A U.S. company announces it has developed a new brand strategy. As reported in the Australian site azobuild.com:
Zircon Corporation, inventor of the world’s first electronic stud finder, has announced a new brand strategy that consolidates its wall scanning tools into two…lines – StudSensor™ and MultiScanner®.
The StudSensor brand will encompass single-function tools that find wood and metal studs, while the MultiScanner brand will include those products that scan for multiple materials such as wood and metal studs, metal pipes and hot electricity. Within the two brands, products will be identified by a simple numbering scheme that makes it easy for end users to identify the feature level that best fits their needs.
…President Robert Coler said. “The new brand strategy will make selecting the right tool for the job … easy.”
Given the new brand architecture, Zircon … announced that ProScanner OneStep … will be renamed and officially launched at the National Hardware Show in May as MultiScanner® i700 OneStep™.
In addition the company has announced…its TriScanner® OneStep™ and MultiScanner® OneStep™, the first products equipped with CenterVision™ technology, will become the MultiScanner i300 OneStep and MultiScanner i500 OneStep, respectively. Future wall scanning tools will follow this branding architecture.
If this i300/i500/i700 naming architecture sounds reminiscent of the 3/5/7 branding of an original stud-finder such as BMW, it’s because it is.
When market analysts draw a direct line between a company’s brand strategy and its financial performance, the lesson is clear. Any company not focused on effective brand strategy puts their market capitalization at risk. Problems at Maytag offer a cautionary tale of what happens when management overlooks the critical role of brand strategy in driving market growth.
Maytag is the third-largest seller of home appliances after General Electric and Whirlpool in the United States. Maytag brands include Amana refrigerators and Hoover vacuum cleaners.
Analysts commented on Maytag’s first-quarter performance, as reported by smartmoney.com:
Shares of the appliance maker were taken to the cleaners Friday, tumbling 28% to a 14-year low of $10.89, after Maytag reported first-quarter profits that plummeted 80% from a year earlier on declining sales. The Newton, Iowa, company’s results missed analysts’ estimates by a mile.
“This is not a financial problem, but a management and execution problem,” says one analyst…. “Its new products are running behind schedule, brand positioning is ambivalent and brand development is weak.” [He goes on to say], “Management is focused on cost reductions…. You can continue to cut costs and slash plants, but that is how companies go away. [Maytag] need[s] top-line growth through successful new products, strong brands, strong retailer relationships — and this isn’t happening.”
[Another analyst says] “…Maytag’s problems are centered around…a failure to capture consumers’ imaginations….”
Maytag is a revered American brand becoming irrelevant without an effective brand positioning. The solution is to refocus the brand by identifying a key point of competitive difference and, building upon the rich heritage of the Maytag brand, mining that heritage for evocative consumer connection.
Until then, just as the Maytag repairman of old, Maytag sales will continue to suffer through consumer inattention.
