The Origin of Brands Blog

Great Product, Lousy Brand

 

 

Just because you have a great idea and make a great product (or deliver a great service) doesn’t mean you will build a powerful brand and enjoy great success. This sad truth sometimes becomes personal when a product I love makes egregious branding errors. In fact, it really makes my blood boil.

 

I am an avid walker. I love walking in New York City going up the avenues and through the park. I love walking in Paris to the Eiffel Tower and through the Tullieries. I love hiking in the mountains of Austria and around the volcanoes in Maui.

 

I am also into fitness and new exercise trends and gadgets. I have all sorts of wobble boards, weighted balls, body bars, ankle weights, abdominal wheels and yoga mats. I also have an elliptical machine, Rollerblades,  an inversion table and now MBT shoes.

 

I love my MBT shoes, but their branding stinks.

 

The point of a brand name is to get into the mind of the consumer. The better your name, the easier it is to get into the mind. Think BlackBerry.

 

The point of a category name is to define the niche your brand occupies in the mind. Ideally you want to be first in a new category. This will give you credibility, authenticity and instant leadership. Think Red Bull and energy drink. If you aren’t first, then you want to be the opposite of the competition. Think Monster, the 16-oz energy drink and the No.2 brand.

 

The point of a tagline (or positioning statement) is to give consumers a verbal message to share with one another. The test of a good tagline goes like this: If somebody asks you why you bought the brand will the tagline explain it? Does it use words consumers would use? Does it even make any sense?

 

Why did you buy Barilla pasta? Because it is “Italy’s #1 pasta.”

 

Why did you buy a Toyota? Because they are “moving forward?”

 

While I can see the Barilla conversation happening. I could never see the Toyota one happening. Don’t Toyotas go in reverse anymore?

 

MBT fails on all three counts.

 

 

The name: MBT.

 

Launching a brand with meaningless initials is the kiss of death. While companies like IBM and GE might be known by their initials, they actually stand for International Business Machines and General Electric. They can get away with the shorthand because they are leaders and have been around forever, IBM has been around for 84 years and GE 116 years. When you are that old and that established, you can use initials. Note: neither company ever changed their name to the initials.

 

Nobody knows what MBT stands for. When nobody knows your name, you can’t use initials. It just makes a bad name worse. Initials are much more difficult to remember than a name and initials communicate nothing about your brand.

 

What MBT stands for is Masai Barefoot Technology. Of course the full name is no good either. I doubt any tribe in Kenya would be running around in $250 shoes. And the shoes are so big and so klutzy-looking that calling them “barefoot technology” is non-sensical even if it is true. The research might say they re-create the positive effects of walking barefoot, but they don’t give that impression at first glance. And perception is everything.

 

Furthermore, they don’t even own mbt.com! The brand’s website is swissmasaius.com. If you have a bad name, at least you should own the bad name website.

 

What MBT needs is a name like Crocs. Simple, different, memorable and a name alludes to the product. If Crocs were called PSTs (Plastic Shoe Technology), they would never have become the billion-dollar brand they are today.

 

 

The category: What is the category? Nobody knows.

 

MBT calls itself “physiological footwear.” Huh? What is that? Nobody is going to use that as a category name. What kind of physiological footwear do you wear? I don’t think so.

A category name should contain simple words and be easy to understand. And don’t trademark it. If you want to get big, you need your category to get big. And for your category to get big, you need competition.  As long as you are the leading brand, having a flock of followers behind you is a good thing.

 

What are some good category names: energy drink, sports drink, energy bar, expensive coffee, wireless email, safe car, packaged salad, performance underwear, natural cosmetics, organic groceries. Of course, the brands that dominates these categories are the brands that introduced the category (Red Bull, Gatorade, PowerBar, Starbucks, BlackBerry, Volvo, Fresh Express, Under Armour, The Body Shop and Whole Foods.)

 

In this emerging shoe category there are several brands and several words floating around to describe them. There is no consistency and no one idea to describe the category that makes sense to consumers. This is going to be devastating to MBT. Some call them “rolly shoes.” I call them “rockers.” Others call them wobbly or balance shoes. The names are all over the place.

 

Another company makes a flip-flop version called FitFlop which it says has “patent-pending micro-wobbleboard technology.” Walking with wobble boards on my feet doesn’t seem like a safe idea. Nor a good branding idea.

 

All this chaos undermines the potential of the category because nobody understands it or knows what to call it. While MBT has avid fans like me, they don’t have a clear message for the general public or the media to spread the word.

 

In addition to the confusion over the category name, there is confusion over the benefit of the shoes. MBT’s benefits range from the ridiculous “cellulite removal” to the relatively tame “improved posture.”

 

A brand should have one clear benefit. The benefit like the category name should be simple, specific, understandable and believable. For MBT is could be: “Makes every walk a workout.” Or “Get 30% more workout in every step.” The more crazy the benefit the less believable it is.

 

For Amazon.com the benefit was “30% off all books.” For iPod the benefit was “1,000 songs.” For Papa John’s Pizza the benefit is “better ingredients, better pizza.”

