Hodes Voices

How to Kill a Brand

Dec 7, 2009 | Mark | Corporate Culture, Employer Branding, Global

Crystal craftsmanship no longer done in Waterford

Growing up, my mother had some things that were special— Wedgwood candy dishes, ashtrays and figurines, and Waterford crystal bowls and glasses. Whenever there was a big family dinner or holiday, she would bring those out of the special cabinet and tell us the stories behind each piece: who bought it originally, where and how it came into our family. Washing up, we were admonished to take particular care of the Wedgwood and Waterford.

So, when my wife and I went on holiday to Ireland recently, Waterford was one of our first stops. We arrived in the evening and told the landlady at our B&B that we hoped to see the Waterford visitors’ centre the next day.

“Well, ye best hurry up,” she said sadly, “they’re closing it down.”

We were shocked as she told us that the famous designer and maker of crystal had been bought by an international conglomerate a few months before. For years, production had shifted to eastern Europe and China. Then, all operations went to Asia. The visitors’ centre was closing down in a matter of days. With that, hundreds of jobs— and a legendary brand— were gone.

Even more interesting was how she immediately told us to seek out Tipperary or Killarney crystal because those were the places where the artisans who formerly worked at Waterford had gone and set up shop. That night, we visited two pubs in Waterford. In both, locals told us about the closure of Waterford and also directed us to the competition.

Ironically, it turns out that the same company that owns what’s left of Waterford also owns Wedgwood. Presumably, they are viewing that brand through the same numbers-oriented lens that skewed their view of Waterford.

The lesson in this tale is as clear as the crystal for which Waterford was once famous. Looking at its costs, the owners reasoned they could increase profits by shifting work to less expensive locations. What they didn’t realize is that in the case of a luxury item such as crystal, the lore and legacy of its location is as much a part of the brand as the physical products.

Even more telling is the way locals proactively informed visitors that “Waterford crystal” really wasn’t any more, and directed them to the competition.

The next day, we drove to the visitors’ centre. It was appropriately a gray and drizzly morning. The parking lot which once welcomed tour buses was now being used for overflow parking by an adjacent community college. The visitors’ centre shelves were almost bare and we wound up not buying anything. It was a depressing experience.

While there are “green shoots” indicating that the worst of the Great Recession may be behind us, companies are still watching budgets closely and looking for ways to economize. While it may be tempting to move operations to cheaper locations and skimp on severance, organizations would do well to take the time to reflect on how that will affect the brand.

Had Waterford kept design and R&D in Waterford, for example, they could have still laid claim to the name legitimately. Providing better severance benefits would have reduced the bitterness of the local population (indeed, both the BBC and PBS did documentaries on the closure of the Waterford plant in Kilbarry). It would have reduced their profits, true, but the brand would live on.

Instead, they are left with a brand which, like fallen premium brands of yore (think Pierre Cardin), will instead represent faux luxury and never achieve the prestige— or margins— of the original.

Tags: brand branding layoffs