Pizza
Hut is now selling chicken wings and pasta as well as pizza.
Kentucky
Fried Chicken is now selling grilled chicken as well as fried chicken.
Boston
Chicken was once focused on rotisserie chicken, but then they wanted to expand, so
they added turkey, meatloaf and ham to the menu. Then to explain the expanded menu
to consumers, they changed the name of their restaurants to “Boston Market.”
And
promptly went bankrupt.
It’s
logical, isn’t it? If you want to grow your business then you need to expand your product line to sell
more things to more people. And if your existing category is declining, then it
would be criminal not to expand, right?
Wrong.
Of course, to
left-brain, logical management people, expansion makes a lot of sense. That’s
why Pizza Hut is not only adding pasta and wings it is also now using a more general name, “The Hut” in its marketing.
That's right, they are taking the "Pizza" off the "Hut" on signs and marketing materials. Why? Because management looks at reality and sees the chain as a massive delivery infrastructure machine not a pizza place. Big mistake.
Marketing is concerned,
not with reality, but with perception. So right-brain marketing people understand that the place is perceived as pizza. After all Pizza Hut is the leading pizza chain with 18% of the $29 billion category, nearly double the share of the number two brand Domino's. While having more items to sell at Pizza Hut might be
logical, but it undermines the perception of the brand.
Everybody
knows what Pizza Hut sells, but what would happen if they changed their name to
The Hut?
In
the short run, nothing. But in the long run, some people are going to forget
exactly what a chain like The Hut sells. And then there are the younger people
coming into the market who have never heard of Pizza Hut. “The Hut” would be a
strange name to them.
Would
it make sense for Taco Bell to start selling hamburgers? And then change its
name to “The Bell?”
And
perhaps Burger King should change its name to “The King,” now that they sell
chicken, fish, breakfast and a host of other non-burger items.
Then there is Dunkin' Donuts? Surely they should drop the "donuts" and go by Dunkin' since they are more about bagels, muffins and coffee these days.
The
management mantra at most companies is “more.” How do we dream up more items to
sell to more customers? And especially how can we take advantage of our
powerful brand name to sell those new items to those new customers.
Line
extension is the most over-utilized strategy in business today. That’s true in
spite of the fact that 90 percent or so of line extensions fail in the market
place.
Line
extension is a much-loved strategy because it’s logical. The more you have to
sell, the more you sell. So almost every company is busy trying to figure out
what new products to slap its brand name on.
They
should study history.When
Domino’s Pizza first got started, it sold pizza and submarine sandwiches. When
Little Caesars first got started, it sold pizza, fried shrimp, fish and chips
and roaster chicken. When Papa John’s first got started, it sold pizza,
cheesesteak sandwiches, submarine sandwiches, fried mushrooms, fried zucchini,
salads and onion rings.
Now
do you suppose you would ever have heard of Domino’s Pizza, Little Caesars and
Papa John’s Pizza if they kept expanding their menus? I think not.
Rather
they all did the same thing. They all narrowed their focus to pizza only.
Good
things happen when you narrow your focus. You should try it too, I think you will like it.
Can 17 million iPhone users be crazy? Probably not. Was I wrong? Probably so.
The iPhone has developed a loyal, vocal and proselytizing fan base. But
17 iPhone users are not jumping for joy over convergence. Because as it
turns out, convergence is not what the iPhone is really about.
Initially, convergence is what Apple touted as the main benefit of the
device. Convergence is what drives me crazy. And if the iPhone was
selling convergence then I had serious doubts about its universal
appeal. That was the argument I had during the launch.
The much-hyped convergence of the tv/pc, car/plane, and many other
convergence pipe dreams have all been dismal failures. Apple's might
have been cooler, but convergence in the end still means a device that
is a jack of all trades but master of none.
And in the end, consumers want a huge television, a small laptop
computer, an iPod, a Wii, a cellphone, a BlackBerry, a Nintendo DS, a
Garmin GPS, a Sirius XM radio, a TiVo, a digital SLR camera etc. Not
one device that can do it all because no device can ever be the best at
everything.
The iPhone initially took off because of Steve Job and his brilliant
ability to drum up hype. After his success with the iPod, the world was
waiting for Steve's next masterpiece. (Luckily few remember his follow
up to the Mac, the NeXT computer.)
But here is what really changed the game for iPhone and moved it from
convergence to something else. Apple, which initially refused to allow
users to install 3rd-party software on the device, changed its mind.
Then Apple launched the 3G iPhone which took better advantage of the
internet with faster speeds and included GPS. This was the spark that
ignited App mania.
Today, iPhone users are hooked on applications not convergence. Apps
are where all the excitement is. There are over 40,000 applications
available with thousands of new ones flooding into the store each
month. iPhone owners have downloaded over 1 billion applications. An
impressive and staggering number.
What the iPhone represents is a whole new interactive mobile Internet
experience. The experience is fueled by mobile applications built for
this new medium called the mobile web.
As a result, the iPhone has become a device which is desired not so
much for its inherent traits of phone+camera+music+email but for its
ability to download and run these little programs which give the phone
magical powers.
The rise of the mobile internet has created a great new opportunity to build new brands.
Of course, most companies are just trying to expand their brands on to
the mobile net, they way they did with the Internet. And as a result,
few will be successful.
But for smart marketers now is the time to launch new focused brands
and make a fortune. It wasn't old brands like Microsoft, Time Warner or
Barnes & Noble that succeeded on the Internet, it was new brands
like Google, Yahoo and Amazon.
I still have doubts about the iPhone taking over the world and crushing everything in its path. They are as follows:
1. Apple hasn't taken over the world yet.
While Apple experienced amazing growth last year of 248 percent, they are still third place in world-wide smart phone sales, according to Gartner.
Apple has a 9 percent market share while BlackBerry has a 17 percent
share and Nokia a 44 percent share. And let's not forget that while
cool and trending upwards, smart phones still only represent 14 percent
of cellphone sales. Regular cellphones outsell smartphones by more than
seven to one.
2. BlackBerry is still strong.
There is never going to be one device for everybody. And corporate and
heavy email users are sticking to the brand that focuses on mobile
email. BlackBerry still is selling strong and growing. In 2008,
BlackBerry grew 97 percent worldwide and sold 23 million phones. They
may not talk as much about their phone, but CrackBerry addicts like
Obama can't be without them.
