Ries' Pieces

It's the category, stupid.

A leader brand should own a category not just a word.

 

The harsh reality is that consumers care more about categories than they do about brands. It is categories like rubber shoes, DVD rentals by mail, delivery pizza or hard-drive music players that get consumers excited. Not the brands Crocs, NetFlix, Domino’s or iPod.

 

The brand name is just short-hand for the category in the mind. Companies often believe that consumers fall in love with their brands when what they really fall in love with is their categories.

 

For just that reason, leaders many times become the generic for that category. The brand becomes a short-hand device for talking about and asking for a particular category.

 

Need an energy drink? You think and say Red Bull.

Thirsty for a cola? You think and say Coca-Cola.

Could use a facial tissue? You think and say Kleenex.

Want to go in-line skating? You think and say Rollerblading.

 

That is why leadership and new category creation are so important in branding. Getting your brand to be the first in the mind and the leader of a category that matters to consumers should always be your goal.

 

So what happens when consumers stop caring about your category? Your brand is in trouble. Big trouble.

 

Kodak is not in trouble because people don't love the Kodak brand anymore. Kodak is in trouble because people don't use conventional film cameras anymore. Moving Kodak to the digital category makes no sense at all.

     

A Kodak digital camera is like saying a film digital camera. It's an oxymoron.

When your brand owns a category in the mind and your category is in trouble, you need to launch a new brand. You can't save your brand by moving it to a new category.

 

Strong brands are bolted to the ship and if the ship is going down like the Titanic there is nothing you can do to stop it from going down. Better to spend your time and money on launching a new brand.

 

Sometimes your category is flat and you see potential new growth by moving your brand name into an adjacent but perhaps competitive category.

 

This is also very dangerous.

 

Why? Because if a brand stands for one category, then using that name on another category is confusing. It diminishes the significance of that brand in the mind.

 

It also undermines the brand in another way. Every brand needs an enemy. The leader in a category does not have an enemy in its own category; its enemy is usually competition from other categories.

 

McDonald's enemy is not Burger King; its enemy is eating at home. That is why "You deserve a break today" was such a powerful marketing message. It said don't eat at home; take the kids out to eat.

 

Introducing a line of frozen McDonald's hamburgers you could eat at home would be a terrible idea. Yet that is exactly the type of strategy many brands are using today.

 

Here are a few that I found particularly problematic.

 

V8 Soup

V8 owns "vegetable juice" in the mind. Over the last 75 years they have been telling us to have a V8 in order to meet our daily vegetable requirements.

 

But now V8 isn't just a juice; it is also a soup!

 

A vegetable juice has three main enemies: vegetable soup, vegetable supplements and eating no vegetables.

 

Juice is a whole food and much more convenient to consume than soup. They should play up that difference.

 

Introducing V8 soup is confusing. The idea of eating hot V8 juice is not very appealing. Soup is thick; juice is thin.

 

 

Mac & Cheese Crackers

 

Kraft owns "mac & cheese" in the mind. And while you can argue that line extensions like Kraft microwaveable mac & cheese might be a good idea. But expanding into cheese crackers is crazy!

 

It is crazy for two reasons. If kids are craving cheese, they can have cheese crackers or cheese pasta. Cracker brands need to promote crunch while pasta brands need to promote comfort. Two very different ideas.

 

Secondly, the cheese-cracker category is already dominated by a very strong brand: Cheez-Its.

 

 

TagHeuer cellphones

 

One reason younger folks aren't wearing and buying as many watches is that they find them redundant. Since every self-respecting young adult has a cellphone attached to his/her pants or ear, he/she always has the time. Wearing a watch is no longer necessary.

 

TagHeuer owns the high-end sports watch category. But with sales flat and consumers using cellphones instead of watches to define status they are fighting back.

 

With a new watch marketing campaign? No. With a new $5,000 cellphone.

 

When under attack, you shouldn't let your brand fight on both sides of the battle. Instead of knocking out the enemy, you are more likely to just kill yourself.

 

TagHeuser is trying to fight two battles and they are losing both. They are losing the high-end watch battle to Rolex and they are also going to lose the high-end cellphone battle to Vertu.

 

The way to avoid these problems is to think category first, brand second.

How and When to Attack

The harsh political season has spawned a new round of attack ads from marketers. Campbell's and Progresso are sparring over MSG. Dunkin' is doing the taste-test thing to Starbucks. And in the best campaign of the genre, Apple continues to attack Microsoft.

Who should attack and when?

In general, the leader should never attack or name the competition. Instead the leader should promote the category. By attacking a competitor or responding to an attack ad, the leader only legitimizes the competition and the existence of a choice. Neither is good.

If under attack, a leader should instead address any problems with PR. Never with advertising. When Apple says consumers are frustrated with Vista in its advertising, Microsoft shouldn't run ads saying everybody loves Vista.

For two simple reasons. 1) everybody doesn’t like Vista and everybody knows that and 2) Even if they did, any message from Microsoft is not credible because it is self-serving.

Microsoft needs to first fix Vista. Then they need PR to talk about how Vista is fixed. Then they can run advertising saying Vista is king.

The brand that has the best chance to pull off a successful attack ad strategy is a strong number-two brand. A well funded number-two brand positioned as the opposite of the leader can use a targeted attack to gain attention and create controversy. Hopefully, the competition will respond which only gives the attack more legitimacy.

Let’s look at some classic attacks and lessons learned.

Dunkin' Donuts attacks Starbucks

Just this month, Dunkin' Donuts woke up to the fact that Starbucks with 11,000 outlets has taken over as the King of Coffee. The 55-year-old brand is launching an aggressive campaign taking on Starbucks over taste. DunkinBeatStarbucks.com promotes a double blind survey that shows consumers prefer Dunkin' coffee to Starbucks 54% to 39%.

