The Origin of Brands Blog

Wal-Mart: To change or not to change, that was the question.

The word “branding” comes from the cattle ranching days of the Old West. The branding of livestock was a rigidly-enforced practice that helped to keep life peaceful and orderly.

 

All cattle look pretty much the same. Without a brand, no cowboy would know whose cattle are whose. Determining ownership would be a nightmare.

 

In the American West, cattle still graze freely and branding allows ranchers to easily identify their animals especially during the fall roundup.

 

(Of course, some ranchers keep their herds on fenced lots and in that case branding isn’t required but is often done anyway. And in business, if you have no competition you don't need a brand either.)

 

A brand is the special mark or identifying design owned by a rancher. Branding occurs when an owner’s branding iron is heated to red hot in a fire and is pressed against the side of the animal. Not a particularly pleasurable process for the animal but essential for the rancher.

 

 

In the marketplace, brands and branding are as essential as they are on the ranch. Without a brand, consumers would have difficulty differentiating one product from another. But while any company can put a mark on the side of a package, that doesn’t make the mark a powerful brand. Brands are only powerful when you can burn that same mark into the mind of the consumer as well. Ouch!

 

Burning the consumer’s mind is the key detail many companies miss. They think branding is putting their name and logo on the package. But that is only half the answer. Making a branding iron is the easy part. Holding the consumer down and burning that brand into the mind is the hard part.

 

The good news is that once you have burned your brand in the mind of the consumer it is practically permanent. An established brand is difficult to change and hard to forget. Unless you keep changing what the brand stands for to the point of no recognition.

 

It is important to keep the look of your branding iron consistent over time. Constant or drastic change can be a brand-killer.

 

(Of course, if nobody knows your brand, you can change it all you want. Marlboro was initially a women’s cigarette which was rebranded with cowboy imagery.)

 

It was no trouble for Marlboro to change from a woman’s to a man’s cigarette but they can’t change from the cowboys without dire consequences. Marlboro has wisely stuck to the same imagery, look and logo for over 50 years.

 

 

Why do companies want to change the look of their brand?  One reason is to keep the brand current and fresh. Or to attempt to change the position of the brand.

 

Making subtle changes over time to a brand is fine. It allows you to keep the logo fresh and up-to-date. The UPS logo has undergone 4 changes over 100 years but it still retains the same look, feel and most importantly the same color, brown. Consumers have hardly noticed the changes.

 

 

Sometimes a logo may not be perfect, but sudden, radical change to a well-known brand can be jarring, disturbing and destructive. This is the case with the latest changes to the Wal-Mart logo.

 

Since the launch of the company in 1962, Wal-Mart has made many subtle changes. But for the most part it has stuck to its traditional uppercase type. The brand is currently the world’s largest retailer meaning that its logo is burned into the minds of hundreds of millions of people around the world.

 

 

So what did they just announce? A drastic change.  Not a small change, but a change that makes me cringe.

 

To hyphenate or not to hyphenate? Uppercase or lowercase? Star or no star? Dark blue or light blue? One color or two colors? Let’s change everything!

 

One change would have been radical enough, but making all these changes at once will  disconnect Wal-Mart from its past. Which for the world’s largest retailer is stupid.

 

In general, it’s preferable to avoid hyphens in names and to use upper and lowercase letters rather than all-caps. But for Wal-Mart, its name and its typography are so well known that changing everything at once is dangerous.

 

What is even worse is the yellow starburst that Wal-Mart is adding to the end of its name. What the heck is that? I’ll tell you what it is. It is an attempt to make Wal-Mart look like a environmentally-friendly company and a big-box store that cares despite a record of union blocking and community commoditizing.

 

Wal-Mart spokesman Kevin Gardner said: "This logo update is simply a reflection of the refreshed image of our stores and our renewed sense of purpose of helping people save money so they can live better."

 

Really? I think this logo update is an attempt by Wal-Mart to try and change the minds of consumers. To try to convince them that Wal-Mart has a renewed sense of purpose.

 

Has anybody mentioned Wal-Mart’s renewed sense of purpose to you? No one has mentioned it to me.

 

Changing the logo won’t change the brand in the mind. The only way to change what people think about Wal-Mart is to generate favorable publicity. The company has been making progress in this area with a more media-friendly CEO, Lee Scott, and by promoting energy-efficient light bulbs and a discounted drug program. I congratulate Wal-Mart for their PR, but question their radical logotype redesign.