3. The Netbooks are coming.
The real threat to the future of the iPhone is the netbook. Because the
real excitement of the iPhone is that it is a mobile PC always
connected to the internet. And netbooks are just that, but in a
slightly larger form but with many more benefits like a larger screen
and keyboard.
If consumers get a netbook will they also need an iPhone? And if they
get the iPhone will they be willing to pay the Internet access fees for
both devices? Maybe yes, maybe no.
4. Apple needs to stick to simple. The next generation iPhone is rumored to have 3.2 megapixel
auto-focus camera, FM radio, digital compass and more. What the iPhone
needs to do is narrow the focus to just a few things that it does best.
Focus on these and keep making them better. Forever adding additional
functions could complicate and weight down the device. It is what Sony
did to the PlayStation 3. Doing too much even of a cool thing is not
good. Sticking to simple is best and it is how the Nintendo Wii killed
the PlayStation.
5. Applications are not the next new advertising medium. In
spite of the excitement, applications are not going to be a new
advertising medium. Consumers don't like advertising.
Sure an application for a virtual Zippo lighter has been downloaded 3 million
times. But gimmicks like this have a short shelf life.
Gimmicks don't represent the future of applications.
When anything is new, whether a new mass medium or boyfriend,
everything is exciting. But as time goes on the excitement and novelty
wears off.
Hearing "You Got Mail" used to be the highlight of the day
for people. Now email represents the drudgery of the day for most.
We now filter and delete as much of the email advertising as quickly as possible.
Email advertising is not the future. If it was we would all have sent
our money to Nigeria, met lots of new "friends" who are lonely and
taken a lot of pills we shouldn't.
Applications will follow the same pattern. Initially people will
download and try almost anything. But eventually what will be left
standing are the real brands and the real applications with value. The
brands that are first in the mind with a new idea, in a new category
and generate PR and word-of-mouth.
Of course, it will make sense for many existing brands to jump on the
mobile applications bandwagon, especially when it adds value not
novelty.
Like Nationwide insurance offering an application to help you if you
get into a car wreck. What a brilliant idea. The first companies to
launch these applications will benefit from breaking new ground. But
eventually all the major companies will have applications and it won't
be a game changer. (Eventually all companies launched a website for
example.)
Nobody knows exactly what the future will be. Not you and not me. But
what I do know for sure is that the future will always bring new
categories and new opportunities to launch new brands.
The current mission of the Swift School is “to prepare children with dyslexia and related language-based learning differences to be successful in life.We will strive to accomplish this mission by teaching them specific learning strategies and skills and by identifying and fully developing their talents.To do so, we will create an environment that is exciting, challenging and supportive.” A mouthful and not very memorable. Even the director has trouble remembering it word for word.
The first step is to focus on a word. While the Swift School helps students with a variety of language-based leaning differences, the most obvious one to focus on is dyslexia. Why don’t they just say dyslexia? Well, non-profits and educational brands often have trouble limiting their brand in any way. But you will never get in the mind with idea like “language-based learning differences.” You can be inclusive with your program but need to be exclusive with your messaging.
The Swift School= Dyslexia. So if the word is dyslexia we now need a way to verbalize the idea that is memorable.
The way a brand gets established is with word of mouth. But for word of mouth to flourish it has to lend itself to being passed-along. It needs to be short, simple, easy to remember, credible and differentiating. The message has to be one that parents, students, teachers or therapists feel comfortable and confident about sharing.
The “The”
The full name of the school is “The Swift School” and the website address is www.theswiftschool.org.
Having the “The” in the brand name is just an extra word that makes the name longer. It used to be that companies always named themselves that way, as in The Procter & Gamble Company.
But these days it just makes the name unnecessarily longer. Using the “The” takes the emphasis away from the most important word which is “Swift.”
Also in a listing or directory how do you alphabetize The Swift School? Under “T” for The or “S” for Swift? Confusing.
Having the “The” makes the site address longer and especially for the web, the shorter the better.
My suggestion is to just use Swift School as the name. Of course, this can be changed easily on most places except for perhaps the most important, the internet.
Since prospective students are usually referred by a therapist or teacher, the website is typically the first and most important place parents find out more about the school. Having a great website with an easy to remember address is an extremely important brand component.
Unfortunately, www.SwiftSchool.org is already taken by an elementary school in Bon Secour Alabama.
However, sometimes you just get lucky. www.SwiftSchool.com was still available! I couldn't believe the luck! I purchased it right away and will transfer it over to the school’s ownership.
Using a .com address has many advantages. Dot com is the gold standard domain for the internet. Dot org is typically used by non-profits, so it would be good choice as well, but since it is taken it is not an option.
And if you take the “The” out of the name (which I really think they should) you really need to take it out of the website address. Inconsistency will lead to confusion.
Of course, what is wonderful about the web, it that you can own multiple addresses and point them all to one site. All the www.TheSwiftSchool.org traffic can simply be sent to the new site www.SwiftSchool.com. Nobody will get lost or confused.
A new position for the Swift School
The Swift School uses specific teaching methods with small class sizes to help dyslexics succeed. The key words to focus on are dyslexia and success. These are what set it apart from other private schools, inspire hope and get people talking. Parents, teachers and therapists agree that going to the Swift School ends the struggle with dyslexia and starts kids on the road to success.
My idea for the brand message is this:
Swift School
Where success
with dyslexia starts
You can see how this will lend itself to word of mouth.
“My son had trouble reading and was really struggling in school, but now he is at the Swift School. Swift is where success with dyslexia starts. He is learning how to overcome his dyslexia with specialized teaching methods. I can’t believe what a difference Swift has made in all our lives. Who knows he could the next Richard Branson or Thomas Jefferson or Albert Einstein, did you know they has dyslexia too?”
Successful Dyslextics
When parents get a diagnosis of dyslexia usually they panic. What can we do? What does it mean? What will people say? They worry about how the child will ever be able to succeed in school and be a success in life.
It is very comforting to parents and inspirational to children to be constantly reminded of all the successful dyslexics in the world. There are no limits to what a dyslexic child can achieve.
