OPINION: Preserve loyalty but appeal to a new generation

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

sides.



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

changing markets.



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

paradox.



This says that brands have not only to continue resonating with their

established customers, but have to find new ways to reach new

customers.



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

Kapferer.



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

renewal.



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.



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