Ries' Pieces

The Secret of Steve Jobs

    Steve Jobs was a rebel who didn’t go about life or work in the normal way. He dropped out of college, was a fruitarian for a time and was often called an arrogant, obnoxious, weirdo.

    Being a rebel, however, wasn’t the secret of Steve Jobs. In our youth-obsessed culture, rebels are a dime a dozen.

    Steve Jobs was a technology genius. From an early age, he was fascinated by electronics. He tinkered at his father’s workbench and joined his high-school electronics club. Jobs was so gifted that Atari's chief technology engineer gave him a job as a game designer even though he had no formal technical training.

    But being a technology nerd wasn’t Job’s secret either. Silicon Valley is filled with brilliant technology nerds.

    Steve Jobs was a design genius.  He was obsessed with creating tools that were not just good but beautiful. And his aesthetic sense didn’t just apply to the outside of things; even the inside of things had to be beautiful. On the Apple II, for example, Jobs insisted that the circuits be redone to make the lines straighter.

    But being a design genius wasn’t the secret of Steve Jobs either. Check out your local Ikea; it is filled with wonderful designs.

    The world has many great rebels, great technology geeks and great designers. What made Steve Jobs so unique was his supremely-gifted marketing ability.

    Here are some examples of the marketing decisions made by Steve Jobs. Decisions that put Apple on the path to becoming  the world’s most valuable company.

 

The power of a simple brand name.

    In the 1970s and 1980s, there were hundreds of brands of personal computers on the market. Many of these brands were line extensions of existing brands: AT&T, Burroughs, Dictaphone, Digital, ITT, Memorex, Motorola, NCR, Radio Shack, Smith Corona, Siemens, Xerox and many others.

     Many of these brands were new brands with strange names: Osborne, Commodore, Micro Pro and dozens of others.

    The difference between Apple and the other brands wasn’t in the hardware. It was in the name. Apple was a simple name consumers could instantly associate with the home market. The name also allowed a simple "apple" visual which hammered the name into prospects' minds. (How would you visualize Micro Pro?)

    Furthermore, Jobs resisted the path that many entrepreneurs take. That is, giving the brand his own name. Would Jobs Corporation have become the world's most-valuable company? Or even worse, how about Jobs & Wozniak Corporation?

 

The power of a second brand.

    During a 1979 visit to Xerox’s Palo Alto Research Center, Jobs saw a prototype of a computer with a graphical user interface. Rather than typing commands, users rolled a mouse and clicked on menus. This technology fit with Jobs' philosophy of making computers that were dead simple to use. He immediately started working on replicating the technology.

    On January 24, 1984, Apple released the Macintosh. Previously, the product line included such names as Apple I, Apple II and Apple IIe. But this new computer got its own name and thereby created its own new category. Most companies would have called it the Apple III, but not Steve Jobs.

 

The power of an enemy.

    Sometimes the best way to position a brand is by figuring out who your enemy is and then being the opposite. Apple's obvious enemy was IBM which had about 50 percent of the PC market.

    That is exactly what Jobs did with the famous 1984 Super Bowl commercial announcing the launch of the Macintosh. What made the commercial so powerful was that almost everybody instantly recognized Big Brother, who represented "conformity," as a stand-in for IBM. He repeated the same strategy later with the Mac vs. PC guy ads.

 

The power of being first.

    In his career at Apple, Steve Jobs did this over and over again. Launching a new product that was the first brand in a new category.

    Pixar's Toy Story. The first feature-length animated movie done entirely on computers.

    Apple's iPod – the first hard-drive music player.

    Apple's iPhone – the first touchscreen smartphone.

    Apple's iPad – the first tablet computer.

 

The power of a diverging category.

    Initially we were skeptical of the iPhone. Jobs had described his new brand as a combination iPod, cellphone,  email-and-internet device, all rolled into one. A red flag went up in our head since convergence devices are typically flawed.

    The Nokia Communicator had been on the market for a number of years, it was a combination personal digital assistant and cellphone and it was a total loser. But in reality, the iPhone was not a convergence device. Jobs may not have explained it correctly initially, but no matter. The iPhone exploited the divergence phenomenon by becoming the first “touchscreen” phone.

