Too Big to Succeed? Remedies for Revitalizing Big Brands

on Wednesday, 17 December 2014. Posted in Brands

Brands are introduced, grow and unless they are very good at sustaining relevance, they decline. Today, many of the largest, most valuable US ‘mega’ brands are struggling. The unique value propositions these brands offered in their salad days are being undermined by their size and market klout, leaving them vulnerable to smaller, nimbler upstarts. For big brands on the bubble, the answer is probably not a short -term PR campaign or high priced reputation consultants. Here are just a few ways mega brands can reinvent themselves for the new marketing era.

All brands seek growth, but when does size become a disadvantage?

Mark Stevenson, Fine Art America The giant sauropod dinosaurs of the Jurassic and Cretaceous periods were the largest terrestrial animals ever, boasting body masses in excess of 50 metric tons. (For perspective, the space shuttle Endeavor is 70 tons when empty). Compared to other herbivores, the saurapod’s long neck allowed more efficient food uptake and made food accessible that was out of the reach of other herbivores. The selective advantages of large body size however reached a limit as resources declined. We all know the rest of the story, epitomized in the epigram, ‘went the way of the dinosaurs.’

The Birth of Mega Brands

We may be witnessing a similar evolutionary arc in the history of branding. During the 1980’s, mid-sized brands aspired to become global brands and small brands found it increasingly difficult to survive. In his influential book, MegaBrands (1991), John Loden observed the number 1 brand in many consumer products categories in 1980 was still on top 10 years later, and many had strengthened their leadership position. Meanwhile, the ranks of mid-size brands shrank in the 80’s as brand franchises began to gravitate to the extremes of large and small. The large brands, labeled a “megabrands”, were defined as “an elite group of consumer franchises with a loyal, massive, and growing customer base.” Major companies retooled their marketing organizations to better develop, manage and grow these franchises, creating modern brand management along the way.

Mega Brands in Decline?

These days, consumers just don’t seem to be feeling the love when it comes to mega-brands. McDonalds, Coca-Cola, JC Penney, and others seem to be struggling to maintain their cool factors. Even fast-growth newcomers are feeling the downside of size. Google, Amazon and Uber are each the subject of growing consumer concern for customers, as they exercise the leverage that comes with size and marketplace klout. Eight years ago, Walmart was similarly caught by surprise when it realized that their internal view of themselves as the champion of lower prices on behalf of ordinary Americans was no longer the view of many of its stakeholders. Critics focused on low employee wages, cheap foreign goods and the killer of small independent retailers. Its “reputation crisis” was a real threat to the company’s future, and woke the company up to the need for action.

Likewise the issues confronting today’s mega-brands are threatening businesses, not just reputations . Consumers are demanding more from brands - more purpose, more responsibility, more listening, more quality. And consumer are putting their wallets on the line to make their voices heard.

For small brands, this change combined with new business models and digital customer connection opportunities means an increasingly level playing field. A damaged Goliath is an easy foil for upstarts, and many smaller brands - from craft breweries to niche online merchant sites like Zulilly and NomoreRack - are taking advantage of the big brands’ woes to establish themselves as the choice of a savvier customer. Let’s face it, Pepsi simply is no longer the choice of a new generation - can any mega brand even aspire to that position any longer?

Dinosaurs Fighting Back

For big brands on the bubble, the answer is probably not a short -term PR campaign or high priced reputation consultants. Turning these ships of state around will require focused internal and external brand building efforts over many years. They will need to rethink the competitive landscape and respond to customer needs in new ways.

Here are just a few ways mega brands can reinvent themselves for the new marketing era.

  • Remember your roots. Each struggling mega-brand was once a cool new upstart. Their corporate values often read like a message from a by-gone era. Rekindling their sense of identity around values, often those of the founder(s), is a good starting point.
  • colaThink small before applying scale. Small initiatives may not scale, but scale may allow big brands to feel smaller, and are difficult for small brands to copy. Last summer, Coca-Cola and Pepsi made their packaging interactive, and last week Bud Light followed their lead with a customized packaging initiative of their own, putting hundreds of customized messages on bottles and providing surprising, one-of-a kind experiences for consumers at concerts and other events.
  • Champion the little guy. Americans naturally want to root for the little guy, so big brands should look for opportunities to champion the little stories within their companies. Companies are made up of people, so put a human face on your brand whenever possible. Southwest Airlines is a master of the personal anecdote. Amazon has earned a reputation for being a bully, but is missing an opportunity to tell the story of how it provides infrastructure for startups. Instead of taking credit for helping to level the playing field (few large companies actually enable competition), we know Amazon as the world’s largest retailer and little else.
  • starbucksShake up the portfolio with niche brands. Big brands have the option of reinventing their portfolio to focus away from their master brands and create smaller more targeted stand alone brands. Creating smaller, targeted brands allows companies to experiment with new business models and offer solutions that are no longer credible from the mega brand. Starbucks launch of Reserve is an attempt to do just that. By moving up market with hand crafted coffee, Starbucks aims to capture more wallet form the high end coffee sophisticate who is at risk to upstarts like Equator.

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