reasons for that. As assets, these brands are still endowed with brand awareness, attributes, beliefs: it is less costly to start from these premises than to restart from scratch. This is why, for instance, in 2003 Unilever relaunched Sunsilk shampoo for the third time in Europe.

Second, as old brands they capture a value enhancing emotion, nostalgia. Part of the past of many consumers in our ageing societies, they evoke the ebb of life and good times past. Some of these consumers may want to recapture these emotions, as a symbolic way to stop the passage of time (Brown et al, 2003).

It is necessary to differentiate clearly between a number of close and related concepts: an old product relaunch, a reinvention, an old product facelift and a brand revitalisation:

  • An old product relaunch consists in taking a product from the past and selling it as it was. In 2001, Wal-Mart listed a new and unknown brand, Lorina. This brand comes from a small company selling lemonade. For all distributors, lemonade is a commodity: the cheapest is the better. One litre of standard lemonade is sold at around a quarter-euro. Lorina sells it for s4. It has recreated the exact lemonade people used to drink in the 1950s, with a typical glass bottle, a very specific cap and a recipe from that time. Who are the buyers? People of 50 and older.
  • An old product reinvention is the new VW Beetle. No one, except collectors, would be prepared now to drive an old Beetle: it is too insecure and uncomfortable by modern standards. This is why Volkswagen decided to reskin it a little while keeping its unique design, and to completely revise all its functionalities to match a modern consumer’s bottom-line expectations. Whoare the buyers? Old consumers and those younger people who are willing to adhere to the brand community.
  • Brand revitalisation in the narrow sense consists of recreating a consistent flow of sales, putting the brand back to life, on a growth slope again. When the brand is made up of many products, we shall see that this typically entails two actions in parallel: keeping the old typical product globally as it is (to keep its franchise) and reinventing it for new and younger consumers (that is to say asking the question, what would this product be today, if we had to invent it from scratch for the needs of modern consumers?).
  • Brand facelifts (Lehu, 2006) are part of the revitalisation process. They refer to an upgrading of the performance and/or design of the brand to keep up with the competition.

A lot of people are interested in brand revitalisation:

  • Young investors or venture capitalists who buy an ailing brand at low price, often an old brand, with the objective of reselling it in a few years at a profit, after revitalising it.
  • Small businesses that will never have enough money to create their own brand, but are willing to buy the name of a formerly active brand for a reasonable price. For instance, 10 years after having stopped selling the European yogurt brand Chambourcy, Nestlé thought it could sell it. A small company bought it, but the fact that the name was still known did not guarantee the success of the revitalisation, and it soon went out of business. A brand alone without a viable economic equation is of no use. (Nestlé had, of course, put a number of restrictions on the use of the brand, since it did not want to find it competing against itself). In addition, the sales of a brand are the result not only of the attractiveness of that brand to consumers, but also of the muscles of the corporation operating it. Modern mass retailers also tend to value much more the capacity of a company to sustain competition, and to deliver products efficiently to their storage facilities, than its possession of a known but old brand.
  • Large companies are also interested in revitalizing old brands, but only if these brands are not perceived as old, that is to say as brands with no relevance for today, associated exclusively with older consumers. This is how Ford bought Jaguar and had to invest as much again into putting it back to use as a marque for quality cars.
  • Global companies might buy a leading local brand in order to ease and finance the local development of their international stars. The local brand is a door opener with local distribution. However, it is often found that these so-called local leaders present the clear symptoms of ageing (no innovation, too few younger clients, little challenge of the past practices, no systematic upgrading of packages, designs and communication).
The decay of brand equity

Although they may have ceased their commercial activity, brands do not immediately lose their assets. Learnt through time, their brand image is not erased from consumer’s long-term memories. Indeed, after many years a brand can still evoke a number of positive or negative associations. What is lost however is the key brand asset: brand salience, the capacity of the brand to be evoked spontaneously in consumer’s minds as soon as the need to buy the product type appears.

This is why belonging to the consumer ‘evoked set’ (or consideration set) is a key measure of brand equity, signifying both brand presence and its perceived unique relevance for that need.

Table below illustrates how brand equity decays over time. Brand X is a FMCG food brand in a very popular category (with almost 100 per cent penetration). Until recently, this brand was the number two in its market. Then it was bought by market number three, which immediately sold all Brand X’s factories so that the acquisition of the brand paid off immediately. Most important, it discontinued its activity and as a result became the market number two in volume and number one in value.

Eight years after the end of any kind of commercial activity, the brand equity had not disappeared.  Top-of-mind awareness had dropped from 13 per cent to 5 per cent and aided awareness from 86 per cent to 55 per cent. Interestingly, there are still 13 per cent of consumers who declare that they have bought it at least once over the preceding 12 months. This latter figure casts doubts on the validity of such indicators of brand equity in this FMCG category: it seems to be a mere reflection of spontaneous awareness.

How brand equity decays over time

How much would this brand be worth if its owner decided to sell it? Not far from zero. The owner would never take the risk of selling it so that it could be revived in its own market. Out of this market, it is just a name with faded remote credentials: there will be no buyer. Could the owner itself revitalise that brand? Probably in specific segments or niches. As far as the mainstream market is concerned, a return to the shelves would be impossible.

