Today's Brand Erosion

Daniel Burrus

As a brand, Mercedes Benz has long been a name that stood for high-end luxury automobiles at a high-end price. Many young and middle-aged managers dreamed of the day that they could be like the boss and afford to show their success to the world by driving this international status symbol. If someone asked a Mercedes owner what kind of car they drove, they didn’t need to talk about the model, or the horsepower, all they needed to say was a Mercedes.

That’s what building a brand is all about. It is a word or phrase that tells you what the product or service is and what to expect every time you experience it. Walk into a McDonald’s and you know what kind of food and service to expect. You can count on it.

It takes years of work and usually great sums of money to build a brand. It also takes a fanatical focus on consistency.

Inconsistency Dilutes Brands
What would happen to your opinion of Mercedes if they cost the same as a Ford or Chevrolet? What if they started looking more like a Ford or Chevrolet? You and I both know the answer: Mercedes would start losing their ability to give owners a feeling of success, pride and status.

As many of you know, over the past few years Mercedes has been introducing lower-end models that now compete with high-end Fords and Chevrolets. Now, middle managers can afford one. Do you want to spend over $100,000 for a Mercedes to show the world your success and status when your neighbor can buy one for $36,000? Remember, the brand name Mercedes has never been about a particular model; it has always been about what it means to own one.

What would happen to your opinion of McDonald’s if some of its restaurants had a fast service and some were slow? What if some had completely different menus that what you had come to expect? Once again, you and I both know the answer. You could no longer count on them being McDonald’s.

Market research has shown that McDonald’s service has fallen off and it is not delivering fast and friendly service in all of its restaurants. Nor wonder its stock price has been down for some time now.

Short-Term Thinking Dilutes Brands
I am amazed at how many companies are falling prey to crises, short-term thinking and implementing costly strategies that will inevitably dilute their brands.

Earlier, I discussed Mercedes and what it was doing to dilute its brand. On the other end of the auto spectrum, we all know what to expect from the brand name Volkswagen. You can expect it to be a small, inexpensive car or van that offers reliable transportation. It makes a good first-time automobile.

Recently in Europe, Volkswagen introduced a new model with a list price over the $100,000 mark; it will soon be available in the United States. Would you pay over $100,000 to be a proud owner of a Volkswagen? I don’t think so.

In this case, Volkswagen saw that high-end luxury brand automobiles were out selling less expensive brands. They must have thought to make a luxury version of their Volkswagen and cash in on this trend! Never dilute your brand based on what is happening in the present. This trend is a soft trend, meaning it is not a guaranteed long-term trend. And, even if it were a guaranteed long-term hard trend, it would still dilute the brand name of Volkswagen.

If you have spent time and money building a strong brand, keep it, grow it, magnify it, but never dilute it. Once diluted, it’s hard to get it back.

About the Author: Daniel Burrus is considered one of the world’s leading technology forecasters and business strategists, and is the author of the best selling book Technotrends. He produces a number of audio and video learning systems and is the publisher of the Technotrends® Newsletter.


Daniel Burrus, one of the world's leading technology forecasters, business strategists, and author of six books
Copyright 2004 Author retains copyright. All Rights Reserved.

 

 

 

 

 

 

 

 

 

 

 

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