Page 339 - Marketing Management

316 PART 4 BUILDING STRONG BRANDS

Consider Perrier. In 1994, Perrier was forced to halt production
worldwide and recall all existing product when traces of benzene, a known
carcinogen, were found in excessive quantities in its bottled water. Over
the next weeks it offered several explanations, creating confusion and
Marketing Insight
Marketing Insight skepticism. Perhaps more damaging, the product was off shelves for over
three months. Despite an expensive relaunch featuring ads and promo-
tions, the brand struggled to regain lost market share, and a full year later
sales were less than half what they had been.With its key “purity” associ-
ation tarnished, Perrier had no other compelling points-of-difference.
Managing a Brand Crisis Consumers and retailers had found satisfactory substitutes, and the brand
never recovered. Eventually it was taken over by Nestlé SA.
Marketing managers must assume a brand crisis will someday arise. Second, the more sincere the firm’s response—a public acknowl-
Whole Foods, Taco Bell, JetBlue, and toy and pet food brands have all edgment of the impact on consumers and willingness to take necessary
experienced potentially crippling brand crises, and AIG, Merrill Lynch, steps—the less likely consumers will form negative attributions. When
and Citi were rocked by investment lending scandals that eroded con- consumers reported finding shards of glass in some jars of its baby food,
sumer trust. Widespread repercussions include (1) lost sales, (2) re- Gerber tried to reassure the public there were no problems in its manufac-
duced effectiveness of marketing activities for the product, (3) increased turing plants but adamantly refused to withdraw products from stores.
sensitivity to rivals’ marketing activities, and (4) reduced impact of the After market share slumped from 66 percent to 52 percent within a cou-
firm’s marketing activities on competing brands. ple of months, one company official admitted, “Not pulling our baby food
In general, the stronger brand equity and corporate image are— off the shelf gave the appearance that we aren’t a caring company.”
especially credibility and trustworthiness—the more likely the firm can
weather the storm. Careful preparation and a well-managed crisis man-
Sources: Norman Klein and Stephen A. Greyser, “The Perrier Recall: A Source of
agement program, however, are also critical. As Johnson & Johnson’s Trouble,” Harvard Business School Case #9-590-104 and “The Perrier Relaunch,”
nearly flawless handling of the Tylenol product-tampering incident sug- Harvard Business School Case #9-590-130; Harald Van Heerde, Kristiaan Helsen,
and Marnik G. Dekimpe, “The Impact of a Product-Harm Crisis on Marketing
gests, the key is that consumers see the firm’s response as both swift
Effectiveness,” Marketing Science 26 (March–April 2007), pp. 230–45; Michelle L.
and sincere. They must feel an immediate sense that the company truly Roehm and Alice M. Tybout, “When Will a Brand Scandal Spill Over and How
cares. Listening is not enough. Should Competitors Respond?” Journal of Marketing Research 43 (August 2006),
pp. 366–73; Michelle L. Roehm and Michael K. Brady, “Consumer Responses to
The longer the firm takes to respond, the more likely consumers
Performance Failures by High Equity Brands,” Journal of Consumer Research, 34
can form negative impressions from unfavorable media coverage or (December 2007), pp. 537–45; Alice M. Tybout and Michelle Roehm, “Let the
word of mouth. Perhaps worse, they may find they don’t like the brand Response Fit the Scandal,” Harvard Business Review, December 2009, pp. 82–88;
Andrew Pierce, “Managing Reputation to Rebuild Battered Brands, Marketing
after all and permanently switch. Getting in front of a problem with PR,
News, March 15, 2009, p. 19; Kevin O’Donnell, “In a Crisis Actions Matter,”
and perhaps ads, can help avoid those problems. Marketing News, April 15, 2009, p. 22.

“orphan” or “ghost” brands that larger firms want to divest or that have encountered bankruptcy
such as Linens n’ Things, Folgers and Brim coffee, Nuprin pain reliever, and Salon Selective sham-
64
poos. These firms attempt to capitalize on the residue of awareness in the market to develop a
brand revitalization strategy. Reserve Brands bought Eagle Snacks in part because research showed
6 of 10 adults remembered the brand, leading Reserve’s CEO to observe, “It would take $300 mil-
lion to $500 million to recreate that brand awareness today.” 65
If the company can’t find any buyers, it must decide whether to liquidate the brand quickly or
slowly. It must also decide how much inventory and service to maintain for past customers.

Evidence for the Product Life-Cycle Concept
Table 11.2 summarizes the characteristics, marketing objectives, and marketing strategies of
the four stages of the product life cycle. The PLC concept helps marketers interpret product and
market dynamics, conduct planning and control, and do forecasting. One recent study of 30 prod-
uct categories unearthed a number of interesting findings concerning the PLC: 66
• New consumer durables show a distinct takeoff, after which sales increase by roughly 45 percent
a year, but they also show a distinct slowdown, when sales decline by roughly 15 percent a year.
• Slowdown occurs at 34 percent penetration on average, well before most households own a
new product.