The rise & fall of the Razr. By Al Ries for Ad Age.com : 1/2007

Published in Advertising Age on January 22, 2007.

Motorola stock recently fell 12 percent after the company warned of disappointing holiday sales.
?The trend-setting Razr has lost its buzz in the marketplace,? reported the Associated Press, ?and Motorola?s efforts to come up with a new killer product have so far not paid off.?
Like many companies, Motorola has focused its efforts on building better products not on building better brands.
If you just build a better product, eventually some other company is going to build a better product than yours and your stock will fall like Motorola?s did.
If you build a better brand, it doesn?t matter whether somebody else builds a better product or not. A better brand has the perception of being a ?better product.?
Nor does it matter whether another company copies your product and sells it cheaper. Most consumers won?t buy the cheaper product because ?it can?t be any good.?
Would a watch company be successful by trying to build a better watch than Rolex? Would an energy drink company be successful by trying to build a better energy drink than Red Bull? I think not.
By focusing on the Razr as a product rather than as a brand, Motorola made a mistake. Introduced in 2004 as the first ultra-thin cellphone, the Razr was initially an enormous success. By 2005, the company was on a roll with a net income of $4.6 billion and a net profit margin of 12.4 percent. (That year Motorola made three-and-a-half times as much money as it did in the previous 10 years combined.)
Then Motorola launched a blizzard of new products along with an assortment of new brand names. In addition to Razr, Motorola introduced Krzr, Slvr, Pebl and Rokr. To add to the confusion, they have now changed those names to MotoRazr, MotoKrzr, MotoSlvr, MotoPebl and MotoRokr. There?s also MotoSlim, MotoMing and Motorola Q.
That?s not what Apple Computer did when it introduced the iPod, the first brand of high-capacity MP3 player to get into consumers? minds. Apple markets many different MP3 models, but the brand name is always the same: iPod.
Today you can?t compete with Apple by building a better MP3 player. Too many consumers would say, It?s nice, but it?s not an iPod.
Furthermore, consumers buy brands, not companies. Unlike Motorola?s MotoRazr, Apple didn?t try to drag its corporate name into its MP3 product by calling it the APPiPod.
This is the second time Motorola made the same mistake. Back in 1996, the company introduced StarTAC, the first clamshell cellphone. At 3.1 oz. it was even lighter than the Razr which weighed 3.4 oz at birth.
What builds a brand anyway? Invariably, it?s an initial burst of publicity that puts the brand into orbit. Once there, it can stay in orbit for decades with a little advertising help from time to time.
That?s what happened with Motorola?s StarTAC. The PR turned the brand into a status symbol with the celebrity crowd. Of the 50 greatest gadgets of the past 50 years, PC World magazine, for example, listed StarTAC as No. 6.
StarTAC should have become a brand name, not a model name. Furthermore, Motorola should have used the name for its entire cellphone line. StarTAC could have been just as powerful a brand as iPod, PlayStation, BlackBerry, Palm, Nokia and other high-tech brands.
Multiple names are not necessarily better than a single brand name. Names like Razr, Krzr, Slvr, Pebl and Rokr might have received a roar of approval in the boardroom, but not with consumers. Multiple names cause confusion.
Should Nike have called its basketball shoes ?Bike?? Its soccer shoes ?Sike?? And its track shoes ?Tike??
Should Rolex have called its diamond-encrusted watches ?Dolex?? Its thin watches ?Tolex?? And its women?s watches ?Wolex??
That would have been Krzr.