Iconic brands tend to lose their relevance long before the cash they generate begins to dry up. Once they lose their luster, a cash cow brand is nearly impossible to change.
It can be challenging for iconic brands to take advantage of new opportunity and remain relevant to people. When it comes to killing a cash cow brand, you need to “know when to hold them, know when to fold them, know when to walk away and know when to run.”
It’s a gamble.
Consider the fate of these iconic brands that held on to their iconic heritage at the expense of innovating a bigger future:
Sears: Once the dominant leader in the mail order business, now an “also-ran” retailer, 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 was finally sold off to a digitally savvy Internet competitor.
Chevorlet: 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 advertising campaigns don’t seem to get much attention as most people seem to be paying more attention to forward-thinking Tesla these days.
Kodak: It invented digital photography, yet cemented itself into its 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 Apple product innovation since the Newton Computer gave way to Macintosh.
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 reinvented itself–emerged from the chrome and glass shackles of the Ford culture– completely re-designing its entire product line and successfully leveraging the most transcendent attributes of it’s long heritage.
Harley Davidson, in response to the onslaught of Honda and Kawasaki bikes in the US market launched lighter versions of its flagship bikes. The lighter bikes got considerable traction in the market, but eventually Harley decided to stop making them because it made no sense to turn a Harley into a Honda with a Harley logo on it.
What gets you there won’t keep you there.
The 21st century 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.
Owners and 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.
Should every iconic brand be forced to change with the times?
Not exactly. White Castle Hamburgers has been around since the 1920’s.
Their core 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 fast food 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 for its own sake was not the driver of brand value.
Making the transition from a dying brand to an emerging one.
Killing off a brand is a difficult thing to do for brand owners. Not only does killing a brand have the potential to dilute the equity of the overall portfolio, but is also poses a real danger of alienating loyal legacy customers.
However, over time, brands can become a liability and the strategic move to protect the overall brand portfolio might suggest killing the cash cow brand. The most challenging task for brand owners is to know how best to kill a brand.
Brands are intricate systems with their own communities made up of loyal customers, and their own meaning systems for customers across multitude of scenarios. When the decision is made to kill a brand, brand owners will have to ensure they don’t lose those legacy customers but transition them to a new or different brand in the portfolio.
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.
With foresight and astute management, 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.
Whatever the reason for killing a cash cow brand, brand owners should approach this strategic action with a compelling vision for the long term future and the intestinal fortitude to stay the course despite the potential short term cost.
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