Biggs and I were talking shop awhile back and I mentioned that it was as if, sometime in the past decade, LG and RCA had a Freaky Friday-like switcheroo. As anybody over the age of 10 likely recalls, RCA used to be an omnipresent CE brand—especially in TVs. And LG? Let’s just say those letters didn’t always stand for “Life’s Good.” Rather, the company-formerly-known-as Lucky-Goldstar used to be synonymous with el cheapo bargain basement goods.
The fact is, for consumer electronics companies, brand is everything. It isn’t just features and value that causes somebody to reach for a certain box at Best Buy, its the warm and fuzzy feelings a brand name gives them. And, as RCA and Lucky-Goldstar show us, a brand’s fortunes can change on a whim.
So now, we take a look not only at one company that has done a great job of keeping with the times, but the many who have failed, and the lessons they can offer to those who are on the verge of winding up in the clearance bin.
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A SUCCESS STORY:
No company has done a better job of redefining itself in recent years than LG. I was talking to a layman the other day, and he was going on and on about how much he “loves LG products” and ONLY buys LG cell phones. So how did a company that was once synonymous with Korean toothpaste turn itself into one of the world’s largest (and most successful) makers of cell phones and TVs?
Just try saying “Lucky-Goldstar” out loud without laughing. It is an almost hilariously cheap-sounding name, and sounds like a poorly-translated warning label on Asian detergent. But “Life’s Good”? Its simple, it’s emotive, it’s smile-inducing, and it’s even a bit American sounding. Next add pale, sky-like colors to your logo and ads, turn your assembly lines over to products that feature designs that emphasis feelings of simplicity. When the company rebooted itself, relaunched in North America, and retconned its name, it succeeded in pulling off an extraordinary transformation.
In simple, they ditched all the negative stereotypes of Asian electronics (cheap, generic, poorly-made), and replaced them with all the good ones (well-designed, compact, simple.)
Pitfall #1: Failing To Change With The Times.
In the early-1950s, RCA essentially invented the color TV. Before that, they produced the first 45 rpm record and the first 33 1/3 rpm record. Today, however, RCA makes products that are more likely to be found behind the counter at CVS than on any holiday wishlists.
It isn’t just the complete lack of real innovation, or the ineffective marketing, or the hideous design of their current line of products. It goes beyond that, into the intangible. Picture this: I was recently in Buenos Aires walking through a high-traffic touristy area filled with cruddy theme restaurants (think of it as what Argentina Land would look like at DisneyWorld.) Right in the center of it all was a gigantic billboard from RCA advertising some of their MP3 players. However, the ads were utterly hideous, trying to whore off products that were insanely ugly on some gross orange background. This ad was not on cheap real estate, but anybody who looked up at it would see a company that hasn’t evolved one iota since 1989—the only thing boxier than their product design is their logo, which is in drastic need of an update.
Pitfall #2: Becaming Another Company’s Bargain Line
Zenith has a history of innovation—this is the company that invented the modern remote control. But the 1980s weren’t easy on American TV makers, as cheaper sets from across the Pacific pushed out our homegrown sets. In the late-1990s, as the company approached bankruptcy, LG bought more and more of a stake in the brand. Unfortunately for the heralded company, they’ve placed most of their energy in their flagship, leaving the Zenith brand to gather dust.
Never a top-tier brand, Magnavox was still a respected company with a long history (it was founded 90 years ago.) In the 1990s, my family had a big ol’ Magnavox set that worked just fine for years. Today, however, Magnavox is little more than the name Philips pushes their bargain-basement products under.
Pitfall #3: Becoming Little More Than A Licensed Name
Two words: digital photography. Polaroid’s instant cameras used to be the only way to snap dirty shots without catching the attention of nosy photo developing shop employees. Unfortunately for the iconic brand, Polaroid film costs about a million times more than digital snapping. Late to the digital game, Polaroid went bankrupt in 2001, and was bought by a bank, which went on to license the Polaroid name out to anybody with a checkbook. Whenever this happens, products bearing a brand’s name will naturally have wildly inconsistent levels of quality, and it is nearly impossible to build a strong brand identity (nor is there much will on anyone’s part to do so.)
Today, Polaroid cameras are mostly of interest to OutKast fans, art school students, and American Apparel ad photographers, while the other products bearing the name (in particular, their TVs) are notoriously cruddy.
THE AT-RISK GIANTS:
I’m no Sony-hater—I’ve had nothing but good experiences with the company and their products. However, the company that was once the electronics gold standard (to such a degree that a “Sony Premium” became an accepted tax if you wanted a decent TV) has been hurt by an ever-crowded marketplace of ideas and competitors.
Now, there has always been two Sonys. There’s the Sony that gives its designers and engineers carte blanche to create wacky, creative, and innovative products. This is the Sony that made the first portable tape player, the first portable CD player, and newer products of intrigue such as the MYLO personal communicator.
And then there’s the Sony with a religious devotion to closed standards. The Sony of RootKit, Memory Stick, and MiniDisc. This Sony could survive, and even prosper, for many years because, even if they weren’t the only game in town, they were the home-run hitter in the line-up. Today, we have more choices, and that choice means we don’t have to accept whatever Sony throws at us.
It’s not that Sony has fallen down the toilet — in fact, they’ve stayed pretty consistent over the years. That, however, might be the problem. They haven’t done enough to change their ways for changing times, and adopt to a marketplace where consumer choice and open-standards are the new religion. If they keep it up, they could end up in the heap bin.
Recently, Panasonic has sort of re-imagined itself as almost exclusively a maker of flat-panel TVs. The problem, however, is that this is increasingly becoming a commodity market, with name brands carrying less and less importance. In 5 years, there will be no difference between a Panasonic and a Sceptre TV, and consumers will know it. While Panasonic could still make a healthy chunk of change selling panels to the small guys, manufacturing products for other guys is no way to keep your brand name valuable. If Panasonic continues to place most of their eggs in this one basket, they could very well see their reputation not so much turn bad, as simply disappear.