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Simple Brands Are Simply Better

As the world gets more complex and more difficult to navigate consumers are attracted to brands that portray and provide simple solutions. Brand simplification is easier said than done but the financial incentive is significant. Siegel+Gale, a global brand strategy consultants, does an annual survey to monitor global brands simplicity with states that 64% of consumers are willing to pay more for simpler experiences. Their study also concludes that simple brands enjoy increased revenue, stock valuation, brand advocacy and employee engagement. Companies must look at everything their brand projects within the lens of simplicity, from the purchase process to packaging to customer interactions to product usage to communications and marketing.

 

Simple Brands means a Convenient Brand

Ideally you want your product precisely where and when the customer most wants it. This is the point where they are willing to pay the most and will be the most loyal. Imagine you are in the hot dessert with the temperature hovering around 100 degrees Fahrenheit. Stinking hot! The sun baking your face and your mouth feels like sandpaper. You are dying for an ice-cold drink. You see a Coke vending machine ahead of you. You can tell it’s working hard to keep its contents cold as water is collecting on the outside of the machine. How much would you pay for that bottle of Coke to quench your thirst? A lot! In 2010, Coca-Cola Company estimated there were more than 6.9 million vending machines in the United States.  Why so many? Convenience means more impulse sales and a higher value for the product. That’s why Best Buy, with an online and brick-and-mortar strategy also provides smaller mobile stores and vending machine, to deliver the right products in the right place. There are times I would have paid dearly for a phone charger.

 

Simple Brands means a Faster Brand

Jeff Bezos, CEO of Amazon, always talks of keeping his company in a continuous Day 1 state, both physically and mentally. He says, “To keep the energy and dynamism of Day 1, you have to somehow make high-quality, high-velocity decisions. Easy for start-ups and very challenging for large organizations.” Bezos says to survive in today’s world brands must “embrace powerful trends quickly.” To make this happen organization must be able to make decisions quickly without all the answers. Customers also want brands to react and fulfill promises with speed, like Amazon Prime and 1-Click.

Netflix is also recognised as one of the top simple brands by the Global Brand Simplicity Index, as they provide customers with entertainment anytime, anywhere, instantly. This brand went quickly from DVD movie distribution to streaming.

Simple Brands means a Brand for Dummies

Statista, the statistics portal, states Netflix had 109.25 million streaming subscribers worldwide in the third quarter of 2017. Of these subscribers, 52.77 million were from the United States. In less than a few clicks you can escape from reality to any genre, a task which even a three year old can accomplish. Netflix CEO Reed Hastings says the battle-tested KISS principle holds a ton of power at the Netflix headquarters. He says over the years they have figured out “that people really love simplicity.”  The end game is successful brands don’t make customers think they just make them happy.

 

Simple Brands means a Focused Brand

Apple is passionate about creating a simple, focused brand. Tim Cook, CEO of Apple, said, “This is the most focused company I know of… We say no to good ideas every day so that the company can keep its focus on a small number of areas.” Jeremy Miller, author of Sticky Branding says successful simple brands can be described in 10 words or less. Can you describe what makes your brand unique in 10 or less words?

No surprise, Google has been in the top 10 ranking for the last eight years Siegel+Gale began publishing its Global Brand Simplicity Index. That means Google needs to satisfactorily answer over 63,000 search queries every second (or 5.5 billion searches per day or 2 trillion searches per year) world-wide. No pressure.

“A simple design is like telling a compelling story with as few words as possible” explains Art Director Bianca Magna at Banfield advertising agency. This is true for packaging, website and online applications and advertising.

The eco-friendly Ikea has been recognised for its “minimalist” designs in its variety of products and memorable brand advertising. True to its brand Ikea has “simplicity” as one of its key values stating “It is about being ourselves and staying close to reality…and see bureaucracy as our biggest enemy.” However, assembling some of the Ikea furniture might require an engineering degree if you can’t understand the pictorial instructions.

