The 22 Immutable Laws of Branding: Chapter Summaries
The 11 Immutable Laws of Internet Branding: Chapter Summaries
Introduction
What is the single, most important objective of the marketing process? What is the glue that holds the broad range of marketing functions together?
We believe it's the process of branding.
Marketing is building a brand in the mind of the prospect. If you can build a powerful brand, you will have a powerful marketing program. If you can't, then all the advertising, fancy packaging, sales promotion and public relations in the world won't help you achieve your objective.
Brands are valuable.
A company's most valuable asset is often its brands. According to Interbrand, a brand consultancy group, the world's most valuable brand is Coca-Cola, worth more than $83 billion. (That's 59 percent of the company's market capitalization.)
The most valuable Swiss brand is Nescafe, worth $17.6 billion. The second most valuable Swiss brand is Rolex, worth $2.4 billion.
What is branding?
From a business point of view, branding in the marketplace is very similar to branding on the ranch. A branding program should be designed to differentiate your product from all the other cattle on the range. Even if all the other cattle on the range look pretty much alike.
A successful branding program is based on the concept of singularity. It creates in the mind of the prospect the perception that there is no product on the market quite like your product.
Can a successful brand appeal to everybody? No. The same concept of singularity make certain that no one brand can possibly have a universal appeal.
Yet, broadening the base, widening the appeal and extending the line are all popular trends in marketing. The same forces that try to increase a company's market share are also the forces that undermine the power of the brand.
How to direct and control those forces, both inside and outside of the corporation, is one of the major themes of this presentation.
1. The Law of Expansion
The power of a brand is inversely proportional to its scope.
Think Chevrolet. What immediately comes to mind? Having trouble? It's understandable. Chevrolet is a large, small, cheap, expensive car . . . or truck.
When you put your brand name on everything, that name loses its power. Chevrolet used to be the best-selling automobile brand in America. No longer. Today Ford is the leader.
Chevrolet has nine separate car models. Ford has seven. That's one reason Ford outsells Chevrolet. The power of a brand is inversely proportional to its scope. Why does Chevrolet market all those models? Because they want to sell more cars. And in the short term, they do. But in the long-term they undermine their brand name in the mind of the consumer.
Short term vs. long term. Do you broaden the line in order to increase sales in the short term? Or do you keep a narrow line in order to build the brand in the mind and increase sales in the future?
The emphasis in most companies is on the short term. 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.
2. The Law of Contraction
A brand becomes stronger when you narrow its focus.
Every small town in America has a coffee shop. In larger cities and towns you can find coffee shops on every other block. So what can you find to eat in a coffee shop? Everything. Breakfast, lunch, dinner. Pancakes, muffins, hot dogs, hamburgers, sandwiches, pie, ice cream, and, of course, coffee.
What did Howard Schultz do? In an incredible burst of business creativity, he opened a coffee shop that specialized in, of all things, coffee. In other words, he narrowed the focus. Today Schultz's brainchild, Starbucks, is a rapidly growing chain that does hundreds of millions of dollars worth of business annually. His company, Starbucks Corp., is worth more than a billion dollars on the stock market. And Schultz's share of that stock is worth $65 million.
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.
3. The Law of Publicity
The birth of a brand is usually accomplished with publicity, not advertising.
In the past, it may have been true that a beefy advertising budget was the key ingredient in the brand-building process. But what worked in the past doesn't Necessarily work today. We live in an over-communicated society, where each of us gets hit with hundreds of commercial messages daily.
Today brands are born, not made. A new brand must be capable of generating favorable publicity in the media or it won't have a chance in the marketplace.
And just how do you generate publicity? The best way is by being first. In other words, by being the first brand in a new category.
Rolex, the first expensive watch.
Swatch, the first fashion watch.
CNN, the first cable news network.
Haagen-Daz, the first gourmet ice cream.
All of these brands (and many, many more) were first in a new category and, in the process, generated enormous amounts of publicity.
What works in marketing today is publicity, not advertising. This is especially true in the high-tech field. All of the big global marketing powerhouses Microsoft, Intel, Dell, Compaq, Gateway 2000, Oracle, Cisco, SAP, and Sun Microsystems were first created in the pages of The Wall Street Journal, Business Week, Forbes and Fortune. By publicity, not by 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.
