Brand Failures

When a brand falls asleep

In 2002, the Ovaltine brand celebrated its 98th birthday. That same year, it closed its UK factory and was forced to admit it had finally lost its main market. The Ovaltine brand was put up for sale and, at the time of writing, no interested buyers have emerged.

First produced by a Swiss food company in 1904, the malt drink with added vitamins became the UK’s favorite bedtime drink. However, although commonly sipped to get a good night’s sleep, the original advertising for the brand highlighted opposite qualities. Indeed, Ovaltine was an official sponsor of the 1948 Olympics and was billed as an ‘energy drink’ years before the term became widely adopted. In 1953, it was used by Sir Edmund Hillary on his famous Everest expedition and it was even reported to cure impotence, decades before the arrival of Viagra.

Curiously, this image was reversed in the later 20th century, and it became more popular as a cure for insomnia than a tonic for athletes and the sexually challenged. As Mark Lawson wrote in the Guardian in June 2002, it also became seen as a drink for the elderly through advertising campaigns steeped in nostalgia:

The singing kiddies of the radio show, winsome in their Winceyette pyjamas, were accurate reflections of contemporary childhood at the time they started but, as they continued to be the official faces of the brand, kept sending the subliminal image that it was something your granny used to drink. In common with cocoa and Horlicks, Ovaltine took on the image of the sedative nightcap of veterans. Any potential buyer for the drink might reflect that the backwards-looking website Sterling Time - dedicated to ‘British nostalgia. . . Englishness and patriotism’ - contains a large section memorialising the Ovaltineys [the children used for the 1930s Ovaltine campaigns].

Future anthropologists may also be interested in the fact that so many people were once drawn to draughts reputed to put you out for the night. Part of the reason for the decline of Ovaltine is surely that more recent generations exist in a habitual state of exhaustion, caused by longer working hours, the collapse of public transport and the cult of intensive, hands-on parenting among young mums and dads. They are also far more likely than their grandparents to drink wine nightly and have the option of late-night or all-night television: all reliable knockouts. Graham Norton, Jacob’s Creek and long-distance commuting now achieve much of what Ovaltine used to.

When Ovaltine sales started to slip, it launched spin offs such as Chocolate Ovaltine, Ovaltine Light and Ovaltine Power. It also started to use contemporary children in its advertising, in its attempt to reposition itself as a ‘now brand’ as opposed to a ‘then brand’.

However, unlike other drink brands - such as Lucozade, which moved from medicine status to sporty essential through clever marketing - Ovaltine has not been able to shake off its sleepy, nostalgic identity. Whether a new owner will be able to perform such a miracle remains to be seen.

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Failing to hit the present taste

Pear’s Soap was not, by most accounts, a conventional brand failure. Indeed, it was one of the longest-running brands in marketing history.

The soap was named after London hairdresser Andrew Pears, who patented its transparent design in 1789. During the reign of Queen Victoria, Pear’s Soap became one of the first products in the UK to gain a coherent brand identity through intensive advertising. Indeed, the man behind Pear’s Soap’s early promotional efforts, Thomas J Barratt, has often been referred to as ‘the father of modern advertising.’

Endorsements were used to promote the brand. For instance, Sir Erasmus Wilson, President of the Royal College of Surgeons, guaranteed that Pear’s Soap possessed ‘the properties of an efficient yet mild detergent without any of the objectionable properties of ordinary soaps.’

Barrat also helped Pear’s Soap break into the US market by getting the hugely influencial religious leader Henry Ward Beecher to equate cleanliness, and Pear’s particularly, with Godliness. Once this had been achieved Barratt bought the entire front page of the New York Herald in order to show off this incredible testimonial.

The ‘Bubbles’ campaign, featuring an illustration of a baby boy bathed in bubbles, was particularly successful and established Pear’s as a part of everyday life on both sides of the Atlantic. However, Barratt recognized the ever changing nature of marketing. ‘Tastes change, fashions change, and the advertiser has to change with them,’ the Pear’s advertising man said in a 1907 interview. ‘An idea that was effective a generation ago would fall flat, stale, and unprofitable if presented to the public today. Not that the idea of today is always better than the older idea, but it is different - it hits the present taste.’

