While the laws of branding are immutable, brands themselves are not. They are born, they grow up, they mature, and they eventually die.
It’s sad. Companies are willing to spend millions to save an old brand, yet they resist spending pennies to create a new brand. Once you understand the nature of branding, you’ll know when it is time to let your old brand die a natural death.
Opportunities for new brands are constantly being created by the invention of new categories. The rise of the personal computer created opportunities for Compaq, Dell, Intel, Microsoft, and many other brands.
But the rise of the personal computer also put pressure on established minicomputer brands like Digital, Data General, and Wang.
It’s like life itself. A new generation appears on the scene and goes off in exciting new directions. Careers are born and blossom. Meanwhile, the old generation withers and dies.
Don’t fight it. For brands, like people, there is a time to live and a time to die. There is a time to invest in a brand and there is a time to harvest a brand. And, ultimately, there is a time to put the brand to sleep.
“Tide’s in. Dirt’s out.” The rise of detergent brands like Procter & Gamble’s Tide put pressure on laundry soap brands like Rinso, which eventually faded away.
Companies make serious errors of judgment when they fight what should be a natural process. Yet the Nursing Home for Dying Brands does a booming business with millions in advertising and promotional dollars being spent to keep terminally ill brands on life-support systems.
Don’t waste money on walkers and wheelchairs. Spend your money on the next generation. Invest your money in a new brand with a future.
Many managers make poor financial decisions because they fail to distinguish between two aspects of a brand’s value.
A well-known brand that doesn’t stand for anything (or stands for something that is obsolete) has no value. A brand that stands for something has value even if the brand is not particularly well known.
You can do something with a brand that stands for something. When you stand for something, you at least have the opportunity to create a powerful brand. This is especially true in the area of publicity.
What’s a Kraft? Who knows? When a brand is just well known but doesn’t stand for anything, it doesn’t lend itself to publicity and other branding techniques. It has nowhere to go but down.
What’s a Kodak? A conventional camera and conventional photographic film. But that market is slowly shifting to digital photography.
Look what happened to the 8mm motion picture camera and film. For amateurs at least, film cameras are dead. They have been almost totally replaced by electronic systems using videotape. So how did Kodak try to compensate for the loss of the amateur movie film business it used to dominate? Of course. It put its Kodak brand name on videotape cassettes.
Does the Kodak brand dominate the videotape business? Of course not. Kodak stands for photography. The Kodak brand has no power beyond the realm of conventional photography.
But videotape is only a side skirmish to the main battle that is developing between photographic cameras and digital cameras. Long term, Kodak’s billion-dollar photographic business is in jeopardy. Will the market go digital?
History is not on Kodak’s side. The slide rule has been replaced by the pocket calculator. The analog computer has been replaced by the digital computer. The record album has been replaced by the compact disc. Analog cellular phones are being replaced by digital phones.
In music, television, and telephones, the trend has been to digital. The average automobile today has more digital computing power than an IBM mainframe had not too many years ago.
Fight or flee? As you might have expected, Kodak has decided to do both. And, in our opinion, Kodak is making major branding mistakes on both sides of the street.
Take the photography side of the street. Kodak has been the major driver in the creation of the Advanced Photo System. Based on a new 24mm film and new electronic control systems, APS gives you a choice of three print formats, plus a lot of other advantages. Besides Kodak’s massive up-front investment in APS, the scheme requires photo shops to spend hundreds of millions of dollars for new film-processing equipment.
(You know that Kodak spent a lot of money on developing the APS system, because it even gave it a new name, the Kodak Advantix system.)
The question is obvious. Why spend all that money on conventional photography if the market is going digital? Wouldn’t it be better to let the old system die a natural death and use the money to build a new digital brand?
Meanwhile, on the digital side of the street, Kodak is also making a serious error (and this might be its biggest mistake of all). Instead of launching a new brand, Kodak is venturing into the field with the Kodak brand name (Kodak Digital Science).
It will never work. In the first place, there are too many competitors in the market with a digital reputation that Kodak lacks. To name a few: Canon, Minolta, Sharp, Sony, and Casio. Even more important, when a revolutionary new category develops, the inevitable winner is a revolutionary new brand name.
When miniature electronic products became technically feasible, the winning brand was not General Electric, RCA, or Zenith. It was Sony, a brand-new brand.
When videotape rentals of motion pictures became commercially feasible, the winning retail brand was not Sears, 7-Eleven, or any supermarket or drugstore chain. It was Blockbuster Video, a brand-new brand.
When personal computers invaded the office field, the winning brand was not IBM, AT&T, ITT, Hewlett-Packard, Texas Instruments, Digital, Unisys, Motorola, Sony, Hitachi, NEC, Canon, or Sharp. It was Dell, a brand-new brand.
Whatever happened to Rinso White and Rinso Blue? Almost none of the soap brands survived the detergent era. Will the photography brands do any better in the digital era?