 

For consumers who had problems with Wal-Mart’s brand the new logo won’t change their minds, slapping lipstick on a pig does little good either. For consumers who love to shop and save money at Wal-Mart (and there are a lot more of these consumers) the new logo is likely to confuse and frustrate. It is like your wife coming home with a new Mohawk, she might hope it makes her suddenly look young and rebellious but her family knows nothing could be further from the truth.

Perfect Pitch People

When should your CEO make the move from the boardroom to the broadcasting studio to become the pitch person in your new advertising campaign?

Not an easy question to answer. It’s a move that can either lead to fame and fortune or embarrassment and ridicule. Dave Thomas is an example of the former and Dr. Z of the latter.

To help your company decide if your top person has the chops, I have put together a check list. How does your CEO score on the following criteria?

1. Authenticity. Does this person have an authentic link to the company? Is he or she widely known to be the leader? Founders, namesakes and longtime leaders have this built in. Michael Dell and Orville Redenbacher, for example. Bill Ford had the name but not the reputation as a leader.

2. Likability. Some people are instantly likable. Dave Thomas, Papa John or Lee Iaccoca, for example, are very likable. Dry and cold Jacques Nasser is not very likable.

3. Screen presence. Being likable in person and translating your likability onto the screen are two different things. A CEO needs to be natural, honest, and charismatic in front of rolling cameras. A little acting skill is also handy. Scott Blum of Buy.com has little on-screen presence or personality. Donald Trump seems to glow on screen.

4. Well-known. Is your CEO a household name already? Has he or she done enough PR so that the CEO is familiar to a wide audience? Dieter Zetsche was not widely known, especially as Dr. Z. In fact, most consumers assumed Dr. Z was an actor and not the actual chief executive.

5. Story. What is the CEO going to do and say in the television commercial? Is there a reasonable story that he or she has to tell? Frank Perdue talking marigolds was a great story. Or George Zimmer of the Men’s Wearhouse guaranteeing I will love the way I look also works.

Using the company CEO in the advertising is typically used for one of two reasons. One is that the company is in real trouble and putting the leader on television can repair confidence in the corporation. (By some it is seen as a desperation move.) It can either work wonderfully as with Iaccoca or miserably as with Dr. Z.

Another reason is that a company is young and the namesake of the company can sell the back story and heritage of the brand fostering credibility and authenticity. Papa John used this reason and built the #3 pizza chain in the U.S.

The truth is that all companies need a spokesperson, one key player that can be the voice of the company and/or brand. But the main avenue of communication for the spokesperson should be PR. There are many potential PR opportunities especially if the brand is first in a new category. Dell was the first to sell computers direct. Papa John was the first to sell pizza with better ingredients. Being first and using PR are how you build brands.

But in the case of well-known brands in mature categories where advertising plays an important role in the maintenance and defense of a brand, it can make sense to also use the CEO as spokesperson in the advertising.

However, it does work better when there is enough advance PR build-up to give the CEO credibility, experience and authenticity. In fact there are many high-profile CEOs who probably should have stepped in the role of pitch person for their brands.

With all the PR that Jack Welch received, he would have been an ideal pitch person for the GE brand. With all the PR Anita Roddick received in building her natural cosmetics chain she would have been an ideal pitch person for the Body Shop brand.

Going Hollywood is not for all CEOs; it takes a special combination of talents, skills and circumstance to really pull it off. And not pulling it off can be detrimental to your brand, not to mention your CEO’s ego.

Dixie Chicks attempt a comeback

http://www.dixiechicks.com/

The band, formerly known as the hottest thing in country music has suddenly cooled. It started back in 2003 at the start of the war in Iraq when lead singer Natalie Maines remarked on being ashamed that President Bush is from Texas. While the remark played well to her audience in London, flag-waving, Bush loving, country fans in the U.S. were outraged. And a public fire storm erupted. Radical, peace-loving musicians are nothing new. But when and how you open your mouth is important. Not to mention knowing something about your fan base.

Once-uttered phrases such as this are almost impossible to take back. Just ask Howard Dean. But they can be overcome; if you do the right things get your brand back on track.

Let’s take a look at what the Chicks have done right and wrong.

