A Brand By Any Other Name
When I was attending university, I took a marketing class in which the professor was convinced that brand recognition was the only requirement of a successful business. Sure, you needed capital to get started, and you would need a good sense of the product that you were selling, and sales skills and some knowledge of your market were a bonus. But he truly believed that the only thing a company needed to do to ensure their long-term success was to make their name synonymous with their product. He pointed out examples like Kleenex, Aspirin, Band-Aid and Jeep. He made sure that we all walked out of that course with the belief that our businesses would succeed so long as our brand names were part of the public lexicon. Make your product known and you will stay in business forever.
It’s well known that Kodak has had a lot of problems in the last ten years, and the majority of those troubles are being blamed on the growth in the digital camera market. And yet for a brief period of time in 2005, Kodak was actually ranked first in the U.S. in digital cameras sales. But here we are, seven years later, with a different company in the first place slot and Kodak struggling frantically to keep afloat.
But this is Kodak! They invented the Brownie camera, which was the first camera available to amateur photographers at the start of the last century. They were the first company to produce and sell color 35mm film. Would we be able to go the movies or even watch DVDs if Kodak hadn’t been there in the early 1900s to help develop the film stock that was originally used to shoot motion pictures? Who amongst us has not had a “Kodak moment”? And here’s a little piece of irony for you: the man credited with inventing the digital camera, Steve Sasson, worked as an engineer for Kodak at the time that he developed the equipment. Kodak engineers also invented the megapixel sensor, which is a key component to making your digital pictures look so great. That’s right – the company that is currently being brought down because of increased competition in the digital photography market can actually lay claim to being part of the invention of the digital photography market.
So how does this happen to a company that has dominated the landscape for over 100 years and can lay claim to being one of the most recognizable brands in the world? It’s actually quite simple. It’s because they were dominant and had brand-recognition. Sure, they tried to expand a little and open their doors to different products and ideas. But in the mid-1990s, Kodak executives were sceptical that this whole “digital” thing would even become a thing. They were confident in their brand, and while they were willing to branch out a little into new areas they firmly believed that staying the course of their original marketing and production paths was what would keep them at the top of the heap. When others within the organization tried to say differently, they were shut down in favour of management’s plans. To say that management failed to take into account the speed with which the consumer market changes is an understatement.
Now, of course, the management at Eastman Kodak is singing a different song. And with new people and new voices being heard within the organization, there is hope that Kodak will be able to reorganize while under bankruptcy protection and come out even stronger on the other side. But this path is going to be long and painful, and what makes it worse is that it could have been avoided if the company had spent more time ensuring that their brand stayed at the top of the market rather than just assuming that it would because they were a Brand.
If I could take this information and go back ten and a few years to my university professor, I would tell him the following:
- The key to brand recognition is making sure that your brand continues to be seen by the consumer. People have short memories. If your brand disappears from the market, consumers won’t stop buying that product in protest. They’ll move on.
- Price can trump brand, but only in those cases where the brand doesn’t have legitimate strength and clear competitive advantage. If you’re going to rely on product quality as your value proposition, then you need to be sure the quality of your product allows for it.
- All the brand recognition and all the excellent product development in the world will not help your company if management fails to plan ahead and think about the future. Listen to the market, listen to your employees, and remember that what goes up must come down and nowhere does that analogy ring more true than in a capitalist marketplace.