2010

BRAND LIFE CYCLE

This project is about the brand life cycle and its

working process, its ups and downs , its growth and
decline.

On the whole it a an introspect to the world of

BRAND LIFE CYCLE where we are going to Anirwan Chandra Dutta
analyse the life and death or extension of a brand.
Enroll.No: 10bsp0568
8/9/2010
 ENROLLMENT. NO: 10BSP0568

BRAND LIFE CYCLE

[A REPORT ON BRAND SURVIVAL]

ANIRWAN CHANDRA DUTTA

DATE: AUG. O9.2010.

This project is about the brand life cycle

and its working process, its ups and downs
, its growth and decline.

On the whole it a an introspect to the world

of BRAND LIFE CYCLE where we are
going to analyse the life and death or
extension of a brand.

Page | 1
 ACKNOWLEDGEMENT

I Anirwan Chandra Dutta, a student of I.B.S. Kolkata

Enroll. No. 10bsp0568 is really grateful to our professor
and mentor Dr. Shibhashish Chakraborty, who gave me
the opportunity and privilege to show and perform what
I have learnt during these days in the facade of a Project
file.
I am also thankful to my college to provide me with the
required data for the project. I also thank my parents
who stood by me, whether be it financially or morally it
really helped me. I also thank my friends who were
readily available to help me out sincerely.

Thanking you all.

Anirwan Chandra Dutta

Page | 2
 ABSTRACT

This project is about the brand life cycle and its

working process, its ups and downs , its growth
and decline.
On the whole it a an introspect to the world of
BRAND LIFE CYCLE where we are going to
analyse the life and death or extension of a brand.

Page | 3
 TABLE OF CONTENTS

Contents Page.no.
1. Acknowledgement 02

2. Abstract 03

3. Objectives of the report 05

4. The B.M.W. brand life cycle Case 06

5. Phases of brand life cycle 11

6. The life death and resuscitation of brand 18

7. Understanding the brand life cycle model 34

8. Building a better brand 40

Page | 4
OBJECTIVES OF THE REPORT

The Objective of my report is to analyse and review the importance of

BBRAND LIFE CYCLE.

For this I will be taking up a mixed bag of reports, journal, and cases.

My main objective would be on:

 Introduction of a brand
 Growth of a brand
 Maturity of a brand
 Decline of a brand
 Extension of a brand
 Branding strategies
 Brand survival
 Brand repositioning

Page | 5
 THE B.M.W. BRAND LIFE CYCLE CASE

BRAND LIFE CYCLE: We found this study most

informative and provides some great insight into how a great
brand should be managed and nurtured.

BMW: "Newness" and the Brand Life Cycle "We're fortunate right now at
BMW in that all of our products are new and competitive," says Jim McDowell,
vice president of marketing at BMW, as he explains BMW's brand life cycle. To
do that they keep introducing new models over time. They logically plan out
the introductions over time, so they 're not changing a whole model range, at the
same time they 're changing another model range." BMW's strategy is to keep
its products in the introduction and growth stages by periodically introducing
new models in each of its product lines.

In fact, BMW does not like to have any products in the maturity or decline
stage of the product life cycle. Explains McDowell, "If a product is declining,
we would prefer to withdraw it from the market, as opposed to having a strategy
for dealing with the declining product. We're kind of a progressive, go get 'em
company, and we don't think it does our brand image any good to have any
declining products out there. So that's why we work so hard at managing the
growth aspect." BMW - THE COMPANY AND ITS PRODUCTS BMW is one
of the preeminent luxury car manufacturers in Europe, North America, and the
world today. BMW produces several lines of cars, including the 3 series, the 5
series, the 7 series, the Z line, and the new X line, BMW's "sport activity"
vehicle line. In addition, BMW is now selling Rovers, a British car line
anchored by the internationally popular Land Rover sport utility vehicle, and

Page | 6
will begin selling Rolls Royce vehicles in 2003. Sales of all the BMW, Rover,
and Land Rover vehicles have been on the rise globally. High-profile image
campaigns and the award-winning BMW website continue to increase the
popularity of BMW's products. BMW cars typically have a product life cycle of
seven years. To keep products in the introductory and growth stages, BMW
regularly introduces new models for each of its series to keep the entire series
"new." For instance, with the 3 series, it will introduce the new sedan model one
year, the new coupe the next year, then the convertible, then the station wagon,
and then the sport hatchback. That's a new product introduction for five of the
seven years of the product life cycle. McDowell explains, "So, even though we
have seven-year life cycles, we constantly try and make the cars meaningfully
different and new about every three years. And that involves adding features
and other capabilities to the cars as well." How well does this strategy work?
BMW often sees its best sales numbers in either the sixth or seventh year after
the product introduction. As global sales have increased, BMW has become
aware of some international product life-cycle differences. For example, it has
discovered that some competitive products have life cycles that are shorter or
longer than seven years. In Sweden and Britain automotive product life cycles
are eight years, while in Japan
they are typically only four
years long. BRANDING "BMW
is fortunate-we don't have too
much of a dilemma as to what
we're going to call our cars."
McDowell is referring to
BMW's trademark naming
system that consists of the
product line number and the motor type. For example, the designation "328"
tells you the car is in the 3 series and the engine is 2.8 liters in size. BMW has

