Laws of Branding: The Law of The Word (#5)

Originaly by By Al Ries and Laura Ries

The Law of The Word

A brand should strive to own a word in the mind of the consumer.

Volvo owns the word “safety”. Mercedes owns the word “prestige”. BMW owns the word “driving” and the idea of being fun to drive.

Kleenex is tissue. People say “I need a Q-Tip”, “Make me a Xerox copy” and “Please hand me the Scotch tape”. These brands own the word in their respective categories simply because they were first.

What word does Federal Express own? “Overnight” of course. What about building a prestige brand?

To be successful in branding a “prestige” product or service, you need to:

• Make your product or service more expensive than the competition.
• You need to find a code word for prestige. Mercedes used “engineered”.

Laws of Branding: The Law of Advertising (#4)

Originaly by By Al Ries and Laura Ries

The Law of Advertising

Once born, a brand needs advertising to stay healthy.

After the initial explosion of publicity, a brand needs to shift its strategy from publicity to advertising. If nations have a defense budget, a leading brand needs advertising as its defense budget. The advertising budget is an insurance against attacks on the minds of consumers by competitors of the brand.

Advertising keeps a brand leader in the No.1 position, and when you are No.1, consumer behavior shows people will continue to choose your brand over anything else.

• e.g. Coca-Cola, Heinz, Budweiser, Visa, Goodyear

Use advertising to maintain leadership in your category.

Laws of Branding: The Law of Publicity (#3)

Originaly by By Al Ries and Laura Ries

The Law of Publicity

The birth of a brand is achieved with publicity, not advertising.
Anita Roddick built The Body Shop into a major brand with no advertising at all. She used publicity, communicating her ideas about the environment, indigenous people, and animal testing. It was endless newspaper and magazine articles, radio and television interviews that made The Body Shop a major brand.

How do you generate publicity?

The best way is by being First. Band-Aid, Charles Schwab, CNN, Compaq, Domino’s, ESPN, Heineken, Hertz, Intel, Kentucky Fried Chicken…these are just some of the major brands that were first in their categories, therefore inventing their respective categories.

Public Relations used to come second to advertising, but today publicity builds a brand, advertising maintains it.

Most companies develop their branding strategies as if advertising were theirprimary communications vehicle. They’re wrong. Strategy should be developed first from a publicity point of view.

Laws of Branding: The Law of Contraction (#2)

Originaly by By Al Ries and Laura Ries

The Law of Contraction

A brand becomes stronger when you narrow its focus. There used to be a time when every neighborhood had a small coffee shop where you could get everything from breakfast, lunch, dinner, to hamburgers, hotdogs, pancakes, and ice cream, and of course, coffee. This was before Howard Schultz had a simply wonderful idea: why not focus on selling great coffee? Today Starbucks Corp. is worth $8.7 billion on the stock market.

Schultz focused on coffee, but that doesn’t mean he just offered one, Starbucks offers thirty different kinds of coffee.

Narrowing the focus has resulted in big time success stories:

• Toys R’ Us narrowed the focus from the original Children’s Supermart concept carrying kid’s clothing, children’s toys, baby food, and diapers down to a store that offered a greater selection of toys.
• Subway specializes in the submarine sandwich.

To be the brand that rules your category, these are the five basic steps:

• Narrow the focus.
• Stock in depth.
• Buy cheap.
• Sell cheap.
• Dominate the category.

Laws of Branding: The Law of Expansion (#1)

Originaly by By Al Ries and Laura Ries

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

If you want to build a powerful brand in the minds of consumers, you need to contract your brand, not expand it.

Putting your brand name on everything diminishes the brand name’s power. Take a look at Chevrolet, a company that used to be the leader in the automobile industry. It expanded its brand into Corvette, Camaro, Caprice, Lumina, Malibu, Prizm, and so many other brands. People don’t exactly know what a Chevrolet is anymore. What happens when you extend your product line into so many types?

You steadily lose your market share.

In 1988 American Express had 27% of the market. Then it expanded into offering Senior cards, Student, Membership Miles, Optima, Optima Rewards Plus Gold, and a whole range of other cards. Their market share is 18 per cent today.

RJ Reynolds’ Joe Camel campaign

RJ Reynolds’ attempt to create smokeless cigarettes (see Chapter 3) was not the tobacco company’s only brand failure. In the 1990s, RJR got into big trouble over one of its campaigns to promote its leading brand of cigarettes, Camel. The campaign featured a character called Joe Camel, a cartoon camel who wore trendy clothes and sunglasses and who had a cigarette dangling from his mouth.

In 1991 the company was publicly charged in the Journal of the American Medical Association with targeting children through the Joe Camel character.

That same year, the company got into further trouble when Janet Mangini, a San Francisco family lawyer, filed a lawsuit against the company. In doing this, she became the first person to legally challenge the tobacco industry for targeting children with its advertising.

