Brands need to be treated like organic creatures that grow with constant nurturing. A brand's reputation stays strong only as long as it maintains the promises it makes with customers. These promises are usually the simplest: "I will make life easy for you;" "With me in your life, everything will be more fun" and "I will be there by your side, through good times and bad." How else can we explain the love of consumers for a particular brand of chips, jeans or online book store? Consumer needs change with time and brands today need to work extra hard at understanding and serving those customer needs, to generate value.
See: Advertising, Crocodiles And Moats
Companies sometimes need to reinvent brands by changing their value proposition, to encompass a whole new set of users. Apple Computers changed to Apple Inc., when it moved from being a computer company to a maker of gadgets such as the iPod, iPhone and iPad. In addition, Apple started marketing and distributing applications for its devices through its app store, as well as providing a platform to sell and play music for Apple users. All of Apple's products are now aimed at the ease of use and quality of customer interactions.
The Apple brand itself, during inception, was conceived by Steve Jobs to be "fun, spirited and not intimidating." This had resulted in Apple moving from a company that developed computers appreciated more by designers and intellectuals, to a company that develops multiple devices, desirable because they are portable, highly functional and high on design and beauty.
In 2011, Apple stood third on the FT Global 500 list, from its earlier number five position. Apple's brand value has changed 84% since 2010, and is valued at about $153,285 million, topping Google, IBM and Microsoft. (To learn more, see The Apple Ecosystem.)
One size doesn't fit all. This is especially true of brands entering new markets. McDonald's, the promise of American fast food anywhere in the world, has had to rethink and rebrand its offerings in different countries. While the golden arches and the clown Ronald McDonald are constant, McDonald's has had to change its menu. For example, in India, the menu has no beef dishes: there is the very popular McAloo Tikki, a potato-based patty in burger buns; the Big Mac is replaced by the Maharaja Mac, the Big Mac in chicken; there is also the paneer (cottage cheese) McVeggie burger. The Italian McDonald's also has a special espresso corner.
To celebrate its 20th anniversary in China, McDonald's rebranded under the "Make Room for Happiness" campaign; unlimited coffee refills, Wi-Fi and a more contemporary restaurant design were unveiled. This rebranding was especially for China, where McDonald's positioned itself as a place away from the everyday high expectations of Chinese life. Its "I'm Lovin' It" slogan made way for "Make Room for Happiness," and McDonald's became the place where the young over-worked Chinese population could relax and spend time with friends over coffee. The immediate impact of the rebranding exercise has seen an 18% increase in sales, and an increasing legion of fans that is fueling McDonald's' growth in China. (To learn more, see McDonald's: A History Of Innovation.)
What happens if a brand stays stagnant? It will slip, slide and finally die if it fails to remain relevant.
Sears and Kmart
Lack of care and attention to the unique selling proposition of the brand and not adapting to customer requirements, can see a brand falling by the wayside. Post-holiday season, Kmart and Sears are closing 120 of their stores. In a retail scenario where brands like Target and Wal-Mart are clearly identifying with customers and their needs, Sears chose to be laid back. Poor merchandise choices, unattractive store ambiance and with no clear brand positioning, Sears finds itself in a scenario with lower demand.
Competitors like Macy's, J.C. Penney and Target spent more money per store to engage customers, while Sears fell short, rendering the brand substandard. Retail stores are also facing heat from online stores, which are making shopping easier. If Sears does not buck up, it could see a wash out of its brand. (To learn more about Sears, see The History And Future Of Sears.)
Jack in the Box
In 1993, four children died after eating under-cooked meat at a Jack in the Box restaurant in Seattle, and more fell sick due to the E. Coli virus. The food chain lost millions and it looked like they would never be able to come out of the crisis.
In response, Jack in the Box recruited noted food research expert David Theo to come in and implement a safety check system. He implemented the Hazard Analysis Critical Control Points (HACCP) program, which checks for bacterial presence at several critical points. Food supplies from vendors were checked and dropped if bacteria were detected more than once. Cooking systems and samples were checked thoroughly, and the burger flip tongs were sanitized. These practices led to a strong culture of hygiene in the organization.
After totally changing its internal systems, Jack in the Box introduced the ping-pong faced CEO who made the brand irreverent and fun. The "Jack's Back" campaign shows the ping-pong mascot going about his CEO duties after being blown up. This allowed Jack in the Box to reach out to its target audience of young adults. In this case, rebranding helped the company not only come back into the market, but grow larger.
In recent years, Kodak failed to capitalize on changes in society and technology, not keeping with its leadership role for product innovation. Kodak now seems irrelevant in the life cycle of modern photography, where the majority of photos are taken and uploaded with smartphones, and brands that have adapted to the growing market of semi-professional photography.
Kodak, however, did attempt to reinvent itself as a key player in the digital segment. It pitched itself as a diverse provider of state-of-the-art digital imaging products and services useful to many different industries. Kodak, unlike Canon and Nikon, did not build space in their hardware and technology. In the end, a superficial rebranding exercise without realignment of key connective points with customers, will weaken or wipe out the brand.
The Bottom Line
Brand reinvention is an exercise in introspection, where companies need to look closely if they are delivering on the promises they have made to consumers. They need to assess, reconsider their outlook and reorganize from the core. Even a little window dressing can go a long way. (For more information, see Getting To Know Business Models.)
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