Brand Failures
Brand Failures Brand Failures
104 Brand failures fresh produce includes pears, peaches, plums, grapefruits, green vegetables, grapes and cantaloupe. But even after the campaign most consumers and retailers still firmly associated the brand with bananas. This wouldn’t be so bad, if the company’s banana sales were booming. But Chiquita was badly hurt towards the end of the 1990s with a number of banana-related problems. Quite simply, there were too many of the damn things. Banana production in Ecuador, the world’s leading banana producing nation, more than doubled from 1990 to 1999. This increased supply forced Chiquita to charge lower prices. As a result, the margin of profit diminished and debts mounted. There were also other problems over which Chiquita had no control. For instance, Hurricane Mitch devastated Chiquita’s banana plantations in Honduras and Guatemala in 1998, forcing the company to spend more than US $75 million rebuilding them. Chiquita has also accused the European Union of favouritism towards Caribbean bananas grown in former European colonies. The long-running dispute hit Chiquita hard and according to Stephen G Warshaw, president and chief operating officer of Chiquita, the company had about a 40 per cent share of the European market before 1993, but that dwindled to 20 per cent. Although the EU banana trade policies were changed in 2001, Warshaw is sceptical that the company will be able to regain the dominant market position it once held. The problems affecting the banana industry, combined with unpaid debts resulting from expansion and its many attempts to broaden its product offering, means the Chiquita brand is now in deep trouble. Whether the brand’s fortunes will be able to curve back up, banana-style, remains to be seen. Lessons from Chiquita ‘Catch-22’ situations should be avoided. Chiquita tried to stretch its brand when banana sales were slipping. This led the company into debt, because it wasn’t selling enough bananas to cover costs. It needed to move beyond bananas to bring in more money, but more money was needed to move beyond bananas. A classic ‘catch-22’. Historical identities are hard to shake off. The company has been linked with bananas since the 1940s and that association has been difficult to undo.
Extension failures 105 A brand is never under total control. The development of a brand is only ever predictable to a certain extent. Some factors will always be beyond control. Chiquita’s expensive attempts at diversification left the brand illprepared to cope with unavoidable situations such as Hurricane Mitch, the excessive production of bananas from Ecuador and the Euro’s weakness against the dollar. To understand the risks of brand extensions it is worth taking a brief look at 10 more extension failures.
- Page 62 and 63: 54 Brand failures on it,’ wrote B
- Page 64 and 65: 56 Brand failures Clearly if Corfam
- Page 66 and 67: 58 Brand failures been officially r
- Page 68 and 69: 60 Brand failures ‘There are risk
- Page 70 and 71: 62 Brand failures 13 Oranjolt The d
- Page 72 and 73: 64 Brand failures 14 La Femme Where
- Page 74 and 75: 66 Brand failures patronizing. This
- Page 76 and 77: 16 Clairol’s ‘Touch of Yoghurt
- Page 78 and 79: 18 Maxwell House ready-to-drink cof
- Page 80 and 81: 20 Thirsty Cat! and Thirsty Dog! Bo
- Page 83 and 84: Barron’s Dictionary of Business T
- Page 85 and 86: Extension failures 77 21 Harley Dav
- Page 87 and 88: Extension failures 79 making up the
- Page 89 and 90: Extension failures 81 Keep it tigh
- Page 91 and 92: 23 Crest Stretching a brand to its
- Page 93 and 94: Extension failures 85 ‘No toothpa
- Page 95 and 96: Extension failures 87 24 Heinz All
- Page 97 and 98: Extension failures 89 Lessons from
- Page 99 and 100: Extension failures 91 the no-nonsen
- Page 101 and 102: Extension failures 93 Have a core
- Page 103 and 104: Extension failures 95 In the mid-19
- Page 105 and 106: Extension failures 97 every brand -
- Page 107 and 108: Extension failures 99 sales rose to
- Page 109 and 110: Extension failures 101 However, amo
- Page 111: Extension failures 103 29 Chiquita
- Page 115 and 116: 31 Ben-Gay Aspirin Ben-Gay is anoth
- Page 117 and 118: 33 Smith and Wesson mountain bikes
- Page 119 and 120: 35 Lynx barbershop Lever Fabergé,
- Page 121 and 122: 37 LifeSavers Soda Invented in 1912
- Page 123: 39 Frito-Lay Lemonade Frito-Lay is
- Page 127 and 128: It can be expected that brands will
- Page 129 and 130: PR failures 121 40 Exxon Don’t sa
- Page 131 and 132: PR failures 123 including the clean
- Page 133 and 134: PR failures 125 environmentalists,
- Page 135 and 136: PR failures 127 the public. [. . .]
- Page 137 and 138: PR failures 129 42 Perrier’s benz
- Page 139 and 140: PR failures 131 common purpose thro
- Page 141 and 142: PR failures 133 Lesson from Pan Am
- Page 143 and 144: PR failures 135 In addition, Snow B
- Page 145 and 146: PR failures 137 45 Rely tampons Pro
- Page 147 and 148: PR failures 139 Lessons from Rely
- Page 149 and 150: PR failures 141 As Gerber saw it, a
- Page 151 and 152: PR failures 143 regarding youth mar
- Page 153 and 154: PR failures 145 buying about 40 per
- Page 155 and 156: PR failures 147 Be sensitive. By s
- Page 157: PR failures 149 Remember that comp
- Page 161: Brands operate on a global scale. B
Extension failures 105<br />
A brand is never under total control. The development of a brand is only<br />
ever predictable to a certain extent. Some factors will always be beyond<br />
control. Chiquita’s expensive attempts at diversification left the brand illprepared<br />
to cope with unavoidable situations such as Hurricane Mitch,<br />
the excessive production of bananas from Ecuador and the Euro’s weakness<br />
against the dollar.<br />
To understand the risks of brand extensions it is worth taking a brief look at<br />
10 more extension failures.