BUSINESS OF BRANDS
The butterfly effect in brands
No, this post is not about that really cool movie with time travel. But, is the same principle applicable in the world of brands?
In popular culture, the butterfly effect is a phenomenon where a minor change can cause a large change in the outcome. And once a change occurs, the grand design will never go back to being normal.
Sure, my reaction is adverse. But, what kind of an effect will this have on other KF brands? Will a disturbance in the force change the brand affinity for their other products? I do know two people who refused to enter the UB city (built by Vijay Mallya) because of their very bad experience with KF Airlines. Is this likely to spill over.
But, KF as a brand has managed to delight many customers previously and build brand advocates. At a time like this, the brand advocates can be of great help. Why isn’t that happening? Can KF beat the butterfly effect by merely handling things better?
4 Comments
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ArvindFebruary 22, 2012 at 5:01 pm
whom do you blame? the brand or the consumer? Yes the consumer might feel let down by HIS/HER brand (loyal beer drinkers)… but a wise consumer would have chosen differently…
I will talk about myself… as I do not know about the rest… I fly a lot and I fly only indigo…. and whenever Im at an airport for around 2-3 hrs for transit… I chill at the good times bar….
My point is… consumers should not let a brands bad performance in one industry, lead to a change in behaviour of the same brand in another industry
DonFebruary 22, 2012 at 5:15 pm
Dear Abhi,
According to me I would look butterfly effect from a different perspective. If KF does not fly (international flights), people consuming KF alcohol in the flight will reduce which would result in selling less alcohol, which would result in lesser volumes which would result in profits, which would result in lesser investment for raw materials, which would result in high procurement costs which would result in increase in price of alcohol and other KF offerings to adjust cost whci would result in people moving away from the brand so on and so forth. On the other hand, brand loosing its recall value and other intangible brand benefits.
Otherwise I dont see any direct correlation between the bad experience and people not going to UB city mall or not drinking KF beer.
There might be instances that people would not prefer KF airlines. thats nothing got to do with other familiar brands.
Himanshu SahaniFebruary 22, 2012 at 10:18 pm
Very interesting. If I remember correctly, the KF brand is mortgaged with SBI for 2000 cr which the airline needed some years back. Wondering if the airline goes under and the bank auctions the assets to recover, who would buy the brand. Also wondering if the bank would m-t-m losses due to brand impairment.
ScattershotFebruary 24, 2012 at 10:27 am
@Abhinaya: You make a very important point. The butterfly effect is more pronounced in India, where the goodwill or vice-versa ill-will(if I may say) of the parent brand sets the precedent for the rest of the offerings. This is because India abounds in companies which encompass every possible offering. As the newspapers put it ‘TATA- from salt to software’ and others. Hence its essential that the firm maintains its offerings across its spectrum, otherwise your resolve about not consuming KF beer could transcend across other products and offerings too.