    But it wasn’t just the touchscreen that would be the iPhone's greatest achievement. It was the way the iPhone handled the many hundreds of thousands of apps created for the new device.  What email did for BlackBerry, Apps did for iPhone. Apps made the iPhone more than a cellphone, more than a music player, more than an email device, more than a web device. iPhone was a totally new touchscreen App device.

 

The power of the verbal.

    When you are the first brand in a new category, consumers need extra help in understanding what you are selling. Steve Jobs had an amazing ability to simplify not just his products but his product messages as well.

    With two words, “Think Different,” Jobs communicated the essential difference between the Macintosh and every other PC.

    With five words, “1,000 songs in your pocket,” Jobs communicated the essential difference between the iPod and the other MP3 players that could only hold 30 songs.

 

The power of the visual.

    Words can communicate a message, but visuals can reach consumers emotionally in a way that words cannot. Jobs understood the power of visuals like no other CEO on the planet and effectively used simple visuals to build his brands.

    The rainbow apple for Apple.

    The white ear buds for iPod.

    The even better white apple for Apple Inc.

    Job's presentations were also powerful visually. First was his consistency of dress. From 1998 to 2011 (the era of his return to Apple), he always wore a black turtleneck and jeans for his presentations. Even more impressive were the slides he used during his famed presentations. No text-filled PowerPoints for Steve. Nothing but a huge screen with just a single image and a few words on each slide.

    A picture is worth a thousand words.

 

The power of multiple brands.

    Apple didn't get to be the most valuable company in the world by expanding one brand into multiple businesses.  Apple launched multiple brands.

    In the beginning, Apple Inc. made the Apple computer. But no longer. The Apple computer died along with the home-computer category.

    Today, Apple is a company name, not a brand name. And a good one at that. Apple Inc. owns the brands: Macintosh, iPod, iPhone and iPad.

 

    No CEOs make decisions and follow the principles of branding the way Steve Jobs did. He has left us an amazing legacy.

    Future leaders should study Steve Jobs and his accomplishments so that they too can build brands the way Jobs did. If you build brands like Jobs, you can build the next most valuable company in the world.

 

Coupons, Groupon and Cocaine

         These days marketers are going in exactly the wrong direction.

         The recession has caused a lots of companies to panic. And when companies panic, they print coupons and throw up sale signs. Look in your mailbox, your email inbox or your newspaper and you will see what I mean. Everybody is having a sale.

         But does this coupon-sale-discount strategy work?

         Yes and no.

         Yes, in the short term coupons, sales and discounts do work. Discounts bring in customers and ring up sales. But the short term is not the only thing that needs to be considered when building a business and brand.

         Coupons are like cocaine. The first time you do it, it is the best feeling in the world. But over time it takes more and more of it to achieve that same feeling. And then you need it just to function. You are a cocaine addict. From the mug shots of Lindsay Lohan and others we know how personally destructive cocaine is, yet we fail to realize the similar brand-destroying danger of coupons.

         Think about it. The effects of coupons, sales and discounts are exactly the same as cocaine. The first time you get a discount card in the mail you are elated! Wow! 10% off, 20% off, 2-for-1! You might rush out to the store and take advantage of the offer. But next time you drive by that store you think, I’ll just wait and see if there are any more coupons coming. Next time you drive by that store you get mad since you forgot the coupon. Eventually you refuse to step into the store without a coupon.

         Try checking out of one of these stores without using a coupon and even the sales clerk looks at you like a pathetic loser. Nobody pays full price here what’s the matter with you! She may even reach down to pull out a coupon of her own to give you.

         Coupons and discounts do one thing every well. They teach consumers that your regular prices are too high. A lesson consumers learn very quickly. Once they think your regular prices are too high, they won’t buy from you until given a discount. And desperate companies are too quick to oblige.

         High-low pricing is devastating to the consumer’s opinion of your brand. It’s also devastating to your bottom line. If you are giving away the merchandise, you aren’t making any profits.

         You might be thinking in this economy what other choice do I have? My competition is doing deals so I have to do them too.

         Wrong. Its peer pressure. But Mom, all the other kids are doing cocaine so I have to do it too. No parent would buy that argument. And no marketer should either.

