Disappearing brands

Sinking shipby Tony Fannin, Partner, BE Branded  |

Each year, 24/7 Wall Street releases their predictions on brands that will disappear sometime the following year. This doesn’t mean they will completely go away, some brand names will disappear due to acquisition or renamed and introduced into a new category.

The main lesson to glean is realize how important your brand image is. Many of these brands still have great products and parts of their business dominates certain categories, but in the end, the REAL value of any company is their brand. This is what is the worth the millions and billions of dollars. Which would you rather own, a warehouse full of shoes or the Nike brand? A real life example is Rolls-Royce. The actual car is owned by Volkswagen while the brand and name is owned by Rolls-Royce. Volkswagen pays a licenses fee. Rolls-Royce understands where the money is and cut their overhead costs by not producing the car.

Ten Brands that may disappear in 2015:

1. LuLulemon – Started in 1998 in Vancouver, British Columbia, Canada, as a yoga-inspired athletic apparel company. By 2005, they skyrocketed in sales and locations and went public in 2007. At their height, the LuLulemon brand meant “scarce quality”. They kept quantities low and trained their customers to buy now instead of waiting. So they rarely had discounts and if you did wait, the stock could be gone by tomorrow. The problem was they had too many hits to their brand image from interview gaffs to PR mishandling of a bad batch of product. All companies make mistakes, the brands that survive are those who protect their image like it was gold, because it is.

2. DirectTV – Before, DirectTV was an innovator and their brand meant something. They failed to DYOB – destroy their own business – so others did it for them. Being an innovation and convenience brand means you must continue to do that, even at the expense of your own business.

3. Hillshire Brands – Here’s a case where individual brands outperform their parent company. Ball Park Franks and Jimmy Dean Sausage are category leaders. Hillshire meat and cheese gift sets, not so much. Here’s where advertising support increases the brand’s value and neglect contributes to a brands’ irrelevance.

4. Zynga – I really wouldn’t call this a brand, but a single product that was hugely successful. Some companies are able to make the transition from a hit product to a meaningful brand, but Zynga depended too much on trying to create the next big hit instead of focusing on what kind of company they create. An example of a company who knew to focus on the brand and not just their one hit product is Pixar.

5. Alaska Air – This brand may disappear, not because it is bad, but because the market will force them to be bought out by a larger airline group (possibly Delta). Airlines have been consolidating to survive and Alaska Air is one of the last remaining independent airlines. It’s difficult to stay price competitive without cutting back on too much service.

6. Russell Stover – Another case of a profitable brand being courted in a buyout by larger brands such as Hershey. Like the airline industry, the candy landscape has also been consolidating. Marketing and advertising the brand is the difference maker between these two brands, not the product quality.

7. Shutterfly – This is a disruptive company who is being disrupted, something that is becoming more commonplace in the tech industry. With brands like Instagram, Facebook and Dropbox offering photo sharing and online storage for free, it’s hard to compete. They need to find a side door revenue stream before it’s too late.

8. Time Warner Cable – ‘nuff said.

9. Blackberry – This is more of a case of hubris than anything else. A once, great brand is now almost extinct in their current form as a cell phone company. Their real value is their OS and how secure it is. Just as Shutterfly and Zynga, they failed to understand what their brand is really about and banked too much on a one-hit wonder which is lethal in the tech industry. The cool image of iPhone trumped pure functionality of the Blackberry.

10 Aeropostale – Being a teen brand is difficult. Your customers are finicky and change moment-to-moment. The whole category (casual clothing for teens) have been on a decline because of more hipper, cheaper brands like Forever 21 and H&M. Though their competitors like American Eagle and Abercrombie & Fitch are also taking a hit, Aeropostale is much more vulnerable because of lower profit margins and a lack of real brand direction (like the Gap).

Great products and services are only the ante to get in the game. The real brand is about what you offer on top of that base. The 10 companies listed have quality products and services, but failed to keep their focus on the most important part of their business. Their brand.



About Be Branded

Tony Fannin is of President of BE Branded, an integrated marketing firm who helps clients BE Somebody to their customers. If you aren't somebody, then you are commodity.

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