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Why Declaring Yourself a Lifestyle Brand Is a Bad Decision

By Rich Duprey - May 22, 2014 at 12:22PM

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It's a sign a company has nothing left to offer.

Source: Burger King 

When even Burger King Worldwide (BKW.DL) begins repositioning itself as a so-called lifestyle brand, it's clear the term has lost all meaning and purpose, suggesting companies are listening to their PR spin more than their customers. Increasingly it seems those companies that are losing sway in the marketplace are the ones most prone to attempt this makeover as a means of masking operational failures, and it's a maneuver that risks squandering scarce shareholder resources.

The burger joint announced the other day it was abandoning its 40-year-old "Have it your way" slogan in favor a more amorphous (and unintelligible) "Be Your Way" tag line that it believes expresses a more personal, individual ethic that will help launch it into the realm of lifestyle brands. You know, just like Gucci, Polo, or even Harley-Davidson (HOG -2.22%). I think the correct term is delusional.

Unfortunately, Burger King isn't alone in having such lofty -- and misguided -- ambitions. Handbag maker Coach (TPR -1.01%) also recently committed itself to becoming a lifestyle choice. And while there's arguably more of a basis for the aspirational luxury company achieving that status, I remain unconvinced it will be a successful transition because in the end it's still largely a handbag company with an odd assortment of shoes, fragrances, and key fobs tossed in the mix. Or put differently, it's an accessories business with even more accessories added to it. That's hardly a way of life. It also happens to be what it's always been, only now it's declaring it's a lifestyle brand.

Source: Coach 

But it's a decision still not resonating with customers. Revenues last quarter dropped 7.5% from the year-ago period, but were down 18% in the U.S. as comps tumbled 21%. With new and hotter rivals like Michael Kors and Kate Spade stealing Coach's thunder -- and market share -- the idea the handbag maker is now a destination brand all its own doesn't seem to ring true.

That's because simply calling yourself a lifestyle brand doesn't make it so. Nike (NKE -6.99%) started off as simply another sneaker company that slowly, over time built a reputation among its customers that identified with its performance and quality. It allowed Nike to morph into an brand beyond just sneakers to include apparel, shoes, and accessories that fit into an athletic lifestyle beyond just sports. Similarly, Apple (AAPL -2.98%) now has people lining up for blocks on product launch days not because it one day declared itself a lifestyle brand, but because its products represent both functional quality and a sense they're on the cutting edge of technology and style. 

Similarly, Harley-Davidson initially didn't set out to be a motorcycle manufacturer that would lead enthusiasts to tattoo its logo on their bodies, but the mystique surrounding the bike lent itself to be adopted as a lifestyle choice. While some of its brand extensions helped build its reputation as such a brand -- there's a rationale behind Harley leather goods, headwear, and even the H-D edition F-150 pickup truck -- I'd argue the biker hurt its reputation, cheapened it, when it also stamped its logo on perfumes, grill accessories, and salad servers. Tough to imagine Marlon Brando brandishing a spatula in The Wild Ones.

The challenge companies face is building a brand that inspires customer loyalty over the long haul. Those who consciously pursue the creation of becoming a lifestyle choice do so at their peril. They open themselves up to even more intense competitive pressure, not only from rivals in their own industry, but among other lifestyle brands.

The difference seems to be brands that develop the aura of a lifestyle choice organically and those that consciously pursue it. And those that do invite additional risk they may not have considered. According to a study published in the Journal of Marketing in 2011, going from functional branding to lifestyle positioning sets companies up for broader, more fierce competition beyond just their typical competition. Because they are now competing based on lifestyle, there are just only so many outlets for such brand identity.

The "consumers' need for self-expression is finite and ultimately can be satiated, such that the value consumers place on self-expressive brands tends to decrease as the number of alternative means of self-expression increases."

Not every brand is a lifestyle brand. Neither can they be nor should they try. Brands achieve this status by exhibiting qualities that influence consumer behavior and choices, becoming essential to the culture that builds up around them. In contrast, there's no street cred to be earned by saying you eat at Burger King everyday.

Forcing an ill-fitting lifestyle brand on a company can prove wasteful, one that may squander  shareholder value. Whenever any company comes out and declares it is now going to be a lifestyle brand, it should send up warning flags for investors that worse times are ahead.

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