 

Simple Brands means a Successful Brand

Successful and sustainable brands have one common promise – they make life simple. Simple brands are the furthest away from being a simple businesses. In the eyes of the consumer these are beautifully designed, understated brands that come with powerful benefits. These brands take complex, complicated technology, processes and algorithms and turn them into simple customer interfaces that look effortless and simple. Their business operations are state-of-the-art, their employees are focused on what matters and their understanding of their customers is paramount.

Achieving simplicity is not simple. But the brands that harness its power stand to reap a multitude of both reputational and financial rewards.

 

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Wine Branding Will Drive You To Drink*

Or at least that what they hope you will do.

To understand wine labels you need to understand the history of wine brands or how the wine industry has evolved over time. I recently saw an article in the Globe and Mail by Christine Sismondo who takes a stab at trying to understand wine branding, but spends most of her time on the crass attempt some wine brands are taking to stand-out through lewd and vulgar language. I am not sure sex sells wine. Maybe it’s the other way – wine sells sex. Or least that’s how I remember it.

 

Old World, Old Ways

Legend has it that back in the 17th century a French Benedictine monk named Dom Pierre Pérignon was the first to craft a sparkling wine by the so-called méthode champenoise in the region called Champagne but also was the first to hand craft a wine label that was tied to the neck of the bottle. However, it wasn’t until 1936 that the Dom Pérignon label was placed on a cuvée de prestige bottle when it was first commercialized – an icon brand today.

 

Wine has been around for centuries. The biggest constraint in label development was technology. It wasn’t until 1798 that lithography was invented that allowed the ability to print a label in mass quantities. Glass bottles improved and the printing press was invented in the 19th century in Germany. People began to recognize the importance of different winemakers, grape varieties and vineyards. They also began to understand the importance of aging their wine.

 

No surprise the wine label purpose is to inform the customer about the qualities and the origin of the wine, which is strictly regulated and standardized. It’s fair to say that the bulk of the labels are formal and functional providing consumers with such information as: year of bottling, locality of vineyard, years of aging, alcohol level, certification and varietal.

 

 

 

France is notorious for producing some of the world’s great wines and approximately 8 billion bottles per year. That’s a lot of labels – actually a lot of boring labels. Since the culture of wine is based on knowledge and traditions (of which, the French have many). The buying process relied on word-of-mouth and familiarity, rendering the labels to be all about the facts. The label’s purpose was to inform the consumer of the bottle’s content and reassure them of its authenticity. One of the world’s most famous French wines, Château d’Yquem from the Sauternes appellation of Bordeaux, declares that “More than four centuries of history are summed up in the words ‘Château d’Yquem Lur-Saluces’ found on every bottle of Yquem.”

 

The Art of Wine

 

But that hasn’t stopped some wine brands from breaking out of the mold. As one of the world’s greatest wines and one of only five Bordeaux Premier Cru, Château Mouton Rothschild has a history of commissioning famous artists to design their label for each new vintage. Such artists include Pablo Picasso (vintage 1973), Andy Warhol (vintage 1975), Francis Bacon (vintage 1990) and more recently, Miquel Barcelo (vintage 2012) all have created an 8 cm x 4 cm piece of art. A great wine has no difficulty in attracting great artists.

 

You also don’t need to be one of the world’s top wines to feature original creations. Vietti Wines of Italy has also been supporting artists since 1970, who design one-time original works of art that are displayed on one wine vintage. Alfredo Currado, husband of Luciana Vietti and head of Vietti Wines, says wonderful wines “deserved to be graced with labels unlike any other: labels designed by Artists.”

 

New World Changes the Wine World

 

But the biggest turning point was in 1976 when the legendary blind tasting of French wines against California wines put North America on the map as a serious producer of great wines. France was no longer the only place in the world that made connoisseur wines. Since then the world’s wine market has flourished both in production and consumption. U.S. leads the way in consumption followed by France, but China’s market is the fastest growing. In 2013, Vineexpo estimate that over 38 million bottles of wine were produced world-wide with 58% coming from Italy, Spain, France and the United States. Canada, where I reside, is less than 0.24% of the world’s production or 91,200 bottles. A drop in the barrel, if you will.