Dyslexics can become the President of the United Stateslike Thomas Jefferson, George Washington and John F. Kennedy. Or a scientist like Albert Einstein and Sir Isaac Newton. Or a musician like John Lennon or Cher. Or an actor like Tom Cruise or Harrison Ford. Or an athlete like Muhammad Ali or Magic Johnson. Or a general like George S. Patten. Or an entrepreneur like Richard Branson or Steve Jobs. Or an inventor like Thomas Edison. Or even the sexiest man alive like Patrick Dempsey.
To reinforce this idea, you should line the walls of the school with the famous faces of dyslexia. That way children, teachers and parents will constantly be reminded of all their child can achieve.
What parent or student would not be impressed seeing all the images as they toured the school? It tells them that Swift believes it is OK to be dyslexic and that the school believes that great success is possible.
As Charles Revson famously said, we are not selling beauty cream we are selling “hope in a bottle.” Swift is selling hope in a school.
Public relations
Swift should work hard at generating media stories about dyslexia. Media attention will help drive brand recognition and word of mouth. The goal is for Swift to become the go to place for dyslexia information.
One controversial idea centers on early intervention. The idea that if reach a child early enough in development you can actually retrain the brain and reverse the symptoms of dyslexia. In other words, “Dyslexia doesn’t have to be forever.” Getting parents to see the signs early and seek help right away is key. This idea that dyslexia doesn’t have to be forever would be very effective on the website and brochures.
You might put together a “Signs of dyslexia to look for in your pre-schooler” brochure or offer lectures and information to local pre-schools. You might find a local therapist to work with in order to develop some kind of screening test. The advantages of getting kids help early is clear. So Swift should be on the cutting edge of making this happen.
In terms of the school’s expansion, adding kindergarten seems like the first place to start. If you propose early intervention, having classes for five year-olds is key. Long-term however there is no reason Swift should not plan on being a full pre-K to 12 grade school.
As you are doing now, Swift should continue community outreach by offering seminars and speeches about dyslexia. The new website itself can offer lots of background information about dyslexia to serve as a resource for parents and prospects.
When anybody thinks dyslexia the first thing they should think of is Swift and go to www.SwiftSchool.com
Stay tuned, I'll be back with Matchstic's logo design soon. First step is the strategy then the design to reinforce it.
The Swift School is a non-profit school in Roswell Georgia that teaches students in 1st thru 6th grades with dyslexia and other language-based learning differences.
The school was founded in 1998 by Gail Swift a long-time teacher at The Schenck School in Atlanta. When Gail wanted to retire from Schenck parents urged the beloved teacher to continue teaching privately. She accepted and in one room in her church Gail began teaching five students.
In 2000, a two room modular building was leased and the schools enrollment was up to twenty-two students. The school continued to thrive and expand and by 2005 was up to seventy students.
Clearly a larger and more permanent home was needed for the Swift School. So in 2006, after a board of trustees had been established, the school purchased a 20,500 square-foot office building conveniently located on 5 acres in Roswell, Georgia.
Unfortunately due to medical concerns, Gail Swift announced her retirement in 2006 and the board began a national search for a new Executive Director.
Swift found Elizabeth Strowd from the prestigious Fletcher School in North Carolina and wooed her to the Swift School.The Fletcher School also specializes in dyslexia as well as other learning disabilities and attention deficit disorders.
In 2008, the Swift School celebrated its 10th anniversary. With a new building, an energized new Executive Director and 120 succeeding students, the Swift School was ready to take things to the next level.
Winning the $100,000 On the House marketing make-over is just what Swift needs to get there.
The Challenge.
Nobody knows about the Swift School. Public awareness of the brand is extremely low even in the learning disability community.
The logo, materials and website need to be updated. But before any materials can be improved by the other On the House volunteers, the brand strategy needs to be clearly defined. No brand will get in the mind with a three paragraph brand mission. Brands get into the mind by owning a word.
Swift needs to narrow its focus to own a word in the mind. For example, BMW owns driving, Volvo owns safety. Or in business schools, Kellogg owns marketing and Harvard owns management. It is interesting to note that both Kellogg and Harvard offer a wide variety of business majors; it is not about limiting what you do, it is about focusing your message to perhaps not include everything you do.
We live in an over-communicated society today. With too many brands, too many media outlets, too much advertising. The only solution to these problems is the over-simplified message. An over-simplified message allows you to cut through the clutter and get into the mind.
What word should the Swift School own? How can Swift verbalize that position in a memorable and meaningful way? What can Swift do to increase brand awareness?
These are the brand questions we will address and answer. Each consulting assignment is different, we don’t have a formula. We dive in and figure out what is going on, what is needed and what can be done. We had a meeting with the Swift team on May 4th. I'm first am outlining the problem, opportunity and challenges. Then I'll give you my strategy in tomorrow's post.
What is Dyslexia?
Dyslexia not seeing words backwards. Dyslexia is a specific learning disability that is neurological in origin and is characterized by difficulty with accurate and/or fluent word recognition. It is typically the result of a deficit in the phonological component of language and often unexpected in relation to other cognitive abilities.
In other words, Dyslexia is a difficulty with reading in otherwise bright people.
Students with dyslexia typically have poor spelling and decoding abilities, problems with reading comprehension and a reduced reading experience that can impede growth of vocabulary and background knowledge.
In other words, students with dyslexia find school extremely challenging.
Undiagnosed dyslexics are often assumed by parents and teachers alike to be lazy and lacking in intelligence. They struggle in school and frequently experience failure which often leads to low self-esteem and behavioral problems.
Who is Dyslexic?
The numbers are astounding. 15-20% of the population has a language-based learning disability. Dyslexia is the most common cause of language disability which includes reading, writing and spelling difficulties.
Dyslexia doesn’t discriminate, it affects males and females nearly equally, and people from all ethnic and socio-economic backgrounds.
In the greater Atlanta area of 5.5 million people it is likely that at least 40,000 elementary school children suffer from some degree of dyslexia.
Obviously, the market for Swift and other specialized schools is huge. There are thousands of students in need of help.
Despite the challenges, many dyslexics have gone on to great success. Some famous dyslexics include: Thomas Jefferson, Albert Einstein, Sir Isaac Newton, Henry Ford, Walt Disney, Steve Jobs, Charles Schwab, Richard Branson, Ted Turner, David Needleman, Wendy Wasserstein, Pablo Picasso, John Irving, Hans Christian Andersen, George Patton, Magic Johnson, John Lennon, Harry Belafonte, Jay Leno and Tom Cruise.
