Wednesday, February 21, 2007

Killing them softly...

Not with a song, but with an M & A. I'm talking brands, people. Those things which advertisers create with 'personalities'. The repositories of our 'love' and 'trust'. Now that the world and their uncle is on a buying spree, someone's gotta give. Some brands must say their goodbyes.

Now in products like steel and aluminium it probably doesn't matter. And at the corporate level you can always hyphenate it - Tata-Corus, Mittal-Arcelor. Sounds cool enough, in fact adds a little sheen - esp to the Mittal name.

But what about consumer brands? Hutch will soon be replaced by Vodafone, but really, telecom is one of the relatively easy categories. You're locked into a service by virtue of owning a number. When Orange became pink (Hutch), the transition was pretty seamless. The ubiquitous dog walked into an ad with the new candy coloured logo. Besides, you could bombard subscribers with your message via sms and use the monthly bills/ prepaid recharge card to communicate the story.

And oh, Vodafone's already killed the 'bought out brand' in 20 odd countries so by now they've probably got a 'how to manual'.

But what about other, less 'locked in' categories. What does the Acquirer company do with the acquired - competing - brand. The classic example is 'Thums Up' . After Coke bought out Ramesh Chauhan's cola brands - which had put up a spirited fight to Pepsi - the company struggled with the question. Ab kya?

Killing off 'Thums Up' was not an option. Because it was found that consumers would not necessarily, automatically, switch to Coke. So Thums Up lived on, like a neglected old family member. Its once iconic advertising (who can forget 'Taste the Thunder'!) a chapter in history.

The brand was reduced to the status of a 'tactical weapon' against Pepsi. And yet, the Grandaddy of India Cola refused to die. As recently as 2003 - 10 years AFTER Coke bought Thums Up - it was the leading cola brand in India with a market share of 23.7 % vs Pepsi's 21.6 %. As recently as 2005, Coke refused to share figures of its individual cola brands, merely stating that the Coca Cola company had a consolidated share of 60.9 %.

Makes you think hey, maybe Thums Up could have fought off these two firang brands. The fact however is that Ramesh Chauhan know his bottlers would start deserting him -so he had no choice but to sell out.

So what is the inexplicable magic of Thums Up - a brand that existed only for 16 years before its buyout? I don't know. Some kind of hangover effect? Maybe nostalgia for days past?? Of course, many simply like the stronger, fizzier taste. Which is what the advertising emphasises these days - the new 'macho' drink.

Actually, there could be a super campaign on the 'swadeshi' platform. But hey, that would be senseless. Since it is owned by the Coca Cola company...

And the point is?
That brands are entities with an irrational, emotional pull. Obviously, the best brands also offer quality products and services at prices that consumers endorse through purchase behaviour. But you never can say what will happen when you kill a trusted name - even if it's on the decline.

So there are hybrid models. Little known Chinese company Lenovo buys out IBM and kills of the acquired brand. But its notebooks retain the 'Thinkpad' tag reminding users of its IBM heritage.

Lastly, there's the 'attempted suicide' model, also known as 'repositioning and relaunch'. In this model, company apne haathon se brand ka gala ghot deti hai and hopes to see it swiftly and painlessly reborn in a new and cooler avatar. Sometimes it works - and sometimes it doesn't.

Like I recently saw an ad on TV for Dove soap which featured young women age 22 and 26. That is pretty weird because Dove has had a pretty consistent advertising campaign aimed at women in their 30s. Guess the brand believes the India 'youth' story and wants to catch 'em much before they get wrinkled.

Considering that the soap offers a tangible functional benefit ( 1/4th moisturising cream) it could work. However, women in their 20s may not actually need that extra cream - as you tend to have more oil in your skin at a younger age. And a lot of young women in the target segment use facewash these days.

So...

Speaking of second life, there's the spectacular rebirth of AT & T. The brand was killed off after its buyout by rival Cingular a couple of years ago. Only to be revived and relaunched last month after another complex series of mergers and buyouts.

Which is wonderful news for advertising agencies, logo designers, TV networks and hoarding contractors. At least someone benefits from all the chaos. I mean think of the good people in the business of printing visiting cards...!

13 comments:

  1. Ohh lovely...This is one topic that I love reading/discussing these days & I come here & see a post on the same.....Loved the examples you have taken....Same is going to happen with Retail Chains propping up all over the Country...To sustain & eat the market share...buyouts will happen...some will die...some will be revamped & relaunched...The last para is gooooood...Someone benefits !!!!

    ReplyDelete
  2. SBC was the parent company of Cingular.

    The AT&T Wireless brand was usurped by Cingular after the merger of Cingular and AT&T Wireless.

    The AT&T brand was retained by SBC after the merger of SBC and AT&T
    (the long distance phone company).

    Now the monolithic AT&T company has decided to kill off the Cingular brand and just call it the wireless division.

    ReplyDelete
  3. Awesome analysis.. Great combination of Indian and International Brand Examples. One more good example for brand analysis is the recent Takeover of VPL(vijayananda Publishers Ltd.) by Bennett colomn and Co.(Times of India).

    With This acquisition of VPL., The TOI got 3 Major Brands of News papers. 2 Kannada and 1 English. The English News paper Vijay Times(Competitor to Times of India) was retained by Bennett colomn co. Thanks to its low pricing and Popular amoung the Rural areas.

    The other 2 brands are Kannada Newspapers Vijaya Karnataka and Usha Kirana. Vijaya Karnataka is the leading News Paper. The usha Kirana is Low cost and was not doing well. So, the Bennett colomn Co. Closed Usha Kirana and after some days replaced by Times of india Kannada edition. Its just the Translation Version of times of India. Priced at just 1.50Rs.

    Here the brand Decision can be observed. If its the winning Horse everybody will bet on it. Just like thums UP.

    ReplyDelete
  4. 1. "in fact adds a little sheen - esp to Mittal name"

    How so?

    2. Killing off Thums Up was an option pursued initially - but abandoned later.

    ReplyDelete
  5. more examples for brand analysis
    - CBZ xtreme
    - Zen Estilo
    Old brand names are used for the new ones.

    ReplyDelete
  6. Hi,
    Killing of brands are new for any corporates across the world. Also destroying brands with extensions(I'm not an MBA)is not new for us.
    1.Hero Honda
    Splendour, Splendour Plus, Super Splendour, tomorrow?
    2. Reliance, Reliance Energy, Reliance Telecom,Reliance Petro, Reliance Mutual,Reliance Retail, Tomorrow. If Reliance might have concentrated just on plastics and petro they could have become dominant force across the world(This is my opinion.)
    3.Tata Motors,TCS,Tata Steel,Tata Power,Tata Coffee,Tata Chemicals,Tata?? end nos. How many are profitable. If they cut or sell off and concentrate on few biz they could dominate the world( I knew that people at that company won't accept)
    This is nothing new for India. There is no point in mentioning by writing articles and wasting time.

    ReplyDelete
  7. Here in the US we have a similar brand retiring underway. AT&T has purchased BellSouth and along with it the Cingular wireless brand. AT&T is now in the process of absorbing Cingular's "Raise the Bar" tagline.

    With AirIndia and IndianAirlines merger, we will see Indian Airlines brand retired.

    ReplyDelete
  8. Yes that too good to describe with national and international trade brand and product Each and every thing have become compitent in the world one is subordanate and other is complimentary

    ReplyDelete
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