Brands on brink get kiss of life

12 August 2010 | By Lou Cooper

Most new products and services fail to make an impact and are dropped from the shelves quicker than it takes a business to launch them. The failure rate for new products is so high that throwing a lifebelt to an abandoned brand is often considered a shrewder option than letting it sink to the bottom of the ocean.  

After months, or sometimes years, of investment in new product development (NPD), as many as 95% of new brands introduced each year fail to make an impact, according to Cincinnati research agency AcuPoll.

But the decision to save an existing or lapsed brand is a tricky one. In the case of a relaunch, companies must be prepared to invest in modernising or adapting the product for a new generation and it must sit well within an organisation’s existing portfolio. Consumers must still value the brand but businesses often have difficulty judging the difference between brand recognition and brand love.

Despite the complexities involved in getting it right, brands are being saved across every sector in a variety of ways. Channel Five is the latest high-profile brand to be saved from extinction. Although previous owners RTL saw the broadcaster’s business model as untenable, publisher Richard Desmond stumped up £104m to buy the channel (see case study, below).

BBC radio’s 6 Music station is another broadcast survivor, following a huge campaign earlier this year that saw 180,000 consumers join the Save 6 Music Facebook campaign, millions of Tweets hashtagged #save6music, along with more than 25,000 emails and 250 letters.

Film for the classic Polaroid camera has also been brought back from the brink recently, when a group called The Impossible Project saved the last production plant for Integral Instant film in Enschede, the Netherlands, from closure. The business has reinvented and reproduced a new instant film for traditional Polaroid cameras.

In the insurance sector, consumer financial services brand Bradford & Bingley has been rescued from being swallowed up by the Spanish-owned Santander after being bought by price comparison site Comparethemarket.com owner BGL Group, back in April.

Saving a brand that another company no longer sees value in could prove a profitable acquisition for your business’s portfolio, argues Stuart Whitwell, joint managing director of brand valuation consultancy Intangible Business. “It’s often a corporate decision in tight markets to spend on one brand not two, but that doesn’t mean that there isn’t a consumer proposition there.”

Large companies with a broad portfolio of products are often strategic in their management of related brands. Just because a product is flagging under the guidance of one company, it doesn’t mean it’s not worth saving, explains Whitwell. Tia Maria was a lead liquor for years in the UK market, but its parent company Pernod Ricard decided to ditch the brand in favour of rival coffee liquor brand Kahlua. Now Illva Saronno has bought the Tia Maria brand, and is planning to revive it because the company believes it has enough value to be saved.

Car brand Mini has also been successfully revived by new ownership. Production of the original Mini ended in 2000, but BMW decided

to launch a bigger, more powerful version of the iconic car.

“Many leading brands of their generation wilted away through poor management over time, not because they weren’t great in the first place,” argues Whitwell. “The Mini had iconic status. As long as that’s there, there’s a chance to tap into that heritage and nostalgia and apply it in a modern context.”

Amy Frengley, managing director at brand strategy agency Brandsmiths, agrees: “Mini did a fantastic job in identifying that what was great about it – zippy, small, easily manoeuvrable, a great town car – is equally relevant today if not more so. They played on that, but gave it a style makeover and increased the internal space to bring it up to date for contemporary urban life.”

Mini has a nostalgic value, which other brands have been trying to use to stage a comeback. In recent years numerous brands, such as SodaStream – which was popular in the Seventies and Eighties – have been saved and relaunched for a new generation of consumers. Private equity firm Fortissimo Capital acquired

a controlling stake in SodaStream in 2007 resulting in the brand relaunching with a £3m TV ad campaign that first aired last month.

The brand has been saved from obscurity because it’s still well known among consumers despite being off the shelves for a number of years, claims SodaStream marketing director Fiona Hope. “SodaStream has the best equity in the UK. It has still got an awareness of almost 90%, which for a brand that’s not been on TV for about 20 years is phenomenal.”

