Why Brands Fail? Successful brand management helps a business to differentiate itself from its competitors. Read the importance of brand positioning in the previous post. However, brands can fail for many reasons. The famous brand failure story is Nokia.
Nokia was a favourite mobile phone brand during the ’90s. I had kept my Nokia 3310 model for years. I lost it when we moved to a new house. Apple and Samsung beat it hard with intelligent devices. Nokia failed to offer the latest technology to its customers. It lost its market share as a result. Today you hardly hear the brand.
Brands don’t fail overnight. Your brand may fail due to wrong social media postings, but you can quickly recover your reputation with drastic actions. A total brand failure takes weeks to months until one day, customers have moved away. The common reasons are listed here.
Brands failure: Complacency
These businesses did well for decades. Sales and profit growth were healthy too. The old-fashioned belief says why change when it’s not broken. They didn’t take the initiative to review their business models. They put all efforts into maintaining the status quo. When consumer behaviour has shifted, they have failed to respond accordingly. Sooner their businesses became redundant.
Klook and Airbnb created a new marketplace for consumers. Hotels and travel agencies fail to see the strong demand. Their profit has shrunk. Read the findings of how Airbnb has affected the hotel industry.
Losing Touch with Customer Perception
Some businesses fail to monitor their customer’s ever-changing needs and motivations. They think that they are international brands or decade-old companies, customers will stick with them forever. Honestly, customer loyalty is easy to break like glass. I admit I am not a loyal consumer. Consumers lack patience. When you fail to address their needs, your brand is in danger of slipping into irrelevance.
I have ordered my meals from this local restaurant for many years. They used Styrofoam as food packaging six years ago. They neglected my requests for no Styrofoam. After four repeating reminders, I stopped ordering from them.
Failure to Innovate
The common myth is to invent new and better products. It remains true in certain situations, but not all. Businesses should ask if the innovation delivers better value to their customers. Will customers keep using the products?
Boost e-wallet has a dominant market share of 18% in Malaysia. Shopeepay, on the other hand, gained popularity in the past year. Shopeepay records higher retail sales when more retail outlets are accepting Shopeepay payments. Boost is gradually failing to offer similar value to its members. I believe Shopeepay will take over as the leading player soon.
Why Brands Fail: Poor Product
Some brands lost their identities by sameness. They tried to be different with new product inventions. Unexpectedly, the new product failed. Samsung Note 7 is the best example of poor production invention due to its faulty battery. Samsung recalled and suspended its production.
Brands failure: False Marketing
False marketing is a common mistake many businesses make. A brand is a promise. If you break that promise, your brand will be severely affected. Don’t ever take it lightly.
Watson’s Malaysia offers Click & Collect service for its members. I have used this service three times. But they have also cancelled my orders twice. I only buy directly from Watsons unless it has fantastic deals. I prefer to buy from Shopee sellers at discounts.
Place the BUYER not the competition at the center of your strategic thinking
It takes years to build a reputable brand and one or two occasions to destroy it. The marketplace waits for no one. Businesses must stay abreast of current trends. The minute a brand becomes disconnected from customers is the moment it has failed.