         What is even scarier is that there is excitement surrounding the rise of coupons. Look at the recent love affair with Groupon. A recent front page article of Advertising Age magazine proclaims “Suddenly, Everyone wants to be on Groupon.”

         Suddenly, everyone wants to damage their brand by undermining its position with Groupon! Great.

         Many marketers make it even worse by thinking that Groupon can help their brand and don’t acknowledge any downsides. Instead of a Valupak delivered in your mailbox, Groupon is an electronic coupon delivered via the internet.  

         It is new? Yes.

         Is it a cheaper form of discounting? Probably.

         Do consumers like discounts? Yes.

         Do discounts build your brand? No.

         Do discounts damage your brand? Yes.

         For local and small businesses, the rise of Groupon is seen as the obvious answer to the decline of the Yellow Pages. The marketing dollars for local businesses used to be predominately spent on a listing and an ad in the Yellow Pages. And for decades, this approach was enormously  effective.
         Of course, today the internet has made the Yellow Pages obsolete.

         So how do you build a business whether you are Joe, the Plumber or JC Penny? It comes down to basic marketing philosophy.

         Do you build a brand by:

         1) Standing for something in the mind of the consumer?

         2)  Offering coupons and discounts?

         My answer should be obvious, you build a brand by standing for something in the mind.

         If you are Joe, the Plumber you might be the leading plumbing company in your area, you might be the 24-hour plumber focused on fast service, or you might be the high-end plumber focused on custom work, or you might be the plumber focused on commercial jobs or you might be something else that is focused and clear.

         In any case, Joe needs a good name and a strong, unique visual. He needs to verbalize his focus so his customers can pass along his message. He needs to put his message on his truck, website, business cards. He may also need to advertise his message and credentials.

         Many small businesses today are desperately looking for an easy replacement to the Yellow Pages. So they have jumped on Groupon as the Holy Grail.

         I’m sorry to tell you, but Groupon isn’t the messiah as the hype promises. To me it looks more like coupons in sheep’s clothing.

         Coupons don’t build a brand, they destroy it.

 

Non-Profit Marketing: Lessons from Kate's Club

            For many non-profits, spending money or time on branding is a hard pill to swallow. Too many non-profit leaders think it is either shallow or useless to spend either time or money on improving their brand image, tagline or logo.

            Nothing could be further from the truth. Branding is the key to success no matter if you are selling sneakers or helping the homeless.

            Here in the Atlanta area I have had the pleasure of working with several non-profits including Kate’s Club which was founded by Kate Atwood to help kids deal with the death of a parent. I have known Kate since the beginning of her journey in starting the non-profit.
            There are important lessons to learn from watching a brand emerge. If you are building a new brand, remember to keep these lessons in mind:

 

1. Start Slow.

            Kate’s Club was founded in 2003 with six children, their families and an outing to a bowling alley. In the beginning, Kate kept her day job and worked on Kate’s Club on the side. If she had expected to the club to take off rapidly, she probably would have quit her job right away. That likely would have been a disaster.

            Start slow. Don’t expect donations, volunteers or even people in need to break down your door right way. Just because you are doing good work doesn’t mean you can defy the rules of branding. And the more revolutionary, the more remarkable your work, the more time it is likely to take to build the brand.

 

2. Have Patience.

            Brand building takes time. You need to show great patience. Getting into the human mind isn’t easy. You need to wait it out as word of mouth delivers the message about your brand. That won’t be easy, especially when you feel strongly about your work and your non-profit mission.

            But is the key to success. Without it patience you are likely to make foolish errors in strategy. Early on I remember sitting with Kate wondering how we would get anybody to talk about death, which is  not an easy subject. But because of her own experience she showed great patience and conviction that it was an idea worth sticking to. Too many kids are left to suffer alone after a parent dies because nobody knows how to talk to them.

 

3. Don’t force it.

            You cannot force your way into the mind. Turning too quickly to advertising to build a brand is the biggest mistake companies and non-profits can make. Until your brand has gained credibility and established a position in the mind, any ad dollars spent are wasted.

            In addition, trying to force people to change beliefs or behavior with advertising is doubly foolish. It just doesn’t work. Even if your brand is the best thing since sliced bread, consumers won’t believe you if you say it with advertising.

