Brand Failures

Extension failures 99
sales rose to the US $1 billion mark. In 1969, Xerox became a majority
shareholder of the European operation, Rank Xerox, and so the Xerox name
was now a truly global brand.
The following year, the company strengthened its reputation as a technological
innovator by setting up the Xerox Palo Alto Research Center, abbreviated
as Xerox PARC. However, the research centre was also a testimony to
Xerox’s broader ambitions. From 1970, the company expressed its desire to
stretch beyond copying into the field of computer technology and data
processing. In 1975 this desire became a reality with the launch of a computer
product, Xerox Data Systems, which had been researched at Xerox PARC. It
failed disastrously and Xerox lost US $85 million. Four years later though,
the company was still determined to extend its brand beyond the copier
market, this time with an early version of a fax machine called a Telecopier.
Another disastrous failure.
The problem wasn’t that Xerox’s brand name was too weak. On the
contrary, the problem was that Xerox was a very strong brand name, but one
associated almost exclusively with copier machines. Xerox wasn’t just a
company that made photocopiers – it was photocopiers. It didn’t matter if
the machine was made by Canon or Kodak, people still referred to it as a
Xerox machine. Indeed, this was an impression enforced through Xerox’s
own marketing efforts. Through much of the 1970s and 1980s Xerox ads
used to pose the question: ‘How to tell the real Xerox from a Xerox copy’
The implication was that if it wasn’t Xerox, it wasn’t the real thing. While this
strategy helped to sell copiers, it meant that it was tied to that product
category. After all, no one brand can claim to be the only genuine article in
more than one category.
For years, Xerox had competed on the superior quality of its copier
products. Then, when the company’s rivals had caught up, it competed on
the superior quality of its brand. And as soon as a company makes the
transition from a simple product manufacturer, to a global brand, it has to
live with the consequences. It can’t just create a strong perception and then
undermine that perception by embarking on other categories. As Al Ries
memorably put it, ‘the difference between brands is not in the products, but
in the product names. Or rather the perception of the names.’
However, Xerox didn’t give up. Instead, it tried to tackle the problem head
on. For instance, in a magazine ad for Xerox Computer Services, the strap
line read: ‘This is not about copiers.’ But of course, this only confirmed the
impression that Xerox was about copiers.