The Tale Of TiVo And Why Great Brands Fall From Grace

Remember TiVo and Listerine breath strips? Products like these dispel the myth of long-term “first-mover” advantage in marketing brands--ultimately, it is the companies able to adapt that thrive.

Why is it that some brands launch like meteors, captivating our imaginations and our wallets, only to fall spectacularly into marketing oblivion? And perhaps more importantly for marketers today: How can this fate be avoided? The answer lies in the difference between what is required to generate initial trial of a new product, versus building a relevant equity that stimulates ongoing interest and repeat business.

Looking backwards from today’s vantage point, it might be easy to dismiss brands like Listerine Pocketpaks or TiVo, but at the pinnacle of their success they had a Jeremy Lin-like, out-of-nowhere stardom that had consumers all atwitter, brought riches to their corporate owners, and had competitors searching for answers. What is it about these brands that relegated them to eventual irrelevance, while other brands with meteoric success remain on top? And what does the future hold for today’s meteoric brands like UGG boots or Keurig coffee?

First, we need to dispel the myth that there is any long-term “first-mover” advantage in marketing brands. This may be true at the start, but ultimately it is the companies able to adapt to changing conditions that thrive. That is to say, survival of the fittest brands, not the first brands, drives the market. Neither Google, nor Amazon, nor even Gillette was the first brand in its respective category that it now leads. So while some “boom, splat” brands were the first to popularize innovative benefits--such as digital video recording--this distinction alone is insufficient to defend against encroaching competition and a restless consumer.

In 2001, Pfizer’s Listerine brand, then famously known for its antiseptic mouthwash, launched Listerine Pocketpaks breath strips. The product not only helped the brand extend into a new category, but also created awareness, relevance, and reinvigorated the parent brand’s equity in fresh breath. Everyone needed to try the distinctive strip format and unique sensory experience. A true innovation blockbuster, brand awareness and trial were off the charts and year one sales exceeded $175 million, quickly establishing it as the number-one brand in the category. But by 2003, brand sales were already off by 40%-50%, fueled by intense competition with copycat products and a consumer seeking more exciting offerings from strong brands like Altoids, Tic Tac, and Ice Breakers. Today under new ownership, Listerine Pocketpaks remains a viable business, generating about $25 million in annual sales, but is a shell of its initial success.

One contributing factor to the brand’s fall may be the polarizing product experience. However, even if some consumers were ultimately not wowed by the product and did not repeat purchase, the brand still managed to engage enough consumers to drive it to category leadership, so the answer may lie more with the brand than the product. Listerine Pocketpaks were so closely associated with a product form, rather than a brand equity, that it lacked the authority to sustain a category leadership position. The brand may have been more successful had it pinned its brand proposition on, say, Listerine freshness to-go or intimate togetherness or anything other than the product form itself, which was quickly copied.

Listerine effectively did not leverage a strong point-of-difference compared to its new competitive set (i.e., mints), beyond a hot new product form. Once the form novelty wore off, the brand did not find a way to win versus other brands doing an equally good job offering a minty fresh experience. The breath-mint consumer was then free to switch to a competitive breath strip, or align with a conventional format mint brand with strong appeal on both a functional and emotional level, such as Altoids.

Listerine is not the only “boom, splat” brand to soar behind the short-term functional difference of a unique product format. In other categories, Motorola’s ultra-thin Razr phone or Pert’s 2-in-1 shampoo both come to mind. In these cases, too, there was no meaningful second act following the initial success of the brand launch. Loyal consumers seeking the next level of involvement were left with nowhere to go but the competition offering newer, shinier objects for sale.

So, which brands are doing these things well? Like their style or hate them, UGG Australia has successfully kept its brand fresh and strong for years. Many predicted that UGG boots would be a passing fashion fad. But a decade after gaining must-have status, the brand keeps marching on, achieving a record $1.2 billion in global sales last year. UGG is more than a fashion icon; the brand solves an unmet consumer need of stylish footwear that doesn’t involve painfully high heels. Worn by countless celebrities, the UGG brand was established as a genuine article, not to be copied by a competitive imitation. And now that it seems every fashionable closet has a pair, the brand has pushed into slippers, gloves, hats, and other accessories where stylish comfort plays a role. At this stage, there is no "boom, splat" forecasted for UGG.