 

4. Focus on PR

            Say it with PR. It works because it is third-party endorsement of your brand. That’s why Red Bull, Starbucks, Google and many other brands used no advertising to build their brands and instead relied on PR.

            Getting PR for your brand isn’t easy, especially if editors have never heard of your organization. But again, stay patient and keep at it.

            And don’t just write press releases. You need to focus on creating news. What are you the first in? What is your story? Who is the spokesperson? What is your category?

            Remember that neither consumers nor the media care about brands. What they really care about are categories. Nobody cares much about Kate’s Club, but they care about “kids facing the death of a parent.” That’s why it is so important to create a category you can be first in and then position your organization as the pioneer, leader and voice of the movement.

            Kate has very much been a pioneer in the “grief” category. She has been on The View, The Today Show, CNN and many other television shows. She has been profiled in People magazine. And last year published her first book: A Healing Place: Help Your Child Find Hope and Happiness After the Loss of a Loved One.

 

5. Stay Consistent

            You might start slow and show great patience but you won’t succeed unless also remain consistent with your brand.

            You need a razor-like focus, not just weeks or months but for years. Too many leaders and marketers like to tinker. So they constantly change messages, taglines, events, spokespersons etc. That never works.

            At Kate’s Club the brand and message has stayed very focused. They have also stayed focused and consistent with their big yearly gala called the Kate’s Club Cabaret. The first Cabaret was held back in 2004 just over a year after Kate’s Club was founded and every year since.

            A yearly event is a great way for any non-profit to raise money. But you need to keep the event consistent with its name, date and position.

            Unlike most non-profits, Kate’s Club went after a younger audience. While this meant having lower ticket prices, it allowed the Kate’s Club Cabaret to build a reputation as a fun, young people gala. Nor did this strategy turn away the older folks who are now attending in droves. What middle-age person doesn’t want to attend the in-crowd gala with all the fun young pretty people?

            Locking the name of the event to your non-profit is also key. Kate’s Club Cabaret uses alteration one of the best ways to increase memorability of a word in the mind.

            No date you pick for an event is ever perfect. Don’t feel the need to have your gala during the “season,” the best strategy is to pick a date and stick to it.

            The first Kate’s Club Cabaret was in August. Why? Who knows? August is hot in Atlanta and kids are going back to school. Getting the venue might have been cheap? Kate might have just picked it at whim. Whatever the reason doesn’t matter, August became the time for the Cabaret and it was locked into the mind.

            One year Kate’s Club tried to move the Cabaret to September. September is a better month for a charity event, less people are on vacation, the weather is beautiful and there is a more serious feeling in the air. Did it work for the Cabaret?

            No! It was one of worst events in terms of attendance. I was there and it was definitely less crowded and didn’t feel right.

            As a result, the Cabaret quickly went back to August where it has remained ever since, growing bigger and better every year.

            The Kate’s Club Cabaret has grown from a 200 person event to a 500 person event. Last year the tickets were sold out.

            In this sour economy, that is an amazing accomplishment. But it speaks to the power of the brand, the message, the PR and the consistency. Bravo Kate and Kate’s Club.

            The 7^th annual Kate’s Club Cabaret is this Friday, August 20^th. Hope to see you there.

Also read another post with more of my Marketing tips for non-profits

High Five to FiveFingers

 

              There is nothing I get more excited about than seeing a new category and a new brand hit the market. There’s the thrill of discovery the first time you hear about one or read about one. The challenge of finding the store that has one. The glory of getting your hands on one. The pride in showing yours off. And the jealousy and bewilderment on the faces of those who don’t have one.

 

            I’m not alone. In every category, there are always enthusiasts or early adopters who jump on new trends and make them future brand successes.

 

            Creating excitement is one of the keys to brand success. Easy to say, hard to do, you might be thinking. Wrong. There are some surefire keys to generating enthusiasm.

 

            1. Be specific and narrow.

 

            Don’t promise everything; promise one thing. Your product or service might be great at lots of things, but “lots of things” isn’t an idea that gets into the minds of consumers and isn’t an idea to get excited about. Focus on one key idea. Preferably one that is the opposite of the competition.