 

 

The tagline: First problem, MBT has two. Second problem, neither is any good.

 

Brands should have one tagline and use it everywhere: websites, advertising, letterheads, business cards etc. Having a brand tagline “physiological footwear” and an advertising tagline “the anti-shoe” makes no sense. Two taglines are not better than one.

 

Obviously the agency for MBT took one look at the current brand tagline and said we can’t use that!

 

 

So they came up with “The anti-shoe.” The anti-shoe? MBTs are the biggest, ugliest shoes ever made! How can they ever be known as the anti-shoe? Answer: they can’t.

 

But they can be known as the ultimate workout shoe. Every step, every day is a workout.

 

The thing I like most about MBT shoes is that they are so different looking. Every single time I wear them people notice these shoes and stop me to comment on MBTs. They are like the lime in the top of the Corona bottle. You can’t miss the difference.

 

Geox is a fantastic shoe brand known as “breathable shoes,” but the difference is unnoticeable. Unless you look at the bottom of somebody’s feet, there is no way to see the holes that allow the shoes to breathe.

 

When people see MBTs, they can’t help but to ask: What are they? What do they do? Do they work? Where did I get them? When this happens it pains me because the brand is missing a big opportunity. My answers to these questions are weak because the brand is weak. The terrible name, a shaky position and unnamed category leave me with a difficult story to tell about them. Without word of mouth no brand can thrive.

 

If you are single, you might get a pair of MBT shoes. For some reason guys at the gym see these shoes as the perfect excuse to come and talk to me. One guy said “At first I thought you had the funny shoes because one leg was shorter than the other.” Guess he thought that was a funny line.

 

MBT has got to be careful because FitFlop is moving in. They have a memorable and descriptive name along with a cleaver tagline "It's the flip-flop with the gym built in."

 

MBT shoes are a great product but a lousy brand. Such a shame.

An Achy Breaky Branding Blunder

She was named Destiny Hope Cyrus because her parents knew she would do great things. And that is exactly what the girl now better known as Miley Cyrus and/or Hannah Montana has done.

Miley has become an international pre-teen sensation and mega-brand for the Disney Company. She is only 15 years old but Miley is predicted to be a billionaire by her 18th birthday. Not too bad, all your typical teenager brings home is average grades and acne.

Miley Cyrus’ Empire includes:
- Hit Disney channel TV show: Hannah Montana
- 2 multiplatinum albums
- Sold-out concert tour and concert film
- Upcoming movie (due 2009)
- Book deal with Disney (reportedly seven figures)
- Merchandise including lunch boxes, bed sheets and MP3 players

Miley Cyrus is a teenager and a billion dollar franchise. That is a tough combination to manage from a business, branding and personal perspective. You have three forces at odds with one another.

Disney

Disney is in it for the short term. Disney’s goal is to milk the Miley brand as fast and as furious as it can. Why? Because of the short shelf life of a pop-princess. A pre-teen act has 3 to 5 years maximum before the kids grow up or their fans move on.

Disney can treat Miley like an ordinary brand. Ordinary brands in ordinary categories can develop, grow and mature over decades. (Like Red Bull introduced in 1987. )But in 20 years, Miley will probably be lucky enough to get a call back on a third-rate reality cable television show.

Miley Cyrus will grow out of her role as Hannah Montana brand before you know it. She has maybe 3 good years left. Nothing can stop time or puberty.

Ideally Disney would keep Miley in a bubble. With a short shelf life, nobody wants any major slip-ups.

Today Miley is incredibly important to Disney. But five years from now, they will have created another star to replace her.

Miley’s parents

While they are happy to make money now, Miley’s parents, who also manage her career, are also wisely keeping an eye on the future. Her Dad (Billy Ray Cyrus) knows all too well the realities of being a one-hit wonder.

Team Cyrus has to be very worried about how Miley can sustain her fame past 18 years old. It is not easy. There are very few Justin Timberlakes and Britney Spears who go from Mickey Mouse Club to mainstream stardom. Most fade into oblivion.

I imagine it was team Cyrus who wanted to do the Vanity Fair shoot. Vanity Fair is an upscale, sophisticated, cultural, adult magazine. It is the magazine that Tom Cruise and Katie Holmes gave their first baby photo to. And the one Bono was a celebrity editor of last summer.

The thinking goes like this: Appearing in Vanity Fair would give Miley her own credibility and authenticity with an influential adult audience apart from Disney. The photographer, Annie Leibovitz, is one of the most respected artistic photographers of our time and her images would lend an edgy, sophisticated look to young Miley. Clearly Disney would be against this; they want Miley to always be Hannah Montana and stick to Seventeen magazine at the raciest.

Miley Cyrus

Let’s not forget, Miley is a teenager. And as any parent will tell you, teenagers are not the most predictable or reliable of creatures. But for Miley and Disney things have gone perfectly.

The clean-cut, church-going, modestly-dressed Miley has been a dream come true for Disney and parents alike. But you could have said that about Britney Spears 10 years ago. So it goes to show you, you just never know. And sometimes delayed rebellion is far worse than one can imagine.