 

“The wine market has become a real global market. Despite increasing competition, very few brands have succeeded in really imposing themselves at [an] international level,” says Benoit Léchenault, Head of Agrifranc.

 

European wines had the luxury of history, pedigree of terroir, and a stately Château to boot, to sell their wines on mystic at a princely sum. But the new world had none of these characteristics and focused on producing a top-quality single-varietal wine. No longer was geographical knowledge required (left bank vs right bank) nor historical significant important or required to understand the wine’s lineage.

 

Bernie Hadley-Beauregard, founder of Brandever agency who specializes in wine branding in Canada, says the grape became the star. ‘The pedigree and history of the winemaker, the location of the vineyard and the age of the chateau all became irrelevant.’

 

Standing Out Doesn’t Mean Outstanding

 

A typical wine store can have anywhere from 1,500 different wines on its shelves to 3,300 different wines. Standing-out above the crowd becomes a perquisite for wines that don’t have the budget to build awareness outside the store shelves. A joint 2008 study in US and Australia, revealed that wine label attractiveness is important in the decision making processes for over 75% and 62% respectively.

 

The label characteristics that were perceived to be desirable are: eye catching, attractive, interesting, unique, stylish, creative, clever, colorful, sophisticated, artistic, and elegant.

 

It wasn’t until the 1980s that USA and Australian wines started revolutionizing the snobby image of the wine industry. In 1986, Michael Houlihan and Bonnie Harvey started Barefoot Wines with the slogan “Get Barefoot and have a great time!” A slogan more fitting a beer brand than wine at the time but it was the exclusive beer drinkers who were attracted to this brand. “Our initial fan base was folks who didn’t like wine,” says Houlihan. He says Barefoot Wine success was built on a brand image that was fun, friendly and approachable. Barefoot Wines is now the largest wine brand by global volume sales in the world.

 

In 2001, Yellow Tail Wines followed a similar path but more strategic if you believe the mythical tale known as the “Blue Ocean” strategy. To make a long story short they designed their wine to attract a new customer outside the traditional wine market. Focusing on the U.S. market they crafted a wine to suit the Coca-Cola tastes of the American consumer. They also made sure the label stood out from the crowd with a bright yellow wallaby in the center and neon colored bars to distinguish different grape varietals. “We did some testing and the label came back with mixed results, people didn’t like the animal on it,” says Peter Deutsch, CEO of Deutsch Family Wine & Spirits, and part owner of Yellow Tail Wines. But we took the risk because it was completely different. That risk turned out to be a home run.” The brand built on the Aussie stereotype of being laid back and carefree seems to be working, as they sell over 8 million cases a year in the U.S. alone. Currently, Yellow Tail sits as the second largest wine brand in the U.S. having lost the first position to Barefoot Wines, a few years ago.

 

Aging Wine with Your Consumer

 

The biggest opportunity for wine brands are the growing millennial consumers who aren’t tied to any past wine traditions or formalities. Wine has emerged as a social beverage on par with beer where not only is wine consumption growing among Millennials but they are also happy to experiment with different tastes.

 

In a 2012 study done by Profs. Joe Bath and Statia Elliot of Guelph University they found that a majority of Millennials choose wine based on package appeal, with racy labels faring best. They are attracted to ‘spirited’, ‘up-to-date’ and ‘colourful’ labels with sexually suggestive language and images.

 

Now the shelves are covered with colourful, highly-designed, provocative images and humours typography. A good example is B.C. winery Church and State’s Lost Inhibitions label which has a multitude of different colourful labels with catchy and tweetable sayings such as: “This is Effing Epic”, “I Fu*cking Love You” and “Kiss My Ass”, to name a few. I think you get the point.

 

I am not sure you can build a long-term wine brand that is pushing the borders all the time. Ok, you can laugh once and buy once, but building a long-term relation on abusive language isn’t sustainable. It looks and feels like an opportunity to take advantage of the moment but it will only be a moment. It reminds me of the underwear fad fifteen years ago when young people were wearing trendy, funky boxer shorts with funny messages and images. Today, they have moved those words and images onto wine bottles. But you should never judge a wine by its label. Or should you?

