Content area
Full Text
In the mid '80s, BMW had a strong share of America's then-thriving luxury car market. Fortyish-year-old execs across the nation spent their weekends hugging the curves and waxing Germany's premier car, carefully positioned as the "ultimate driving machine."
But then, just briefly, BMW lost its way. Instead of promoting how well the BMW drives, the company promoted the brand's status, with commercials featuring polo ponies and upwardly mobile professionals. Now, a falling sales curve has gotten BMW to shift gears and steer advertising back where it belongs--on the quality of the automobile.
Unfortunately, not all companies so quickly see the error of their ways. Take General Motors. Until the '70s, GM had five well focused brands; if you told your office pals you had just bought a Buick, they all knew exactly what that meant. But today, GM "has destroyed the meaning of its brands," according to Jack Trout, president of Trout & Ries, an image consulting firm based in Greenwich, Conn. "All of its brands began to look alike and be priced alike." It may be no coincidence that in the past decade GM has lost 11 share points of the U.S. auto market--roughly $11 billion.
The annals of corporate America are filled with similar stories of brands that have fallen off track only to lose their cache. Some, like GM, got away from the basics; others were unable to keep up with changing consumer life-styles and tastes. In most cases, according to Quinn Spitzer of Kepner-Tregoe, the New Jersey-based strategy consultants, these companies have a brand-induced identity crisis. "Many companies have never properly articulated what their brand's strategic advantage is," says Spitzer. As a result, "brand image and competitive advantage go out of sync."
BRAND SWITCHERS
In decades past, companies could get away with this. But no more--according to recent polls, brand loyalty is down among consumers. Consumer loyalty to nationally advertised brands has dropped from 75 percent in the mid-'70s to just 61 percent today, according to Martin Horn, vice president and associate director of strategic planning and research at DDB Needhaim Worldwide.
Bradford Fay, research director at the Roper Organization, also reports a drop in brand loyalty; his surveys show loyalty has fallen 10 percentage points in the past three...