4. The Law of Advertising
Once born, needs advertising to stay healthy.
Your advertising budget is like a country's defense budget. Those massive advertising dollars don't buy you anything; They just keep you from losing market share to competition.
Publicity is a powerful tool, but sooner or later a brand outlives its publicity potential. As the publicity dies out, brands will someday have to shift to massive advertising to defend their positions. First publicity, then advertising is the general rule.
Leaders should not look on their advertising budgets as investments that will pay dividends. Instead leaders should look on their advertising budgets as insurance that will protect them against losses caused by competitive attacks.
What should a brand leader advertise? Brand leadership, of course. Leadership is the single, most-important motivating factor in marketing.
Heinz, America's favorite ketchup.
Barilla, Italy's No. 1 pasta.
Goodyear, No. 1 in tires.
5. 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.
Volvo owns the word "safety" in the mind of the automobile buyer. And, as a result, over the past decade Volvo has become the largest selling European luxury car in America.
Forget about the laundry list of wonderful attributes your product has. You can't possibly associate them all with your brand name in a human mind. The key to getting into the consumer's mind is sacrifice. You have to reduce the essence of your brand to a single thought or attribute. An attribute that nobody else already owns in your category.
6. The Law of Credentials
The crucial ingredient to the success of any brand is its claim to authenticity.
Credentials are the collateral that you put up to guarantee the performance of your brand. When you have the right credentials, your prospect is likely to believe almost everything you say about your brand.
Leadership is the most direct way to establish the credentials of a brand. IBM, Coca-Cola, Hertz, Heinz, Visa, and Kodak all have credentials because they are widely perceived to be the leading brands in their categories. When you don't have the leading brand, best strategy is to create a new category in which you can claim leadership.
Many companies run branding programs almost devoid of credentials. If you leaf through a stack of print ads or watch a series of television commercials, you'll find an endless parade of almost meaningless benefits: Tastes great, saves money, whitens teeth, easy assembly, bigger, smaller, lighter, faster, cheaper. While many of the benefits may be of intense interest to prospective customers, they each lack credibility so they are generally ignored. "That what they all say."
When the benefits, however, are structured around some aspect of a brand's credentials, they carry much more weight.
7. The Law of Quality
Quality is important to have, but brands are not built by quality alone.
Years of observation have led us to this conclusion. There is almost no correlation between success in the marketplace and success in comparative testing of brands. Whether it be taste tests, accuracy tests, reliability tests, durability tests or any other independent, objective third-party testing of brands.
Quality or rather the perception of quality resides in the mind of the buyer. If you want to build a powerful brand, you have to build a powerful perception of quality in the mind.
As it happens, the best way to build a quality perception in the mind is by following the laws of brand building.
Take the law of contraction. What happens when you narrow the focus? You become a specialist rather than a generalist. And the specialist is always perceived to know more, in other words to have "higher quality" than a generalist.
An important aspect of brand building is having a better name. All other factors being equal, the brand with the better name will come out on top.
Another factor in building a high-quality perception is having a high price. Rolex, Haagen-Dazs, Mercedes-Benz, Montblanc, Dom Perignon, and Absolut, are all brands that benefit from their high price.
There's nothing wrong with quality. We always advise our clients to build as much quality into their brands as they can afford. But don't count on quality alone to build your brand.
8. The Law of The Category
A leading brand should promote the category not the brand.
The most efficient, most productive, most useful aspect of branding is creating a new category. In other words, narrowing the focus to nothing and starting something totally new. That's the way to become the first in a new category and ultimately the leading brand in a rapidly growing new segment of the market.
Customers don't really care about new brands, they care about new categories. They don't care about Callaway; they care about whether or not an oversized driver will cut strokes off their golf scores. They don't care about Prince; they care about whether or not an oversized racquet will improve their tennis game.
By first pre-empting the category (as Prince did with the oversized tennis racquet and Callaway did with the oversized driver) and then aggressively promoting the category, you create both a powerful brand and a rapidly escalating market. Callaway Golf outsells the next three brands combined.
