Brands in the News

Five Brands to Watch in 2015

1 Jan , 2015  

This will be a challenging year for many brands. Competition is intense, growth can be hard to find and the growth of digital communication is shifting the marketing landscape.

Here are five notable brands to watch in the year ahead.

Lufthansa

Lufthansa is one of the world’s great airlines. It is also under attack. Lufthansa has two big problems. First, low-cost discount carriers continue to expand in Europe. This is putting pressure on Lufthansa’s short-haul business. Second, Middle Eastern carriers are putting pressure on Lufthansa’s long-haul business. For many years, Lufthansa could rely on connecting traffic to power its Frankfurt and Munich hubs. Now, Emirates, Etihad and Qatar are all stealing share. In many cases, these relatively new entrants offer better service.

The question for 2015: will Lufthansa defend its position? The airline clearly needs to respond, but powerful unions are resisting changes designed to make the company competitive. It would be easy for Lufthansa to ignore the threats but this would be a mistake.

Apple

Apple ends 2014 on a high note. Revenue is booming and people are excited about the next big innovations: the Apple Watch and Apple Pay.

High expectations are a mixed blessing; it can be easy to fall short. It isn’t clear that Apple’s new products will be the success people anticipate. Apple Watch isn’t yet on the market. Apple Pay is just getting started.

In 2015 we will see of Apple can continue its incredible run of innovation.

McDonalds

After a decade of spectacular growth, McDonalds is struggling. Sales are soft and the chain is struggling with a bloated menu, negative brand perceptions and tough competitors.

This makes 2015 a critical year. I think the year will unfold in one of three ways for McDonalds. First, the company might make a series of small, incremental moves: a new ad campaign, some trims to the menu and some small new products. This is the likely path, but I’m not certain this is enough to reverse trends.

Second, McDonalds might refocus on its core customer, shifting its marketing message and significantly reworking its product offering. This would result in a drop in sales but position the brand for long-term growth.

Third, the company might acquire or launch a second brand. This would be a dramatic strategic shift and isn’t likely. But it might be CEO Don Thompson’s best route.

Cadillac

GM is working desperately to rebuild Cadillac. It hired a new leader, Johan de Nysschen, from Nissan. The team at Cadillac is now scaling back discounts, introducing new vehicles, reworking the dealer network and relocating the brand to New York.

The key question: will it work?

Cadillac is a brand with a long history. This is powerful but it is also a challenge. People have clear perceptions of Cadillac. Changing these won’t be easy.

GM needs Cadillac to succeed, so 2015 is a critical year.

The Republican Party

This fall the Republican Party triumphed in the fall elections as many people rejected the Democrats and President Barack Obama’s agenda.

Still, the Republicans lack a strong message and there is some conflict in the ranks.

Will the Republicans identify a compelling positioning with broad appeal? Will a strong leader emerge with a strong message? Or will the party fragment and stumble? It isn’t enough to be against President Obama; the Republicans have to identify and own a benefit.

 

Best wishes for a 2015 full of great brands and interesting marketing challenges.



6 Responses

  1. Carlos Cortez says:

    Hello, Prof. Calkins. Indeed, McDonald’s has a significant challenge. I would not however agree that acquiring another brand would a solution to a dwindling core business unless the issue is declining industry size and not market share. Are competitors gaining share within the industry? Or is the overall market declining?
    I believe that they need to fix their core business and get to positive organic growth (even if small) and then add the M&A component to drive future growth.
    For a company as big as McD, it might be worthwhile to launch a corporate venturing initiative as a ways to be more innovative and this may also pave the way for future M&A opportunities.
    What do you think?

  2. Robert Damico says:

    Thanks for your list Calkins. Strong insights throughout.

    One Brand to consider on your list – Nike. I’ll never forget your words after class one day when I shared that I would be joining the Nike org. “I’ve never understood that Brand.”

    Nike is on role, and creating further separation with strong inspiring message. Will it continue? 2015 will be a telling year, as a few smaller brands are trying to follow the same strategy (read Under Armour).

    Hope to see it on your list next year!

    • timcalkins says:

      Excellent addition to the list. I talked about Nike in class just last week; the company has delivered remarkable results. Adidas is in trouble. Right now things look great for Nike but maintaining momentum can be difficult.

      • scott says:

        Agreed!! Though I’m not an ad exec. I have dealt in management and advertising. It’s a long row to hoe to keep the attention of people today. Something comes along tomorrow and it’s off to the races.

  3. Andrei says:

    Happy New Year professor Calkins! I just finished reading “Defending Your Brand” – fantastic book. I considered the Lufthansa question from that perspective. It seems that Lufthansa has already exercised several defensive options (including regulatory restrictions against major players from the Middle East). They also acquired low cost Eastern European carriers such (as TAROM) which may offer defense opportunities against Ryan Air types without sacrificing the Lufthansa brand. It would be interesting to see in what area they might choose to defend. Blocking awareness may be close to impossible. Same with blocking trial and acquisition of competitors. But blocking repeat through bundling of benefits and gate control may be within their capabilities. Otherwise, a price war between heavily subsidized airlines (on both side) may make 2015 a good time to travel across Europe :).

  4. Kat says:

    You’re on point with McDonalds–the company is already making moves with a revamp of the “I’m Lovin’ It” campaign (http://time.com/3652696/mcdonalds-lovin/?xid=newsletter-brief) in addition to their menu cuts (http://fortune.com/2014/12/10/mcdonalds-menu-cuts/). Looking forward to seeing how the rest of the brands continue rise to the challenge this coming year!

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