For many global companies, brand evolution is a natural part of running the business. As consumer attitudes and lifestyles change, so must brands if they want to continue to deliver value to their customers.
But in an effort to remain relevant, companies too often hinge their brand identities on current events and passing trends rather than thoughtfully forging a path forward. In this pursuit, many companies forget to first examine their place in the hearts and minds of customers. That’s a mistake because the stakes are high if you don’t get brand evolution right. This is a lesson Tropicana learned the hard way when, in 2009, it decided to drastically change the design of its packaging—a move that resulted in swift consumer backlash and a 20% sales drop.
Packaging is just one small part of your brand identity, but Tropicana’s misstep is a cautionary tale on the potentially risky consequences of making drastic changes to your brand without engaging with your customers first. In changing markets, it’s important to be nimble, but it’s even more crucial to step lightly and purposefully to maintain a healthy brand and avoid alienating existing customers.
We get it—evolving a well-recognized global brand is hard. Staying true to your brand while keeping up with the evolving habits and preferences of consumers is a tricky balance. But why do some companies pull off this transformation successfully while others confuse their customers and lose sales in the process? Examining three brands that are currently in transition can help answer this question.
McDonald’s: Confusing Consumers with a Reactionary Approach
The emergence of “fast casual” restaurants and the increasing consumer appetite for healthier alternatives have challenged McDonald’s and the fast-and-cheap model it has pioneered for decades. To respond to disruptions in its industry, McDonald’s has implemented new tactics very quickly. But when you examine these moves more closely, many of them seem inconsistent with the brand the company has worked hard to establish.
In 2013, for example, the company killed its Dollar Menu because of rising commodities prices and after some pressure from franchises. The move, unfortunately, turned off the company’s value-seeking consumers, many of whom switched their loyalties to other fast-food companies. Ignoring these consumers proved to be a mistake, and McDonald’s is now flip-flopping on this strategy, bringing back a new version of its Dollar Menu this year.
It isn’t just value-centric consumers that McDonald’s is after: it also wants to cater to people looking for fresher, healthier options. The company is in the process of replacing frozen beef patties with fresh beef in 14,000 of its locations in the US—a change that is driving costs up and lengthening service time by one minute. It’s the exact opposite of fast-and-cheap.
But perhaps the biggest evidence that McDonald’s is stumbling as it attempts to evolve is its haphazard approach to addressing social issues. Many consumers today increasingly prefer organizations that are transparent about their brand value, and many companies—including McDonald’s—are creating campaigns around social movements as a response. But some of McDonald’s moves in this arena have backfired.
This year, for instance, to celebrate International Women’s Day, the company decided to flip its iconic arches to a “W.” The move, the company claimed, was “in celebration of women everywhere.” Unfortunately, people felt the move was disingenuous. Critics pointed out that McDonald’s could provide a higher wage to its employees, many of whom are women. I for one began to wonder what a burger chain had to do with this organic movement. Were they about to ask me if I wanted a side of social justice with my Big Mac?
These moves suggest that the company is moving quickly but not always thoughtfully. The company appears more interested in pursuing the new thing rather than understanding where it can be more relevant to its current customers through customer experience research. The company is hunting for customers it doesn’t have—but it has alienated many current customers in the process and has had to reverse some decisions to lure consumers back.
Budweiser: Walking a Fine Line in a Changing Industry
Just like McDonald’s, Budweiser is facing major disruptions and an identity crisis. Whereas McDonald’s is tackling the rise of fast-casual restaurants, Budweiser is dealing with the rapid rise of craft beers. Examining Budweiser’s approach to the craft beer phenomenon reveals that the brand is walking a fine line.
For example, in 2016, the company created a Super Bowl ad proclaiming itself as a macro brewery. The ad proudly stated that Budweiser makes beers that are not to be “fussed over.” But critics thought the campaign was a bit hypocritical given that Budweiser’s parent company, Anheuser-Busch InBev, was busy buying craft breweries at the same time. (Some consumers were so upset about Anheuser-Busch InBev’s acquisition of craft breweries that they’ve supported Take Craft Back—a tongue-in-cheek crowdsourcing project that aims to raise $213 billion to buy InBev.) This past Christmas, Budweiser released its own craft brew—a move that could further confuse the company’s positioning in the beer market, or at least attract more mockery from those who hated the company’s past anti-craft stance.
Even when the company makes a move that’s respectful and benign, some of its detractors find a sore point. During the last presidential election, Budweiser rebranded its beers to “America” for a period of time. In many ways, that decision made sense because Budweiser is among the oldest of American beer brands. But some consumers found the move ironic since the company’s new parent company is not American.
Unlike McDonald’s, Budweiser hasn’t made spectacular mistakes yet, but these examples demonstrate that the beer company has not solidified a path forward yet. It’s more critical than ever for Budweiser to get closer to consumers to keep up with changes in its industry and the evolution of beer consumers.
Global CPG Company: Treading Lightly and With Purpose With Customer Insight
McDonald’s and (to some extent) Budweiser demonstrate that following trends isn’t necessarily the best way to evolve your brand. The first step is to evaluate your company, learn about your current customers, and determine where you can make the biggest impact in consumers’ lives.
We recently had the pleasure of working with a global consumer packaged goods (CPG) manufacturer that was, just like McDonald’s and Budweiser, tackling major changes in its industry. The company wanted insight on how to revive sales growth in several categories, especially personal care, where the company played a major role. With that goal in mind, we collaborated closely with the company to get a deeper understanding of consumer journeys, implementing a layered approach that leveraged advanced analytics, ethnographic and qualitative tactics to better understand consumers.
This global CPG company undertook a multi-phase brand research program to find out where exactly it can make the most impact in its customers’ lives—and the approach turned out to be effective. According to our client, this was groundbreaking research because it clearly defined the opportunities and limits of where the company could go as it evolves its brand. Findings from this research provided internal consistency as well as marketing alignment as the company mapped its next big steps.
Make Evolution Work for Your Brand
All companies have to evolve their brand at some point. With some luck, a rushed reactionary approach to your brand’s transformation could sometimes work. But this strategy is, in fact, rarely worth the risk. As the examples I mentioned here show, a reactionary strategy may hurt your company’s bottom line and even your reputation in the long term.
As you make changes to your brand, it’s important to understand the customer journey, the limits of where you could make changes, and where you could meaningfully create more value and relevance for your customers. Branding is tough, and evolving an existing brand is even tougher. But with a better understanding of what you could and couldn’t influence, you are in a better position to evolve successfully with the marketplace.