No kid or adult should be ashamed of being dyslexic. It is a common disorder affecting millions of people.And being dyslexic doesn’t mean a life of struggling with reading, there are now proven techniques and strategies that enable success and offer great hope.
Up next: I'll share my strategy for Swift. Until then, think about it, how would you position Swift?
When the going gets tough, get giving. These are tough economic times for everybody, especially marketing agencies and consultants. When things were quiet for us back in January, I booked some events, made some contacts and looked for some ways to give back. Giving your services away with coupons and deals just undermines your value. But giving it away completely to companies in need not only feels good it helps your community and builds your brand.
I choose to team up with other successful Atlanta companies so we could give an entire package of services to a local non-profit. One great benefit of this is that it can be an excellent case study to share with prospects. One of the most difficult parts of being a consultant is usually you can't discuss any of the great work you do.
I'm extremely honored to be part of the On The House team which is giving a $100,000 extreme marketing make-over to a needy non-profit. There was an extensive selection process with applications, interviews and meetings to choose the lucky winner.
The winner is: The Swift School, a non-profit school for grades 1 to 6 that specializes in teaching kids with dyslexia.
We start the process on Monday morning with a Ries & Ries half-day brand strategy session. Al & I will be working with the Swift School team and Matchstic to develop the marketing plan that will then be executed with brand logo design, website design, photography, videography, brochures and other materials.
It is going to be very exciting and I look forward to sharing the work and experience with all of you.
The idea for On the House was conceived by Matchstic, a brand identity house here in Atlanta run by Craig Johnson and Blake Howard. Craig recently interviewed me about the project which I'd like to share with you.
CRAIG JOHNSON: How did you hear about On The House?
LAURA RIES: Blake, Craig and I were all chosen as Top 40 Under 40 award winners by the Atlanta Business Chronicle in the Fall of 2008.
Few of the winners were in branding (a lot of lawyers and real
estate executives), so we gravitated towards each other. They guys had
read some of my books and I was intrigued by Matchstic.
Sometimes you just click with people and that is what happened with
me and the guys. After spending an hour or so having coffee with Craig
talking about branding and life he mentioned the On The House project.
I instantly signed up.
CRAIG JOHNSON: Why did you want to be a part of On The House?
LAURA RIES: I wanted to work with Matchstic. I
wanted to give something back to the local community. And I wanted to
keep busy during this recession. CRAIG JOHNSON: What makes The Swift School a perfect candidate for On The House?
LAURA RIES: The Swift School
is the perfect candidate because they have everything but a brand. They
have a wonderful school that nobody knows about with marketing
materials that don’t do it justice.
The school is well respected by experts, lead by fantastic teachers,
filled with thriving children and supported by loyal parents. But
nobody has heard of it, the logo is dated, the positioning unclear and
marketing materials in need of investment.
Like many non-profits all the money has gone into running the place.
Many see the investment in branding frivolous. But nothing could be
further from the truth.
After the On The House team gets finished with Swift, I think it
will serve as a great example of how a focused brand well executed can
succeed. Branding means owning something in the mind. And for Swift
strengthening and defining its brand will allow them to sell less and
teach more, by making it easier attract students, teachers and donors.
CRAIG JOHNSON: What types of clients do you normally work with?
LAURA RIES: We work with a wide variety of clients
from Fortune 500 companies like Microsoft, Frito-Lay and Disney to
entrepreneurial companies like The Republic of Tea and Papa John’s
Pizza. We don’t specialize in any industry or company size. Our
specialty is branding. We help companies to focus. A focus is the key
to building a brand in the mind.
You are going to be providing a brand strategy session for the Swift
School. Tell us about what you’ll be doing during the session.
My partner/father Al Ries
and I are going to lead one of our brand strategy sessions. This is the
core of what we do. We don’t have long term clients we only work on a
one-day basis. This is the opposite of the way most consultants work.
Most consultants study the situation, figure out the solution and
present it to the client. We work together with the client to find the
answer. That way everybody has ownership of the idea and understands
how we got there. Many times there is internal conflict about what the
brand is or should be, we help to resolve conflicts and get everyone
focused and enthusiastic about the strategy.
CRAIG JOHNSON: What will The Swift School walk away with from that session?
LAURA RIES: The Swift School will walk about from
the session with a marketing plan. Swift will have nailed down its
brand focus and the exact verbalization of the idea. CRAIG JOHNSON: What do you think is the most important rule in branding?
LAURA RIES: The most important Law of Branding
is the Law of Focus. The way to build a strong brand is by having a
narrow focus and owning a word in the mind. Ex. BMW owns driving. Volvo
owns safety. Red Bull owns energy drinks. Target owns cheap chic. Zara
owns fast-fashion. Nordstrom owns service. FedEx owns overnight.
CRAIG JOHNSON: How can non-profits organizations benefit from a well thought out branding strategy?
LAURA RIES: Non-profits benefit the same as
for-profit companies from a strong brand. Strong brands are more
successful. They have the ability to generate
donations/support/volunteers/PR easier.
Even if you are doing good work it isn’t easy to get attention for
it these days. We live in an over-communicated society. We are
bombarded daily with thousands of images, sales pitches and charity
requests. The only way to get above the clutter is with a focused brand
and message. It is the same whether you are selling cars or curing
cancer.
CRAIG JOHNSON: What’s your favorite thing about what you do?
LAURA RIES: My favorite thing is being able to work
with my Dad. We have been working together since 1994 and he has taught
me so much about branding and life. I love being able to travel around
the world, meeting new people, learning about different business and
helping them to succeed.
CRAIG JOHNSON: What’s the one piece of advice would you give a non-profit that doesn’t have resources to hire a brand strategist?
LAURA RIES: Many companies especially non-profits
hesitate to focus their brand and message. They want to make there
message as wide as possible. But this is a mistake. Your message and
brand needs to be focused in order to get into the mind. You don’t have
to include everything you do in your message. Also read my article: Marketing a Non-Profit Brand.
Backed by a $30 million campaign, the UPS Store hopes to introduce customers to its expanded services which include a myriad of things from document & brochure printing to office supplies. What they are obviously doing is trying to take on Kinko’s (now FedEx office) in the document business.