Throughout the first half of the 20th century, Pear’s remained the leading soap brand in the UK. However, towards the end of the century the market was starting to radically evolve.

In an October 2001 article in the Guardian, Madeleine Bunting charted our love affair with soap:

Over the past 100 years, soap has reflected the development of consumer culture. Some of the earliest brand names were given to soap; it was one of the first mass-produced goods to be packaged and the subject of some of the earliest ad campaigns. Its manufacturers pioneered market research; the first TV ads were for soap; soap operas, tales of domestic melodrama, were so named because they were often sponsored by soap companies. Soap made men rich - William Hesketh Lever, the 33-year-old who built Port Sunlight [where Pear’s was produced], for one - and it is no coincidence that two of the world’s oldest and biggest multinationals, Unilever and Procter & Gamble, rose to power on the back of soap.

Recently though, Bunting argued, a change has emerged. The mass-produced block has been abandoned for its liquid versions - shower gels, body washes and liquid soap dispensers. ‘In pursuit of our ideal of cleanliness, the soap bar has been deemed unhygienic,’ she claimed.

Of course, this was troubling news for the Pear’s Soap brand and, by the end of the last century, its market share of the soap market had dropped to a low of 3 per cent. Marketing fell to almost zero. Then came the fatal blow. On 22 February 2000 parent company Unilever announced it was to discontinue the Pear’s brand. The cost-saving decision was part of a broader strategy by Unilever to concentrate on 400 ‘power’ brands and to terminate the other 1,200. Other brands for the chop included Radion washing powder and Harmony hairspray.

So why had Pear’s lost its power? Well, the shift towards liquid soaps and shower gels was certainly a factor. But Unilever held onto Dove, another soap bar brand, which still fares exceptionally well. Ultimately, Pear’s was a brand

built on advertising and when that advertising support was taken away, the brand identity gradually became irrelevant. After years of staying ahead, Pear’s Soap had failed to ‘hit the present taste’ as Thomas J Barratt might have put it.

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How the ‘King of Chrome’ ended up on the scrap heap

Oldsmobile is among the brand legends in US car history. Conceived in 1897, it was one of the five core brands manufactured by General Motors (GM) - the other four being Chevrolet, Pontiac, Buick and Cadillac - and helped lead the company to a 57 per cent share of the US car market by the middle of the last century.

For decades, Oldsmobile was a pioneering brand. In the 1920s, it became known as the ‘King of Chrome’ because it was the first car with chrome-plated trim. A decade later it became the first production line car in the US with a fully automatic transmission. In 1966, it introduced a car with front wheel drive.

However, in more recent times Oldsmobile has lost its pioneering edge. GM famously decided that instead of preserving and accentuating the unique identity of each of its brands it would increase its profits ‘through uniformity’. As a result, Oldsmobiles began to look very similar to other GM cars, with only small, superficial differences.

In 1983 a Fortune magazine article highlighted the growing homogeny of the GM brands by including a photograph of an Oldsmobile alongside a Chevrolet, a Buick and a Pontiac. The article’s headline was, ‘Will Success Spoil General Motors?’, but it may as well have been, ‘Spot the Difference’. The article described GM’s new state-of-the-art assembly plant at Orion, Michigan:

The $600-million plant bristles with robots, computer terminals, and automated welding equipment, including two massive $1.5 million Ploogate systems that align and weld assemblies of body panels. Unmanned forklifts, guided by wires buried in the floor, will carry parts directly from loading docks. In its flexibility, Orion sets new standards for GM plants.

