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Some of the most disastrous brand failures ever seen…

If you’ve read any of our Be Smart blogs before then you’ll know that we’re quite evangelical about the importance of branding. A brand is more than simply a name, term, design, or symbol, and we always say that your brand can make or break your business.

We’ve talked about typography, photography, colours, messages and more, and we’ve also talked about how you know when you need a rebrand. Making changes to a brand can have really powerful effects… but it can be catastrophic, too.

We want to show you a few examples that will illustrate our point.

Still not convinced about how powerful a brand is? Ask these five well-known brands what they think now!

 

New Coke

Coca-Cola is one of the most recognised brands in the world. The company is even said to have had input into the visual appearance of Father Christmas, a newer depiction of St Nicholas who was originally dressed in green and white.

The association is so powerful that now the (mostly American) phrase “The Holidays are coming” is now seen as the launch of the festive time, much like the ‘red cups’ in coffee chain stores.

But it wasn’t always plain sailing for Coca-Cola. In 1985 Coca-Cola changed their product to combat an increasing threat from the new, sweeter tasting Pepsi cola that had rebranded to attract a younger, trendier crowd. Coke changed their recipe, only testing it privately before the launch. before launching “New Coke” to the marketplace.

… it didn’t go well.

The core fan base of Coca-Cola didn’t agree that the taste was an improvement and sales plummeted! Coca-Cola sensibly stopped producing the new version, admitted publicly that they’d got it wrong and reverted back to the original taste. Instead they opted for a different approach to the competition with Pepsi. This serves as an example of why we need to be cautious when tampering with a well-established and already successful and popular brand.

Coke is still one of the strongest brands in the world, although the company currently sits at number 395 of the Fortune 500 whereas Pepsi Co is above them at number 154. It’s often argued that there’s little difference between the taste of both products, so this is largely a brand war rather than a taste war.

Lesson: Internal testing isn’t always as good as a real-life consumer test so be prepared to change when the market tells you that you got it wrong.

 

 

Betamax

Back in the 70s there were only three TV channels. That sounds unthinkable now! And back then recording TV was a very new concept. There were two very distinct options; Betamax and VHS.

One went on to win the battle and the other became a warning tale. The loser was owned by one of the largest companies in the world – Sony.

In 1975 Betamax launched into the marketplace with tapes that would only play in a Sony Betamax player. Betamax was a better quality tape recording and the brand had everything going for it, with even big film companies remarking on the quality of the product for home use.

But in 1976 a new technology was released in the marketplace. The inferior VHS technology shouldn’t have won the war but thanks to one very sensible decision, they did.

Sony refused to release the Betamax technology to other tech companies, meaning that Sony had the monopoly on the video recorders that you could buy. VHS, on the other hand, was licensed out and was used by four other manufacturers, so the market had more choice.

Betamax was actually better quality, but the market wanted choice and by 1982 just 25% of machines sold were Betamax, despite the brand name once being associated with video recording, just like Googling is to search now.

Lesson: Listen to the market and don’t appear selfish. Sony refused to license Betamax so others couldn’t create Betamax machines, a decision that would lead to the death of Betamax all together in the mid-80s.

 

 

Persil Power

Households everywhere all create one thing in piles – laundry! The weekly (or often daily) laundry pile is shoved into the washing machine and then plied with washing power, or at least it was.

Persil powder, Unilever’s flagship product and brand, was a household name in the 70s, 80s, and 90s but there was stiff competition, so Persil took drastic action.

Washing was measured in results. ‘Whiter than white’ was a term we all knew very well and the adverts on TV would nearly always show a family getting up to nonsense whilst rubbing in stains that would horrify any loving parent who just wanted a clean child for five minutes!

Persil created a powerful product called Persil Power, and in 1995 they pushed it out to market in a move that should have taken a huge market share. The product was rumoured to be the most powerful cleaning powder on the market.

