Chip maker Intel announced recently that after four years it was
ending its attempt to crack the consumer electronics market. If your
reaction is 'so what?', you are among the majority that hadn't even
noticed that Intel was trying to extend its brand in this way, so
lacklustre were the results.
The company had hoped that by moving into products such as MP3 players,
digital cameras and electronic games, it could extend its business
beyond the cyclical, feast or famine world of microprocessors.
On paper the idea probably looked like a winner. After all, Intel had
earned its marketing spurs with its 'Intel Inside' campaign, where its
relationship with personal computer makers brought benefits to both
Why not go one step further?
Well, for one thing consumer electronics is already dominated by
powerhouses such as Panasonic and Sony. Nor was the brand fit there,
despite the fact that Intel is arguably one of the most recognised
brands in the world.
The real reason is that Intel's heart probably wasn't really in it. When
you have such a powerful brand, it's too easy to let the perceived brand
essence act as a drag on truly creative thinking. So extensions are done
dutifully, but without real belief.
Admittedly, it's not easy for established brands to stay true to
themselves, while at the same time reinventing themselves to survive
But that's the equation they have to solve, says Jean-Noel Kapferer,
professor of marketing at the HEC School of Management in Paris.
In an excerpt from his new book, Re-inventing the Brand, in the latest
edition of Market Leader, Kapferer describes what he calls the brand
This says that brands have not only to continue resonating with their
established customers, but have to find new ways to reach new
Survival demands change.
In other words, the accepted wisdom that businesses should put more
effort into customer retention than acquisition is now meaningless. The
existing customer is a necessary source of revenue today. But you have
to find new customers to flourish tomorrow.
To make the brands relevant for each new generation you have to keep
rediscovering and proving their relevance to new groups, says
Otherwise they are in danger of being like actors or singers who stick
doggedly to the same repertoire. They delight their core audience, but
as time passes there's a good chance their appeal will diminish. It's a
question of striking the right balance between permanence and
Just look at the way Madonna reinvents herself every few years.
Brand owners should move beyond the confines of any rigid definition of
brand 'essence' and decide which aspects of the brand can change and
which can't. Then they need to embark on a marketing approach that keeps
loyal customers while targeting a younger generation.
What's ironic, argues Kapferer, is that any resistance to change more
often comes from the company itself than from current customers. That's
either because reverence for the brand blinds its owners to the sort of
radical rethink that will give them a successful new positioning
strategy, or they blame the brand, not their uninspired thinking, if the
new audience rejects it. Brand renewal has to be based on core values.
But they'd better be the right ones.