<#026> 4 reasons why big brands decline and how bottom-up thinking can prevent that

<#026> 4 reasons why big brands decline and how bottom-up thinking can prevent that
Photo by Sébastien Goldberg / Unsplash

In our industry, there's a tendency to think that bottom-up brand building is only for small brands. I've been challenged that it works for small brands launched in the market, but it does not work when selling 1 million cases.

Well, that's a myth.

Although big brands have passed the famous Malcolm Gladwell's Tipping Point, no brand is safe after that. If that were true, there wouldn't be a need for re-launch, re-branding, or re-positioning of big brands. No brand is too big to fail.

Unfortunately, most brands focus on short-term growth more than long-term brand building. They forget the fundamentals and need to return to fix their brand when it's too big. Young trees are easier to fix than old ones.

It takes 20 years to succeed overnight and one year to ruin everything.

How many brands have you seen succeeding and ruining all the hard work to grow too fast?

It reminds me of the story of the dog with a piece of bread in its mouth that goes to the lake and sees himself reflected. To catch the mirrored piece of bread drops his and loses it all.

So why do brands fail when scaling up, and how can you fix it?

1. They forget about on-trade when selling in the off-trade.

People always look at supermarkets for fast growth. You can do that but not at the expense of your On-trade channel. If you forget about maintaining your relevance in the On-trade, your brand becomes a commodity. Your brands start to get discounted, and consumers looking for premium products look for the next cool thing as your brand has become too affordable. Think of what happened to Absolut when Grey Goose appeared and to this one when Tito's Vodka launched. There's always a newcomer; if you don't keep your users hooked, they will switch brands. Why do managers fail at this?

Very few managers understand how to work with On-trade. There are more Off-trade types of managers than on-trade ones. That's simply because, in corporations, only a few categories are sold in bars and restaurants, while all the others( from yogurt to toilet paper) are sold in supermarkets. Mastering Off-trade may give you more career opportunities, but if you work with drinks brands, you must master how to work with bars.

2. Management gets a new toy and defocuses on it.

In the era of M&As (Mergers and Acquisitions), it is very common for companies to switch priorities. There is always a cool brand that the management holds as holy. It's the one mentioned at every meeting, whose numbers are always checked, and whose posters and logos are everywhere in the headquarters.

Suddenly, a new brand enters the family because of its fast growth and potential. Everyone in the organization wants to sell that one. Sales teams go crazy about it; distributors feel that this is the brand that will make them rich. The brand the market was craving for. The older brand loses its share of mind and status. It starts to lose ground, but it takes time for the management to adjust growth expectations, and the old ambitious numbers stay. They start a heavy promo strategy in off-trade discounting to reach the numbers, igniting the issue from point 1.

3. They get bored with the fundamentals too quickly.

People working for the brand think everyone knows about it; they feel too self-confident and want to try something new. The issue is that when you start getting bored of it, people start to notice it! By changing it, you have to start all over again.

The occasion and ritual on which you build the brand should not be de-prioritized just because now you are in off-trade and running billboard campaigns (where legal). Building a brand is like cooking. Even if you can do incredible dishes, the recipe always starts with the basics.

Think about an Aperol spritz or the cucumber on Hendrick's gin and tonic. Even if you buy those brands in a supermarket, you still expect a perfect execution when sitting at a bar.