Why Brands Fail?

Take a look at the marketplace. For every successful brand you see, there are several that you dont any more. Colgate toothpaste has endured but others such as Kolynos, Forhans, Prudent, Aim, Binaca and Signal have passed on. Check out the television market its a veritable graveyard. For a successful brand like Sony, several others, such as EC TV, Dyanora, Keltron, Nelco, Crown TV and Uptron are no more. While Raymonds remains, there is virtuality no words from brands such as Binnys or Thackersey or Tata Textiles. Once upon a time there were Kwality, Joy and Volga ice cream. Now, Kwality has transformed itself into Kwality Walls while Amul and Vadilal have licked the market. Why do brands fail? It is a question that has intrigued marketers for ages and there are several viewpoints. Dr CR Sridhar, chief executive officer of SRS-Icon Brand Navigation India Pvt. Ltd. says some categories of brands fail because fashions change. Polyester used to be most-wanted fabric about 15 years ago and cotton was looked down on, whereas now cotton rules and brands such as Color Plus charge Rs.1400 for a shirt. Consumers dont mind paying a high price for a product when it is in vogue. One of the biggest challenges for a marketer is to get the price-value equation right for the consumer. Says Pranesh Misra, president and chief operating officer, Lowe India. When you dont get this right, the brand does not attract too much of a following. According to Ali Merchant, director at Triton Communications Private Ltd., virtually any product will succeed if the entry strategy is based on good pricing. Pricing is an important entry strategy because it must deliver value and quality to a consumer that the competition does not have and it must communicate this effectively, he says. Brands that fail have an element or a combination of elements missing. He points out that regional brands such as Ghadi detergent powder and Moov pain rub claimed a fair bit of success in the market place, taking market share from their multinational corporation (MNC) competitors and one of the key weapons in their armory was price. The attraction of price is relevant to the kind of consumer that the brand is aimed at. According to Nabankar Gupta, group president and whole time director at Raymond Ltd., people aspire to possess brands based on their socio-economic, demographic and psychographics profile. Some might aspire to own a car, whereas others aspire to own a Rolls Royce or a Mercedes, and yet others, a Maybach. He says. A brand takes on an aura when consumers experience it and the value of the brand comes from this experience. With up market brands price becomes less important to a consumer than in the case of mass-market brands. Roger Pereira, chief executive and managing director of R&P Management Communications Pvt. Ltd., says. Brand consciousness with loyalty comes with prosperity. For most people in India it is still a matter of fulfilling needs. Thats why price becomes a very important factor. Indeed, smaller players in the market have been growing at a healthy pace over the past few years. According to market research agency AC Nielsen the number of detergent brands increased to 115 last year from 74 in 1998, toilet soap brands numbered 236 from 148, the number of shampoo brands increased to 99 from 61, toothpaste brands rose to 115 from 78 and tea brands, 205 from 117. On the other hand large MNCs seem to be losing market share. HLLs share in the shampoo market slipped to 54 per cent from 60.4 per cent between June 2002 and February last year, in terms of volume and from 53.2 per cent to 50 per cent in value terms. Britannias share fell in the period to 45.8 per cent in value from 46.8 per cent and to 38.4 per cent from 40 per cent in terms of volume. Regional brands not only understand their market better but also are more agile and flexible, making it easier for them to respond swiftly to changed market conditions. On the other hand most large companies are bogged down by bureaucratic hurdles and take longer to respond to a changing market scenario. Besides, popular brands such as Britannia and Parle have also lost because small regional companies often produce counterfeit brands and sell them at far lower prices. Consumers

