Author Topic: 22 Laws of Branding  (Read 199 times)

Offline Osman Gani

  • Newbie
  • *
  • Posts: 15
  • Test
    • View Profile
22 Laws of Branding
« on: December 13, 2014, 09:55:23 PM »
The 22 Immutable Laws of Branding
Al Ries and Laura Ries

Summary
1.   The Law of Expansion: The power of the brand is inversely proportional to its scope
2.   The Law of Contraction: A brand becomes stronger when you narrow its focus
3.   The Law of Publicity: The birth of a brand is achieved with publicity, not advertising
4.   The Law of Advertising: Once born, a brand needs advertising to stay healthy
5.   The Law of the Word: A brand should strive to own a word in the mind of the consumer
6.   The Law of Credential: The crucial ingredient in the success of any brand is its claim to authenticity
7.   The Law of Quality: Quality is important, but brands are not built by quality alone
8.   The Law of the Category: A leading brand should promote the category, but not the brand
9.   The Law of the Name: In the long run a brand is nothing more than a name
10.   The Law of Extensions: The easiest way to destroy a brand is to put its name on everything
11.   The Law of Fellowship: In order to build the category, a brand should welcome other brands
12.   The Law of the Generic: One of the fastest routes to failure is giving a brand a generic name
13.   The Law of the Company: Brands are brands. Companies are companies. There is a difference
14.   The Law of Subbrands: What branding builds, subbranding can destroy
15.   The Law of Siblings: There is a time and place to launch a second brand
16.   The Law of Shape: A brand’s logo should be designed to fit the eyes. Both eyes.
17.   The Law of Colour: A brand should use a colour that is the opposite of its major competitors
18.   The Law of Borders: There are no barriers to global branding. A brand should know no borders
19.   The Law of Consistency: A brand is not built overnight. Success is measured in decades, not years
20.   The Law of Change: Brands can be changed, but only infrequently and only very carefully
21.   The Law of Mortality: No brand will live forever. Euthanasia is often the best solution
22.   The Law of Singularity: The most important aspect of a brand is its single-mindedness
Introduction
•   Marketing is building a brand in the mind of the prospect: If you can build a powerful brand, you will have a powerful marketing program

•   Marketing is branding: everything that a company does can contribute to the brand-building process

•   Today most products are no longer bought and sold ie: in a supermarket there is no “selling” just buying. The consumer makes a choice based on the products available with minimal assistance or prompting from staff

•   Branding is simply a more efficient way to sell things as it “pre-sells” the product or service to the consumer

•   There is a seismic shift in the world of  business from selling to buying

•   A brand name is nothing more than a word in the mind, albeit a special kind of word

•   A commodity purchase is when the consumer is willing to purchase any brand as long as it is the product that s/he is after (eg: milk and bread)

•   A brand purchase is when the brand of the product is important to the consumer (eg: cigarettes and beer)

•   Aim high, you can never achieve more than you aspire to

•   A branding program should be used to differentiate your cow from all of the other cattle on the range. Even if all the cattle in the range look pretty much alike.

•   Branding creates the perception in the mind of the consumer that there is no product on the market quite like your product

1) The Law of Expansion
•   When you put your brand name on everything, that brand name loses its power

•   The power of a brand is inversely proportional to its scope

•   The question that has to be asked is: do you keep a narrow line in order to build the brand in the mind and increase sales in the future?

•   Case study: American Express used to have a very strong brand and membership used to have its privileges, it used to be prestigious to own one etc. Then it broadened its product line with new products and services. The result was that its share of the card market fell from 27% to 18%

•   Many companies try to justify the line extension by invoking the masterbrand, superbrand or megabrand concept

1.   Chevrolet is the megabrand and Camaro, Caprice, Cavalier etc are the individual brands
2.   Pontiac is the megabrand and Firebird, Grand Am etc are the individual brands

•   Consumers want short and simple names that they can identify with the product. Marketers tend to go a bit far in the opposite direction and give products ling names that they think will make the consumers identify their brand as different

•   If the competition is week, you can expand your product in the market and this may result in increased sales. But this only serves to show that the competition is weak, not that you are strong

•   To build powerful brands, you have to contract it, not expand it

2) The Law of Contraction
•   Narrowing ones focus is not the same as carrying a limited line. Starbucks offers thirty different types of coffee.