But while GM’s technology may have been cutting edge, the values associated with the Oldsmobile brands were anything but. An article in the Detroit News in May 2002 explained the problem the Detroit-based company faced in the 1980s and 1990s:

GM’s historic brand strategy, pioneered by chairman Alfred Sloan in the 1920s, counted on consumers methodically moving up the ladder of affluence from Chevrolet to Buick to Oldsmobile to Cadillac. The game plan worked when GM built distinct cars for every division, but fell apart when the company slapped different nameplates on essentially the same vehicles. A solid, but staid Oldsmobile has little appeal to consumers enamoured with sleek Audi sedans or Toyota’s elegant Lexus luxury cars.

Loyalty, instead of enthusiasm, drew consumers to GM showrooms. The average age of owners of Oldsmobile, Buick and Cadillac drifted into the mid-60s.

Towards the end of the 1990s, GM unveiled a new branding strategy to combat this lack of enthusiasm. The idea was to focus more on specific models rather than the brand division. Within the Oldsmobile range, GM launched the Alero, Aurora and Intrigue models in an attempt to catch up with its slicker rivals. Although the new cars received various positive reviews within the automotive press, and an intensive marketing drive that included strategic appearances in The X-Files, they failed to capture the share of the younger market they were designed to attract.

At the end of 2000, GM made what must have been a painful, if unavoidable decision to gradually phase out the Oldsmobile brand. The Oldsmobile collector’s models mark the end of production. From 2004, no future Oldsmobile models will be manufactured.

Since the decision was made, marketing experts have been conducting post-mortems of the brand to see what exactly went wrong. One mistake that has been highlighted repeatedly is GM’s attempt to strip the brand of its old-fashioned connotations. This was always going to be difficult for a car that predates Ford and even has the word ‘old’ within its name.

GM tried to get round this problem by launching an advertising campaign based around the slogan, ‘This is not your father’s Oldsmobile’. However, as Coca-Cola discovered with New Coke, it is not easy to reverse a brand identity which has been a century in the making. Another, rather pointless tactic was to build Oldsmobiles without the name Oldsmobile on the outside of the car. One Brand Week article, published in February 2001 after GM made its decision public, examines the folly of such branding exercises:

The problem [Oldsmobile] encountered is that brands, particularly brands with a well-established image, cannot be repositioned. At best they may be nudged slowly in a new direction but not one that is the antithesis of what it stood for [. . .] A better solution, and a more unique approach, would have been to accept the brand as it was, with its older profile, and give its older customers a product they wanted to own with a message that appealed to their needs. In addition to capitalising on the existing profile of the brand, that strategy would have taken advantage of the growing number of mature Americans and their increased spending power.

The Oldsmobile hadn’t always been viewed as staid and boring though. Although it had never been a youth brand, it had been considered an innovator in its field. The most critical brand damage therefore occurred when this reputation faded, and the motivation to buy an Oldsmobile (as opposed to another GM car) no longer remained so great.

However, despite these obvious failings, affection among Oldsmobile’s traditional customers is still strong. There is even a Web site (www.saveolds mobile.org) dedicated to encouraging GM to reverse its decision to phase the brand out. But a visit to the Web site will only serve to remind you that the significance of the Oldsmobile brand is confined to the past. The affection most feel for the car is already tinged with nostalgia. Indeed, if it is the job of branding to distinguish one product from the next in the mind of the customer, the Oldsmobile brand failed decades ago.

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The party’s over

A magazine ad depicting a man vomiting into a dustbin may not be the most conventional tactic to use in order to sell sportswear, but then boo.com was hardly the most conventional company. The September 1999 advertising campaign, in which this image appeared, was designed to let everyone know that the first global sportswear site had arrived, in style, and that it was about to take the world by storm. Of course, the reality was rather different.

On 18 May 2000, less than a year after its launch, liquidators from the accounting firm KPMG were called in to the company’s London headquarters. After spending millions and attracting relatively few customers, boo.com became what The Financial Times referred to as ‘the highest profile casualty among European e-tailing start-ups’.