There are two problems with this research. One, the survey compares the old Starbucks brew to Dunkin', not the new milder Pike's Place Roast introduced with much fanfare earlier this year. Second, it is too late. Had Dunkin' done this years ago when Starbucks was first moving into its territory, it might have made sense.

Today, Starbucks is too big and too strong. And Dunkin' is too small and too weak.

Miller Lite attacks Bud Light

When the Atkins low-carb craze swept across the county, it seemed that every brand was suddenly carb counting from low-carb ketchup to bun-less burgers at Burger King.

In one of the most successful carb attacks of the era, Miller Lite pointed out a striking fact that few consumers ever noticed. Miller Lite has 2.6 carbs per bottle. Bud Light has 6.6 carbs.

Who would have thought beer guzzling frat boys would care, but suddenly it was big news. The ads were simple and clear. Bud Light had almost three times the carbs of Miller Lite. WOW.

What made the Miller campaign successful was the fact that Budweiser fought back. They tried to joke about all the exercise one might need to do to burn the extra 4 carbohydrates.

Compounding Budweiser's problem was the fact that its sister brand, Michelob Ultra, was touting itself as an ultra low carb brew. So what is it Bud? Do carbs matter or not?

Bud should have ignored the attacks, hoping that the low-carb craze wasn't going to last (it didn’t.) Miller should have kept up the attacks anyway knowing they were on to something, however small. Unfortunately for them, Miller moved on to the ridiculous Man Laws campaign.

Scope attacks Listerine

This is a good clean fight that has built two powerful brands. A good attack always leaves a valid and reasonable position for the opponent. Listerine vs. Scope is the best example of this.

Listerine invented the mouthwash category over 120 years ago. As one of the first prescription products to go over the counter it was very successful. Over the years Listerine effectively used advertising to expand the mouthwash category by introducing things like halitosis into consumers' vernacular.

Listerine also took a strong negative (bad taste) and used it to its advantage by proudly touting how the bad taste was killing the germs. And a brilliant slogan: "The taste you hate, twice a day."

Except for Scope, all the competition copied Listerine with their own bad-tasting mouthwash brands. Scope attacked Listerine on taste. Scope, the good tasting mouthwash, said people who used Listerine had medicine breath. Yuck!

Two strong positions, two strong brands.

Pepsi-Cola attacks Coca-Cola.

In the early 1980's, Pepsi was on a roll. The Pepsi Generation and Pepsi Challenge taste test where so successful that for a time Pepsi outsold Coke in the supermarket. The slightly sweeter taste of Pepsi performed well in blind one-sip taste tests and the test were a home run in the Pepsi Challenge advertisments. The new generation idea also positioned the taste of Pepsi as what the kids of today preferred.

For awhile Coke took it; then they snapped. Coke put out ads with Bill Cosby defending the not too sweet taste of Coke. But what the Pepsi attacks were really eating away at was the egos of Coca-Cola's leaders. So Coke did the now unthinkable. They changed their secret formula and reformulated Coke to basically win in blind taste tests. Coke made sure it tasted better by doing over 200,000 of its own blind taste tests which proved that New Coke tasted better than Pepsi.

Of course, nobody drinks anything blind. Every consumer drinks the name on the label whether they can see it or not. Less than three months later, Coca-Cola was forced to bring back the original formula. And New Coke was left for the history books.

It just goes to show you. If responding to an attack is a bad idea, changing your product is disastrous. Just think if Listerine suddenly tasted great! Actually they tried that with Listerine Cool Mint, which wasn’t a good direction either.

 

Apple attacks Microsoft.

With over 90% market share, Microsoft's long monopoly over the operating system market makes them an easy target for focused attacks. In an industry where geeks are good, Bill Gates has been the ultimate geek as well as becoming the richest man in the world.

Apple, on the other hand, has always been about cool. When the competition had names like Commodore Pet and TRS-80, Apple pulled ahead with simple designs and strong branding starting with its simple name.

The success of the iPod and now the iPhone brought Apple back from the brink. At a time when Microsoft let its guard down, Apple moved in. But let's not forget that Apple still only has a tiny share of the PC market.

That said, Apple has made a lot of waves over the years with its "Mac vs. PC" advertising.

First of all, they have been consistent. Repeating the same simple message with the same look over and over again makes for effective and memorable advertising. Second, the ads didn't tell people anything they don't know already.

You can’t use advertising to inform consumers or to the change the perception of your brand. You can only use advertising to accelerate your success by reinforcing ideas already in the mind.

Consumers already thought Apple was cool. Consumers already were frustrated with Microsoft. The ads just remind us of that fact. And they remind us there indeed is a choice.

Like Coca-Cola, Microsoft clearly got its feeling hurt by all the Apple love and finally said enough is enough. And like Coca-Coca, they are foolishly responding to the Apple attack ads. This fall Microsoft launched a massive $300 million dollar ad campaign. I’m just waiting for New Vista to be introduced.

In Microsoft's first ads, Bill Gates and Jerry Seinfeld got together and did nothing. It was not funny. They ended up looking like two out-of-touch middle-age rich white guys. Not a good message.

Then Microsoft followed that up with the "I’m a PC" ads showing people all around the world using a PC. They just don't get it. People use a PC because they have to; people use a Mac because they want to.

Obama attacks everybody and wins.

A successful attack has to be big enough, bold enough, credible enough and consistent enough to succeed.

Take the Obama brand. For almost two years, Obama has been on the attack with his consistent message of "change" while first Hillary and now McCain keep trying to reformulate in an attempt to compete. Not a good strategy.