 

            For years, running shoes have added springs, cushions, treads, electronics and all sorts of things. MBTs and Sketchers even have extra thick heals.

 

            Vibram did the opposite. They don’t wrap your feet in an array of features; they free your feet. More of a sock than a sneakers, wearing Vibram FiveFingers is more like being barefoot. With 26 bones, 33 joints, 20 muscles, and hundreds of sensory receptors, tendons and ligaments the typical human foot is an anatomical marvel of evolution. Like the rest of the body, the feet need to be stimulated and exercised to keep them healthy.  Vibram FiveFingers’ barefoot technology stimulates and exercises your feet.

  

 FiveFingers = Barefooting.

Stimulating your feet to make you stronger and improve your balance.

 

            2. Create a visual difference.

 

            If your brand doesn’t have a visual difference it is going to be very difficult to create excitement. Shock and surprise is what generates excitement. You need to stop consumers in their tracks to say “What is that?!”

 

            Sometimes a visual difference is a natural part of the product; at other times you need to exaggerate or create a difference.

 

            Monster introduced an energy drink in a 16-oz can. That shocking visual difference generated interest and excitement. It also made Monster the #2 brand behind leader Red Bull whose 8.3 oz can created its own visual difference by being the first small can. Most recently 5-Hour Energy entered the market with the energy shot in the exciting 2-oz bottle.

 

            With Vibram FiveFingers, the difference is shocking and easy to see.

             It’s the toes!

 

            Vibram could have easily hidden the toe pockets, but they didn’t. Instead, the design enhanced them. Every time you wear a pair of FiveFingers you are sure to get several people asking “what is that on your feet?”

 

            3.  Make it pass along friendly.

 

            One of the biggest mistakes companies make is not giving a product a strong brand name that consumers can use to pass along the message to others. Both the name and brand message need to be in language that consumers will actually use.

 

            Seattle’s Best Coffee. Too generic, not distinctive, hard to pass along.

            MBT. Meaningless initials, hard to remember, hard to pass along.

            Eucerin. Impossible to pronounce, impossible to spell, hard to pass along.

 

            Eucerin has survived and thrived in spite of its impossibly horrible, unpronounceable name only because of its strong in its position as the dry-skin treatment dermatologist recommend. (Apparently the dermatologist figured out how to pronounce it.) The rest of us are unlikely to ever learn it. I buy Eucerin, but never tell anyone, because I have no idea how to say it.

 

            It’s best to have a name and a message that are both pass-along friendly. A unique, memorable name combined with an easy-to-understand and easy-to-explain message.

           

            FiveFingers is a super name. Much better than TenToes which is too generic. The idea of using fingers for toes is what makes the name stick in the mind. They look like gloves for your feet. That idea hooks the visual difference into the name. Of course, that difference also leads itself into the explanation of why FiveFingers?

 

            “I love my FiveFingers because being barefoot is better for my feet. It makes them stronger and healthier and improves my balance.” A nice pass-along name and message.

 

          

                A few problems with the FiveFingers brand.

 

            First, the typeface they use is very difficult to read. Never sacrifice legibility for visual gymnastics. Graphic designers may love to create artistic looks, but the bottom line is that consumers need to read the words.

 

            Second is the double branding and third branding when you throw in the model names. I bought the Vibram FiveFingers Bikila for example.  Way too many names going on.

 

            The box has a large Vibram logo. That extra word just drags down and dilutes the idea. It is best to focus on one name. Vibram is unnecessary. Sure Vibram is the company that makes them. But FiveFingers is the brand. If Vibram is there at all it should be tiny and more oriented towards the trade. Consumers buy FiveFingers. The trade orders them from Vibram. Of course, the company is most likely in love with its Vibram name and heritage. Consumers could care less, they should have put the FiveFingers brand name on the shoes. Sadly the company doesn’t own the fivefingers.com website either, they use vibramfivefingers.com.

2009: The Year of Brand Darwinism

Welcome to a brand new year. It is 2009 and almost everybody is hoping 2009 will be better than 2008.

 

Sadly many brands didn't live to see 2009.  Some of the casualties of 2008 include: Bombay Co., Aloha Airlines, Skybus, Lehman Brothers, Bear Stearns, Linens N' Things, Sharper Image, KB Toys and Mervyns.