They are now overcrowded, first by private labels, and second by the few remaining producer’s brands, which have become megabrands. Typically, a shift of channel would be possible. For instance, a drink brand might be sold via on-premise distribution (for consumption in canteens and business restaurants), if this were a channel where it could add value without meeting fierce competition. Channel and use changes are a classic form of revitalisation for this very reason.

This example illustrates a fact too often overlooked: the value of a brand does not lie in its assets, but in the ability of a company to make a profitable business with these assets. After eight years of inactivity the whole commercial environment will have changed. Nature abhors a vacuum, and business does too. As soon as the brand disappears from the stores, the shelves are filled with other products from other brands, including the distributor’s own brand.

In order to sell the original again, they would need to be displaced. It costs a lot to induce the modern distribution to reallocate space for a comeback, with very little guarantee of success. A brand is not enough to stage a comeback, one needs an innovation.

It is clear why it is essential to prevent decline, and how a brand loses value after a period of inactivity. But what are the factors of decline?

The factors of decline

When a company ceases to be interested in its brands (thus creating a lack of innovation, advertising or productivity), it can expect the consumer also to lose interest. And if the brand loses dynamism, energy, and shows fewer and fewer signs of vitality, how can one possibly hope that it will arouse passion and proselytism? Apart from these rules, which are so basic that it is astonishing that they can be forgotten, there are some factors that accelerate decline. These will now be studied.

When quality is forgotten

The first and surest road to decline is through the degradation of the quality of the products. The brand ceases to be a sign of quality. Economic factors oblige companies to cut corners with regard to quality, albeit in minor steps, and unfortunately, far too frequently. For instance, when l’Oréal bought out Lanvin, its leading perfume Arpège was a mere shadow of its former self.

The fragrance had originally been made up of natural oils but by then included a fair amount of artificial ingredients. The bottle had even lost its round shape. Consumers around the world were conscious that they were no longer respected since Arpège had been so badly mistreated. L’Oréal’s first step was to give back to this perfume the case, the bottle and the ingredients of the quality that it deserved. This task, which was not spectacular but was expensive, was absolutely necessary. It enabled contact to be re-established with the consumers who had been forsaken, and the rebuilding of acceptable foundations for the brand.

Beware of non-significant differences

The change in the level of quality of a product is rarely abrupt, but results from the insidious logic of statistical tests. Each change is tested against the product’s previous version: if consumers have a lower opinion of the changed product but statistical analysis reveals that the difference is not significant, the company will not hesitate to carry out the change to provide a source of financial savings.

The problem entirely rests with the expression ‘significant difference’. All the decisions are based on the so-called ‘alpha risk threshold’ (generally 5 per cent). As long as the difference observed in the sample, just due to chance, affects less than 5 per cent of the cases, it is declared non-significant. In sciences, the aim of this high-risk threshold is to avoid taking for real a phenomenon which would not exist in reality.

The problem is that in marketing, it is the ‘beta risk’ that should be taken into account, the aim of which is to avoid considering as false a hypothesis that is in reality true. For, through modifying a product even by the smallest amount which each time has been declared ‘non-significant’, a considerable risk is taken. Consumers are not fooled. They avoid the product, then abandon it, even sometimes spreading by word of mouth a very negative opinion. From then on, any modification of the product must be approached with caution if it is rated below the standard product, even if the difference is said to be non-significant.

Missing the new trend

The third factor of decline is the refusal to follow immediately a durable change. Thus Taylor Made, for a long time the world reference for golf clubs, did not believe the gigantic head launched by the Callaway brand under the suggestive name of ‘Big Bertha’ would catch on. By clinging to a different conception that was more demanding for the average player, ie for the majority of the market, Taylor Made suddenly lost its leadership. In the same way, Banga orange juice continued to believe in glass bottles when the market, following the market leader Oasis, turned towards plastic.

In 2001, according to Zandl, a specialized US marketing research company, the jeans was still number one in the youth clothing preference. However, young people now quote 112 different brands as being their ‘preferred brand for jeans’. The market has become fragmented, a challenge for Levi’s, whose image and sales are very much associated with a mono-product, the 501.

Fragmentation led tribes, small groups to prefer new types of jeans, more adapted to new usages, and new brands. A lot of new competitors filled niches. Pepe and Diesel addressed the urban rebel, ‘For us by us’ and underground streetwear. Gap also became a major player. Levi’s had expressed disbelief in streetwear and neglected the rappers and gliders, who are in fact the opinion leaders of the new youth. Tight 501s are totally unadapted to skateboarding and rollerskating.

Skaters wish to wear an XXXXL rolled up their knees, and rappers like multi-pocket trousers. On the other end of the spectrum, girls desired Tommy Hilfiger and Polo jeans, not to speak of Armani and Versace jeans. It was clearly the end of the mass market. Levi’s had not foreseen it, and worse, it had not reacted when the trends were there.

The mono-product syndrome

Still at the level of product policy, the brands associated with a single product are more vulnerable. They risk being carried away by the decline of that product. This again is part of what happened to Levi’s, with its too-long association with the mythical 501. Wonderbra is another clear instance of a brand that fell into the mono-product trap.