 

Beyond the crude, there are many unique wine labels using whatever possible styles and techniques to grab your attention; everything from distinctive etched, engraved and embossed bottles, wax and other materials, such as metal, wood, fabric and even dirt, minimalistic & conceptual designs and personalization. The vineyard’s budget is the limit.

 

Wine Improves With Age – The Older I Get, The More I Like It

 

A wine’s taste is the most important fact for generating repeat purchases, packaging can impact the initial trial purchase and help with visual recall. But worth-of-mouth can`t be ignored. No different than advertising, you can lead the consumer to drink but the product in the glass will make or break the relationship, not the label. The worst scenario is when they love the wine but can’t remember the label. Thank heavens for cameras on phones.

 

Purchasing a bottle of wine can be overwhelming and somewhat intimidating for many people. Like any food and drink your palate evolves over time and the same will occur with wine. The situation and environment that you consume the wine also effects how you experience the wine. Have the same bottle of wine with your best friends reminiscing around a bonfire on a beach, then experience the same bottle by yourself in a somber mood, in a quiet room alone, and the wine will taste different. If the only chance for the wine to communicate to a consumer is through the 10 cm x 10 cm label on a bottle, make sure you catch their attention and the name is memorable – or at least pronounceable. Also understand who, how and where they will consume it, which should influence the label’s design and graphics. The stronger the message (like Church and State’s Lost Inhibitions) the more restrictive the audience or greater the chance it’s received like a fad.

 

But what do I know. I have seen Barefoot Wines on the wine shelf for almost 30 years and I have never thought of buying it. I don’t need the bottle to scream at me or make me laugh, I just want an effing great Cab that has a bold character, depth and a balanced finish. I’d like to think I’m aging well. Cheers!

 

*Please no drinking and driving.

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The Sound of a Brand

Audio branding is like the icing on the cake. It provides a rich and memorable tone to your brand identity. Sound has the ability to stop you in your tracks and quickly engage you like no other sense can.  Sound can trigger memories and emotions. We are literally wired to sound thanks to Apple’s iPod invention.  Sound and music are visceral. To test your audio branding knowledge we have created a quiz. Listen to 7 different unique sounds and see if you can identify the brands.

Most retailers already leverage music as a selling tool in stores. But, generally sound is under-utilized in building a brand identity. Few brands are strategically using music, sound and voice to create a brand connection.

 

The Beginning of Sound Branding

Before television, radio was the darling for reaching consumers. I have been told by those who still remember that radio was the entertainment center in households. The entire family would huddle around the radio to listen to broadcasts sponsored by a brand, well before, the trend of radio advertising spots. It is believed that Generals Mills aired the first singing commercial back in 1926 entitled “Have you tried Wheaties?” and was an instant success and made Wheaties a national brand.

The art of building brands through jingles reached a peak during the economic boom of the 1950s. Jingles were used in brand advertising for such products as breakfast cereals, candy, snacks, pop, tobacco, beer, automobiles, personal hygiene products, household products and especially detergent. Like the epic musical films, branding jingles lost their appeal by the 1960s. Any Boomer can recite a number of advertising jingles as they sit dormant in their brains like “Oh, I wish I were an Oscar Mayer Wiener”, “Ai, Yi, Yi, Yi, I am the Frito Bandito”,and “I’d like to but the world a Coke.”

To be a memorable and enduring jingle Linda Kaplan Thaler, creative legend and Chairman of Publicis Kaplan Thaler advertising agency says “it has to have huge sticking power. A jingle is not successful if you listen to it once and like it. You have to listen to it and want to sing it. Essentially, you become the advertiser for the brand.” She also thinks today is a better time than ever to build a brand through a jingle due to the many social channels to share it on. While Martin Puris, another ad legend and past Chairman and CEO of Ammirati & Puris, thinks jingles are passé. “In a marketing wary world a jingle seems oddly out of place. Too slick, too contrived.”

