The Origin of Brands Blog

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.

Viral Marketing

The premise of viral marketing is that people will enjoy an advertisement so much they will not only watch it but be willing to pass it along to several other people they know.

The rise of the internet, email and social networking sites have made viral marketing an easy, cheap and highly seductive new tool for marketers. The recipe is simple. Identify individuals with high social networking potential, deliver your message to them, have them tell two or more friends and let the viral process begin.

But does it really work? Is it an effective way to build or maintain brands?

Not in my opinion.

And not according to the reseach. A recent study by JupiterResearch found that only 15 percent of campaigns achieved the goal of having consumers pass along the brand message. Not very successful at all.

Some messages do spread wildly over the internet like The Subservient Chicken for Burger King. But did the chicken campaign help the Burger King brand? I don’t think so. Kids thought the chicken was cool, but it didn’t lead them to talk about or chow down those Burger King chicken sandwiches.

The problems with viral marketing are the same problems facing traditional advertising.

1. Consumers don’t like advertising.

Advertising is not something consumers like or generally want. When they can, they avoid it at all costs (with TiVo, pop-up blockers, spam filters, no-call lists etc.)

Consumers are very sensitive and suspicious of companies sending messages to them because advertising lacks credibility. Advertising is self-serving one-way message which is why advertising works best to remind people of something they already know rather than to try and tell people something new.

When the internet was new, every email message you received was exciting. “You’ve Got Mail!”

When television was new, it was the same thing. Any program or advertisement on television was exciting to watch.

But the internet is not new anymore. Most people dread checking their inbox because finding the important stuff is going to be difficult since there is so much bad stuff (AKA spam or advertising). We now have spam filters, blockers and all sorts of contraptions to weed out the bad stuff, something unheard of in the early days of the net.

2. Too much focus on creativity.

Getting the attention of consumers is tough so most viral campaigns are built on jokes or gimmicks. Jokes and gimmicks don’t build brands. Ideas build brands. But people don’t pass along ads with just an idea, even if it is a great idea. Where is the credibility or fun in that?

In order to boost consumer involvement, viral marketing agencies (like regular advertising agencies) have focused on creativity with mainly humorous and outrageous concepts to gain attention. But like funny commercials where nobody remembers the advertiser, funny viral marketing campaigns face the same fate.

They might be funny but they usually have no relevance or connection to the brand. Monk-E-Mail has nothing to do with finding a job. Unless you are a monkey.

It is the catch-22 of viral marketing. Nobody is going to pass along a pure advertisement to friends and family. But the funny or gimmick message they are likely to pass along is usually devoid of any true brand message.

A powerful gimmick is an oxymoron. And viral marketing is a gimmick.

Of course, not every viral campaign is a waste of time. A few campaigns do make sense, but it is only on the rare occasion where you have a known brand and the gimmick has real significance to the brand and delivers a message. Much like powerful traditional advertising is created when you reinforce an already embedded idea, viral advertising is the same.

HBO’s Whack-A-Soprano takes the core of the brand and uses a gimmick to entertain fans. It would not have worked with a show and cast nobody had ever heard of.

What does work to build brands?

Word-of-mouth generated by a legitimate idea or message is what builds brands. And the best way to get high-quality word-of-mouth started is with PR.

High-quality means people talk about your brand not just your advertisement.

The Pets.com sock puppet, the Taco Bell Chihuahua or the Burger King Subservient Chicken were all low-quality gimmicks. Consumers only talked about the ads not the brands.

The difference between viral marketing or advertising and PR is the third party effect. Viral marketing or advertising is a message from the advertiser. PR is a message from a third-party. Not you saying you are great, somebody else saying you are great.

The credibility of having a third party endorse your brand is what builds the brand. If you are thinking “I can’t get any PR for my brand, I need to do something like viral marketing or advertising to build my brand” you are in big trouble. Because if you are having trouble getting PR, then what you have is a branding problem. You brand is not relevant, is a copy-cat, has the wrong name or something else is wrong.

Consumers are much more likely to forward an interesting PR story to friends and family than an advertisement. Why? The third-party factor.

