Do brands have a life cycle?

Marketing science and history tells us that products have life cycles.  For example, consider the typewriter.

For about 100 years, the typewriter was the pre-eminent letter-writing tool in business and administration but in the 1960s, its dominance began to decline.  First there was the rise of the electronic typewriter, then the word processor arrived and finally, the personal computer arrived.  The PC basically killed the market for typewriters: its went into near terminal decline.

In some circumstances, it is possible to revive products using tactics such as line extensions, changing distribution channels, using price reductions and through market repositioning.

If products have a life-cycle, do brands?

Brands are not products, or logos, or company names.  They have wider recognition and a well-defined ‘personality’. Nike for example started as a pair of trainers but now is a far wider fashion and sports brand.  Nike doesn’t just make clothing and footwear, it makes golf clubs and other sport’s equipment.

L’Oréal began life as a hair dye but is now a major soap and cosmetics brand.

Louis Vuitton began making luggage for the upper classes but is now recognised for ladies handbags.  Vuitton has a clothing range and fragrances.

Many brands keep surfing for new products.  Virgin has major product/service lines such as Virgin Rail, Virgin Music and Virgin Atlantic.  However Virgin Group has over 200 corporate ventures in markets as diverse as healthcare, banking, tourism and cosmetics.

Some brands which are closely associated with a single product may decline, such as Polaroid and instant cameras, but brands with wide product portfolios is diverse markets can survive the loss of individual products.

So how do you protect a brand identity in the long-term?  This often means resisting low-cost competition.  This can be achieved by

  1. By enforcing intellectual property rights – Organisations like Coca Cola and Manchester United ensure they hold a variety of trademarks and other rights and do not tolerate brand imitations.  The shape of the coke bottle is a trademark.  Manchester United ensure they hold the image rights of players.  Intellectual property rights can be used to keep those who copy brands confused.  Many football clubs register trademarks they have no intention of using.  They send private investigators to pass fictitious strip designs to counterfeiters.
  2. You can nurture perceived difference in the minds of consumers.  This is achieved by always being ‘good news’.  ‘Good news’ is being seen as always making progress; always being at the forefront of market innovation through product reformulation and continuous but selective innovation.  Colgate Toothpaste is regularly reformulated for new ingredients.  Gillette razors are continually adapted to give an increasingly smooth and comfortable shave.  To preserve a superior image products should be renewed frequently.  Renewal should integrate mew and emerging customer needs.  Market superiority can be confirmed using line extensions.  For example, Head and Shoulders was originally aimed at people who suffered with dandruff.  Now it is the UK’s favourite shampoo brand.
  3. You can invest in media communication to protect a brand identity.  By ensuring strong share of voice, you can use communication as the brand’s weapon.  Guinness is almost as well recognised for its long history of advertising innovation as it is for its stout.  Media communication can be used to re-communicate the dangers of brand switching.  Faced with a flood of cheap Chinese lighters, Bic produced a leaflet highlighting potential safety dangers with cheaper products and distributed it to retailers.
  4. A dangerous tactic is to reduce price gaps.  This may be achieved using special offers and techniques but a BOGOF (buy one get one free). A permanent price reduction may do serious damage to a brand’s perceived value in the minds of consumers.  Often firms protect the brand by making a ladder which allows consumers to eventually achieve a premium brand.  Golf club brands do this by creating fighter products which allow consumers to experience a brand cache but at lower cost.
  5. A brand can be defended by identifying and suppressing unnecessary costs through the use of tools such as value chain analysis.
  6. You can fight destruction of brand value through education and innovation.  Consumers have an internal reference price for a class of product by reminding them of the additional value attributes of a brand you can recalibrate that reference price in their mind.
  7. Finally, you can protect a brand log-term by creating market entry barriers.  For many years Black and Decker defined the home power tools market by giving competitors little room to manoeuvre.  This was achieved by globalised production and economies of scale.  Coca Cola dominate their market through scale of distribution.  Other firms have vertically integrated into the supply chain or through purchasing raw material providers.  In the printer market Hewlett-Packard use technology as an entry barrier.  Their printer cartridges are brand specific and have software which prevents generic cartridges being used in their machines.  Manufacturers of photocopiers collect the empty cartridges for recycling but  this also prevents them being refilled by other parties.

The majority of brands can exist outside the frame of the product life cycle if properly managed.  A brand identity extends beyond product features and in some cases comes to define a whole market segment.