What happens when competition appears, as it inevitably does? Most category leaders just can't wait to shift into a brand-building mode. That's a mistake. Leaders should continue to promote the category, to increase the size of the pie, rather than their slice of the pie.
Instead of fighting competitive brands, a leader should fight competitive categories. Leading brands should promote the category, not the brand.
9. The Law of The Name
In the long run a brand is nothing more than a name.
The most important branding decision you will ever make is what to name your product or service. Because in the long run a brand is nothing more than a name.
In the short term, a brand needs a unique idea or concept to survive. It needs to be first in a new category. It needs to own a word in the mind.
But in the long term, the unique idea or concept disappears. All that is left is the difference between your brand name and the brand name of your competitors.
Brands are not just something to think about at marketing meetings. Brands are the essence of the company itself. A company's very existence depends on building brands in the mind.
10. The Law of Extensions
The easiest way to destroy a brand is to put its name on everything.
More than 90 percent of all new products introduced in the U.S. grocery and drug trade are line extensions. Which is the major reason that stores are choked with brands. (There are 1,300 shampoos, 200 cereals, 250 soft drinks.)
When your customers are not exactly rushing out to buy your product, why would you need more brands to satisfy those customers? Logic suggests you would need fewer brands.
But that's customer logic. Manufacturer logic is different. If volume is going nowhere, the manufacturer concludes they need more brands to maintain or increase sales. When a category is increasing in sales, there are opportunities for new brands, but manufacturer logic suggests they're not needed. "We are already doing great, we don't need any more brands."
As a result, the marketplace is filled with line extensions in areas where they are not needed and is starved for new brands in areas where they are needed. Figure that one out.
One reason 90 percent of all new brands are line extensions is that management measures results with the wrong end of the ruler. They only measure the success of the extension. They never measure the erosion of the core brand.
Let sleeping brands lie. Before you launch your next line extension, ask yourself what customers of your current brand will think when they see the line extension?
If the market is moving out from under you, stay where you are and launch a second brand. If it's not, stay where you are and continue building your brand.
11. The Law of Fellowship
In order to build the category, a brand should welcome other brands.
Not only should a dominant brand tolerate competitors, it should welcome them. The best thing that happened to Coca-Cola was Pepsi-Cola.
Choice stimulates demand. The competition between Coke and Pepsi makes customers more cola conscious. Per-capita consumption goes up. Remember, customers have choices, even when there is no competition. They can choose to drink beer, water, ginger ale or orange juice instead of a cola. Competition increases the noise level and tends to increase sales in the category.
Customers respond to competition because choice is seen as a major benefit. If there is no choice, customers are suspicious. Maybe the category has some flaws? Maybe the price is too high? Who wants to buy a brand if you don't have another brand to compare it with?
For each category, two major brands seem to be ideal. Coca-Cola and Pepsi-Cola in cola, for example. Listerine and Scope in mouthwash. Kodak and Fuji in photographic film. Nintendo and PlayStation in video games. Duracell and Energizer in appliance batteries.
You can also see the law of fellowship at work in the retail arena. Where one store many not make it, several stores will. Instead of being spread out in every section of a city, used-car dealers are often clustered along "automotive row." Where one dealer might have had trouble surviving, a handful of dealers are prospering. That's the power of fellowship.
Your brand should welcome healthy competition. They often bring more customers into the category. And remember no brand can ever own the entire market (unless of course they are a government sanctioned monopoly.)
12. The Law of The Generic
One of the fastest routes to failure is giving a brand a generic name.
The problem with a generic brand name is its inability to differentiate the brand from the competition.
The high-tech field is loaded with generic names that are unlikely to generate much in the way of brand identity. Security Software Systems, Power and Data Technology, Server Technology. Compare those names to Microsoft, Compaq, and Intel and you can see the power of a meaningful brand name.
Nobody is saying that you should always invent a new name for an established brand, although that's often a good strategy for a product or service that is truly revolutionary and unlikely to be copied for some time. Kodak and Xerox are the usual suspects.
What you should generally try to find is a regular word taken out of context and used to connote the primary attribute of your brand.
Blockbuster Video is a powerful brand name. General Video is not. Hollywood brags about its "blockbusters," so Blockbuster Video borrowed the term to suggest they rent the best movies.