Who has never heard about Wonderbra? Very few, either women or men. Although the product is in fact comparatively old (it was invented in Canada in 1953 by Canadelle Corp), its real launch in Europe was quite recent  (1994). Sara Lee had bought the company and gave Playtex the responsibility of launching the Wonderbra in Europe. The fantastic advertising campaign (‘Hello boys’) and accompanying publicity made this innovation famous.

The brand helped women who felt they had small breasts look more sexy and gain self-assurance as a result. It created a new segment. In 1995, 5 million units were sold in Europe, and 86 per cent of its consumers were less than 35 years old. Now where is Wonderbra? Still trying to find pathways for growth, if not prevent decline. Despite an aided awareness level of 70 per cent, its goodwill has come close to bad will in some countries, in the trade channels.

After the peak sales of 1995, sales started to decline. Competitors with known brands entered this segment too.

The problem was that Wonderbra became associated not with a brand but with a product, and its brand name became a generic name: people spoke of ‘the wonderbra’. This highly technical product (it had 42 parts, and needed a specific manufacturing technology) was much adored inside the company. Everyone was very proud of it. Where to go next? If innovation is the key to market penetration, a brand has to become more than a name of a product.

But Wonderbra did not innovate sufficiently, and consumers did not repurchase its products. Today, 61 per cent of Wonderbra consumers possess only one Wonderbra. They wear it for special occasions, and rarely on weekdays. Wonderbra might instead have capitalised on its sexy positioning but offered new products based on different reasons for purchase. The very same benefit could have been expressed using different materials or shapes. Instead it remained too narrow, preventing the consumer from moving freely within the brand.

Another difficulty was the global management of the brand. New models were designed essentially for the UK, its leading European market, because of an excess of centralisation at Playtex (Sara Lee). The management did not recognise that the tastes and wishes of Italian, French and Spanish women were not those of English women. As a result European sales became one-country sales.

Distribution factors

The relationship with a distribution channel can be a factor of decline if the brand does not live up to the new expectations of it. Because companies such as l’Oréal developed particular brands for supermarket distribution, such as Plénitude for cosmetics, Vichy’s status in the field of pharmaceuticals is under threat. Consumers who go to a chemist shop to buy such products expect from them a higher level of quality as befits the laboratory guarantee.

But over time, Vichy had become a generalist brand more focused on life-style than scientific quality. It found itself, in 1995, carrying products which no longer corresponded with the products which consumers wanted to buy in a chemist shop. Vichy’s survival was contingent upon a qualitative upgrade of all its products and its repositioning on the benefit of better health through the skin.

Other brands have collapsed because they have allowed themselves to become trapped in a declining distribution network. The recent rise of large liquor stores in Japan, at the expense of small convenience outlets, has caused the immediate decline of all the brands lacking a sufficient level of public awareness. In small outlets, they did not need it: the store owner pushed the brand, sold it to his clients. In modern distribution the brand has to sell itself, it needs market pull.

Weak communication creates a distance

Finally, communication can accelerate the decline of brands. Beyond the obvious fact that ceasing to advertise means ceasing to exist in the market and ceasing to be a key actor, the sensible management of communication consists of modernising the signs, but keeping the essence.

If the daughter brands are too much in the spotlight, the mother brand can be adversely affected and give the impression that it is in decline. This happened with Dim, a Sara Lee hosiery brand. Although the brand was by far the main advertiser in its hosiery market, and even in the textile market in general, it seemed to be declining, less active. Such an imbalance between the actual share of voice and the feeling of loss of energy felt by the market worried the management of the Sara Lee group.

In fact, the diagnosis was clear: the promotional tactics of the daughter brands had been carried so far that they had fragmented Dim’s image. Indeed, it was appropriate to clarify Dim’s wide range by attributing names to different products which did not propose the same customer benefits, hence the appearance of Sublim, Diam’s and other lines. On the other hand, this measure produced a dispersion of the Dim image, even the disappearance of Dim to the benefit of the daughter brands.

The first symptom of this condition was the packaging. There was no longer any homogeneity between the different packagings, and the mother brand appeared in a minor endorsing role in variable places. Moreover, in the context of the organisational change, further divisions had been introduced (tights, lingerie, men’s items). Unfortunately, there was no longer anybody in charge of coherence between the divisions and of the defence of the Dim mother brand’s capital.

Finally, since the Dim logotype only appeared clearly on bottom-end products and was concealed on advanced products, this increased the perception that its quality had declined. At the same time, the market was moving towards opaque tights, a more durable and more top-end product, which could easily make Dim the symbol, not of today’s woman, but rather of a poor quality.

In order to correct these dangerous impressions, Dim undertook to increase the added value of all its products, including the basic product, to upgrade all its packagings, to return the status of source-brand by replacing the first-name brands under a visible umbrella, and to clearly advertise ‘Dim presents the new Diam’s’ instead of ‘This is the new Diam’s by Dim’. (This example illustrates, in passing, a tendency which is fatal for a brand: its systematic distance from the best new products, thereby confining it to an offer which is static, obsolete or old-fashioned.)