Britney jumped from Mickey Mouse club to "baby one more time" to this Rolling Stones cover when she was 17. And we have all seen the photos of her today.

Was the Vanity Fair shoot a good idea?

No. From the very start this strategy was flawed.

A few months ago Miley turned 15 years old. She is at the height of her success. Vanity Fair is the wrong magazine, Annie Leibovitz is the wrong photographer and the back-bearing shot was the wrong photograph.

But that was the point of the picture and it shouldn’t be such a shock. An adult magazine wants adult photos. The shot of Miley is a beautiful, artistic, edgy, mature photo commonly found in the book. Vanity Fair does not publish publicity shots, it is known for pushing boundaries. When you play with fire, you can’t complain when you get burned.

The time to move to Vanity Fair is when Miley turns 21. Then you have a story to tell of her move into adulthood. Managing the transition is not easy. Start too young and it is child porn. Start too old and it is creepy.

Will this hurt her brand?

It certainly didn’t help. But it is unlikely to do any long-term damage to the Miley Cyrus brand because:

1: There is nobody else out there for teens to adore. The lack of competition is the best thing she’s got going for her. Hillary Duff is in her 20’s. The Cheetah Girls are in their 20’s. And her biggest competition Jamie Lynn Spears (Nickelodeon star and Britney’s sister) got pregnant last year at just 16 years old.

2: The photo of Miley was shocking but not pornographic. It caused so much attention not because of its raciness, but because it was the opposite of her brand image.

Like I said, being the opposite and looking grown-up was probably the intent of Team Cyrus, but the photo obviously went too far. Although other girls have gone farther, quicker, parents thought that Miley would be different and wouldn’t try to grow up so fast like most other pop-stars.

3: She was not on the cover. Not being on the magazine's cover and being mostly covered is Miley's saving grace. This will allow the controversy to blow off relatively quickly as long as she doesn’t hitting the clubs with Paris Hilton or doing cocaine with Amy Winehouse. And her parents don't book her the cover of Maxim magazine.

Miley immediately issued a statement saying she is “embarrassed” by the photos; so she is likely to get sympathy. Her managers and parents on the other hand will get hell.

While it is good for Miley she is not on the cover. It is bad for Vanity Fair. All this free publicity and they are unlikely to reap any rewards or much of a spike in newsstand sales.

The Future?

While it lasts, Miley needs to enjoy the Hannah Montana ride. Her future is uncertain. If she is like the Olsen Twins, she won’t make it into adult stardom. If she is like Lindsay Lohan, she will make it and then throw it all away by doing drugs. If she is like Madonna, she will be as famous 25 years into her career as she was when she started. The secret to Madonna’s success is that she starts a trend, she fades from view and then she returns reincarnated. Hard to do, but when it works, it is pure magic.

Now playing: Blockbuster Bombs Big

Once upon a time Blockbuster Video was the quintessential success story. A company and a brand that was admired, feared and emulated. With its great name and focused strategy Blockbuster quickly swept the nation via growth and acquisitions to become American’s place to rent movies.

This fairly tale doesn’t end well. Today, Blockbuster is in shambles. Bad decisions, bad strategies and bad management have left the giant gasping for air. Where did it all go wrong? Let’s take a look and find out.

In the beginning things were great.

Great branding and rapid expansion made Blockbuster the world’s largest video rental chain with more than 7,800 stores in more than 20 countries (about 60% of which are in the US). Each year Blockbuster rents more than 1 billion movies and games. Impressive to say the least.

The brains behind Blockbuster was David Cook. In 1985, he created the brand known as Blockbuster by combining a flashy look, a great name and a computerized rental system. Entrepreneur Wayne Huizenga was the money behind Blockbuster.

In 1987, Huizenga took over Blockbuster and injected $18 million into the company. He set out to become the first national brand in the emerging video rental category and the category leader in the mind. In just three years, Blockbuster went from 130 stores to 1,500 stores. In addition, Blockbuster went global. With the purchase of Cityvision, Blockbuster became the largest video renter in the UK in 1992.

The beginning of the end.

Success can sometimes lead to arrogance. And arrogance in this case meant believing you can sell anything, putting your name on everything and being oblivious to the future. Several bad moves sealed Blockbuster's fate.

Bad move #1: Don’t line-extend into businesses you have no business being in.
Blockbuster Music

Feeling quite full of itself Blockbuster launched Blockbuster Music in 1992 by purchasing of the Sound Warehouse and Music Plus chains.

First of all, Blockbuster means movies not music. Second of all, Blockbuster means rentals not sales. Third of all, talk about getting into the wrong business at the wrong time. Retail music chains are a thing of the past. iTunes, Amazon and Wal-Mart are putting them all out of business.

Bad move #2: Be wary of huge corporations taking over your brand.
Viacom takes over Blockbuster and renames the division Blockbuster Entertainment Group.

Big companies have a lot of advantages including lots of money and distribution might. But unfortunately they usually have no marketing sense. Viacom looked at Blockbuster as an opportunity to expand the business into other “entertainment” areas. Bad move.