Sometimes you can carve out a brand name by cutting a generic in half. This often has the further advantage of creating a short, distinctive, easy to remember brand name. Intelligent Chip Company is a lousy brand name, but Intel Corp is terrific.
"Intelligent Chip inside" is a lousy advertising slogan. All computers have intelligent chips inside, but only the top of the line have "Intel inside."
13. The Law of The Company
Brands are brands. Companies are companies. There is a difference.
A company is the organization that manufactures or produces the brand. It is not the brand itself. Microsoft isn't Word, Procter & Gamble isn't Tide. Microsoft produces many products one of which is Word. Procter & Gamble produces many products one of which is Tide.
While this makes sense, it's not usually the best branding strategy. Unless there are compelling reasons to do otherwise, the best branding strategy should be the company name as the brand name.
The WD-40 Company produces the WD-40 brand. The Zippo Corporation produces the Zippo brand. The Coca-Cola Company produces the Coca-Cola brand. Neat, simple, straight-forward, easy to understand.
The brand isn't just the name the manufacturer puts on the package. It's the product itself. To a customer, Coca-Cola is first and foremost, a dark, sweet, reddish-brown liquid. The brand name is the word customers use to describe that liquid. What's inside the bottle is the most important aspect of the branding process. Coca-Cola has branded the liquid itself.
It's not a cola made by the Coca-Cola Company. The cola itself is Coca-Cola, the real thing. This distinction is at the heart of an effective branding strategy.
The brand itself should be the focus of your attention. If you have to use the company name, use it. But do so in a decidedly secondary way.
14. The Law of The Subbrands
What branding builds, subbranding can destroy.
Subbranding is an inside-out branding strategy that tries to push the core brand into new directions. It captures management's attention because of what it promises, not necessarily because of what it delivers.
Subbranding has taken its share of criticism, so the marketing establishment is rethinking the concept. Leading-edge practitioners today are more likely to call the concept the masterbrand or megabrand strategy. It's especially prevalent in the automotive field.
"Ford is not our brand. Our brands are: Aspire, Contour, Crown Victoria, Escort, Mustang, Probe, Taurus and Thunderbird ." What's a Ford then? "A Ford is a megabrand."
You can't apply your own branding system to a market that sees things differently. What the manufacturer sees as a brand, the customer see as a model. What the manufacturer sees as a megabrand, the customer sees as a brand. (Customers don't understand the megabrand concept at all.)
The essence of a brand is some singular idea, or attribute or market segment you can own in the mind. Subbranding is a concept that takes the brand in exactly the opposite direction. Subbranding destroys what branding builds.
Branding concepts that are not driven by the marketplace are going to go nowhere. Subbranding, masterbranding, and megabranding are not customer-driven concepts.
Think simple. Think like a customer and your brand will become more successful.
15. The Law of Siblings
There is a time and a place to launch a second brand.
The key to a family approach is to make each sibling a unique individual brand with his or her own identity. Resist the urge to give the brands a family look or a family identity. You want to make each brand as different and distinct as possible.
Most managers are too internally focused to see the power of a separate identity. They want to "take advantage of the equity" their brand already owns in the mind in order to successfully launch the new brand."
In particular, corporate management should keep the following principles in mind when selecting a sibling strategy for their stable of brands.
1. Focus on a common product area.
2. Select a single attribute to segment. Price is the most common, but other attributes include distribution, age, calories, sex, flavors.
3. Set up rigid distinctions between brands.
4. Create different, not similar brand names. You don't want to create a family of brands, you want to create a family of different brands.
5. Launch a new sibling only when you can create a new category. New brands should not be launched just to fill a hole in the line or to compete directly with an existing competitor.
6. Keep control of the sibling family at the highest level.
A family of sibling brands is not a strategy for every corporation. But where it is appropriate, a sibling strategy can be used to dominate a category over the long term.
16. The Law of Shape
A brand's logotype should be designed to fit the eyes. Both eyes.
A logotype is a combination of a trademark which is the visual symbol of the brand and the name of the brand set in distinctive type.
