Brand Darwinism: when & why brands Falter & Die.

Much like living organisms, brands have a lifecycle. At times, they take on a life of their own. While some brands stand the test of time, others fade away soon after they come to market. What happens when it’s time for brands to die, and why?

A primary reason for brand fragility is the very nature of the brand world. Consider this: in 2006, over 20,000 new products were introduced just in the food and beverage category, according to research firm Datamonitor. While many new products may be extensions of an existing brand, imagine the number of new brand names embedded in that statistic.

The record for these new products isn’t pretty. Fewer than ten percent of all new products and services produce enough return on a company’s investment to survive past the third year, according to consulting firm Copernicus Marketing.

It is within this marketing maelstrom that a promising brand must somehow survive. Despite these enormous challenges, there are timeless brands that not only survive but thrive for decades. These brands remain relevant to consumers, and they consistently capture enough market share to prosper, even in tough economic times.

But what about the brands that falter? What happens to them? It turns out that some companies intentionally kill off such older or weaker brands as part of their brand strategy.

Ice cream maker Ben & Jerry’s is a case in point. Known for its quirky, humorous brand names (“Cherry Garcia” and “Chunky Monkey,” for example), the company regularly discontinues ice cream flavors in an effort to keep their stable of brands fresh and relevant. Ben & Jerry’s uses an actual “Flavor Graveyard” as both a stop on their Vermont facility tour and as a whimsical Halloween-themed area of the Ben & Jerry’s website. It’s a brilliant consumer involvement technique: the company offers customers the opportunity to submit a “Resurrect Your Favorite Flavor” request. (Now might be a good time to bring back the 1987 flavor “Economic Crunch.”)

Ben & Jerry’s may treat the brand lifecycle with irreverence, but marketing managers at other companies who are forced to kill off a brand are likely not amused. After all, they invest considerable corporate resources in the brand launch. And their budgets—or maybe even their jobs—could become vulnerable when a brand dies.

This was undoubtedly the case when two major airlines, Delta and United, launched new low-cost brands, Song and Ted, respectively, in a fit of competitive hysteria. Despite cool perks and novel marketing ideas, both brands died. Song lasted a few years, only until Delta filed for bankruptcy in late 2005. Ted limped along until 2008. Both airlines had to repurpose or scrap airplanes and reassign or lay off workers.

The same kinds of painful decisions will soon by made by recently bailed-out American automobile manufacturers. The Big Three (General Motors, Ford and Chrysler) currently market over 100 different car and truck models through 15 different brands in the US, according to The New York Times. Toyota, Honda and Nissan, the three Japanese leaders, market only 58 models and seven brands. According to The Times, “G.M. is already trying to sell its Hummer brand. …the company had considered earlier this fall a plan to put the Saab and Saturn brands up for sale” (“Big Three May Need to Trim Number of Brands,” Dec. 2, 2008).

G.M. already cut its famous Oldsmobile brand in 2004, ending production of an automobile that, at the time, was the oldest American car brand in existence. The renowned Pontiac brand is also seen as being vulnerable to harsh economic realities.

The problem for G.M. and other companies that must eliminate popular, long-standing brands is complex. While consumers may intellectually understand that brands don’t last forever, they get emotionally attached to them. Dayton Hudson/Marshall Fields became Target, and in so doing, closed stores with the Marshall Fields name. Those stores were taken over by Macy’s. Here’s what Diane Prange had to say about the death of the Dayton and Marshall Fields brands: “I have emotionally bonded with Dayton’s for almost 30 years… When Dayton Hudson bought the likewise Midwestern Marshall Field’s a few years ago, the brand changed, but it did not die. … Today, however, we lay both Dayton’s and Marshall Field’s to their final rest. They have been replaced by an East Coast name and logo. They have been replaced by a brand we barely know.” (NAMEWIRE blog, Sept. 21, 2005)

Another major reason brands die is the continuous upheaval that occurs in the brand world. It isn’t just sheer product volume, it is also what happens to those products—and those brand names—when business conditions change.

One of the most notorious contributors to brand mortality is business mergers and acquisitions. When companies come together, the need to consolidate and streamline becomes a priority. There often isn’t room for multiple brand names, regardless of their legacy or brand equity. Each time a merger or acquisition occurs, a brand with a history, a significant market presence and a loyal following may disappear. There are some cases, however, in which a company realizes that the value of the brand name trumps corporate ego. When P&G acquired Gillette, it retained that famous name as a separate brand entity.

Do you recall Digital Equipment Corporation, a global company that was second only to IBM in the computer business in the late 1980s? This well-known, well-respected brand name was killed off when the company was acquired by Compaq Corporation in 1998. But the story doesn’t end there. Compaq itself was a renowned brand name—an upstart that successfully challenged IBM in the PC marketplace. In 2002, Compaq was acquired by Hewlett-Packard (HP), another global computer company. The Compaq brand, long held in high regard, was sent to the graveyard by the new owner.

While this scenario is commonplace in the technology world, it is repeated time and again, with many different brand names, in many different industries. In financial services, a notable example is the largest bank in the United States, Bank of America. The mega-bank started on its brand-killing rampage some ten years ago, when it merged with NationsBank. Some of the well-known bank brands that got trampled in Bank of America’s growth include Continental Illinois, Fleet Bank, La Salle Bank, MBNA, Security Pacific and US Trust (although US Trust still exists as part of “Bank of America Private Wealth Management”).

Whether it is declining sales, poor economic conditions or corporate mergers, brands will continue to die off, and some consumers will grieve their loss. But the latest branding wrinkle is the marketing opportunity dead brands represent. In August 2008, for example, Kellogg reintroduced a cookie brand called Hydrox, a competitor to Oreo that was discontinued in 2003 (“Bringing Snack Brands Back From the Dead,” US News, Aug. 25, 2008). Kellogg may have decided it was less expensive to revive an old cookie brand with name recognition than launch one anew.

Apparently, reintroducing dead brands is a legitimate business. “Exploiting the equity of dead or dying brands—sometimes called ghost brands, orphan brands or zombie brands—is a topic many consumer-products firms, large and small, have wrestled with for years,” says consumer marketing journalist Rob Walker (“Can A Dead Brand Live Again?,” The New York Times, May 18, 2008). Dead brands such as Brim (coffee), Underalls (clothing) and Nuprin (pharmaceutical) have been acquired by Chicago firm River West Brands. According to Walker, River West is “starting to bring some familiar names back into the consumer realm.”

In the article, River West founder Paul Earle makes this intriguing comment: “In most cases we’re dealing with a brand that only exists as intellectual property. … We’re taking consumers’ memories and starting entire businesses.”

So don’t be surprised if, when a brand dies, you see it come to life again someday.

Courtesy of http://www.brandchannel.com