Why some brands succeed and others fail Part 2

There are several reasons

Market Research

Aside from the money and the talent factors, market research is one of the best tools brands have in their arsenal. A good market research team can help brands and designers determine: what the market will bear (product-wise and price-wise), what colours can make a splash, how much advertising is needed to make a product succeed as well as a whole host of other things. A great example of this (though it isn’t football) is “Gangnam Style”, which was developed through heavy market research by the Korean firm YG Entertainment. They figured out how to make a huge hit because of their market study. Market research can fail though. We only have to look at adidas’ Battle Pack from the 2014 World Cup to see this. The Three Stripes were expecting a 65-70% sell-through across all lines and silos but in most places managed about 60%. Not bad, but hugely disappointing for a brand that spent millions on ads leading up to that World Cup.

Development

Which is where development comes in. Adidas assumed that their market research and development would make the Battle Pack a great seller when in reality the colours were divisive, and not in a good way. They should have spent more time during development period figuring out what colours would actually work. And maybe don’t stealth release a Predator launch. There is the phrase “strike while the iron is hot” which is why we see loads of similar products to others that are currently best sellers. Sometimes a normal 2 year development cycle for a boot will get chopped down to 1 year or a little less in order to make it big on the latest trends. These development cycles are also some of the reasons why some brands seem behind the curve when it comes to releases. The problem is that if a brand rushes through development too much, then it can hurt the chances of the product succeeding. The opposite is also true, where in a long development cycle can doom the product when it launches by making it seem out of date. During this process, brands also have to figure out how to get products to customers.

Distribution Routes

Distribution Routes are probably the most unremarkable, yet most important parts of the boot industry. Much like the actual production of the boots for many companies (but not all), distribution is often done through third-party companies rather than the brands themselves. But having access to these routes is key to most companies’ success. After all, there’s no point in make an amazing product if no-one can get their hands on them. This is one of the reasons why New Balance dropped the Warrior brand was dropped as the name for New Balance’s football line. New Balance as a brand has a lot bigger spread and a much bigger reach through distribution routes than one of its subsidiaries. When Warrior first sponsored Liverpool, they were struggling to deliver product on time and as widespread as a club like Liverpool demands. Switching to the New Balance name made this process much easier because each brand has its own contracts and distribution routes. Just because a brand is a subsidiary of another doesn’t mean it can always use its parent company’s routes. Another big example of this is looking behind the reasons why Nike bought Umbro in 2007 for around 555 million US Dollars only to sell it 5 years later to Iconix (who own brands like Marc Ecko, Ed Hardy and the like) for 225 million US Dollars. It was not a surprise that Nike stripped Umbro of it’s more popular licenses like England National Team and Manchester City but Nike also wanted the distribution routes that Umbro had established not just in the UK (where Nike have historically struggled) but also around Europe and South America.

This is somewhat of short list of reasons of why some brands manage to make a lot of money and others fail. There are of course other factors such as brand loyalty, public perception and the like but for me these are some of the biggest reasons.

What are your thoughts? Make sure to let me know and please share this with your friends! Make sure to also follow me on Instagram, Facebook and Twitter!
じゃあね!

aglockhart

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