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Reinventing the wheel
Written by: Martin Zika
Photo by: Jan Vágner
The "resuscitation" of old,
well-known brands is good business sense, as it may take advantage
of previous associations and loyalties. Following are a few examples
of Czech firms that have re-launched or re-designed classic products
successfully.
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| Ladislav Vrdlovec |
DO YOU REMEMBER the "Beetle", the popular people's car
from Volkswagen in the sixties? Three years ago a new modern version
appeared on the global market. It kept some of the original design,
but added the modern lines and innards of a state-of-the-art car.
The new Beetle was an immediate hit - the manufacturer reinvented
a model that had long ago been popular, and it worked. A similar
move also paid off for the makers of Apple computers, whose sales
dropped rapidly at the beginning of the 1990s. In 1997 the brand
controlled only 3% of the market and recorded a loss of USD 2.3
billion. The basis for resuscitating the brand was an emphasis on
users' relationships with their Apple computers. It wasn't so much
a question of the machine's technical performance as it was the
options it offers users. In 1998 the firm came out with a campaign,
"Think different", followed by the launch of the iMacs
and G3s, computers that meet the new vision: a powerful computer
at a low price, with attractive design and easy operation. Apple's
market share rose to 12%, and by August 1999 its share value was
up 500%.
Investing in renewing an already existing brand is of benefit in
many ways. Primarily, relaunching a well established product costs
far less than launching an entirely new brand. Another advantage
is that people already know the product and may have certain loyalties
to it. "It is always easier to address someone who already
has some experience with a given brand, because buying a completely
new product is always more complicated," says Ladislav Vrdlovec,
a consultant for ICV, an educational company. He says that this
is borne out by cases of foreign companies buying Czech brands,
such as the popular dishwashing liquid Jar. "These brands have
enormous potential for firms, because Czechs know them well,"
Vrdlovec claims. This can be seen in the field of confections -
French firm Danone and Swiss confectioner Nestlé bought chocolate
maker Orion and biscuit maker Opavia, successfully revitalizing
many traditional chocolate bars and biscuits: Opavia and Tatranka
biscuits and Kofila and Kaštany chocolate bars, etc.
Renewing a brand is an art in its own way, because it is mainly
necessary to judge which brands have the potential for it. We look
differently at brands that have simply become commonplace and gradually
disappeared than we do at brands that were not successful with customers,
leading to production halts. In order for a renewal attempt to be
worth it, a brand must contain values that consumers appreciate
or values that can be developed. Then all you have to do is proceed
according to marketing mix principles and use similar strategies
to those for maintaining a brand's market share over the long term,
according to Vrdlovec.
However, it's not always nostalgia that leads people to buy a product
that they used long ago. Often one must bear in mind that the goods
must appeal to new customers with different values. This requires
certain changes encompassing new trends. For example, modification
of the recipe, or the installation of a more powerful engine or
processor, passing the new benefits on to customers. Such "new
and improved" strategies worked with products like the Beetle
or the Czech Tatranka (see sidebar, p. 37).
For this article we prepared four case studies of Czech brands that
were more or less renewed in the new post-1989 environment. Find
out how the producers proceeded, and how successful they were.
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Exceptionally bitter
The bitter beverage Fernet Stock was born back in 1927. Two
years later, sales of the liqueur were encouraging, but at
that time some rather unpleasant events were taking place:
the global economic crisis, the confiscation of the distillery
by the Nazis in 1939, and the communist nationalization in
1948. However, during the sixties and seventies, Fernet's
popularity rose sharply, and until the nineties it was practically
impossible to find it on the shelves. But the profits from
sales were used to subsidize other parts of the socialist
system, so investments in modernization and improved production
were out of the question.
According to Richard Švéda, Stock Plzeň-Božkov's marketing
director, the brand awareness and prestige that the Fernet
Stock liqueur managed to maintain through 40 years of a centrally
directed economy were the main advantages for the future.
But this does not change the fact that the firm had to completely
change its business philosophy. The new era of building the
Fernet Stock brand after 1989 was naturally preceded by marketing
research. The specially ordered research covered practically
everything that related to production, from questions like,
"Would you like green or clear bottles?" through
tests of the popularity of advertisements. As a matter of
course, the firm conducts such research prior to every principal
decision.
The entire process was based on a complex marketing strategy,
which Švéda illustrates with an example of the advertising.
Like other products from the socialist days, Fernet Stock
did not have its own "face", and that had to be
changed. Its target group is men aged 25 to 45. "We started
out from the fact that, thanks to its specific, bitter taste,
Fernet Stock is popular mainly among men. And from there the
building of the brand's image developed as the drink for real
men," Švéda says. In 1996 there appeared an advertising
spot that was the very first television advertisement for
spirits. The visual form of television and print advertising
has changed since then, but the main motto, "A top Czech
brand with exceptional flavor, for exceptional men",
remains the same.
From 1990 to 1997 sales of the liqueur grew by nearly 500%,
from 2.7 million liters to 12.5 million liters, and today,
Stock Plzeň-Božkov, with a market share of over 30%, is the
largest spirits producer on the Czech market.
