Brand Mortality: A two part series.

Turns out brands are just like the rest of us, merely mortal. They can’t live forever. This is good news and bad news for companies. Good news because it creates opportunities to launch new brands but bad news because it means having to say goodbye to some old, dependable friends.

What causes a brand’s demise? It is not as if they are really living and breathing like you and me. Yet they are vulnerable to annihilation by two main causes:

1: The extinction of a category.

As a category declines, so does the value of the brands that dominate that category. In the mind of the consumer a brand is only worth what its category is worth. Because it is categories that consumers really care about not brands. Brands are just short-hand for categories in the mind. Therefore once a category dies so do the brands associated with it.

Here are some brands that have died because of the decline and extinction their categories:

Polaroid: The brand that pioneered instant photography was wiped out along with its category by the 1-hour photo-processing places.

Wang: The brand and the word-processor category were wiped out by the personal computers.

Western Union: The telegram? Yes, it used to be a big business but the category was wiped out by the fax and cheap long-distance phone calls.

Kodak: This brand is on life support as conventional photography fades away and digital photography takes over.

The problem most companies have in dealing with the realities of brand mortality is that they are so in love with themselves and their brands that they are reluctant to launch new brands. And new brands are where the real opportunities for growth and prosperity lie in business.

Instead of pulling the plug on their old brands, many companies try and move these geezers into the future. Witness the launch of Western Union telephone service in the 1980s, Kodak digital cameras in the 1990’s.

It never works. Because once you have a powerful brand that stands for something in the mind, it is almost impossible to change it.

Once in a great while a brand will have a second coming. But it is very rare and only occurs when it enters a category with little or no competition. This is the case with Western Union. The brand survives today because it was the first brand to move into the money-transfer business. Using the old name really gave them no advantage, being first is the real reason for their success.

The biggest branding tragedy I see today is the decision to rebrand Cingular to AT&T. Cingular, a joint venture by SBC and BellSouth, was a focused and successful brand in the wireless world. Six years of brand building is now going down the chute.

Why did AT&T do it? Because management still thinks AT&T is a powerful brand and they want to take advantage of the dubious concept of convergence.

According to Boyd Peterson, analyst at the Yankee Group: "Services are converging and the lines between wireless and wireline are increasingly blurred. Customers want simplification. By uniting the three company names into one, AT&T has simplified its message to the marketplace."

While this logic might sound good in a press release, it has little chance of working in the marketplace. Consumers want brands that stand for something, not one company to deliver everything. Many mergers have been based on convergence thinking, very few of which were successful. For example, AOL’s merger with Time-Warner.

Land-line phones and the long-distance category is dying in favor of nationwide cellular service, a category that has many focused brands like Verizon, Nextel and the former Cingular. It makes no sense to go back to the AT&T name, a brand that is headed for the nursing home.

What they should have done is so obvious, I can’t believe I have to say it. Keep the Cingular name and keep the brand focused on wireless. Keep the AT&T name on long-distance and let the brand and category fade away. It is the harsh reality of life that both have a bleak future.

As a brand name, Cingular has many good things going for it. Because of their uniqueness and legal protectability, coined words have a huge advantage. Sometimes, however, they face a difficult task getting into consumers’ minds because they are difficult to remember and spell.

But Cingular already cleared that hurdle with six years of hard marketing work, thousands of retail stores and hundreds of millions of dollars in advertising. Combine the recognized name with its strong orange color, its simple logo and its leadership position and you are left scratching your head. Why would anyone walk away from that?

Changing Cingular to AT&T is a move backward, not forward. The future belongs to strong brands focused on new categories, not old brands trying to put two existing categories together. AT&T is not going to relive its glory days, using Cingular would have been the better bet.

Next time: the second way to kill a brand.

Comments

[Bhushan Parulekar]

Few more causes a brand’s demise

1:There is no Innovation
2:There is too much innovation
3:The Brand becomes the Generic Brand
4:The Brand Fails to Give Justice to its USP or Core Competency
5:The Change In The Consumer Behavior
6:The Entry of the Giant Competitor in the market

[Steve Woodruff]

I think it's well worth opening up a dialogue on convergence vs divergence - is the marketplace actually going to force more large companies to consider spinning off divisions, or working with multiple brands/names? In the pharma marketplace, for instance, I think the convergence M&A strategy has proven to be pretty lame as far as tangible results...

[Amanda Heismann]

I agree with the AT&T, however, I disagree with Kodak. I think Kodak is one of the few brands that has moved forward, at least in the department of personal photography.

[Laura Ries]

Thanks for all the comments. I was on the phone today with BellSouth also soon to be AT&T and even they are confused and agree the new name makes no sense!

I also read about the new diet sodas fortified with vitamins. Diet Coke Plus is a crazy name. What are they now going to have all the varieties in regular and plus? I'll have a decaf diet coke with Lime plus vitamins please.

Tava at least is a new name. But the category is undefined. I don't think just soda with vitamins is going to fly.

On the other hand, the new Coke product (joint with Nestle) Engiva has some potential. I don't like the name because it is difficult to say, spell and remember. But at least it is a new name and a new category. Sparkling Green Tea with negative calories! Perfect for PR, of course they will over advertise it killing the PR potential.

[DofAM]

Man, is this right on. Further, AT&T has meant so many things since divestiture in 1983, I don't know what kind of company it is or what thye're about anymore. Cable? PCs? Credit cards?

[JohnB]

Great article Laura.

The truth is that no one really cares what the name of their phone provider is.

It reminds me of the cable tv world, I've lost track of how many times my cable company has changed in the last 5-10 years. No one could care in the least..they care about the bill and they care about what's on.

I think these mergers and name changes only further confuse the average consumer and the phone category is already extremely confusing, with so many plans and options.

At&T is looking more and more like the GM brand...bland, standing for nothing.

[deelaina]

This is off-topic, and I think I already know the answer, but I'd love to hear what you have to say regarding this story:

http://publications.mediapost.com/index.cfm?fuseaction=Articles.showArticleHomePage&art_aid=56706

Coca-cola and Pepsi-Co both to introduce "healthy" drinks. One company names theirs "Diet Coke Plus" and the other names theirs "Tava."

I wonder which "brand" has the better chance of winning?

[Damir Duraki]

Hey Laura,

I really enjoy your and your father's books and articles, and I have learnt a lot from you. Just wanted to say hi from Serbia (hey, that's another brand in trouble)!

Damir Duraki
Professor of Ries-ology in Serbia

[Daves Davoli]

Brilliant as always.
In a clear way, it always makes the defense, very intelligent, of the concept category and positioning, to get success!

[Ethan]

Agreed on the strengths of the Cingular name, logo, color, identity ... brand.

Also involved in this highly questionable move: awkward, expensive messaging like "Cingular is now part of the new AT&T."

The first time my wife and I saw one of those spots (on a national broadcast network), we gave a collective "huh!?"

Necessary messaging in some ways, but always awkward.

[Bill Gammell]

Laura,

I could not agree more. I am not sure what AT&T is thinking. I blogged about what I think is a telling statement from their press release: "AT&T, the standard bearer of communications excellence for more than a century, is getting younger on Monday, when the company folds the six year-old Cingular wireless name into the iconic AT&T brand."

There is a lot that can be said about the press release statement, but I think it would have been better to say "AT&T will crush the Cingular brand in the many folds of this over-weight, line-extending, stand-for-nothing AT&T brand."

[Mack Collier]

Exactly Laura, this bit of branding suicide was purely ego on AT&T's part. Cingular is young and hip to mobile customers, AT&T represents landlines and the Reagan administration.