I am not passing on a self-serving message from a company. I am passing along an endorsement by the Wall Street Journal about a product. Big difference.

But what about …?

Branding is both an art and a science. The laws of branding are not like the law of gravity. The laws of branding work most of the time, but not every time. On the other hand, the law of gravity works every time.

In branding, exceptions and special circumstances sometimes apply. What is troubling to me is that so many people only want to look for the exceptions.

It’s like playing the lottery. Sure you can beat the odds, but your chances are very small. Sure you can beat the odds in branding, too, but your chances are very small.

Basing your brand strategy on the exceptions is a risky way to build a brand. The best, safest and most successful way to build a brand is by doing what is most likely to work. And what is most likely to work? Following the laws of branding which are based on a close study of marketing history.

Just because the line extension Diet Coke was successful, even though it was not first in its category, doesn’t mean you can do the same thing in your market.

Just because one smoker lived to be more than 100 years old, doesn’t mean you can smoke and not suffer an early death from cancer or other health problems. Once in a while somebody just gets lucky.

My last post was all about understanding your brand better so you could make an informed decision about when it is best to launch or not launch a new brand. As I said, the biggest problem we have in consulting sessions is that small companies want to launch new brands and shouldn’t and large companies don’t want to launch new brands and should.

Let me debunk some of the biggest exceptions to the laws of branding. Ones that most critics seem to cite.

Diet Coke

The day that Coca-Cola introduced Diet Coke, TAB was outselling Diet Pepsi by 32%. TAB was a lousy name, just the internal code name (The Alternative Beverage,) but it became a strong brand. What eventually undermined the TAB brand is that Coca-Cola keep using saccharine as the TAB sweetener and didn’t change it to the new NutraSweet.

It was Diet Coke that got the benefit of NutraSweet. In addition, the whole diet industry exploded in the 1980s. Of course, Diet Coke was successful. When a line extension from a leader faces only competition from other line extensions, then its line extension will win.

The real lesson to be learned is that Diet Pepsi had no chance to become the leading diet cola, even though the line-extension brand was launched years ahead of Diet Coke. The number-two guy is in trouble with an extension. Pepsi should have launched a diet product with a new name. Preferably without the word "diet" in the name.

General Electric

GE does have one business without the GE name, NBC. If they didn't buy it with the name already established, they probably would have called it General Electric television. I have little doubt about that.

General Electric is a weak generic name. But the company was founded over 100 years ago. GE invented the light bulb and many other important technologies of the last century. Furthermore, they have gotten out of businesses where they weren’t number one or number two.

For 20 years Jack Welch was a strong leader, PR master and a household name in the media. GE competes mostly against other conglomerates. And GE has been not been successful entering into competitive new technology markets like computers.

The Japanese

Japan is a line-extension society. With a number of exceptions (the automobile companies, for example) the big Japanese companies tend to make everything. Everything except money, that is.

Line extension has been a tragedy for the Japanese economy. While Japanese products have a reputation for high quality, most Japanese products are sold on price. Why is that? Because when you sell everything under a single brand name, it’s difficult to build a brand.

And when you sell on price, you don’t make money. The profit margin for the average Japanese company is in the neighborhood of one percent. Even Dell in the cut-throat PC market manages about 6 percent net profit after taxes, and the average U.S. company does even better than that.

The two stock markets reflect the superiority of the American approach to the Japanese approach. In the last 17 years, the U.S. stock market (Dow Jones Industrial Average) is up 406 percent and the Japanese stock market (Nikkei 225) is down 54 percent.

Why? The average U.S. company is much more focused and brand oriented than the average Japanese company which puts its name on everything. And when your name is on everything, it ends up standing for nothing.

My best advice is to plan your company’s branding strategy based on principles that work most of the time. Only pointing out and thinking about the exceptions is unlikely to help you succeed.

Focus your brand, understand your brand and stay true to your brand. That is the closest thing to a sure thing in branding.

Branding boundaries

Understanding the boundaries of your brand. What you can or cannot do and what you should or should not do with your brand when it comes to launching second brands.

