Everything has a natural cycle of life – even major brands. Yesterday the Wall Street Journal reported that Ford Plans to Kill Storied Mercury”. Although as early as 1985 Mercury was still dominant US brand, since then it has increasingly declined. In 1985 Mercury sold over 500,000 vehicles, but by last year that number had dropped to just over 92,000.
For 25 years (and especially over the last 10) the brand has declined. As such it is a good business decision for Ford to cut its losses and move on. After a certain point, there is not much that can be done to revive a dying brand, no different than a dying person.
That doesn’t mean that there is no room in Ford’s line-up for another brand – Volkswagen does very well with multiple brands – but just no longer Mercury. Mercury’s demise began when it no longer stood for anything special, unless you consider replicating a Ford sister car with fancier trim as something special.
As such, hopefully Ford Motor Company has learned the importance of brand management for its future. Good brand management means that you don’t only declare and communicate the position in the consumers’ minds that you intend to hold, but that you consistently and exclusively deliver products and/or services that meet the consumers’ changing ideas of what that position means. Mercury failed to do so.
Moreover, it’s a recognition that sometimes a brand position can be squeezed into non-existence by other brand positions. Ford, Mercury, and Lincoln represented a “ladder of brands” strategy, giving people smaller stepping stones between levels of prestige. But when foreign auto makers started selling higher quality cars with more standard features at lower price points, Ford had to respond by improving its main Ford brand, which squeezed Mercury from the bottom. Similarly as Lincoln offerred cars at lower price points, it squeezed Mercury from the top. That has left no distinguishing position for Mercury.