HOW TO PREVENT BRAND FAILURE

How many consumers do you know who would buy bottled water for their cat or dog? Ready meals made by Colgate? Yoghurt-based shampoo? Or cleaning products from Heinz?

These may sound like ridiculous ideas, but they have all been launched as serious products.

Of course they turned out to be major brand failures, but if the marketers could have foreseen the shortcomings, these products would never have been launched.

There are numerous reasons why brands fail, but there is no excuse for marketers to repeat the mistakes of those before them.

Brand Failures by Matt Haig, a collection of the 100 biggest brand blunders of all time, makes entertaining reading, but its message is serious and provides a valuable checklist of lessons learned. The book, out on May 20 from Kogan Page, identifies six principle kinds of brand failure. Here Marketing takes an exclusive look at each one.

THE IDEA FAILURE

Many brands fail because they are simply bad ideas that haven't been properly researched. Occasionally these failures are the result of established brands coming up with a bizarre twist on their formula. The real question is how bad products appear in the first place. If the consumer doesn't want them, why invent them? It is certainly true that market research has failings of its own. As Henry Ford remarked on the launch of his Model T, "If I had asked the customer, he would have asked for a faster horse."

KELLOGG'S CEREAL MATES

Although Kellogg has now redeemed itself in the convenience market with Nutri-Grain bars, the company came unstuck in the late-90s with its first foray into out-of-home products.

An increase in working hours in the US, combined with the rise in fast-food chains led Kellogg to believe that there was a demand for an 'all-in-one' breakfast product. Cereal Mates were small boxes of Kellogg cereal packed with a container of milk and a plastic spoon.

As each container of milk was 'aseptically packaged', it didn't need refrigeration. But consumers didn't like warm milk. Kellogg eventually decided to place Cereal Mates in refrigerators, but this led to even more confusion, as the product was not in a breakfast cereal location. Kellogg complicated matters further with TV advertising that featured children helping themselves to the product while their parents lay snoring in bed.

The packaging of the product, however, was far from child-friendly, and if parents left their kids to help themselves, they would have probably been crying over spilled milk.

Finally, retailing at more than $1 (64p), Cereal Mates was considered too expensive by many consumers, who did not expect to pay as much as they did for a family-sized box of cereal.

Cereal Mates proved a major flop, and in 1999, the year Kellogg's rival General Mills took over as the leading cereal maker in the US, the product was pulled from the shelves.

MORE IDEA FAILURES

- Clairol 'Touch of Yoghurt' Shampoo

- La Femme pink cars for women

- Persil Power

- RJ Reynolds Smokeless Cigarettes

- Thirsty Cat! and Thirsty Dog! bottled water for pets

THE PR FAILURE

Many companies react badly to crises, denying their existence. "Crisis, what crisis?" is their general response. So those companies that are willing to provide the whole truth, and nothing but the truth, score points for their open approach.

If a company tells the truth about a negative incident, it is more likely to be believed later when it is trying to tell consumers about how fantastic its brand is. Public relations is about exactly that; relating with the public, not ignoring them.

MORE PR FAILURES

- Rely tampons (toxic shock syndrome)

- Firestone tyres

- Farley's infant milk (salmonella)

- Perrier (benzene contamination)

- McDonald's McLibel trial

EXXON

In 1989, the Exxon Valdez oil tanker ran aground and began to spill oil off the coast of Alaska. Within a very short period of time, significant quantities of the tanker's 1,260,000 barrels had entered the water, making it the worst tanker oil spill in history.

Not only was the action to contain the spill slow to get going, but the company also refused to communicate openly with the press. Exxon chairman Lawrence Rawl was immensely suspicious of the media, and reacted accordingly.

Within hours an army of journalists had arrived. A company spokesman pointed to the existence of procedures to cover the eventuality - procedures that the TV shots belied.

When asked if he would be prepared to be interviewed on TV, Rawl's response was that he didn't have time for "that kind of thing".