1. Get out of the spotlight and give the public a break.

GOT IT RIGHT. The girls very wisely took three years off. Today, their new album release comes at a time when views of the President and the war have changed. But even more important than that, time really can heal most wounds. Time gives fans, reporters and disk-jockeys the ability to save face and embrace the trio once again.

2. Embrace the controversy, apologize in front of the media and end the bitterness.

GOT IT WRONG. While the Dixie Chicks have certainly embraced the controversy and not shied away from the media (they recently were on the cover of Time, interviewed on the television show 60 Minutes and were heard on the Howard Stern radio show to name a few) they have not admitted any wrong doing or apologized. Instead they come across as arrogant and angry. Admitting some fault would go a long way in helping to repair their image. The first single, “not ready to make nice,” is a fine song, it creates controversy and attention. But while you sing it you actually do have to make nice with the media and fans.  Saying you don’t care what your fans or country radio thinks is egotistical.

3. Start slow.

GOT IT WRONG. Making a comeback is like starting over in many ways. You don’t get to start back where you were at the height of your fame. You need to be humble, work hard and inch your way back up the ladder. Launching a huge nationwide tour was most certainly not the way to go. The bad press surrounding the disappointing tour sales is more damaging than the losses in tour revenues. “Dixie Chicks May Lay Egg with U.S. Tour.” Wall Street Journal is a typical example. It is a sign of failure having these stories hit the press. It would have been better to do a limited tour with only cities you know you could sell out, maybe even booking smaller venues so tickets would be hard to come by.

The irony is that the album debuted at number 1 despite not getting any airplay and will likely be a huge success. But the negative press about the tour has taken the air out of the sails of that news story.

4. Keep your brand focused.

GOT IT WRONG. The Dixie Chicks are a country act. Crossing-over means more album sales, but can leave you stuck in the mushy middle. Core fans think you have sold out and new fans can quickly move on to the next thing. The Dixie Chicks today are wearing lots of black eyeliner and saying things like “Country listeners are a bunch of rednecks; we don’t need ‘em.” Not a good move. Always remember where you came from and never insult the fans who made you successful.

The classic 1-2-3

Strategy is strategy. Tactics are tactics.

A strategy should never change. Tactics should be changed frequently to adopt the new ideas, new concepts, new opportunities and new media that are constantly coming into the market.

But guess what? Company after company tries to win their marketing wars by constantly changing their strategies. The latest example is General Motors.

Years ago, General Motors had a brilliant strategy. Chevrolet was the entry-level car. Pontiac was the youth-oriented car. Oldsmobile was the high-technology car. (No really, the now defunct brand was cutting edge at one time. In fact, it was the first high-volume front-wheel-drive car.) Buick was the conservative car. (Bankers drove Buicks.) And Cadillac was the high-end, expensive car.

Today, everything is a mess at General Motors. Nobody knows what the individual brands stand for.

What is GM’s entry-level car? Is it Saturn or Chevrolet?

What’s the difference between a Chevrolet, a Pontiac and a Buick? Not much since the brands share many models with the only difference being the nameplates.

In Friday’s New York Times, Ryndee Carney, GM’s manager for advertising and marketing communications said that the divisions “operate independently.”

A big mistake. Strategy should be dictated by the corporation. The divisions should only have the freedom to determine their individual tactics.

If a company wants to be successful with a multiple-brand approach, it should set rigid rules for the strategy of each brand and then let each brand manager determine the appropriate tactics to execute the strategies dictated by the company.

In many categories, a company can be successful with what we call a one-two-three approach.

1. An inexpensive brand.

2. A popular-price brand.

3. An expensive brand.

Today, Toyota is a company flying high. Toyota has built the classic 1-2-3 strategy with

1. Scion

2. Toyota

3. Lexus.

You can distinguish by skills. Black & Decker is the consumer brand. DeWalt is the professional brand.

Or you could distinguish by distribution. L’eggs is the panty hose brand sold in supermarkets. Hanes is the brand sold in department stores.

If you appeal to no one, you are forced to sell your product on price. Not a very efficient or profitable way to run a business. A strong narrowly-focused brand helps to differentiate your product and makes the selling process easier. Strong brands attract consumers; weak brands need to be forced upon consumers with advertising and low prices.

Toyota is has done a brilliant job of building distinct brands. Toyota’s latest brand winner is Scion. In 2005, Scion spent the fewest in media dollars for each new vehicle sold at $284. Toyota was $422 and Lexus was $875. Compare those numbers to some of GM’s cars and you see the power of strong branding. Buick was $751, Saturn was $1012, Saab $2,116.