Corporate ownership isn’t always bad, but when it undermines your marketing strategy and your brand’s authenticity, it can be deadly. For example, Quaker Oats almost killed Snapple. But PepsiCo has done very well with Gatorade.

Bad move #3: Expanding into everything is a killer.
Blockbuster promotes itself as a “Neighborhood Entertainment Center”

Blockbuster greatly expanded the offerings in its stores to make itself a so-called entertainment center. They started selling videotapes (instead of renting them), selling books, CDs, gift items and music.

Consumers don’t use words like “entertainment center.” They rent movies and buy music and watch movies. Blockbuster had a strong and formidable brand in the movie-rental business. Blockbuster’s expansion into other types of entertainment undermines that. They should be saying “Don’t read or listen to music alone, watch a movie with your honey or family tonight.” And they should also be saying “it’s silly to buy a movie you only watch once.”

An attempt to regain its footing

Just when you might have thought all was lost at Blockbuster, the company did make one heroic comeback attempt. In 1997, Blockbuster refocused on movies and returned to its rental roots.

In one of the most brilliant business moves ever, they negotiated with the movie studios and forced them into a revenue-sharing agreement that replaced the standard practice of buying rental copies for as much as $120 each. This move allowed Blockbuster to stock all the latest movies in depth. It also lowered their costs, giving Blockbuster a huge competitive advantage.

Bad move #4: Giving up the future to be greedy in the present.
The DVD takes over and Blockbuster misses the boat.

One thing is for certain, the future will be different than the past, especially when it comes to electronics. In music, there was vinyl, then 8-tracks, then tapes, then CDs and now MP3s. In video, there was Betamax, then VHS and now DVD. Tomorrow it will probably be BluRay and in another ten years something else. Nothing lasts forever.

Blockbuster had a lock on the VHS rental market. With its revenue-sharing agreement, the movie studios received 40% of rental revenues. The formula was such a big success that everybody was happy. A rental window ensured a period of time where a movie was only available for rent before it was available for purchase. And the purchase price was high enough to promote Blockbuster’s highly profitable rental system.

But 1998 was the dawn of the DVD age. And a new technology meant a new agreement between Blockbuster and the studios. The facts are hard to find, but from press reports you can surmise that Blockbuster got greedy and wanted to keep more revenue for itself. Reportedly saying things like “The studios can’t live without a video rental business – we (Blockbuster) are your profit.”

Since rentals represented a $10 billion business for the studios, it was an important market, but today the VHS business is practically $0. Without a new agreement and system for DVDs, the future would be tough for Blockbuster. Too bad they didn’t know back then what they know now.

Warner & Sony which had sunk millions into DVDs didn’t want them to be the new laserdisc but the next VHS. So without a deal with Blockbuster, they moved to plan B. They basically knocked out the rental window and priced DVDs low enough so that they could be sold in competition with rentals. With Blockbuster’s outrageous late fee system, paying $20 to buy a movie could be a lot cheaper than renting it and bringing it back a few days late.

Bad move #5: Getting stuck in the mushy middle
Today Blockbuster is stuck in the mushy middle between Wal-Mart and Netflix.

Turns out people love to buy cheap DVDs. I have a whole closet of DVDs, most of which I haven’t even watched yet and probably never will. I see the case and say, “Gee always wanted to see that movie!” I buy it and then never have the time or patience to watch it. Then there is my closet full of kids’ DVDs. Those are the ones that get watched so many times that the DVDs wear out and I have to buy replacement ones. (All I can say is thank you to Volvo for selling cars with DVD players. Anything to keep two little boys quiet in the car is worth the price.)

By 2003, the studios were taking in three times as much money from DVDs as they were from VHS videos. DVD was the new king and Wal-Mart was the new queen beating out Blockbuster to become the new, single, largest source of revenue for the studios. Making things even worse for Blockbuster is the fact that mass retailers of all types began selling newly-released DVDs below wholesale costs to draw in customers with the hope of selling higher profit TVs and other electronics.

Add to all this, the arrival of Netflix. Like Amazon, Netflix used the internet to offer access to a wealth of titles (100,000 plus) which it delivers and you return via the old-fashioned postal service. A slow process indeed, but with no late fees, no due dates, no postage fees, endless variety and a personal movie queue, it is a system that is a killer. With its most popular plan, Netflix charges a monthly fee which gets you three DVDs at a time with no monthly limit. Simple, clever and cool.

Blockbuster is in the mushy middle. With cheap DVDs selling like hot cakes at Wal-Mart and easy rentals mailing out like crazy at Netflix, Blockbuster has nothing left to sell but its locations. Locations that are costing them an arm and a leg in leases.

Bad move #5: Merging with a loser
Blockbuster trying to take over Circuit City is insane.

Two losers don’t make a winner. Just look at the mess a combination of Sears and Kmart has created. A merger with Circuit City would result in two brands in two different businesses with two sets of problems to deal with.

The last thing Blockbuster needs is more real estate. And the last thing Blockbuster needs is Circuit City, a miserable brand getting clobbered by Best Buy.

