Brand Pruning

Laura Rie's Latest:

2009: The Year of Brand Darwinism

Welcome to a brand new year. It is 2009 and almost everybody is hoping 2009 will be better than 2008.

Sadly many brands didn't live to see 2009. Some the casualties of 2008 include: Bombay Co., Aloha Airlines, Skybus, Lehman Brothers, Bear Stearns, Linens N' Things, Sharper Image, KB Toys and Mervyns.

And this year many more are likely to be wiped out like Circuit City or perhaps even Sears/Kmart or Chrysler.

But is this bloodshed all bad? And how can you your brand avoid extinction? Read on.

First of all, brand busts are not a bad thing. It is brand Darwinism at its best, survival of the fittest. It is a good thing for everybody when only the strongest brands survive.

Currently we simply have too many of everything. Too many clothing stores, too many gas stations, too many malls, too many sandwich shops, too many coffee shops, too many furniture stores, too many car dealers, too many condos, too many real estate agents.

This excess was created by the previous economic boom. Anyone could start a business, open a franchise or buy a house and they did. And many of those brands, buildings and businesses needed to fail because they were bad ideas. Nobody can win unless somebody loses. That's life.

It is time to thin the herd. Of course, thinning the herd will not sound good if you are a sick buffalo trying to keep up (like anybody working at Kmart). But it is the best thing for the whole herd (Walmart/Target and you.)

Thinning the herd means more food and a greater chance of survival for the stronger animals and their young. The sick, old and weak animals drag down the whole herd down just like the sick, meaningless and over-populated brands drag the whole economy down.

If strong brands are allowed to succeed and weak brands are allowed to fail, the free market will allow prosperity to return. Propping up loser companies in the country or loser brands in your company is not a good idea. (The bailout, for example.)

Now is the time to cut the losers (Chrysler, for example.) Nobody wants to see people lose their jobs. But the only way to create jobs is with strong brands and companies. Companies with strong brands generate profits. GM has billions in sales but still loses money, because they don???t have strong brands.

Not only do we have too many brands, but we also have a lot of very weak brands. How do brands become weak? Expansion and unchecked growth.

As every gardener knows, the way to keep a plant vigorous is by pruning. Corporate and government gardeners seem to have trouble accepting and understanding this principle.

Unchecked growth in all directions weakens a plant which needs constant pruning to remain healthy. The same hold true for companies. Yet when times are good, nobody wants to cut brands, products or services. And remarkably even when times are bad, nobody still wants to cut brands, products or services.

So how can you avoid extinction this year? Hopefully you have been a good brand gardener and have been pruning and keeping your brand strong. If you haven't, you can only hope your competition is a worse gardener than you are.

Just being well-known does not spare you from extinction. Unless you can link your brand to a category or an idea in the mind, your name might be known but it would be worthless. Chevrolet, for example.

In general, leading brands or strongly differentiated No. 2 brands in categories with a future have the best chance for success.

If you are a me-too No. 2 brand like Linens N??? Things or Circuit City, you are in trouble. If you are a No.3 brand especially behind two strongly differentiated competitors you are really in dire straits like DHL or Kmart.

If your category is a thing of the past, even though your name is well-known you are going to find survival difficult like Kodak, Sharper Image or Mervyns.

What the world needs, what the U.S. needs, what your company needs, (perhaps even what your waistline needs after too much Christmas pudding) is a lesson in gardening.

A healthy pruning now will be rewarded with a lovely growth spurt later on. Sounds illogical but it works.

Nobody ever said marketing was logical.

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