 

And this year many more are likely to be wiped out like Circuit City or perhaps even Sears/Kmart or Chrysler.

 

But is this bloodshed all bad? And how can you your brand avoid extinction? Read on.

 

First of all, brand busts are not a bad thing. It is brand Darwinism at its best, survival of the fittest. It is a good thing for everybody when only the strongest brands survive.

 

Currently we simply have too many of everything. Too many clothing stores, too many gas stations, too many malls, too many sandwich shops, too many coffee shops, too many furniture stores, too many car dealers, too many condos, too many real estate agents.

 

This excess was created by the previous economic boom. Anyone could start a business, open a franchise or buy a house and they did. And many of those brands, buildings and businesses needed to fail because they were bad ideas. Nobody can win unless somebody loses. That's life.

 

It is time to thin the herd. Of course, thinning the herd will not sound good if you are a sick buffalo trying to keep up (like anybody working at Kmart). But it is the best thing for the whole herd (Walmart/Target and you.)

 

Thinning the herd means more food and a greater chance of survival for the stronger animals and their young. The sick, old and weak animals drag down the whole herd down just like the sick, meaningless and over-populated brands drag the whole economy down.

 

If strong brands are allowed to succeed and weak brands are allowed to fail, the free market will allow prosperity to return. Propping up loser companies in the country or loser brands in your company is not a good idea. (The bailout,  for example.)

 

Now is the time to cut the losers (Chrysler, for example.) Nobody wants to see people lose their jobs. But the only way to create jobs is with strong brands and companies. Companies with strong brands generate profits. GM has billions in sales but still loses money, because they don’t have strong brands.

 

Not only do we have too many brands, but we also have a lot of very weak brands. How do brands become weak? Expansion and unchecked growth.

 

As every gardener knows, the way to keep a plant vigorous is by pruning. Corporate and government gardeners seem to have trouble accepting and understanding this principle.

 

Unchecked growth in all directions weakens a plant which needs constant pruning to remain healthy. The same hold true for companies. Yet when times are good, nobody wants to cut brands, products or services. And remarkably even when times are bad, nobody still wants to cut brands, products or services.

 

So how can you avoid extinction this year? Hopefully you have been a good brand gardener and have been pruning and keeping your brand strong. If you haven't, you can only hope your competition is a worse gardener than you are.

 

Just being well-known does not spare you from extinction. Unless you can link your brand to a category or an idea in the mind, your name might be known but it would be worthless. Chevrolet, for example.

 

In general, leading brands or strongly differentiated No. 2 brands in categories with a future have the best chance for success.

 

If you are a me-too No. 2 brand like Linens N’ Things or Circuit City, you are in trouble. If you are a No.3 brand especially behind two strongly differentiated competitors you are really in dire straits like DHL or Kmart.

 

If your category is a thing of the past, even though your name is well-known you are going to find survival difficult like Kodak, Sharper Image or Mervyns.

 

What the world needs, what the U.S. needs, what your company needs, (perhaps even what your waistline needs after too much Christmas pudding) is a lesson in gardening.

 

A healthy pruning now will be rewarded with a lovely growth spurt later on. Sounds illogical but it works.

 

Nobody ever said marketing was logical.

 

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!

Being different visually

The ability of a brand to stand out in the marketplace will enhance its chance of standing out in the mind. We live in an over-communicated world where each of us is bombarded with hundreds of branding, advertising and editorial messages daily. If your brand looks like every other brand, it isn’t likely to be noticed.

Looking the same as everybody else might be a good strategy if you are a 13 year-old-girl in middle school, but not if you are a brand looking to succeed in the marketplace.

A visual difference is important for three reasons:
1: Gets your brand noticed in a crowded marketplace.
2: Establishes your unique position.
3: Reminds customers of your brand every time they see your visual difference.

A unique visual difference is usually created by taking the standard look in a category and flipping it on its head.

Take beer, for example. Most beer is consumed in pint glasses, bottles or cans. All manly delivery vehicles. Not Stella Artois. Stella is served in a chalice glass, a delicate glass with a stem.

