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Brands Disappearing in 2014

03/20/2014

Falling-off-CliffPredicting brands disappearing in the coming year is akin to picking/panning red carpet dresses. It’s either ‘I told you so’ or ‘OMG!’.

According to YAHOO Finance the top 10 brands picked for the dubious distinction of facing extinction include (for me)  a couple of head scratchers and one ‘that’s no surprise’.

YAHOO uses the following methodology in deciding which brands will disappear (which we generally agree with). The major criteria include:

—Declining sales and losses;
—Disclosures by the parent of the brand that it might go out of business;
—Rising costs that are unlikely to be recouped through higher prices;
—Companies that are sold;
—Companies that go into bankruptcy;
—Companies that have lost the great majority of their customers; and
—Operations with withering market share.

From our perspective, branding plays a role here too.

Each brand on the list suffers from one or more of these problems. Each of the 10 will be gone, based on YAHOO’s definitions, within 18 months. OK, if you want to read about all ten go to YAHOO. There you’ll see JC Penney, LivingSocial, Martha Stewart Living Magazine, Nook – among others. If you want to read about the eye-poppers…keep reading.

Volvo – Not Capitalizing On A Niche It Created – This is pathetic. Why? Volvo owned a nebulous concept – volvo_safety_belt_015SAFETY. Former front man for Nirvana, Curt Cobain, drove a Volvo because it was the safest car on the market. Where’d Cobain drive his Volvo? To his cocaine dealer’s house. Convoluted? Yes! Rational? Maybe.

According to YAHOO, “In the United States, Volvo was never a giant manufacturer with a large number of models or ultra high-end brands. As of April, its market share in America had dropped to 0.3%

The company’s models compete directly with mid-luxury offerings from every large auto company in the United States, including giants General Motors and Toyota. It also has more direct competition from low-end models made by BMW, Mercedes and Audi. With all that competition, consumer demand just is not there for Volvo cars. In the first four months of this year, Volvo sold 19,571 vehicles in the U.S., down 8% — in an overall market in which sales rose almost 7% to 4,974,000. A mid-market car company without a broad range of sedans, SUVs and light trucks would find it hard to make any progress in the United States. Volvo’s model line is too small to allow it any chance.”

Buying our first (and only) Volvo 240 station wagon was a statement and a commitment to safety once we had children. How could a brand squander that consumer connection?

Olympus – Caught Flat-Footed – Wait,  what? Phones have cameras built-in?

22457725-02e9-4e19-b571-8d725b3a1970_thumbYAHOO says, “Except for market leaders like Canon, Sony and Nikon, no one wants to be in the digital camera business anymore. Worldwide unit sales are down 18% in 2012 since their peak in 2010 and are accelerating this year. It is no surprise then that Olympus, which only has 7% market share, has failed to generate a profit from its imaging business in any of the past three years. The decline caught the company’s management off guard. Actual sales were less than two-thirds of forecasts.”

Nobody at Olympus owned Apple stock and foresaw the future of people and devices? Criminal!

Mitsubishi Motor – Bad Marketing – And from the bad marketing stack…while it never had a massive presence in the United States, the niche Japanese automaker has had some success with models like the Lancer and the Eclipse. Really? I know one human who owned a Mitsubishi…and he bought a second one!

YAHOO’s take is “Mitsubishi Motors will soon exit the U.S. market, just as its Japanese rival, American Suzuki Motor Corp., did at the end of last year. Its sales are nose diving. In 2012, Mitsubishi sold fewer than 60,000 units in the United States, down from nearly 80,000 in 2011. That decline was the biggest of any auto brand and has continued this year. In the first four months of the year, sales have fallen by 6.5% to just 20,571 vehicles. The U.S. market share of Mitsubishi was only 0.3% in April. Mitsubishi does not have the advantages of some other companies with low market shares — it is not a luxury car company like Porsche and Land Rover, which sell high-end cars and command high prices. The average price for Mitsubishi’s seven models is under $25,000. One of the company’s weaknesses is this small model lineup. Mitsubishi is further hampered by the public’s perception of its products. In the new J.D. Power vehicle dependability survey, it ranked third from last out of 33 brands.”

J.D. Power sums it up well in their 2014 Vehicle Dependability Study – “Poor Dependability Creates Avoidance”.

With ads like this, it’s a wonder we’re even mentioning this brand…seems like a foregone conclusion.

https://www.youtube.com/watch?v=sCcbkNkQmGc

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