Tonight Obama will air a 30-minute commercial. This makes good marketing sense. The time to pile on with advertising is when you are ahead in the game. When you are behind and have a weak brand, advertising won't do you any good and may even make you look desperate.

So even if McCain had the money and even if he had a terrific 30 minute commercial, it wouldn't help him win the election. Brand first, advertising second.

Hail Mary passes only work in football.

Don't Tinker with your Brand!

 

 

The economy is in trouble. The stock market has gone haywire. And consumers have drastically reined in their spending. These are not good times for most companies and most families.

 

But now is not the time to panic. Now is the time to preserve. To preserve your brand, its meaning and its identity by staying focused.

 

In the face of uncertainty, focus is more important than ever.

 

Of course, it is not easy to be calm and steady amidst such economic turmoil. Your natural instinct is to get out there and do something. To actively tinker with your brand to keep it afloat.

 

Economic markets rise and fall like the ocean. Strong brands will survive no matter what the tide. The key to long-term success is riding the waves up and down using your brand as a steady rudder. You should not attempt to sail against the current. And you should not over steer the ship.

 

Changing your strategy depending on the economy is a trap that many companies fall into. That is the worst thing to do.

 

When times are good, companies often launch expensive versions of their brands like Folgers Gourmet. When times are bad, companies often go downmarket with coupons, discounts and sales.

 

Can't afford the $160 six-course meal at Wolfgang Puck’s Spago anymore? No problem, now you can get cheap Puck eats, like a BBQ Chicken Salad for $6.95, at Wolfgang Puck Express. “Express” is just a code word for cheap, many companies are using it.

 

Brands that stay strong and survive no matter what the weather are those that stay consistent. Your brand has meaning and strength only if it owns something in the mind. And the more you adjust and tinker with that meaning, the weaker your brand becomes.

 

Now that the economy is hurting, the worst thing you can do is to launch cheap versions of your brands or go the sale/coupon route. That just tells consumers your products weren’t worth the high prices you have been charging all these years.

 

Coupons are like drugs; once consumers get hooked they won’t shop without them. Only a fool would go to Ann Taylor Loft or Bed, Bath & Beyond or Cache without a coupon. Several times I've driven by these stores and wanted to shop for something but refuse to go in because I left the coupon at home.

 

Companies need to think long term not just short term. The choice is maintaining the brand or maintaining the sales.

 

Why not both, you may say. Well, when times are great that may be easy to do. But in today’s market that is going to be tough. Everyone’s sales are likely to go down. You need to focus on maintaining your marketshare and your mindshare not your sales.

 

The goal is to preserve your brand, ride the storm and wait for sunnier days that will eventually come.

 

If you only look at your numbers over the next few months, you are going to be in trouble. You need to think like a marketer and view the situation holistically. Because what might allow you to make your numbers today could sink your ship tomorrow.

 

Why should you care about your brand? Why not just look at the numbers?

 

Because your brand is what allows you to make a profit. Your brand is why people are willing to pay more for your product or service. And profits are what make company’s successful. Not just sales.

 

When you destroy your brand, you destroy your company’s ability to make profits.

 

Look at Sony, once a strong a powerful brand that has been decimated by years of reckless expansion. Compare Sony with Nintendo a company that just makes videogames and players.

 

In the last 10 years, Sony has had sales of $658.3 and net profits after taxes of $12.1 billion, or a net profit margin of just 1.8 percent. (In America, that would get a CEO fired. No wonder Sony is now run by an Englishman, Sir Howard Stringer.)

 

In the last 10 years Nintendo has had sales of $48.3 billion and net profits after taxes of $7.5 billion or a net profit margin of an astounding 15.5 percent. (More than eight times as much as Sony.)

 

No wonder Nintendo is worth more than twice as much on the stock market as Sony, a company more than 13 times as large.

 

Sony is worth $26.5 billion. Nintendo is worth $54.1 billion.

 

Sony is a well-known but weak brand. Nintendo is a strong, focused and profitable brand.

 

I know it is ugly out there in the marketplace, but do your brand a favor and don’t tinker. Stay true, stay focused and everything will eventually be alright.

 

 

 

 

 

 

Don't forget to become a fan of Al Ries on Facebook!

Line Extension Intervention

Line extensions are like drugs. And like drugs which we all know can be deadly, the long term risks are often overlooked for some short term fun.

 

 

A nightclub filled with young, beautiful, successful people high on cocaine doesn’t look so dangerous it looks like a rocking party. That first time club user never imagines becoming a junkie living on the street. But it often happens. And what seemed cool initially can take over your life destroying everything you once had.

 

 

Line extension works the same way. A little can feel great but soon you are addicted. The addiction takes over and you can’t stop. You end up losing your category, marketshare and meaning. For some it happens quickly for others is can take years but eventually you wake up and you have a brand like Chevrolet that doesn’t stand for anything anymore.

 

 

Why don’t people heed the danger of drugs or line extensions? Because drug use and line extension abuse have been romanticized. Line extensions get glorified in the trade press the way drug use gets glamorized in the movies.

 

 

You read about all the new and exciting line extension launches but rarely read about the abysmal results. Movies are filled with alcohol, drugs and cigarettes yet rarely address consequences from these vices.

 

 

So we the masses are left with a false impression that everybody is doing it, it’s fun and nobody ever gets hurt. Therefore, the few straight-arrows at the party not partaking in the fun feel like losers.

 

 

But like the losers in high school that studied and are now successful, rich and powerful; the losers that don’t line extend will be the ultimate winners in the marketplace.

