Friday, 1 January 2010

When Moribund Brand Meets Turning a Disadvantage into an Advantage

Two of the more daunting challenges in consumer marketing certainly must be: (i) successfully obtaining a moribund trademark with the intention of reviving it; and (ii) developing a campaign whereby one turns an apparent disadvantage into a marketing virtue.

Regarding the first, we are reminded of the revival of the "Packard Bell" mark. It was first used in 1926 in connection with radio products and later expanded into defense contracting work as well as other consumer electronic products, most notably television sets. In the 1980's, the mark was purchased by a group of investors for use in a newly formed personal computer manufacturing company. The latter company plus mark was sold to Acer in 2008. Presumably, at the time of acquisition in the 1980's, the investors were convinced that there was sufficient goodwill in the mark, and that this goodwill could be extended into a new product category, that made its acquisition an attractive alternative to building a new brand from scratch.

Regarding the second, the iconic corporate slogan of Avis Rental Cars--"We Try Harder", springs immediately to mind. The slogan was first adopted by the company in 1962 and conveyed the dual message that while the company was certainly a respectable number two to the industry leader, The Hertz Corporation, it would not rest on its laurels and was committed to out- hustling its principal competitor. (This promise may be put to a severe test. According to Wikipedia, "the company primarily leases General Motors (GM) vehicles, such as Chevrolet, Pontiac and Saturn within the United States, though some locations feature other popular non-GM brands, such as Huyndai or Kai.")

It is difficult enough to succeed either in reviving a moribund brand or turning a marketing disadvantage into an advantage. An attempt to do both simultaneously must certainly pose even a greater challenge. An instance where it did succeed was recounted in the November 14th issue of The Economist. The article, entitled "Salesman of the Irrational", described the fascinating success of Jean-Claude Biver in successfully reviving three Swiss watch brands ("Blancpain"; "Omega"; and "Hublot") over nearly a 30-year period. The strategy that he employed regarding each of these brands was different, and we wish to focus on his success in connection with the "Blancpain" brand.

In 1981, Mr. Biver and a friend bought the rights to the "Blancpain" mark for what seems to be the sum of SF22,000. The mark had been used by a Swiss watch company which, among other things, had once supplied watches to the US navy. The company, however, had effectively gone out of business in the 1970's. What attracted Mr. Biver to the brand? According to the article, there were two things: First, the defunct company had claimed to be Switzerland's oldest watch manufacturer; second, the company had completely missed out on the technological revolution from mechanical watches to quartz timepieces operated by a battery.

Mr. Biver parlayed these two factors into the slogan--"Since 1735 there has never been a quartz Blancpain watch. And there never will be." To appreciate the audacity of the message, consider that at the time, digital watches being manufactured in Asia were selling for $20, a fraction of the price being charged for a Swiss watch. I remember to this day the spate of publication of articles eulogizing the end of the Swiss watch industry.

Mr. Biver bet that the message of tradition, which could be seen as the antithesis to technological progress and cutting-edge prowess, would ultimately carry the day. He was right. As the article mentions, "[i]t turned out to be an industry-changing move. Last year mechanical watches accounted for 70% of the value of Swiss watch exports." The "Blancpain" mark, which had been left for dead, succeeded in reestablishing itself as a respectable and viable brand.

As we enter the third year of the world economic slowdown, we have witnessed companies, some with venerable brands, go out of business. One by-product has been an increased interest in purchasing such brands out of bankruptcy. See here for an earlier blog post on this topic in connection with "The Sharper Image" mark. Mr. Biver's success has paralleled the 20-year boom from the 1980's until the recent past, and this confluence of favorable circumstances should not be forgotten. Nevertheless, the saga of the revival of the "Blancpain" mark shows how the likelihood of succeeding in the acquisition of a brand out of bankruptcy can succeed on the back of a high-risk marketing strategy. In appropriate circumstances, it remains an instructive example.

We wish all the readers of the IP Finance blog the best for the year 2010.

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