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(MBASkills.IN) Book Summary: 22 Immutable Laws of Branding

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22 Immutable Laws of Branding by Al Ries and Laura Ries explores various aspects of branding. Branding is one the marketing world’s hottest concept. The success of your business depends very much upon what image is formed in the customer’s mind when your brand name pops up. Read the summary prepared by Prof. Sameer Mathur for more insights.

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(MBASkills.IN) Book Summary: 22 Immutable Laws of Branding

  1. 1. BOOK SUMMARY AND KEY INSIGHTS: 22 Immutable Laws of Branding by Al Ries and Laura Ries PREPARED BY Sameer Mathur Ph.D. (Carnegie Mellon University)
  2. 2. Prof. Sameer Mathur, Ph.D. “The Power of Brand is Inversely Proportional to its Scope” 1: The Law of Expansion Prof. Sameer Mathur, Ph.D.
  3. 3. Prof. Sameer Mathur, Ph.D. If we want to build a powerful brand, we should contract it, not expand it. Consumers want a brand that is narrow in scope and distinguishable by a single word, the shorter the better. 1: The Law of Expansion Prof. Sameer Mathur, Ph.D.
  4. 4. Prof. Sameer Mathur, Ph.D. EXAMPLE: American Express suffered the adverse consequences of the Law of Expansion. They had a handful of cards and ~25% market share in 1988. Their market share plunged to under ~20% after they launched a blizzard of new cards. 1: The Law of Expansion Prof. Sameer Mathur, Ph.D.
  5. 5. Prof. Sameer Mathur, Ph.D. 2: The Law of Contraction Prof. Sameer Mathur, Ph.D. “A Brand Becomes Stronger When It Narrows Its Focus.”
  6. 6. Prof. Sameer Mathur, Ph.D. A brand should narrow its focus, contracting the category. Narrowing focus is not the same as carrying a limited line. The objective should be to dominate a narrower category. 2: The Law of Contraction Prof. Sameer Mathur, Ph.D.
  7. 7. Prof. Sameer Mathur, Ph.D. EXAMPLE: Fred De Luca implemented the Law of Contraction. He narrowed focus to one type of sandwich, the submarine sandwich. He called his restaurant Subway 2: The Law of Contraction Prof. Sameer Mathur, Ph.D.
  8. 8. Prof. Sameer Mathur, Ph.D. “The Birth Of A Brand Is Achieved By Publicity (Not Advertising)” 3: The Law of Publicity Prof. Sameer Mathur, Ph.D.
  9. 9. Prof. Sameer Mathur, Ph.D. A new brand must be capable of generating favorable publicity in the media. A new brand needs to be “born” not “made”. The best way of generating publicity is by being the first in some important, credible way for e.g. the first in a new category. 3: The Law of Publicity Prof. Sameer Mathur, Ph.D.
  10. 10. Prof. Sameer Mathur, Ph.D. EXAMPLES: Band-Aid = first adhesive bandage Jell-O = first gelatin dessert 3: The Law of Publicity Prof. Sameer Mathur, Ph.D.
  11. 11. Prof. Sameer Mathur, Ph.D. “Once Born, A Brand Needs Advertising To Stay Healthy” 4: The Law of Advertising Prof. Sameer Mathur, Ph.D.
  12. 12. Prof. Sameer Mathur, Ph.D. First Publicity, Then Advertising should be the general rule. Advertising “raises the price of admission” for competitors. A brand’s advertising budget serves as insurance against losses caused by competitive attacks. Advertising is useful for maintaining brand leadership, but not to obtain it. 4: The Law of Advertising Prof. Sameer Mathur, Ph.D.
  13. 13. Prof. Sameer Mathur, Ph.D. EXAMPLE: The first iPad was released by Apple on April 3, 2010. It received tremendous publicity and media coverage. Subsequently, Apple launched its advertising campaign. 4: The Law of Advertising Prof. Sameer Mathur, Ph.D.