Page | 7
found this naming system to be clear and logical and can be easily understood
around the world. The Z and X series don't quite fit in with this system. BMW
had a tradition of building experimental, open-air cars and calling them Z's, and
hence when the prototype for the Z3 was built, BMW decided to continue with
the Z name. For the sport activity vehicle, BMW also used a letter name-the X
series-since the four-wheel drive vehicle didn't fit with the sedan-oriented 3, 5,
and 7 series. Other than the Z3 (the third in the Z series) and the X5 (named 5 to
symbolize its mid-sized status within that series), the BMW branding strategy is
quite simple, unlike the evocative names many car manufacturers choose to
garner excitement for their new models. MANAGING THE PRODUCT
THROUGH THE WEB - THE WAVE OF THE FUTURE One of the ways
BMW is improving its product offering seven further is through its innovative
website (www.bmwusa.com). At the site, customers can learn about the
particular models, e-mail questions, and request literature or test-drives from
their local BMW dealership. What really sets BMW's website apart from other
car manufacturers, though, is the ability for customers to configure a car to their
own specifications (interior choices, exterior choices, engine, packages, and
options) and then transfer that information to their local dealer. As Carol
Burrows, product communications manager for BMW, explains, "The BMW
website is an integrated part of the overall marketing strategy for BMW. The
full range of products can be seen and interacted with online. We offer pricing
options online. Customers can go to their local dealership via the website to
further discuss costs for purchase of a car. And it is a distribution channel for
information that allows people access to the information 24 hours a day at their
convenience."

Page | 8
 POINTS OF CONSIDERATION

 B.M.W. products are new and competitive.

 B.M.W. has a strategy of always keeping their products in the
introduction and growth stage only.
 B.M.W. does not want to keep its product-line in the maturity or the
decline phase, if required is ready to pull out the product.
 To keep product-line in the first 2 phases of B.L.C. they upgrade it each
coming year.
 Even though their model reaches its decline period its life cycle keeps
extending due to up gradation.
 B.M.W. sees best sale of the model in the 6th or 7th year.
 B.M.W. discovered new scales of brand and product life cycle in different
markets in different parts of the world.
 B.M.W. uses its name and not distinct name for its product line.
 B.M.W. using the internet as prospective market for growth.

Page | 9
 CASE ANALYSIS

B.M.W. has taken an innovative strategy of always keeping its product-line and
the brand stake always in the first 2 phases of brand life cycle and never go to
the following stages of it.

To make it happen they always keep evolving and upgrading their product line
each coming year, thus even though their model reaches its decline period its
life cycle keeps extending due to up gradation and keeping its product-line new
and competitive.

Due to this strategy it sees the best sale of the model in the 6 th or 7th year of its
life tenure.

B.M.W. has discovered new scales of brand and product life cycle in different
markets in different parts of the world, and accordingly have to plan to develop
stake market there.

B.M.W. does not fancy the trend of naming its products distinctly, but launches
them under the brand name of B.M.W. only. It has also developed a new
strategy of marketing through the internet.

Reference: www.bmwusa.com.

Page | 10
 BRAND LIFE CYCLE

The three phases through which brands pass as they are introduced, grow, and
then decline. The three phases of the brand life cycle are the introductory
period, during which the brand is developed and is introduced to the market; the
growth period, when the brand faces competition from other products of a
similar nature; and, finally, the maturity period, in which the brand either
extends to other products or its image is constantly updated. Without careful
brand management, the maturity period can lead to decline and result in the
brand being withdrawn. Similar stages can be observed in the product life cycle.

Brand Life Cycle and Strategy

Generally speaking, every brand or product has its life cycle which spans from
the time it is launched to the time it exits from the market. This cycle covers
five stages, namely product development, introduction, growth, maturity and
decline. The life cycle of each and every brand or product is different, and
different advertising strategies should be adopted at different stages to suit the
marketing targets and market environment in order to achieve the best
marketing results.

BRAND LIFE CYCLE GRAPH

Page | 11
Product Development -- This is the stage of design, production and research
carried out by a company to ensure that its products can meet consumer needs
through sufficient market survey. The company will also improve its products in
the light of market response and gradually build up its brand.

Introduction -- During this stage, the product is introduced into the market and
publicity campaigns are launched to promote its functions, features, quality and
usage and attract customers to try out or buy the product.

Growth -- The branded product begins to build up its following among

consumers during this stage. The cumulative effect of marketing begins to show
and the market share expands. However, the company must further step up its
advertising efforts, and the advertising must highlight the characteristics and
value of the product.

Maturity -- Brands or products in the maturity stage have a considerable

market share and have reached their sales peak, with growth beginning to slow
down. Brand influence at this stage is at its height and the kinds of marketing
strategies to be adopted are many.

Decline -- Brand awareness is high but sales are on the decline. Other
characteristics of this stage include falling prices, weakening competitiveness
and emergence of new products.

The same product or the same company may experience different life cycles in
different markets. Sa Sa Cosmetics is a case in point. The company is a
household name in Hong Kong which has already reached the stage of maturity.
However, it has only started venturing into the mainland in recent years and is
now at the stage of introduction or growth there. Sa Sa adopts different
strategies to achieve its targets at different stages. In Hong Kong, its target is to

Page | 12
increase its market share. On the mainland, it aims to draw the attention of
consumers and increase its reputation.

Some brands or products may experience exponential growth in their life cycle.
When China began its reform and opening up in the early 1980s, mainlanders
who came into contact with the new technologies and new products of foreign
countries for the first time found them amazing. These products saw rapid
growth and penetrated the mainland market within a short time, experiencing
only the introduction and maturity stages in their life cycle.

Examples of Exponential Growth

Mobile phones were rare commodities on the mainland in the early

1990s, but by August 2001, China had overtaken the US as the world
leader with 100 million mobile phones. Home PCs also witnessed
exponential growth. In 1994, there were only 400,000 PCs in China.
The number soared to 10 million within a short span of eight years.

Source: Synovate Ltd

SMEs must have a good understanding

of the positioning of their brand and
product category before they can
effectively formulate marketing
strategies. The following four branding
strategies can serve as useful reference
for SMEs.