who mistake such brands for the real thing are disillusioned by the quality and form a negative association with the brand. GOOD VALUE A brand must, if it is to survive, offer its customers perceived value. Misra points out that perceived value. Misra points out that perceived value in the mind of a consumer is critical for a brand to succeed. When Hindustan Lever Ltd. (HLL) launched Surf Excel the results were so drastically different from those of existing detergents in the market that is justified the premium pricing in the mind of the consumer. Santoor soap, for instance, which was operating in a highly competitive market, latched on to the benefits of natural ingredients such as turmeric, sandalwood and spices, and claimed the product kept the skin looking young. It could even change a premium for this. Says Misra. Subsequently other brands, including several regional ones, made their appearance on the same platform. But none of them was as powerful as Santoor, which had captured that position. To displace Santoors place at the top another brand would have to offer similar perceived value at the same price as that of Santoor. Similarly, Jet Airways took off with a higher value in the minds of the consumer and matched it with a higher price than that of the competition. The airline could sustain it because the consumer perceives value in the brand. Indeed, Jet Airways took off with a higher value in the minds of the consumer and matched it with a higher price than that of the competition. The airline could sustain it because the consumer perceives value in the brand. Indeed, Jet Airways offers service that matches that of international airlines. The difference in the quality of service was perceptible and it made a dent in competitor Indian Airlines business. Now airlines such as Deccan Airways and Sahara Airlines are trying to claw their way into the market on the price platform, offering no frills services. Jagdeep Kapoor, Chairman and managing director of Samsika Marketing Consultants Pvt. Ltd has worked out a formula comprising nine shastras without which he says a brand will not succeed. The principle is the subject of his latest book, released in July, Nine Brand Shastras. Brand building is like breathing he says. Its simple but also strategic. There are nine parameters of success. They must be used persistently, insistently and consistently or else a brand will not succeed. CHANGE IS CRUCIAL Madhukar Sabnavis, country manager, Discover at Ogivly & Mather, believes brands die out in the face of competition because they have not reinvented themselves to cope with a changing market scenario.The competition comes in and redefines things, he says. Consequently companies such as shoemaker Bata went through a tough phase of reinvention and BPLs electronic offerings have virtually disappeared from the market. It is the way of all brands. They must adapt to cope with change, which could be triggered as much by new technology as by terrorist attack on a land that has hardly seen war on its shores. September 11 changed the way people think and brands had to cope. In the US the luxury brands did their bit to survive. The markets confidence had been shaken by the September 11 attacks on the World Trade Centre and elsewhere, corporate accounting scandals and even sex-abuse scandals in the Catholic /church. In such a scenario up market brands such as Lexus and BMW, for instance, focused on pre-owned vehicles, which especialty was no more than putting on a fresh warranties on used cars after reconditioning them and cutting back their prices by several thousand dollars. French luxury luggage designer Louis Vuitton promoted a line of leather goods and other products that were considerably less expensive than louis Vuittons normal line because they were smaller. Closer home there have been some glaring examples of a lack of innovation that have left brands lackluster. The Ambassador and the Premier Padmini car, for instance, have remained the same shape and size for decades, in a sellers market, except for the occasional cosmetic makeover. Then, when liberalization triggered the onset of competition, other brands swamped the market virtually overnight and raced ahead. Most potential consumers are unlikely to even consider them while making a buying decision. Similarly, HMT watches were overwhelmed in the face of competition mainly from Titan,

which has proceeded to march way past it. Such brands did nothing to innovate and simply let the competition walk over them, losing their pride of place. However, some brands fail virtually soon after their launch. There could be several reasons for this, such as inappropriate pricing or the very nature of the product or because, as Harish Bijoor, chief executive officer of Harish Bijoor Consults Inc., a marketing consultancy plus it, they fail to show consumer connect. Some years ago, Real Value Private Ltd, a company that made small fire extinguishers called Cease Fire, launched vaccumisers for Indian house holds. The product stored food longer and kept it warm but it cost far more than a food carrier that vaccum- flask makers had already had on the market. Essentially if a product has not been able to find a distinct role in the lives of a sizeable number of consumers. It will fail to take off according to Sabnavis. GET RELEVANT Sridhar says faulty positioning could hurt a brands performance as well. Benettons advertising theme, united colors of Benetton did not do well in India because it did not mean much to the customer. Our traditional attire like the