Six Major Brand Devaluation Reasons: How to Avoid & Fix Them!
Brand value devaluation is a harsh fact, that’s why we hear about rebranding carried out by major brands all the time. There are six major or primary reasons for brand devaluation.
1. Poor Customer Service
2. Pressure Group
3. Lack of blockbuster Product Launches
4. Employee Remuneration
5. Quality Decline
6. Competitors
Considering
the above reasons, it is imperative for small medium and large businesses to
keep check on these areas all the time. So that any brand devaluation can be prevented in advance.
Now let’s
discuss each reason one by one and in the end I will provide a reasonable fix
to avoid any potential brand devaluation.
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Brand Devaluation Six Reasons
Customer Service
Customer perception
of service brand in particular and product brand in general depends on front line
employee’s behavior (1). That means that your employees dealing with
your customer is essential to the success of your brand.
Similarly
late response to customers, multiple contacts by customers without any positive
outcome has been major cause of dissatisfaction in around 74% customers in the
US (2).
And
according to Harvard study, one dissatisfied customer, customer having bad
experience with a business, company did negative word mouth to around 10 or
more people (3).
In light
of the above facts imagine the consequences of your bad customer service.
While on
other hand positive word of mouth is the driving force behind 20 to 50 percent
of all purchasing decisions and that a 10 percent lift in word of mouth
increases sales by up to 1.5% (4).
You may also like How to Deliver Effective Customer Service
Pressure Group
Pressure
groups or interest groups can drastically change public opinion about a brand.
Take for instance McDonald, which has been constantly criticized by various
health groups for its menu.
All of this
has pushed McDonald to rebrand (5) now by pressure group I don’t mean every
interest or pressure group that is part of your brand environment, rather you need
to identify the right pressure group
and then you need to devise a strategy to pre-empt any brand devaluation due to
any such pressure group.
By the right
pressure group, I mean a pressure group that has immense influence on public
opinion, a group that has huge membership or represents a large section of
society that share common interest.
Such public
opinion (health conscious group in US) is on the rise , with its members
increasing everyday in USA (6), thus becoming a “right
group” in context of McDonald.
Lack of Successful Product/Service
It was your
successful product/service that made your brand a “brand” in the first place. But
as you know successful product/service don’t last forever and so does the
leverage it gives to your brand.
That is why,
innovation is essential even after successful product/service and for that
reason I would like to share, an idea of Super Product, (an article
that give a unique strategy on product development that would surely result in
a blockbuster).
Employee Remuneration
Customer’s
expectation about the brand can be sustained through employee performance (7).
And employee performance depends on employee satisfaction, which results in
customer satisfaction (8).
And employee satisfaction can be achieved through
effective remuneration. In a nutshell if you don’t have a right remuneration
plan in place, you are more likely to become victim of brand devaluation.
Quality Decline
You started
off awesomely, you were the best and thus your target market loved you but
with time you lost it , lost in terms of quality, ending up as a victim of brand
devaluation.
Remember that a lower quality product/service has
been a major cause of dissatisfaction for about 64% of customers in the US (9).
Competitors
Over the
years markets have become highly competitive and customers very demanding (10).
In such scenario market orientation or market knowledge plays extremely essential
role in success of any organization, business (11).
And being a
manager, entrepreneur it is your key responsibility to protect and strengthen
your company, business against your competitors to maintain your business hold
and success.
In other words
building up company structures, managing its growth and
development and defending its strategic assets (in our case strategic assets
would be brand image, brand value etc) against competitors is your key role as
an entrepreneur, owner/manager (12).
And to do
that, to carry out strategic assets defense effectively, you as a manager/owner/entrepreneur
should have market knowledge (customers and competitors orientation), as “Market knowledge(Customer Orientation &
Competitor Orientation) is widely regarded as an important contributor to
innovation and new product outcomes that lead to greater business performance” (13).
So considering the
above fact based on research one can understand the importance of market
knowledge and how it helps in developing a successful new product.
Learn how to use new product development as offense/defense against competitors (an
interesting read), beside that, most small business owners are
confused about their competitive strategy, their competitive strategy focus.
Well here is an
interesting read on that, learn, know what should be your small business competitive strategy focus.
Now Let’s Move To The Fix
Simple, start your
experiments in a single business outlet, experiment there with different
approaches, variables while at the same time keeping the primary reasons of
brand devaluation in perspective.
In a nutshell,
experiment >> implement >> assess >> corrective measures/due
measures >> implement, follow this cycle until you don't get your desired results.
That’s it, over to
you guys ! comment box is , yeah just under ;)!
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And yeah don't you forget to subscribe!!!
References:
1. Cadwallader, S., Burke Jarvis, C., Bitner, M.J. and Ostrom, A.L. (2010), “Frontline employee motivation to participate in service innovation implementation”, Journal of the Academy of Marketing Science, Vol. 38, pp. 219-239.
2. http://www.accenture.com/SiteCollectionDocuments/PDF/Accenture-Global-Consumer-Pulse-Research-Study-2013-Key-Findings.pdf
3. Harvard Business Review, “Stop Trying to Delight Your Customers” by Matthew Dixon, Karen Freeman, and Nicholas Toman, July 2010.
4. http://www.forbes.com/sites/mckinsey/2014/02/14/can-a-goldfish-show-you-how-to-excite-your-customers/
5. http://www.businessweek.com/articles/2014-07-23/mcdonalds-to-embark-on-rebranding-initiative-over-next-18-months
6. http://www.caloriecontrol.org/articles-and-video/feature-articles/americans-increasingly-health-conscious
7. Ind, N. (2004), Living the Brand: How to Transform Every Member of Your Organization into a Brand Ambassador, 2nd ed., Kogan Page, London.
8. P.r.sandilyan; Mousumi Mukherjee et al “Effect Of Remuneration And Rewards On Employee Motivation- A Study Of Selected Hotels In West Bengal” ZENITH International Journal of Business Economics & Management Research Vol.2 Issue 4, April 2012.
9. http://www.accenture.com/SiteCollectionDocuments/PDF/Accenture-Global-Consumer-Pulse-Research-Study-2013-Key-Findings.pdf
10. Blocker, C.P., Flint, D.J., Myers, M.B. and Slater, S.F. (2011), “Proactive customer orientation and its role for creating customer value in global markets”, Journal of the Academy of Marketing Science, Vol. 39 No. 2, pp. 216-233.
11. Grinstein, A. (2007), “The effect of market orientation and its components on innovation consequences: a meta-analysis”, Journal of the Academy of Marketing Science, Vol. 36 No. 2, pp. 166-173.
12. Schumpeter, J.A. (1934), The Theory of Economic Development, Harvard University Press, Cambridge, MA.
13. Grinstein, A. (2007), “The effect of market orientation and its components on innovation consequences: a meta-analysis”, Journal of the Academy of Marketing Science, Vol. 36 No. 2, pp. 166-173.
TAGS Brand Value Branding Strategy Editor Choice Measuring Brand Awareness Service Branding
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