The problem, of course, is that consumers don’t think about going to a UPS Store to do anything except to ship something. The advertising even makes fun of this fact. In one radio ad, a UPS Store worker tells a customer: “I’ll help you print out all those documents you need for your client meeting.”
The customer replies: “The UPS Store? But you guys just ship stuff.” The worker responds, “We do a lot more than shipping.” Oh boy. This is a huge problem. One that cannot be solved with advertising and one that UPS should have never gotten into in the first place.
Once your brand stands for something in the mind, it is almost impossible to change the brand’s position. UPS stands for shipping and the UPS Store stands for a place to ship. And that is not a bad thing, in fact it is an enormously profitable business.
Brands like UPS should reinforce their strengths in advertising and not try to expand into other companies’ categories.
Here are two branding lessons to be learned from this situation.
What makes a brand strong is a focus. What makes a company successful is dominating a large category.
FedEx is a very strong brand. FedEx got into the mind by being the first overnight package company. “When it absolutely positively has to be there overnight.” Its unique name, focused position, colorful logo and upscale image has made FedEx the leading air cargo brand and Memphis, the leading air cargo airport in the world. In the last 10 years FedEx had $257.3 billion in sales, $10.7 billion in profit or a net profit margin of 4.2 percent. Not bad.
But that doesn’t come even close to UPS. UPS might not have as strong a brand as FedEx. For starters, the UPS name is a weak generic name that often gets confused with its competitor, the USPS. Of course, what has made UPS successful is its focus on shipping and the strength of the shipping category.
UPS is the real thing when it comes to parcel delivery because they were first. When you are first in the mind, you are seen as the original, the authentic and the real thing. Consumers don’t crave brands, they crave the authenticity that only strong and focused brands provide.
When it comes to colors, UPS might not be pretty but it is memorable. They have stuck to the rather unfashionable color brown from their logo, to their trucks even down to their drivers socks and probably even their underwear.
But like I said, success comes not just from your brand but from your category. What has made the UPS company so strong is the explosion of the shipping category itself. When your iceberg grows so does your brand. No matter how strong your brand, when your category melts so does your sales (ex. Kodak and Blockbuster are both in deep trouble because the film category and the video rental category are melting.)
That is why UPS is a bigger company than FedEx. In the last 10 years UPS had $353.4 billion in sales and $25.8 billion in profits or a net profit margin of 7.3 percent.
UPS makes more than twice as much in net profits as FedEx. That’s because overnight shipping is a small segment of the overall shipping category and because FedEx has expanded into markets like ground shipping where its brand is clearly at a disadvantage.
First of all, customers think of UPS first when it comes to ground shipping. Secondly, FedEx has a high price perception from its overnight business and when shipping ground, customers generally want the cheapest. FedEx has followed an “We do a lot more that overnight” strategy for years and it has hurt them.
You don’t necessarily need your name on more places.
Both the UPS Store and the FedEx Office store were successful independent pioneers in their categories before being bought out. The UPS Store was called “Mailboxes Etc.” and dominated ground shipping and packing services. The FedEx Office store was called Kinko’s and dominated document printing. Today both are trying to be everything to everybody with names that don’t make sense.
Mailboxes Etc. had a focus: mailing. They offered post boxes, shipping services and supplies. Of course, the most important part of that business was UPS packages and probably the reason the UPS company felt the need to buy the Mailboxes chain. But while it makes sense for UPS to own Mailboxes Etc., it doesn’t make sense to change the name to the UPS Store.
The UPS Store will never be known for anything but shipping. The stores are independently owned, so don’t call UPS with a question about something that happened at a UPS Store. Bad service at UPS Stores therefore hurt the UPS reputation.
Also, having the UPS name on the store undermines UPS’s relationship with other important vendors like Office Depot. But more importantly there was no need to change the name. Mailboxes Etc. was perceived as authentic, original and the pioneer in the category. From a marketing point-of-view, Mailboxes Etc. would have been the perfect second brand for UPS. But obviously, management won the battle in the boardroom on this one.
The FedEx Office store faces the exact same problems. What does FedEx have to do with document printing? Nothing. Kinko’s owned the idea in the mind. The name was brilliant. Starting as a copy shop in California in 1970, Kinko’s dominated documents and in 2004was bought by FedEx for $2.4 billion. Again, management own in the boardroom on this one, too.
I think FedEx bought Kinko’s mainly as a reaction to UPS buying Mailboxes Etc. FedEx feared losing drop locations and losing face against the competition. Because otherwise buying Kinko’s makes little sense from an operational standpoint for FedEx. The printing business is quite different from the air cargo business.
And changing the name from Kinko’s to FedEx Office makes absolutely no sense at all. FedEx stands for overnight packages what in the heck does that have to do with printing? Most people would never think to go to FedEx for help for signs, brochures, business cards, stationery or printing needs. People think hey we need to go to Kinko’s, oh yeah you know that place that used to be Kinko’s but they have the FedEx name on now.
Today, both stores are a mess. Both have names that don’t make sense. Both are driven by ego and the belief that having your brand name in more places is better. Having your brand name on the same thing in more places is good. Having your brand name on different things in more places is not good.
Trying to “do more than _____” is just never a good branding idea.
In tough economic times, many companies launch new brands to keep the attention of consumers and stimulate demand at distribution channels. Nothing is wrong with launching new brands. As a matter of fact, now is a very good time to do that.
But to hedge their bets, top management at most companies have chosen to launch line-extensions instead of launching products with new brand names.
Why does this happen? Because line extensions sound so logical to top management that they can’t resist them, especially when budgets are tight.
“We already have a great brand that people trust. Let’s just leverage our powerful brand equity,” goes the thinking of management. “We’ll use our well-known and trusted brand name on this new product which will give our line extension instant credibility. And a line-extension will also be easier to get retail stores to stock the product on their shelves. And our advertising will be more effective because we can put all our money behind one name. Why waste our money on launching a totally new brand, it makes no sense.”
Trying to convince management otherwise is a very difficult job for marketing. The truth is that in the short term, line extensions usually do rack up some sales. Management loves that; they are more interested in saving their quarter than saving the brand.
Look at this example. A product that is a short-term success and a likely long-term loser is G2.