Four Branding Strategies

Page | 13
 POINTS OF CONSIDERATION

 Brand Life Cycle consists of 3 phases namely:

 Introductory phase
 Growth phase
 Maturity phase

 These 3 phases consists of 5 stages namely:

 Product development
 Introduction
 Growth
 Maturity
 Decline

 There are situations when brands experience exponential growth,

resulting in jumping directly from introduction stage to maturity stage.

 Good understanding of Brand Strategies for better positioning of Brand

and Product.

Page | 14
 CASE ANALYSIS

In this case the process of brand life cycle has been explained and what role it
plays in determining whether a brand is dieing or is suffering from a heart attack
or is extending to lie on.

Brand Life Cycle consists of 3 phases namely

 Introductory phase:

It consists of 2 different stages of Brand life Cycle namely:

 Product development: Under this stage, design of the product or brand,

production and research are carried out by a company to ensure that their
products have the quality to satisfy and meet the consumer needs through
sufficient market survey. The company will also improve its products in
the light of market response and gradually build up its brand in the
coming future.

 Introduction: In this stage, the brand is introduced into the market and
publicity campaigns, advertisements are launched and lots of promotion
is done to highlight its functions, features, quality, attributes and usage to
attract customers to try it out or buy the product and clinch a market share
for the brand or product.

Page | 15
 Growth phase:

The product which was launched starts to build itself up as a brand among
consumers during this stage. The cumulative effect of marketing and
proper sales figure begins to show the growth and strength of it and the
growth of the market share expands. Moreover, the company must further
step up its advertising efforts to highlight the characteristics and value of
the product for it to perform in the long run.

 Maturity phase

It consists of 2 different stages of Brand Life Cycle namely:

 Maturity – After the growth stage or growth phase Brands or products

enter the maturity stage where they have a considerable market share and
have reached their sales peak, while growth begins to move towards
stagnation . The Brand influence of the product or product-line at this
stage is at its height and different kinds of marketing strategies are to be
adopted to make the brand inevitable.

 Decline/Reallocation – after the maturity stage a Brand enters the decline

stage where awareness is high but sales are constantly falling and the
profit graph is on the decline. Other characteristics which are commonly
seen in this stage are falling of prices, weakening of competitiveness and
emergence of new products. This can be rectified if reallocation or
repositioning of the brand is done on time either by innovation or by

Page | 16
 developing new product line, as the name and trust of the brand will be
huge and trust is also great which can be used as a medium to return in
the market with a big bang.

Exponential growth can be termed as ― HYPER INCREASE‖ in the

growth process due to which a brand or a product directly reaches the
maturity stage from the introduction stage or better quoted experiences
like getting a bonus and jumping over growth stage to reach maturity.

Sometimes it can be good but most of the time it actually pushes the
brand towards declining stage because as maturity reaches innovation and
repositioning is need to sustain the brand but many a times companies are
not ready for it and thus face doom.

Excellent knowledge of Brand Strategies are needed because they act is

the cistern containing the juice of life which can revive a sinking brand
and convert it into a fighter or a leader again.
There are 4 types of branding strategies which can be referred from the
diagram on page. 13.

Reference:
http://www.hktdc.com/info/mi/a/pgbp/en/1X005EN7/1/Practical-Guide-To-
Brand-Promotion-In-China/2-1-Brand-Life-Cycle-And-Strategy.htm

Page | 17
 The life, death and resuscitation of brands

What’s in a name?

Traditionally, brands have been defined as ―a name, term, symbol or design (or
combination of them) which is intended to signify the goods or services of one
seller or groups of sellers and to differentiate them from those of the
competitors‖ (Kotler, 2000). However, this definition is limiting. Dibb et al.
(1997) suggested that branding is a component of a product’s tangible features –
the verbal and physical cues that assist the customer in choosing one product
over another. However, this is not just applicable to a ―product‖. Services also
communicate verbal and physical cues. A five-star hotel while providing a
range of services ―transmits‖ a range of verbal and physical cues to potential
customers. They are all part of the hotel’s brand.

Moreover, the actions of people, the processes involved, the packaging and the
psychology behind the operations all contribute to the branding of a product or
service. It is really a combination of these factors that, in reality, drive branding.

Using metaphors

The development of a product or service is often discussed in terms of a ―life

cycle‖. Here the same metaphor is used to link the concept of branding to the
human condition. However, it is acknowledged that this is far from a ―perfect‖
fit, as will be clearly seen in the later discussion on ―terminally ill brands‖.

On this basis it is not impossible that some of the major brands that currently
adorn our homes and offices will face decline and death in the future. Of course
these are brands with long, and for the most part, a distinguished history. They
Page | 18
leave various legacies. However, this states nothing of the ―minor‖ brands that
come and go, virtually everyday, almost at a blink of an eye.

Internal and external environmental factors

Brands are affected by a combination of internal (micro) and external (macro)

environmental factors. It is useful to briefly consider some of these factors. By
understanding these influencing factors an organization can review their brands
position within the marketplace. Moreover, they can aim to forecast or scenario-
plan possible outcomes for their brand – in other words the future ―health‖ of
the brand. For example, a tobacco brand facing increasing global restrictions in
terms of promotion and distribution may seek to diversify into other business
areas. However, they may be able to build on their existing brand name.
Therefore they can re-energize the brand by developing these new market
opportunities.

Darwinian approach to brand development and survival

The stereotypical product life cycle is depicted in. Normally it is segmented into
four key components – introduction, growth, maturity and decline. Of course,
additional components are often added, such as birth with death at the other end
of the spectrum. The same process can easily be equated to brands.

Some brands have lasted for decades, even centuries. However, it cannot and
should not be assumed that during that time frame the brand has been frozen in
time. Perhaps the very reason why some brands outlast competitors in the ―age‖
stakes is that they have not been stationary. On the contrary the brand has
―moved with the times‖ it has adapted to or evolved with the changing
environment in which it finds itself. This is not far removed from Darwin’s

Page | 19
view of how various animal species, including ourselves, have adapted to our
changing climatic, rural and urban environments over hundreds of years.