Rajasthani choli or rangoli are very colourful, he says. Perhaps the colour positioning did not appeal to our people Perctra of R&P Management Communications says a product and its advertising must be relevant to the market, if it is to succeed. When Coca-Cola re-entered the Indian market in the early 1990s it bought over Thumps Up and overnight had captured about 65 per cent of the market. But its archival, Pepsi, made itself relevant to the market with a campaign it ran during a cricket tournament, with the headline, Nothing official about it. Coca-Cola, on the other hand, kept running its international campaigns here. Years later when Coca-Cola ran its Thanda matlab Coca-Cola campaign with Aamir Khan it became more relevant to the market. Incidentally, Pepsi seems to be playing the opposite with Coca-Cola has been seen as the older persons drink because it is the original and has been in the market longer than most others, Pepsi positioned itself as a younger persons drink. Incidentally the soft drinks have cut across class barriers. Everybody, from peon to president, drinks it and yet the brands have maintained their image. Sometimes government regulations help to kill brands Government rulings that proscribe smoking in public places and a slap blanket ban on advertising of tobacco products are bound to have an effect on the development of cigarette or gutkha brands. Besides, increased duties levied on cigarettes boost prices, which discourage people from using the product of push them to switch brands. Cigarettes are a very price-sensitive market with a high rate of brand attrition, says Sridhar. If the price of a packet of cigarettes is increased by even one rupee people switch brands. He Points out that surrogate advertising is at best a short term measure & brands that have strong iconography will do well. Like the Marlboro man, the Wills line, made for each other, will stand out. And after all that, new & improved technology has often boon know to render brands obsolete. Sunlight, for instance used to be a very popular washing soap in the rural areas. People used to use the bar to wash their clothes as well as to bathe themselves the Indian consumer is inclined towards such multi-purpose products. But with the advent of the technologically advanced detergent powder HLL began to abandon the brand. In the detergent segment players have added little hype & marketing muscle to sell their products, says Sridhar. The consumer has changed. The onset of competition gave the consumer many more options than she ever had before. It made it far more difficult for marketers to determine how a consumer would react to a given situation. Bijoor believes that in a competitive market a lack of adequate market research contributes to the downfall of many a product. The launch of tea bags, & subsequently Tetleys boilable tea bags, for instance, have hardly taken the market by storm & are relegated mainly to a hurriedly consumed cuppa at railway stations. It has not become a way of life despite urban Indias fast paced lifestyle. Sabnavis ventures that the problem with a product like a tea bag is that Indians do not brew their tea- they boil. It. This only underlines Bijoors view on the need for adequate market research.

Market research that is not holistic & market research that is piecemeal destroys the very fabric of a solid brand plan, he says. Many organizations still do repose a substantial amount of faith in the old techniques of quantitative research. Gleanings & diagnostics that come out of such mass implemented market research exercises are, more often than not, faulty Quantitative research is richer. Whats more, holistic research that depends of the observational and experiential techniques at play, are more reliable, contemporary and clutter-breaking. HDFC seems to have done its homework well when it opened its doors in the 1970s, long before the economy was liberalized & the company was finding its way in the housing loans market. At the time HDFC was aiming to rope in those in the middle-income category, who looked down on borrowing money - it was just not socially acceptable & negotiating a loan was seen as a social embarrassment. The company realized this & consequently it designed its offices with cubicles that afforded customers the privacy they sought & enhanced their comfort. This insight into customer sensibility has paid rich dividends. Besides, HDFC has also worked on other means to become more customercentric, such as reducing the processing time for loan applications. Consequently HDFC has earned the customers unflinching loyalty & more important the company is top-ofthe-mind when it comes to housing loans. The group has also built a reputation for being customer centric. Many homebuyers ever look to HDFC as a crutch in the face of unscrupulous builders, many of who are known to have cheated people out of their flats or given them less than they promised after taking their money. HDFC would never have been able to provide its customers with such a valued service experience had it not understood the needs of its customer. Having understood the needs & sensibilities of its target customer the company can tailor its service to provide an appropriate experience. & at the bottom of understanding a consumer lie good market research & its accurate interpretation. National Textile Corporation Ltd.