Although boo.com is one of the most obvious and spectacular brand failures of the dot.com era - if not all time - it was founded on reasonably secure marketing logic. As Al and Laura Ries write in The 22 Immutable Laws of Branding, ‘the most efficient, most productive, most useful aspect of branding is creating a new category.’ There is no denying that ever since boo.com’s Swedish founders Ernst Malmsten and Kajsa Leander had visited Amazon in 1997, they believed this was the key to dot.com success. As Malmsten writes in the best selling account of the boo phenomenon, boo hoo:

If we were really to achieve the global impact we hoped for then we had to exploit ‘first mover’ advantage. If you’re first, then you achieve vital recognition as you become identified with whatever you’re selling. You get a lot of free publicity and customer confidence because you’re the leader. It’s then very difficult for the second wave to compete. Amazon. com was a shining example of that. Here was a company that spent almost nothing on marketing before its IPO, but still managed to create one of the best known brands in the world.

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One of the best ways to generate publicity for a brand is to deploy unconventional tactics. For instance, when London nightclub the Ministry of Sound projected its logo onto the side of the Houses of Parliament, the media attention was immense. Indeed, it was considered such a successful trick that a few years later FHM promoted its ‘100 Sexiest Women of the Year’ campaign with the same tactic, beaming the image of an almost naked Gail Porter (one of the contenders for the number one spot) onto the side of the historic building.

Such outlandish techniques are generally referred to as ‘guerrilla marketing’. The logic behind guerrilla marketing is straightforward: if a company promotes itself in such a unique fashion it will not only be able to gain press coverage, but will also stick in people’s minds and encourage word-of-mouth publicity. Furthermore, guerrilla marketing is usually cheap. When the online portal and search engine Yahoo! wanted to promote its Yahoo! mail services, it didn’t decide to invest in hundreds of magazine ads. No. It built a couple of cows.

The company took part in an event called the Cow Parade in which cows were decorated according to different themes. Yahoo!’s ‘udderly moovelous’ (as it put it in a press release) pair of purple plastic cows were installed with an Internet facility that enabled members of the New York crowd to send ‘moomail’ messages to each other. Although this tactic was undeniably ‘out there’, it succeeded because it was relevant to the service it was promoting.

However, some guerrilla techniques have had considerably less success. For example, when IBM hired an innovative advertising agency to promote its Linux-based software, the campaign involved employing graffiti artists to scribble the words ‘Peace, love and Linux’ on pavements and walls throughout San Francisco and Chicago. Unfortunately, the bio-degradable chalk used to create the marketing messages turned out not to be so bio-degradable. Subsequently, IBM was charged with violation of city ordinance and had to pay a US $18,000 fine.

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Problem? What problem?

In 1997, a professor of mathematics found a glitch in Intel’s Pentium chip. He discovered that the mathematical functions for the chip’s complicated formula were not consistently accurate. The professor decided to send an article about his findings to a small academic newsgroup. Word spread through the university community and the editor of a trade title caught hold of the story. The general press then reported the professor’s findings and sought Intel’s response. Intel denied any major problem, declaring it would only affect a ‘tiny percentage’ of customers. They failed to take responsibility or replace the affected chips.

The issue grew online, as it became a key topic in an increasing number of online discussion groups, which kept on feeding the offline media. Intel’s share value dropped by over 20 points. It was only when IBM’s declaration that it would not use Intel chips in its computers made the front page of the New York Times that Intel went back on its previous position and agreed to replace the chips. Even today, evidence can be found of how Intel’s poor response to online criticism has affected its reputation on the Net. The ‘Intel Secrets’ site at www.x86.org, which was set up at the time of the media’s damning coverage of Intel’s unhealthy chip, still emphasizes the faults to be found in various Intel products.

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Not quite a net gain

In late 1999, computer manufacturer Dell launched the Web PC. The computer was small (a mere ten inches in height) and came in five different colors. The aim of the computer was to simplify the experience of surfing the Internet, while at the same time being attractive. ‘The quality of the customer’s experience will be the defining source of loyalty in the Internet era,’ Michael Dell told the press at the time. ‘The Web PC is breaking new ground for our industry as we take our one-on-one relationships with customers to a new level of helpfulness.’

