Revival of the fittest: how to resuscitate dormant or dying brands

 

After last month's cover story on reviving brands, Stuart Whitwell, joint managing director of Intangible Business, puts forward his take on which brands can be resuscitated and which should be put out to pasture

 

Killing a brand is not as easy as putting it out of business. The main reason businesses behind successful brands die is management and operational incompetence. While this does have a negative impact on a brand's value, this article will discuss what it is about brands that enable some to rise, phoenix-like from the ashes, while others crumble into dust.

 

Case studies of brands that have been revived successfully, such as Harley Davidson, and brands that have failed to be revived, like Babycham, will be analysed to identify the common threads that give brands permission to revive. This will provide insights into which brands that are currently in distress, such as Rover and MFI, are capable of resuscitation and if so, how.

 

Brands that have been successfully revived

Harley Davidson
Harley Davidson had been through turmoil. It had seen changes in ownership, management, a new wave of more modern, cheaper and better quality products from Japan, it had developed a reputation for poor quality and in 1984 it was just minutes away from bankruptcy. What followed is a text book example of how to revive a brand. Harley Davidson had a unique heritage in the history of American motor transport and an incredibly loyal following - 75% Harley customers made repeat purchases. Harley therefore leveraged both its brand and its customers to revive the business.

 

It established the Harley Owners Club (HOG) which now has about 500,000 members in 115 countries. This encouraged word of mouth, enabled products to be marketed directly at existing customers and built loyalty. Harley streamlined and segmented its products into four distinct categories, targeted at a newly defined demographic: married men with an income over k who were previous owners and about 46 years old. It re-built its brand largely through products which evoked Harley's strong heritage but giving them a modern, evolutionary twist. This reintroduced a reputation for quality and increased the brand's relevancy to a modern audience while not losing sight of its heritage. It also redressed the balance between the brand's outlaw image and the weekend rider.

 

Harley Davidson now has a 48% of the US motorcycle market, revenues of over bn and a profit margin of nearly 20%.

 

The same strategy of leveraging a brand's heritage and loyal following has been adopted by other brands which continue to enjoy a revival. Gibson guitars, for example, had suffered terribly under its owner of twenty years, an Ecuadorian beer and concrete conglomerate, before Henry Juszkiewicz bought it from near bankruptcy in 1985. Burberry is another classic example.

 

There are four main common threads between these brands: heritage, loyal customers, brand awareness and management focus. Harley Davidson has been around since motorcycles began in the early 1900s, Gibson was founded in 1894 and Burberry in 1856. Over this time, the brands had become engrained in society, established a loyal following and enjoyed high levels of international awareness. It was a change in management which gave each of these brands a new lease of life; Richard Teerlink and his team for Harley Davidson, Henry Juszkiewicz for Gibson and Rosemary Bravo for Burberry.

 

Brands that have been unsuccessfully revived

Babycham
Not all successful brands are capable of revival, as Babycham illustrates. Babycham was originally introduced in the 1940s as a sparkling perry in large bottles mainly in the West Country. When it was launched nationally in the UK in 1953, the product was in its trademark ‘baby' bottles at double the price and aimed at women.

 

The formula tapped perfectly into female emancipation and a reaction against the austere post-war period. The brand managed to latch on to aspirational luxury values as the next best thing to Champagne and, when supported by heavy media spend (it was the first beverage to be advertised on television), it became the marketing success story of the 1960s. Babycham became the must have party drink and took the market by storm.

 

As affluence grew through the 1970s Babycham failed to evolve with the times and the brand lost its cache and relevance to new consumer attitudes and affluence. Several attempts have been made to revive the brand to regain its former prestige but all have failed. Even with the current wave of nostalgia for 1970s, with brands such as Blue Nun and Cinzano enjoying a limited resurgence, Babycham's opportunity for revival is negligable.

 

Babycham was a product of its time. It caught the post-war wave for indulgence but existed on a heritage borrowed from another brand, Champagne. This borrowed heritage reduces the brand's ability to be revived - it lacks authenticity. The brand also lacks a loyal following; its original audience has aged and the younger generation have evolved beyond Babycham's offer. Being the butt of jokes isn't an impediment to brand revival per se, as Scoda proved, but few brands have the luxury of being so integrated into a supportive conglomerate such as VW.

 

Brands do not always have an indefinite life. Enron, Bearings, TWA and Pan AM, for example, would all be incapable of being revived, largely because of the indelible negative connotations consumers have of them. Rover and MFI are two other brands which are currently in distress.

 

Brands that currently require revival

Rover
Rover was once a great brand. A series of attempts to revive it from BMW, the Phoenix venture capitalist consortium and China's Nanjing Automotive Group Corp all failed. As one half of Ford's brands Range Rover and Land Rover it was recently bought for protectionist reasons for about m by Ford.

 

In isolation, the Rover brand in the UK would prove difficult to revive due to the huge barriers to entry but elsewhere in the world, such as Asia, the brand still has huge potential. Shanghai Automotive Industry Corp, one of China's leading car makers, was reported to have offered m for the Rover brand. Its plans would have been to attach the Rover brand to its own cars and sell them to the Chinese and Asian markets. This would undoubtedly have been a success as the Rover brand still has significant prestige in those markets, which know it for its English heritage and the quality cars it produced throughout most of the 1900s.

 

Rover's opportunity for revival no longer resides in its stand-alone ability. By feeding off the equity of its other family of brands, Range Rover and Land Rover, Rover does have permission to grow. Perhaps the Rover brand will live on as a suffix, attached to a new range of prestige sedans, city hatchbacks or sports cars - The Tourer Rover, City Rover or Race Rover perhaps.

 

MFI
Since it heyday in 1970s and early 1980s, MFI has been dogged by a low quality brand image in the 1990s and more recently by supply chain and IT systems issues that have brought the retailer to its knees. So much so that it reported operating losses of £49m in 2005 and was forced to pay Merchant Equity Partners £74m just to take it away.

 

With a renewed management focus and potential investment of £136m the brand has the opportunity to be revived. To do so, MFI must re-establish its cache and loyal following to once again compete efficiently in the kitchens and bedrooms markets against powerful competition from the likes of IKEA and B&Q.

 

The MFI brand has a following in the value DIY market and if it gets its product and pricing right it has a reasonable chance of maintaining a limited degree of success. However, the trends in the market are moving towards builders, rather than customers directly, sourcing kitchens through trade suppliers such as Howdens at the lower end of the market and specialist kitchen designers at the top.

 

If MFI is going to deliver it will have to adapt its product offer to include home furnishings as well as improve its overall brand image to attract higher value shoppers and improve sales and margins. Does MFI as a brand have the necessary credentials? The jury is out.

 

Conclusion
From an analysis of these brands, common threads necessary for a brand's revival are an authentic heritage, a level of international awareness and an existing loyal, although perhaps dormant, customer base. If a brand has these three elements then all that is needed is a fourth; resource and management focus to sustain its rejuvenation.

 

Other recent successful brand revivals such as Mini, the Beetle and Ovaltine all had the four elements, as does Rover. MFI does not, it seems, so belongs in the same camp as Babycham and is likely to be unable to return to its former glory.

 

Dormant or underperforming brands are attractive to buyers as acquiring and turning them round is often more cost effective than creating new brands. This has certainly been the case for companies such as Premier Foods which has acquired a stable of heritage brands, such as Smash, Ambrosia and OXO.

 

There will always be risks attached to reviving dormant brands but if a brand ticks these four boxes then it is more likely to be a phoenix than a flop.