Brand Killing Case Study

Brand Killing

Brands are strategic assets of companies. A brand has always been a symbiotic relationship between its creators/owners and the people who consume it. It’s the company that invents the brand, builds it and sustains it. Companies give birth to a brand and keep investing in building and nurturing the brands throughout their life with the help of its financial, reputational and human resources. Companies also work hard to create a place in the heart and earn loyalty of their customers by promoting the unique value propositions of brands. But the vote that counts the most is the one cast by the keepers of the brand or the consumers. Their actions, or lack of them, determines most how their brand fares and their fate and when brands

Nestlé had around 8,000 brands in 190 countries in 1996. The bulk of the company's profits came from around 200 brands, or 2.5 percent of the portfolio.

Harley Davidson decided to axe its 20 year old Sports bike brand “Buell” as they wanted to focus on its core Harley brand. It also decided to divest its MV Agusta business, a high-end Italian brand it bought only last year to increase its revenue. Loss making Brand Identification and Pruning Process

Audit

First, CEOs make the case for rationalization by getting groups of senior executives to conduct joint audits of the brand portfolio where they calculate the profitability, market reach, fixed cost and liabilities associated with the product. On the basis of these parameters, the brands are categorized as Dominant, Strong and weak in market position. These audits help to narrow down the unprofitable brands and make the need to prune brands apparent throughout the organization.

Brand

However the companies must take caution creating legal standards before selling the brand so that the brand doesn’t return as rivals to haunt them.

Milk: - Milking strategy is used by companies when it's not possible for the company to sell or Merge the marked brand due to some reason or the other. Here companies keep bare minimum marketing and advertising support for the product to keep product moving off the shelf. The costs in distribution and retailer margins are also gradually decreased so as to increase the profit margin out of this product.

Drop: - Companies generally drop the brands which they have trouble getting shelf space and attracting customers. However here companies must retain the patent name of the product before dropping so that the brand doesn’t return as rivals to haunt them.

Investment in Core