To complete the story, it should also be mentioned that, in parallel with the excessive exposure of the daughter brands, the Dim brand had been extended to leisure and indoor clothing. This created an added danger for the brand, that of dilution. By leaving its field of competence (everything which is worn close to the body) to enter the sector of regular clothes, its added value became less tangible. The existence of clothes with a Dim label without any tangible added value could only raise doubts about the brand’s actual contribution, not only in this new market, but also in its basic markets: tights and lingerie.

So, in the context of Dim’s renewal plan, an end was put to this extension, which was causing the dilution of the brand’s capital. The priority was to return Dim to the field in which it was recognised to have expertise. The history of ready-to-wear clothes contains too many examples of brands which have abandoned their initial concept to experiment with new extensions and so lose their identity. This has been the case with Newman, which can no longer be associated with a typical product, of Marlboro Classics which has moved away from its founding style, and so on.

When the brand becomes generic

The highest degree of dilution of the brand’s added value occurs when the brand becomes generic. The brand is considered a descriptive word, part of everyday vocabulary with no distinctive properties. The classic examples are well-known: Scotch, Kleenex, Xerox, Nylon, Velux. What causes a brand to be reduced to the point of becoming generic? The abandonment of any communication on the brand’s specific nature and purpose can cause its decline. Thus, any dominant brand of a new product risks becoming a generic name. This can be prevented by taking certain precautions, for example:

  • create a word to designate the product of the brand;
  • never mention the brand’s name alone, but together with the product’s generic designation;
  • never use the brand’s name as a verb (in the United States, for instance, to xerox means to make a photocopy) or as a noun, but as an adjective;
  • systematically protest whenever the brand’s name is used as a common noun by third parties and the media; for instance, request that an erratum be published. Through not having reacted strongly enough, Du Pont de Nemours lost the ownership of Nylon and Teflon, which have since become generic terms;
  • nurture the perceived difference between the brand and competitive products, either with tangible attributes or with intangible values. In any event introduce new products.

Preventing the brand from ageing

It is frequently said that a brand is ageing, shows signs of ageing or seems aged. This impression may be felt by customers, noncustomers, suppliers, distributors or employees themselves, who acknowledge a difference between them and their competitors. Ballantines, Martini, Black & White, Club Med, Yves Saint Laurent and Guy Laroche have all been described as ageing.

The concept of ageing has in fact two different meanings:

  • The general meaning suggests a slow but systematic decline over a long period of time. The brand is not destined to end rapidly but seems likely to be inevitably phased out with time. Yesterday strong and active, it appears today much more mundane, as if it no longer had anything to say or to propose to the market and lived exclusively on its loyal clients. One symptom of this is the widening gap between the spontaneous awareness and the assisted awareness. The brand still rings a bell, but it is not one of the brands which has an impact on the market. It does not launch new products as often as the category actors. It does not surprise. It repeats itself. There is only a small difference between repetition and boredom.
  • The second meaning refers to the reflected image of the customer. Everything points to the typical customer being older. And even in the case of a company whose marketing is deliberately targeted at older customers, it is never advisable for the image of a brand to be too closely associated with an older clientele. Although it is aiming at the flourishing older customer market (that is, customers over 50), Damart must make sure not to be associated with the clientele who are 60 or 70. Without going to that extreme, the Yves Saint Laurent label appears to young people to represent a clientele older than that of Dior’s and Chanel.

What is it that produces these impressions of ageing? Most of the time these impressions are well founded: the brand no longer seems to belong to its time and has lost its inner energy.

Many brands allow themselves to be associated with the products of another age. With the acceleration of time, the notion of another era now refers to a close past. In all markets dominated by technology, obsolescence can occur very rapidly. Little can be done for brands linked to a dated technology, or those which seem not to have kept up to date with progress or with the internet.

A brand can be 18 years old and threatened with ageing. The challenge for the eau de toilette Eau Jeune (ie Young Water), launched by l’Oréal for supermarket distribution, is to be still considered Eau Jeune by the next generation of 18- to 25-year-olds, but who are so different. If this brand had remained a single product, it would have disappeared. What symbolised youth in 1987 no longer symbolises it in 1997.

The point of view expressed by the brand on its market can also sometimes seem to be suddenly behind the new dominant values. As long as decisions regarding Playtex in Europe were taken in the United States, the brand never seemed to take into consideration the role of femininity in women’s choices. Even though the products were of high quality, they were purely functional, that is based on the tangible problem of breast support. What was relevant in the United States was totally opposite to the way European women related to their bodies. In its tone and inflexibility, Playtex seemed to be addressing the mothers, not the daughters.

Although it was still the world’s leading brand for shoes and ski bindings, Salomon recently realised that it was in great danger of ageing within a few years. In fact, Salomon, in the same way as Rossignol does, has represented the values of alpine skiing for half a century: effort, order, competition, gaining one hundredth of a second, beating all others by a microsecond.