If you find yourself singing along, then you are hooked – marketing or not. “I wish I was a CEO of a famous advertising agency, la, la, la,….”

 

Big Bold Sounds

Filmmaker Alfred Hitchcock also known as ‘Master of Suspense’ understood the importance of sound to telling a story. He said “When we tell a story in cinema, we should resort to dialogue only when it’s impossible to do otherwise.” He was brilliant at manipulating his audience’s emotions by using sound design to enhance the situation. Remember his movie, The Birds (1963). He used a combination of real bird sounds and electronically synthesised noises, creating an auditory assault that brought the vicious bird attacks to life.

Great sound design can only be fully appreciated through good quality sound systems and speakers. Since the 1960s, we saw great innovations concerning sound systems from the bulky multiunit stereo systems and the iconic boombox to putting our entire music library into our pocket with the iPod. Add a set of good quality headphones and you are in another world.

 

Audio Branding – Music

Eric Sheinkop, co-author of Hit Brands: How Music Builds Value for the World’s Smartest Brands says “Music brings value to a brand in three ways: identity, engagement, currency. Specifically, using music to establish an emotional connection with a brand, increases brand recognition, creates excitement and buzz beyond the brand’s core products or services, and can empower consumers, giving them valuable content to discover and share. Music creates the value that brands need to win the war for attention and develop a genuine connection with their consumers. When used correctly, music not only creates loyalty, but true advocacy.”

Music has plays an important role in brand building for automotive and aviation brands where it is all about the emotional state. Music is a universal language that crosses all borders of culture, nationality and languages. It is the emotional connection to the brand. Yet, most brands tend to use sound and music to be campaign-oriented, not brand-oriented. Here is an example of a campaign-oriented advertisement by Honda featuring a 60-person choir who were the sole audio track. There isn’t any car sound that they can’t sing.

United Airlines took the brand-oriented approach using music as a key brand element. Since 1976, United has used the familiar George Gershwin’s tune Rhapsody in Blue as a foundation to their brand. The music is used in its television advertisements, its airport terminals, and even its pre-flight announcements. United Airlines uses this piece of music to strategically create a distinct audio identity that expresses its vales at all necessary customer touch points. Have you ever watched someone bring on a musical instrument onto a plane? How about the entire London Symphony Orchestra.

Their onboard safety video creatively incorporates the distinctive rhapsody in blue music in various interpretations to emphasis each cultural destinations – very clever.

 

Audio Branding – Sonic Logo

Sonic logo is linking your brand logo with a distinct and unique sound that becomes synonymous with the brand identity. The key is using it everywhere the brand is communicated.  It takes years of reach and frequency to link a sound firmly to the brand. But, once it occurs it becomes timeless like NBC’s three-tone chimes, Intel’s five-note bong, and THX Sound System’s deep note. Kevin Perlmutter brand strategist and blogger explains that because sound bypass the rational part of the brain and reaches the most instinctive level, sound can be the fastest way to heighten brand engagement. Therefore, a brand identity is incomplete without utilizing a sound or music to help develop an emotional connection even if your brand is an unemotional computer chip. You have a better chance to position a brand into the customer’s mind if you use a multisensory approach.

 

Audio Branding – Product Sound

Some product brands have their very own sounds that can different themselves from the competition. Kellogg’s Rice Krispies “Snap, Crackle, Pop”, Alka-Seltzer’s “Plop, Plop, Fizz, Fizz”, Snapple’s “Pop” when the top is unscrewed, Dyson’s unique vacuum sound, Infiniti’s engine sound (check out the ten most distinctive sounding cars) and the “scritch-scratch” sound of a Sharpie marker on paper. The sound of your product can be as distinctive as its look, feel and smell. Rachael Pink, an acoustic engineer at Dyson says “People now expect products to sound good—not just sound quiet, but have a nice quality.”