  14. 14. Prof. Sameer Mathur, Ph.D. “A Brand Should Strive To Own A Word In The Mind Of The Consumer” 5: The Law of The Word Prof. Sameer Mathur, Ph.D.
  15. 15. Prof. Sameer Mathur, Ph.D. A company must focus its branding efforts on “owning a word” in the minds of its target customers. This should be a word that nobody else owns. One way this occurs is when the brand name gets used as a verb. 5: The Law of The Word
  16. 16. Prof. Sameer Mathur, Ph.D. EXAMPLES: “To Xerox” = To Make a photocopy “To Google” = To Search the Internet 5: The Law of The Word
  17. 17. Prof. Sameer Mathur, Ph.D. “The Crucial Ingredient In The Success Of Any Brand Is Its Claim To Authenticity” 6: The Law of Credentials
  18. 18. Prof. Sameer Mathur, Ph.D. A brand’s credentials in a category as authentic, real, original or the leader make it very powerful. Credentials serve as collateral put up to guarantee the performance of a brand. A product’s perceived benefits are higher, if they are structured around the company’s credentials. 6: The Law of Credentials
  19. 19. Prof. Sameer Mathur, Ph.D. EXAMPLES: Volvo = “safety” FedEx = “overnight” 6: The Law of Credentials
  20. 20. Prof. Sameer Mathur, Ph.D. “Quality Is important but brands are not built by quality alone” 7: The Law of Quality
  21. 21. Prof. Sameer Mathur, Ph.D. Perception of quality is in the mind of the consumer. Having a high price signals high quality to consumers. There is often little correlation between the popularity of a product and the quality of the product. 7: The Law of Quality
  22. 22. Prof. Sameer Mathur, Ph.D. EXAMPLE: Does a Rolex keep better time than a Casio watch? Yet, it is perceived as a better quality watch. 7: The Law of Quality
  23. 23. Prof. Sameer Mathur, Ph.D. 8: The Law of The Category “A Leading Brand Should Promote The Category, Not The Brand”
  24. 24. Prof. Sameer Mathur, Ph.D. A brand should narrow the focus, create a new category, become the first and thus the leading brand in the new category. Once competition arrives, the brand should promote the category and increase the size of the pie, rather than increasing their slice of the pie. 8: The Law of The Category
  25. 25. Prof. Sameer Mathur, Ph.D. EXAMPLE: Customers care more about a new category (eating fresh pizza within 30 minutes) than a new brand (Domino’s) 8: The Law of The Category
  26. 26. Prof. Sameer Mathur, Ph.D. “In The Long Run, A Brand Is Nothing More Than A Name” 9: The Law of The Name
  27. 27. Prof. Sameer Mathur, Ph.D. In the long term, the unique idea or concept behind the brand goes away, leaving behind just the name. Shorter, unique, memorable names are better than longer, vague, generic names. 9: The Law of The Name
  28. 28. Prof. Sameer Mathur, Ph.D. EXAMPLES: “To Xerox” = To Make a photocopy “To Google” = To Search the Internet 9: The Law of The Name
  29. 29. Prof. Sameer Mathur, Ph.D. “The Easiest Way To Destroy A Brand Is To Put Its Name On Everything” 10: The Law of Extensions
  30. 30. Prof. Sameer Mathur, Ph.D. Brand extensions destroy brand value, felt by a reduction in the market share of the parent brand; a loss of brand identity. The company should either continue to invest in the parent brand, or launch a new brand. 10: The Law of Extensions
  31. 31. Prof. Sameer Mathur, Ph.D. EXAMPLE: Does Extra-Strength Tylenol imply that regular Tylenol is not good enough? 10: The Law of Extensions
  32. 32. Prof. Sameer Mathur, Ph.D. “In Order To Build The Category, A Brand Should Welcome Other Brands” 11: The Law of Fellowship
  33. 33. Prof. Sameer Mathur, Ph.D. Choice stimulates demand! (although too much choice can confuse consumers) Competition broadens the category, allowing the brands to focus. Similar businesses located close together attract more customers; consumers can comparison shop; competitors can keep an eye on each other. 11: The Law of Fellowship