 

 

Today, more than ever, the pressure is on to just maintain market share and sales numbers. So the temptation for a quick line-extension bump is hard to resist. But remember, that short term rush isn’t worth it, when you come down from the high in a few months time your branding problems may be far worse that today. It takes guts to just say no. But in the end you’ll be glad you did.

 

 

Big food companies in particular are addicted to line extensions. Corporate culture in these company rewards line extension internally. Brand managers spend an average of 16 months on a brand so an easy way to look busy and pad your resume is to launch a line extension. The problems caused by that extension are left to the unlucky guy or gal who gets the brand next.

 

That’s why new powerful brands are not being launched by big companies, they are being launched by entrepreneurs. VitaminWater would have never been launched by Cola-Cola. A company who had the bright idea to launch Diet Coke Plus with vitamins.

 

 

 

Coca-Cola had to buy VitaminWater for a pretty penny. Why can't the world's best beverage company launch a successful new brand itself? Because they only do line extensions and me-too products. It is a tragedy.

 

 

But you can’t blame the addicts, corporate culture pushed the idea on them and now they are hooked. Line extension is a disease. We need treatment for these people. Perhaps they should be locked up and forced to read Ries books.

 

 

The really scary thing is that line extension addiction has hit an all time high. Walk down the aisle of any supermarket and you can see the carnage. Almost every grocery brand is a mess. The shelves are crammed with too many varieties, flavors and extensions. The average consumer is overwhelmed, confused and usually disappointed.

 

 

How many of you are like me and came home with the wrong product? Bought caffeine-free Coke instead of Diet caffeine-free Coke? I have bought the wrong kind of Cheez-Its, Oreos, Cheerios, Campbell’s soup, Gatorade, Tide, Crest, Kraft cheese, Thomas’ English muffins and Coca-Cola more times than I would like to admit here. I am smart, I am careful, and even I have a hard time shopping.

 

 

Then imagine the disaster when I send my darling husband to the store. Even with a list in hand, the poor guy has no idea what to buy. I put Goldfish, English muffins, Oreos, Tide and Dannon on the list and the man is at a total loss and needs several phone calls home to get help. And even with all that he comes home with the wrong stuff and gets yelled at.

 

 

I say it is time for an intervention. You think America’s addiction to oil and drugs is bad, just take a look at our addiction to line extension.

 

 

Next time your kids rush to the side lines for some Gatorade ask them “Will that be with Tiger or without?”

 

 

Tiger is a line extension of Gatorade! It is just about the craziest thing I have ever seen. What executive green lighted this idea?

 

 

I think we need an intervention at many corporations, I would start with the executives at Gatorade. Perhaps it could be pitched as the next great reality show: Line Extension Intervention.

 

 

I'll lock up executives up in brand rehab and make them follow my 12-step program.

 

The Twelve Steps of Line Extension Anonymous 

 

Step 1: Admit our company has become powerless over line extension and that our brands have become meaningless.

 

Step 2: Believe that a brand guru greater than ourselves can help bring sanity and return brand focus.

 

Step 3: Make a decision to turn our brand over to the care of the teachings of focus.

 

Step 4: Make a searching and fearless inventory of what has weakened our brand.

 

Step 5: Admit to ourselves, our colleges and our shareholders the exact nature of our line extension wrongs.

 

Step 6: Be ready to remove every ridiculous line extensions from the brand portfolio.

 

Step 7: Ask distribution to take these line extension disasters off the shelf.

 

Step 8: Humbly ask consumers to forget our brand sins.

 

Step 9: Make direct amends to such people who got stuck buying terrible line extensions when possible.

 

Step 10: Continue to take a brand inventory to maintain focus.

 

Step 11: Practice daily affirmation of focus and promise to stay true to the mission of having a brand stand for something in the mind.

 

Step 12: Have a spiritual awakening as the result of these steps and take this message to other line extension addicts.

 

May the Focus be with You!

McCain vs. Obama. Coke vs. Pepsi

By historic standards, the next president of the United States, should most definitely not be John McCain.

With an unpopular two-term president and a sluggish economy, the candidate from the incumbent party is typically dead on the campaign trails, the polls and the ballot box. But not this year.

Even though he is from the incumbent party and even though he has been in Washington for over 20 years, McCain is unique because he can still credibility claim to be a reformer and an agent of change.

A year ago who would have guessed we would be where we are today and that the race would be so close, so interesting and that the two contending candidates would be Obama and McCain?

Very few.

A year ago, who would have guessed there would be a woman on a ticket but not on the Democratic side. Not even Sarah Palin would have guessed it would be from the Repulican party and that it would be her.

One thing has always been clear, this election is about change. Change is what the voters crave most. The nomination of both Obama and McCain make that perfectly obvious. Whoever can effectively sell his brand of change will win in November.

Both candidates have credible messages of change, both have build strong brands and both have avid followers.

  

This is a battle of Coca-Cola vs. Pepsi-Cola. (Neither is weak like RC Cola or Mike Dukakis.) About half of the people prefer Coke while the other half prefer Pepsi. It is the sign of two powerhouse brands when there is no room left for a third brand. 

McCain is Coca-Cola. As part of the incumbent party that has dominated the White House for the past fifty years, he is the real thing. He embodies courage, duty and honor. As part of a legendary Naval family McCain has a long history serving our country, his fighting in Vietnam and years spent as a  POW are legendary. His reputation has always been as a maverick. McCain's strength is his experience. His weakness is that he has been around forever; he is not new and different.

Obama is Pepsi-Cola. Obama is the choice of a new generation. Pepsi said, "You don't want to drink what your parents drank. You are the Pepsi Generation!" With a whole new taste and look, Pepsi stormed into the cola aisle just as Obama stormed onto the political stage. Obama is new, young, different and embodies the idea of change and hope. Obama's strength is that he represents the choice of a new generation. His weakness is that not everybody wants a new generation to take over.

