New and fresh ideas usually come from an awareness of new opportunities in the marketplace. It can be challenging for iconic brands to take advantage of new opportunity and remain relevant to people. Iconic brands tend to lose their relevance long before the cash they generate begins to dry up. Once they lose their luster, iconic cash cow brands are nearly impossible to change.
Consider the fate of these iconic brands that held on to their heritage at the expense of innovating a bigger future:
Sears: once the dominant leader in the mail order business, now an “also-ran” against big box retailers. Their relevance lost by disruptive technologies. The very principles of “mail order” that made Sears a great iconic brand, were reinvented by Amazon. The rest is history.
Newsweek: Once the biggest news magazine by circulation in America. Now diminished by lost circulation and advertising revenue, it has finally been sold to a digitally savvy internet competitor.
Chevrolet: No brand was more iconic and embedded into the fabric of 20th century American culture. The problem is we are now in the 21st century and the game has changed. Chevy’s current advertising manta “runs deep” is a gallant attempt to reinvent itself by looking to the past. Good luck with that one. Most people seem to be paying more attention to forward-thinking Hyundai these days.
Xerox: It invented laser printing but held tightly to it’s dominant document company positioning while HP exploited the technology and became the industry leader.
Kodak: It invented digital photography, but cemented itself into it’s dying film business.
The most successful companies are the ones who have no problem killing their cash cow brands.
Apple has done this over and over again. Killing cash cow product brands has been the hallmark of every Apple product innovation since the Macintosh. True enough, Apple is an easy benchmark to make the point, yet there are other marketers who routinely reinvent, reposition and realign their brand innovations at the expense of their most sacred cash cow brands.
Gillette is another great example–first killing its highly successful single-edge razor blades in favor of the TRAC II, then killing that with another innovation– the adjustable twin blade Atra brand.
Jaguar has reinvented itself–emerged from the chrome and glass shackles of the Ford culture– completely re-styling its entire product line and successfully leveraging the most transcendent attributes of it’s long heritage. But it was an expensive transition for the new owners.
What gets you there won’t keep you there.
The marketplace moves too rapidly to rely on the momentum of scale and history. There is simply too much choice today. Evolving the meaning of an iconic brand is a tricky business. Along the way it’s easy to blur the brand’s identity and it’s value proposition attempting to fit what worked in the past into what’s going on today. Managers of iconic brands are naturally boxed in by the heritage the brand represents in people’s minds. When heritage represents “old and tired”, it’s nearly impossible to change that perception in people’s minds.
To change or not to change–that is the question.
Should every iconic brand be forced to change with the times? Not exactly. White Castle Hamburgers has been around since the 1920’s. Their identity, store décor and menu have been pretty much the same since the beginning. White Castle is indeed an iconic brand, yet it is far from old and tired. As the burger category evolved around them, White Castle kept doing what they do best. The result–next to McDonald’s, they have the highest sales per store unit in the category. Why is this? The answer may lie in the fact that White Castle did not pursue growth for its own sake. White Castle kept its focus on serving its customers in ways customers have highly valued for over 70 years– growth was not the driver of brand value.
Making the transition from a dying market to an emerging one.
When an iconic brand is “locked in” by it’s heritage, brand owners and managers may find themselves in a similar fix as the aforementioned Sears-its iconic heritage blurred by the “softer side of Sears” and now the brand is limping into the sunset meaning very little to anyone. Sears could well have leveraged its original mail-order heritage to the online world and become the dominant online retailer. Of course, that prize went to Amazon.
According to Marty Neumeier, author of ZAG, iconic brands make the leap to new relevance only when they focus on the two-stage rocket strategy–essentially leveraging the cash generating strength of the iconic brand to fuel the innovation of a new brand. Killing the cash cow, as the second stage rocket of the new brand takes full advantage of the momentum of the first, can take a long time–certainly longer than a quarter or two.
Brand managers with enlighted management and the intestinal fortitude to stay the course, can leverage their iconic brands and pave the way for newer and more relevant expressions of the original value that people continue to care about. With all the revenue pressures facing marketers today, the difficulty is knowing when to fire the second stage rocket before the fuel of the first is at last spent.
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