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.
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.
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.
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.
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.
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