The new generations no longer subscribe to these values: a counterculture, originating in the surf, is dominant on the slopes, bringing with it new sports and new values. What has been called the ‘glide generation’ has not learnt alpine skiing and probably never will. They instinctively practise snowboarding on the slopes in winter and roller-skating or rollerblading in the streets. They put as paramount values friendship and emotion: they eschew competition and the brands associated with yesteryear. They have elected their own gods: Burton, Airwalk, Quiksilver, Oxbow. All these brands are new and symbolise another vision of sport.

The lack of evolution in a brand’s outward signs indicates its present lack of interest in attracting new customers.

Certain brands also come to a standstill because they remain associated with the same images. The fact that Yves Saint Laurent seems more dated than Dior or Chanel is connected with the omnipresence of the ageing creator himself and association with Catherine Deneuve. Lancôme was sensible enough to bring in younger and international stars. 

As for the clientele, the loss of direct contact with young people is the surest symptom of ageing. This is what differentiates Johnnie Walker from Jack Daniel’s or Martini from Bacardi.

Without necessarily having to appeal to young people between the ages of 20 and 25, the brand should always be attractive to tomorrow’s consumers. The buyers who are today in their forties will modify their functional expectations when they reach their fifties. But they will also like to show that they have not changed by staying with their usual brands. They will refuse to support the ghetto brands which signal their entry into old age.

This is why Damart’s future depends on its image among 45-year-old men and women even if its marketing is rather targeted at the 55-year-old senior consumer. Damart has to work on the evolution of its image, not of its target clientele. To do so, they must improve their image so as not to appear a last-frontier brand. This is why, besides the modernization of their main product, underwear, they have left behind their old methods of distribution: some department stores now have a Damart lingerie department next to Playtex, Rosy or Warner. Damart also advertises products that cross the generation barrier, allowing them to dissociate their image from one based merely on age: thick and coloured tights are just as appropriate for a young girl in a short skirt riding a motorbike as they are for skiers and autumn hikers.

Through these significant actions, they address their future customers and put an end to the stagnation of their clientele, for in 1990 Damart was attracting hardly any new buyers, but was selling more and more to loyal customers.

As has been noted, keeping in touch with young people implies a cultural revolution among management. The efforts to be made may seem huge to an older internal team who often do not appreciate the danger they are facing as their own reference points always seem secure. Finally, with consumers living longer, the effects of the clientele’s ageing may pass unnoticed. The decline is slow and never spectacular. But unfortunately, as with a cancer, without an obvious sign of decline to react rapidly to, it may sometimes be too late.

To make the radical internal changes required to energise an organisation which has aged with its own reference points, there should be no hesitation in rejuvenating the entire management with younger people. The revitalisation of brands always starts with a major work of internal rejuvenation.

Rejuvenating a brand

How should one rejuvenate a brand? How can a declining or a past brand revive? How do you recreate a durable growth for a brand that has for long been declining? Although there exist a wide variety of situations, the goal is the same: to bring a brand back to life. This leads to the core question, what life? Whose life? As a rule, it will rarely be the same as formerly.

There is a big difference between respecting one’s roots and cultivating the past. Revitalisations, revivals are based on an updating of the overall offer of the brand while staying true to part of its identity. Revival means aiming at a new growth market. The brand must find a new relevance and differentiation.

The term ‘revival’ of a brand is not quite accurate since it always implies a change in the product, or in the market, or in the target market. It is a relaunch but not necessarily among the same people as before, or in the same distribution channels, for the same uses, or whatever. With time the consumers, the markets and competition will have changed.

Redefining the brand essence

Even forgotten brands have an internal meaning, a domain of legitimacy to be exploited. The first task in a brand revitalization is to understand which values of this brand still have a high relevance, and which have lost meaning. Burberry rediscovered its DNA: the ability to epitomise the classic eccentric dandy in English fashion. Old brands have disseminated bits of associations in people’s memories, even among non-customers or newer generations.

These weak memories act as a ‘humus’. It is important to analyse this humus. What is left about the brand essence? What are the potentialities emerging from it? What market opportunities could be met? It is useful to analyse this as shown in Figure below.

Analysing the potential of an old brand

As a rule, declining brands have few positive salient evocations, or these evocations are generic and lack differentiation. The real potential usually lies in the latent associations. It will be the role of marketing to choose the right set from among these buried positive associations. Then the brand will have to embody them in new products or services and channels aimed at the new target.

Revitalising through new uses

The revitalisation of a brand usually follows new paths that are very different from those that led to its initial success. If there has been a decline, it is because these paths did not lead to any new demand or pocket of growth.

Revitalisation involves establishing new parameters for the brand. Since its original consumers are no longer able to ensure its success, it has to attract a new clientele, develop new user occasions, new distribution channels and new consumer networks.

Brandy is a classic example. It is typically associated with the ‘after-dinner’ and ‘connoisseurs enjoying a brandy together’ type of occasion, an image and occasion that have been responsible for a massive decline in the volume of brandy sales worldwide. After years of decline in the face of competition from white spirits, which are much easier to drink and much trendier (Bacardi, Absolut, Seagram’s Gin and so on), brandy sales have recently soared in the United States.

But with one major difference – 50 per cent of the volume of brandy currently consumed in the United States is consumed by the black community, which represents 12 per cent of the population. It has become the favourite drink of African-American males, within the context of a lively social situation, where status value is essential. They ask for Martell or Hennessy, as well as Thackeray (gin) and Crystal Roederer (champagne).

