Wednesday, January 09, 2013

The concept of a PLC

Global case studies of struggling brands show that similar to the concept of a PLC (Product Life Cycle), revival strategies must depend on the stage of life cycle that the brand is in as well as the real reasons why it has lost its connect with its customers. When properly applied, brands can survive many PLCs

Brands that face decline typically would fall into two categories – those that carry a huge legacy and those who don’t. American Airlines is in the first, and it’s trying hard to win back customers. It’s AAdvantage Mystery Miles program achieved huge success on Facebook initially with 210,000 fans within 54 hours of launch, and is a welcome step towards engagement. But besides getting seats filled quickly, the airline needs to ensure a far improved service. Similarly, Sony and Nokia are now perceived to be far less innovation and customer oriented than before. Departmental store chain Sears is said to have suffered due to poor focus on store upkeep, lack of a clear positioning & a disdainful approach to merchandising, while the likes of Wal-Mart and Target galloped ahead. Jaguar’s target audience aged over time. Jean-Noel Kapferer, Professor at HEC Paris, cites the instance of Mercedes in his book ‘Strategic Brand Management’, which faced a decline in brand perception over 10 years back and lost its aspirational tag to the Toyota Lexus. It was being perceived as an old brand, and Jean asserts, “The event that revitalised Mercedes was the launch of the A-Class... It departed from the traditional Mercedes image on two counts – it had a front-wheel drive and a completely different design. However, it still had the interior space of the C-Class and the safety of the E-Class.” It also attracted a younger clientele with an average age of 37. Typically, legacy brands attempting rejuvenation tend to balance the old and the new.

On the other hand, a brand like Yahoo! has problems of a different nature. It doesn’t have that kind of legacy by its side, and may actually be long gone before it does! It started off in 1994 by positioning itself as “David & Jerry’s guide to the World Wide Web”, after the Stanford students who started it. Within three years, Yahoo! had the largest audience on the internet. But later efforts at being the customer’s window to the web appeared quite misguided. Moreover, the company lost out to Google on search, which made the latter the preferred window to the internet world, even though Yahoo! still retains a more interesting, informative and nicely segmented web portal. It’s not just search that it missed monetising on. It acquired Broadcast.com for $5.7 billion in 1999 to capitalise on multimedia on the web, seven years before Google acquired YouTube. However, they failed to gain popularity. Besides, Yahoo! missed out on the social networking bus as well as the movement of masses of customers to mobile phones. BlackBerry faces problems of a similar nature globally. Though its messaging service has a huge fan following, the company’s products have lost their edge amidst the Android and Apple wave. Such brands, that face rejuvenation issues so early in their life cycle, have to be more open to drastic measures. They may need to radically reposition themselves through proper communication to attract new audiences. But Ramanujam Sreedhar, noted brand consultant and CEO, brand-comm, also cautions, “Before you go for a brand repositioning, you must analyse if the product itself has become irrelevant.”


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
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