But it turned out to actually be too powerful and it ruined clothes. Negative reports inundated Unilever and the press got hold of the story. Rival company Proctor and Gamble even started a campaign to highlight the flaw.

It was a brand disaster. Unilever removed the product from sale and eventually scrambled to replace to product with the new ‘Persil New Generation’, but the brand damage and top-level damage cost an estimated £200M.

Lesson: Your products’ quality can ruin your brand trust and that in turn can ruin your profits.

 

 

Ratners Group

Gerald Ratner started working for the family-owned jewellers ‘Ratners’ in 1965. In his time working there the company was a sleeper and didn’t ever really put a dent in the marketplace.

That was until he inherited the business in 1985. Ratner took the business from 150 shops that were just ticking over, to 2000 shops and market domination in just six months.

The ‘Ratners’ brand was aimed at the lower end of the market. Most jewellers considered their products a luxury and not something you wear all the time, let alone buy every week. Jewellery moved from being something only the wealthy could afford and Ratners became the choice for the working class. It was known as cheaper, but that was OK for the target market.

At the peak of his company’s success, Ratner was invited to speak to the Institute of Directors, about his story and how he’d made his company so successful. The engagement, which Ratner himself now refers to as “the speech,” has gone down in history as one of the most expensive faux pas in business.

“We also do cut-glass sherry decanters complete with six glasses on a silver-plated tray that your butler can serve you drinks on, all for £4.95. People say, ‘How can you sell this for such a low price?’ I say, because it’s total crap!”

He went on to say that some of the earrings sold by the Ratner Group were; “cheaper than an M&S prawn sandwich but probably wouldn’t last as long.”

Wow. Would you say that about the brand you’re representing, even if it were true? Well, he did, and of course the press latched onto the phrase “cheaper than a prawn sandwich” which has since become so famous that if you Google it, you find Ratner’s Wiki page on the right-hand side of Google.

The remarks cost Ratners nearly $1Bn in losses and eventually forced a rebrand.

Lesson: Your marketing messages have to carry on through all your touch points, including speeches and public addresses. Nothing is private!

 

 

Harley Davidson perfume

Harley Davidson. The brand that evokes so much emotion, history, power, freedom, and an over-the-top celebration of what you would create if you were allowed to.

They have a very loyal following, and much like Apple users and the VHS example from above, the fanbase freely admit that the technology within Harley Davidson products is far from the best. It’s the brand and what that says about them that keeps them loyal.

That’s an important branding point, right there.

Harley is a masculine brand. The scenes depicted in advertising often include a muscular man with his female partner on the back, riding the open road.

“Screw it, let’s ride!” is a well-known tagline for the American loudmouth motorbike company.

But it nearly all went wrong for them, too.

The merchandise market for Harley became an attractive proposition. The fans loved the brand so much they would wear it proudly on leather jackets and T-Shirts. That all made sense to the brand. But then they took a very similar merchandise route to Disney and Lucas Film and started to sell a multitude of additional merchandise. But there was a big problem; the fan base didn’t like what that meant to the brand.

A masculine brand associated with Hell’s Angels was now selling socks, kids’ clothing, and even a feminine perfume! The kickback was big and the brand was forced to re-think the entire merchandise range at a large cost.

They have since been more selective about where they place the brand and logo and are more careful how they choose to present their masculine motorcycle brand. You can’t buy Harley Davidson shampoo or baby grows now unless they’re somewhat inauthentic on a Costa-del-Sol beach front.

Lesson: Always build your brand with your core audience in mind. Your fan base is nearly always your key marketing channel.

 

Branding is important… vitally important!

Understanding what your brand stands for and more importantly who it’s trying to attract should be at the core of your business and marketing.

Get it wrong or change things without testing, and you risk looking like the above five who all survived, but at vast costs. All they could do was put those experiences down to experience.

Thinking about re-branding or changing direction? Speak to us first. We’ll help you make the right decisions for your business and your customers. Be smart – contact us now!

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