R.I.P.

Thursday, August 3, 2006

Brands that have refused to be dynamic & customer-oriented, have simply been digging their own graves

“We read the world wrong and say that it deceives us,” said Rabindranath Tagore. It’s a saying worth looking into more carefully by our corporate houses and their CEOs. It would help them understand & “read” consumers more accurately, and offer them the right products & services.

According to some estimates, 80% of all new products fail upon introduction, and a further 10% die within five years. Booze Allen & Hamilton, too, published a finding which found the simple truth – most new products fail! Yet, corporations repeatedly spend their precious resources on products, just to fail time and again in the market. Come to think of it, more that 22,000 products are introduced each year – most fail. Why?

Adapt or Die

Since the beginning of time, the survival rule on this planet has been simple – only those who have been ready to adapt to the changing circumstances have survived, the rest have perished. 99.9 % of all species that have existed on the planet have become extinct. The marketplace, too, seems to follow this killing jungle law.

This product used to rule the Indian roads. Launched in 1972, the brand was the quintessential part of every bride’s dowry list. It used to have a waiting period of more than 10 years. This superstar of a brand was none other than “Hamara Bajaj”. However, this vehicle of the masses, the inimitable Bajaj Chetak scooter, officially closed production in December 2005. Bajaj did not change with the changing needs of the consumers. Chetak – named after the most dependable and reliable stallion of Maharana Pratap – could not keep galloping forever. For almost 40 years, the company did nothing to change or modify the design of Chetak. This winner succumbed to the growing & changing demands of the consumer. How ironical, that a product that had a tag-line of ‘You can’t beat a Bajaj’, itself got beaten in the marketplace, just because it didn’t change.

When it came to the ‘pain rub market’, only one name loomed large – Iodex. It ruled the market for almost eight decades. However, somewhere down the line, it forgot that the consumer is the king and stopped listening to him. It did not realise that there was someone waiting to fill the gap. Surreptitiously, Moov moved in and dethroned the king. A brand owned by a giant like Glaxo, commanding not just more than 50% of the market share, but also a huge goodwill, is dwindling today! Ooh, Aah, Ouch!

The name Federal Express did not match with the express delivery service that the brand stood for. People perceived it to be a slow government organisation. They immediately changed the name to a smart & snappy FedEx. Suddenly, the Fed was a happening company!

As home baking took a back seat, thanks to the packaged food culture taking over the market, Arm & Hammer changed too. They started promoting their baking soda as a deodorizing agent for refrigerators & drains. Sales, once again, shot through the roof.

There is no place for complacency in today’s market. When the theme restaurant, Planet Hollywood, was launched in 1991, it seemed to be a jackpot of an idea. You had top Hollywood stars like Arnold Schwarzenegger, Bruce Willis, Demi Moore and Sylvester Stallon, who had stakes in it. The place was decorated with Hollywood memorabilia. The recipes were given by famous stars. They even had a full line of Planet Hollywood clothing being retailed at the restaurant. People were curious and thousands flocked in. However, very few came in a second time. They felt the food was nothing great and it was over priced. The company was too much in love with itself to look down from its ivory tower. It refused to change! From 95 outlets, the number reduced to 13; and by 2001, its founders, Robert Earl & Keith Barrish, were struggling to escape bankruptcy. The planet flew out of its orbit!

If success makes you arrogant, you are bound to fail. Hayes was a brand that was as strong as Microsoft and Compaq. Sometimes, people bought the Hayes modem before they even purchased a computer. The consumer was in love with the product. However, success muddled up the company’s vision and they did not see the changing needs of the consumer, who now wanted many more features. The company refused to budge and today lies buried in the godowns of failed products.

