Brand Life Cycle (DOC)

Document Sample
Brand Life Cycle (DOC) Powered By Docstoc
					Brand Life Cycle

The three phases through which brands pass as they are introduced, grow, and then
decline. The three stages of the brand life cycle are the introductory period, during
which the brand is developed and is introduced to the market; the growth period,
when the brand faces competition from other products of a similar nature; and,
finally, the maturity period, in which the brand either extends to other products or its
image is constantly updated. Without careful brand management, the maturity
period can lead to decline and result in the brand being withdrawn. Similar stages
can be observed in the product life cycle.

Brand Life Cycle and Strategy

 Generally speaking, every brand or product has its life cycle which spans from the
time it is launched to the time it exits from the market. This cycle covers five stages,
namely product development, introduction, growth, maturity and decline. The life
cycle of each and every brand or product is different, and different advertising
strategies should be adopted at different stages to suit the marketing targets and
market environment in order to achieve the best marketing results.

Product Development -- This is the stage of design, production and research carried
out by a company to ensure that its products can meet consumer needs through
sufficient market survey. The company will also improve its products in the light of
market response and gradually build up its brand.

Introduction -- During this stage, the product is introduced into the market and
publicity campaigns are launched to promote its functions, features, quality and
usage and attract customers to try out or buy the product.

Growth -- The branded product begins to build up its following among consumers
during this stage. The cumulative effect of marketing begins to show and the market
share expands. However, the company must further step up its advertising efforts,
and the advertising must highlight the characteristics and value of the product.
Maturity -- Brands or products in the maturity stage have a considerable market
share and have reached their sales peak, with growth beginning to slow down. Brand
influence at this stage is at its height and the kinds of marketing strategies to be
adopted are many.

Decline -- Brand awareness is high but sales are on the decline. Other characteristics
of this stage include falling prices, weakening competitiveness and emergence of new

The same product or the same company may experience different life cycles in
different markets. Sa Sa Cosmetics is a case in point. The company is a household
name in Hong Kong which has already reached the stage of maturity. However, it
has only started venturing into the mainland in recent years and is now at the stage
of introduction or growth there. Sa Sa adopts different strategies to achieve its
targets at different stages. In Hong Kong, its target is to increase its market share.
On the mainland, it aims to draw the attention of consumers and increase its

Some brands or products may experience exponential growth in their life cycle.
When China began its reform and opening up in the early 1980s, mainlanders who
came into contact with the new technologies and new products of foreign countries
for the first time found them amazing. These products saw rapid growth and
penetrated the mainland market within a short time, experiencing only the
introduction and maturity stages in their life cycle.

    Examples of Exponential Growth

    Mobile phones were rare commodities on the mainland in the early 1990s,
    but by August 2001, China had overtaken the US as the world leader with
    100 million mobile phones. Home PCs also witnessed exponential growth. In
    1994, there were only 400,000 PCs in China. The number soared to 10
    million within a short span of eight years.
    Source: Synovate Ltd

SMEs must have a good understanding of the positioning of their brand and product
category before they can effectively formulate marketing strategies. The following
four branding strategies can serve as useful reference for SMEs.

Four Branding Strategies
there is a debate in branding circles as to whether or not a brand can have a "life
cycle" on its own, or whether its peaks and troughs and just a symptom of managing
the brand elements (logo, personality, positioning etc)

For one, I can see that a brand CAN rise, then FALL out of favour, to be superceeded
by a new and improved brand.
The only issue I have with viewing a brand as having a lifecycle is that the branding
process can take many years to develop (unless you have an overnight success on
your hand).

Products do have a lifecycle, but their peaks and troughs can come in a quicker
timeframe, so the cycle is more obvious.
You can provide a quick fix to most products or solution out there to improve sales
and prolong the lifecycle, not so easy with a brand.

Brand Life Cycle

A concept, building on the product life cycle concept, which states that brands also have
a life cycle - introduction, growth, maturity, decline - and that particular brand
management strategies are appropriate at each stage. See Product Life Cycle.

My view is that a brand can have a lifecycle in much the same way that a product
can. This may consist of a number of phases from inception to launch, growth,
maturing, decline, revitalization, and retirement.


1)   The   Brand Definition
2)   The   Awareness Experience
3)   The   Buying Experience
4)   The   Using and Service Experience
5)   The   Membership Experience

Other articles that may be of interest include

A brand generally has four phases of growth - based on the product life cycle


And that for each phase particular brand management strategies are necessary.

If you charted the progress it would start at the bottom (that's the intro) and go up
for a certain period of time (growth), then level off (maturity) and then go back
down (decline.)

All brands generally go through this, and it's how they manage the decline that
makes the difference. Ergo the constant state of reinvention for many brands. I
actually think that Madonna is the greatest example of this.