The introduction of Scion in 2003 has been brilliant. Toyota made great use of viral marketing and event sponsorships instead of advertising to build the brand the buzz surrounding it. Other brands have tried viral marketing, but the technique only works if you have a credible brand, a unique message and can target a narrow audience. Scion has all three and the brand completes the Toyota trifecta.

Read more on how to fix GM in Al’s adage.com column.

As well as Stuart Elliott’s New York Times' GM article on Friday.

Other companies with 1-2-3 strategies:

• Busch – Budweiser – Michelob
• Old Navy – Gap – Banana Republic

Price isn’t the only way to build a unified company strategy. You can distinguish your brands using age, MTV is for hip teens, and VH1 is for hip adults (or hope they are still hip.)

Delta no longer singing a Song

Bankrupt Delta Airlines announced it is discontinuing its discount airline Song. Launched in 2003, Song was created as a hip low-cost carrier to compete with high fliers Jet Blue and AirTran. The flights were all coach and included amenities such as increased legroom, pre-flight meal ordering and a music service.

So why is Delta/Song no longer singing? Well, there are two problems. Delta and Song.

Delta’s strategy was flawed. Song was destined to ring flat. Launching a second brand is a great strategy if you want to establish a new category. But you can’t wait forever to do it. Song was launched way too late. Southwest invented the low-cost category back in the 70’s. Delta had 30 years to match that success and did nothing.

Then there’s the name itself. Song? Crazy names can work for some brands in some categories. Google in search engines. Monster in jobs. Sir Richard Branson makes Virgin Airlines work, but no one else alive can pull off the PR that he can.

But Song was just a crazy name for the sake of being crazy. It has no “crazy” credibility. Just a weak attempt by a bunch of blue suits to establish a new airline. It’s like a super geek trying to act cool at the prom. It just doesn’t fly.

Obviously, Delta has troubles too. The airline is bleeding red ink and has filed for bankruptcy.  All the major airlines have made the same mistakes. Over the years they have chased every new category. As a result each airline has eroded its brand and its business model.

Every time there was a fork in the sky the airlines took both forks. First class and coach. Business and leisure. Domestic and international. Passengers and cargo.

They tried to do everything.

Not every air transportation company is failing. Those that have focused have succeeded. Southwest and Jet Blue in coach travel. United Parcel and FedEx in cargo.

Song is just another chapter in the book of brands that never had a chance to make it off the ground. There’s a chapter on Continental Lite, too. (Believe me, I’m not making this stuff up.)

Continental tried to get into the low-cost carrier business with the Lite name. Look where it got them! Then there’s a chapter on the Shuttle by United, which never got off the ground either. And I expect there will be a chapter on Ted, United’s latest effort to launch a no-frills carrier.

Martha’s Time Out

Welcome back Martha. We missed you. But we knew you’d be back. A woman with your smarts and a brand with your strength couldn’t be wiped out by a measly few months in jail. In fact, your time away is the best thing that could have happened to you and us, the public. It was a much needed time out.

Time outs work wonders for both brands and people. I use them very effectively with my 3 year old son. After being at wits end with my little boy, I make him stand in a corner for a time out at which point I can take a deep breath myself. Afterwards we both emerged refocused and I remember why I love him so much. Like a computer reboot it clears the system and allows to time to forget the bad stuff and look forward to a bright future.

Martha has emerged from her court-ordered time out, better than ever. There have been a few missteps, like Martha’s Apprentice reality show. But overall she is on the right track.

First of all, Martha’s live, syndicated television show is a daytime delight. Live television is the perfect remedy for toning down her image of absolute perfection. Let’s face it, nothing can be perfect on live television and you can tell Martha accepts that. It allows us to see the human side of Martha. And seeing Martha in this new way is marvelous. She is funny, warm, and engaging. And I think with practice she will continue to get even better.

Secondly, Martha has embraced the media. After the scandal she shunned the media and hid out for over a year. But today she is doing countless interviews to promote her brand and image. And Martha is answering tough questions with candor and humility. She’s even poking fun at herself and her situation. All of which have done much to resurrect her image and brand.

