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.
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