In this epic movie, I’m afraid there is no happy ending. If only Blockbuster could go back and rewrite history, maybe things would have been different. But life is not like a movie. Once the scene is shot, there are no retakes.

Hand me a napkin, what a naming mess.

Kentucky Fried Chicken is the world’s most-popular chicken restaurant chain. But while Colonel Sanders’ secret recipe for fried chicken may be finger lickin’ good, the brand strategy has been finger pointingly bad.

In the beginning, things were great. The Kentucky Fried Chicken brand was born in the 1950’s. Colonel Sanders himself created his secret “original recipe” for chicken which he cooked in a pressure fryer to deliver his chicken faster and fresher than the competition. And the Colonel himself travelled from town to town cooking chicken for restaurant owners and signing up franchisees. By 1960, Kentucky Fried Chicken had more than 600 franchised outlets in the United States, Canada and England.

Keys to early success:

1. Be first in a new category.

Pressure-cooked fried chicken with secret spices.

2. Dominate the category.

Kentucky Fried Chicken quickly expanded the business becoming a national then an international chain. The rapid expansion blocked the competition and allowed them to own “fried chicken” in the mind globally.

3. Create a brand personality: Colonel Sanders.

Sure you can succeed by just being first (like Pizza Hunt in pizza.) But you can become so much more powerful if you use a strong spokesperson to lock your brand into the mind. Dave Thomas and Wendy’s. Papa John and Papa John’s Pizza. Michael Dell and Dell Computer. Howard Schultz and Starbucks.
How well known is Colonel Sanders? Well in 1976, an independent survey ranked the Colonel as the second most-recognizable celebrity in the world. Not bad for an old guy from Kentucky selling pressure-fried chicken in a funny suit.

Every brand needs a story. Every brand needs a spokesperson. And Kentucky Fried Chicken has both a wonderful story and a spokesperson. And even though the Colonel had sadly passed on, it doesn’t matter. His image and legend lives on today. It’s just as relevant and integral in selling his namesake chicken as it ever was.

The wave starts to crest.

The mistake most managers make is thinking the good times will last forever. They don’t. You ride a wonderful wave of brand success which eventually either crashes you into the rocks or slowly rolls you into the shore.

Kentucky Fried Chicken is still the biggest and most well-known chicken brand in the world. But it faces a serious problem. A problem management has incorrectly dealt with time and time again over the last 20 years.

The problem: fried food is unhealthy. And people are looking to eat healthier.

So what has Kentucky Fried Chicken been doing? You know what they have been doing, they have been trying to run away from “fried” the only idea they own in the mind, as well as copy every hot new chicken trend.

1. Running from Fried.

In 1991, Kentucky Fried Chicken changed its name and signage to KFC. As if using only initials removes fried from the name. It doesn’t. People may use the abbreviation to refer to the restaurant, but the abbreviation is just short hand for Kentucky Fried Chicken. The focus is still on fried albeit it with a weaker name. Initials are never more powerful than a strong brand name. Changing from a strong brand name to initials doesn’t make sense.

2. Chasing competition.

Boston Chicken was a big success, so KFC launched Colonel’s Rotisserie Gold and Tender Roast chicken.

White Castle was a big success, so KFC launched the Chicken Little sandwich.

McDonald’s was a big success with McNuggets, so KFC launched Kentucky Nuggets.

Were any of these successful line extensions for KFC? No. All have since been discontinued.

What is next?

Today, KFC is going back to basics and expanding all at the same time. And all slapped together in a new name.

First the good news. In 2007 company leaders realized their mistake and wisely went back to the original name and signage of Kentucky Fried Chicken. (Unfortunately most international locations remain KFC.)
Now the bad news. With “fried” still a worry, company leaders are adding “grilled” to the name. As if Kentucky Fried Chicken could become healthy like in some bad reality makeover show.

The new name expected to roll out nationally in 2009 is: Kentucky Fried & Grilled Chicken.

They will have the good, the bad and the ugly all together in one name and one giant mess.

What should they do?

The reality is that people are still eating fried foods and fried chicken. Not too many people are going for the carrot sticks over the fries. The future may belong to healthier alternatives. But the now belongs mostly to tasty higher fat and calorie eats.

I think there is a compromise right in front of Kentucky Fried & Grilled Chicken’s eyes. A way to keep the bad and include the good without resorting to a long and difficult name.

Why not just call it Kentucky Chicken? That name would work globally and solidify Kentucky Chicken as the dominate chicken brand for today and allow them to transition to healthier fare for the future.

Hand me a napkin, this is one mess that can easily be cleaned up.

Don’t coddle the cow. Kill the cow.

Much has been written about the failure to innovate at dominant companies like Microsoft, Coca-Cola and Procter & Gamble. These companies have little chance to innovate because innovation requires letting go, relinquishing control and potentially undermining a cash cow. Something not tolerated in corporate corridors.

Instead of developing innovative products internally, corporate behemoths tend to buy innovation. But like an absent parent who tries to make up for lost time by bringing home a box full of toys, the initial giddiness wears off quickly. After awhile, things haven’t changed and just get messy and difficult.

