strategy+business is published by PwC Strategy& LLC.
or, sign in with:
strategy and business
 / Spring 2008 / Issue 50(originally published by Booz & Company)


New Life for Tired Brands

How to discover the dormant vitality in an old product line.

Illustration by Lars Leetaru

When the last Ford Taurus rolled off the production line in October 2006, it seemed to mark the end of one of the automotive industry’s truly iconic brands. The sedan, which 20 years earlier had revolutionized car design by embracing a more aerodynamic, jellybean form, had been the top-selling car in the U.S. throughout the early 1990s, beating even such formidable overseas competitors as Toyota’s Camry and Honda’s Accord.

But starting in 1996, the market dominance of the Taurus (which was also sold under the Mercury marque as the Sable) had fallen prey to a number of adverse circumstances — including a more competitive marketplace, a badly received new design, and some pricing missteps — that eroded the brand seemingly beyond repair. During its peak U.S. sales year of 1992, the Taurus had sold almost 410,000 units; by the time that last car was produced 14 years later, its sales had dropped to just under 175,000, with virtually all of those cars designated for rental fleets. Ironically, the concentration on rental fleet sales was the last vestige of a strategy that Ford Motor Company had embarked on years earlier to secure the Taurus’s number one position. That strategy turned out to be the beginning of a death spiral of ever-increasing fleet sales and the inevitable erosion of the Taurus brand. Ford had also starved the Taurus’s core market by cutting back on ad spending.

Given all Ford’s missteps, it might not be surprising that the carmaker decided to scuttle the brand and replace it with a new vehicle, the Five Hundred. But it soon became clear that launching a new vehicle that improved on the Taurus’s performance was not the solution. The Five Hundred’s sales were disastrous. At the peak of its brief life, in 2006, it sold a mere 100,000 units, less than 60 percent of what the Taurus had sold in its worst year.

So, in February 2007, just a few months after Ford had stopped making the Taurus, the automaker announced it would rebrand the Five Hundred sedan as the Taurus. In explaining the decision to resurrect the brand, Ford CEO Alan Mulally told USA Today that Taurus had “80 percent instant name recognition; only 40 percent, even after all the work we’ve done to date, recognize Five Hundred.” After all the time, effort, and expense that went into killing one brand and launching a new one, Ford came to the conclusion it would have been better off revitalizing the Taurus in the first place, updating the product and the image to suit the changing marketplace. It was an expensive mistake: Advertising costs alone to promote the new Five Hundred brand name had totaled more than US$150 million, according to figures from TNS Media Intelligence.

More and more often, we see tired brands being put out to pasture and replaced by new, and presumably better, ones. Yet although weakened brands like the 2004-era Taurus may have lost their currency, there is often life left in them in the form of embedded equity and a remaining core of loyal consumers. Indeed, many brands have been successfully revitalized, such as Abercrombie & Fitch, Johnnie Walker, Olay, and Ford’s own Mustang. In the last case, the once-popular model was saved from a planned shutdown by a write-in campaign organized by Mustang owners, and a return to the brand’s “muscle car” roots has once again made it a hit.

Given the natural ebb and flow of a product’s life, most brand managers will eventually have to make the decision either to stay the course or to abandon ship. And as tempting as starting anew is, it carries its own risks — as Ford’s experience with the Five Hundred shows. But the price of sticking with a faltering brand can be just as disastrous. The problem is that such a decision has always relied on instinct and an appetite for risk. But what if Ford had had a set of tools that could have saved it from its Taurus flip-flop? What principles would have guided the company to decide to revitalize the dormant brand rather than to kill it?

Follow Us 
Facebook Twitter LinkedIn Google Plus YouTube RSS strategy+business Digital and Mobile products App Store


Sign up to receive s+b newsletters and get a FREE Strategy eBook

You will initially receive up to two newsletters/week. You can unsubscribe from any newsletter by using the link found in each newsletter.