Magazine article Marketing

Mark Ritson on Branding: Golden Wonder Can Blame Only Itself

Magazine article Marketing

Mark Ritson on Branding: Golden Wonder Can Blame Only Itself

Article excerpt

The news that Golden Wonder had been placed into administration last week was mistakenly attributed by the media to the success of Walkers.

Their argument is a simple one: because Walkers is financed by the deep pockets of PepsiCo, because it has run a consistently successful ad campaign featuring Gary Lineker, and because it enjoys a market share of more than 50% of the UK crisp category, Golden Wonder simply could not survive such stiff competition.

Placing the blame for the demise of Golden Wonder on the success of a competitor, however, smacks of ignorance and over-simplicity. When Sunderland is relegated from the Premiership this season, its manager, Mick McCarthy, will not blame Chelsea. So what were the real reasons?

First, inconsistent ownership. In the past 20 years, Golden Wonder has had six owners. A review of its undulating ownership provides a potted history of British corporate takeovers. Corporate raiding, divestiture, management buyouts and venture capital all feature in the Golden Wonder story.

Multiple owners with different corporate goals usually spell disaster for any brand. Analyse Britain's most successful brands and you invariably discover that most have had unchanging owners and consistent management for years, if not decades.

The second major factor was a naive and incompetent grasp of brand repositioning.

In 1996, the brand was relaunched under the tagline 'Bursting with flavour'.

Two years later it was relaunched again, using 'Best flavour, best taste'.

And in 2003, it was at it yet again, this time disastrously attempting to portray itself as a 'no-nonsense' crisp and mocking the more sophisticated flavours and celebrity endorsements that had made Walkers so successful.

The third factor was the changing face of British retail. The traditional retailer of crisps had always been the corner shop, but today 60% of packets are purchased in supermarkets. Even leading brands struggle when negotiating with Tesco or Sainsbury's, but for a firm such as Golden Wonder, displaced long ago as one of the top five crisp brands, life is almost impossible. Most supermarkets are only interested in stocking the leading three to five brands in any category. Golden Wonder was getting desperate.

This leads to the fourth factor: own-label products. As demand for its crisps declined, Golden Wonder experienced increasing capacity utilisation problems, with some factories operating at as low as 60% of capacity. …

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