How can either McCain or Obama become President? I'm going to lay out my best plan for each not as an activist or a supporter but as a marketing strategist.

   

What should McCain do?

Whether you are selling popcorn or want to be the next president the key to success is owning a word in the mind. McCain's word is "maverick." He needs to reinforce and repeat that word as often as possible. His signs, commercials and speeches should constantly and consistently talk about his maverick reputation and how Washington needs a maverick to deliver real change.

Consultants love "attack ads." But attacking your opponent and calling him/her names is not the way to look like a winner, you look like a whiner.

A better idea is to start your dialog with an idea that already connects with what's in the voter's mind. State the obvious, focus on your word, give your position then reverse it for your opponent.

"I'm for cutting your taxes. My opponent is for increasing your taxes."

"I'm for less government. My opponent is for more government."

"I'm for straight-talk. My opponent is for highfalutin talk."

McCain definitely picked the best possible choice for VP. Sarah Palin reinforces his maverick position, and comes from as far from Washington DC as one can get and did I mention she is a woman. What more could you want?

Well how about that fact that she is a fabulous speaker, a hockey-Mom, young, attractive and conservative.

McCain needs to stop talking about "Country First." This was the slogan of the convention and has been dominating the rally signs. Forget it.

A good slogan is one that can be easily and credibly used in reverse. Does anyone believe Obama puts "Country Last"? Or that Obama is unpatriotic? (Sure a few right-wing nuts might, but they were already voting for Republican.) The reality is: everybody that runs for president loves America.

McCain needs to stick to talking about being a "Maverick" in order to win.

 

What should Obama do?

You got to hand it to Obama. Through excellent branding strategy, he was able to bring down the greatest living political brand in the business: Clinton.

How he beat Hillary Clinton was simple. He focused on one word, one message, one sign: "Change." Hillary waffled from "experience" to "change" to "ready" to "solutions." She changed message as often as she changed her pantsuits. Not a good strategy.

Obama has become a political superstar. He combines charisma, presence, eloquence, style and message.  His words inspire. His words give people hope. He has connected to the youth of America like no other leader of this generation.

Like McCain, Obama should refrain from negative attacks. And he should forgot about attacking Sarah Palin at all. Attacking the VP candidate just makes him look bad.

The key to running against the incumbent party's candidate is to say "Who wants a third term of this crummy guy's policies?" The problem is that McCain was not Bush's VP. The problem is that McCain is known as a maverick and has come out strongly against Bush so the third Bush term putdown has not stuck.

"No More Bush" gets people excited doesn't help Obama beat McCain.

Obama needs to run against the Republican party. Obama needs to say we CAN'T have four more years of Republicans in the White House. We have to get the Republicans out of the White House in order to bring about real change.

We need a new generation to come in and clean Washington up. Thank you Senator McCain, I look forward to working with you and praise your spirit of change, but now it is the Democrats turn to take charge.

Obama's word is "change." He has been so effective for so long because he uses change in every speech and every sign. He has been consistently and doggedly focused on change.

Obama needs to repeat his message of change but add the idea that electing a Republican would mean there is no change. In order to achieve real change we need to get the Republicans out of the White House.

Obama should say:

"I'm for change in Iraq. My opponent is for more of the same."

"I'm for having a Democrat in the While House. My opponent would mean just another Republican."

"I'm for changing the tax code to help the middle class. My opponent is same tax breaks for the rich."

Obama had a lose/lose/lose choice for picking a VP. If he went with Hillary, he might get the White House, but he would be stuck there with two people he cannot stand. (and who could blame him)

If he went with another young outsider, he would be labeled the ticket with no experience. If he went with (as he did) a respected, boring insider who has been around forever, he would get labeled as not being for real change.

I think he picked the best of three terrible options. With his choice of Sarah Palin, McCain exploited Obama's choice.  But in the end the candidate at the top of the ticket is the one who wins or loses the race.

This year's race is a classic battle between Coke & Pepsi, between McCain & Obama. But unlike soft drinks, you can't have both. Only one man will win.

The time for change is now.

  

No, I’m not talking politics, I’m talking branding. And I’m talking specifically about my brand, my blog brand.

Branding is not easy. Sometimes you don’t get it right and you need to make a change. For me, the time for change has come. Let me chronicle for you how, when and why I made the change and why you might need to make a branding change, too.

The beginning

In the beginning, many companies are so excited about the potential for their new product or service they believe the name won’t matter. As long as they have the latest and best technology, beverage, service or widget on the market, consumers and the media will knock down their doors.

Sometimes they are right. Bud Light, Treo, Quiznos, Southwest might not be the best names, but consumers were so excited about light beer, smartphones, toasted sandwiches and cheap airline tickets that these brands rose to great heights.

But in the long run, competitors jump in, categories get crowded, the playing field gets leveled and your brand name becomes increasingly important. So much so that, in the end, the main difference between you and the competition usually comes down to the name alone.

Back in the summer of 2004, when the Internet was a buzz about a new thing called blogging. It was then that I decided I needed to jump in. I asked Seth Godin if he enjoyed blogging and if it was helping his brand. Of course, he said yes. So I immediately signed up with TypePad.

When you register your account, the first thing you need is a name. A name that cannot be changed. Luckily I used Ries, a name that I would likely never want or need to part with. But the name I gave my blog was a poor choice. I was only thinking short term; I had a new book coming out “The Origin of Brands” so I saw the blog as a way to promote the book. What I should have done is to select a name that would have made the blog a brand of its own apart from a simple book promotion.