Since the eyes of your customers are mounted side by side, the ideal shape for a logotype is horizontal. Roughly two units wide and one unit high. A two-by-one horizontal shape will provide the maximum impact for your logotype. This is true wherever the logotype is used: On buildings, brochures, letterheads, advertisements or calling cards.
Of equal importance to shape is legibility. Logotype designers often go way overboard in picking a typeface to express the attribute of a brand rather than in its ability to be clearly read.
The other component of the logotype, the trademark, or visual symbol, is also over-rated. The meaning lies in the word, or words, not in the visual symbol.
It's the Nike name that gives meaning to the Swoosh symbol. The Swoosh symbol doesn't give much meaning to the Nike brand. After a symbol has been associated with a name for a long period of time, the symbol can represent the name, through a kind of "rebus" effect. But it's still the name that carries the brand's power.
17. The Law of Color
A brand should use a color that is the opposite of its major competitor.
Another way to make a brand distinctive is with color. But keep in mind that all colors are not created equal in the eye of the beholder.
Red is the color of energy and excitement. Red is an in-your-face color. Blue is the opposite. Blue is peaceful and tranquil. Blue is a laid-back color. In the world of brands, red is a retail color used to attract attention. Blue is a corporate color used to communicate stability. For example, Coke-Cola red and IBM blue. The other primary colors are in-between. Orange is more like red than blue. Green is more like blue than red.
Yellow is a neutral color. But it is also the brightest color. (Its brightness is the reason yellow is often used as to communicate "caution," as in yellow lights.)
Leaders have first choice. Normally the best color to select is the one that is most symbolic of the category. John Deere is the leading brand of farm tractor. Does it surprise you that John Deere picked green, the color of grass, trees and agriculture, as the brand's signature color?
Color consistency over the long-term can help a brand burn its way into the mind. Look at what red has done for Coke, yellow for Caterpillar, brown for United Parcel Service and blue for IBM.
What Big Blue did for IBM, a big color can do for your brand.
18. The Law of Borders
There are no barriers to global branding. A brand should know no borders.
The best way to grow your business is to build a global brand. For years the magic word on many brands has been "imported." Food, beer, wine, liquor, clothing, automobiles, appliances, and many other products have benefited from an imported label. As if crossing a border suddenly increased the value of the brand.
Actually crossing a border often does add value to a brand. Since value lies in the mind of the consumer, the perception of where the brand came from can add or subtract value. Does anyone doubt the value of:
Watches from Switzerland.
Wines from France.
Automobiles from Germany.
Electronic products from Japan.
Clothing from Italy.
Would watches from Albania, wine from Poland, cars from Turkey, electronic products from Russia, or clothing from Portugal have the same perceptions? Obviously not.
Every country has its own unique perceptions. When a brand is in sync with a country's perceptions, that brand has the possibility of becoming a global brand.
In spite of duties, tariffs, import quotas, inspections, regulations, red tape, and petty harassment, the world is becoming one big global market. And your brand had better get on the global bandwagon or you risk losing out altogether.
19. The Law of Consistency
A brand is not built overnight. Success is measured in decades, not years.
Markets may change, but brands shouldn't. Ever. They may be bent slightly or given a new slant, but their essential characteristics (once those characteristics are firmly planted in the mind) should never be changed.
You have a choice. Follow the fad and destroy the brand. Or hang in there and hope the merry-go-round swings your way again. In our experience, hanging in there is your best approach.
Brand building is boring work. What works best is absolute consistency over an extended period of time. Volvo has been selling safety for 35 years. BMW has been the ultimate driving machine for 25 years.
When people do boring work, they get bored. So every once in awhile, someone at a company like Volvo gets a bright idea. "Why should we limit ourselves to dull, boring, safe sedans? Why don't we branch out into exciting sports cars?"
So on the drawing boards at Volvo are sports cars and even a convertible. What will a ragtop do for the Volvo brand? Nothing, except dilute the safety message.
20. The Law of Change
Brands can be changed, but only infrequently and only very carefully.
Having harped on the idea of consistency and focus, why would we bring up the concept of change?
Because nothing in life, nothing in branding, is ever absolute. There are always exceptions to every rule. And the law of change is the biggest exception. Where does the change occur? Companies are often focused on what they need to do internally in order to facilitate the change of a brand.