How a brand adapts to the changing environment is largely in the hands of the
brand managers, their team and the company as a whole. A company can, and
many do, bury their collective heads in the sand, become complacent and fail to
realize (except when it is too late) that their brand is about to become extinct.

Brand Adaptation

Adaptation can take time. McDonald’s is an example of a corporate brand that

has needed to adapt in order to develop and survive mounting criticism. These
adaptations have been driven by:

 The need to understand local cultural demands – often linked to religious

beliefs. Therefore, the adaptation of products has needed to match the
local cultural perspective, such as vegetarian meals.
 There is mounting concern throughout North America and Europe over
increasing obesity, especially in children and adolescents. This has
resulted in the reduction of proportions such as the super-size meal in the
USA.
 Food sources and perceived disease risks from factory-farmed produce.
 Requirements for organic rather than factory-farmed produce on both
ethical and quality grounds. Adaptations have included the introduction
of salads, low-fat, low calorie and organic-sourced ingredients.

The process of rejuvenation

The process of rejuvenation can be achieved through two core activities:

innovation and re-positioning of the brand. These are not mutually exclusive
activities and can often be seen operating in concert.
Page | 20
Innovation

This does not necessarily mean

radically enhanced changes. Innovations can be small incremental steps in the
development of a product. Consider, for example, minor on-going
improvements to a product or service. Take, for instance, the enhancements to
first and business class cabins on major international airlines.

On the other hand, there have been radical innovations to the mobile phone
brands. Gone are the days when a mobile phone looked and weighed like a
household brick and had a very limited range. Through technical innovation
mobile phones are now lightweight, multifaceted and can pick up signals
virtually anywhere. Today the major mobile phone brands compete in a highly
dynamic, and some may say, volatile environment. While price plans may
differentiate over the short term, it will be innovations over the longer term that
will truly differentiate the mobile phone brands from each other.

With the Darwinian view, brands are adapted through minor and major
innovative refinements. In some cases, while the brand name has remained the
same the actual product or service has evolved into something radically
different. This is very true of corporate brands that have become the ―umbrella‖
for a collection of major/minor sub-brands. Just think for a moment of how the
Ford Motor Company, as a powerful automotive brand, has evolved through
innovation since Henry Ford opened his factory gates in the early years of the
twentieth century producing just one brand of car – the Model T. Yet it is clear

Page | 21
that if Henry Ford had not sought innovation, and thus evolution, the Ford brand
would have been yet another car brand landing on the scrap heap.

The Ford brand has outlasted many of its younger rivals. But it, too, cannot
afford to become complacent. The international car market is saturated; there
are many more international players and several companies have merged to pool
their resources in order to survive.

The car brands are facing new challenges such as the impact of global warming,
global dimming and changing consumer preferences. Thus new innovative paths
must be followed for the companies to rejuvenate their brands. This
rejuvenation should, in turn, contribute toward gaining competitive advantage.
However, it must be remembered that gaining a competitive advantage is only
one part of the equation. The challenge is to sustain that advantage over the
longer term.

Re-positioning the brand

This can be defined in two integrated ways:

1. The physical re-positioning of the brand in relation to current and

potential future competitors. Indeed, by physically re-positioning the
brand contact will be made with new competitors.
2. The re-positioning of the brand in the mind of the consumer. It is the
consumer that has to be persuaded that the brand is right for them.

The following provides two illuminating examples of how brands can be re-
positioned.

Page | 22
Lucozade

In 1927 in the Northeast of England an energy drink – Gluozade – was

introduced. By 1929, it was re-branded as Lucozade and for some 50 years was
marketed as a ―convalescent drink‖ for those who were ill. During the 1950s
and 1960s it was Beecham’s largest brand. However, with increased market
pressures it was repositioned in 1985 as an ―every-day replacement energy
drink.‖ This allowed the company to broaden its market.

In 1986 the product line was extended to include orange and lemon variants.
The product line was further enhanced, in 1990, with the introduction of a new
tropical flavored variant. Although changes had already been implemented, by
1996 there was a need for a major repositioning within the market. The brand
was re-launched with a newly shaped 300ml bottle (later replaced by a 380ml
PET bottle), a new logo and fresh inventive advertising. Further revitalization
came in the form of the computer-generated adventure character Lara Croft, the
heroine of the game Tomb Raiders. Lara Croft was the focal point of the
advertising and reinforced the drink brand’s position as an ―iconic energy
drink.‖

Since these acts of revitalization Lucozade has become on of the world’s best
known energy drinks with major markets in the UK, Ireland, Mexico and Hong
Kong.

Benetton

Re-positioning may be undertaken on a local, regional and indeed international

level. For example, in 2000 the international clothing retailer Benetton sought to
increase its presence in the USA. At that time it only had a New York outlet so
Benetton signed a major deal with the nationwide Sears group. This would, over

Page | 23
time, provide Benetton with some 800 outlets within Sears’ stores.
Simultaneously, Benetton’s radical marketer Toscani was developing another
controversial advertising campaign. This time the campaign focussed on
advertisements that featured prison inmates on US Death Row, which proved to
be too controversial.

Opponents were able to create a word-of-mouth storm that lead to Sears

terminating the contract (estimated to be worth several million dollars). This
was devastating for Benetton in the USA and significantly damaged their brand
image in that region. The consequence was a separation. Toscani left Benetton
and the company sought another approach to their international marketing.
Since then, they have been able to re-position themselves within the US market
in a new attempt to build market share.

But do brands really last forever?

Although it may seem that brands last forever, that is only because of the
relatively short life of brands in the human time experience. For instance,
certain brands, such as the UK bank Lloyds TSB can be traced back to the
eighteenth century. However, the vast majority of ―everyday brands‖ are a
creation of the twentieth century.