In our consulting practice, we work with big companies, small companies, old companies and new companies. And while the actual laws of branding never change, what laws are most relevant for a particular client often do. What might work for one brand is not necessarily going to work for another.

The most frequent troubles occur with the law of the second brand. Launching a second brand is a powerful tool in expanding the power, success and growth of a company.

But companies often misunderstand when a second brand is necessary. Companies that should launch second brands often don’t and companies that shouldn’t launch second brands often do.

A company should launch a second brand when its initial brand is so strongly positioned in the mind that the new idea will undermine its meaning. But sometimes launching a second brand while strategically sound would undermine the focus of a company and overtax management’s time and attention.

Here are five brand attributes to analyze before your company launches a second brand:

1. Size
Bigger companies have more to gain from second brands. Smaller companies have more to lose from second brands.

2. Age
Older companies need to launch second brands to enter new markets. Newer companies need to dominate an existing market before moving on to a new market.

3. Competition
Companies with many focused competitors need second brands more than do companies with fewer line-extended competitors.

4. Opportunity
The bigger the opportunity, the more important it is to use a second brand. The less significant the opportunity, the more confusion a second brand will cause.

5. Resources
The man who chases two rabbits catches neither. Unless he hires another man. Can your company afford the resources required to launch a second brand? And resources don’t just mean the money for a second marketing budget, but also the additional drain on management’s time and attention.

Coca-Cola would have been wise to make Diet Coke a new brand instead of a line-extension. While Snapple would have been foolish to give Diet Snapple a new brand name. (Big companies should generally launch second brands. Small companies should not.)

General Electric, a company over a century old, can survive with one brand because in most categories it does not faced focused competition. But GE got slaughtered in mainframe computers because it faced IBM and other focused competition. (Companies with focused competitors need second brands.)

Toyota needed a second brand to move up-market into luxury automobiles (Lexus) and a third brand to move down-market into cool, hip machines for the younger crowd (Scion.) But Lexus smartly keeps its brand focused by using model numbers instead of new brand names for its sedans, SUVs and sports cars. (Both luxury cars and cool cars are big opportunities that deserved new brands.)

Understanding the world of branding is important but knowing where your brand can go is even more important.

Consumers don't love brands

It's not what most company CMOs and brand champions want to hear. But I have to say it anyway: Consumers care more about categories than they do about brands.

What? You might be thinking. You’re a branding expert. Isn’t it hypocritical of you to say that brands aren’t that important?

Not really. Consumers love categories, but they refer to these categories by brand names. Inside the consumer’s mind, the brand is just a shorthand device for the category. A consumer thinks, I’ll impress my friends by ordering an ultra-expensive vodka. But that’s not what he or she says to the bartender. “I’ll have Grey Goose on the rocks.”

Brands succeed not because of love but because of location.

Brands are simply an efficient means to an end. And powerful brands are those that stand for and represents a distinct category or concept in consumers’ minds.

In an over-complicated world, we search for simplicity wherever we can find it. And great brands provide that in spades.

You want “cheap chic,” just say Target.
You want an “energy drink,” just say Red Bull.
You want “performance athletic wear,” just say Under Armour.
You want a “professional all-day laptop computer,” just say Lenovo. (Wait a minute, they didn’t use the strategy I suggested in my last post yet. But imagine if they did, how terrific a brand it would be?)

Too many company managers are too much in love with and too focused on their brands. And management thinks, we consumers are in love with their brands, too.

But we’re not. We are only in love with the ideas, concepts and categories that brands represent in our minds.

Therefore the key to building and maintaining a brand is to be sure the category and idea your brand represents is vibrant, relevant and frequently thought about.

Look at Dell, a company in trouble. Dell is in trouble because it stands for a category in trouble. In the mind, Dell means desktop computers sold direct.

When businesses were buying customized desktop computers by the truck load, Dell was the number-one computer company in the world. Everyone assumed Dell was a platinum brand and whatever products the company offered, consumers would think they were great.

So Dell began to market computers to consumers with advertising like “Dude, you’re getting a Dell!” They compounded their troubles by also trying to sell a wide range of products including television sets and MP3 music players.