But changing a brand does not occur inside a company. It occurs inside the mind of the consumer. If you want to change your brand, keep your sights on your target, the consumer's mind.
There are three situations where changing your brand is feasible.
1. Your brand is weak or non-existent in the mind.
2. You want to move your brand down the food chain.
3. Your brand is in a slow-moving field and the change is going to take place over an extended period of time.
If you are in the mind, and if you have an unique and distinct perception, then change your brand at your own risk. It's going to be a long, difficult, expensive, and perhaps impossible process.
Don't say we didn't warn you.
21. The Law of Mortality
No brand will live forever. Euthanasia is often the best solution.
Opportunities for new brands are constantly being created by the invention of new categories. The rise of the personal computer created opportunities for Compaq, Dell, Gateway 2000, Packard Bell, and other brands.
But the rise of the personal computer also put pressure on minicomputer brands like Digital, Data General and Wang.
It's like life itself. A new generation appears on the scene and goes off in exciting new directions. Careers are born and blossom. Meanwhile the old generation withers and dies.
Don't fight it. For brands, like people, there is a time to live and a time to die. There is a time to invest in a brand and there is a time to harvest a brand. And ultimately there is a time to put the brand to sleep. Spend your money on the next generation. Save the money spent to prolong an old brand's life and invest it in a new brand with a future.
22. The Law of Singularity
The most important aspect of a brand is its single-mindedness.
What's a brand? A proper word that can be used in place of a common word.
Instead of an imported beer, you can ask for a Heineken.
Instead of an expensive Swiss watch, you can ask for a Rolex
Instead of a safe car, you can ask for a Volvo.
Instead of a driving machine, you can ask for a BMW.
What's a brand? A singular idea or concept that you own inside the mind of the prospect.
Introduction
The Internet in the nineties will take its place in history along with the personal computer, the electronic chip, the mainframe computer and television. Five decades of incredible change that has revolutionized the way we live and work.
Of the five, the Internet will turn out to be the most important, the one development that will change you life in more ways than the other four.
And the changes have just begun. What's important to keep in mind is that the Internet will change your business even though you don't have a Website, you don't do business on the Internet and your product or service will never be sold or advertised in cyberspace.
So fasten your seatbelts and brace yourself for the ride of your life. This is the decade of the Internet and the future belongs to those who can do the best job of building brands on the Net.
1. The Law of Either/Or
The Internet can be a business or a medium, but not both.
If the Internet is going to be a business, then you must start from scratch. You must develop a totally new brand with a new strategy and (most important of all) a totally new name.
If the Internet is going to be a medium, then you can use your existing brand name. The Internet becomes a complement to or a replacement for existing media, be they radio, television, direct mail, newspapers, magazines.
How can you tell whether the Internet is a business or a medium for your brand? You need to ask yourself the following questions:
1. Is the brand tangible or intangible? For tangible products the Internet tends to be a medium. For intangible products, a business.
2. Is the brand fashionable or not? For fashionable products the Internet tends to be a medium. For other products, a business.
3. Is the product available in thousands of variations? If so, the Internet tends to be a business.
4. Is low price a significant factor in the brand's purchase? If so, the Internet tends to be a business.
5. Are shipping costs a significant factor as compared to the purchase price? If so, the Internet tends to be a medium
No one factor, of course, will determine whether your brand should be a business on the Internet or whether the Net is just another medium to promote your brand. You have to carefully consider all the factors before you decide.
2. The Law of Interactivity
Without it, your Website and your brand will go nowhere.
Not since television took off in the early fifties has the nation seen such a technological revolution as the Internet. There is a relationship between television and the Internet. Each is a mass-communications medium. And nothing on earth affects more people in a more powerful way than the introduction of a major new mass-communications medium.
We believe that history will rank the Internet as the greatest of all media. And the reason is simple. The Internet is the only mass-communications medium that allows interactivity.
On the Internet a brand lives or dies in an interactive era. In the long run, interactivity will define what works on the Internet and what doesn't work. The secret to branding on the Internet is your ability to present your brand in such a way that your customers and prospects can interact with your message.