Why does Microsoft need to buy Yahoo? Why did Coca-Cola need to buy Vitaminwater? Why did Procter & Gamble need to buy Glide? Don’t these companies have some of the best engineers, developers and researchers on the planet?

Of course they do. But what they don’t have is marketing sense; they have only management sense. Management sense tells them to milk what they already have. Marketing sense would tell them to also invest for the future in new categories and new brands.

That is really hard to do when (a) it is so easy and sometime initially so profitable to milk your brands and (b) when you have so much cash you can buy whatever and whomever you want to buy. But is this the best way to grow? Is this the best way to run a company?

I think not. The best way to run a company is by managing your brands much like you would manage a stable of racehorses. Don’t over-train, over-race or over-fed.

Management people often confuse innovation with ideas like Oreo cake sandwiches. That is not innovation; that is a sacrilege.

Innovation usually involves abrupt change that can take years to fully realize. That is why small companies run by entrepreneurs are willing to take chances and big companies run by financial types can’t be bothered because they are more concerned with their next quarters.

Sometimes big companies can make innovation happen. Either because they are down and out and have nothing to lose. Or they get ahead of an emerging new technology and face little competition.

In the first scenario, one can point to Apple. By the end of the 1990s, its future looked bleak. Betting everything on the iPod wasn’t a threat to the cash cow, because Apple’s cash cow was bringing in very little cash. The company was free to chase the future.

In the second scenario, one can point to Orville Redenbacher, now owned by ConAgra but obviously run by entrepreneurial-types. Going from popcorn jars to microwave popcorn bags was a huge shift. Excellence in one area does not necessarily translate to excellence in the other. But the company wisely jumped on the microwave trend early and established its authenticity. Waiting could have cost them dearly.

It took many years to get there, but the future belongs to microwave. And you’d be hard-pressed to find a jar of Orville kernels at your local supermarket. Most are long gone from the shelves.

Sometimes the delineations are clear. Everybody goes from using popcorn jars to using microwave popcorn bags. Or from typewriters to computers. Or from film photography to digital photography.

Sometimes they are not. Most people still drink Coca-Cola but many people also drink Red Bull, Gatorade, Propel, Dr. Pepper and Snapple too.

Microsoft faces the same problem that Coca-Cola and Orville Redenbacher faced. Today everybody uses packaged software. Tomorrow things could be different. Today, all the money is in software packages and closed operating systems, categories that Microsoft dominates. Why would the company want to undermine that?

One motivating force for innovation is getting mad at the way things are and agitating for change. If the enemy is external, nothing charges up the troops like discussions of the enemy and its weaknesses.

But when the enemy is internal, it becomes a much more difficult game to play. It is not safe for internal marketers to offer up solutions that could be seen as hostile. That is why rational, management-type thinking usually prevails. “Let’s focus on what we’ve got, milk what we’ve got and if something else pops up, we’ll buy them.”

So Microsoft goes after Yahoo. Besides the obvious challenges of integration, people and cultures, a merger creates another problem. It creates a company without a focus.

A company without a focus is a company without an enemy. And a company without an enemy is a company without a purpose.

There comes a time when a company needs the courage to kill its own cow. Without the courage to do is, the company has no future.

Which is what happened to Western Union, Wang, Digital Equipment, Polaroid and many other once-famous companies.

Halloween Tricks and Treats

Happy Halloween!

In honor of Halloween, I thought I would follow up last week’s post on great restaurant branding with some of the scariest restaurant branding ideas I’ve recently come across.

1. The worst restaurant name.

Humuhumunukunukuapua’s, located at the Grand Wailea Resort in Maui, Hawaii.

This terribly long and totally unpronounceable name is the worst I’ve ever seen. The restaurant has a nice view, good food and benefites from being in a popular hotel, but what a missed branding opportunity. Never underestimate the power of a good name.

My husband and I referred to it as the huma-huma restaurant. I was too embarrassed to call for reservations or tell anyone where we ate because I had no idea how to pronounce it. Not a good idea for generating word of mouth.

The name means Hawaiian Triggerfish. Triggerfish would have been a whole lot better.

2. The worst line-extension restaurant.

It is a mistake is thinking that a popular brand in one category will translate into another.

Tommy Bahama, the hot men’s resort ware brand has gone bananas. I saw a Tommy Bahama restaurant in Maui. And see advertisements from Tommy Bahama Rum almost daily in the New York Times.

What are they thinking? Obviously they must be drinking too much of the rum. Just because a brand is successful doesn’t give you carte blanc to take it anywhere.

It is one thing for a famous restaurant to sell t-shirts, it is quite another for a famous shirt maker to sell cheeseburgers.

3. The worst menu addition.

When you build a powerful brand by focusing on a core attribute it is best to stick to that attribute. It is unwise to introduce menu items that are the opposite of your position.

Subway owns fresh and healthy sandwiches in the mind. Jared’s weight loss and the new fresh fit menu reinforce that position in the mind.