Frit-Lay, part of PespiCo Inc. introduced a compostable chip bag for its SunChips brand to become more environmentally friendly. The noisy bag changed the customer experience so drastically sales fell and consumers complained about the sound. Frito-Lay went back to the old bag. Don’t underestimate the customer’s relationship with your brand sound.

 

Final Sound Track

Today, visual branding remains the focus for many marketers, but with the increased number of touch points (like TV, radio, website, mobile apps, social channels, in-store displays, voice messages, events and in-store), you can’t rely solely on visuals. Digital is also becoming the main channel for brands to communicate. Well, digital has many channels to reach the consumer; it can lack personality and emotional attachment. It can also come across as seemingly uncaring. Kevin Perlmutter says “The strategic use of music and sound can dramatically improve a digital interaction by placing a brand’s unique identity and personality front and center to provide clear navigation with proprietary sounds that are simultaneously functional and emotional.”

In our cluttered and over stimulated communications world, brands need to engage all senses to create powerful emotional impact that transforms brand experiences. Audio branding can play a part. Start turning up the volume.

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Lessons from the Brand Graveyard

Jim Mullen founder of Mullen Advertising said, “Of all the things that your company owns, brands are far and away the most important and the toughest. Founders die. Factories burn down. Machinery wears out. Inventories get depleted. Technology becomes obsolete. Brand loyalty is the only sound foundation on which business leaders can build enduring, profitable growth.” But so often, these business leaders fail to understand this and stick to what they know, which is to continue to withdraw on their brand loyalty and continue down the wrong path. There are thousands of brands that have come and gone and hundreds that are the walking dead. Learning from mistakes is always harder than justifying enormous brand successes. The graveyard is full of interesting stories of how not to build and sustain a prosperous brand.

“Brands have run out of juice. They’re dead,” says Kevin Roberts, executive chairman of Saatchi & Saatchi and author of the book Lovemarks. “Now the consumer is boss. There’s nowhere for brands to hide.”

The truth is brand loyalty isn’t what it used to be. There was a day, people who drove a Ford drove Fords their whole lives. Not anymore. In 2008, Nokia was ranked as one of the most valuable brands in the world. New Yorker writer James Surowiecki says Nokia failed to keep up with the competition in the smartphone game and relied on its past brand strengths. “The high-tech era has taught people to expect constant innovation; when companies fall behind, consumers are quick to punish them.”  Nokia was punished and is no longer in the mobile phone business.

In a 2009 study done by Sunil Thomas and Chiranjeev Kohli at the Kelley School of Business, Indiana University, they concluded that brand managers must always be vigilant “for signs of brand decline, in the form of problems with brand knowledge, brand differentiation, and customer response.”  But high levels of brand awareness and positive brand image isn’t a sure bet that your brand will survive the difficult times. It’s easy to build a brand on innovations. It’s much harder to sustain a brand on past innovations and successes. Kodak didn’t envision a future without film.

Brand Relevance – A Time & Place

Remember the Pet Rock? In 1975, Gary Dahl (passed away this month) an advertising executive conceived and marketed the Pet Rock. In less than a year, he sold 1.5 million for $4. It became an instant success story that was never repeated.

pet-rock

Remember the first time you had a Krispy Kreme? I do. There was a time the only Krispy Kreme store in Canada was in Toronto. Every time I flew back from Toronto, I took an hour detour to pick up a dozen of Krispy Kreme donuts and carry them on the plane. Everyone would look in awe and I was a true hero at home. I also remember the first visit to the Krispy Kreme that opened in my city. But, today you can’t find a Krispy Kreme anywhere and my waist thanks them. Was it bad luck with a major shift towards healthier diets and Atkins or was it just bad management? Andy Sernovitz author of Word of Mouth Marketing says brand overexposure was part of the problem as they offered cold packaged Krispy Kreme in stores and gas stations everywhere. But they also lost focus from the exclusive experience of customers waiting in line to taste the amazing hot and fresh doughnut made to order.

hummer

The story goes that Arnold Schwarzenegger saw a convoy of military HumVees driving down a highway in 1989 and immediately he had to have one. We know from history that Arnold gets what he wants. AM General worked with General Motors to supply a civilian version called the famous Hummer. It was a great success as other affluent Arnolds stepped forward to have the privileged to feel the power of a tank stuck in traffic gridlock. Sales peaked in 2006 and the last Hummer H3 rolled off the line on May 24, 2010. High gas prices and the ever increasing pressures by the environmental movement made the Hummer brand symbol unpalatable as a gas guzzler. Eventually, even Arnold sold his seven Hummers for a reported $950,000 to conform with other Californians.