Brands come and go, some far more rapidly than others. While companies may
seek to rejuvenate and/or adapt their brands there will arise circumstances where
the brand no longer matches the expectations of either the company or the
market. In such cases the company may decide to either sell the brand to another
company, with the sale including all associated resources, such as employees
and plant. Equally, the company may deem that the brand is ―terminally ill‖ and
as such seeks its closure.

Page | 24
This is perhaps the weakest point of the metaphor or analogy with the human
condition. So far, few countries allow the termination of life or euthanasia on
health grounds. Yet the life cycle of a brand may be prematurely terminated. In
cases where a brand cannot be rejuvenated – and thus becomes a drain on a
company’s resources – there may be little alternative but to withdraw it from the
marketplace. For historical and thus perhaps emotional reasons some companies
―hang onto‖ a brand, in hopes that the brand will suddenly be resuscitated.
However, this prolongation may do more harm than good for the company
concerned, such as draining resources that would be more effective if invested
into a new brand.

There are cases where companies have clearly failed to disengage themselves
from failing brands, which has, in turn, crippled the company.

Brand heart attack or catastrophic failure

Brands can also suffer a catastrophic failure, perhaps likened to a human heart
attack or stroke. As in the human condition, such a catastrophe may be
recoverable or they can be fatal. Here are two examples of a brand suffering a
catastrophic failure that can be likened to a heart attack: Ratner was a leading
jewellery chain in the UK and Pan Am was one of the most respected globally
renown airlines in aviation history.

During the 1980s Ratner became a highly successfully UK high-street jewellery

chain. The business had rapidly developed though a combination of organic
growth and prudent acquisition. However, this brand was soon to implode.
During a business reception the CEO and founder of the company Gerald
Ratner made an ―off the cuff‖ remark about the quality of the company’s
products in relation to their price. It was meant as light-hearted humor.
Page | 25
However, the media printed Ratner’s comment word-by-word. These two
relatively short sentences were to be repeated across the media. Both investors
and customers took note of the comments. Within days sales were down and so
was the share price. The brand was now in meltdown – it had suffered severe
heart attack.

Ratner resigned from the company in the hope that the rift between
investors/customers and the brand would be healed. No matter what Ratner or
his marketing team did they could not resuscitate the brand. Within months the
company was divesting businesses and even attempted to re-brand itself. Yet the
illness was fatal.

Survival of a different kind

From the 1930s Pan American World Airways (commonly known as Pan Am)
was the USA’ principal international airline. Through many groundbreaking
innovations Pan Am helped shaped the international airline business that we
now take for granted. However, by the early 1970s the brand was beginning to
suffer from a series of events that were to signal its downfall.

A combination of external factors (high fuel costs and oversupply within the
marketplace due to the US government offering routes to other airlines) and
internal factors (lower demand for air travel and investment in new aircraft) lead
to reduced performance. It also sought to build a US internal route network,
which took several attempts before permission would actually be granted. Pan
Am finally developed this internal route network through the acquisition of the
National Airline brand. However, that acquisition came at a high price, and
pushed the company further into debt.

By the early 1980s the company was selling assets to save the brand. Then the
terrorist attack that brought down a New York-bound flight over Lockerbie in
Page | 26
Scotland virtually sealed the fate of the once glorious brand. Then came the
Gulf War. Passengers avoided transatlantic flights. Even with its now limited
routes, the Pan Am brand could no longer take the strain. In August 1991 Pan
Am filed for bankruptcy and operations ceased in October.

This was not the final chapter, however, as the brand would be resurrected
twice. In 1996 a new operation was initiated with the objective of providing a
low-cost service between US cities and major Caribbean destinations. However,
a combination of rapid expansion and market difficulties lead to another
bankruptcy in 1998. A second incarnation of the airline occurred that very same
year when the railroad company, Guilford Transportation Industries, acquired
the brand. But the Pan Am operations under Guildford Transportation ceased in
November 2004 only to be transferred to Boston-Marine Airways.

In one more attempt, a Pan Am service was resumed in February 2005. While
the Pan Am brand lives on it is a very different entity than the brand that once
graced the skies.

Conclusion

Organizations must seek to continually monitor the ―health‖ of the brand in

relation to its changing environments. Life expectancy can be increased through
evolving the brand (innovations and re-positioning). However, organizations
must also recognize when the brand has genuinely reached the end of its life
span. Brands that have a lingering decline do little for the brand or the
organization. The challenge for many organizations is knowing when the brand
can no longer be resuscitated.

Page | 27
 POINTS OF CONSIDERATION

 To understand the metaphor of life and death and the theory of survival
by Darwin and its comparison with Brand Life Cycle.

 To ponder on the internal ( micro )and external factors ( macro ).

 Key features of brand adaption.

 Process of Rejuvenation consists of:  Innovation

 Re-positioning

 Brand heart attack or catastrophic failure

Page | 28
 CASE ANALYSIS

In this case Brand Life Cycle has been compared with the inevitable truth and
working process of human life. Here a comparison has been done between birth
of a new life and the introduction of a new brand. Here a similarity has been
pointed out between the growing of a human being and the growth of a brand.
Here a balance is being shown between the maturity of a human being and of a
powerful brand. Here a relation is been depicted between the death of a human
being and of a declining brand. On the whole in this case analysis is done on the
basis of Darwin’s theory of survival of the fittest.

Environmental factors

Brands are affected by a combination of internal (micro) and external (macro)

environmental factors, such as:

Micro:

 Customers – if customers become disenchanted with a particular brand,

they will switch to another, either temporarily or permanently.
 Financial stability of the company – a brand may be a viable proposition.
However, if the parent company is financially unstable, then it may
damage the brand's reputation – unless the company decides to sell the
brand.
 Promotion – poor, inadequate or inappropriate promotional activity,
especially within a highly competitive environment, can result in a brand
losing market share.