As you probably know, “Dude, you’re getting a Dell” fell flat along with other sales initiatives at Dell. Today Dell’s sales are down, Dell’s stock is down, and Hewlett-Packard is now king of computer hill. Michael Dell even fired his CEO and is now back in charge at Dell.

Dell, a brand in trouble? No. Dell is a category in trouble. If we all wanted desktop computers for our companies, Dell would still be on top.

Unfortunately, today most business people as well as consumers want laptop computers. Business is going mobile and global. So instead of laptops, many companies give employees laptop computers. Today’s laptops last longer, have more memory, more power, cost less and allow you to work from home, the airport or on vacation.

Sure Dell has launched laptop computers to meet this demand. But here is where the problem lies. In the mind, the Dell brand doesn’t mean laptop. It means customization and buying direct which happen to be two things inconsistent with buying a laptop computer. Most laptops are too small to allow for much change and most people want to feel and touch a laptop before purchasing the product.

No matter what Dell does, the brand is in trouble because the category is in trouble.

No brand owns the laptop idea today because no brand has focused on it. Compaq had a great opportunity. (They had the name and the cute nickname “the luggable computer.”) But they gave up on that focus and started to sell all types of personal computers until they finally threw in the towel and merged with Hewlett-Packard.

Toshiba had a great opportunity. At one point, Toshiba was the largest seller of laptop computers (and may well be so today.) But like Compaq, they also got into the desktop market. Furthermore, the Toshiba name is tarnished because the company sells a broad range of products under that name.

That’s why Lenovo has such an outstanding opportunity. If they focused on their ThinkPad brand name, they would have the perfect product, the perfect name and the perfect opportunity to dominate the laptop category. That’s how you use a category to build a brand. But the only way to lay claim to a category is by having a focus. If you make a full line of products for all types of consumers, you haven’t laid claim to anything and you will never own any real-estate in the mind.

So what is a once high-flying company like Dell to do if it sees its category sliding?

Launch a second brand to ride the new opportunity and let the old category drift with your existing brand.

That’s what Dell should have done. That’s what Kodak should have done. That’s what Toyota did.

Toyota, the reliable, affordable but slightly boring Japanese car company, made itself both luxurious and cool. But not with the Toyota brand. The company did it by launching the Lexus brand at the high end for the luxury market and the Scion brand at the low end for the youth market. (And today they dominate both markets.)

Much has been written about the success and brilliance of the Apple stores. How they demonstrate the power and consumer love of the Apple brand.

It’s just the opposite. Apple stores are strong evidence of the power of the iPod category. High-capacity MP3 players are a hugely vibrant and relevant category today. (Apple has sold more than 100 million iPods.)

Certainly Apple stores do an excellent job of promoting Apple products, giving great service and excellent technical support. But without the success of the iPod category, Apple stores would be just like Sony stores, empty. No matter how cool the décor.

Some branding experts say Sony needs to get consumers to love its brand again, just like consumers love the Apple brand. But the only way Sony can do that is by dominating a category people are in love with or willing to fall in love with. Instead, Sony sells a full line of products to all types of consumers and is getting no love.

As Apple iPods become more mundane and as Apple iTV and iPhone devices fail to generate much excitement, we will see how successful Apple stores continue to be. If I were Apple, I would make my stores iPod stores, focusing on music and players.

With Tower Records gone, kids have no place to hang out. And nothing works better than music in drawing a crowd. I would promote music in order to get people to buy more, listen to more and keep my music category vibrant. Because we all need a little love in our lives. And the way to brand “love” is by building and maintaining lust for a category.

New medium, new leaders

The way to exploit a new mass medium like the Internet is by launching a new brand with a new name. Not by dragging an old brand into the new medium. Yet time and again companies make this classic error.

Why can’t the kings of yesterday’s technology reign supreme in a new kingdom?

Because, a new brand has greater authenticity and the freedom to adapt itself better to suit the new medium.

If you study the history this is exactly what has happened over and over again.

Newspaper brands never made it big on radio. Radio brands never made it big on broadcast television. Broadcast TV brands never made it big on cable. Cable brands never made it big with magazines. And newspaper, magazine, radio, and television brands never made it big on the Internet.