One of the key features of the product was an ‘e-support button’, that instantly launched a self-diagnostic program. The button could also connect users directly to Dell’s award-winning online technical support team.

The PC also included a ’sleep mode’ designed to eliminate the time spent booting up the computer for Internet access. Users could simply push a button to instantly ‘wake up’ the computer.

‘Many of these benefits are made possible by the ‘legacy-free’ design of the Web PC,’ explained John Medica, the vice president and general manager of Dell’s Web Products Group. ‘We hand picked every piece of technology that went into the Web PC without carrying over any technology from previous PC designs that doesn’t contribute to a pure Internet experience.’

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Why another protocol?

In order to gain public awareness new technologies are now promoted as brands, by technological companies and organizations. However, often those technologies that receive the most hype die an early death while those that are launched with no fanfare gain mass acceptance.

Nowhere has this been more evident than with mobile phone technology. In Europe, the major mobile phone companies were unable to anticipate the success of SMS (short messaging service) text messaging. Indeed, some even failed to mention their phones included an SMS facility. As I explored in my previous book Mobile Marketing, mobile phone users were left to discover SMS for themselves - and discover it they did. In the UK alone, over 1 billion text messages are sent and received every single month.

In Mobile Marketing, I provided an overview of the technology’s popularity:

SMS, or the Short Messaging Service, was the first mainstream technology to enable short text messages to be sent from one mobile device to another. Devoid of color, graphics, audio, video, and confined to 160 characters per message, SMS hardly seemed the most radical of new media technologies. Furthermore, people wanting to send an SMS text message had to work with small, fiddly mobile keypads and tiny gray screens.

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Bad branding @ work

There was a time when Excite@Home was considered to be one of the ’safe bets’ of the Internet revolution. Based around one simple service offering - the delivery of high-speed net access - investors were quick to see its potential. Then, bolstered by investment dollars, Excite@Home decided it wanted to be something bigger, and purchased a variety of online media properties including the Excite Web portal and Blue Mountain Arts in an attempt to build on AOL-style empire.

Although the company was once the leading cable Internet access provider, it fell behind the competition once it had broadened its ambitions. According to CNET journalist Ben Haskett, the demise of Excite@Home ‘bordered on Greek tragedy,’ with a history filled with tense boardroom skirmishes, ill-conceived acquisitions and executives who governed the operations from afar. ‘Excite@Home was largely a victim of its own grandiose ambitions, as well as of a convoluted ownership structure that kept too many cooks in the kitchen,’ Haskett wrote in his post-mortem of the company.

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Failing to be heard

Technology company Altec Lansing learned the importance of marketing with its failed VoicePod digital recorder. As the leading maker of computer speakers, Altec was sure it had a hit on its hands with its innovative recorder that attached audio messages to e-mail.

PC World magazine said the VoicePod looked like ‘a mouse on steroids - a lot of steroids - and promised to make your voice dramatically more helpful as a tool for the PC.’ Gone, said Altec, are the days of unnecessary typing and fumbling for multimedia controls as its device offered the benefits of simple installation and use. VoicePod let users record and attach voice files to documents and e-mail messages with a few simple pushes of a button. There was another handy feature of the VoicePod: personal to-do lists. Users could dictate a short message to themselves and then save it.

The design was also technologically advanced as it exploited the company’s ’signal processing technologies’ that used noise removal filters and other technology to allow for minimum background noise and clear recording. ‘With these features, the VoicePod could be a sound investment,’ reckoned PC World. Not enough computer users agreed.

The trouble was, poor marketing had led to a lack of interest and awareness. The company was so confident that consumers would snatch the product off the shelves that it spent little money and effort on promotion. As a result sales were so poor that the company pulled the VoicePod from the market after just one month.

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