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Understanding Declining Brands: Causes and Consequences

A declining brand is one that has consistently lost market share and consumer interest over time. This article explores the top 10 reasons brands decline, including quality issues, resistance to change, excessive pricing, poor communication, and lack of differentiation. Notable case studies like Maruti, Cafe Coffee Day, and others provide insights into the nuances of brand decline. Understanding these factors can help businesses adapt and refurbish their brands to regain market presence and consumer loyalty.

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Understanding Declining Brands: Causes and Consequences

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  1. Declining Brands

  2. Defying Newton

  3. What is a declining brand? • A brand which has over a period of time been losing both market share and mind share amongst its target consumers

  4. Top 10 Reasons for Declining of Brands

  5. Cause #1 • Decline in quality • Cost-cutting (Maruti 800) • Increasing volumes (IIMs) • Relaxation in QC Measures (Café Coffee Day) • Perceptual Decline: Price, Channel, Sensorials, Advertising, Packaging

  6. Cause #2 • Resistance to Change • Product Oriented (Robin Blue) • Need Oriented (Nirma Detergent) • Consumer Oriented (Dabur Chavanprash) • Why resistance? • Investment • Product Orientation • Tried & Tested • Complacency

  7. Cause #3 • Single Product (Ambassador) • No portfolio • No extensions • Problem? • Visibility • Stature • Decline in segment • Decline in product

  8. Cause #4 • Excessive Pricing (Daewoo Cielo) • Premium pricing • High margins • Entry of Competition • Feeling of being cheated • Private Labels

  9. Cause #5 • Wrong extensions (ICFAI Learning Centers) • Bad products • Crowded categories • Lower image products / segments

  10. Cause #6 • Communication (Kelvinator) • Low levels of communication • Wrong message • Low impact • Brand Ambassador • Production values

  11. Cause #7 • Channel management (CrossWord) • Attitude of Sales Team • Margins • No push • Emergence of alternate channel

  12. Cause #8 • Ageing (HMT Watches) • Old age • No makeover (Product / Communication) • Perceived as ‘Not for me’

  13. Cause #9 • Lack of differentiation (Acer Computers) • Cluttered market • No USP • No competitive advantage • ‘Me Too’ Branding

  14. Cause #10 • Tough Consumer • Less emotional • Lowering levels of loyalty • Flirtatious attitude • More knowledge driven • Connected via media

  15. Exercise: Failed Indian Brands • Weikfield Jelly • Maruti Zen Estillo • Yamaha RX-100 • Roohafza • Margo Soap • Kinetic Scooter • Fiat • Moti Soap • Savlon • Milkfood

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