However, the Joe Camel campaign survived until 1997, when various Californian local authorities intervened and came to Janet Mangini’s aid. A trial date was set for December 1997. In preparation for the trial, the prosecuting lawyers discovered that RJR had researched the reasons why people start smoking and the smoking patterns of children. The lawsuit charged that as a result of this secret research, the tobacco giant developed advertising and promotional campaigns aimed directly at children, encouraging them to smoke Camel cigarettes.

As the trial approached, RJR asked whether the Mangini lawsuit could be resolved ‘if the campaign was pulled.’ However, in order to avoid court, RJR also had to make sure that the previously confidential internal documents regarding youth marketing and the Joe Camel campaign were made public.

When the settlement was resolved, RJR stated that the ‘Mangini action [. . .] was an early significant and unique driver of the overall legal and social controversy regarding underage smoking that led to the decision to phase out the Joe Camel campaign.’

However, as the RJR documents are still available on the Web, the negative PR damage has been a little more difficult to erase. As Stanton Glantz of UCSF University, which manages the online resource where the documents are kept, points out, ‘the RJR information is very easy for the public to address. In contrast to recent releases of documents by the tobacco industry and the House Commerce Committee on the web, the Mangini documents are in a form that facilitates downloading them and understanding what they mean.’

In other words, this time the unpleasant taste wasn’t left by the cigarette itself.

Lesson from Joe Camel

• Youth marketing is a sensitive area. Obviously any cigarette or alcohol manufacturer caught trying to push its product to children is in breach of the law. However, all companies need to tread carefully when it comes to youth marketing. For instance, in the UK brands such as Walkers and Tesco’s have come under fire for trying to push their brand names through school-based campaigns.
• Also, it is important to remember that just because children have an interest in something, it doesn’t mean that this is the way to reach them. For example, just because many children are interested in the occult (over 50 per cent according to one MORI poll), it clearly doesn’t mean that marketers should fuel this interest.

Brand PR Failures: Gerber’s PR blunder

In 1986, Gerber, the German baby food manufacturer, made a critical PR mistake. When incidents of glass shards were found in its jars of baby food, Gerber remained tight-lipped and failed to issue a recall. This decision invited a lot of criticism with articles in Business Week, Newsweek and Time openly attacking the company on ethical grounds. Although the pieces of glass had not caused any fatalities, some babies had been severely hurt.

Glass fragments had originally been found in some Gerber products – namely, their apple-plum and apple-cherry juices – in 1984. But in that instance, Gerber handled the problem effectively. Although neither the company nor the authorities found a manufacturing-related cause, Gerber
recalled over half a million jars of juice.

In 1986, however, there were over 200 reports of glass being found in Gerber’s baby products across the United States. Although the authorities failed to discover anything that would warrant a recall, Maryland officials banned certain Gerber ranges from being sold anywhere in the state. Gerber’s response? The company sued the state of Maryland. Other than this legal reaction, Gerber did nothing. Not a word was said to the media about the issue, in the hope that the whole fiasco would just pass by.

From Gerber’s perspective, the company was doing nothing wrong. After all, nothing suggested that the fragments of glass were the fault of Gerber’s manufacturing process. It had certainly been under no obligation to recall its products. The company therefore believed that the state of Maryland was in the wrong and took what it saw as the appropriate legal action.

As Gerber saw it, a recall would only serve to generate more media attention and would have a negative impact on sales. It would also be expensive to implement. But Gerber forgot one important thing. Brands are about the public’s perception. It is not about proving who is right or who is wrong. By refusing to talk, Gerber was acting as though it had something to hide.

For a company that built its whole brand identity around the high quality and safety of its products, this was clearly a bad move. If you produce baby food, you have to constantly remind the public that you have parents’ and babies’ best interests at heart. By taking the state of Maryland to court, failing to issue a recall, and by then remaining silent, this was not the message Gerber put across.

Although Gerber’s brands survived the crisis, most analysts now agree the incidents were not well managed and that Gerber’s reputation suffered as a result.

Lessons from Gerber’s PR blunder

• Make a public response to a crisis. As soon as the news arrived that some products had been tampered with, Gerber should have responded publicly and confirmed that it had the babies’ best interests at heart. After that, it should have been open to all lines of media enquiry. Most of all, Gerber should have looked like it was doing something, such as coming up with new types of product packaging to prevent tampering.
• 
  Provide information. At the time of the crisis, parents wanted information. For instance, Gerber could have told them how to distinguish between products that had been tampered with and those that had not.
• 
  Act tough. In a paper on the ethical issues surrounding the glass scare, Dr Philip Rothschild recommended that Gerber should actively and publicly lobby for increased penalties for product tampering. ‘They should make every effort to make someone else the bad guy,’ he suggested.