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Why Brands Fail (And Protecting Yours)

November 03, 2015 7:06 am

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Why Brands Fail (And Protecting Yours)

brandsFailing brands are all over the news these days — from Volkswagen’s diesel disaster to Donald Trump’s serial bankruptcies. Businesses old and new fall on hard times, make mistakes, rise and fall. It’s the story of business. But if you are savvy, you can learn for others’ mistakes.

At the end of the original article, there are a few prescriptions to extend the life of virtually all brand. But first, let’s observe a moment of silence and remember a few cautionary tales from the recent past.

Why Do Brands Fail?

Not all brands are successful. Some brands disappear in an instant — where are US Airways, Blockbuster, and Borders today? Others like Kmart and Oldsmobile, simply grow old and tired. A few businesses collapse from moral decay (Enron and Lehman Brothers). And many, many brands never achieve success because they can’t compete in a crowded marketplace. So let’s see what we can learn from four once-mighty brands that have failed.

In a spectacular fall from grace, a name that had once defined trust and business ideals became synonymous with corruption. Corporations that had once hired Andersen for its sterling reputation couldn’t run away fast enough. In a matter of months, the Andersen brand had all but vanished.

Sweet Success?

In 1985, the Coca-Cola Company made one of the most famous brand blunders in history. Archrival Pepsi was gaining market share. Pepsi had positioned itself as the “young” brand and proclaimed itself the best tasting cola. Meanwhile, Coke’s market share had dwindled to an all-time low. Coke needed to take action. In blind taste tests, a sweeter version of the company’s flagship drink actually outperformed Coke and Pepsi. So in a spasm of logic, the world’s number one brand rolled out a reformulated version of its flagship beverage: New Coke.

What the company didn’t understand, of course, was that Coke was not about taste at all. In fact, the brand is built on people’s emotional attachment to something iconic and eternal. In the minds of loyal customers, “New” Coke was no longer Coke at all. Instead, it had become something inauthentic, not “The Real Thing” of their childhood. New Coke was such a colossal failure that in less than three months it was yanked from shelves and replaced with the reassuring familiar taste of Coke Classic.

(I know, I know. Coke is still around and doing just fine, thank you. But it’s a testament to the strength of its brand that Coke was able to bounce back from such a mistake. The company had fundamentally misunderstood its brand promise: that Coca-Cola is the very image of tradition and Americana. They should have known that in the sepia-tinted drugstore that is their brand, there is no room for New.)

If you like, you can schedule a free laser coaching session to discuss how to prevent you brand from failing.