Brands that have made it big on the Internet are brands focused on and built exclusively for the medium: Yahoo!, eBay, Amazon, Google, You Tube, My Space and Monster.

Look at celebrity gossip, many people’s favorite secret pastime and one I can’t get through a Stairmaster cardio session without.

Over the years celebrity gossip has seen a different brand leader for each new medium.

Newspapers: The Enquirer
Television: Entertainment Tonight
Magazines: US Weekly
Cable: E!
Internet: TMZ

For almost every category it’s the same story. A new mass medium brings new leaders. Rarely does the old guard survive the new world order. And if they do survive, it is usually only short lived. Sooner or later a focused competitor comes along and knocks them off their throne.

That is exactly what TMZ has done in the celebrity gossip category. In just a little over a year TMZ.com has become the leader in the category beating out old-guard heavy hitters like People.com, E! Online and Entertainment Weekly’s portal. With a short, unique name and Harvey Levin, a PR savy managing editor and spokesperson, TMZ has arrived and become king of celebrity gossip on the Internet.

So if you have a successful television, newspaper or magazine brand and are thinking of transferring it to the Internet, think again. Go ahead and build an Internet site, but give your site a new name and a new brand identity.

And if you are a start-up looking to build an Internet brand and are fearful of competing with offline brands with more resources than you can imagine, fear not. Have faith that small focused brands can become the David that slays the Goliaths. Look at TMZ for proof.

Warning: Massive line extension can kill you.

Brand Mortality series: Part 2.
Click here to read Part 1.

The second disease that will kill a brand is massive line extension in the face of focused competition.

A great example of a brand that has fallen victim to this disease is Chevrolet. What is a Chevrolet in the mind of a consumer?

A large, small, cheap, expensive car or truck. When you try and have your brand stand for everything, your brand ends up standing for nothing. Chevrolet is a well-known but weak and dying brand.

What is killing Chevrolet is not just line extension, but the strength of its focused competitors. Diet Coke and Bud Light are flagrant line extensions too, but the lack of any focused cola and beer competitors keeps these brands alive and well.

Chevrolet is not so lucky. It has to contend with extremely focused competition. Here are a few of Chevrolet’s competitors and the concepts they own in the mind:

Toyota = reliable
Lexus = luxury
Scion = hip kid car
Volvo = safety
BMW = driving
Mini Cooper = quirky

Miller is an example of how a number-two brand is harmed more by line extension than a leader brand. It is even more important for a number two brand to stay focused than it is for the leader. Staying focused is the only chance a No. 2 has for keeping up with the leader.

Leading brands have more leeway. They can often get away with a certain amount of line extension. They still shouldn’t do it, but line extension doesn’t hurt a dominant brand as much as it does an also-ran.

Microsoft can line extend all it wants. With 95% of the operating-system market, does it really matter? No. However, they still do better when they launch new brands like Xbox.

Miller has paid an enormous price for its countless line extensions over the years. Miller could have been the number one brand of beer in the U.S.

Miller Lite was the first light beer in the mind. But instead of giving its new light beer a powerful new brand name, Miller Brewing chose a terrible generic name, Lite.

To compound the error, the verbal confusion between “Lite” and “light” forced the company to rebrand its new light beer Miller Lite.

Who hands a bartender their order written on a napkin? Verbally, Lite and light are indistinguishable. Tragic.

There’s another problem, too. When you saddle a beer with a diet word like light, you undermine its manliness. Miller made multiple mistakes all at once and it has cost them dearly.

Miller not only messed up its Lite brand, but at the same time it line extended the heck out of its Miller brand. The brewer launched countless varieties of the brand, from Miller Genuine Draft to Miller Regular to Miller Clear to Miller Reserve. Then, of course, there’s also the light versions of most of these brands.

When you compete with The King of Beers and the focused smaller brands like Corona, Samuel Adams and Heineken, you can’t afford to make many mistakes.

Other beer brands have made the same mistakes as Miller in varying degrees. But like cancer, the line extension disease also takes a while to kill you.

