Understanding the Brand Life Cycle Model

This is a model I developed in the mid 1990’s to help companies understand how a particular brand should be positioned and its relation to the company’s overall strategy. I was helping many senior ad agencies’ executives/planner from New York to Tokyo to use this to understand their clients’ branding issues. This was based on my extensive study of US and European companies and their brands in different categories. This model enables companies to look at their corporate strategies, portfolio of brands and products in a meaningful way. I have not revisited this since this was published some ten years ago. I thought you would find this interesting.

The analogy is that all brands basically evolve through four stages. Most of them start as a Product Brand, and then some are transformed into a Service Brand. Over years of brand building effort and market presence they gradually become either a Category Brand, which is defined as having leading market share within a category; or a Personality Brand, which establishes a strong brand personality that consumers identify with; or an Experience Brand, which goes beyond traditional service and product excellence with a strong sense of uniqueness. 

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Procter & Gamble is not particularly well known among consumers, while its brandsAriel, Tide, Pampers, Always, Pantene are all very well known brands within their respective categories. Another type of brand is an Ingredient Brand, which is actually a co-brand since it co-exists together with others who might be responsible for physically manufacturing products or delivering of the service.

Ingredient Brands usually serve the purpose of providing additional trust or confidence and often signify the use of an exclusive or proprietary technology. Examples include Lycra, Polartec, Gortex, Windows, Intel, Dolby and Oracle etc. This is the exact opposite of product brands. By contrast, the technology products communicate at the level of the company whose credibility and expertise have turned its name into a brand is stressed. The most successful case is likely Intel. If you buy an IBM computer today (already a powerful brand name), you will find two other co-brands: Windows and Intel. Twenty years ago we would not have envisioned the operation system and chip supplier would put their brand side by side with IBM. Today, however, they are top household names.

Ingredient Brands are not new. Only the term is. It existed hundred of years ago in the form of country brand. Remember all those “Made in Germany” and “Made in Japan” labels, symbolizing quality and sound engineering. The chemical and pharmaceutical industries have also become skilled in using the Ingredients Brand. When Du Pont differentiates its elasthane it becomes a symbol of quality. Without the Lycra label, consumers might believe that this fabric was a lower quality material. Lycra gave Du Point so much market power that the whole industry paid premium prices for this material. Du Pont actually made Lycra fashionable; how often have you heard of a chemical company who provides the material that has an impact of fashion trend.

After being extremely successful these brands become cash generating trademarks. They will then sometimes be moved up one level and become a Corporate Brand (the brand name becomes the corporation) or a Global Brand, expanding geographically to become a global dominant leader. These different stances illustrate the major strategic choices required by each corporation, namely the optimum level at which a brand should be positioned to capture and create shareholder value. Companies sometimes can successfully move brands to different strategic levels and become the overall brand if that brand is very successful.

Sometimes a brand needs to move from one category and become a brand of multi-categories. This is particularly common in fast moving consumer goods. In choosing a branding level you position against future competition to enjoy the best competitive advantage vis-à-vis channel partners and consumers. This is always the key consideration governing the choice of level.

These catergorizations are not mutually exclusive. A brand can be both a global brand and a personality brand (Virgin) or a global brand and an ingredient brand (Intel). The model suggests that the ultimate goal for all companies is to have a global brand. A strong global brand is a powerful weapon. These days, it is an indispensable one, as the economy challenges our faith in brands to deliver a profit. All studies suggested the most valuable brands are all global.