When a business sees its sales decrease for a few consecutive trimesters, certain questions start to arise. What needs to change? Is it management, operations, the product, marketing strategy or its competitive edge? When the organization has gone through the full spectrum and nothing changes, it sometimes leans toward a drastic solution: a rebranding.
A solution as such, when done with the proper expertise, for the good reasons and with the sufficient resources, both budget and dedicated time, can be a true saviour and a second wind to a business. That being said, if a rebranding is done as a last resort, wrongfully thought throughout, analyzed and strategically implemented, it can be a complete catastrophe. And a costly one too.
The three principal challenges
For the project to work and produce positive outcomes for the business, a rebranding exercise needs to overcome three imperative challenges.
Challenge #1: listen to your consumers and the reasons why they have moved away from your brand products/services
Challenge #2: offer the best possible products/services to properly respond to the consumers’ needs and desires
Challenge #3: convince consumers, both current and potential, that your products/services and trustworthy
The operation is a delicate one that possesses that potential to produce significantly positive results, but that involves proportionally significant risks and challenges. The more important and the bigger the pivot, the more risks are at stake for a successful implementation.
Let’s have a look at a few organizations have either failed or succeeded at the operation and learn from their mistakes and accomplishments.
An example to follow: McDonald’s
In the early 2000s, McDonald’s was facing an important decline in sales caused mainly by the lack of healthy choices on its menu. The phenomenon was amplified by the documentary Super-Size Me in 2004, portraying the food chain as a health hazard for its customers. That is when the organization decided to listen to its customers and identify new needs and desires from them. The restaurant chain revisited its menu to integrate healthier options, such as salads, and even organic ingredients.
McDonald’s hasn’t stopped there. It also identified an opportunity to add a second wave café to its business model. It launched McCafé and opened locations with fully integrated coffee shops, including a menu that was similar to what Starbucks had to offer, while being adjacent to its food offer and integrating the café menu in all its locations. This integration was a novelty that seduced current and even new clients for the brand.
The final touch was on the advertising side, with the development of the concept « I’m lovin’ it ». The concept has now been around for almost two decades and has been deployed all around the globe.
Today’s McDonald’s sales are still thriving, and the food chain remains the most important fast-food chain in the world.
When the edge captures the market: Old Spice
In 2010, the Old Spice brand was at a standstill and although carried an important brand awareness, it was also perceived as an old and dusty brand only used by your grandfather. A far cry from anything that would appeal to a younger generation to renew its clientele.
Old Spice’s brand managers started a market analysis and surveyed what younger generations of men were seeking, what they liked and what appealed to them. The brand underwent a 180 spin with a single goal in mind: they wanted to disrupt its current positioning and completely reinvent it with an edgy, audacious and absurd tone.
The launch was supported by the now famous campaign « Smell Like a Man ». The ad went viral on Social Media and was largely deployed in both traditional and digital outlets. All the while, the actual products had been completely rebranded, presenting new scents. Each new SKU was powered by a version of the advertising concept.
The new Old Spice was acclaimed by a new generation of younger customers that celebrated the absurd humour of the brand and embraced what it was representing. A generation that did not want to take life too seriously. One that had a natural ease and a great sense of humour.
The avoidable mistake: Gap
In 20190, the famous clothing brand The Gap launched a new logo that ended up costing the business over $100M in less than a week. The logo was massively rejected and mocked, and the brand was forced to retract it after only 6 days online.
The first mistake was underestimating the value of the current logo and the symbol it represented for its customer base. The classic Helvetica white letters in the blue box were more than just a logo. Without any external validation, the brand simply assumed it was time for a change.
But most importantly, the change of the logo was a Band-Aid on a bigger problem. The main reason of Gap’s downfall was not its image, but rather its products. The clothes were not on trend anymore, collections had not followed the market to support the needs of its customers and create a new fanbase.
The first critiques on the web were the designers, mocking the new design, to which the masses joined forces to complain and ridicule the brand’s efforts at presenting itself as a younger, more modern version of itself.
Not only did the brand fail at attracting a new customer base, it also upset its current base, affecting sales even more than what the initial state was.
All in all, the only good move the brand made was to acknowledge its mistake and return to the former logo in only a few days.
The disaster that made history: Tropicana
In 2008, Tropicana was the most important orange juice brand in the US. Record sales were ongoing. On January 1st, 2009, the brand launched a completely revisited packaging. Not only was this change uncalled for and unexpected, but it was also instantly rejected by the brand’s customers.
In only two months, sales dropped a whopping 20%. PepsiCo, its main shareholding, then reacted promptly and retracted all new packaging from the shelves to reintroduce the classic and former version. This error of judgement cost the company an astounding $35M, not including its losses in sales.
An advertising campaign supported the introduction of the new packaging but seemed to also not resonate with Tropicana’s customer base.
Thankfully, Tropicana had only changed its image. The product and the recipe had remained untouched, which allowed for a quick correction in the market to return to the previous product.
Just as the example of The Gap, this rebranding was uncalled for. Customers were still happy with the brand; it had become a staple and the classic orange with a straw was comforting and provided a sense of belonging. Moreover, sales were at a peak point for the company. While it is certainly smart to be pre-emptive, it is also mandatory to validate the hypothesis before enterprising such a change.
In the end, one positive lesson to learn from the Tropicana disaster was the speed at which PepsiCo recognized its mistake and lifted the new packaging from the shelves.
At dada, we can help guide you through the right path, whether it be a full rebranding or simply the creation of your Employer Brand, or a redirection in your commercial strategy. We can optimize your solutions and decisions, based on your goals and business objectives.
To learn more on our full marketing and branding services, as well as our consultation capabilities, feel free to contact us. We serve the best coffee, with one of the best views in town. And that part is free!
With love and purpose,