Tuesday, January 20, 2015

Discovering a Brand’s “Fountain of Youth”

"When should a brand be declared dead? Like Smith Corona or possibly Kodak? What are the signs it is time to let go or reinvent?"

I have heard people talk about brand life cycles. I am a firm believer that brands don’t need to have life cycles if they are managed well. They can live on indefinitely. Products have life cycles. Typewriters were made obsolete by computers and film was made obsolete by digital photography, but the brands under which these products are marketed don’t have to become obsolete unless they have come to be associated with the obsolete product category rather than a unique value proposition. What do I mean by this? Disney can transcend product categories because its essence is “fun family entertainment.” If Hallmark defines itself as “caring shared” it can transcend the greeting card category and could easily extend into giftable candy and flowers and even romantic cruises. And even if a company that owns the brand name is devastated by a disruptive technology so that it has to file for bankruptcy, its brand name is still worth something (and maybe even millions or billions of dollars) if it has come to stand for something important to the customer that transcends the obsolete product category or format. Take Kodak as an example. The name is worth far less these days if it is primarily associated with film and film processing. It is worth a little more if it is associated with point-and-shoot cameras, but even these are becoming less relevant with the advent of smart phone cameras with increasingly high resolution lenses. If Kodak stood for SLR cameras, it would be worth more because film-based SRL cameras have a direct analog in the digital world – digital SLR cameras. If it stood for capturing moments and preserving memories, it could transcend many technological disruptions, assuming the company owning the brand name could adapt fast enough operationally to keep up with the disruptions. The bottom line: if a brand name has high awareness, positive associations and promises a unique value proposition that transcends product categories, the name can live on either as a part of the original company or by the new company that purchases the rights to the name. For a brand to live on forever, it must do two things: (1) define itself as a unique and compelling customer proposition rather than a product category and (2) extend into new product and service categories over time to keep up with technological and market changes. And often, it is the ever evolving portfolio of products and services itself that helps define the brand as a broader value proposition rather than a specific product category or format.

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