The worst scenario would have been a bitter Martha. But it is quite to the contrary. Martha is sweeter, kinder and funnier than ever. She has been able to move on from her situation and get back to business with grace. She has acknowledged her jail time; she has made fun of her jail time. We are now all willing to move forward with her into a new era of Martha.

But there are some problems. Let’s start with the Apprentice. In a word, The Apprentice: Martha Stewart sucks. There is no reason for this show to exist except that NBC needed a show to fill its lackluster line up. Mark Burnett must have snuck Martha some delicious scones into prison in order to get her to sign on to this dud. No doubt Martha wanted to come out of jail with guns blazing. But she has her hands full with the magazines, daytime show and Kmart stuff. And her perfunctory involvement with this show is evident; she obviously can’t stand being on it. It is a lousy show, and now that it will be up against ABC's Lost it is sure to be sunk. The Donald’s over-the-top antics keep his version of The Apprentice afloat, but even then the joke is kind of stale.

The second problem is Kmart. The problem here is the store itself much more than Martha’s foray into sheets and towels. Can’t she just somehow move her stuff into Target? I would much rather see her brand in the bright booming aisles of the chic Target brand. Kmart and new partner Sears are fading stars that do little to help keep the shine on Martha. They need Martha a lot more that her brand needs them. And Martha doesn’t make sense in either of them.

Nobody likes to get in trouble, whether fully deserved or not. But I think Martha’s jail time has brought a conclusion to the issue. Her public time out has done wonders in recharging a powerful brand that is likely to dominate homemaking for some time to come. Women everywhere are cheering your return Martha and embracing your new found humanism. Myself included.

Consider Divergence

Al's article on Divergence appeared in the Financial Times on June 27th. The text is not available online so I thought I would post the entire article. The day will come when the convergence bubble will burst. You would think the recent unbelieveable success of the iPod would encourage people to take a look at divergence. But the craziness continues as they try things like iPod Photo (another recent loser.)

Consider divergence. Financial Times, June 27, 2005.

               Convergence is an example of chaos theory in action.

                The flap of a butterfly’s wing in the Bahamas could eventually cause a tornado off the coast of Taiwan. Or so the theory goes.

                Chaos theory does ring true in the media. One story leads to another and pretty soon you have a full-blown tornado. On September 15, 1992, a butterfly named John Sculley flapped his wings in The New York Times: “John Sculley, chairman of Apple, has been preaching about a post-industrial promised land where four giant industries (computers, consumer electronics, communications and information) will converge.”

                “Mr. Sculley describes an emerging industry that he says will be a $3.5 trillion business within a decade. It will, he says, be more than half as large as the combined economies of the United States, Canada and Mexico are today.”

                Well, the decade has come and gone and the four giant industries have not converged and the $3.5 trillion business is nowhere in sight and John Sculley is no longer with Apple, but the concept of convergence is alive and well and running rampant around the world. Every major player in the high-tech field has jumped on the convergence bandwagon.

                “Put a mark on your calendars, 2005 is the year Sony will fulfill its digital promise by creating a formula that melds electronics, video game entertainment, movies, music and other forms of entertainment, and become more networked and converged than ever before.” Sir Howard Stringer, CEO, Sony.

                “At Intel, computing and communications will be indistinguishable. We will be a true convergence company.” Paul Otellini, CEO, Intel.

                “The whole new ballgame is these worlds (computing and consumer electronics) converging, and that’s a world we’re comfortable in.” Michael Dell, chairman, Dell.

                “The phone and the PC are coming together.” Bill Gates, chairman, Microsoft.

                With the world’s largest consumer electronics company, the world’s largest semiconductor company, the world’s largest personal computer company and the world’s largest software company solidly behind the convergence concept, who could doubt that one day it will all happen?

                With the philosophical support of a dead poet, I could, that’s who. “The best of prophets of the future,” wrote Lord Byron, “is the past.”

                Has convergence ever happened in the past? Not really.

                When the airplane was first introduced, many experts predicted that it would converge with the automobile. (The Wright brothers first flew in 1903. The first flying car story appeared in 1906.)

                As recently as September 26, 2004, The New York Times Magazine ran a four-page story on flying cars. “The age of the flying car may arrive sooner than you think,” said the publication. (How long do we have to have to wait?)

                When television was first introduced, many experts predicted that people would get their newspapers delivered through their TV sets. It never happened.

