The Rise and Fall of Famous Brands – Why Do They Fail?

by . February 8th, 2012

We are living in a world where water is sold with a name, clothes are being marketed with signature signs and food items are being promoted with trademarks. The concept of branding has completely shaped the way people consume commodities. Customers in this day and age prefer status symbols over necessity. This shows the importance of branding and its influence on businesses.

It takes years to erect a successful brand identity, but only an instant to destroy it. All the famous brands and corporations have risen to their current status after a lot of painstaking effort. Failure is common for small businesses and start-ups, but have we ever wondered how famous brands falter? Today, I seek to uncover some of the most common reasons why renowned brands fall by illustrating the cases of some famous brands.

1. Confusing Brand with Product:

Nike logo

One of the most common reasons why some brands fail is that they confuse a brand with product. However, the reality is otherwise. Both the terms “brand” and “product” are dissimilar and each must exist separately in front of the consumers. For instance, Nike may not be able to send as many products and merchandise without its renowned swoosh and trademark. For Nike, the product is the merchandise they offer, but their brand constitutes the quality and reliability they guarantee.

2. Short-Term Approach:

British Petroleum logo

For a successful brand, the short-term approach is always hazardous as it restricts the domain and vision of the company. While it is an inherent truth that all companies are there in the market to make money, one cannot keep such a short-term and narrow-minded mindset if it wants to win customers for a longer period of time. A recent case in point was British Petroleum that didn’t accurately forecast the repercussions of its business on the environment and ended up becoming the bad company in the eyes of the general public.

3. Fall Short of Customer Expectations:

New Coke

For a brand identity system, brand promise is critical to gain customer loyalty. When people start believing in a particular brand, they have certain expectations and satisfaction levels attached to it as well. If the brand fails to meet these intrinsic expectations and fall short of what the customers believe of them, they are bound to fail. Coca Cola met a similar fate when they introduced “New Coke” that failed to live up to their customers’ expectations.

4. Too Slow to Change:

Commodore logo

In this day and age, companies cannot afford to lag behind in technology and advancement. Those who were too slow to adapt to the changing environment lost the race in the long run. I remember a 64-Bit Commodore system lying in my attic that was once used by our grandparents for computing and entertainment purposes. The company was too slow to update their systems and lost the race to giants like IBM, Compaq and Apple.

5. Going Against The Image:

Cosmopolitan yogurt

Honda, Toyota, Ford and Ferrari – all of these brands have built an image of being reputable car manufacturers. This brand image is attached to the company and affects their future operations as well. If one of these car manufacturers decide to enter a totally diverse field, let’s say, perfumes, would it be appropriate? Most certainly not! A similar case happened in 1999, when the famous women’s magazine, Cosmopolitan, introduced its own line of low-fat yogurt. The brand failed badly since the customers were reluctant to accept a yogurt linked to a female magazine.

To wrap up, brands must not be treated as mere products or items of physical value. They have an intrinsic value that completes the whole brand personality. Companies must align their branding efforts according to the expectations of their customers.

About the Author

Nora Reed runs, where she writes about logo design trends, tips for logo designers, famous logos and inspiring logo design collections.