Initial success does not guarantee long-term success. You need to re-invent yourself. You can not rest, on your past laurels. Customers have to be nurtured. So it’s imperative to innovate constantly. Margo, one of the oldest soaps in India, refused to do that. Back in the good old days, when people’s tastes were not so refined and were much simpler, a good soap with the medicinal properties of neem was enough to convince them to buy it. However, with time, the consumer wanted better packaging, better fragrance, better shapes. Margo refused to re-invent itself and lost out on the younger generation, who refused to pick up an old, ugly looking soap. It was a classic case of waking up to reality a bit, too late. Lifebuoy, almost as old as Margo, changed quickly and adapted itself to the changes. It survived! Margo, even with its neem content (something Indians depend on today, too) had to taste “bitter” failure! Darwin’s law still rules. It’s still the survival of the fittest!

Missed the bus?!

Surprising, but true. It’s the fear of failing, which is causing many CEOs to fail. No wonder there is an over dependence on research. Coca-Cola had to face a lot of flak when it launched C2, its low-carbohydrate version of the main drink. The company, after doing intensive research, launched the drink just when the low-carbohydrate diet fad was waning. The product bombed.

Kraft, too, decided to launch its range of products based on the South Beach diet, after research proved that it was the next hot trend. However, when the products finally hit the shelves, the diet had already lost its chance and hardly anyone picked them up!

Depending blindly on research findings can be fatal. Coca-Cola succumbed to it yet again, when research showed them that consumers’ tastes had changed and they now preferred a sweeter taste. Armed with these findings, Coca-Cola launched the new Coke. The product was a debacle, for everyone wanted the “Real Thing.” You need to be an expert in being able to grasp the market perception. Just relying on the numbers can prove to be dangerous.

This does not imply that we should not undertake research. However, we must not base decisions only on research findings. Come to think of it, if research had to be believed hundred percent, then one would have never seen movies like Star Wars (by George Lucas) and E.T. (by Steven Spielberg), whose initial research advised the producers to ditch the ideas. In fact, the world would not have seen the likes of Walkman, FedEx or CNN. All were researched, and were forecasted to be bad ideas!

Marketing Blunders

In the 90s, Hoover offered its British market, something very novel. They would get a chance to fly to the US for free if they spent £100 on Hoover products. The offer, open only for very limited period, resulted in about 22,000 people scrambling into Hoover showrooms, buying vacuum cleaners they did not need. What Hoover was giving away for free was worth twice as much as they were asking the consumer to spend. It was something which was too good to be true! People were buying Hoover just to get the free tickets.

What the company failed to realise was, though the offer was for a very limited period, the number of people jumping on to the bandwagon would ensure Hoover’s costs shooting up, sky high. In fact, consumers became so awash that papers were soon full of ads of sale of second hand Hoover vacuum cleaners – some still in their boxes. Couples getting married even warned, they did not want Hoover’s products as presents. It was one of the biggest marketing gaffes. The company eventually landed up paying £50 million for the tickets and was forced to sell up to Italian washing machine maker, Candy!

In the 90s again, P&G was ruling the European fabric detergent. To get back its foothold in the market, its arch-rival, Unilever, introduced a new detergent called ‘Power’. It had a secret ingredient, namely manganese, which could rip out even the ‘stubbornest’ of stains. The product was launched as Omo Power in Netherlands, as Persil Power in the UK, and as Skip Power in France. Unilever had planned a marketing blitzkrieg in Europe to fight for the number one slot and take it away from P&G. Not to sit and wait and watch in the wings, P&G did its own research and came upon an interesting fact. It discovered that the new washing powder produced holes in boxer shorts! P&G hired a PR firm and inundated the market with a campaign showing lots of pictures of clothes damaged by ‘Power’. Though Unilever tried to fight it back, the consumers decided to step aside and switch to safer brands. Eventually, Unilever had to pull out its product and concede defeat after spending more than £300 million on developing, manufacturing and marketing Power products!

Dasani was launched in the US by Coca-Cola as bottled purified water, and soon was a roaring success. Encouraged by this, the company launched the water in Britain too. However, someone discovered that unlike most bottled waters in Britain, which are sourced from glaciers or natural springs, Coke got its from the tap. All it did was purify it and add some minerals. The next day papers were covered with headlines that read, “Coke sells tap water for 95p!” When someone as big as Coke goofs up, the media has a field day.

