Brand New or Old Brand

What makes a brand? Superlatives have been used to describe products, places and people, though not all the adjectives have been positive. What goes up . . . Highly recognizable brands can be valuable, but they require constant attention. Brand values can rise or fall on management decisions, changes in the competitive environment or the belief that the brand has aged beyond its useful lifetime. Often, the true cause of a decline in a brand's value is folly and arrogance. Even the most powerful brand cannot survive horrible decisions. A brand derives its value from several factors, the most obvious being how much money it earns. This is evident with Marlboro -- the best-selling cigarette brand for Philip Morris International (PM) and Altria (MO). The tobacco companies have fostered the brand through hundreds of millions of dollars of advertising and marketing support. Some brands have ascended on lofty claims, only to stumble when those claims were not realized. Take AMR's (AMR) American Airlines, which has fared poorly in on-time arrivals and other metrics that consumers care about.

“Software Glitch Mars Nokia’s U.S. Re-Entry”–Wall Street Journal (4/12/12)

Nokia had 40% of the global hand set market in 2007. Its three challengers — Motorola, Samsung, and Sony Ericsson — had less market share combined. Research in Motion sold its BlackBerry at the time, but almost all of its customers were large companies. Apple did not release the first iPhone until June 29, 2007. Google’s Android OS, now so popular, was not commercially available. In less than four years, Nokia went from being the top mobile phone company in the world to a company whose future is questioned by Wall Street. Nokia’s share price is down 80% from its price five years ago. It was time to act. In an attempt to correct the company’s slide, CEO Stephen Elop, a former Microsoft executive, decided to form a partnership with his old employer. The world’s largest software company had no success getting its Windows Mobile OS widely adopted. The two companies decided to attack the market together by combining their hardware and software to make smartphones. Leveraging Microsoft’s massive marketing and R&D budget, together the companies had a chance to challenge Apple and Google. When announcing the partnership, the Finnish company said, “Nokia plans to form a strategic partnership with Microsoft to build a global mobile ecosystem based on highly complementary assets. The Nokia-Microsoft ecosystem targets to deliver differentiated and innovative products and have unrivalled scale, product breadth, geographical reach, and brand identity.” The flagship of the new venture is the Lumia smartphone, which was built to challenge the Apple iPhone and high-end products from Samsung. Nokia set an alliance with AT&T in the U.S., and the earliest sales figures were impressive. Nokia said it sold more than 2 million units of all its Lumia smartphone models in the quarter that ended March, up from over 1 million in the overlapping November-to-January period. But analysts had expected an even faster uptick in sales. Following the muted success of early versions of Lumia devices overseas, the Lumia 900 was launched in America. Nokia announced the most recent model had a software bug that could cause the smartphone to disconnect from data networks. The news was a public relations nightmare and it was widely assumed that U.S. sales would plummet. In response, Nokia said it would issue $100 rebates to owners of the handsets, which is a penny more than what they paid for them. The phone may be broken, but it’s free. Read more: America’s Nine Most Damaged Brands - 24/7 Wall St. href="http://247wallst.com/2012/04/13/americas-nine-most-damaged-brands/#ixzz1tdxXzYTg">America's Nine Most Damaged Brands