It bears repeating. The difference between the Internet and every other medium is "interactivity." Unless your site has this crucial ingredient, it is going to get lost in cyberspace.
3. The Law of the Common Name
The kiss of death for an Internet brand is a common name.
In pre-Internet days, a brand always had a visual component. While the name was the most important element, the visual also influenced the brand's purchase.
The Internet wipes out the visual. To tap into a Website, you type in a word. No pictures, no colors, no typography, no look, no location.
If the name is so critical, then why are most brand names on the web so bad? That's putting it mildly. Most Internet brand names are not bad; they're terrible.
Some typical Internet brands include: Cooking.com, Flower.com, Garden.com, Gifts.com, Individual.com, Mail.com, Office.com, Phone.com, Wine.com. What's wrong with these brand names? They're all common or generic names.
Will some of these generic names be successful? Sure. In the land of the blind, the one-eyed man is king. In the absence of competition, people will buy from a site with a common name. But as sites are set up with strong "proper" brand names, the common name sites are going to dry up and blow away.
You have to win in the mind. And the mind treats common or generic names as representative of all the sites in the category. Not just a single site.
In general, you can't build a brand with a generic name.
4. The Law of The Proper Name
Your name stands alone on the Internet, so you'd better have a good one.
Make no mistake about it. The name stands alone on the Internet and is by far your most valuable asset. That's why you need a proper name.
So how "proper" should your Website name be?
It all depends. First, and most important of all, you want your Website name to be perceived as a proper name. Than hopefully you want your name to be more "proper" than your competitors. But you also want to consider other factors.
In addition to being a proper name, your Website name should also have the following eight attributes:
1. The name should be short.
2. The name should be simple.
3. The name should be suggestive of the category.
4. The name should be unique.
5. The name should be alliterative.
6. The name should be speakable.
7. The name should be shocking.
8. The name should be personalized.
It all starts with the name. If you pick a name that satisfies most of these eight naming strategies, then you will be well on your way to building a successful Internet brand.
5. The Law of Singularity
You should avoid at all costs being second in your category.
There's one big difference between branding on the Internet and branding in the real world. In the real world, there is always room for a No. 2 brand. They serve a need, not just for the consumer, but also for the trade.
Would a supermarket stock just Coca-Cola and not a second brand? No. The second brand gives the trade leverage against the leader. You will find a similar need in the industrial field where most companies insist on "a second source of supply." What if their primary supplier is out on strike? If a company didn't have a second source for a particular part, it might have to shut down its production line.
The Internet, on the other hand, is more like a football game or a political contest. It's the Law of Singularity. Second place is nowhere.
For many products, it's the retailer that is responsible for the strength of the second brand. On the web the situation is different. The real world is the second brand. When Amazon.com offers best-sellers at 50 percent off, the book buyer mentally compares the Amazon deal with the 30 percent off one can find at most brick-and-mortar book stores.
When the web matures, of course, there will be opportunities for No. 2 brands. Until that day arrives, you need to be the leading brand in your category or look for an opportunity to narrow your focus in order to create a new category you can be the leader in.
6. The Law of Advertising
Advertising off the Net will be a lot bigger than advertising on the Net.
The Internet is interactive and for the first time the target is in charge, not the shooter. And what the target definitely does not want is more advertising arrows shot in its direction.
We're not negative about advertising. Quite the contrary. The Internet has and will continue to spawn an enormous increase in advertising volume, except it will be off the Net rather than on the Net.
As the Internet grows up, you are going to see an explosion in Outernet advertising. And much of this advertising will be directed at creating customer for Internet brands.
In particular, radio will turn out to be an ideal medium for dot.com advertising. On the Internet the name is everything. A verbal medium like radio is perfect for driving a name into the mind.
Advertising might be vitally important for driving prospects to your site, but once they get there you can forget about using them as human fodder for your advertising messages.
The Internet is a revolutionary new, interactive medium. And when people interact with advertising, they generally turn it off.
7. The Law of Globalism
The Internet will demolish all barriers, all boundaries, all borders.
What is the "message" of the Internet medium? We believe the message is "Globalism." The Internet will drive the citizens of the world into one interconnected global economy. "The global village" in Marshall McLuhan's vocabulary.