The brand has been reinvented because the company believes it is relevant in the current economic climate, she explains. “People more than ever are searching for value for money, which SodaStream provides, relative to pre-packaged soft drinks. With the recession, many people – especially mums – want a return to simple fun. It’s a way that families can connect and have a good time at home.”

In the altered consumer landscape, Hope has found a new marketing angle through which to promote the retro brand. SodaStream will eventually be positioned as an environmentally friendly option as the bottles, which are used to create fizzy drinks, can be re-used and last two to three years. “The environment wasn’t a big thing in the Seventies and Eighties, so in a way SodaStream has become more relevant now than it was in its heyday,” she says.

We bought Five because it is a great broadcaster. It has shown enormous creative vision and business acumen during the most difficult time imaginable for the economy. Richard Desmond, Northern & Shell

However, Richard Huntington, director of strategy at Saatchi & Saatchi, warns that brands that are brought back in this nostalgic vein are vulnerable. Retro foods such as the Birds Eye Arctic Roll and Findus Chicken Curry Crispy Pancakes might have their moment of glory when marketers announce a comeback, but these types of revivals can end up being fads.

Saatchi & Saatchi measures a brand’s performance by assessing the extent to which it is loved and the extent to which it is respected, explains Huntington. He says: “Really powerful brands are both loved and respected. If there are low levels of respect and low levels of love, you haven’t got a brand at all; you’ve got a product.

“The curious ones are high levels of love and low levels of respect. I think that’s really what’s going on with products like SodaStream and Arctic Roll. People don’t actually respect these brands, but they have a nostalgic feel for them. In consumer groups, they wax lyrical about how much they adore them, but have no intention of buying them. You might get a little short-term hit, but I worry about their long-term viability.”

The Impossible Project has ensured the survival of the Polaroid brand for a global niche market of consumers. With the advent of digital, the instant cameras could not compete on the same level and in 2007 Polaroid Corporation announced that it had stopped manufacturing instant cameras. The following year it stopped producing instant film.

News that the film was no longer in production prompted bidding wars by consumers on eBay and mass hunting for untapped sources of film.

“Everyone’s lives are becoming so much more digital now, so using a Polaroid camera is not going to be a mainstream thing that people do,” says Greg Coley, creative director at integrated agency VGroup. “There’ll always be a market for it, but with the advent of digital cameras, I can’t see it becoming dominant again.”

However, The Impossible Project – run by three Polaroid enthusiasts – has taken over the old Polaroid factory and decided to reinvent instant film. According to Polaroid, before it shut down operations there were 1 billion working Polaroid cameras in the world, says Dave Bias at the Impossible Project.

The retro market is a popular one, adds Brandsmiths’ Frengley. “The pace of change is so fast, with new brands and technologies consistently upon us, that there’s been this groundswell of opinion towards bringing back those things that have some sort of genuine meaning to us, which have marked out our life in some way.”

VGroup’s Coley adds: “When the first Polaroid cameras came out, it was quite a magical invention, so I suppose that historical value will attract a certain generation.”

Targeting a niche market with a retro brand may be more about nostalgia than big business, but that doesn’t mean it can’t be a profitable enterprise, argues Frengley. “What’s not a viable proposition for a larger company can be quite the opposite for a small one.”

Take Angel Delight, for example. While Kraft decided to ditch the brand, its popularity among the family market and nostalgic quotient made it an appealing purchase for buyer Premier Ambient Products, adds Frengley.

While businesses often spot a brand that has potential to survive, consumers can be the driving force for saving a brand. Consumer clout, especially with the advent of social media platforms, is very powerful. But understanding the difference between fleeting consumer nostalgia for a familiar product and a genuine, enduring market for a brand can be difficult.

Cadbury discontinued its Wispa bar in 2003 after it fell out of favour with chocolate lovers. But following a Facebook campaign that built up 10,000 fans – the second biggest group on Facebook in 2007 – it was relaunched permanently in 2008.

“People want us to bring back things all the time, but with Wispa it was probably both the weight and intensity of consumer opinion that did it,” explains Wispa brand manager Ross Farquhar.