Eventually, the Exxon boss deigned to go on television. In a live interview he was asked about the latest plans for the clean-up. It turned out Rawl had neglected to read the plans, and said it was not the job of the chairman to read such reports. He placed the blame for the crisis at the feet of the world's media. Exxon's catastrophe was complete.

The consequences for Exxon of both the disaster and the poor way in which it was handled were catastrophic. The spill cost about £4.5bn, including the clean-up costs.

Most of this was made up of the biggest punitive fines ever handed out to a company for corporate irresponsibility. Exxon fell from being the biggest oil company in the world to the third-biggest.

The damage to the company's reputation was even more important.

The Exxon Valdez incident became synonymous with corporate arrogance, and the story remained prominent in the media for more than a year.

THE EXTENSION FAILURE

If properly executed, extensions can work. In 1982, Coca-Cola launched Diet Coke. Today, it's the third-most popular cola drink and boasts more than $1bn (£644m) worth of sales every year. Many companies believe that once they have created a successful brand, they should extend it into other categories. After all, it is not the product that makes a brand, but rather an association. But when companies fail to understand the true nature of their brand the results can be disastrous. And when that happens, every product that falls under the brand name starts to suffer, and line extensions cost market share.

HARLEY DAVIDSON PERFUME

Harley owners aren't just loyal. Many love the brand so much that they have its logo tattooed on their bodies.

The company has tried to capitalise on this unique strength of feeling through the Harley Davidson chain of shops selling a variety of branded merchandise: T-shirts, socks and cigarette lighters.

While Harley Davidson's core fans may have accused the company of having 'Disneyfied' the brand, problems arose when the company attached its name to a range of aftershave and perfume. For some lovers of the motorcycle, this was an extension too far.

The brand had fallen into the trap of thinking that more products equals more sales, and it usually does - in the short term. But the disaster was a relatively limited one.

Joe Hice, former director of corporate communications for Harley Davidson, spoke of the decisions in a press interview: "Over the years we've tried a number of different approaches to merchandising and have put the Harley Davidson brand on some things that in retrospect we may not have been well-advised to do. The company is much more selective today about how we go about extending the brand."

The perfume and aftershave range is no longer available in the UK, but it is still on sale in France, Germany, Spain and Greece, where it is used as a tool to reach youth audiences that can't afford to buy a bike but want a part of the Harley brand.

MORE EXTENSION FAILURES

- Bic underwear

- Colgate Kitchen Entrees (ready meals)

- Cosmopolitan yoghurt

- Heinz All Natural Cleaning Vinegar

- Pond's toothpaste

THE PEOPLE FAILURE

The people behind a brand are its main ambassadors. If those people fall out with each other, act illegally or make negative statements about their products, then a crisis may quickly develop. This is especially true in those cases where the people are the brand, as in the case of a pop group or a TV personality. It is also true when people at the highest level of a company are caught acting irresponsibly.

No matter how much time, money or energy is poured into a brand or corporate strategy, it ultimately depends on the behaviour of individuals whether or not the strategy remains on track.

MORE PEOPLE FAILURES

- Arthur Andersen (complicity in Enron scandal)

- Fashion Cafe

- Planet Hollywood

- Ratners

- Enron

HEAR'SAY

ITV reality show Popstars was the first programme to document the making of a band from obscurity to pop superstardom. The aim was to create a pop 'brand' that would not only be able to sell albums and singles, but also a wide variety of merchandise.

Hear'Say was the end product - consisting of band members Noel Sullivan, Danny Foster, Suzanne Shaw, Myleene Klass and Kym Marsh.

At the start of 2001, Hear'Say was the most hyped act never to have released a single.

The group's first hit, Pure and Simple, was released in March 2001 and quickly became the fastest-selling single in UK music history, with sales of more than 1.2 million copies.

The first album, Popstars, also went to number one and a 36-date tour soon sold out. Yet, as the memory of the television programme started to fade, so did public interest.