                When the Internet was first introduced, many experts predicted it would converge with television. Interactive TV became the battlecry. In 1997, Microsoft bought WebTV Networks for $425 million and has since poured more than half a billion dollars into the venture. Results have been dismal.

               Microsoft’s next convergence attempt was the “media center PC.” Watch television, play music, play video and show pictures, all controlled from the homeowner’s personal computer equipped with Microsoft software. So far, the media center PC is a non-starter.

                Microsoft, of course, is a major player in smart phones, the latest and greatest convergence fad. Global shipments in the first quarter of this year were some 10 million units. That may sound like a lot, but keep in mind that worldwide cellphone sales during the same quarter were 180 million. As a percentage of the market, smart phone sales are less than 6 percent.

                As a percentage of the media coverage, however, smart phone hype is something like 99 percent. “Everyone seems to agree,” reported the Economist on August 12, 2000, “that the mobile phone will quickly overtake the personal computer as the means by which most people gain access to online services.”     

                It hasn’t happened yet and it never will. Sure, some people will buy smart phones. Some people will buy anything. But most people prefer divergence devices, not convergence devices.

                The convergence crowd likes to point to the camera phone as proof that electronic products will converge. And it’s true that whenever convenience is a major issue, you’ll find some examples of convergence.

                Does a camera phone take better pictures than a digital camera? No, but it’s a convenient way to take a picture and then email it to someone.

               Currently the hottest consumer electronics product is Apple’s iPod, a classic divergence device. Expected sales this year: 22 million units.

                Will a combination smart phone/MP3 player replace the iPod? Don’t be ridiculous. Combination devices invariably end up as niche, not mainstream products

                The MP3 player demonstrates the natural course of technology. First there were flash-memory MP3 players like the Diamond Rio. Then hard-drive MP3 players like the iPod.

                What started as one category (MP3 player) is now two. (Flash-memory and hard-drive MP3 players.) That’s the way a technology evolves.

                Take the videogame player. It didn’t converge with television (although a videogame player without a TV set is useless.) It diverged. And now you have a new category called portable videogame player. (75 million Game Boys have been sold in America alone.) Next up, the dual-screen portable videogame player, the Nintendo DS.

               Divergence is a law of nature. In his book The Origin of Species, Charles Darwin credits divergence for the millions of species that populate the earth, like the branches of a tree that diverge from a single trunk.       

               Darwin’s genius was in recognizing that species like cats and dogs might have a common ancestor, but that they had “branched off” or diverged in response to environmental changes.

                What happens in nature happens in technology. The computer might have had a common ancestor (the mainframe), but today we also have midrange computers, network computers, personal computers, laptop computers, tablet computers and handheld computers. The computer didn’t converge with another technology. It diverged in response to consumer demands.

               Television might have had a common ancestor (broadcast TV), but today we also have cable TV, satellite TV and pay-per-view TV. Television didn’t converge with another medium. It diverged in response to consumer demands.

                The telephone might have had a common ancestor (the wired phone), but today we also have cordless phones, headset phones, cellphones and satellite phones. The telephone didn’t converge with another technology. It diverged in response to consumer demands.

                It’s probably a lost cause, but a divergence butterfly like myself keeps flapping his wings and hoping another tornado will develop.

Doing deals is not marketing

Carly Fiorina was the ultimate celebrity CEO. She was a brilliant, brash and bold leader who used public relations to build the great Carly brand and become the most powerful woman in business.

But one thing was lacking in her formula for success: good strategic thinking for the company she was running. What made Carly front page news, the merger of Hewlett-Packard and Compaq is what ultimately brought her down.

Carly did deals to do deals. Deals, of course, generate tons of press, prestige and personal profits. But all too often deals spell doom for the company that got dealt the deal.

H-P is a printing powerhouse. H-P invented the desktop laser printer and dominates the market on a worldwide basis. Why would they want to attempt to prop up their sagging personal computer division by merging with Compaq?

Leaders should focus on their core strengths, cut their losses and look for ways to improve upon success. The merger with Compaq did none of that. It made H-P a bloated company trying to compete against Dell on personal computers, IBM on larger systems and Accenture on consulting and out-sourcing while still tying to maintain its lion’s share of the printer business. A difficult and ultimately impossible task.

As a woman, I admire Carly for her drive and dedication. As a brand, I admire Carly for her astute use of public relations to build her brand. But as a marketing strategist, Carly leaves me cold. I do appreciate, however, her gift of another case history that demonstrates the folly of trying to be all things to all people.