A Stella Artois glass looks more like a wine or an iced-tea glass than a beer glass. Of course, there are many technical and historic reasons for the glass. The chalice, along with a special Stella pouring ritual, allows the beer to flow, breathe and develop a proper head. According to its website: “Not only does the beer taste great, it also looks wonderful.”

Stella could have said: “Not only does the beer taste great, but it also looks different. And being different is what has built our brand in the mind.”

People see a Stella chalice and say “Wow! What is that you’re drinking?” The glass is not for everybody, of course. Building a powerful brand requires sacrifice. By giving up thebeer-guzzling frat boys and their bars, Stella Artois has been able to focus on the upscale market and force its glass into distribution.

At first, bars didn’t want to deal with the Stella glasses which are delicate, hard to wash and don’t stack like pint glasses. But Stella stuck to its guns and its chalices. And its dedication has paid off. (Nobody said executing a good strategy is easy.)

Many brands were built with a striking visual difference:
- Lime in the top of a Corona bottle.
- Curves of a Coke bottle.
- Grille on a Mercedes.
- Grille on a BMW.
- Wristband of a Rolex.
- Thinness of a Razr.
- Small can of a Red Bull.

Many times a unique visual difference can be created with a color:
- Green jacket at the Master’s golf championship.
- Red hat of a cardinal.
- White ear buds of an iPod.
- Orange handle of a Fiskars scissors.
- Purple Nexium pill.
- Brown UPS truck.
- Red bull’s eye of a Target store.
- Gold jacket at Century 21.

Why has the Toyota Prius outsold the Honda Civic hybrid more than 3-to-1? Because the Prius looks different than any car on the road. (You can’t tell a regular Civic from a hybrid unless you bend down and search for the small wording on the back bumper.)

One automobile expert explained the success of the Prius over the Civic hybrid with the comment: “Consumers don’t want a hybrid. They just want a car that looks like a hybrid.”

Consumers buy hybrids, of course, because they want to do something positive about the environment. But they also want to make sure everybody else on the road knows they are doing something about the environment. The biggest mistake car makers make with hybrid technology is converting existing models into hybrids. They should be thinking new models and new names, if not totally new brands.

A visual difference also helps to establish a strong number-two brand. After Red Bull got going, hundreds of companies including Coca-Cola flooded the market with me-too energy-drink brands. All the me-too brands copied Red Bull and its small 8.3-oz. can. (Small is a good visual symbol for an energy drink because it connotes the stuff is strong. But Red Bull owns the “small can” visual.)

The way to build a strong number-two brand is to be different. That’s exactly what Monster did. It was first to introduce a 16-oz. can and a 16-oz. name.

Today, Monster is the number-two brand in the energy-drink category. After Monster’s success, everybody rushed to market with their own large cans, but it didn’t matter. The spoils go to the first brands in the mind and those brands are Red Bull and Monster.

Being different doesn’t work every time. The laws of marketing are not 100% guaranteed. There are always exceptions.

One exception is the Pontiac Aztek, a car that was certainly different but about as successful as the Edsel. There has to be a strategy behind a difference. Suburban Moms driving SUVs don’t want to be different. Their 13-year-old daughters would die from embarrassment.

On the other hand, young urban car customers love to be different, so the odd-shaped Scion, a youth-focused brand, is doing great.

Being different may seem risky and your distribution channels may scream, but it can be well worthwhile. Being different may kill you in middle school but not in the mind which is where powerful brands are built.

If we can't beat 'em, we'll join 'em and other bad ideas

Some branding strategies are just plain crazy. Two crazy strategies that are making the rounds in boardrooms across the county are:

If we can’t beat ’em, we’ll join ‘em.

And it’s close cousin

If they take mine, we’ll take theirs.

Are you kidding me, what are we on the playground in first grade again? You should not run a company like a six-year old. You need to stand tall, stay focused and remain true to your brand.

TMZ TV

TMZ.com is brilliant because it owns online celebrity gossip. Without a magazine to sell or a television show to promote, it has been able to focus on delivering breaking news fast. Managing editor Harvey Levin is a terrific spokesperson and appears frequently on all the major news channels.

