Why Brands Fail

www.jagooindia.com Introduction Product and Brand failures occur on an ongoing basis to varying degrees within most productbased organizations. This is the negative aspect of the development and marketing process. In most cases, this failure rate syndrome ends up being a numbers game. There must be some ratio of successful products to each one that ends up being a failure. When this does not happen, the organization is likely to fail, or at least experience financial difficulties that prohibit it from meeting profitability objectives. The primary goal is to learn from product and brand failures so that future product development, design, strategy and implementation will be more successful. Studying these Brand and Product failures allows those in the planning and implementation process to learn from the mistakes of other product and brand failures. Each product failure can be investigated from the perspective of what, if anything might have been done differently to produce and market a successful product rather than one that failed. The ability to identify key signs in the product development process can be critical. If the product/brand should make it this far, assessing risk before the product is marketed can save an organization budget, and avoid the intangible costs of exposing their failure to the market. Defining Brand Failures A Brand is a failure when its presence in the market leads to: • • • •

The withdrawal of the product/brand from the market for any reason; The inability of a product/brand to realize the required market share to sustain its presence in the market; The inability of a product/brand to achieve the anticipated life cycle as defined by the organization due to any reason; or, The ultimate failure of a product to achieve profitability.

Failures are not necessarily the result of sub-standard engineering, design or marketing. Based on this critical definition, there are hundreds of bad movies that have reached â cult status and financial success while many a good movies have been box office bombs. Other premier products fail because of competitive actions. Sony Beta format was a clearly superior product to VHS, but their decision to not enable the format to be standardized negatively impacted distribution and availability, which resulted in a product failure. The Benefits of Studying Failures Gaining a better understanding of brand/product failures is important to help prevent future failures. Studying the history of brand/product failures may generate some insight into the reason for those failures and create a list of factors that may increase the opportunity for success, but there are no guarantees. Common Reasons for Product/Brand Failures In addition to a faulty concept or product design, some of the most common reasons for brand/product failures typically fall into one or more of these categories: -

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High level executive push of an idea that does not fit the targeted market. Over-estimated market size. Incorrectly positioned product. Ineffective promotion, including packaging message, which may have used misleading or confusing marketing message about the product, its features, or its use. Not understanding the target market segment and the branding process that would provide the most value for that segment. Incorrectly priced too high or too low. Excessive research and/or product development costs. Underestimating or not correctly understanding competitive activity or retaliatory response. Poor timing of distribution. Misleading market research that did not accurately reflect the actual consumer behavior for the targeted segment. Conducted marketing research and ignoring those findings. Key channel partners were not involved, informed, or both. Lower than anticipated margins. Thus, Brand Failure cannot just be attributed to poor product not being able to sell in the market but the reasons others than that.

Why Brands Fail In our opinion, the factors which contribute maximum to the brand failures are: Category Timing Cultural factors Hence, an in-depth analysis of such factors can result in better understanding of the topic. In an era of brand loyalty and brand experience, it is important marketers analyze the causes of brand failures as they could offer valuable insights. While there may be several reasons why brands fail (both internal to the organisation and external), but focusing on the conceptual aspects of why they could. Its should be clear at the outset that brand failure is the withdrawal of the brand from the market due to its non performance or a brand failing to capture a significant portion of the market relative to the market structure in a given product category. By applying academic reasoning across a variety of situations, taking into consideration the overall market for a product category and competitive offerings at a given point in time, we can get and put across a clearer picture for the reasons for failures. The first aspect that comes across as the reason for failure is: Category Development Normally, in a number of categories, brands evolve over a period of time as the category evolves. Soaps, biscuits, shampoos, pens, washing machines and audio products are just a few