The band's second album was a complete flop and the singers even started to get heckled at their public appearances.

Relationships within Hear'Say soon broke down.

As a result of constant bickering, Marsh very publicly left the band at the beginning of 2002.

Then, on October 1, 2002, a statement from its record company Polydor confirmed that the group was splitting.

So while the Popstars phenomenon continued to be a success, spawning Pop Idol and Popstars: The Rivals in the UK and American Idol in the US, the pop brand it created was on a downward slope almost from conception.

THE REBRANDING FAILURE

"Whatever made you successful in the past, won't in the future," were the wise words of Leo Platt, chief executive of Hewlett-Packard. If you stand still you will fall behind, seems to be the general message. Many of the most successful brands today retain their prominent position by evolving and updating their identity over time.

But while there is no denying that market trends now move faster than ever, companies that don't think carefully before rebranding can risk undermining their previous marketing efforts. The need to stay ahead means companies are prepared to gamble away their history and heritage for the promise of future profits.

CONSIGNIA

When the Post Office Group decided to change its brand identity, a name was first on the shopping list. The reason for the brand makeover was partly to do with the fact that the 300-year-old Post Office Group was no longer a mail-only organisation. It had logistics and customer call centre operations, and was planning a number of acquisitions abroad.

On January 9, 2002, the group's chief executive, John Roberts, stood outside his organisation's headquarters and declared that the new name was Consignia.

This name, he added, was "modern, meaningful and entirely appropriate" to the rapidly evolving organisation.

The reaction from the media and the general public was considerably less sympathetic. Some thought it sounded like a brand of aftershave or deodorant. Others thought it was the name of an electricity company.

Soon it became clear that the name change was not having a positive effect.

As the Post Office's corporate performance started to falter, the name was blamed even more.

Soft target or not, May 2002 saw a U-turn as Consignia chairman Allan Leighton confirmed the name was to go - probably in less than two years. He also admitted that he hated the name.

"There's not really a commercial reason to do it, but there's a credibility reason to do it," he told the BBC's Breakfast with Frost programme. He said the name change was "unfortunate", as it had coincided with a period of underperformance by the company - it lost more than £1m a day during one month in 2001.

MORE REBRANDING FAILURES

- British Airways

- ONdigital to ITV Digital

- Tommy Hilfiger

- Windscale to Sellafield

THE CULTURE FAILURE

The dismantling of trade barriers combined with the rise of global communication technologies such as the internet have meant companies can expand into new markets faster than ever.

But many have confused globalisation with homogenisation. If they have had success with a product in one market, they assume they can have equal success in another by setting up a web site in the relevant language, running an ad campaign and setting up a similar distribution network.

But cultural differences between, and often within, countries can greatly affect the chances of success for a brand.

HALLMARK IN FRANCE

Hallmark greeting cards have proven immensely popular in the UK and the US. Catering for every occasion - from birthdays to passing a driving test - the cards are sent by thousands of people every day. The signature of its cards is the message - consumers don't have to think about what to write, as sentimental words are printed inside and out.

While this formula is successful in many countries, it has not proved universal. When Hallmark tried to introduce its cards to France, no one bought them, as people preferred to write in the cards themselves. The syrupy sentiments within the cards did not appeal to the Gallic taste. After a few months, Hallmark admitted defeat and withdrew.

MORE CULTURE FAILURES

- Kellogg in India

- KFC in Hong Kong

- Parker Pens in Mexico

- Schweppes Tonic Water in Italy

- Vicks in Germany

Brand Failures is available at a special offer price of £15 (inclusive of postage and packing) to Marketing readers (published price £18.99). Send a cheque (made payable to Littlehampton Book Services) or credit card details (listing expiry date as well as card number) to Kogan Page Publishers, Freepost 1, 120 Pentonville Road, London N1 9BR, UK. Or you can fax an order on 020 7837 6348 or e-mail kpsales@kogan-page.co.uk. When ordering, please quote code MARMAG1. Orders must be received by July 1.

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