•   Good things happen when you contract your brand rather than expand it – it is focused

•   When you only make one thing, you get pretty good at making that thing

•   The five step pattern

1.   Narrow the focus. A powerful branding program always starts by contracting the category, not expanding it
2.   Stock in depth: carry maybe one or two types of product, but lots of it
3.   Buy cheap:  buy in bulk to reduce overall costs
4.   Sell cheap: when you buy cheap you can sell cheap and still maintain good margins
5.   Dominate the category: this is the ultimate objective of a branding program

•   When you dominate a category you become extremely powerful. In order to dominate your category you must narrow your brand focus
•   If you want to become a successful company, do what the successful companies did before they became successful (buying private jets is what a successful company might do now, but if a start-up tries that it won’t help them at all)

3) The Law of Publicity
•   With virtually no advertising, but with massive amounts of publicity, The Body Shop has become a powerful global brand – it was the endless torrent of newspaper and magazine articles, plus radio and television interviews that literally created The Body Shop

•   Advertising generally won’t get a new brand off the ground

•   A new brand must be capable of generating favourable publicity in the media or it won’t have a chance in the market place

•   The best way to generate publicity is by being the first brand in a new category – media wants to report what is new, not what is best

•   What others say about your brand is far more powerful that what you can say about it yourself

•   Today’s brands are built with publicity maintained by advertising

•   Companies such as Microsoft, Dell, Intel, Gateway, Oracle, Compaq etc are companies that were first created by the Wall Street Journal, Business Week, Forbes and Fortune Magazine – publicity, not advertising

•   Strategy should be developed from a publicity point of view rather than from an advertising perspective

4) The Law of Advertising
•   Publicity is an essential tool for a product in its initial stages, but the product will eventually outlive the publicity – you can’t rely on publicity forever

•   After the product has been written about and spoken about in the media, get the media to concentrate on the company and how innovative the company is etc. Once that avenue of publicity has been exhausted, then you must turn to advertising

•   ie: First publicity, then advertising

•   You should look at your advertising budget as insurance that protects the brand against losses caused by competitive attacks

•   A brand leader should advertise brand leadership eg: “Good Year, #1 in tyres”

•   When you say that the product is “better” consumers think “that is what they all say”, but when you advertise that your product is “the leader”, they think that it must be better

•   Most people buy the leading brand

•   Advertising is useful to maintain brand leadership, but not to obtain it

5) The Law of the Word
•   FedEx has become synonymous with “overnight delivery”

•   To build a brand you must focus your branding efforts on owning a word in the prospect’s mind. A word that nobody else owns (eg: Volvo owns the word “safety”)

•   A common mistake in branding is when once the company “owns” a word it then moves on to broaden its base and enter into other markets

•   In the same way that Kleenex owns tissue (“Can you pass me a Kleenex”  really means, “can you pass me that box of tissues” even though it may not be Kleenex), Coca Cola owns cola, Band Aid owns adhesive bandages and Rollerblade owns in-line skates – you know when your brand owns the category name when people use your brand name generically

•   You can only become a generic brand by being the first (Pepsi will never own the word “cola” even if it outsells Coke”

•   If you were not the first in your category, you can become the first by creating a new category by narrowing your focus eg: FedEx overtook Emery because Emery offered all different types of services. FedEx concentrated only on overnight deliveries and soon became famous for being able to deliver packages overnight, while Emery was not seen to be able to deliver that quickly

•   The product itself might have a visual reality, but it’s the brand name and its associations that give the product meaning in the mind of the consumers

•   Don’t expand the brand, expand the market – make your product the “in-thing” in your industry eg: “Hey, this data must be important because it was analysed using ICRFS”

6) The Law of Credentials
•   Credentials are the collateral that you put up to guarantee performance of your brand

