We’re back for another round, bookworms! In this segment we’re discussing branding with the brand masters themselves: none other than the inimitable Al & Laura Ries. Impressive, eh? Yes folks, I take my host duties very seriously. For those of you new to our Book Club, welcome aboard (learn all here). And for those returning for a second round, welcome back….
What will we be doing this segment? We’ll be getting a little Darwinian, debunking some long-held branding “truths”–and likely, spurring some debates. What’s more? You get a (free!) bonus just for reading this article. Hey, I’m just doing what I can to heat things up in an otherwise very cold winter here in the Northeast.
Our feature this segment is “The Origin of Brands,” a book that explains how changing conditions in the marketplace, much like in nature, create endless opportunities to build new brands and accumulate riches.
But here’s where it gets interesting: these opportunities are not found where most people and companies look–that is, in the convergence of existing categories like television, the computer, cellphones and the Internet. Instead, opportunity for new brands lies in the opposite direction (psst: we’ve been overlooking the strategy of “divergence,” which explains the miniscule survival rate of so many new brands).
By following Darwin’s brilliant deduction that new species arise from divergence of existing species, Al and Laura outline an effective strategy for creating and taking an effective brand to market. So, while Darwin gave us “The Origin of Species,” the Ries’s give us “The Origin of Brands.” I read the book in late 2005 and was astonished at how many marketers had not yet heard of or read it, especially given the provocative subject matter–supported through case study upon case study–illuminating how divergence dramatically lowers risk and increases success rates.
Which begs the question: why is divergence regarded like a dirty little secret? Al and Laura point to convergence hype, a decades’ long theme trumpeted by scores of media outlets. To kick-off this segment I discussed the book’s themes with Al and Laura; here are the highlights:
Some computer divergence categories and the brands they spawned include: Minicomputers (Digital Equipment); Workstations (Sun Microsystems); 3-D workstations (Silicon Graphics); Personal computers (Apple); Business personal computers (Compaq); Personal computers sold direct (Dell); Desktop laser printers (Hewlett-Packard); Computer peripherals (Logitech); Hard-drive MP3 players (iPod). Virtually every product or service category goes through the same process. It starts with a single product and then through the process of divergence creates many new categories and many new opportunities to build brands.
Invariably the long-term winners in new categories are the brands with new names, not the brands with line-extended names, like: Dell, not IBM personal computers; Ebay, not Yahoo! Auctions; Quicken, not Microsoft Money; PowerBar, not Gatorade energy bars; and Red Bull, not AriZona Extreme Energy. Companies often line extend because they are focused on building brands rather than creating new categories. But brands are worthless unless they stand for something in the mind. The more things you try to hang on a brand name, the less it stands for.
Almost every branding success story follows the same pattern. An entrepreneur notices an empty hole in the marketplace and then introduces a new brand that goes on to exploit that new category. Some examples include: Starbucks, the first high-end coffee house; Silk, the first soymilk; Costco, the first warehouse club; Under Armour, the first athletic underwear; and Glide, the first flat dental floss. The list is endless and they all follow the same pattern. Find an open category and then develop a new brand to dominate that category. As the category takes off, your brand also takes off.
Before I close there are a couple of logistics to cover:
In closing, Group Review for the book will start Tuesday, March 20th, giving you five weeks to get your books read and, uh, wait–did you hear that? Who’s try to cut-in on my post? Oh, its word from our authors–let me hand over the article to them to close:”This is Al and Laura Ries here. We are so excited to be working with the new MarketingProfs Book Club and CK for our book ‘The Origin of Brands’. We look forward to stoking the fire over the convergence vs. divergence debate with all of you. When Al & Laura Ries get involved you know it will be controversial! Talk to you all during Group Review in March.” You heard it from them bookworms, get ready for a great round #2!
P.S.: Did you think I forgot your bonus? Not a chance. Al and Laura have created a 20-page, chapter-by-chapter overview of The Origin of Brands for us to download–absolutely free! While it’s not a replacement for the book it’s a terrific piece for you to enjoy before you dive into the full read. Download your copy here.
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