Keep tuned. Other beer brands will pay the price Miller has paid and will face an untimely death. Heineken in particular is vulnerable to succumbing to a line extension disaster with its launch of Heineken Light. A short-term winner maybe but long-term it is likely to damage Heineken and undermine Amstel Light. That is the way line extension works. In the short term it feels great, in the long term it kills you.

The best way to keep brands healthy is limiting exposure to line extension as much as possible. A little won’t kill you, but too much and you can easily overdose and die.

Brand Mortality: A two part series.

Turns out brands are just like the rest of us, merely mortal. They can’t live forever. This is good news and bad news for companies. Good news because it creates opportunities to launch new brands but bad news because it means having to say goodbye to some old, dependable friends.

What causes a brand’s demise? It is not as if they are really living and breathing like you and me. Yet they are vulnerable to annihilation by two main causes:

1: The extinction of a category.

As a category declines, so does the value of the brands that dominate that category. In the mind of the consumer a brand is only worth what its category is worth. Because it is categories that consumers really care about not brands. Brands are just short-hand for categories in the mind. Therefore once a category dies so do the brands associated with it.

Here are some brands that have died because of the decline and extinction their categories:

Polaroid: The brand that pioneered instant photography was wiped out along with its category by the 1-hour photo-processing places.

Wang: The brand and the word-processor category were wiped out by the personal computers.

Western Union: The telegram? Yes, it used to be a big business but the category was wiped out by the fax and cheap long-distance phone calls.

Kodak: This brand is on life support as conventional photography fades away and digital photography takes over.

The problem most companies have in dealing with the realities of brand mortality is that they are so in love with themselves and their brands that they are reluctant to launch new brands. And new brands are where the real opportunities for growth and prosperity lie in business.

Instead of pulling the plug on their old brands, many companies try and move these geezers into the future. Witness the launch of Western Union telephone service in the 1980s, Kodak digital cameras in the 1990’s.

It never works. Because once you have a powerful brand that stands for something in the mind, it is almost impossible to change it.

Once in a great while a brand will have a second coming. But it is very rare and only occurs when it enters a category with little or no competition. This is the case with Western Union. The brand survives today because it was the first brand to move into the money-transfer business. Using the old name really gave them no advantage, being first is the real reason for their success.

The biggest branding tragedy I see today is the decision to rebrand Cingular to AT&T. Cingular, a joint venture by SBC and BellSouth, was a focused and successful brand in the wireless world. Six years of brand building is now going down the chute.

Why did AT&T do it? Because management still thinks AT&T is a powerful brand and they want to take advantage of the dubious concept of convergence.

According to Boyd Peterson, analyst at the Yankee Group: "Services are converging and the lines between wireless and wireline are increasingly blurred. Customers want simplification. By uniting the three company names into one, AT&T has simplified its message to the marketplace."

While this logic might sound good in a press release, it has little chance of working in the marketplace. Consumers want brands that stand for something, not one company to deliver everything. Many mergers have been based on convergence thinking, very few of which were successful. For example, AOL’s merger with Time-Warner.

Land-line phones and the long-distance category is dying in favor of nationwide cellular service, a category that has many focused brands like Verizon, Nextel and the former Cingular. It makes no sense to go back to the AT&T name, a brand that is headed for the nursing home.

What they should have done is so obvious, I can’t believe I have to say it. Keep the Cingular name and keep the brand focused on wireless. Keep the AT&T name on long-distance and let the brand and category fade away. It is the harsh reality of life that both have a bleak future.

As a brand name, Cingular has many good things going for it. Because of their uniqueness and legal protectability, coined words have a huge advantage. Sometimes, however, they face a difficult task getting into consumers’ minds because they are difficult to remember and spell.

But Cingular already cleared that hurdle with six years of hard marketing work, thousands of retail stores and hundreds of millions of dollars in advertising. Combine the recognized name with its strong orange color, its simple logo and its leadership position and you are left scratching your head. Why would anyone walk away from that?

Changing Cingular to AT&T is a move backward, not forward. The future belongs to strong brands focused on new categories, not old brands trying to put two existing categories together. AT&T is not going to relive its glory days, using Cingular would have been the better bet.

Next time: the second way to kill a brand.

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.