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Unusually roasted chicken
Production of Remoska, a multipurpose kitchen appliance,
started in 1957. "In the 1950s and '60s nearly every
household used one," says Ivo Svoboda, Remoska's sales
director. But not only locals could prepare chicken of special
taste - the "made in Czechoslovakia" oven was exported
to other Eastern markets as well. About 3 million products
were produced between 1957-1991, but after that the production
dropped down, even halted, and in 1994 the company was privatized.
The new history of Remoska began later in the same year. According
to Svoboda, consumer interest was the main stimulus for the
resumption of production. Because the brand was very well
known from the past, the target group was initially the older
generation. Today the company tries to address mainly young
people between 20 and 30 years of age. Four basic points were
set for the marketing strategy - high quality, energy conservation,
tradition, and utilitarian value - on which the advertising
campaign was built. According to marketing research results,
the firm focuses its communications strategy mainly on women's
magazines and television and radio programs like "Receptář",
"Sama doma". Svoboda says that allying with DuPont,
the producer of the non-stick material known as teflon, was
a great move. Many PR articles in various technical, specialized,
and gastronomy magazines were published under this cooperation.
Of course the design has undergone some changes, and new,
modern materials are used. "It was important to make
it obvious that it is the successor of the traditional Remoska,
with improvements like teflon," explains Svoboda. Over
the years the Remoska also got new attractive packaging. The
production gradually grew from about 12-14 thousand units
in 1994 to last year's 32 thousand units. Today customer's
are found in Slovakia, Hungary and Yugoslavia. A big success
was recorded in Great Britain, where 1,500 units were sold
in 2001, and about 18,000 to date.
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Milking tradition
The technological process for producing Tatranka wafers,
which first saw the light of day in 1945, is marked as one
of the greatest events in the Czech comestibles industry.
Dipping the edges in chocolate was made possible by the use
of little metal rails. In the nineties, Opavia worked on the
further development and profiling of the Tatranka brand. Several
marketing research projects were implemented, the goal of
which was to learn the opinions of potential customers on
matters relating to, for example, packaging, price, communications,
etc.
The target group is mainly younger, active families, but according
to the senior brand manager of Opavia-LU, Roman Trzaskalik,
the wafers are consumed by all age groups. The first television
advertising was aired in 1993, and the greatest change in
brand support strategy took place in 1996. That was when an
advertising spot named "Kánoe" was aired, and became
deeply engrained in the subconscious of viewers. For the first
time the spot began to feature the concept of Tatranka for
the outdoors and for outings. The most recent advertising
activities are two television spots - the man with the scythe
for ČokoTatrankas and the family in the mountains for classic
Tatrankas.
However, brand support is not limited to television advertising:
it also includes a wide range of below-the-line activities,
not only at points of sale (for example, marking out hiking
routes or the campaign in major mountaineering or winter centers
throughout the Czech Republic). Over the years there have
been several basic changes in the product itself. For example,
the introduction of the production of MiniTatrankas or the
fully coated ČokoTatrankas. Today there are already several
types of both classic Tatrankas and ČokoTatrankas. According
to an Advertising Tracking Study in 2002, which was conducted
by Millward Brown, the Tatranka brand is currently recognized
spontaneously by 97% of the Czech public and 30% of the population
identifies it as the number one brand of cookies or wafers.
In 2002 milk and chocolate ČokoTatrankas were named "Product
of the Year" in the bars category, with consumers themselves
deciding the results.
As far as sales go, the firm provided us with only percentage
indexes as of 1996. After the already mentioned change in
brand support strategy, sales increased - in 1997 by 38% and
in subsequent years, growth as compared with 1996 increased
annually by 20 to 30%. On today's highly competitive wafer
market, Tatrankas are holding their position as the most widely
sold product.
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Energy for the road
After few years of existence (production began in 1954),
a few representatives of the former regime put their heads
together and concluded
that Pribináček, the dairy treat from Posázaví, is healthy.
And because the communists controlled the nation, it was decided
that in each region at least one milk factory must produce
Pribináček. Gradually the products in each region became differentiated
not only by name, but also in taste and packaging. The new
brand-building era for Pribináček had a good position to start
with, as it was still quite strong after 1989. On the other
hand, the company had to respect the strong customer relationship
and expectations about the brand, which imposed certain limitations
on design planning, brand development, and communications
in general. "First we had to carry out a thorough analysis
and chose areas and methods for supporting the brand,"
says Jarmila Eflerová, Pribina's brand manager.
While the target group is young children (since Pribináček
is a healthy, natural curd product that is made especially
for them), the campaigns focus on mothers who buy these products
for their children. In 1996 the company moved, and at the
same time installed a new production line. In 2000 the product
went through a "face-lift" with the aim to make
it more visible in shops and to partially change the image
emphasizing traditional values. The following year this change
was supported by television campaign. Concerning themes for
advertising slogans and spots, Pribináček draws heavily on
the past - campaigns still use the legendary song, "Every
Day", from the successful Czech film Long Live the Ghosts!
Among other relaunching tools were print advertising and all
sorts of consumer activities during which the firm could take
advantage of direct contact with customers. Pribináček is
now "number one" on the market for dairy treats
(AC Nielsen research in 2000 and 2001), and according to studies
done by Opinion Window in 1998 and AISA in 2000-2001 it is
also the best-rated product by customers.
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