The lessons from the failure of big brands in the world are a wake-up call for young businesses. Thanks to them, the leaders will know how to create the most appropriate and business-oriented strategy when participating in competitions between brands.
In this article, BEMO will help you learn many things through the 2 failures of Coca-Cola and McDonald’s and understand the moral aspects of branding.
1. Reasons why brands fail
The war between brands never ends and is getting more and more intense as customer behavior has changed. Nowadays they only buy items that “represent” trusted brands instead of focusing on products as before. This means that no matter how good the products are, it is normal to fail to make a big splash.
Failure comes from one of the following reasons:
- The ability of the brand to conceal: Dr. Eliot once commented: “Humanity cannot accept too many realities”. This is clearly shown in the Marketing stage, when the internal operating system performs many strategies to exaggerate the actual product. Compared to the advertisements and how brands communicate their products’ value, real ones on the market make customers disappointed.
- Lack of on-time adaption: The market changes according to the tastes of users, and when businesses and brands cannot create new value to retain customers, it will lead to complete failure.
- Good product thinking will succeed: A brand will have to forfeit if they keep the mindset that good products will be sold well for they have not analyzed the customer needs. This means they need to ask why customers come to their brand, what problems their products solve. This is the core of successful branding.
- Using advertising will not fail: This can be considered a wrong idea and misunderstanding about advertising. Indeed, advertising is a branding tool and it takes a lot of budgets, but there is no guarantee of success. To be specific, it is a way to reach customers to communicate the brand instead of selling products. Therefore, businesses or marketing departments must think carefully about each of their advertising campaigns.
- The autocracy of the business: Leaders tend to be overconfident about their own brands in the marketplace. This is what motivates them to expand into new markets based on previous success without clearly analyzing if the culture, habits, and behaviors are suitable for the product or not. Consequently, they suffer losses and failures.
2. Lessons from large brands
For the world’s giant businesses, the failure of branding strategies is so normal that they leave profound lessons for each business to refer to.
A typical case is Coca-Cola. Their failure came from a new product launching campaign called “New Coke” in 1985. It infuriated customers who loved the traditional taste and they created a wave boycott to this new type of drink. This is considered a historic failure of Coca-Cola in the beverage industry.
There are lessons that we can sum up from the “New Coke” campaign such as:
- Failure for losing brand memory – For perennial brands, the memory becomes a huge matter. Coca-Cola used the wrong marketing tactics when focusing on new products and advertised it as if it should replace the traditional formula. They misjudged the strength of the first brand.
- Create something new instead of “imitating” competitors: Coca-Cola had deliberately built a “Pepsi’s copycat” for its new product and this imitation caused existing customers to condemn and boycott the “New Coke” product. Therefore, businesses should create differences and draw a new direction to identify the brand suitable with orientation.
- Try and come back: Although the new product campaign failed and Coca-cola was forced to reproduce the traditional drink, Coca-Cola had inadvertently created a stronger bond with their customers because they already knew how customers loved their products in the market.
- Focus on researching the market: This is an integral part of strategic marketing planning, and Coca-Cola is a classic failure when they ignored the research table for customer perception of traditional products. As a result, they paid a heavy price when they were so confident in the taste of new products.
Another case can be mentioned is McDonald’s Burger Arch Deluxe from which they have learnt a memorable marketing lesson. This type of burger was aimed at the adult segment and just like Coca-Cola, McDonald’s also did market research on the popularity of this new burger and got many agreements from their mature customers. However, when announcing new products to the market, they were opposed in the same case of “New Coke”.
There are lessons that we can sum up from new product of McDonald’s such as:
- Stick to the brand identity: McDonald’s is known for their simplicity, convenience and suitability for children. Therefore, offering a product that “says no to children” is going against the inherent characteristics, and this consequently lead a serious impact.
- Do not forget the brand’s key customers: Expanding the product range is a wise business strategy, but moving away from key customers is the wrong direction.
- Doubt the polls: Ironically, McDonald’s researched the market prior to making its “Adult Burger” and it had been supported, but the reality is the opposite. Therefore, doing the appropriate research is effective, but it should not be taken as truth.
These are two lessons about brand failures in the market, and businesses can learn to avoid repeating the same mistakes in their marketing strategy. BEMO hopes to bring you valuable information and help you have more ideas for doing business.