Understanding the Brand Life Cycle Model

This is a model I developed in the mid 1990’s to help companies understand how a
particular brand should be positioned and its relation to the company’s overall
strategy. I was helping many senior ad agencies’ executives/planner from New York
to Tokyo to use this to understand their clients’ branding issues. This was based on
my extensive study of US and European companies and their brands in different
categories. This model enables companies to look at their corporate strategies,
portfolio of brands and products in a meaningful way. I have not revisited this since
this was published some ten years ago. I thought you would find this interesting.
The analogy is that all brands basically evolve through four stages. Most of them
start as a Product Brand, and then some are transformed into a Service Brand.
Over years of brand building effort and market presence they gradually become
either a Category Brand, which is defined as having leading market share within a
category; or a Personality Brand, which establishes a strong brand personality
that consumers identify with; or an Experience Brand, which goes beyond
traditional service and product excellence with a strong sense of uniqueness.

Procter & Gamble is not particularly well known among consumers, while its
brands—Ariel, Tide, Pampers, Always, Pantene are all very well known brands within
their respective categories. Another type of brand is an Ingredient Brand, which is
actually a co-brand since it co-exists together with others who might be responsible
for physically manufacturing products or delivering of the service.
Ingredient Brands usually serve the purpose of providing additional trust or
confidence and often signify the use of an exclusive or proprietary technology.
Examples include Lycra, Polartec, Gortex, Windows, Intel, Dolby and Oracle etc. This
is the exact opposite of product brands. By contrast, the technology products
communicate at the level of the company whose credibility and expertise have
turned its name into a brand is stressed. The most successful case is likely Intel. If
you buy an IBM computer today (already a powerful brand name), you will find two
other co-brands: Windows and Intel. Twenty years ago we would not have
envisioned the operation system and chip supplier would put their brand side by side
with IBM. Today, however, they are top household names.
Ingredient Brands are not new. Only the term is. It existed hundred of years ago in
the form of country brand. Remember all those “Made in Germany” and “Made in
Japan” labels, symbolizing quality and sound engineering. The chemical and
pharmaceutical industries have also become skilled in using the Ingredients Brand.
When Du Pont differentiates its elasthane it becomes a symbol of quality. Without
the Lycra label, consumers might believe that this fabric was a lower quality
material. Lycra gave Du Point so much market power that the whole industry paid
premium prices for this material. Du Pont actually made Lycra fashionable; how
often have you heard of a chemical company who provides the material that has an
impact of fashion trend.
After being extremely successful these brands become cash generating trademarks.
They will then sometimes be moved up one level and become a Corporate Brand
(the brand name becomes the corporation) or a Global Brand, expanding
geographically to become a global dominant leader. These different stances
illustrate the major strategic choices required by each corporation, namely the
optimum level at which a brand should be positioned to capture and create
shareholder value. Companies sometimes can successfully move brands to different
strategic levels and become the overall brand if that brand is very successful.
Sometimes a brand needs to move from one category and become a brand of multi-
categories. This is particularly common in fast moving consumer goods. In choosing
a branding level you position against future competition to enjoy the best
competitive advantage vis-à-vis channel partners and consumers. This is always the
key consideration governing the choice of level.
These catergorizations are not mutually exclusive. A brand can be both a global
brand and a personality brand (Virgin) or a global brand and an ingredient brand
(Intel). The model suggests that the ultimate goal for all companies is to have a
global brand. A strong global brand is a powerful weapon. These days, it is an
indispensable one, as the economy challenges our faith in brands to deliver a profit.
All studies suggested the most valuable brands are all global.

         Per Philip Kotler,
                     A name, term, sign, symbol, or design
                       intended to distinguish the goods
                       and services of one seller from
                       another and to differentiate them
                       from those of competitors.

 Confidential - for classroom use only
                                                                                12 - 6

                                         Functions of a Brand
                            Per Douglas Dalrymple, branding facilitates
                                         Reducing perceived risk
                                         Status and prestige
                                         Market segmentation
                                         Coherent marketing and promotional efforts
                                         New product introductions
                                         Premium pricing
                                         Repeat purchases
                                         Reducing search costs
                                         Protection of intellectual property
     Confidential - for classroom use only
                                                                                                                            12 - 7

                                                                                                                     Brand Strategies
                                         Brand Equity
                                                                                                   Line extension
       The value of a brand derived from
                                                                                                   Brand extension
                 Brand personality
                 Brand awareness                                                                   Multi-brands
                 Brand loyalty                                                                     New brands
                 Brand association                                                                 Co-branding
                 Brand image

Confidential - for classroom use only                                            Confidential - for classroom use only
                                                                       12 - 8                                                           12 - 9
The Product Life Cycle