The middle

Like many brands, my blog has had moderate success mostly because I was an early entry into the blogosphere and because I tirelessly promote it and because it gives the unique Ries perspective. But that success is hindered by my poor naming choice. Today, there are millions of blogs, many with fantastic names. Just having a blog doesn’t help you, you need one with a great name.

It happens often. A great idea will initially take off, but will eventually stagnate held back by a poor naming choice.

Southwest is a good example. The pioneer in low-cost airlines, they have grown rapidly over the decades. Today they are a national airline and they face tough competition from JetBlue and AirTran. The problem is the name. With a name like Southwest, you don’t think about using them to fly from New York to Miami. Today, they need a national name.

For me, The Origin of Brands, was a fine name to start with. It strongly linked to my book the way Southwest’s name linked to its original location. But sometimes you need and want to move beyond that.

The end

Even if your brand name is not great, sometimes it is not worthwhile making a name change. Changes are hard, they cause confusion, they are time consuming and they are expensive.

The deciding factor on whether or not to make a change is this: What would you change your name to?

Your name is only as good or as bad as opposed to what? Like so many other issues in marketing, naming is not black or white. Names are not good or bad, they are all shades of grey.

Changing your name from one mediocre name to another mediocre name is unlikely to help you.

It is only when you find a name superior to your current name that it pays to make a change.

In 1948, Rich DeVos and Jay Van Andel called their new multi-level marketing distributorship Ja-Ri (get it Jay and Rich.) Clearly this was not a powerful name. Wisely, in 1963 they changed it to Amway. The company went on to dominate the category and today operates in 80 countries around the world today. I don’t think Ja-Ri would have ever become that successful.

In 1999, with the rise of the internet, Amway launched the internet-focused brand Quixtar. Then in 2001, all the North American distributors changed from the Amway name to Quixtar. Quixtar? Are you kidding me? Apparently not.

This is an example of going from a fine name to a terrible name. Not good strategy. The better move would have been to just move Amway to the Internet and to forget the second brand strategy.

Not every company is in a position to successfully launch a second brand. Three airlines, Song, Ted and Continental Lite didn’t get off the ground either. Note: None had decent name.

Initially, The New York Chemical Manufacturing Company make chemicals like alum and saltpeter. In 1824, the company entered the banking business and by 1851 left manufacturing altogether although they kept the Chemical name.

By the early 1990s it was one of the richest and most successful banks in the U.S. But after 173 years you don’t just change your name on a whim. One great strategy that helps with a name change are mergers and acquisitions. You have a bad name, just merge with or acquire a company with a better name and use that. In 1996, that is exactly what Chemical Bank did. It acquired Chase Manhattan and changed from Chemical to Chase.

My original name, The Origin of Brands has remained for four years, because I could not think of a better one. Some website names I considered were taken, Branding Babe Blog, for one. But on second thought I don’t think that would have been a wise choice.

Last week it occurred to me what the perfect name would be. Ries’ Pieces. Pieces is a great triple entendre that describes my blog posts, TV appearances as well as the correct pronunciation of my name.

Of course, there is one problem. You can’t use apostrophes and other punctuation marks in a website address. But you can cover your bases by buying close but incorrect names and redirecting them to your main site. I got RiessPieces.com and RiesesPieces.com to cover my new name and address RiesPieces.

No name is ever 100% perfect, but Ries’ Pieces is a name that I think is worth moving to.

Have you ever changed your brand name? Are you thinking about it now? Send in your thoughts, comments, questions and suggestions.

Olympic Glory and Shame

There is one thing for sure, nothing is for sure when it comes to the Olympics. The Olympics is a place where even the best laid plans can collapse in under a tenth of a second, by the whim of a judge or by a nagging injury.

Like its sporting counterpart, Olympic marketing is an expensive gamble that sometimes pays off big but many times doesn’t at all. For all the happy faces going home with gold around their necks there are many more heads hanging low. The Olympics are a winner takes all competition, where second place is no place because winning silver really means losing gold.

But as the old saying goes, you can’t win it if you aren’t in it. For mass marketing giants like Coca-Cola, Nike, McDonalds and Visa the opportunity to be an Olympic sponsor is too valuable not to take a chance on and too important to let a competitor get a hold of. So who won marketing gold? And was it smarts, money or luck that made the difference? Read on to see.

 

After Michael Phelps stunning sports perfection of 8 gold medals in 8 events, it would seem so easy to plan an Olympic marketing success. Find an athlete destined for gold medal glory and then pay them handsomely to endorse your product. Launch a massive marketing campaign tying the athlete, your brand and the host country to a powerful message to increase brand awareness and loyalty.

But just like competing in an Olympic event, it is easier said than done. I always thought badminton was a nice leisurely sport but after watching the women’s final where two Chinese athletes swatted the birdie to near extinction, you realize the Olympics takes everything to the extreme and that includes marketing.

Michael Phelps became at sensation at the 2004 Athens games winning six gold medals but there was nothing to guarantee that he could even duplicate that in Beijing let alone break the Spitz record. In fact, after a 2005 drinking and driving guilty plea you might have assumed sponsoring him could be rather risky.

 

Liu Xiang also became a sensation at the 2004 Athens games where he became the first Chinese man to win an Olympic gold medal in track and field. Liu quickly became the most celebrated and sponsored athlete in China. And Lui’s event, the 110-meter hurdles, was the most highly anticipated event at the Beijing games. Some fanatic fans even believed the Bird’s Nest stadium was built with Lui in mind as the place where he would defend his title and win gold in front of the home crowd.