With sales of $159 million, G2 from Gatorade was the top new food product of 2008. Hard to believe isn’t it? Since it is really one of the worst line-extensions ever, right up there with C2 from Coca-Cola.
But even dumb ideas can sell initially. Crystal Pepsi got a 5 percent share in test markets (unheard of, but one of the best test results ever) but the clear cola product quickly fizzled.
Why does that happen? Silly line-extensions, well supported and discounted at retail, receive the “oh I’ll try it once” effect.
But rarely do they get repeat business especially at full price and in the end any remaining sales just cannibalize the core brand and even worse will undermine the core brand’s position and identity in the mind.
Today, G2 is a product without any buzz. G2 is a product most people tried once because it was part of a huge display and on-sale. G2 is a product is usually only bought by accident, since the package looks exactly like G.
Gatorade is a mess. Put Gatorade on your husband’s grocery list and you are guaranteed a panic call. “Honey is that G or G2 or G3 (probably coming soon and he is clueless.) Is that G with or without Tiger? Is that the power or the liquid? Or do you want this chocolate Gatorade protein bar?” Forget it sweetheart, just get some Red Bull. (Of course he’ll probably come home with Red Bull cola by accident.)
Despite marketing’s advice to the contrary, management just can’t seem to get enough of line-extensions. The store shelves are loaded with them.
But what to name the line extension can be tricky. Besides the “diet,” “light” and “2” extensions, companies have to get a little more creative when it comes to other line extensions. But not too creative. Management likes simple descriptive names. The thinking goes “consumers don’t have the time and we don’t have the money to educate them. So to make it easy for everybody we’ll just add a generic to describe exactly what our line-extension is.”
It sounds so simple and logical, how could it not work? Well it doesn’t. Because marketing is not simple or logical.
Here are three new products that management confidently signed off on, but marketing minds cringe at.
Spray 'n Wash
Spray 'n Wash is the leading pre-wash stain spray. But this new line extension is not prayed on or used before you wash. Instead Spray 'n Wash Bright & White is an bleach-alternative stain remover that you add by the cut into the washing machine. I kid you not.
Even the marketing director for fabric care at Reckitt Benckiser (owner of Spray n’ Wash) admitted that the “Spray ‘n Wash name sounds weird for an in-wash product.” No kidding. Yet she still said that it made sense “to extend an existing brand name.” No it doesn’t.
The product even has a differentiating benefit: It helps to extend the life of your clothes. But stain removers have the image of damaging your clothes it doesn’t make sense that they help save them too. About as logical as Woolite Rug Cleaner, oh yeah Reckitt used to have the dumb extension too.
Haagen-Dazs Five
Haagen-Dazs is the leading super premium ice cream. To take advantage of the trend toward more natural and whole foods they wanted to launch an ice cream composed of just five natural ingredient. (Which begs the question how many unnatural and natural ingredients does regular Haagen-Dazs have?)
So Haagen-Dazs is launching a new line-extension called Five. Haagen-Dazs brand manager Ching-Yee Hu explained that “part of the reason we called it Five is that we have modest marketing dollars and wouldn’t have a lot of money to explain what it was.” Most people still won’t get it and will have a hard time getting over all the junk ingredients in their regular Haagen-Dazs.
Besides, “I think I’ll have vanilla Haagen-Dazs Five tonight?” People just don’t talk like that. When will management listen to marketing? The truly scary thing is that regular Vanilla Haagen-Dazs only has 6 ingredients, so what is the point of Five anyway?
Quaker True Delights
Quaker is the leading oatmeal. Everybody knows oatmeal is good for you. But the glop isn’t necessarily appealing and messy to cook. On the other hand, bars are easy. But most are highly processed and many are high in calories.
Well Quaker has the whole dilemma solved with a new line extension. It has the Quaker name which stands for goodness. It has the name “True Delights” which tells you it tastes good. It has wholesome qualities with ingredients like raspberries, rich dark chocolate, and whole almonds. And the best part is it only has 140 calories! Wow! What more could you want?
Try this over the weekend “Hunny, how about a True Delight tonight?” His face will probably beam, until you throw the Quaker bar at him.
Good News! War in the Boardroom was reviewed in USA Today Monday!
Is a good
education the key to success? There is no doubt that reading, writing and arithmetic
are important to get ahead in the world. But what about a college degree? What
about a graduate degree? What about an MBA?
Whatever the
value of these degrees are, you can’t get a job in corporate America or Wall
Street without them. In particular, an MBA is the gateway credential into the
corner office. So anybody who wants to be a CEO, a CMO, a CIO or a president, a
vice-president, or a director of a company heads off to business school at age
27.
In
particular, an MBA degree from Harvard, Kellogg, Wharton, Stanford, or a handful
of other top-tier schools almost guarantees graduates top job offers and a
bright corporate future.
But are these
business schools giving our future leaders the skills they need to succeed?
Judging from
the current economic crisis, something is amiss. Our companies, our banks, and our
government might have the brightest and most educated people in the room, but I
question their decision-making process. Most notably on Wall Street. With 40%
of MBA graduates going into finance, this sector is in the worst shape of all,
clearly something is wrong. What’s wrong starts with our business educational
system.
First of
all, an MBA is not necessary for success. Many of the most successful people in
business never even went to or completed college, let alone business school.
Leaders,
visionaries and business successes like:
David Ogily
Bill Gates
Russell
Simmons
Liz
Clairborne
Rush
Limbaugh
Dave Thomas
Henry Ford
Richard
Branson
Barry Diller
Michel Dell
Richard
Grasso
Larry
Ellison
Anita
Roddick
Sydney Frank
Second of
all, an MBA could be harmful. School teach scientific analysis and logical
reasoning. Students focus mainly on maximizing shareholder value often ignoring
potential risks and long-term effects. Long-term ideas like branding are frequently
dismissed or under-valued.
MBA schools graduate
analytical, left-brain thinkers are often unprepared to deal with the realities
of brands in the real world. What left-brain MBA students need to be taught is
the value of an intuitive, holistic approach. In other words, right-brain
thinking and marketing sense.
I wanted to
go in marketing so I thought about getting an MBA. But what I realized is
everything I would be taught in business school would be the opposite of the approach
that Al preaches. To get good grades I couldn’t argue with professors, I'd have to play nice and I knew I
would be miserable. But most kids don’t have the luxury of working with a
master marketer like Al Ries. So they go and get an MBA.