•   Leadership is the most direct way to guarantee credentials for your brand

•   Everywhere that the brand name is used, so are the credentials (“The Real Thing” was used in the 70s every time Coca Cola was mentioned

•   Credentials are important in the publicity process. Reporters and editors will not dismiss leadership and other aspects to a brand’s credentials as “puffery”
-   If a reporter is doing a story on car rentals, they will call Hertz
-   If a reporter is doing a story on cola, they will call Coca Cola
-   If a reporter is doing a story on computer software, they will call Microsoft

•   When the benefits of a product are structured around credentials, they carry much more weight

•   Never assume that people know who the leader is in a category

•   Most people would walk away from an empty restaurant and wait for a table at a busy one – because the food/service/ambiance must be better at the full one, otherwise there would be a line outside the door of the empty restaurant

7) The Law of Quality
•   There is almost no correlation between the popularity of the product and the quality of the product (Coke outsells Pepsi, but taste tests prove that Pepsi’s taste is preferred by consumers over Coke)

•   Quality or the perception of quality is in the mind – branding

•   When you contract your lines and focus on one thing you become a specialist rather than a generalist – a specialist doctor is better qualified than a general practitioner

•   Being a specialist and having a better name go hand-in-hand. Expanding a brand and being a generalist erodes your ability to have a powerful name eg: General Electric, General Motors might be well known but as brands they are weak – they can still be a sales success if they compete against other weak or weaker brands

•   Most of GE’s competitors are also generalist: Westinghouse, General Motors and United Technologies

•   Weak brands cannot successfully compete against strong brands: GE failed in its bid to enter into the mainframe market because IBM, a specialist, was much stronger

•   Having a high price also gives consumers the impression of quality – can a Rolex keep better time than a Casio watch? No, but it is better quality because it is more expensive (does your waiter suggest a $20 bottle of wine when you ordered an $80 bottle, even if the cheaper one tastes better? No, because the price tag determines the quality)

•   Brands are not built by quality alone

•   When faced with a sea of similar products, a good strategy is often to inflate the price and ask yourself what you can put in it to justify the price increase eg: Chivas Regal allows the whiskey to age longer, Rolex makes watches bigger and heavier with unique wristbands etc

•   Having a quality product will save you time and money on service costs later on, but quality alone will not build a brand

8) The Law of the Category
•   When you narrow the focus to such a degree that there is no longer any market for the brand, create a new category

•   Create a new category and become the first – and thus, the leading brand

•   To build something out of nothing you have to launch the brand in such a way that there is a perception that you were the first and you have to promote the new category

•   When Apple launched the Newton, they forgot to categorise it. They called it a PDA, but a notebook computer, mobile phone or electronic organisers can all be classified as Personal Digital Assistants. You knew that Apple was in trouble when they launched an advertising campaign “What is it?”

•   EatZi’s decided to create a new category and focused on selling restaurant meals for takeout only ie: white tablecloth, restaurant quality take-away food. A new category, separate from pizza, burgers and sandwiches – they call the category the “meal-market”

•   Once competition arrives, concentrate on promoting the category to increase the size of the pie, rather than increase their slice – competition can be good for publicity (see chapter 11)

9) The Law of the Name
•   In the long run, a brand is nothing more than a name

•   In the long term, the unique idea or concept disappears and what is left is the company name

•   Xerox built the first plain paper copier. Today all copiers are plain paper, but what distinguishes Xerox from the rest of the market is their name

•   What is important is the perception that the name creates (eg: A Rolls Royce may not really be a better car than a Jaguar or a Bentleigh, but the name suggests that it is – and you have to believe it because it is the “Rolls Royce of automobiles”

•   The most valuable asset of the Xerox corporation is its name – it is short, unique and connotes high technology

•   What is a Mitsubishi? Is it a car? A television? A semiconductor? It is all of these ie; generic. The only thing worse than a generic name is a line extended generic name eg: The Mitsubishi Fax Master (nobody can distinguish it from the other fax machines. It is not unique)

10) The Law of Extensions
•   Line extension kills sales of the original brand.

