Brand Failures_ The Truth About the 100 Biggest Branding Mistakes of All Time - Matt Haig [40]
Immediately, the move raised eyebrows among those who knew the market well. ‘It would be easier to make a snowman in July in Florida than to take on Coke and Pepsi,’ observed John Sicher, publisher of the US trade publication, Beverage Digest. But Branson seemed to relish the challenge, launching the drink to the US market in spectacular style. He rode a vintage Sherman tank through New York’s Times Square, aiming fire at a huge Coca-Cola billboard. He also placed his own 40-foot Virgin Cola billboard right above the Times Square Virgin Megastore. ‘The signage alone was worth the rent of the entire building,’ he joked at the time. ‘The store is a bonus.’
However, the new cola brand struggled on both sides of the Atlantic. Although it was priced 15–20 per cent lower than the two leading brands, not enough consumers were being won over. Part of the problem was distribution. Coca Cola and Pepsi managed to block Virgin from getting crucial shelf space in half the UK’s supermarkets. Meanwhile, Coke doubled its advertising and promotion budget. As Rob Baskin, Coca-Cola USA’s spokesman said: ‘We take all competition seriously.’
Ultimately, Coca Cola and Pepsi’s hold on the market has proven too strong and Virgin Cola failed to make a serious dent in their worldwide sales. Even on Virgin’s home turf, the UK, the brand struggled to gain 3 per cent of the market and it has never made a profit.
Lessons from Virgin Cola
Strong brands depend on exploiting competitors’ weaknesses. ‘We often move into areas where the customer has traditionally received a poor deal, and where the competition is complacent,’ Branson once said, explaining Virgin’s brand strategy. However, Pepsi and Coca Cola are anything but complacent.
Distribution is everything. If you can’t get the product on the shelves, it will never outsell its competitors.
Learn from your mistakes. Branson, in an article published in August 2010 in Mint, the second-largest business newspaper in India, certainly claims to have:
One of the reasons Virgin’s enterprises have been successful over the years is that we empower the staff to make mistakes – and then learn from them. This ability to bounce back after a setback is the single most important trait an entrepreneurial venture can possess. If innovation is at the heart of your business, obstacles come with the territory. How you react to and navigate those hurdles will make the difference between failure and success.
I’ve been lucky enough to helm many successful companies, but I’m the first to admit that I’ve also directed a few that failed. You may have heard of Virgin Cola, a company we formed in the 1990s to take on the industry’s two big powerhouses: Coca-Cola and PepsiCo.
We attempted to shake up the market in true Virgin fashion, but it didn’t quite work. From the outset, we faced distribution issues – we couldn’t get Virgin Cola on the shelves in the numbers needed to make an impact and achieve economies of scale.
We certainly didn’t lack enthusiasm, but we quickly learnt that the two giants had a firm grip on the market. It was tough to find their weaknesses. Taking on two of the biggest brands in the world, both of which proved to be anything but complacent, was a tremendous lesson for all of us.
26 Bic underwear
Strange but true
Harley Davidson perfume. Coors spring water. Both of these were doomed to failure because of the brand name’s attachment to an unrelated product. However, the prize for the most bizarre brand extension must go to Bic.
The company, best known for producing disposable pens, thought its brand name was strong enough to be applied to other categories. Indeed, it had already achieved success with disposable cigarette lighters and safety razors. The unifying factor here was ‘disposability’. Bic pens, lighters and razors were all throw-away goods. Furthermore, Bic could exploit its well-established distribution network and sell