  34. 34. Prof. Sameer Mathur, Ph.D. EXAMPLE: The competition between Coke and Pepsi makes consumers more cola conscious. The best location for Burger King is often across the street from McDonalds. 11: The Law of Fellowship
  35. 35. Prof. Sameer Mathur, Ph.D. “One Of The Fastest Routes To Failure Is Giving A Brand A Generic Name” 12: The Law of The Generic
  36. 36. Prof. Sameer Mathur, Ph.D. A generic name makes it tough for a brand to differentiate from its competitors. It lacks Brand Identity. Many brands have transformed from a generic name (e.g. General Electric) to a specific name (GE). Sometimes cutting a generic name can create a good specific name. 12: The Law of The Generic
  37. 37. Prof. Sameer Mathur, Ph.D. EXAMPLE: “Intelligent Chip Company” is too long and too generic a name. Everyone knows and remembers “Intel”. 12: The Law of The Generic
  38. 38. Prof. Sameer Mathur, Ph.D. “Brands are brands. Companies are companies. There is a difference.” 13: The Law of The Company
  39. 39. Prof. Sameer Mathur, Ph.D. Customers think about and buy brands (e.g. Tide), not the parent company (Proctor & Gamble). The brand name should get greater focus than the company name (unless they are the same). Customers use the brand name to describe the product (e.g. Do you want to drink Pepsi?) 13: The Law of The Company
  40. 40. Prof. Sameer Mathur, Ph.D. EXAMPLE: Customers think about and buy Tide (the brand), not the P&G (the parent company) 13: The Law of The Company
  41. 41. Prof. Sameer Mathur, Ph.D. “What Branding Builds, Sub-Branding Can Destroy” 14: The Law of Sub brands
  42. 42. Prof. Sameer Mathur, Ph.D. Sub-brands can erode the power of the brand by creating confusion. They can adversely impact the positioning of the brand in the minds of the target consumers. For example, Waterford is the leading Irish crystal maker. Introducing “cheap” Waterford as “Marquis by Waterford” dilutes the Waterford brand. 14: The Law of Sub-brands
  43. 43. Prof. Sameer Mathur, Ph.D. EXAMPLE: Consumers could get confused about the different Holiday Inn sub-brands and how they are positioned. 14: The Law of Sub-brands
  44. 44. Prof. Sameer Mathur, Ph.D. “There Is A Time And Place To Launch A Second Brand” 15: The Law of Siblings
  45. 45. Prof. Sameer Mathur, Ph.D. Sometimes it is good to create a family of brands – sibling brands. The second brand should not detract from the parent brand. It could focus on a new subcategory within the same product family. Each sibling should be different and distinct in its own right. 15: The Law of Siblings
  46. 46. Prof. Sameer Mathur, Ph.D. EXAMPLE: Time Inc., the world’s largest magazine publisher has many separate, sibling publications: Time, Life, SI, Money, People 15: The Law of Siblings
  47. 47. Prof. Sameer Mathur, Ph.D. “A Brand’s Logo Type Should Be Designed To Fit The Eyes. Both Eyes.” 16: The Law of Shape
  48. 48. Prof. Sameer Mathur, Ph.D. A logo should be a combination of a trademark and the name of the brand, set in distinctive type. A logo should be horizontal; legible; need not be accompanied by a symbol. 16: The Law of Shape
  49. 49. Prof. Sameer Mathur, Ph.D. EXAMPLES: Some of the world’s best logos 16: The Law of Shape
  50. 50. Prof. Sameer Mathur, Ph.D. “A Brand Should Use A Color That Is The Opposite Of Its Major Competitor” 17: The Law of Color
  51. 51. Prof. Sameer Mathur, Ph.D. Color can help to make a brand distinctive. Focus on the identity and mood that the brand should create. Accordingly, choose the best color possible, but if there is another brand with that color, choose the opposite color. Usually, having one, basic color (red, blue, green, yellow) is better than a mixed color or a combination of colors. 17: The Law of Color
  52. 52. Prof. Sameer Mathur, Ph.D. 17: The Law of Color EXAMPLE: Coke is primarily red, while Pepsi is primarily blue.