To target a new consumer group, a company must be ready to call its traditional marketing into question and define an optimum marketing mix for its new target group. The process begins with new customers, their life-style and new occasions on which the product is consumed or purchased. Innovation is therefore central to the revitalisation of old brands.

Revitalising through distribution change

In fact, it seems that a classic revitalization strategy is to use known brands in different distribution circuits. For instance, a supermarket food brand could be moved to a channel that rests on ‘push’ marketing rather than ‘pull’ marketing. This is why one sees many formerly famous brands in canteens, or office restaurants for instance. It creates value in the eyes of the clients (more than an unknown brand or a private label) and these brands are cheaper than well-known leading brands.

The obverse is also true. One company has specialised in purchasing old medical products, with 100 per cent aided awareness, that are little prescribed these days. Some of them have become generic names. The strategy consists in selling them on the shelves of supermarkets, where their name triggers immediate recognition and trust.

Revitalising through innovations

Barely 10 years ago, Mercedes was under threat. The brand had certainly gained international acclaim, but the signs were nevertheless worrying. In California, where new consumer trends are created, Mercedes was no longer an aspirational brand. It had been replaced by Lexus, the top-of-the-range brand from Toyota. And in Europe the average buyer of the smallest Mercedes of that period, the C-Class, was 51 years old.

Clearly Mercedes was becoming a brand for older people. The company’s CEO made a harsh but accurate diagnosis: either the brand remain as it was and the company would go bankrupt (like Rolls-Royce) or it would have to evolve.

The first step was to re-establish the conditions that would create a favourable economic equation – the company would have to produce 1 million vehicles to lower production costs to an acceptable level. The second was to attract a younger clientele – they could not be left to the competition until they reached 51! To do this, the company had to break with the standard design of all Mercedes cars for the previous 60 years.

This is why the event that revitalized Mercedes was the launch of the A-Class. This little car, which was in direct competition with the Volkswagen Golf, was the brand’s new ‘prototype’ in Europe. It departed from the traditional Mercedes image on two counts – it had front-wheel drive and a completely different design. However, it still had the interior space of the C-Class and the safety of the E-Class. In fact, it currently accounts for 30 per cent of Mercedes sales in Europe. Above all, it has attracted a younger clientele (with an average age of 37), more women and the style conscious.

In the United States, the new Mercedes prototype is the luxury 4 × 4 M-Class, which has re-established contact with the trendy set of California and elsewhere.

To target even younger consumers, the beautiful CLK Roadster was deliberately positioned at an attractive price. Its beauty, sensitivity and design are now part of the new Mercedes brand contract. Of course, any form of extension modifies the original brand, and Mercedes is no longer an exclusively luxury brand. The new Mercedes management is more segmented, more attuned to the needs of its consumers and their life-style. The brand regularly renews its status as the world’s leading car manufacturer via its top of the range models, of which the S-Class is the symbol.

Revitalising through segmentation

To revitalise Burberry, Rose Mary Bravo knew she had to segment the lines and sub-brand them. Burberry London is a modernized offering for the classic clients. Burberry Prorsum is very fashionable and modern. Thomas Burberry is aimed at teenagers. The first segment ensures cashflow and makes it possible to take a risk on cash-demanding fashion stores.

Revitalising by contact with opinion leaders

Why did Hush Puppies become fashionable again in the United States in 1993 (Gladwell, 2000)? Because East Side Manhattan fashionistas found them cute and appropriate for their quest of permanent differentiation.

Ageing brands have generally lost contact with the trendsetters in their category, the tribes that prefigure change. Advertising and product innovation will be of no help without the active support of these trendsetting tribes. It is not easy to make friends again with people one has not called for years, during which time they have been seduced by the competition, including new entrants. In addition the ageing brand is held as an icon of the past, and may attract bad will, not goodwill.

The task of recreating proximity through direct contacts and shared emotional experiences will be difficult, but it is an essential part of any comeback. Salomon, which had lost contact with the surfers who were its future market, had to create an internal cultural revolution, changing its management and hiring young people who were likely to be able to recreate the lost connection.

Apple had lost contact with today’s new trendsetters, who are no longer advertising agencies, but the kids seduced by Napster and whose use of the internet is now mostly to exchange music within their virtual tribe. Ballantines, formerly at Allied Domecq, realised recently that it too had lost all contact with youth. Managers more concerned with their own fate in the midst of mergers and acquisitions in their sector concentrated on the brand’s core clients, not the future clients.

They forgot that sustaining brand equity means addressing current and future business alike. For instance, in 1995 brand equity monitoring showed that in some European countries, brand spontaneous awareness among 18–24-year-olds had dropped from 47 per cent to 13 per cent in seven years.

It is not possible to get out of this dramatic problem just by changing one’s advertising. Sometimes creating a new product is needed, because in between, everything has changed: consumers, their habits, the competition, places of consumption and so on.