(NTC), comprising nine textile mills, & owned by the government of India, is another entity that gav3e the customer the back seat & paid the price for it. It simply did not keep up with consumers changing needs & let the equity of its age-old brand erode. NTCs brand, Finlays, makes cotton fabric. Finlays has been around since 1907 when an Englishman, James Finlay set out to make the finest fabric from the finest cotton woven by the finest weavers. Even today nobody makes as fine cotton fabric as we do. Says a proud VK Tripathi managing director of NTC, south Maharashtra. Even so, the brand lies in the doldrums with few people able to recall what it stood for. It is also a mindset. Products made by public sector companies are considered, by & large, to be sub-standard, & consumers would rather opt for products made by private firms. Finlays is a typical tale of a good product that has not been nurtured. Mill owners were perceived as very affluent & therefore the government taxed textile mills, especially integrated ones, heavily, in some cases, to the tune of 90 percent. On the other hand, the government fixed the price at which mills could sell their fabric. Consequently many of the mills suffered heavy losses. The government saw that the mills were wilting under the burden of high taxes & low sales prices & feared the mills would shut shop & render thousands of workers jobless & homeless. But before it could nationalize the mills a big strike, led by the then union leader Dr. Datta Samant, broke out, putting thousands of workers out of jobs. Consequently some of the workers set up what is now known as power-loom sector. The mill owners refused to bow down to the demands of the union & many of the mills never opened again. Meanwhile the government continued to run the nine mills that make up NTC. But it did virtually nothing to enhance Finlays the brand. There was no expansion or modernization Consequently there was no advertising, no development of awareness, no new product development & no awareness of the brand among the people. Even those who worked to produce the fabric were demoralized. But now wisdom has dawned. Tripathi says times have changed and people no more want fabric but would rather opt for ready-mades in this fast-paced age of

convenience. Finlays failed because we continued to sell fabric until a year & a half ago whereas the trend was towards readymade garments, says Tripathi. We did not change with the times. But now we have decided to improve our product quality by modernizing our mills & have moved into the ready-mades market. We made the lightest cotton shirt that weighs only 95gm we have designer Kurta-pyjama sets & have begun to move towards marketing trendy clothes. NTC is spending Rs.35 crore to resuscitate the brand. Finlays has tied up with fashion design colleges in Mumbai such as GD Somanis fashion designing department & SNDT, where NTC has instituted fashion design awards that are distributed each year at the colleges fashion show. Finlays is moving towards a young urban generation, offering clothes that are trendy & affordable. In May this year Finlays sponsored fashion shows in Delhi to boost awareness of the brand. Meanwhile Tripathi is setting up his retail infrastructure. It has set up eight exclusive outlets in Mumbai, Delhi, Hyderabad, Ahmedabad & Chennai, which stock Finlays ready-mades & fabric, as well as its other products such as linen, towels, dhotis & turbans. Besides NTC has appointed authorized dealers to stock its products, mainly fabric. It has introduced holograms to assure customers they are buying genuine Finlays products. Although Tripathi claims most people know of the brand because Finlays has been around for almost a century he will need to made a conscious effort to position the brand so that it attains top-of-the-mind recall especially with his target customer. Marketing guru, Jack Trout, writes in his book Big Brands big Trouble that many people believe the basic issue in marketing is convincing people they have a better product or service. if youre late into a market space & have to do battle with large, well-established competitors then your marketing strategy is probably faulty. he writes. He suggests the way out is to differentiate. Finlays will need to convince its target customer that its different from the Van Heusens. Louis Philippes & Arrows of the marketplace, not because it lacks quality in comparison but because its a better