In 2010 Strategy Magazine selected “Mark’s Work Warehouse” as recipient of their “Brands of the Year” award for “developing a strong brand identity through a combination of business savvy clear vision and clever marketing”.
The clever marketing had to do, according to the magazine, with expanding the brand into the casual clothing market.
What Strategy Magazine considers a re-branding success for me it’s just another typical case of a brand loosing its focus in the quest for the “bigger pie”.
Mark’s Work Warehouse began in 1977 in Calgary with the simple strategy to sell quality work clothes. With the perfect name, a slogan very targeted to the industrial channel (“Clothes That Work”), and a smart acquisition strategy, Mark’s Work Warehouse became the number one choice in the workwear segment in Canada.
Like most successful brands, Canadian Tire (the company who owns Mark’s Work Warehouse), was faced with a dilemma: how do you continue to grow a brand that dominates its category?
The answer was “obvious”: by expanding the brand beyond the workwear category ( estimated at $600 million) and into the casual clothing market ( estimated at $24 billion).
In order to broaden its appeal, the brand lost any reference to its established reputation as a leading workwear retailer: Mark’s Work Warehouse” becomes the more generic “Mark’s”, while the very focused slogan changes to a meaningless one: “Smart clothes. Everyday living.”
Brand stretching is pursued by many companies in quest for higher profits. This strategy of “refocusing” a brand rarely succeeds for at least three reasons:
- You alienate your core customers who help build your brand. I have no doubt that with sufficient resources “Mark’s” will manage to broaden its customer base. But I find it very hard to believe that the blue-collar workers will continue to make Mark’s their favorite destination for work clothes. This move is a great opportunity for a competitor to take advantage and establish a strong position in this category.
- You trade the “leader” positioning in a niche market with a “me too” positioning in a more competitive category. Mark’s has chosen to go from being number 1 in workwear category to the bottom of the preference list in the casual clothing category.
- You invest more resources trying to change people’s perception than defending your established position. Mark’s will face fierce competition in the new segment. It’s possible that any profit gains as a result of this move might be offset by increased spending related to competing in the new segment.
Mark’s parent company, Canadian Tire, fell into the same trap of changing its focus from being the “tire specialist” to selling everything to everybody and competing with Lowe’s, Home Depot and Walmart.
The result: a perception of poor quality products (the company is sometimes referred to as “Crappy Tire”) and one of the poorest customer service experience in the Canadian retail environment (their Facebook page is inundated with customer complains).
Stretching the brand into another category rarely works in the long run. While the need for a brand to grow is understandable, there are other ways to make than happen while still being relevant to your core audience.
What may seem a success now (the implementation of a new brand identity) might turn out to have tragic strategic consequences. Only time will tell.
Brought to you by: “Brand Positioning 1 on 1” Workshop