For China, Liu is like Tiger Woods and Michael Jordan wrapped up into one pretty package. A young, handsome, charismatic athlete who overnight won the heart of a nation and gained the interest of sponsors worldwide. No Chinese athlete has been marketed more aggressively or more successfully than Lui. Nike, Coca-Cola and Visa are all major sponsors of Lui and have invested millions in endorsement contracts and promotions centering on him. His face is plastered everywhere in China currently. And had Lui won gold at the birds nest, it would have been high fives all around.

But while team Phelps experienced the extreme high of Olympic glory. Team Lui experienced the extreme low of Olympic shame. Sadly Lui limped off the field Monday unable to even compete in his qualifying heat ending the dream for him, his fans, his country and his sponsors.

The games aren’t over yet, but the biggest win certainly goes to Michael Phelps and Speedo. The combination of Phelps’s record breaking medal count along with Speedo’s revolutionary new suit the “LZR” racer which dominated in the pool (nearly every gold medal swimmer wore one) meant a one-two knockout punch for the brand. Speedo’s $1 million dollar bonus paid to Phelps for winning 7 gold medals was money well spent for all the extra favorable PR Phelps, the LZR and swimming received.

In fact, Speedo originally had planned on a major advertising campaign last fall to introduce its new LZR suits, but wisely held off betting on major buzz coming off the Olympics. With Phelps and his 8 gold medals as the spokesperson now is the time to spend heavily on marketing. (It is just too bad summer and swim season is over. Maybe Speedo can ask to have the Olympics moved to May?)

Speedo first signed Phelps when he was 16 years old. In 2003, they signed him to his current deal which included the million dollar bonus and runs through 2009. Signing with an athlete before they are famous and staying with them along the ride is the key to long-term endorsement success. Jumping on the Phelps bandwagon now looks disingenuous on Phelps part and the companies.

Phelps and his agent need to resist the temptation to cash in quick on his fame. Too many endorsements for too many products will undermine his most valuable asset his honesty. Phelps promoting Rayovac batteries, for example, would be just as horrible for him as it was for Michael Jordan.

I actually cringe at the possible endorsement deals he might do? Can you think of any funny ones he should avoid?

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.

LinkedIn: Dull by Design

The way to build a powerful brand is not by emulating the leader and trying to be better. History proves time and again that the best strategy for going against the leader is to do the opposite.

 

Since the rise of MySpace we have seen hundreds of copycat social networking sites popup. They all target the same juicy younger demographic. A better idea is do the opposite. If MySpace is for younger, cool kids; make your brand for older, geeky adults. That is exactly what LinkedIn did.

 

But first let’s look back to see how the social network category started. MySpace got into the mind first by focusing on music. MySpace was the perfect place for independent artists to share music and for fans to congregate. It has been reported that 8 million artists have been discovered by MySpace. Young people with endless hours to waste decorating their MySpace pages made the site the place for online socializing.

 

The initial focus on music was the difference between MySpace and a host of other brands like Friendster, Multiply and others that were also vying to be the first social-networking site in the mind. Music gave people a reason to choose MySpace over the others.

 

At the beginning of any new category there are usually many players. It is like conception. After sex, you have millions of sperm racing to get to that egg to fertilize it. Some are too early, some are bad swimmers, some get lost, and some are lazy. Only one lucky and smart sperm makes it and bam the race is over. The winner is chosen; fertilization is complete. No more winners.

 

The same thing happens in branding. The sex is the exciting new technology, idea or service. The sperm are the initial companies that want to build a brand. The egg is the consumer’s mind. Conception occurs when one company comes up with the right strategy and the right name at the right time.

 

Eight years ago, Creative Technology was the first to launch a hard-drive MP3 player, the Creative Nomad Jukebox. Creative got onto the market first but never go into the mind. Today, of course, Creative is nowhere and Apple’s iPod dominates the market and is seen as the originator of the category.

 

Why did iPod win? iPod won because it had the better name and a focused product line and strategy. Creative made everything: flash-memory MP3 players, hard-drive MP3 players, speakers and a whole host of other electronic products. Apple’s iPod focused on the hard-drive MP3 player and hammered home the idea that it held over 1,000 songs. The iPod got into the mind first and the rest is history.

 

History is actually filled of stories like this. To succeed, brands don’t need to be in the marketplace first; they need to get in the mind first.

• Yuengling was the first beer on the marketplace, but Budweiser was first in the mind.
• Duryea was the first automobile on the road, but Ford was the first car in the mind.
• MITS Altair 8800 was the first microcomputer, but Apple was the first microcomputer in the mind.

In social networking, MySpace was first in the mind and like first-born children has been wildly successful. A recent study showed that first-born children are smarter than their siblings and more likely to become CEOs. But like in any family, there is always room for a few more kids.

 

The second-born brand in the mind was Facebook which was not simply a copycat of MySpace. Facebook narrowed its focus to a small and exclusive market: college students. In fact, if you weren’t a college student you weren’t allowed to be a Facebook member.

 

Good things happen when you narrow the focus. For one thing, a narrow focus gives you an opportunity to use a unique and distinctive name. Facebook is the word used to describe the handout given to most college freshman when they arrive at orientation.

 

New students are given a book filled with all the photos, names, hometowns and majors of the entering class. The analogy was the perfect way to describe the site and what it was meant for. Plus Facebook’s clean and simple design distinguished it from the cluttered look of MySpace. The opposite of any strategy usually works quite well.

 

Today, of course, Facebook is open to everybody. But not starting that way was a wise move. It is like exclusive distribution which is also very effective in establishing a brand. (Exclusive distribution gives a retailer a reason to stock and promote a brand.)

 

Now we have the third child, LinkedIn, who is growing up fast as younger siblings always seem to do. But LinkedIn is not your teenager’s social networking site. It is just the opposite. It is intentionally dull and boring with no video and just a few photos.