TMZ was first with some of the most important celebrity stories of our time, like Mel Gibson’s arrest and rant. Since news reports from the frontlines of the Paris, Lindsey and Britney theaters seems to captive consumers around the globe business is booming.

Most of TMZ competition comes from line-extensions of television and magazine brands. People.com, ET.com, Extra.com, USWeekly.com, etc. They have moved into TMZ turf and have aggressively gone after its audience.

To stay on top, TMZ.com needs to reinforce and extend its breaking news advantage over the competition. TMZ puts up new posts almost continuously 24/7. They don’t need to hold back any exclusives for a magazine or television show; they go live immediately.

So what does TMZ do next? If they take mine, we’ll take theirs. TMZ is launching a television show.

What? Yup, you heard right. All those gossip magazines and celebrity television shows are launching websites and trying to steal our traffic, so we’ll go on TV and take their viewers away and see how they like it.

What a dumb move. It undermines the power of the brand, weakens the strength of its focus and dilutes the meaning of TMZ in the consumer’s mind.

Folgers Gourmet Coffee

Folgers, the leading coffee brand in the U.S., has seen its sales and market share fall dramatically over the years as everyone upgrades their coffee experience. Call it the Starbucks effect. Consumers have gotten used to being spoiled with $3 lattes and can’t seem to stomach that stodgy and bland Folgers brew from the can at home anymore.

So what does Folgers do? If we can’t beat ‘em, we’ll join ‘em.

If expensive coffee is what people want to buy by golly that is what we’ll give them. No use in fighting Starbucks and its $12-a-pound coffee, we’ll just launch our own.

That might have been a fine idea, if Folgers did it 15 years ago with a new brand name. (Shultz purchased Starbucks in 1987 and started expanding across the country immediately. It is not as if expensive coffee took off overnight.)

McDonald’s Premium Coffee

Blame it on Starbucks again. McDonald’s is feeling the heat from the upscale coffee shop so it tried to raise the bar on its own brew. But if you want premium coffee, you don’t want it from McDonald’s. Better to stick to the hamburgers and happy meals.

Diet Pepsi Max: Invigorating Cola

I have yet to figure out with this strange product with the long name is all about. I saw one at the gas station and had to check it out. I asked the guy behind the counter what it was and he looked even more baffled than me!

Forget the fact that the stuff didn’t taste very good. Actually many times taste is irrelevant. Red Bull is not terribly tasty and tests show Pepsi tastes better than Coke.

The real problem is that Diet Pepsi Max has no message. Invigorating cola is unlikely to be a tangible new category any time soon.

My best guess is that Pepsi is feeling the competition from energy drinks and launched Diet Pepsi Max to try and join the party. The ingredients list caffeine and ginseng. It’s about as good idea as adding vitamins to Diet Coke, (Diet Coke Plus.)

Wheaties Multivitamins

Apparently, the breakfast of champions isn’t enough for athletes anymore. They also need a Wheaties multivitamin.

Isn’t the advantage of Wheaties that it delivers your vitamins, minerals and fiber all in a nutritious cereal? What no need for breakfast anymore; just pop a pill instead? Not a good message for Wheaties to be sending.

The enemy of fortified cereals are vitamins. Cereals, especially Wheaties, needs to emphasized the importance of starting the day with a healthy breakfast full of vitamins, fiber, protein and carbohydrates. Popping vitamins an alternative to that.

Snapple Tea Bags.

OK, Snapple has a big success in bottled iced tea. And I’m sure they are pretty peeved that Lipton has come in with a very successful line of Green and White bottled teas. So Snapple’s response seems to be, well we’ll just launch tea bags and see how Lipton likes that.

If they take mine, we’ll take theirs. Not a very mature or wise branding strategy.

Hershey’s Organic Chocolate

Totally insane. Yes, organic and natural are the big buzz words in food today. But you can’t just stick them on any brand and think it will work. Organic Cheetos isn’t too bright either. What is next, organic SPAM?

If you can’t beat your competition, you can’t join them. Trying to force your brand into a position already owned by a competitor is not only foolish but undermines your existing brand by reinforcing the negatives of your position.

If competition moves into your category, deal with it. Success always brings competition. Don’t be territorial and try to move into your competition’s market, especially when it represents a declining market.