There’s
nothing wrong with an MBA. And there’s nothing wrong with logical, analytical
left-brain thinking as long as it’s combined with intuitive, holistic
right-brain thinking.
It takes
both types to make the world go round. It takes both types to manage the
affairs of a corporation, especially in the marketing department.
Too many
companies are missing the big picture. They’re focused on the trees instead of
the forest, on the short term instead of the long term.
Too many
companies don’t have a “vision.” They’re so busy running off in too many different
directions that they overlook the opportunity to develop a powerful brand that
actually stands for something today and tomorrow.
Too many
companies have boardrooms filled with only MBA graduates and left-brain thinkers. There is
no diversity of thought so bad strategies are followed by more bad strategies and are these days followed by a bailout.
To get these companies back on track, they need to invite in and listen to a
few right-brain marketers. Sooner rather than later.
Want more more on marketing? Start following me on Twitter today!
Top 5 Reasons Management got us into this Recession:
1. Management is focused on reality, when the real problem is perception.
Bob Lutz, global product development chief at General Motors, recently said that the company's Saturn brand probably won’t survive. "We spent a huge bundle of money in giving Saturn an absolutely no-excuses product lineup, top to bottom. They had a better and fresher lineup than any GM division, and the sales just never materialized."
That's the reality, but what’s the perception? Ask anyone "What’s a Saturn?" and you’ll probably get a blank stare.
Oddly enough, Saturn did have a favorable perception as an inexpensive, entry-level car. Four years after its introduction, Saturn reached its high-level mark selling 286,003 vehicles in the U.S. market. Last year Saturn’s "no-excuses product lineup" managed to sell only 188,004 vehicles.
2. Management is focused on expansion when the real opportunity is contraction.
Initially Saturn was available in one model only, the "S" series, although you could have it in a two-door, a four-door or a hatchback version.
So what did Saturn management do next? They expanded the line to include a larger, more expensive Saturn, the "L" series. That was the first step in the long decline of the Saturn brand.
Today, of course, Saturn has five models: Outlook, an 8-passenger crossover. Sky, a sports car. Astra, a compact sedan. Vue, a compact SUV. And Aura, a midsize sedan.
When Saturn was introduced, it was the only U.S. automobile brand available in one-model only. Its enormous initial success should have convinced General Motors that you build brands with a narrow line, not a full line.
3. Management demands "better" products when the real opportunity is "different" products.
Both Sony and Microsoft introduced videogame consoles that were vastly more powerful than their previous products. So who won the videogame battle?
The Nintendo Wii, a far-less powerful product, but one with a difference. The controller, a wireless motion-sensing remote that has revolutionized the videogame industry.
When Red Bull arrived in its unique 8.3-oz can, every major beverage company tried to introduce "better" 8.3-oz energy drinks. Except Monster which was introduced in a 16-oz. can and rapidly became a strong No.2 brand.
4. Management expects rapid growth when the real opportunity lies in the opposite direction.
Almost every powerful brand started slowly. It took Red Bull 9 years to break $100 million in sales. It took Microsoft 10 years to break $100 million in sales. It took Starbucks 11 years to break $100 million in sales. It took Wal-Mart 14 years to break $100 million in sales.
Too often, management tries to accelerate this process with massive up-front marketing expenditures. Take Webvan, for example, the first Internet grocery store. The company opened up in eight with a multi-million-dollar marketing campaign. Two years later, Webvan folded, losing $800 million.
On the other hand, FreshDirect started slowly in New York City only. Today, FreshDirect does $200 million in annual sales and is profitable.
And look at the fiscal disasters of Sirius and XM Satellite Radio. Both were launched with massive marketing campaigns and massive upfront talent investments ($50 million a year to Howard Stern, for example.)
A slow, but steady growth might have made a big difference.
5. Management values "creativity" when the real opportunity lies in "credentials."
Take Tropicana’s recent redesign of its packaging. The new design might have been clever and creative, but consumers rebelled. "It doesn’t look like Tropicana anymore." As a result, PepsiCo backtracked and agreed to bring back the original packaging.
A leading brand, over many decades, tends to become accepted as the only authentic brand in the category. The original. The real thing.
When you change the look of the brand, consumers get nervous. Did the company change the product, too? If not, why did they change the packaging.
You can’t separate the product from the package. The classic Coke bottle reinforces the authenticity of the brand.
Why does management continue to make the same mistakes?
Because they are logical thinkers. Cleverness, rapid growth, better products, expansion and reality are all logical ideas. They just don’t happen to work in marketing.
Actually there are two kinds of thinkers: Left brainers and right brainers. Left brainers are verbal, logical, analytical. They tend to be extroverts and good talkers. Right brainers are visual, intuitive, holistic. They tend to be introverts and good writers.
Now what do you suppose the boardrooms of corporate America are loaded with?
Left brainers, of course.
The vast majority of managers in America today are talkers rather than writers. Extroverts rather than introverts. Why is this so? Because of the way people move up the ladder in the corporate world. There's an old saying: You don't get promoted, you get elected.
Management is like politics. Your fellow workers determine who they would like to work for. Left-brain extroverts are particularly good at schmoozing with people. Right-brain introverts are totally outclassed when it comes to office politics.
As companies grow up and get bigger, their upper levels tend to be staffed almost exclusively with left brainers. As a result, the innovators (primarily right brainers) tend to leave or get pushed out. Like Steve Jobs who was effectively fired from Apple before returning to lead the company to staggering successes.
In spite of their absence from most boardrooms, it's the entrepreneurs who have contributed the most to the U.S. economy. People like Bill Gates, Michael Dell, Howard Schultz and hundreds of others.
Did you ever wonder why almost every successful new brand was launched by an entrepreneur and not by an established company?
Amazon.com was not launched by Barnes & Noble, the world's largest bookstore chain, but by Jeff Bezos, an entrepreneur with no experience selling books.
Southwest Airlines was not launched by any of the major carriers, but by Herb Kelleher, an entrepreneur with no experience in the airline industry.
Google was not launched by any major media company, but by Larry Page and Sergey Brin, two Stanford Ph.D. students.