Regaining contact is a preliminary. A brand is not a product with a name, it is a relationship. After years of indifference, not to say neglect by Ballantines, the brand had to reconquer the lost relationship. It might still have been number one in some countries, but that was because of a core of frequent buyers, all ageing. Benchmarking the best practice of Pernod- Ricard, the brand decided to invest massively in Europe, and also in South America, to reconquer proximity by contact. Targeting is crucial: what key tribe? The management identified snowboarding as representing the core values of the new generation.

In cooperation with the International Snowboarding Federation, which was fighting against the International Ski Federation, it sponsored all alpine snowboard events, and created a night event in discos. However, to be effective today at regaining contact, sponsoring must go far beyond just stamping the event with the brand name everywhere. The brand must be at the centre, or a key ally of the event.

Step two entailed recognition that urban youth was the target. Ballantines decided to bring snowboarding to cities through the ‘Ballantines Urban High’ Tour. In the middle of capital cities from Berlin to Rio de Janeiro, or on their beaches, Ballantines had a huge ramp built, covered in artificial snow, to host three-day national contests to find the best freelance snowboarders.

The contest was preceded by country-wide selection phases, thereby creating a mounting buzz through word of mouth. The event fuelled involvement. The first event of the series took place in October 1995 in Berlin, symbolically at the Brandenburg Gate (which used to be the only gate in the Berlin Wall where people from the former East Germany could come through to the free West).

Because among young people everything goes together, during the contest there were an open air concert (with the group Prodigy), grunge fashion shows, and night-time promotions in all the city’s discos around snowboarding themes. In addition for the cream of the cream, Ballantines created Ballantines orbit, a huge mobile tent, with restricted invitation to those perceived as style leaders to listen to live techno music. After Berlin the tour went on to Prague, Milan, Moscow, Rio de Janeiro – it still goes on.

The lessons that can be drawn from this case are that proximity today means bumping into the lives of the target group, not just being there. A multidimensional event was created, merging fashion, sport, music, dancing, entertainment and video games, showing a high level of investment, and a very good understanding of the target audience’s desires. A special logo was created, Ballantines Urban High, which could eventually become a label for licensed products (a clothing line, T-shirts, music and so on), certainly a website, and why not a franchised store chain in the future?

The event was well prepared for through the selection phases and brand presence across the country,. The budget commitment was high (about s600,000) for the Berlin event, which was attended by 100,000 young people (so it cost s5 per person for a contact that should create a long-lasting emotional memory and involvement with the brand).

Revitalisating through 360° communications

When Chivas was declining worldwide, its advertising said defensively, ‘When you know’. In a major turnaround, Chivas 18 now promotes the ‘Chivas life’. Its identity is rich and generous, its positioning sells an appetite for life. This new platform is expressed through 360° via global advertising, but also major events, parties with celebrities, partnership with luxury resorts worldwide, not to mention product placement which contributes to making brands ‘cool’.

Changing the business model

Once in a while daring entrepreneurs buy an old and ailing brand and decide to revitalise it. It also happens that big groups do so. What is often presented as a brand revitalisation is actually a change in the business model. By benefits is meant financial benefits, economic value added (EVA) once the cost of capital had been paid. What makes an ailing brand more valuable is the new business model on which it will rely.

For decades l’Aigle, a former subsidiary of Hutchinson, was known for its rubber boots. Its name was also its symbol: it came directly from the American Eagle. It had become a cult brand among fishermen, hunters, nature lovers and country landowners. But Chinese imports and modern distribution created too many problems, the company went broke, and it was bought in an LBO. Now there are Aigle stores opening everywhere in the world.

Has the brand changed? In name terms it has lost a letter, moving from l’Aigle to Aigle, gaining simplicity and internationality. Most important, it moved from a boots brand to a leisurewear brand, whose prototype (most symbolic product) has moved from the rubber boots to a parka, a solid product, as the main value of the brand commands. The vintage rubber boots are still there to nurture the myth, but business grew through the new prototype. There are a lot of benefits in this change of business model:

  • Brands that rely too much on a monoproduct are always in danger, as they cannot smooth out a drop in sales. Boots sell less when climate becomes dryer. Also, since the rubber boots were of excellent quality, they lasted a long time. Brand loyalty was high but the time between purchases was too long.
  • Extending the line to leisurewear made it possible to free the brand from the grip of modern distribution and build its own selective distribution network. The extended line made it more than possible to fill each store.
  • Leisure wear is fashion conscious: people buy new garments each year even if they already own similar ones. It is also a less price-sensitive sector.

This example is a reminder that too often the success of the revitalisation is attributed to ‘the brand’ as a short cut, because there is a lack of information on the company itself, the strategy, the back office. Certainly the brand reputation was an invaluable asset, but that asset was worth nothing as long as it was not supported by a valid business model.

Growing older but not ageing

Louis Vuitton is 150 years old! It is also the most fashionable luxury brand in Asia. One way of understanding revitalisation is to consider brands that have not ‘aged’. How have they done it? Typically, the brands that have defied the passage of time have adopted a dual logic, as illustrated by Nivea and Lacoste. To follow their example and stay young, a brand must implement three types of initiatives towards the product. These can also be used as a model for relaunching a brand.

