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When Will a Damaged Brand Come Back?

What determines whether a damaged brand has reached a tipping point from which it cannot recover?

One of the remarkable facts of brand equity is its persistence. A strong brand can withstand almost anything. The Apple and Harley-Davidson brands survived years of shoddy unimaginative products and are now among the strongest brands. The AT&T brand suffered from decades of terrible service, yet is now probably the strongest brand in its space. Incredible.

However, some brands do not recover easily. The GM brand was tarnished by the mismanagement of the 80s and parts of the 90s. According to Bob Lutz in his book Car Guys vs. Bean Counters, its sullied reputation lingered for decades. Even in the last few years the media ascribed an inability to design quality cars that objectively was not justified. The Audi sudden-acceleration problem exposed in a 60 minutes piece in 1986 tarnished its brand. Even though according to the CEO of Ford (in a private conversation), Audi had…

July 28, 2011 • Permalink

Three Classic Books that Influenced Me

Three books all written nearly a half century ago may have influenced my thinking with respect to marketing strategy more than any other books written since. The authors are Peter Drucker, Ted Levitt, and Alfred Sloan.

Peter Drucker’s 1964 book Managing for Results, in my view, is the best single book on management written. A few highlights. First, executives should exploit opportunities rather than solve problems and allocate resources accordingly. Second, a key role of management is to identify and actively manage key result areas. A key result area could be anything that drives success such as the leadership position for a product, superior technical staff, or efficient distribution. Third, business can be categorized into nine types such as today’s breadwinner, tomorrow’s breadwinner, investment in managerial ego, justified specialties, and the has-been. Each type should be managed and resourced differently. Years later, BCG popularized the growth-share matrix which…

June 17, 2011 • Permalink

GM’s Ewanick tackles country silos

One of the vexing global brand management issues is how to deal with country silos. In most cases country managers believe that their country is different, that they know the market and outsiders do not, and that if they are to make their “numbers” they need to have the autonomy to develop their own positioning, promotions, and advertising. Further, it is easy for an astute manager to undercut any central guidance. There are many global or corporate CMOs that see their plans fail to be implemented.

My research reported in the book Spanning Silos suggested that in dealing with this issue, it is usually dysfunctional to have centralization or standardization as an objective for central marketing. Rather, the best route is to replace isolation and competition with communication and cooperation. There are a host of ways to do that, including the use of cross-country teams, events to build relationships and communication channels, encouraging strategy commonalities, and the use…

March 4, 2011 • Permalink

How potential breakthrough offferings get killed off

One key to winning the brand relevance battle by creating new categories or subcategories is to evaluate and select the right concepts to develop. In doing so there is a risk that a concept with high potential is not funded or has its funding cut-off. As a result a firm loses the opportunity to create a new category or subcategory in which the firm could hold an ongoing advantage and a potential source of profits and growth. The problem is hard to correct because the results of such decision often are forever hidden .

What kills concepts with potential to make a difference with an innovative offering? Many are terminated by a gloom and doom bias that takes on several forms.

Pessimism about technological advances. GM killed the EV1, a battery operated car in 1998 just before a breakthrough in battery technology occurred—in what the GM CEO Rick Wagner opined in 2005 was GM’s biggest strategic blunder. Synthetic detergent was under development at P&G for five…

January 19, 2011 • Permalink

The real impact of the Toyota quality issues

Recently there have been dramatic sales increases for Ford and GM and other automotive firms while Toyota experienced a small sales decline. Why?

Certainly the quality issues that Toyota has faced, around the “sudden acceleration” hypothesis and a series of visible recalls is a primary reason. There is little question that the Toyota brand has been tarnished to the point that some view it now as just another brand with respect to quality. There has been significant short-term damage. However, in my view, the Toyota quality image, while it has suffered, will be resilient. Toyota will get its actual and perceived quality back over time. It is too good of a company not to.

In my view the real long-term news is not that Toyota has faltered, but that Ford, GM, Hyundai, and other automobile brands have broken through the glass ceiling. Heretofore, these brands have not been able to get full credit for their quality improvements. The quality of many brands has been equal…

December 8, 2010 • Permalink