Both The Coca-Cola Company and PepsiCo, Inc. are more than 100 years old, yet neither company introduced the new brands that would become leaders in the soft-drink categories. Red Bull, Snapple, Gatorade, Dr Pepper and Mountain Dew were all introduced by entrepreneurs. Entrepreneurs who were right brain thinkers and understood marketing.
To get us out of this economic crisis our corporate leaders to understand marketing and take advice from the right brainers in the boardroom.
More of the same left brain thinking is not going to fix GM or Citibank. Now is the time to let the right brainers help clean up this mess and get companies, brands and our country get back on the right track.
Watch this video to find out more about the War going on in the Boardroom.
Do you live in Atlanta? Well you are in luck! I'll be speaking at an Atlanta Ad Club & Atlanta AMA meeting on Wednesday, March 11th. Register today. Both Al & I will be signing books.
Have you checked out the all new Ries.com? It is awesome. Visit us today.
Have you read War in the Boardroom? If so, get over to Amazon or BN.com and write a review today. We are counting on you to help us get the word out. We certainly won't be doing any advertising, we are only doing PR. So if you are interested in an interview or inviting me to make a speech contact me today.
And if you haven't taken our quiz check it out today. You may be surprised by the results.
The recent hubbub over the Tropicana packaging change shines a light on
several marketing myths. Take note so you don’t make the same mistakes with
your brand.
Tropicana brand background
Tropicana is a 60-year-old brand. Originally the company sold gift boxes
of oranges, but looking for something to do with the smaller fruit that went to
waste they got into the frozen concentrate business. But that category was well
established and Tropicana was just another brand.
The key event that really built the Tropicana brand came in 1954. Not satisfied
with being just another player in the concentrate category, the company pioneered
a flash pasteurization method that raised the temperature of the freshly
squeezed orange juice for a very short time, extending the juice’s shelf life
to three months while maintaining its flavor. Tropicana then dropped the frozen
concentrate product and focused entirely on the fresh, "not-from-concentrate"
product.
Being first in a new category is the key to success. Tropicana got into
the mind with a great name and built a new category. Tropicana owns
not-from-concentrate in the mind and is the "real thing" in fresh orange juice.
With the success of Tropicana, eventually the majority of the market for orange
juice moved from frozen to fresh.
Today, Tropicana remains the dominant brand and the world leader in chilled
orange juice. Since the original entrepreneur sold the company in the 1970’s, there
have been several owners. Since 1998, PepsiCo has owned the brand.
Last month, PepsiCo introduced a major overhaul of the Tropicana
packaging. Which was done after PepsiCo Chairman-CEO Indra Nooyi announced the
company would embark on a sweeping revamp of all its brands. To be changed: "every aspect
of the brand proposition: how they look, how they’re packaged, how they will be
merchandised on the shelves and how they connect with consumers."
What? Is she crazy? Apparently. The last thing PepsiCo should do is
totally redo all of its brands. The new Pepsi logo that is a little too close
to Obama’s logo hasn’t been very well received. And results for Tropicana have
been disastrous.
In just a few short weeks after the packaging change, the company bowed
to consumer outrage and scrapped the Tropicana changes. The previous packaging will be
brought back and Arnell will finally be humbled (this part of course I doubt.)
Unfortunately, the company will continue the advertising campaign by
Arnell that accompanied the new packaging look. The tagline is "Squeeze. It’s a
natural." Squeeze? That is not language that consumers would ever use.
Tropicana should have remained focused on fresh not from concentrate orange
juice.
"Squeeze" is a typical campaign that left-brain management loves. Management
values cleverness in advertising. Advertising campaigns that are clever and new
appeal to left-brainers. You see squeeze is used as a double-entendre in the
ads. The advertisement are filled with people hugging. Peter Arnell says the campaign is all about love. Love? The worst part is there is not an orange in sight in any of the ads.
How clever indeed! Reminds me of the Saturn ads with no cars.
Right-brain marketing values credentials in advertising. Advertising that is
relevant, familiar and consistent is what works best at reinforcing a brand in
the consumer’s mind.
Now that you know the background, let’s debunk some enduring marketing myths:
It is the product not the brand that consumers care about. Wrong.
Consumers care about brands. The brand is what gives the product
its authenticity and credibility. The brand includes everything from the name,
the look, the logo, the color and the package.
When you change the look of the packaging, you lose some of the power of
the brand in the mind. It no longer looks authentic. And worse, consumers think
you have also changed the contents.
"We underestimated the deep emotional bond consumers had with the
original packaging," said the President of Tropicana. Consumers weren’t
attached to the packaging! Consumers are attached to the Tropicana brand. And
it didn't feel like their Tropicana brand when you changed the packaging. The
packaging is the visual
that signals the brand’s familiarity in the mind.
Suppose Coca-Cola changed its classic bottle. It would be a disaster. In
fact, Coca-Cola has been aggressively increasing its use of that bottle imagery on cans, cups,
and billboards to reinforce its brand. Good move.
The verbal is more powerful than the visual. Wrong.
Both are necessary and should complement each other. One of the worst
things about the Tropicana redesign was the loss of the iconic orange and
straw. It was a powerful visual that reinforced the fresh, not-from-concentrate
idea in the mind. Instead they used the words “100% orange” on the containers.
Bad move. But typical of left-brain management that thinks verbally rather than
visually.
The strongest brands have powerful visuals that reinforce the brands in
the mind.
Marlboro – Cowboys
KFC –Colonel Sanders
Pizza Hut – Red Roof
AT&T - globe
McDonald's - golden arches
Brands need constant change to keep up with consumers. Wrong.
Strong brands should not make radical changes. Leading brands in particular
should be wary of change.
(Of course, if nobody knows your
brand, you can change it as much as you want.)
Occasionally (like once a decade or two) brands may need some slight changes and updates. But only very infrequently and very
subtly. The changes should be ones that few people even notice.
And sometimes it is a good idea not to change at all. Jack Daniels is
proud of the fact it never changes. In fact, it is the theme of its
advertising. “Not subject to change, not now, not ever.”
If your brand is facing an uncertain future because of a declining
category, it might be better to launch a new brand. You can’t change a brand
radically in the mind anyway. Think Kodak.
Here are some classic logo changes that kept the brand’s authenticity but
made slight changes to keep the look current.
And don't forget to get your copy of War in the Boardroom which is on sale now. Visit our totally redesigned site www.RIES.com to find out more.
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