The Ries team cited case study after case study, where global brands diversified and lost focus, diluting the core brand. "Narrow the focus" in order to be a success was drummed into the audience, over and over again. For example, the world's brand leader in cellphones, Nokia, gave up six products to focus on one - mobile phones - and became the leader as a result. Motorola, on the other hand, which used to be the brand leader, diversified into computers, satellite communications, and so on. As a result, according to Al Ries, Motorola - the inventor of the mobile phone - now only has a market share of 15%. Nokia has 36%.
The key Ries branding concept is: Be a Specialist! "Your brand's power lies in dominance. It is better to have 50% of one market, instead of 10% of five markets."
What is branding anyway? Branding in the marketplace takes place inside the mind of your customer or prospect. You don't own your brand. The mind dominates the practise of marketing today.
Famous for their Immutable Laws of Branding, Al and Laura Ries, touched on some of them:
THE LAW OF EXPANSION
Over diversifying erodes brand image. A more focused company edges out a less focused brand.
The ladder of life means that people move up and on and do not necessarily stay with the same brand. A brand that tries to be all things to all people, loses focus and market share. "People don't stay with the same brand when they move up. They go for what represents prestige at that time of life," says Laura Ries. "Specialist brands are leaders in almost every field."
When you put your brand name on everything, that name loses its power. Line extension, megabranding, variable pricing and a host of other sophisticated marketing techniques are being used to milk brands rather than build them. While milking may bring in easy money in the short term, in the long term it wears down the brand until it no longer stands for anything.
THE LAW OF CONTRACTION
A brand becomes stronger when you contract, rather than expand a brand. If you want to get rich - narrow the focus! The more your brand dominates a single market, the better you do. For example, Toys R Us became the largest toy chain in the US and a great success story. Then they made the mistake of expanding into Kids R Us and Babies R Us, and ran into trouble.
Contracting, rather than expanding may mean a short-term decline in sales, but long-term success. But how many marketers are willing to take that risk?
Good things happen when you contract rather than expand your business. Most of the retail powerhouses today followed the same pattern:
1. Narrow the focus.
2. Stock in depth.
3. Buy cheap.
4. Sell cheap.
5. Dominate the category.
THE LAW OF PUBLICITY
The birth of a brand is usually accomplished with publicity, not advertising. Today brands are born, not made. A new brand must be capable of generating favourable publicity in the media or it won't have a chance in the marketplace. And how do you generate publicity? The best way is by being the first brand in a new category, ie, Rolex, the first expensive watch; Swatch, the first fashion watch; CNN, the first cable news network; Haagen-Daz, the first gourmet ice cream. What is your brand first in?
What works in marketing today is publicity, not advertising. Most companies develop their marketing strategies as if advertising were their primary communications vehicle. They're wrong. Strategy should be developed first from a publicity point of view.
And if you can't be first, then set up a new category you can be first in! Get over the notion of BETTER! Brand success today is defined by the category your brand can be first in.
THE LAW OF ADVERTISING
Once born, a brand needs advertising to stay healthy. Publicity creates the credentials of the brand, advertising maintains it.
So why should a brand leader advertise? Brand leadership, of course. Leadership is the single, most-important motivating factor in marketing. For example: Heinz, America's favourite ketchup; Barilla, Italy's No 1 pasta; Goodyear, No 1 in tyres...
THE LAW OF THE WORD
A brand should strive to own a word in the mind of the consumer. If you want 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, ie, Volvo owns the word "safety"; Fedex owns "overnight". The most powerful concept in advertising is owning a word - if you can own one prospect in the mind, the prospect will give you many others.