Facelifting, reinventing and innovating

The management of a brand involves maintaining the present (what the brand is now) while at the same time working for the future. It is the present that constitutes the source of income and therefore allows the development of the growth products of the future. As shown in Figure below, in order to stay young, a brand must implement three types of initiatives at the same time:

Sustaining brand equity long term: dual management in practice

  • It must continually modernise the ‘prototype’ in the same way that Nivea introduced Nivea Soft to modernise its basic in the famous metallic blue jar. Nivea Soft is lighter and less greasy, and is marketed in a white jar. Lacoste regularly improves its famous 12 × 12 polo shirt in terms of the quality of the wool, the colours, the sleeves and so on.
  • It must also reinvent the ‘prototype’, just as Lacoste produced a tight-fitting shirt with Lycra since this is how the woman of 2005 liked to dress. It was an immediate hit. For example, imagine a brand of haircare products whose basic product is a lotion. It would certainly have to modernise it in terms of the packaging, and update the formulation. But it should above all consider how today’s customers would want to apply the product. It is quite possible that rubbing a lotion into the scalp is something that is no longer done, even though the product itself is extremely relevant. In this case, another method of application would certainly be the best form of innovation. You only have to think of Nivea, which invented the first spray-on sun lotion.
  • Finally, it must innovate by actively seeking out the trends and behaviour that currently dominate the younger consumer segments, since these are the segments that will generate customer loyalty in the future. To return to the example of the haircare brand, it simply cannot afford not to create new products – which are of course in line with its brand contract. Young people are mad about hair gels, styling products and hair colour. These markets certainly exist already, but the brand can create new segments within these markets that work in its favour.

Actively seeking out new types of behavior means opening up to the idea of exploring new distribution channels, since new behaviour is often linked to new places and situations.

These innovations also provide an opportunity to launch new and truly groundbreaking publicity campaigns, both in terms of their basic structure and especially their style. In this way, the brand sends out clear signals that it is reinventing itself. At the same time, these campaigns aim to launch the business of these innovations, just as they would for any new product.

Detecting the symptoms of ageing brands

Brands are built by the sum of all their behaviours creating value at contact points with customers. This is why brands should regularly monitor their behaviour. There are many sure symptoms of a brand dropping off, and they can be grouped into seven main types.

Insufficient preparation for the future

  • Insufficient rate of new products in the yearly sales.
  • Low rate of patent registration.
  • Low rate of trademark registration (a sign of little need to name new products and services).
  • Insufficient investment in R&D, in market sensing, in trend spotting.
  • Insufficient knowledge about new uses and new emerging situations of use.
  • Date of the last executive committee meeting to address these issues.

Insufficient dual management

  • Insufficient knowledge about nonconsumers, modern consumers, tomorrow’s consumers.
  • More and more sales to a reduced number of clients.
  • Following the demands of existing clients, not foreseeing the changes in the market.
  • Slow but regular increase of the average age of clients.

Insufficient capacity to capture growth pockets as they emerge

  • Thinking the brand only through its historical product, without being ready to capture emerging new materials and demands.
  • Excessive vision of what is called brand coherence, thus limiting the types of extensions to be made by the brand.

Insufficient relevance

  • Weakening of the present positioning and values.
  • Weakening of the way values are materialised.
  • Date of the last customer satisfaction questionnaire.
  • Date of the last interview with lost customers.
  • Increase in proportion of customers declaring they are ‘moderately satisfied’.
  • Date of the last blind test.
  • Lowering rate of repeat purchase.
  • Decrease in spontaneous awareness (saliency).
  • Decrease in number of spontaneous press quotes.

Insufficient vitality at contact

  • Lack of regular updating of the quality of the logo and visual symbol of the brand.
  • Date of last change or facelift for the packaging (design, ergonomics).
  • Lack of regular facelifts for stores or concessions.
  • Lack of organised merchandising, lack of plans to regularly rethink it.
  • Lack of service (call centres, websites and so on).
  • Lack of brand proximity marketing.
  • Lack of advertising.

Insufficient self-stimulation

  • Lack of curiosity.
  • Lack of desire to surprise.
  • Lack of PR events.
  • Lack of contacts with new opinion leaders, with the press.

Insufficient staffing

  • Lack of young managers.
  • Sex imbalance among executives (100 per cent male or 100 per cent female).

Back to the future

Often a brand’s decline is tied to forgetting the brand’s mission. Little by little small adjustments have been added to the strategy, and cumulatively they have led the brand astray. This is how heavy discounters become less heavy discounters, luxury brands become less luxurious, feminine brands become less feminine and so on.

‘Back to the core’ is a classic revitalising strategy. It does not mean being obsessed with the past, but if the early vision and mission are still valid, trying to come back to it while acknowledging that the product itself may need to be updated.

Many groups act preventively by regularly checking the relevance of their identity and the fact that the operations are actually in line with this strategy. For instance, at Decathlon, as soon as operating margins get higher, the alarm bell rings.

Decathlon’s deep culture focuses on making people happy through sport and physical activities. This is achieved through a remarkable policy of providing own brands with the best performance/price ratio on the market. Higher margins seem to indicate that this ratio is becoming less exceptional than it should be.