•   Product A is released and is doing well (Let’s call it Acme Beer) so then we extend the product line to attract more customers – Acme Light, Acme Bitter, Acme Extra Taste. You don’t attract more customers, but you shift customers from Acme Beer to the extended lines – isn’t an Acme Beer drinker more likely to try Acme Light than a Budweiser drinker?

•   If you extend your product you may be suggesting that the original wasn’t the best. That is why “New Coke” failed – wasn’t the Real Thing really the Real Thing? “ Should Evian launch Sulfate Free Water – wasn’t the original water good for you?

•   Management often measures the extension rather than the new product. So just because Kellogs Fruit Loops is successful, it doesn’t mean that Kellogs Healthy Style Fruit Loops will also do well –IT MAY ERODE YOUR ORIGINAL LINE but

•    What will customers of the current brand think when they see your extended brand?

•   If the market is moving out from under you, stay where you are and launch a completely second brand (ie: not ICRF-Plus2 but ABCDE brand)

11) The Law of Fellowship
•   One of the best locations from a number two brand is right across the road from the leader – both brands will benefit

•   Choice stimulates demand – the competition between Coke and Pepsi makes consumers more cola conscious (a monopoly makes consumers suspicious. Look at Microsoft)

•   Competition broadens the category while allowing the brands to maintain focus

•   But when there is too much choice, consumers get confused eg: in California there are 1,000 wineries and 5,000 brands but no brand leader

•   Two major brands work well eg: Coke and Pepsi, Kodak and Fuji, Duracell and Energiser

•   Often the law of Fellowship can be seen in Business Centres, Shopping Centres etc eg: the garment district on 7th Avenue or the diamond district on Forty Seventh Street or the financial centre of Wall Street

•   It makes sense for similar businesses to be located near each other. Similar businesses in the same area attracts more customers who can comparison shop and have a choice. Businesses can also keep an eye on their competition

•   No brand can ever own the entire market (except Windows!)

12) The Law of the Generic
•   There are many successful companies that have generic names (eg: General motors, American Airlines, International Business Machines).

•   The success of these companies are probably due to the fact that they were the first in the marketplace, not their names eg: National Biscuit Company was the first national biscuit company; General Electric was the first General Electric company etc

•   The Generic names of these companies have transformed into specific names eg:
-   National Biscuit Company now calls itself Nabisco (there are many biscuit companies, but only one Nabisco)
-   General Electric now calls itself GE (There are many general electric companies, but only one GE)
-   National Broadcasting Corporation calls itself NBC (There are many national broadcasting corporations, but only one NBC)

•   Generic names don’t give the company the ability to distinguish themselves from the rest of the competition – you need Brand Identity (that is why ICRFS is better than Interactive Claims Reserving Forecasting System!)

•   Try to find a regular word taken out of context and used to connote the primary attribute of the brand eg: Blockbuster for Blockbuster Video

•   If you cut a generic name in half, you can come up with a good name eg: Intelligent Chip Company is too long and too generic – but everybody knows and remembers Intel – Intel is a powerful brand because it reminds consumers of the word “intelligent” without actually saying it

•   Line extensions fare poorly. This is often caused by combining the brand name with the generic name eg: Fosters Light can be perceived in the mind as Fosters light – a watered down version of Fosters

•   Sometimes the opposite is true eg: Vaseline Intensive Care is successful because people don’t say, “pass the Vaseline”, but they say “pass the Intensive Care” – “Intensive Care” has become a specific name, transformed from a generic name

13) The Law of the Company
•   Should the brand name dominate the company name or should the company name dominate the brand name – should they be given equal weight.

