REVITALIZING BRANDS

REVITALIZING THE BRAND

In virtually every product category, there
are examples of once prominent brands
that have fallen on hard times and in
some cases even completely disappeared.
Some of these Brands manage to
turnaround and come back --- Readers
Digest, Kelvinator, Cuticura
Brands sometime have to return to their
roots to recapture its lost source of brand
equity.
Akash C.Mathapati

REVITALIZING THE BRAND

Reversing a fading brands fortunes require
either recapturing the lost sources of brand
equity or bringing in new sources of brand
equity.
Brand on the comeback trail needs revolutionary
changes rather than evolutionary changes.
Brands most likely to respond to revitalization
efforts are those that have clear and relevant
values that have been left dormant for a long
time.
They still have lot of Brand equity left in them.
Akash C.Mathapati

REVITALIZING THE BRAND

Revitalizing - deals with such brands which are old but if
redirected may have plenty of life.
This can be substantially less costly and risky than introducing a
new brand.
Seven Avenues for Brand Revitalization.

1. Increasing Usage
2. Finding new uses
3. Entering new markets
Brand
Revitalization

4. Repositioning
5. Augmenting the Product/services
6. Obsoleting Existing Products
7. Extending the Brand

Akash C.Mathapati

Increasing the Frequency of Use

Reminder Communications
Position for frequent / regular use (clinic
shampoo)
Make the use easier (Araldite)
Provide Incentives (frequent flier plans)
Address any undesirable consequences
attached with frequent use.
Use at Different Occasions / Locations
(Coffee, Cola instead of Coffee/tea; soft
drinks at home)
Akash C.Mathapati

Increasing The Quantity Used

Insurance customer reminded to cover
more items (household).
Positive associations with use (Frito-Lay
You just cant eat one).
Incentives can be used to increase the
quantity used / bought (quantity discounts)
Communication efforts to change attitudes
related to usage quantity.
2.Finding New Uses: Milkmaid. Arm
Hammer Baking Soda (to deodorizer).
Akash C.Mathapati

&

3.Entering New Markets

The target market for a particular brand
may not comprise of all the market
segments.
If firm may not have other Brands for
these target segments, then they
become potential areas for the brand to
expand.
Johnson & Johnson baby shampoo promoted
on gentleness plank, taken to adults as a
shampoo that can be used every day.
Akash C.Mathapati

 Texas
Instruments
looked
for
previously neglected womens market
A proposed caffeine-laden Diet Pepsi,
named Pepsi A.M represented an
entry into the breakfast market
The great-tasting cola that beats coffee
cold!

Small refrigerators
Akash C.Mathapati

 P&Gs Ivory soap was revived by promoting it

as a pure and simple product for adults than
just babies.
Van Heusen gained the edge over Arrow in
the US markets by targeting 50% of its ad
budget to women.
Women buy an estimated 60% to 70% of
mens shirts.
Arrow followed by retracing their strategy to
brand its shirts especially with women. (Selling
bolder colors and busier patterns at higher prices)
Akash C.Mathapati

4. Repositioning
One strategic option for revitalizing a fading brand
is simply to abandon the consumer group that
supported the brand in the past to target a
completely new segment.
Brylcream slicked-back look of 1960s, saw its
sales go limp in the 1970s, when the Beatles
popularized mop-top look
To revive Brylcream Gel was launched, a clear gel
with newer packaging enlisting soccer stars (now
Beckham) to endorse --- younger audience.
Akash C.Mathapati

5.Changing Associations
A Positioning Strategy can become inappropriate as the target market ages, the
association becomes less appealing as
tastes and fashions change.
A positioning strategy can simply wear out
as the target segment becomes saturated
New
associations
and
associated
segments are needed to generate growth.

Akash C.Mathapati

New Associations Add Value by

Differentiation

Sometimes, as it matures a product becomes

a commodity and the price pressure makes
the product unprofitable.
One approach is to attempt to reposition the
commodity.
1960s saw Frank Perdue, tired of being in the
commodity business, completely repositioned
it as a high quality branded product --- It takes a tough man to make a tender
chicken.
Akash C.Mathapati

6.AUGMENTING THE
PRODUCT
As product categories mature
Once strong brand associations which
differentiated your product are now
matched by most of competition.
Customers
seem
more
and
more
concerned about price and most are not
willing to pay premium price for a brand.
The temptation is to become resigned to a
very competitive environment.
Akash C.Mathapati

Augmenting The Product

Theodore Levitt: When the product is close

to becoming a commodity, consider
augmenting it by providing services or
features not expected by the customer as
they go beyond anything being offered.
Two ways Do something better or
do something extra /
different.
With a mature product it is more feasible to
do something extra than better.
Improving or innovations in packaging is a
way to provide this
differentiating extra.
Akash C.Mathapati