One brand that will be interesting to watch in the coming year or so is Keurig, the single-serve coffee brand that has grown tremendously (their parent company Green Mountain Coffee Roasters announced 2011 revenue of $2.65 billion, up 95% from 2010). The brand has helped usher in a new wave of premium, at-home coffee options with strong partners like Dunkin' Donuts, Starbucks, and Newman’s Own, succeeding in a crowded space where some first-movers have failed. However, they will need to stay fresh and relevant, continue to innovate and think broadly about their business once the single-serve coffee market is saturated, by them or Nespresso or someone else, and consumers begin to wonder what’s next.

So what can we learn from all this? I see three important lessons: first, having a brilliant innovation ahead of competition is a great thing. But there is danger in letting the technical innovation be the news itself, because inevitably competitors will copy or leapfrog you. It’s always best to build equity that elevates the conversation to emotional benefits, values, and beliefs, rather than a purely functional one. That’s much harder to copy. Second, ensure your product experience is outstanding, creating ongoing repeat from happy consumers. And finally, have a second act. Keep it fresh and give your loyal user base something to trade up to once they’ve committed to the brand; don’t leave them hanging on wondering what is the next level of involvement. Doing these things may not ensure meteoric success, but it will help you avoid the dreaded sound of “boom, splat!”

--Bruce Levinson is vice president, brand strategy at the New York office of Anthem Worldwide, part of the strategic design division of Schawk, Inc. His previous positions include director-level marketing roles at Unilever in the U.S. and U.K., and as an advertising account executive.

[Image: Flickr user Jef Harris]

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6 Comments

  • kitson

    Not sure there's a direct parallel to be drawn with your subject ("failure to follow through"?), but I'm nonetheless dismayed by the prominent use of TiVo in the headline and deck -- and the near-absolute failure to mention the company anywhere in the article.

    ("... it might be easy to dismiss brands like Listerine Pocketpaks or TiVo," in the second graf, is the only direct reference.)Hardly "the tale of TiVo" promised by the headline, which now seems a classic bait-and-switch composition.

  • deniseleeyohn

    I agree "It’s always best to build equity that elevates the conversation to emotional benefits, values, and beliefs, rather than a purely functional one." -- emotion is the bridge to take to cross the chasm from the early market to the mainstream market -- see http://deniseleeyohn.com/bites... -- denise lee yohn

  • Three lessons. And irony.

    I am left wondering, how exactly would these three lessons apply, say, to Fast Company? 

    1. In the case of FastCo. do they possess 'brilliant innovation' or not? Do they provide an emotional benefit, you know, of lasting value? How easy or not is it for a rival to leapfrog them? What makes this emotional 'formula' hard to copy?  

    2. How might FastCo. create a product experience that is outstanding? 
    Say, in a way that I would want to read more about 'Why great brands fall...' and the like.  This particular article doesn't explain 'the why' from the title, with much convincing. 

    3. What might one trade up to, say, from a warmed over and unpersuasive article? 

    Perhaps the answers may lead to a compelling sequel. 

  • Maggie

    Not being privy to the entire history or even 'how' TIVO works, I can only pose the following hypothesis  to their not being at the forefront: The two times I called to inquire about getting TIVO for my home I was 'met' with what sounded like a very bored young man who also sounded ticked off that I interrupted what ever it was that he was doing in order to take my phone call. He also talked 'down' to me as though I was too dumb to understand what I was asking for. If this has been typical for everyone else, no wonder TIVO is no longer a household word.

  • Blade Branding

    In a time when consumers care so much about the environment I am surprised to see Keurig doing so well. I feel a sharp pain of guilt every time I throw one of those little cups in the garbage. 

  • Kayza Kleinman

    On the other hand, a lot of the coffees are prominently marked "fair trade". Also, they seem more energy efficient than many alternatives,such as a shared coffee or hot water urn pulling tons of electricity all day.