3 Examples Of Consumer Brand Destruction

Finally, Under Armour de-valued its brand by pushing into discount channels such as Kohl's (KSS) and DSW (DSW), to make up for volume from the bankruptcy of Sports Authority. Shoppers at these stores expect to purchase at a discount, as opposed to Under Armour's formerly full-price reputation (which the quality to match). This lowers the brand's appeal in consumer's eyes.

What SHOULD the company have done instead?

Clearly, going into digital was a huge mistake - one that Plank should have anticipated considering Nike's shuttering of its popular FuelBand business in 2014. Instead, that $700 million could have been invested in signing new stars, particularly in basketball where endorsements can drive huge sales of expensive sneaker models. Some of that $700 million could have conceivably be spent on James Harden ($14m/year deal with Adidas), or Paul George ($5.5m/year with Nike), or some other young up-and-comer. If Under Armour is going to be in sneakers (and it should), it needs stars to sell them. And when it DOES have a hit like the Curry, it needs to do everything in its power not to blow it. The digital push likely lead management to take their eyes off this prize.

Also, during its growth phase, Under Armour positioned its brand as top quality performance apparel. It was rarely discounted and its logo was counted as a "badge of honor" for serious athletes (or those with the money to look like one).

Now, with wide distribution in discount channels, Under Armour is just another label sold right alongside boring budget names like Champion or Starter.

It will be difficult for Under Armour to get back on the growth track it was once on. Once a brand loses its message (here, through the "Chef Curry" debacle and discounted product), it is very difficult to get it back, particularly with very strong competition from Nike, Adidas, and even Puma.

The lesson here? Brand managers need to keep their eyes on the prize and focus on what the brand does best.

Forgetting the Basics: Chipotle

For about a 5 period from 2010-2015, there was no hotter restaurant brand in America than Chipotle.

Lines at Chipotles around the nation routinely wrapped around the stores. Comparable restaurant sales routinely increased in the high single digits (7-10%) annually, from both increased visits and price hikes. Location count more than doubled (a 12.3% compound annual growth rate). Business was booming.

Most articles at the time cited Chipotle's fresher and healthier options, vs. traditional fast food, as the catalyst behind its growth. The brand became synonymous with its tagline: "Food With Integrity". For its customers, it represented a healthy, fresh, but still fast option for quick casual dining.

Most are familiar with what happened in the fall of 2015. From October through December, 60 people fell ill from e.coli outbreaks linked to eating at Chipotle. This was compounded by a norovirus outbreak that same December, at a Chipotle near Boston College, which sickened 120 students. The intense press coverage of the outbreak also exposed numerous other previous health incidents at its restaurants (mostly norovirus and salmonella) earlier in the year.

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Disclosure: Steve ...

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