examples. When the category itself does not evolve, there is probably a lack of favorable perception in the minds of consumers. Or perhaps they do not understand the nature of the product and hence do not take it into their consideration set whenever they buy an item from the category. A considerable amount of research and a follow-up of the marketing mix is required to ensure that the category registers among the target segment. The onus of doing this falls on the pioneering brand which kick-starts the category (or one of the earliest brands). While this meant just creating awareness some decades ago, now it could be a complicated exercise in a competitive context. Red Label, Horlicks, Surf, Dettol, Colgate, Cadbury and Scissors may be some of the classic brands which have been responsible for their categories' growth. Incidentally, all these brands also have a track record of successful advertising campaigns over the past several years. While some of the brands mentioned may have been under intense competition in the recent years, it is important to note that they have been a part of the product history in the Indian market place. Brylcream is one brand which probably could have contributed to the growth of the hair cream market. It had attempted to revive itself in the recent times. Clinic, the well-known shampoo brand, also extended itself to hair cream but there are no indicators in the market to reflect that the category is getting diffused in a considerable manner. Brylcream (and later a few brands) was the pioneering brand in that category. Despite using a celebrity during the seventies, the category did not explode even when there was sufficient awareness and interest in personal grooming. Timing of the Brand There are two options for a brand to diffuse itself: either introduce a new concept or develop it over time, waiting for the market to develop, or introduce a new concept when the timing is right. The former approach calls for a greater commitment of money, time and organizational resources. The later approach would be successful if there is adequate and ongoing research on understanding the behavior of consumers. Time-shares in the vacation market may have just evolved in the Indian context and even today it is a niche market. The timing for fruit juices (pure) is right even though it is still a niche market. For almost two decades, there was only one brand of pure apple juice (not widely available) but Cadbury attempted to launch a brand in the mid-eighties. Hima Peas was a brand of green packaged peas introduced during the sixties when lifestyles were very different from the current ones and when consumers were not under pressure to buy frozen vegetables. Hero Honda's initial proposition of economy was well-timed when consumers were willing to purchase two-wheelers for personal transport and when the purchasing power of the target segment had improved. Brands in commodity items such as salt and atta have been introduced when consumers need more time convenience and good quality. There may even be situations in which timing plays a role with regard to changing lifestyles. Contact lens is a category which has been in the country for the last 30 years. The drop-out rate of consumers trying out the product had been high in the past. The branded offerings in the last few years have attempted to market the product through a mix of strategies. Changing lifestyles

coupled with convenience and personal grooming aspects may have changed the perception of contact lens in the mind of consumers. The timing is right for such a product if brands adopt a well-structured strategy beginning with the identification of appropriate segments. Baby Powder is one more product category which has seen a number of brands failing to make progress in a niche market (like Pond's and Glaxo). A related market like baby soaps has seen a few brands in the recent times. Given the awareness of consumer, affordability levels and the attitude of parents towards child care, it may be appropriate to build brands in such categories though the market for such products may be niche ones. Brands like Itch-Guard and Krack (for cracked heels) have timed their launch well in a changing environment. Cultural Dimensions Culture is unique to a market. The clear lime drink in the carbonated or soft drink market (like Campa Lime or Limca in the Eighties) would not make significant progress in the country because they are not a part of the culture. While a number of consumer products may get diffused because of changing lifestyles, food products which are not a part of the culture in a market will meet with strong resistance. Bread has low penetration in several parts of the country. Kellogg's made an attempt to market cereals for breakfast. Tang during the Eighties positioned itself as a breakfast drink. Philips and Braun recently launched electric shavers. Though aimed at a niche because of high prices, it would be difficult to enlarge it within a short time because of the strongly entrenched habit. The same reasoning also holds good for shaving systems for women, where Braun is a market player. Soaps (herbal ones) and shampoos with natural ingredients have built brands on cultural practices associated with the usage of such ingredients. Godrej's Storewell advertisements have the traditional marriage occasions at its backdrop. Brands, which are associated with strongly entrenched cultural practices or beliefs, would have to be careful before using a westernised appeal. Fair & Lovely has its core benefit built from cultural beliefs. Its latest TV commercial also makes use of the belief that a girl child is inferior to a male child and shows how the brand reverses such beliefs. The brand has also recently launched an ayurvedic variant. The concept of `family soap' in the soap category does not seem to have worked to the expected extent. Protex from Colgate and All Care from Godrej are brands, which have this proposition. The family "togetherness" may be stronger in the rural areas given the fact that in urban, nuclear families there are very strong individual preferences for FMCG categories. Lifebuoy has re-launched itself as a family soap (the brand, incidentally, has a huge market in rural areas). Drinking Chocolate is a brand of chocolate drink from Cadbury and it has been in the market for the last several decades. While it could be taken hot or cold, chocolate itself is gaining ground among adults only in the recent times. Besides the tinge of bitterness, the taste may not be in line with the sweet tooth of Indian consumers. (Bournville, the company's bitter chocolate brand, which has also been in the Indian market for a long time, caters to a small niche).

The brand Drinking Chocolate made a good attempt in the Eighties by introducing the offering as `Choco-Cheer', targeting the younger generation. Sustained brand building with both advertising and below-the-line promotional activities would have perhaps built the brand. The advantage of targeting youth for such products is that they may be more open to new tastes when older consumers may have got tastes internalized as a part of their eating habits drawn from culture. Besides, youth may be more amenable to such change of habits. Some Other Reasons may be Top Management Complacency: Brands are doomed when top executives drink the deadly glass of complacency mixed with arrogance. Bookish Funda than Consumers Insight: Brands also fail when they base decisions on marketing theories instead of customer requirements. Brands fail because they fail to maintain the quality, trust and loyalty that must be at the heart of every brand. Conclusion It may be worthwhile for marketing managers and practitioners to give as much importance to brand failures as they give to successful brands. As it not only help the companies introspect and think where it went wrong, but what are the things that need to be avoided in the future so that the company does not encounter such things in the future.