He adds: “Wispa didn’t just tap into a retro trend, it tapped into a genuine consumer love and as soon as it went, consumers felt there was something missing.”

One particularly dedicated outpouring of consumer affection involved Wispa fans storming the stage at Glastonbury in 2007 with a banner that read: “Bring back the Wispa.”

Although customer opinion is important, the decision to rescue a brand from obscurity must ultimately be a commercial one if the brand is to succeed beyond the initial comeback campaign.

“Wispa was up against various NPD opportunities at the time,” says Farquhar. “Although 10,000 people is a significant amount [campaigning for a relaunch], if those were the only people that ever bought Wispa, you wouldn’t get the volume to sustain the supply chain that you’d need to have in order to produce it. We needed to drive enough value from it.”

Cadbury produced 23 million Wispa bars in 2007 to see whether online demand would lead to offline sales, before permanently relaunching the bar the following year.

To gauge whether a brand will survive beyond the initial relaunch, a business needs to honestly assess how valuable a brand is to consumers, argues Saatchi & Saatchi’s Huntington.

He says: “Wispa is a brand that performed. It has real equity, courtesy of Cadbury, and it is a great chocolate bar that should never have disappeared in the first place. The marketing campaign for the relaunch was nostalgic, but the product itself wasn’t and that’s why the relaunch was successful.”

Another brand that has managed to change its fortunes is BBC radio station 6 Music, which was saved from closure last month following a high-profile campaign, prompting a dramatic increase in listeners for the once-doomed station. “The station didn’t organise the Save 6 Music campaign, but no one can ignore that a lot of publicity was generated, which in turn increased awareness and helped listener figures grow,”

6 Music editor Paul Rodgers admits.

However, Huntington claims 6 Music is the exception rather than the rule when it comes to using consumer muscle to save a brand and this tactic should not be relied upon as a failsafe rescue method. When some companies decide to drop a brand, no amount of campaigning appears to make a difference.

Unilever’s decision to discontinue Persil washing-up liquid has been met with a barrage of pleas online to continue supplying the cleaning product, but the company says it has no plans to reverse the decision.

But as 6 Music is a public service owned by the BBC, consumer opinion holds more sway than it might in the profit-making world, argues Huntington. “It’s a slightly different conversation than you’d have with most commercial brands, where unless the average weight of purchase is great, then it’s more problematic,” he says.

However, social media has given consumer power a phenomenal boost, allowing customers to raise their concerns with companies in ways and volumes that were never previously possible.

“We’ve got a situation now where effectively Facebook is the world’s third largest country – 500 million people are members,” says Huntington.

“Consumers own brands, not agencies or clients. Brands are no longer built by communications, they’re built by conversations. These are real communities having real, sustained conversations about brands.”

While many shoppers mourned the loss of department store Woolworths, the business couldn’t survive on the modern high street. Often brands that have run their course in their original form can be saved or the brand morphed, to effectively compete in the market again, argues Brandsmiths’ Frengley.

When Woolworths went into administration, it was forced to close its high street stores. However, it returned in online form when Shop Direct Home Shopping reportedly paid administrators between £5m and £10m for the brand name.

Within hours of the announcement that the brand was to return online, 20,000 customers were said to have registered.

“Having hit the wall, Woolies recognised that retail has now all but gone online and that it still had a useful proposition, albeit to a more defined market,” explains Frengley.

The brand has hauled itself into the 21st century by becoming more targeted towards younger families, reforming as an online business, which is focusing on getting the price right.

Silver Cross is a heritage brand that since falling into receivership in 2002 has also altered its offering, embracing social media and diversifying its product range to become competitive again in the nursery market.

New Silver Cross owner Alan Halsall wants to make sure that Silver Cross is seen as a varied brand rather than selling posh prams as this gives the company a level of protection; diversifying into multiple areas means that even if one product range falls out of fashion, you will have many lines to bring in profits.

There is no doubt that saving a brand can be cheaper and more successful than starting again from scratch. However, not all brands can or should be saved. But it’s up to businesses to make sure they know the difference between a brand worth saving and one that deserves to be made extinct.