 Improving package -- Nestle packaged its

chocolates in tiny tubs, so that children can
use it to make chocolate fudge or sundaes in
a microwave oven.
Clinic shampoos special packaging for
children which provided the right quantity per
squeeze (meant for five rinses).
A new package can solve a customer problem.
Eg: sachets enabled packing of shampoos,
tooth paste, coconut oil to be packed for the
use of traveling lot and also for rural
population.
Akash C.Mathapati

 McKesson Inc., in drug wholesaling or

Baxter in Hospital supplies built computer
based information system for their retail /
customers
Virtually
taking
over
inventory
management, reorder decisions.
McKesson could reduce its sales force
engaged in store level sales by a small
force which serviced the systems(1975)
McKesson grew from $1 billion in 1978 to
$5 billion in 10 years.
Akash C.Mathapati

7.Customer Involvement
Involving customer can be key to the process
of finding ways to augment the product or
service.
Customer involvement not only helps to
identify the most appropriate areas to work on
but also makes the effort visible to the
consumer.
The US textile firm Millikin, using Customer
Action Teams (CATs), started making creative
solutions to both current customers (in better
serving them) and to new customers (in
developing them).
Akash C.Mathapati

 A series of CATs launched every year has

turned Millikins industrial towel business
from a commodity to a value added service
business.
Millikin now virtually runs the business of
their clients industrial laundries.
They provide computerized ordering and
logic systems, market research assistance ,
leads from trade shows, audio visual sales
aids etc.
Akash C.Mathapati

 OBSOLETING EXISTING PRODUCT WITH

NEW-GENERATION TECHNOLOGIES
Sometimes a sleepy industry segment can
be revitalized by a product which obsoletes
the existing installed base and accelerates
the replacement cycle.
Yamaha Disklavier, FM-radio are eg.s.
Introduction of CDs virtually saw a rebirth
for the audio and video entertainment
industry with the sales of audio & video
systems surging.
Akash C.Mathapati

 Market leader who has vested interest in

the old technology, faces competitive threat
and will opt for a delay strategy.
Gillette (1960s) resisted the stainless steel
technology knowing the durability of the
new material will reduce the volumes and
also the cost to change over its
manufacturing.
Small player such as Wilkinson(UK) made
permanent inroads into the market.
Gillettes share fell from 70% to 55% and
ROI from 40% to 30%.
Akash C.Mathapati

ALTERNATIVES TO REVITALIZATION: END

GAME

In a declining industry there are

substantial risks in investing especially
if your brand starts to show weakness.
At this point it may not be possible to
provide equal access to resources for
all the brands in any multi brand
organization.
Options are:
1. Milking the brand
2. Exit the market.
Akash C.Mathapati

ALTERNATIVES TO REVITALIZATION-END GAME

The Milking Option
Avoiding investment in the brand, attempting
instead to generate additional cash flow from it.
Milking strategy will accept a decline in sales
and profits and the risk that the brand will
eventually go under.
A variant to milking strategy is hold or
maintain, where enough investment to
maintain the brand.---No growth.
A fast milking: sharp reductions in operating
expenses, increase in price to maximize short
term cash flow. Akash C.Mathapati

Situational characteristics that lead to milking

strategy rather than exit:
1. Industry decline rate is not exceedingly
steep. Pockets of demand exist.
2. Price structure will be stable allowing
efficient firms to make profits.
3. Brand has enough customer loyalty in
certain pockets, to generate enough sales
/profits. Risk of losing relative position due to
milking is low.
4. Milking strategy can be successfully
managed.
Akash C.Mathapati

Difficulties in Implementing
strategy
Suspicion that milking strategy is
implemented can upset the plan.
Customers may lose faith in the brand.
Competitors may attack more vigorously
Most managers will not be experience or
orientation to handle the situation.
To minimize such effects it is better to
keep the milking route inconspicuous.
Akash C.Mathapati

Divestment or Liquidation
When prospects for the brand are bad and
a milking strategy doe not seem feasible,
the final alternative divestment or
liquidation is considered. Conditions that
suggest an exit than a milking decision are:
1. Decline rate is rapid and accelerating. (no
pockets of enduring demand).
2. Price pressures are anticipated to be
extreme.
(lack
of
Brand
loyalty,
differentiation and competitive pressures
from those who have exit barriers).
Akash C.Mathapati

3. The brand position is weak and there

are more than one competitor who
hold dominant position.
4. Firms mission has changed and the
business is becoming non related.
5. Exit barriers if any can be overcome,
such as specialized machines, long
term contracts with suppliers etc.
Akash C.Mathapati