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Why Brands Fail

Why Brands Fail

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03/18/2014

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Introduction

Product and Brand failures occur on an ongoing basis to varying degrees within most product-
based 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: -
\u2022
The withdrawal of the product/brand from the market for any reason;
\u2022
The inability of a product/brand to realize the required market share to sustain its
presence in the market;
\u2022
The inability of a product/brand to achieve the anticipated life cycle as defined by the
organization due to any reason; or,
\u2022
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 \u00e2 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: -
\u2022
High level executive push of an idea that does not fit the targeted market.
\u2022
Over-estimated market size.
\u2022
Incorrectly positioned product.
\u2022
Ineffective promotion, including packaging message, which may have used misleading or
confusing marketing message about the product, its features, or its use.
\u2022
Not understanding the target market segment and the branding process that would
provide the most value for that segment.
\u2022
Incorrectly priced too high or too low.
\u2022
Excessive research and/or product development costs.
\u2022
Underestimating or not correctly understanding competitive activity or retaliatory
response.
\u2022
Poor timing of distribution.
\u2022
Misleading market research that did not accurately reflect the actual consumer behavior
for the targeted segment.
\u2022
Conducted marketing research and ignoring those findings.
\u2022
Key channel partners were not involved, informed, or both.
\u2022
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 andatta 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

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