  53. 53. Prof. Sameer Mathur, Ph.D. “There Are No Barriers To Global Branding. A Brand Should Know No Borders” 18: The Law of Borders
  54. 54. Prof. Sameer Mathur, Ph.D. A global brand should have a narrow focus and consistent message, but account for the perceptions of its country of origin. Regardless of where a brand originated or is produced, the name and the associated connotations determine its geographic perception. 18: The Law of Borders
  55. 55. Prof. Sameer Mathur, Ph.D. EXAMPLE: Honda is perceived as Japanese; Microsoft is perceived as American; Haagen-Dazs is perceived as Scandinavian (although it is American) 18: The Law of Borders or
  56. 56. Prof. Sameer Mathur, Ph.D. “A Brand Is Not Built Over Night. Success Is Measured In Decades, Not Years” 19: The Law of Consistency
  57. 57. Prof. Sameer Mathur, Ph.D. Being consistent over time and limiting the scope of the brand is the key to successful branding. A brand cannot get into the mind unless it stands for something. Markets may change, but brands should not be changed. 19: The Law of Consistency
  58. 58. Prof. Sameer Mathur, Ph.D. EXAMPLE: BMW has been “The Ultimate Driving Machine” for 30 years. 19: The Law of Consistency
  59. 59. Prof. Sameer Mathur, Ph.D. “Brands Can Be Changed, But Only Infrequently And Only Very Carefully” 20: The Law of Change
  60. 60. Prof. Sameer Mathur, Ph.D. Brands should be changed infrequently and cautiously. There are three situations in which brands should be changed: - When a brand is non-existent in the minds of consumers - When a brand needs to be moved to a lower price and perception - When a brand is in a category where change occurs slowly 20: The Law of Change
  61. 61. Prof. Sameer Mathur, Ph.D. EXAMPLE: Marlboro lowered the price of its cigarettes over time to gain market share 20: The Law of Change
  62. 62. Prof. Sameer Mathur, Ph.D. “No Brand Will Live Forever. Euthanasia Is Often The Best Solution” 21: The Law of Mortality
  63. 63. Prof. Sameer Mathur, Ph.D. Brands have a life cycle. They are born, grow up, mature and eventually die. Companies sometimes waste millions trying to save a dying brand. A well-known brand that doesn’t stand for anything has limited value. A brand that stands for something but is not well-known has value because there is the opportunity to create a powerful brand. 21: The Law of Mortality
  64. 64. Prof. Sameer Mathur, Ph.D. EXAMPLE: Blockbuster became a leader in video rentals. Subsequently, with the rise of Video on Demand, Netflix and poor management, its revenues declined. Finally, it filed for bankruptsy in Sept 2010 and was acquired by Dish Network. 21: The Law of Mortality
  65. 65. Prof. Sameer Mathur, Ph.D. “The Most Important Aspect Of A Brand Is Its Single- Mindedness” 22: The Law of Singularity
  66. 66. Prof. Sameer Mathur, Ph.D. The most important aspect of a brand is its singularity. What is a brand? A singular idea or concept owned inside the mind of the prospect. If it is too many things at once, it is confusing and can become worthless. 22: The Law of Singularity
  67. 67. Prof. Sameer Mathur, Ph.D. EXAMPLE: Volvo has stuck to the singular concept of burning into the minds of consumers that it is the safest car on the road. 22: The Law of Singularity

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