Page | 29
Macro:

 Political – if a country is politically unstable then it is likely to become

economically unstable, which can have a serious impact on a brand
limited to a particular country market.
 Economic – recessions, slumps and rises in raw materials can all have a
significant impact on whether current customers can afford to continue
purchasing certain branded products.
 Legal – changes in legislation can have serious impacts on brand
longevity, particularly when the legislation restricts/prevents brand
promotion, i.e. tobacco.
 Environmental – the changing environment due to global warming will
have an impact on certain brands, i.e. companies investing in alternative
environmentally friendly power supplies are likely to increase brand
longevity.

By understanding these influencing factors an organization can review their

brand's position within the marketplace. Moreover, they can aim to forecast or
scenario-plan possible outcomes for their brand.

Key factors of Adaptation

Adaptation can take time. McDonald's is an example of a corporate brand that

has needed to adapt in order to develop and survive mounting criticism. These
adaptations have been driven by:

 The need to understand local cultural demands. Therefore, the adaptation

of products has needed to match the local cultural perspective, such as
vegetarian meals.
 There is mounting concern throughout North America and Europe over
increasing obesity, especially in children and adolescents. This has

Page | 30
 resulted in the reduction of proportions such as the super-size meal in the
USA.
 Requirements for organic rather than factory-farmed produce on both
ethical and quality grounds. Adaptations have included the introduction
of salads, low-fat, low calorie and organic-sourced ingredients.

Rejuvenation

The process of rejuvenation can be achieved through two core activities:

innovation and re-positioning of the brand. These are not mutually exclusive
activities and can often be seen operating simultaneously.

Innovation

This means it is not necessarily important to radically enhanced changes in a

hurry. Innovations can be small incremental steps in the development process of
a product. Consider, for example, minor on-going improvements to a product or
service.

Brands are adapted through both minor and major innovative refinements, and
in some cases, while the brand name has remained the same the actual product
or service has evolved into something radically different. This is very true of
corporate brands that have become the ―umbrella‖ for a collection of
major/minor sub-brands.

Re-positioning

This can be defined in two integrated ways:

1. The physical re-positioning of the brand in relation to current and

potential future competitors; which means the re-positioning process in

Page | 31
 which a brand is refined and given an edge so that it can perform better
than its current and potential future competitors.
2. The re-positioning of the brand in the mind of the consumer. It is the
consumer that has to be persuaded that the brand is right for them. It
means that we have to attack the mindset of the customer and create a
prominent impact on them. This means we have to consider the
CUSTOMER BASED BRAND EQUITY theory to do this. This means
we have to create a space for our product not only on the basis of price,
but also differentiate it with other products and create a distinct want for
our product which can only be satisfied by our product.

Brand heart attack or catastrophic failure:

By the above statement a meaning can be derived that as a human being suffers
a heart attack. Sometimes they die, sometimes they survive. Same wise brands
also face such kind of situations where either a brand collapses and does not
recover or braves the situation and comes back stronger ready for the future.

Increasing life expectancy

Brands come and go, some more quickly than others. While companies may
seek to rejuvenate and/or adapt their brands there will arise circumstances where
the brand no longer matches the expectations of either the company or the
market. In such cases the company may decide to either sell the brand to another
company, with the sale including all associated resources, such as employees
and plant.

In cases where a brand cannot be rejuvenated – and thus becomes a drain on a

company's resources – there may be little alternative but to withdraw it from the
marketplace. For historical and thus perhaps emotional reasons some companies

Page | 32
hang onto a brand, in hopes that it will suddenly be resuscitated. However, this
persistence may do more harm than good for the company concerned.

Organizations must seek to continually monitor the ―health‖ of the brand in

relation to its changing environments. Life expectancy can be increased through
evolving the brand (innovations and re-positioning). However, organizations
must also recognize when the brand has genuinely reached the end of its life
span. Brands that have a lingering decline do little for the brand or the company.
The challenge for many organizations is knowing when the brand can no longer
be resuscitated.

Reference: Jonathan Groucutt, Senior Lecturer at the Business School,

Oxford Brookes University, UK. He can be contacted at either
jgroucutt@brookes.ac.uk or jgroucutt@aol.com

Page | 33
 UNDERSTANDING THE BRAND
LIFE CYCLE MODEL
This is a model I developed in the mid 1990’s to help companies understand
how a particular brand should be positioned and its relation to the company’s
overall strategy. I was helping many senior ad agencies’ executives/planner
from New York to Tokyo to use this to understand their clients’ branding
issues. This was based on my extensive study of US and European companies
and their brands in different categories. This model enables companies to look
at their corporate strategies, portfolio of brands and products in a meaningful
way. I have not revisited this since this was published some ten years ago. I
thought you would find this interesting.

The analogy is that all brands basically evolve through four stages. Most of
them start as a Product Brand, and then some are transformed into a Service
Brand. Over years of brand building effort and market presence they gradually
become either a Category Brand, which is defined as having leading market
share within a category; or a Personality Brand, which establishes a strong
brand personality that consumers identify with; or an Experience Brand,
which goes beyond traditional service and product excellence with a strong
sense of uniqueness.

Page | 34
Procter & Gamble is not particularly well known among consumers, while its
brands—Ariel, Tide, Pampers, Always, Pantene are all very well known brands
within their respective categories. Another type of brand is an Ingredient
Brand, which is actually a co-brand since it co-exists together with others who
might be responsible for physically manufacturing products or delivering of the
service.