deal. The consumer will need to perceive value in the brand, for though Finlays was first in the market it was not the first in the ready-mades segment. It risks being a me-too product unless it is well positioned. Pradeep Narasimha, president of Promotions & Premium Consultants Private Ltd., a marketing consultancy, believes there are far too many me-too products that are offered as brands to consumers because a certain brand, which had the first-mover advantage, is a success. When HLL launched Liril Lime in 1983 it communicated to the consumer, for the first time in India, a concept in the toilet soap category with lime as a fragrance on a platform of freshness. The advertising that showed the girl bathing in a waterfall along with the accompanying music, although very similar to Fas advertising in Germany, became an instant hit in India. For about 10 years hardly any manufacturer came up with a me-too as many wondered what extra benefits they could offer that the market leader with HLLs clout had not already offered. Then Godrej launched Cinthol Lime & the manufacturers of Nirma washing powder launched Neema Lime & other regional companies launched their own versions of a lime fragrance toilet soap. Today there are 28 lime brands available in India. This is the first step towards brand failure, he says. Instead of trying to ride the crest of success of others there is a need to identify a platform thats different & desirable. This must be valuated at the brand development stage itself. All the me-too lime soaps were priced less than Liril but could not satisfy the consumer because she expected the quality of Liril at a lower price. The less expensive soaps are considered cheaper variants & alternatives to Liril. Brands must convey to consumers a perceivable difference, which could come in the form of the shape, price, size, packaging or fragrance of the soap & when me-too products imitate the leader they do not get anywhere. There may be a desire for a lime fragrance soap in the market but certainly marketers could target a different set of consumers than those who use Liril. A toilet soap for the mass market could be sold in small 18gram packets for as little as Rs 2, which would be more attractive to a consumer than buying a seven rupee product. It would serve nicely for two or three baths, offering the consumer an indulgence. Some marketers have already figured it out. Pickles, for instance, are sold in Dharavi (a slum

area in Mumbai) in 50-paise sachets. Velvette shampoo became a runaway hit because it made shampoo affordable the masses, retailing in one-rupee sachets. A brands packaging must speak for the brand. If it does not shout from a shop shelf it will not be noticed. & it is on the shop floor that consumers make spontaneous decisions & might even switch brands or try a new one. Thats where good below-the-line marketing comes in. According to Kapoor of Samsika, a product must be able to generate trials to be successful. He points out that Maggi ketchup did a lot of sampling at various outlets & it is now the market leader in its category. Slowly but surely, Kelloggs is working its way into the Indian household, converting children to cereal from their traditional breakfast, introducing toys to tie up with film releases such as Spider-Man 2. However, Liril itself seems to be following a path that many marketers would shun. Narasimha thinks Liril is on its way out of the market because it has extended itself beyond the scope of the brand. People associate lime with freshness & the two properties with Liril toilet soap. But then came the brand extensions-Liril talcum powder. Liril ley Blue & now there is Liril Orange. The sequence of extensions is reminiscent of HLLs launch of extensions lotion with disastrous results. The products had to be taken off the market. Similarly when Lux was extended to Lux International., it did not take off either. But HLL is not the only company to walk into such a trap. For years Godrej Consumer Products, has been selling Cinthol soap & talcum powder on the deodorant platform. But it suddenly introduced cologne & lime variants, which robs the core brand of its value instead of enhancing it. Indian companies are not the only offenders. US cigarette maker Philip Morris, which manufactures Marlboro cigarettes, also learned the hard way. In an attempt to maintain growth the company added Marlboro Lights to the portfolio & followed it up with Marlboro Mediums, Marlboro Menthol & Marlboro Ultra Lights, Probably with the idea of having a presence in virtually every segment of the cigarette market. But to the companys dismay, the brand began to slow down. The macho image that the cigarette stood for clashed with the freshly introduced menthols & ultra-lights. The more you add the more you risk undermining your basic differentiating idea, which is the essence of your brand, writes Trout in his book, Big Brands