Coke got a huge amount of negative press coverage. In just five weeks, Dasani was withdrawn from the market, even though it was the purest water available. When your marketing goes wrong, everything goes wrong – since the whole world comes to know about it and the dent it puts is big and deep! You have to have your marketing principles absolutely right, or else failure is certain.

Olympia was a brand of beer which was a pale lager, very similar to Coors. However, it had an image problem. Young people did not identify with it. So the company decided to make advertisements that would appeal to the young. At the same time, it changed its packaging, too, to emphasize the lightness of Olympia. Back in the brewery, the brew-masters know that Europeans liked a richer tasting beer and modified the taste of Olympia. In the blind-taste-test, it came out a clear winner as compared to all other beers. Still, the product failed miserably. While the ads and the packaging had emphasized the lightness of the beer, when the consumer tasted Olympia, it was not so. Instead of judging it as a “rich tasting beer,” it was branded as the “bad light beer.” This mismatch ruined Olympia. The brewers had worked hard on the taste, the ad agency had worked hard on the ads, yet, the brewery was closed down. A sad demise of a product due to mis-marketing.

Marketing wars, as they say, are fought in mind. One has to be very clear about market perception of the product and weave all marketing ideas in-sync with it. Or else, be sure the product will land up in Ithaca, New York. It’s a museum which houses, among other things, marketing disasters and dumb ideas. You would find strange exhibits like – ‘Garlic Cake’ (I wonder who could have tasted it!) or “Dr. Care Toothpaste (a toothpaste in an aerosol can!).

Surprisingly, your product need not be bad to fail. In most of the cases, the product is great. It could fail because someone simply failed to communicate the product’s benefits properly to the audience. The concept of “golden eye technology” was developed by Videocon. However, it was marketed so perfectly by LG that one felt they came out with it first! Zen is a good car still. Today, it’s gathering cobwebs in the garage and no one wants it. It failed to market its benefits efficiently.

Strand was a brand of cigarette, which was advertised using the best of talent. Its jingle was written by the very famous Cliff Adams. The model was Terence Brooks, who looked like Frank Sinatra. He was shown standing on a lonely street in London, wearing a trench coat, a hat and lighting a cigarette, as a haunting melody enveloped him. It all looked so good. And finally, the punch line “You are never alone with a Strand!” As expected, the agency was barraged with enquiries. No one was bothered about the cigarette. Everyone wanted the music! The people perceived the cigarette to be a loner’s cigarette; and no one wanted to be termed that. The product had to be withdrawn while Cliff Adams rose the popularity charts for his music and released a hit single. “The Lonely Man Theme.” At least someone benefitted!

Such goof-ups leave everyone bewildered. Vidal Sassoon came out with its “Wash & Go” shampoo. Someone misinterpreted it as “I wash my hair, go.” The shampoo could never again find a place on the supermarket shelves! In Spain, Coca-Cola came out with its innovative 2 litre bottles, but they did not fit into the local refrigerators of the Spanish market. The product had to be withdrawn!

Great products fail for no fault of theirs. However, some people have made it their business to find out such brands from the corporate trash bins and turn them around. One such man is Jeffrey Himmel. He believes, “If you have the right product and do the proper kind of advertising, the cash register is going to ring.”

Ovaltine was already assigned to the bottom-most shelves of stores and had started fading in the consumer’s memory. Jeffrey picked it up. Made simple ads reminding people, their old favourite was still around. Wherever he got the cheapest rates, he bought those slots and bombarded the air-waves with these ads. In 100 days, sales doubled. The annual sales of the product jumped from $13 million to $26 million!

This is a fact – and this magazine that you are reading is proof of it – business is marketing. You need to know and understand the power of a good marketing campaign. Put in your best efforts here. Or else be ready to write the epitaph of your brand for it to be buried in the brand graveyards to “Requiescat In Pace” R.I.P.