Ingredient Brands usually serve the purpose of providing additional trust or

confidence and often signify the use of an exclusive or proprietary technology.
Examples include Lycra, Polartec, Gortex, Windows, Intel, Dolby and Oracle
etc. This is the exact opposite of product brands. By contrast, the technology
products communicate at the level of the company whose credibility and
expertise have turned its name into a brand is stressed. The most successful
case is likely Intel. If you buy an IBM computer today (already a powerful
brand name), you will find two other co-brands: Windows and Intel. Twenty
years ago we would not have envisioned the operation system and chip supplier
would put their brand side by side with IBM. Today, however, they are top
household names.

Ingredient Brands are not new. Only the term is. It existed hundred of years ago
in the form of country brand. Remember all those ―Made in Germany‖ and
―Made in Japan‖ labels, symbolizing quality and sound engineering. The
chemical and pharmaceutical industries have also become skilled in using the
Ingredients Brand. When Du Pont differentiates its elasthane it becomes a
symbol of quality. Without the Lycra label, consumers might believe that this
fabric was a lower quality material. Lycra gave Du Point so much market
power that the whole industry paid premium prices for this material. Du Pont

Page | 35
actually made Lycra fashionable; how often have you heard of a chemical
company who provides the material that has an impact of fashion trend.

After being extremely successful these brands become cash generating

trademarks. They will then sometimes be moved up one level and become a
Corporate Brand (the brand name becomes the corporation) or a Global
Brand, expanding geographically to become a global dominant leader. These
different stances illustrate the major strategic choices required by each
corporation, namely the optimum level at which a brand should be positioned to
capture and create shareholder value. Companies sometimes can successfully
move brands to different strategic levels and become the overall brand if that
brand is very successful.
Sometimes a brand needs to move from one category and become a brand of
multi-categories. This is particularly common in fast moving consumer goods.
In choosing a branding level you position against future competition to enjoy
the best competitive advantage vis-à-vis channel partners and consumers. This
is always the key consideration governing the choice of level.
These categorizations are not mutually exclusive. A brand can be both a global
brand and a personality brand (Virgin) or a global brand and an ingredient
brand (Intel). The model suggests that the ultimate goal for all companies is to
have a global brand. A strong global brand is a powerful weapon. These days, it
is an indispensable one, as the economy challenges our faith in brands to
deliver a profit. All studies suggested the most valuable brands are all global.

Page | 36
 POINTS OF CONSIDERATION:

 The model provided by IDRIS MONTEE enables companies to look at

their corporate strategies, portfolio of brands and products in a
meaningful way.

 His model explains the relation between the Brand Evolution and the
Brand Power.

 His model consists of 4 different stages which are further divided into :

I. product brand
II. service brand
III. category brand
IV. personality brand
V. experience brand
VI. ingredient brand
VII. corporate brand
VIII. global brand

 Categorisation not mutually exclusive.

Page | 37
 CASE ANALYSIS:

This model of Idris Montee enables companies to look at their corporate

strategies, portfolio of brands and products in a meaningful way, because it
helps them understand the issues of branding in a much better way and where to
place their brand and in which category.

His model explains the relation between BRAND EVOLUTION and BRAND
POWER. In his model it has been depicted that as there is aggradation in the
brand category process the power of the brand goes up; likewise the evolution
of the brand also takes place.

Categories of the brand are:

 Product brand : it is the starting stage of a brand.

 Service brand : transformation from product brand to present stage.
 Category brand : its recognition due to brand building effort and market
presence, and has a definite leading market share within a category.
 Personality brand : it is defined as a stage where the it becomes a strong
brand where consumers identify it as a brand.
 Experience brand : it is a stage where the brand goes beyond the
boundaries of traditional services and product excellence, and also
develops a strong sense of uniqueness which only it has.
 Ingredient brand : it is a situation where 2 consecutive brand co-exist
together because of their collaboration a new product is generated.
 Corporate brand : it is a stage where the brand goes up one more level to
become a corporation to give the brand an edge.
 Global brand : it is this stage where the brand becomes a global and the
whole world becomes its market and it starts diversifying geographically
in all directions.

Page | 38
 By this the author wants to state that a product can be consecutively a
global brand as well as a personality brand or a ingredient brand.

http://mootee.typepad.com/innovation_playground/2007/09/understanding-
t.html

Page | 39
 BUILDING A BETTER BRAND
Giant companies know their brands are worth a fortune.
The key to marketing your business is finding a timeless
position and staying focused

Sales & Marketing October 12, 2007, 11:08AM EST

by Steve McKee

Is Nike (NKE) a better shoe than Reebok (ADDDY)? Is Michelin (MHINF) a

better tire than Goodyear (GT)? Who really knows?

Sure, each brand has their loyalists, and if you ask the executives at Nike and
Michelin, I suspect they'd have reams of data to prove that their products are the
best. But to the average shoe or tire buyer, are Nike and Michelin all that
different from the competition? If you took all the brand indicators off both
products, would you know which is made of longer-lasting material or offers
better performance? In all likelihood, you wouldn't.

If that's the case, why are people like you and me willing to spend more for
products from companies like Nike and Michelin? The answer, in a word, is
branding. These marketers know that the huge investment of time and money
they spend on their brands will make their products worth more in the
marketplace. And they're right.

In BusinessWeek/Interbrand's 2007 ranking of the 100 Best Global Brands

(BusinessWeek.com 08/06/07), the global value of the Coca-Cola (KO) brand
was $65 billion. That's the brand alone—not the trucks, not the bottling plants,
not even the secret formula. The same study says that the McDonald's (MCD)
brand is worth $29 billion, and BMW (BYMOF) $21 billion.

Page | 40
Adding Value

Most brands are a long way from being worth $21 billion. But all of them are
worth something, and the better the branding efforts the more value a brand can
add to the products and services to which it's attached.

So how does a company go about building a strong brand? Well, let's start at the
top and take Coca-Cola as an example. If you and I each wrote a rational
description of the Coca-Cola brand, we'd probably use different words, but our
statements would be fairly close in meaning. The Coca-Cola brand is so well
established in our minds that we could work backwards from it and come to
essentially the same place.