It may well be that the biggest trend of the 21st century will turn out to be Globalism. What the Internet hath wrought is the global village. The medium is the message.
America is by far the largest economy in the world with the greatest output of goods and services and the highest standard of living. Yet the US accounts for less than 5 percent of the world's population, a percentage that declines annually.
If you're a business person in America, where does the real opportunity lie? In the domestic market or in the 95 percent of the world that doesn't live in one of the 50 states?
The Internet can turn the world into one giant shopping mall. But like in any shopping mall, you can't win with just a better product or service. You need a better brand.
8. The Law of Time
Just do it. You have to be fast. You have to be first. You have to be focused.
If you want to be successful in business ... in branding ... in life ... you have to get into the mind first. Notice we said "mind," not "marketplace."
Being first in the marketplace doesn't buy you anything except a license to try to get in the mind first. If you throw away that opportunity by being too concerned with getting all the details right, you'll never get it back. (Perfection in infinite time is worth nothing.)
Why were most of the successful Internet sites launched by small, venture-capital-backed companies rather than Fortune 500 firms? A big company hates to do anything without mounds of market research.
The Internet is moving too fast to be measured. It's a new industry. Knowledge is scarce. Few people know what they want, what they would use, what they would pay for ... until they are given a real-world choice.
A big company often fails to exploit new opportunities because it is a "perfectionist." It won't release a new product, a new service or a new Internet site "until we get it right."
On the Internet, timing is everything. Just do it.
9. The Law of Vanity
The biggest mistake of all is believing you can do everything.
Success in business doesn't just show up on the bottom line of the profit-and-loss column, it also goes to the top. Success inflates the egos of top management.
Supremely successful companies believe they can do anything. They can launch any product into any market. They can make any merger work. It's just a question of having the willpower and the resources to throw into the task.
The problem is not a product problem. It's a perception problem and the most difficult problem in business is trying to change a perception that exists in the mind of a customer or prospect. Once a perception is strongly held in the mind, it can almost never be changed.
Everybody wants to grow, so what should an Internet brand like Amazon.com do? There are five fundamental strategies for a leader in any category.
1. Keep your brand focused.
2. Increase your share of the market.
3. Expand your market.
4. Go global.
5. Dominate the category.
10. The Law of Divergence
Everyone talks about convergence, while just the opposite is happening.
After World War II, the two biggest industries in America were the automotive industry and the airplane industry. Sure enough, pundits thought that the car was going to converge with the airplane. Roads would become obsolete, traffic jams a thing of the past.
It's divergence that always triumphs, not convergence. Instead of a flying car, today we have many types of airplanes (jet planes, prop planes, helicopters) and many types of automobiles (sedans, convertibles, station-wagons, sport-utility vehicles.)
The next bit of divergence lunacy was the combination automobile and boat. Millions of dollars were wasted chasing the dream of a floating car.
Why do things divide? Divergence is consistent with the laws of nature and convergence is not. Many companies are going against the laws of nature when they try to build Internet brands on the convergence concept. "Are you getting three different kinds of electronic messages - voicemail, email and fax? Fine, we can fix that for you."
The new all-in-one services are called "unified messaging." Instead of having to dial into your voicemail, open your email or check your fax machine, you just go to the sponsor's web page and get all your messages.
What's wrong with a unified messaging service. Nothing, except it drives like a boat and floats like a car.
11. The Law of Transformation
The Internet revolution will transform all aspects of our lives.
The Internet will affect your business whether you jump on the web or not. What changes will the Internet bring to your business and your life? The future is always fuzzy, but there are some predictions that seem likely.
1. Paper directories are doomed.
2. Paper catalogs face an uncertain future.
3. The elaborate full-color brochure will become exceedingly rare.
4. Classified advertising will shift to the web.
5. The Postal Service won't be delivering as much mail.
6. Financial services of all types will shift to the web.
7. The parcel delivery business will soar.
8. Retailing on the Internet will become a price game.
9. Retailing on the Outernet will become a service game.
10. Speed bumps on the Internet: The stock market bubble and the tax issue.
Whatever the future brings, you can be sure of one thing. It will be a destabilizing development. It will change the way you manage your business and the way you build your brands.
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