Unable to Embrace Drastic Change

blackberry

 It starts with the fear of alienating current users by changing too much, too quickly. This is your bread and butter, so you want to make sure they are happy.Kodak and Blackberry are great examples of trying to stay in the past and trying to meet the future at the same time. They both failed. Allen AdamsonChairman of North America Landor Associates explains that Kodak “failed to seize the day in terms of moving away from the existing cash cow to figure out how to live and fight the future.” Today, Blackberry is trying to reinvent itself to find its vision again. Meanwhile, most of its customers are finding other solutions. I am now on my second iPhone since leaving my crackberry.

Remember the Friday or Saturday evening trip to Blockbusters to rent a new release movie? The writing was on the wall as cable companies, internet providers and Netflix’s offered seamless video streaming at home. But, Blockbusters stayed the course except for extending their late fees charging, which they accumulated over $800 million, which I don’t miss contributing towards.

There are many other brands (such as Circuit City, Future Shop, Olympus, Barnes & Noble, Borders, H&M, to name a few)  facing significant disruption from new technologies and digital innovations that will keep the brand gravedigger busy for a longtime. Unless they embrace drastic changes, but in some cases it too late.

Bad Business Model

The airline industry is notorious for building new airline brand then watching them fall from the sky (in some cases literally). Severin Borenstein, an economist at the Haas School of Business at U.C. Berkeley says “The industry in aggregate has lost about $60 billion over the 32 years since 1978.  The biggest mistake they seem to make is not making money.” Wikipedia has a list of defunct airlines by country. I counted over 430 USA airline brands and over 105 Canadian airline brands no longer taking off. Remember, Eureka Aero, Mohawk Airlines, Zip, Greyhound Air, Roots Air or Pride Air?

air planes grave

TWA, owned by Howard Hughes and Pan Am were the first airlines to fly around the world. They pioneered many innovations such as jumbo jets, computerized reservation systems, in-flight meals and much more. Sadly, they are both gone. In the last year,Malaysia Airlines has lost two planes carrying 537 passengers who didn’t make it to their destination. Malaysia Airline is also not in the best financial shape. Will travelers avoid this cursed airline? I am not sure if I would take the chance knowing that there are many other airline options.

The automotive industry has a similar story, but theirs are less about the business model and more about quality issues and costs. Check out the defunct USA auto list. The list is very long!

Survival of the Fittest

Andy Grove, former CEO of Intel, who made the company a microprocessor behemoth, wrote the book, Only the Paranoid Survive: How to Identity and Exploit the Crisis Points that Challenge Every Business.  While the book was written 19 years ago, it is still very relevant. In the book, he introduced the concept of “inflection points.”  An inflection point is a point where you know that the industry in which your business operates in, has changed so profoundly that you can either change your business completely as well, or get killed by your competitors. The inflection could be a change in competition, a change in regulatory issues and, of course, a change in technology. He believed in taking action, doing something about it, staying ahead of times and winning at all cost, even if it meant changing even his company’s core areas of business. “Most companies don’t die because they are wrong; most die because they don’t commit themselves,” says Grove. “They fritter away their valuable resources while attempting to make a decision. The greatest danger is in standing still.”

Some brands that came back from the dead and are flourishing today are Lego, Marvel comic books, Old Spice, Apple, Nintendo and Volkswagen.

gravestone-branding-dead-300x227

In this new digital reality, innovations are being launched at lightning speed, copied overnight, and improved upon continuously. If you freeze in indecision or blink your brand has a good chance it won’t survive. R.I.P.