But in the real world, people don't diagram the meaning behind brands. Instead,
the name or logo instantly brings to their minds a perception built by years of
branding cues. These cues include everything from product design to pricing to
packaging, as well as all of the tools in the marketing communications toolbox,
from advertising to promotions to public relations.

The trick for any long-term branding effort is to focus first not on the cues
themselves but on the benefits they communicate. For Coca-Cola, the primary
rational benefit is refreshment. For Michelin, it's safety. Master marketers take
great pains to understand the context of the consumer purchasing decision, and
then build their core competencies and market positioning around it.

Take Your Positions

Much has been written about positioning since Jack Trout and Al Ries wrote a
book on the topic more than two decades ago (Positioning: The Battle for Your
Mind). In fact, if you read the Amazon (AMZN) description of their original
work, you'll see it's cited by more than 100 other books. But positioning is not

Page | 41
really a difficult concept: At root, it's simply the rational and emotional benefits
people associate with a brand.

Gatorade (PEP) is the sports thirst-quencher. BlackBerry (RIMM) is a device

that keeps you connected. QuickBooks (INTU) is the accounting software for
non-accountants. The rational side of branding is not that complicated, at least
in theory.

In practice it can be more difficult, primarily because it's easy to confuse true
positioning with a focus on features and attributes.

A couple of months ago I stumbled across an article about the Model T. It's rare
to see one today, of course, but back in the early 20th century, Ford (F) cranked
out 16 million of them. In the Model T's heyday, there was no such thing as
power steering, speedometers, rear-view mirrors, seat belts, radios, heaters, air
conditioners, and not even an automatic starter (imagine hand-cranking your car
today).

Compare that with the last car you bought, which probably came with all of the
above and possibly even an iPod (AAPL) dock, rearview camera, or satellite-
based navigation system. New bells and whistles are great, but today's exclusive
attribute is tomorrow's standard feature.

Keeping Focus

BMW (worth $21 billion—remember?) understands this. As the company

introduces new models, they inevitably include the latest and greatest features.
But BMW doesn't attempt to build its positioning around run-flat tires or side-
impact airbags. Instead, the company understands that in the automotive market
there will always be a segment of buyers for whom the way a car handles and
Page | 42
feels (and makes its driver feel) is the most important consideration.
Performance is the benefit BMW has owned for decades, and the brand has kept
its focus there even as the definition of performance has evolved.

As you evaluate your own brand's positioning, don't focus on features that will
soon be co-opted by your competitors. Consider the primary benefits your brand
provides and what they really add up to. Then examine the extent to which your
positioning passes six key tests: relevance, simplicity, differentiation,
believability, credibility, and defensibility (BusinessWeek.com 09/14/07).

If it's strong, your brand is likely to provide value for the long term as it guides
not only your marketing efforts but decisions ranging from research and
development to acquisitions. If not, you may need to reorient your operations to
make it work or find a different hook on which to base your positioning. Either
way, getting positioning right is the first step in creating a brand worth billions.

Steve McKee is president of McKee Wallwork Cleveland Advertising, an

agency that specializes in businesses with ad budgets under $10 million. He
writes his sales and marketing column every month.

Page | 43
 POINTS OF CONSIDERATION

 Huge investment of time and money spending is done on their brands to

make their products worth more in the marketplace. And they're right.
This is known as branding , because of which a normal consumer is ready
to shell out more money.

 Better the branding efforts the more value a brand can add to the products
and services to which it's attached.

 A brand is so well established in our minds that we could work

backwards from it and come to essentially the same place.

 The name or logo instantly brings to their minds a perception built by

years of branding cues. These cues include everything from product
design to pricing to packaging, as well as all of the tools in the marketing
communications toolbox, from advertising to promotions to public
relations. Any long-term branding effort is to focus first not on the cues
themselves but on the benefits they communicate. The primary rational
benefit for any brand is Achievement. For Michelin, it's safety.

 Consider the primary benefits your brand provides and what they really
add up to. Then examine the extent to which your positioning passes six
key tests: relevance, simplicity, differentiation, believability, credibility,
and defensibility

Page | 44
 CASE ANALYSIS

According to the report, Huge investment of time and money spending is done
on their brands to make their products worth more in the marketplace. This is
known as branding , because of which a normal consumer is ready to shell out
more money.

Therefore better the branding process , the better value and services are added to
the brand and this makes it more recognizable in the market.

The more a brand grows the more impact it creates on our inception and more
are we related to it whether directly or indirectly. We [can analysis the brand
whichever way we want and the result will be same.

The name or logo instantly brings to our minds a perception built by the years
of branding cues. These cues include everything from product design to pricing
to packaging, as well as all of the tools in the marketing communications
toolbox, from advertising to promotions to public relations. Any long-term
branding effort is to focus first not on the cues themselves but on the benefits
they communicate. The primary rational benefit for any brand is Achievement.
For Michelin, it's safety.

Whenever we again start working on the branding of a brand we should

consider the primary benefits of the brand provides and what it really add up to.
Then examine the extent to which our positioning passes six key tests:
relevance, simplicity, differentiation, believability, credibility, and defensibility.

http://www.businessweek.com/smallbiz/content/oct2007/sb20
071012_740637_page_2.htm
Page | 45
 CONCLUSION

After doing the project, I realised that brand is much bigger than its
spelling and its life cycle is very much complicated and a lot of
business and corporate dealings depend upon the credibility of a
brand. Through this project I came to know like any human being
even a brand has a life but with a difference cause its life can be
extended. I am really thankful to my sir Dr. Shibashish Chakraborty
to give me the task to do it and also learn from it.

Thanking you all,

Anirwan Chandra Dutta.

Page | 46