Why brands fail is a question asked by top management, as well as the overall organization when a brand fails. During the process, no one notices the failure of the brand. It is only after the company has given up that they realize where the brand had failed. To understand why brands fail, let us have a look at the past of branding.
There were times when the products ruled and manufacturing was the king of the trade. However, with increasing industrialization, came the time of selling and companies with good sales people ruled the market. But slowly and surely, the market moved on further and then came the time of Marketing and Branding.
Companies began to differentiate themselves from the competition with their marketing efforts, and due to these marketing efforts, the Brands of the company and its brand equity grew higher and higher. With the growth of Brand equity, expectations grew for the brand. And any brand which made a wrong move, whether it was in product or services, dropped severely. Only the individual product or the service did not drop, it was the brand which dropped.
The success of a company depends a lot on the branding and marketing efforts but it also depends on the product. However, it is several times observed, that even when the product is not up to mark, branding is the department which is blamed.
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Thus, overall there are 5 reasons of why Brands fail.
1) Poor product – One of the predominant reasons why brands fail is when they launch very poor products, which was not expected by their customers. The best example here would be celebrity brands. Celebrities are known to go out of vogue if they give 4-5 flops one after the other. Their brand value drops completely and their brand fails, albeit for a limited time.
2) Brand recall drops – Here actually the marketing department is to be blamed. A company has to put in efforts to ensure that it has high brand recall value and that the brand is repeatedly bombarded to the customer to increase brand recall and to avoid brand failure. The positioning of the brand needs to be up to mark as well. However, when brand recall drops, customers slowly move to another brand. This may cause brand failure as the recall is too low for the brand to continue.
3) Too much expansion with few resources – Some companies aim to expand very fast as compared to the resources they have or their brands potential to carry so many products. If you look at Samsung as a company, their mobile phones, refrigerators and televisions are in demand but their cameras and air conditioners have failed. Thus, expanding too fast or too much will leave with few resources to maintain your brand equity across the segments.
4) False marketing – A brand is a promise. And if that promise breaks, you don’t have a brand. For example, when Harley Davidson introduced perfumes, the brand was severely affected. Because Harley Davidson’s promise to its followers is for the ride that they are going to get on their bikes. However, when Harley came up with a commercial product like perfume, it was received negatively by the HOG group because Harley broke its promise.
5) Irrelevancy – The brand might become irrelevant because of many reasons. One of the most common reasons is technology. For example – Nokia as a brand lost its market share because it did not give the latest technology to its customers. Android was the craze at that point in time and Nokia tied up with Microsoft instead of Android which caused redundancy in the brand as the software did not develop as fast as that of the competition. Thus, Nokia was redundant and Apple and Samsung were the new players in the game.
Last line
Thus overall there are many reasons of why brands fail. However, it comes down to the fact that you cannot blame a product failure on branding efforts. The product needs to have an inherent value for the branding to work.