Hewlett-Packard is another example of why keeping a brand and company focused is the best advice.

For another insightful piece on H-P and what they should do next read Al’s article on AdAge.com: http://www.adage.com/news.cms?newsId=44306

What should you do if you are #2?

Number 2 Burger King has problems. Greg Brenneman is the ninth CEO appointed by Burger King in the past 15 years.

According to the Wall Street Journal on July, 13, 2004:

“Mr. Brenneman's arrival will come as Burger King struggles to maintain its place as the second-largest hamburger company, after McDonald's Corp. Nearly 20% of Burger King's units are losing money, and three of its 10 largest franchisees have filed for bankruptcy-court protection in recent years. Some restaurant-industry analysts project the company may shutter as many as 1,000 units in the coming years. At the end of last year, it had 7,904 units. Burger King has been steadily closing units as Wendy's International Inc. opens them. Wendy's has 5,761."

So, what when wrong at Burger King? They didn’t do what a #2 brand should do.

A #2 brand should never try to emulate the leader. And that is exactly what Burger King has been doing for decades. McDonald’s strength is with kids who love Ronald McDonald, happy meals, burgers, fries and the playground. Burger King has copied McDonalds with kiddie meals, a magical Burger King and playgrounds. Only to have the kids still flock to the real thing, the original, McDonalds.

A strong #2 brand needs to position themselves as the opposite of the leader.

Listerine: bad-tasting mouthwash
# 2 Scope: good-tasting mouthwash

Home Depot: messy, male-oriented
# 2 Lowe’s: neat, female-oriented

Coke: older people
# 2 Pepsi: younger people

Microsoft: proprietary-software
# 2 Linux: open-source software

Wal-Mart: always low prices, messy
# 2 Target: cheap chic, wide aisles, neat

Mercedes-Benz: big, comfortable cars
#2 BMW: smaller, “driving” machines

Republicans: conservative
# 2 Democrats: liberal
(Rank determined by which party is defending the White House)

One reason third political parties have never done well in America is because the two major parties are almost mirror images of each other. There’s literally no room for a third party.

Republicans are pro-business, Democrats are pro-labor. Republicans are pro-life, Democrats are pro-choice. Republicans are for less government, Democrats are for more government. Etc. Etc. Etc.

If Burger King were the mirror image of McDonald’s there would literally be no room for third-party hamburger chains. But in reality, third-part hamburger chains are flourishing.

Look last year’s per-unit sales of the top five burger chains:

In-N-Out Burger $1,976,900

McDonald’s $1,632,600

White Castle $1,308,300

Wendy’s $1,293,500

Burger King $ 987,100

All three third-party hamburger chains outsell Burger King by a wide margin. In-N-Out Burger by 100 percent. White Castle by 33 percent. And Wendy’s by 31 percent.

The hamburger chains that are doing well are the ones that are as different from McDonald’s as possible.

In-N-Out Burger from California, for example, only sells: hamburgers, cheeseburgers, French fries and drinks.

While Castle is focused on little square burgers affectionately known as “sliders.”

Wendy’s is focused on older kids, a positioning strategy which would have been ideal for Burger King.

Good luck, Mr. Brennenman. You’re going to need it.

When size doen't matter.

What’s the size of the market?

That’s the first question normally asked before the start of any branding program. It’s also the wrong question to ask.

Branding opportunities do not lie in the pursuit of existing markets. Branding opportunities lie in the creation of new markets.

A new brand is like a new species. A new species does not evolve from an existing species. If the “lion” is a brand, you can’t create a new brand by improving the lion. No matter how much you improve the breed, a lion is still a lion.

New species are created by divergence of an existing species. Somewhere in the distant past, the ancestor of the lion (panthera) diverged and a new species was created called a “jaguar.” In the same way, the panthera diverged a number of times creating the leopard, the tiger and other species. That’s the way nature works.

That’s also the way branding works.

If you want to create a powerful new brand, you should look for ways that your product or service can diverge from an existing category. In other words, the best way to build a brand is not by going after an existing category, but by creating a new category you can be first in.

Divide and conquer is the way you build a powerful new brand.

What’s the size of the market? The best answer to this question, from a branding point of view, is “zero.”
To build a new brand, you must overcome the logical notion of serving a market. Instead you must focus on creating a market.