Big Trouble. That exactly is the point. It confuses the consumer, says Narasimha. Liril will die over time. Its a recipe for failure. You cannot bring icy blue & orange into it & still call it Liril. Liril is attractive for the consumer because of its lime & freshness platform. Matt Haig, in his book, Brand Failures, illustrates a variety of brand failures, and figures out why they happen. The reasons are many and range from a flawed creative idea to failed pubilc relations, a lapse in judgement, faulty brand extensions and rebranding to poor positioning. One of the examples he mentions is of Coors beer, which failed in Spain because the slogan the company chose to go with meant you will suffr from diarrhoea The big question is why do these things happen repeatedly? I believe brands do not fail, says Bijoor. They are killed by poor brand managers. Brands demand sensitivity of handling right from the point of start of conceptualization to the point of actual market entry and thereafter as brands need to face competition. If the brand manager who launched liril was around, the product would not be allowed to take these various avatars because the brand managers who launch a brand understand it and why it was created. When brand managers are transferred every three years, they are not really concerned about the long term well being of a brand but would rather show results while they are working on it and move on. On the other hand, brands such as Dove have retained their shape and packaging over years and there have never been line extensions such as Dove icy moisturizer or what have you, even though a quarter of the product comprises moisturizing cream. Dove is not even referred to as toilet soap; its called a beauty bar. But other marketing sources believe brand extensions just might help Liril to get over the bad times it has been up

against. Liril has been struggling, says a veteran in the field, Maybe Levers is now trying to give it a fresh lease of life. Maybe it got out of it is to attempt new things. Although with hindsight it is possible to state likely reasons why things went wrong for a brand, for a brand manager, in the thick of strategizing, it cannot be easy. It is as mortal a sin for a brand to be out in the market before its time as it is when the market has no use for it. Parle Beverages launched a cola based soft drink, Do it, in the late 1970s when people were not conscious about their weight or fitness as they are today. It was a time when Thumps-Up was gaining ground, soon after the government gave Coca-Cola the marching orders. Do it did not stand a chance not because it was a bad product but because its time had not yet arrived. Even right now its a small market and even though people might be conscious about staying fit they do not connect it with a soft drink. But abroad the soft drinks diet variants have been well received because people tend to drink it like water. WE ARE DIFFERENT Obviously not everything that does well abroad succeeds here. Many multinational companies recognized this when they entered the Indian market and found that Indian preferences and habits varied from region to region. When McDonalds opened its doors in India it abandoned the jewel in its crown, the traditional Big Mac, and introduced several Indian preferences such such as McAloo Tikka Burgers. Now it has even slashed prices, offering sandwiches for as little as Rs.20/-each.Similarly pizza hut has a sew of items on its menu that caters to Indian preferences. These include chicken tikka, spicy korma, spicy paneer and a tandoori range of pizzas. The companies close to innovate in order to stay ahead, having taken a lesson from various brands that forgot the consumer. MTV, for instance began to push western rap, rock and pop music before it realized Citibank, launched in India by targeting high networth Indians but soon they realisedd they would be better off widening its customer base. At the end of the day, a brand serves only one objective to generate sales by attracting new customers and retaining the old ones, says Arvind Singhal president, KSA Technopak, a Delhi based retail consultancy. He says it must contribute to profitability by enabling the brand owner to charge a premium over other brands in the category. If the brand achieves this consistently over a period of time it would be successful or else it would be a failure. Sure, everybody loves a winner but what about failures? There is a lesson to be learned here. According to Christoph Prox, managing director of Germany based Icon Brand Navigation Group, brands fail because of a lack of sufficient investment, lack of management attention , lack of innovation, quality problems, poor advertising. That leaves an army of marketers, with their own perceptions of what works and what does not in the marketplace, competing with one another to make their brands work. And indeed, they do, sometimes.