“Death by a thousand cuts” is becoming the norm in many well-established categories as large, incumbent brands are losing share to an army of small players. For context, over the past four years, the food and beverage category in the U.S. grew 2.3% per year overall. But, the top 25 food and beverage companies made up only 0.1% of that annual growth rate. Most of the growth came from 20,000+ small companies outside of the top 100 (Source). Many categories are similarly affected by this new breed of competition.
Unfortunately, strategically-positioned line extensions and new product formats or flavors are no longer viable solutions on their own. Big brands that are slowly declining may be in need of a full renovation.
A relevant renovation is a daunting task. So, we’re sharing a few approaches that we’ve found fruitful for brands across multiple competitive categories.
Start from the Inside Out
Starting with the formula, format or overall business model, brands can successfully fundamentally shift to address a whole new segment or market trend. Consider this approach if your primary user base has aged out of your category, or if your business model is completely outdated (and you’ve waited a bit too long to make any meaningful changes). In order for this strategy to work, the fundamental user need, and at least some elements of your core brand equity, should still be relevant.
For example, Old Spice knew that guys still need and want to smell great, but the user base of the original brand had grown out of the category–and the fundamental delivery of “after shave” had shifted to new product forms. But, the brand iconography was still strong, and because the brand hadn’t been re-inventing itself all along, it was ripe for a total reinvention. A whole new group of young men could be reached, and the resurgence of the “old made new” brand worked beautifully.
Yellow Pages suffered from an extinct business model (thick paper phone books); but, fundamentally, we all still need to look up the number to a local plumber or the best florist in town. This was another great opportunity for a brand to reinvent itself while keeping its core services intact. In 2013, the company changed its name to YP and focused on grassroots efforts to help businesses reach customers virtually and offline.
Check out this quick slideshow for more on these cases and other examples.
Own Up to Your Faults
It can be surprisingly endearing to consumers when a brand is self-aware enough to point out its own flaws. For example, when Domino’s received a massive amount of consumer feedback about its subpar pizza, the brand resolved to make things right. Domino’s poked fun of itself via honest video marketing campaigns, pointing out to consumers that the brand was aware of its stumbling blocks, and worked hard to make recipe improvements based on the harsh feedback. The result: a totally renovated brand and a return to growth.
Leap-Frog a Trend
Just because a product hasn’t been a category leader in the past, doesn’t mean it can’t be a leader in an adjacent category. For example, Yeti profited by jumping on the emerging trend of on-the-go hydration and pivoted from making industrial fishing coolers to drinkware–specifically, tumblers to keep drinks hot and cold for long periods of time. Now, Yeti is a lifestyle brand and a household name thanks to its smart capitalization on a big trend.
The Garage Group helps corporates innovate and grow like startups. Want to re-invent and adapt your brand in the face of emerging competitive sets? Contact us to learn more!