•   Brand names should almost always outweigh company names – consumers buy brands, not companies

•   Unless there are compelling reasons to do otherwise, the best branding strategy should be to use the company name as the brand name (eg: Coca Cola produces Coca Cola, WD40 produces WD40 etc)

•   The brand name is the word that the customers use to describe the product eg: Do you want some Coca Cola? I bought a Cadillac today. Put it in an Excel Spreadsheet

•   Microsoft Word – this is a generic name because there are other word processors that use “Word” as part of their name (Wordstar, WordPerfect etc) So consumers tend to refer to it as Microsoft Word (or MS Word). This can be bad for the company because the name is too long (eg: people don’t say, “Can I have the chunky soup?” they are forced to say, “Can I have the Campbell’s Chunky Soup”)

•   Your company name should not dominate your brand – if you make the company name too small consumers might get suspicious that you are trying to hide something. If it is too large then the company overshadows the brand and CONSUMERS BUY BRANDS, NOT COMPANIES

•   Use the company name in a secondary way




14) The Law of Subbrands
•   Holiday Inn has many subbrands – Holiday Inn Express, Holiday Inn Select, Holiday Inn Sun Spree Resorts, Holiday Inn Garden Court. When you went into a Holiday Inn, you knew what to expect. Because of all of these subbrands, you don’t know what to expect

•   Subbranding can erode the power of the core brand

•   Market research at Holiday Inn Crowne Plaza produced the following response from guests, “It’s a nice hotel, but a bit expensive for a Holiday Inn”. From now on the hotels will be called Crowne Plaza (If I am forking out the big bucks, I want to stay at a big brand hotel)

•   Subbranding tries to push the core brand into a new direction.

•   Ford is not a brand. The brands are Laser, Falcon and Fairlane – Ford is a Megabrand, but consumers don’t understand this concept.

•   Branding is all about creating perceptions in the mind of consumers. Subbranding creates confusion and this destroys the brand’s image

•   A brand can be marketed in more than one model as long as those models don’t detract from the essence of the brand

15) The Law of Siblings
•   There does come a time when there is a need to launch a second brand – but not so that it detracts from the original brand

•   Sometimes it is good to create a family of brands – sibling brands

•   Each brand has to be different and distinct in its own right

•   Some managers want to take advantage of the equity that they have in their brand, but they are mistaken if they use the existing brand to support the new one as it could damage the original brand

•   Time Inc is the world’s largest magazine publisher by launching totally separate publications ie: Time, Fortune (not Time for Business), Life (not Time for Pictures), Sports Illustrated (not Time for Sports), Money (not Time for Finances), People (not Time for celebrities)

•   Siblings are not associated as being in the same category as the other members of the family

•   The siblings can all be controlled by the same parent. Upper management has to be more involved to ensure that there is no mixing of the siblings so that they remain separate

•   Do not tag the company name onto every sibling – do Lexus buyers buy a Lexus because it is made by Toyota? Or in spite of the fact that it is made by Toyota

•   Keep the following siblings in mind:
-   Focus on a common product area
-   Select a single attribute to each segment (eg: distribution, age, flavours – but most commonly, price
-   Set up rigid distinctions between brands
-   Create different brand names for each sibling
-   Create a new sibling only if you can create a new category
-   Keep control of the siblings at the highest level – otherwise the effectiveness of the brands can degrade.

•   A sibling strategy can be used to dominate a category over the long term

16) The Law of Shape
•   A logo is a combination of a trademark and the name of the brand set in a distinctive type

•   A logo:
-   should be horizontal
-   should be legible
-   does not have to be accompanied by a symbol (but over time a symbol can come to represent the name of the brand – eg: the Nike swoosh) – the power of the brand name overrides logo recognition

17) The Law of Colour
•   Colour can help to make a brand distinctive

•   It is best to stick to the five basic colours of red, blue, green, yellow and orange rather than a mixed colour or combination of colours
-   Red is the colour of energy and excitement (Coca Cola)
-   Blue is a tranquil colour but also a corporate/leadership colour (IBM)
-   Orange is an in-between colour which is like Red,
-   Green is the colour of the environment (eg: Vitamins, Health Foods)
-   Yellow is a neutral colour that also is associated with caution (road signs)



•   There are other colours which can be used as well:
-   White is the colour of purity (Weddings)
-   Black is the colour of luxury (Johnnie Walker Black Label)
-   Purple is the colour of royalty

•   Focus on the identity that the brand should create, not just the mood

•   Choose the best colour possible, but if there is another brand with that colour, choose the opposite colour

•   The colours that you choose will determine whether consumers can visualise your logo or not – eg: Coke is easy to visualise (lots of red) but Pepsi has two colours and it is difficult to picture