So what do they do next? They recently introduced personal deep-dish pizzas! How unhealthy could you get? No much in my opinion. Let’s hope Jared doesn’t go on a pizza diet.

4. The worst company naming strategy.

Luckily this one is just a ghost story. Using current marketing thinking at most companies today, you can see how Darden, founder of The Red Lobster chain, could have named their other restaurants:

Italian Lobster, Steak & Lobster, Bahama Lobster, Lobster Grill and Healthy Lobster.

Instead Darden went with Olive Garden, Longhorn Steakhouse, Bahama Breeze, Capital Grille and Seasons 52 to give each its own brand identity. Good move.

Think the fake names were funny? Well think again, it is a strategy countless companies continue to use. Because most companies prefer to launch line extensions than new brands.

It is exactly what Toys R Us did. They launched Kids R Us and Babies R Us. A strategy that has left the company in trouble. Even though the Babies R Us concept has taken off, it has succeeded in spite of its lousy line extension name because it was first in a new category. And its success has come at the price of Kids R Us being shut down and Toys R Us losing its toy leadership position to Wal-Mart.

5. The worst steal.

Everybody has watched with envy the success Starbucks has had in coffee. Starbucks has single handedly elevated the lowly .50 cup of joe to a $3 experience and obsession.

Instead of launching their own brands early on before Starbucks was firmly established, they waited and now everybody is jumping on the upscale coffee bandwagon.

McDonald’s is serving “premium” coffee along with lattes and espressos. Wendy’s is launching a Javaccino’s menu in an effort to become a beverage destination. On the Javaccino’s menu: Rainforest select sustainable coffee, iced pomegranate green tea and confused turtle Frosty-chinos.

6. The worst Halloween candy idea.

Snickers Marathon energy bars. Sounds like a great idea, take the best-selling candy bar and make it into an energy bar. Because really, what is an energy bar anyway, but lousy tasting candy bar.

The Snickers brand is known for great taste so they will rule the energy bar market. Right?

Wrong. These treats are unlikely to trick any kids or adults. There is nothing wrong with the bars, but there is everything wrong with the brand. Or should I say brands. Snickers Marathon bars come in many different varieties including: energy, nutrition, multi-grain, low-carb and protein. Just to totally confuse you.

Snickers is a candy bar, they would have been better off telling people to just enjoy a Snickers. One bar only has 273 calories and almost 5 grams of protein, not much difference from the Marathon bar. Selling energy bars undermines the candy. It tells people the candy is bad, when in fact they are not much different.

* Snickers: 273 calories, 14 g fat, 33 g carb, 5 g protein.
* Snickers Marathon: 210 calories, 8 g fat, 26 g carb, 14 g protein.

Snickers satisfies because it tastes great. Snickers Marathon is a poor tasting substitute. Remember you taste in your mind not your mouth. A Snickers energy bar is never going to taste good up there. Want energy? Grab a PowerBar.

Halloween warning:

On Halloween, kids play dress-up, act silly and scare people by catching them off-guard.

None of these are strategies you should use for marketing. Dressing up as something you aren’t, acting silly and scaring people are all bad branding ideas.

So Marketers, leave Halloween to the kids and keep your brand true, authentic and focused. No tricks allowed.

EBay Express a failure, I'm shocked. (just kidding)

In today’s Wall Street Journal the top headline is “EBay’s Bid to Go Beyond Auctions Isn’t Selling Well.”

Really? I’m shocked!

Well, actually I’m not shocked. I could have told you that months ago because the idea of EBay going beyond auctions violates a fundamental law of branding. And when you violate a fundamental law your brand suffers.

The Law of Expansion states that the power of a brand is inversely proportional to its scope. In other words, expansion weakens a brand. When you try to stand for everything and appeal to everybody your brand loses its meaning in the mind.

EBay owns online auctions in the mind, a powerful and profitable position to own. EBay owns it because online auctions created the category by being first in the mind.

EBay selling goods at fixed prices make no sense for the brand or to consumers. EBay Express is totally confusing and contradictory concept.

So why do companies constantly mess with a good thing? A never ending demand for growth on a quarterly, monthly or even daily basis at all costs. Unfortunately, building a brand for long term with a solid focused strategy like Southwest Airlines and no frills is the exception rather than the norm in business today.

To attain growth business leaders constantly try to move beyond the boundaries of their brands for a quick growth fix. Unfortunately the quick fix usually fails and many times even leads to long term losses for the brand.

Some examples:

1. Volvo C70 convertibles & coupes.

A carefree sporty convertible is the complete opposite of what the Volvo brand stands for. Not surprisingly the sporty Volvo C70 models did not sell well and were the biggest automotive sales flops of 2005.

2. Kids “R” Us clothing.

At its peak Toys “R” Us, the former top U.S. toy retailer, expanded its brand into Kids “R” Us and Babies “R” Us. Babies “R” Us has succeeded in spite of its lousy line extension name because it was first in a new category and faces no serious competition. (It might have been a better idea to give the brand its own name.) On the other hand, Kids “R” Us was a total disaster. And the toll it took on management’s time and attention under minded the Toys “R” Us brand. Today, Wal-Mart is the leader.

