Brand Mortality: A two part series.
Turns out brands are just like the rest of us, merely mortal. They can’t live forever. This is good news and bad news for companies. Good news because it creates opportunities to launch new brands but bad news because it means having to say goodbye to some old, dependable friends.
What causes a brand’s demise? It is not as if they are really living and breathing like you and me. Yet they are vulnerable to annihilation by two main causes:
1: The extinction of a category.
As a category declines, so does the value of the brands that dominate that category. In the mind of the consumer a brand is only worth what its category is worth. Because it is categories that consumers really care about not brands. Brands are just short-hand for categories in the mind. Therefore once a category dies so do the brands associated with it.
Here are some brands that have died because of the decline and extinction their categories:
Polaroid: The brand that pioneered instant photography was wiped out along with its category by the 1-hour photo-processing places.
Wang: The brand and the word-processor category were wiped out by the personal computers.
Western Union: The telegram? Yes, it used to be a big business but the category was wiped out by the fax and cheap long-distance phone calls.
Kodak: This brand is on life support as conventional photography fades away and digital photography takes over.
The problem most companies have in dealing with the realities of brand mortality is that they are so in love with themselves and their brands that they are reluctant to launch new brands. And new brands are where the real opportunities for growth and prosperity lie in business.
Instead of pulling the plug on their old brands, many companies try and move these geezers into the future. Witness the launch of Western Union telephone service in the 1980s, Kodak digital cameras in the 1990’s.
It never works. Because once you have a powerful brand that stands for something in the mind, it is almost impossible to change it.
Once in a great while a brand will have a second coming. But it is very rare and only occurs when it enters a category with little or no competition. This is the case with Western Union. The brand survives today because it was the first brand to move into the money-transfer business. Using the old name really gave them no advantage, being first is the real reason for their success.
The biggest branding tragedy I see today is the decision to rebrand Cingular to AT&T. Cingular, a joint venture by SBC and BellSouth, was a focused and successful brand in the wireless world. Six years of brand building is now going down the chute.
Why did AT&T do it? Because management still thinks AT&T is a powerful brand and they want to take advantage of the dubious concept of convergence.
According to Boyd Peterson, analyst at the Yankee Group: “Services are converging and the lines between wireless and wireline are increasingly blurred. Customers want simplification. By uniting the three company names into one, AT&T has simplified its message to the marketplace.”
While this logic might sound good in a press release, it has little chance of working in the marketplace. Consumers want brands that stand for something, not one company to deliver everything. Many mergers have been based on convergence thinking, very few of which were successful. For example, AOL’s merger with Time-Warner.
Land-line phones and the long-distance category is dying in favor of nationwide cellular service, a category that has many focused brands like Verizon, Nextel and the former Cingular. It makes no sense to go back to the AT&T name, a brand that is headed for the nursing home.
What they should have done is so obvious, I can’t believe I have to say it. Keep the Cingular name and keep the brand focused on wireless. Keep the AT&T name on long-distance and let the brand and category fade away. It is the harsh reality of life that both have a bleak future.
As a brand name, Cingular has many good things going for it. Because of their uniqueness and legal protectability, coined words have a huge advantage. Sometimes, however, they face a difficult task getting into consumers’ minds because they are difficult to remember and spell.
But Cingular already cleared that hurdle with six years of hard marketing work, thousands of retail stores and hundreds of millions of dollars in advertising. Combine the recognized name with its strong orange color, its simple logo and its leadership position and you are left scratching your head. Why would anyone walk away from that?
Changing Cingular to AT&T is a move backward, not forward. The future belongs to strong brands focused on new categories, not old brands trying to put two existing categories together. AT&T is not going to relive its glory days, using Cingular would have been the better bet.
Next time: the second way to kill a brand.