•   Line extensions destroy the impact of colour on the original brand

•   Sometimes, but rarely, a case can be made for multiple colours eg: FedEx chose two colours that would be sure to stand out on someone’s desk – orange and purple

18) The Law of Borders
•   Building a global brand means: keeping the brand’s narrow focus in its home country and going global

•   The words “imported product” on a brand creates the perception of quality

•   Heineken Beer is actually made in Holland but because of its geographical proximity to Germany and because of the perception that Germany produces very good beer, Heineken capitalised on that perception. They even distributed cardboard coasters that had written on them “Printed in Germany”

•   There is no such thing as a global brand without a global perception (eg: Toyota, Honda and Nissan are Japanese, Compaq, Intel and Microsoft are American etc)

•   Coca Cola is one of the only brands that can be classified as being the closest to a truly “International” brand – but it must stay with it’s American heritage because every brand must originate from somewhere

•   It doesn’t matter where the brand originated, is produced etc, the name and the associated connotations determine its geographic perception  eg: Häagen-Dazs ice cream sounds Scandinavian, but it was developed in New Jersey

•   The use of English words in promoting a brand and in the brand name is important because English has become an international language (Red Bull energy drink is Austrian, but they don’t call it “Roter Stier”!)

•   The name of your product doesn’t have to be an English word but must sound like one.

•   Be careful with advertising slogans because sometimes they don’t translate well eg: “Come alive with the Pepsi generation” translates to Chinese as “Pepsi brings your ancestors back from the dead”

19) The Law of Consistency
•   A brand cannot get into the mind unless it stands for something. BMW has been the “ultimate driving machine” for 25 years

•   Brands should never change – they can be bent slightly or given a new slant but not changed

•   If the market moves, stick with the brand and the cycle will come back to you (just because the trend is towards white alcohol (gin, vodka etc) Jack Daniels would destroy its whiskey line if they introduced Jack Daniels Vodka)

•   Limiting the brand is the essence of branding. Limiting the brand and being consistent (over decades) is the key to successful branding

20) The Law of Change
•   Brand changing occurs in the mind of the consumer, not inside the company

•   There are 3 feasible situations for changing a brand:

1.   Your brand is weak or non-existent in the mind of consumers (eg: not many realised that Intel was originally a producer of RAM but moved into processors – nobody but those directly involved even noticed! – If they were to try to move back to manufacturing RAM, they would fail because their product is strong in the minds of consumers)

2.   You want to move the brand down the food chain. Lower the price of your product over time and make it cheaper. This often helps a company to gain market share (Marlborough did it). Moving up is far more difficult

3.   The brand is in a slow moving field and change will take place over a period of time. Eg: Citicorp is slowly changing its brand’s focus from corporate business to consumer business

•   Customer perceptions of brands don’t go away so quickly eg: Kentucky Fried Chicken wanted to move away from “Fried” so it called itself KFC and offered healthier style chicken, but people still went to them for fried chicken.

21) The Law of Mortality
•   Brands have a life cycle – they are born, prosper and die.

•   Companies spend millions trying to change an old brand (Kodak uses the Kodak name on all digital products to try to change with the market)

•   Opportunities for new markets are always being created with the birth of new categories

•   Many managers make poor financial decisions because they fail to distinguish between the two aspects of a brand’s value: How well known it is and what the brand stands for

•   A well known brand that doesn’t stand for anything has no value and a brand that stands for something but is not well known has value – because there is the opportunity to create a powerful brand

•   Brand new brands make the impact, not rehashed old brands (eg: Blockbuster video became a market leader in video rentals even though it was up against established companies who were too generic and not exciting enough in the new category

22) The Law of Singularity
•   Your brand must be a single idea or concept that you own inside of a prospect – if it is too many things at once, it is confusing and becomes worthless

•   What is an Atari? It used to be the most popular games console but then it became a computer and now it is nothing – because it lost its singularity

•   Volvo sells more cars in the US than BMW or Mercedes because over 35 years it has stuck to its concept of burning into the minds of consumers that it is the safest car on the road