3. IBM personal computers.

When IBM launched its PC line in 1981, the company was the most powerful, most admired company in the world. The PC line was even first in a new category (the first 16-bit business personal computer.) Yet IBM reportedly lost $15 billion in personal computers over a 23-year period. Finally IBM threw in the towel and sold out to Lenovo, a Chinese company.

Every company wants to increase sales. Fortunately there is a right way and a wrong way to do so. In most situations, line extension is the wrong way.

Launch a second brand.

A better strategy is to launch a second brand. As Toyota did with Lexus. As Sony did the PlayStation. As Apple did with iPod. As MTV did with VH1.

A second brand allows a company to expand while still protecting the integrity of its core brand. Even today, IBM still means mainframe computers. Twenty-three years of marketing personal computers didn’t change its basic perception.

The truth is that nothing in marketing or in life is more difficult than changing a human mind. Go home and try and change the mind of your spouse and you’ll see what I mean.

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.

Brand war in the morning: Today vs. GMA

The Today show has been on the air for over 50 years. It is the gold standard for morning television winning a record 512 consecutive weeks in the ratings war.

But the dominance of Today has taken a major hit. Good Morning America has come out fighting in past few years and last season came within a heartbeat of scoring a weekly win against Today. GMA missed the mark by a mere 40,000 viewers.

Some say this rating season could be the one that GMA overtakes the one-time juggernaut Today. And you can tell that Today is definitely feeling the GMA heat. This summer the show made sweeping executive changes to try and right the ship. With profits in the hundred of millions of dollars, morning television is big business. And sagging brands mean sagging profits and sagging stock prices.

So the question is: What happened to Today?

The answer: expansion.

If you look at the problem from a branding perspective, the answer is simple. Yet none of the articles about Today I have read even mention the idea or the problem of expansion.

Our Immutable Law of Expansion states that the power of a brand is inversely proportional to its scope. When you expand a brand, you weaken a brand.

At the height of Today’s success, they expanded the brand in an effort to squeeze every dollar they could out of the brand.

First NBC launched After Today, a one-hour spin-off, to expand the brand. Then in May 2000, NBC expanded Today from a two hour show to a three hour show. The After Today line extension eventually was cancelled. But Today continues to be a three hour show as compared to GMA which is still only two hours.

Originally, Today said that Katie and Matt would participate less in the final hour and Ann and Al would pick up the slack. But as the ratings troubles began, Katie and Matt are having to put in more face time later in the show.

Today, Today is a weakened brand. To fill three hours of television, Today has been diluted with silly segments and new reporters. Three hours five days a week, 52 weeks a year is a lot of airtime. Not to mention the weekend editions of Today.

On the other hand, GMA has stayed more focused. Let’s face it, it is simply easier to produce two hours of great television than it is to produce three hours especially on a daily basis. Yes, GMA has silly segments and network show plugs too. But overall, we see more of Charlie and Diane. The bottom line is that more viewers are making the switch to ABC.

Sometimes it takes a while for the effects of expansion to catch-up to a brand. In 2000, the NBC network was riding high with hit shows in prime time and Today dominating morning television. They thought they could do no wrong. Why not give the public more of a show they love? But more is not always better. The effects of expansion have caught up to NBC. In 2005, both Today in the morning and NBC prime time are hitting hard times.

At the height of success the temptation to expand is at its greatest. It’s also the time for self-restraint. It’s the time to keep your brand focused. Brand building is a marathon race. You want a brand that can make it not just Today, but tomorrow too.

Google sushi anyone?

Google is a branding success story. A small company taking on the well established, but overstretched, Internet giant, Yahoo! and winning. We all love Google. The name alone is branding genius. Short, simple, unique, different.

But today, rich and powerful Google is going backwards on the food chain. Google was once a small nimble fish that became an killer whale, and now looks more like an octopus. Google has its tentacles in way too many divergent businesses.

While Google has not overly publicized its grandiose dreams, the word on the street is that Google is contemplating everything from Wi-Fi Internet access and mobile devices to operating systems and e-commerce. Of course, we already know about the gmail, froogle and mapping sites. So it is clear, Google everything is the strategy.

The problem is that the octopus model for running a business is all wrong. Building a strong base and then stretching out your tentacles in all directions gets your brand in trouble. It confuses the consumer as to what your brand stands for. It confuses the company as it what it stands for. It confuses management as to who the enemy is. It confuses R&D as to what direction to go. It confuses the advertising agency as to what the message is. It confuses the public relations agency as to what the buzz is.

The last giant octopus, Microsoft is a case in point. While it dominates in personal computer operating systems, they have not been able to make money outside of that. They have sold millions of Xboxes but have not been profitable. Money is a loser compared to Intuit’s products. And don’t get me started on Microsoft’s hopes for a converged world, they have poured hundreds of millions into interactive television, media center television, tablet computers and other losers.

I am very concerned for the Google brand and Google stock holders. No brand can stand for everything and dominate every market. Today, Google is a great search engine. Tomorrow, Google might be octopus sushi for another new brand.