 

In terms of a brand with profit potential, I think LinkedIn has the best chance for success. It may not be sexy but it serves a function and appeals to a broad and distinctive market with deep pockets and who are not fickle in changing brands like teens.

 

LinkedIn is the first professional social networking site for businesspeople. The private company just raised an additional $53 million in capital which currently values the company at $1 billion. More valuable than MySpace which News Corporation paid $580 in 2005 but less than the $15 billion value assigned to Facebook last year.

 

More important than its current valuation is the fact that the LinkedIn brand is solid because it was built on solid branding principles. LinkedIn did the opposite. It’s a social network for the serious, professional white-collar worker who wants to get ahead by staying in touch. Getting a job usually comes down to who you know not always what you know.

 

In terms of size, both MySpace and Facebook are huge. Each has 115 million users worldwide, while LinkedIn has only 23 million. But in the end, LinkedIn could represent a much larger and far more lucrative market than the pimple-popping teens at MySpace and Facebook. These two sites attract younger people who have little money and move on to the next big thing much more quickly than us older folks.

 

There’s a big reason why everyone over 30 should be on LinkedIn instead of MySpace or Facebook. Using Facebook at work is likely to get you fired. Using LinkedIn could land you in the corner office. It’s the revenge of the nerds at its finest.

 

 

Join my LinkedIn network today!

 

Ni hao from China!

  

Ni hao! Hello from China! Above is my name Laura Ries in Chinese. As I sit here in Guangzhou, China after also visiting and giving speeches in Beijing and Shanghai this week, I am left to wonder about the future of Chinese brands in the world.

As a first-time host of the Olympic Games this summer and talk of being the next global superpower, China is on top of the world. It is a place of great excitement, potential and opportunity. But living up to its potential won’t be easy.

Japan, the land of the rising sun, was predicted to take over the world in the 1980s. It didn’t happen. Despite a reputation for high intelligence, hard work and high quality goods, Japan wasn’t able to capitalize on its potential because it forgot to build powerful brands.

There are a few exceptions in Japan like Toyota, Honda, Nissan and Nintendo. But other than a handful of companies, Japan is line-extension society. A country of companies that make everything and put their name on everything. Brands like Mitsubishi, Hitachi and even Sony have become meaningless brands in the mind. And despite huge sales figures they fail to make significant profits due to the weakness of the brands.

When you don’t have a powerful brand, you are forced to sell on price. And when you sell on price, it is hard to make money.

The good news, in my opinion, is that China will experience rapid growth in the next 7 years, like Japan did in the 1980s. The bad news is that the Chinese economy will eventually hit the wall much like Japan’s did in the 1990s. Right now because of its cheap labor costs and reputation for quality, China has an enormous advantage. But as the country prospers, wages will go up, prices will go up and the country’s low-cost export business will move to Vietnam and other cheaper places.

China’s key to maintaining economic growth is to take advantage of this attention and low-cost production right now and use it to build powerful brands. Brands that own something in the mind. Germany is perhaps the most expensive place in the world to manufacture anything, but the country is successful because they build powerful brands like Mercedes-Benz and BMW.

So did I see the rise of powerful brands in China? Nope. Exactly the opposite. It is a branding mess over here. Everybody makes everything. Just like they do in Japan.

Chang Hong was the dominant brand of television sets. So what did they do next? Expanded. Today Chang Hong makes refrigerators, air conditioners, semi-conductors and commercial electronics. Today they make everything but money. Ten years ago they had net profits of 2 billion Yuan. Today they are losing money.

Chunlan was once China’s largest air-conditioner manufacturer. Then they expanded into motorcycles, automobiles and heavy equipment. And after three years of negative revenues and losing 400 million Yuan last year, they were delisted from the stock market. It would be like Harley-Davidson making fork lifts, cars and air-conditioners. It would sound crazy in America, but it is happening every day in China.

There are a few exceptions. Gree focused on air-conditioners and become the country’s leading company. While the competition expanded and lost focus. Gree built a brand and today dominates the market. Unfortunately, examples like Gree are hard to come by. Because if China can get its branding right, the country will become a force to be reckoned with on the world stage for decades to come.

One brand with huge potential is Chery. With oil costs soaring to over $130 dollars a barrel and greater concern for the environment, the future for compact cars is colossal. There is a giant hole in the mind and in the marketplace for a compact, low-cost car brand. And China is the perfect country to fill it. They even have a car brand that is ready to roll, the Chery.

The wildly successful Chery QQ fits the bill on all accounts. Compact, cheap and chic. The problem? Chery isn’t staying focused. We read in the papers that Chery engineers are now at work on developing 40 or 50 new car models at least 10 of which could be ready for production this year. Building bigger and more expensive cars will totally undermine Chery’s compact position in the mind. Not to mention the fact that building new models will take the company’s attention away from improving the QQ.

It is exactly what happened to Saturn. At first, Saturn was a wildly-successful a one-model, one-price, affordable, compact car. Then they expanded into bigger, more expensive Saturns. The brand today is a weak brand losing substantial amounts of money. You can just build a brand and forget it. You need to constantly update and stay on top of it. When you expand the brand, it takes time and resources away from the maintenance task.

In just a few weeks the best athletes in the world will travel to Beijing to compete in the Olympic Games. How do you get to the Olympics? How do you get to be the best athlete in the world? By training for many different events? No.

You get to the Olympics by practicing one sport, one event, one distance, one stroke, your whole life. Winning a gold medal takes discipline, commitment and focus. Winning a gold medal in the Branding Olympics takes a similar commitment.

Shanghai speech.

 

The Lion & Al. Not sure who is scarier.

Our articles appear monthly in China Marketing magazine.