KATHMANDU: During my college days, Matiz was considered a great car from the stables of an industrial conglomerate whose businesses ranged from consumer goods to ship building and construction. The world saw the brand and accepted the company. During its heydays, Daewoo (Automobiles) ranked fourth among 38 brands in the JD Power 2000 Customer Service Index Study. However, there was more to the brand — the corporate machinery, which worked on its own. The story of Daewoo is a reminder that brands are important extensions of a company — an independent asset. A brand attracts consumers and generates revenue.
Over the past few weeks, we covered great brands that have successfully played their roles of attracting revenues, and also been suitably backed by the other ‘assets’ like prudent financial management, correct manufacturing practices and organisational leadership. The inability of other assets to serve their respective functions led to the fall of Daewoo, which in effect impacted its brand equity.
The fall of the company and the brand had little to do with anything central to the products, the marketing or the positioning of the brand. The consumer products from the Daewoo stable were largely ‘satisfactory’ and provided the expected ‘value return on investment’. Whether it was the automobiles or the consumer electronics or the Daewoo piano, the brand always managed to deliver in terms of experience and reliability. A manufacturer of necessaries rather than luxury items, the product line served its purpose.
However, some of its products like the Matiz car (now rechristened the Chevrolet Spark) were superlative machines that enjoyed great brand equity.
The marketing and the product positioning of the brand was mediocre and centred on the ability of the brand to provide a ‘value experience’. It was a brand that was built around the needs of the masses and always projected to be such. No fancy promises and no controversial advertisements. It was an average company which succeeded to sell on elements of value, durability and utility.
The collapse of the comp-any, because of financial mismanagement, was so fast that no one was left standing to collect the debris and re-build. With the complete conglomerate in tatters and no one left to steer the ship, the Daewoo brand suffered withdrawal of consumer confidence. Simultaneous with the collapse of the organ-isation, the brand began to score negatively on the ‘line-age’ front. The element of ‘lineage’ which closely charts the ability of a brand to infuse confidence in all stakeholders was totally eroded. How could one invest in a Daewoo product today, not knowing whether the company will be there tomorrow?
The negative branding was so great that General Motors, who bought the consumer cars business line, dropped the brand name ‘Daewoo’ and reintroduced its old brand ‘Chevrolet’. Every branding expert will tell you that to kill an existing brand is to bury millions of dollars. However, the negative lineage of the brand justified it. The Daewoo stigma is a grim reminder that a brand is a differentiator and different-iation can be good, bad or ugly. RIP Daewoo.
(The author is associated with The Chaudhary group and can be contacted at firstname.lastname@example.org)