How to tackle a leader in the brand category

How to tackle a leader in the brand category

Mumbai: Al Ries is a legendary marketing strategist and best-selling author or co-author of 11 books on marketing, including Positioning, Marketing Warfare, Focus, The 22 Immutable Laws of Branding, and his latest, The Origin of Brands. Ries is chairman of Ries & Ries Inc., an Atlanta-based marketing strategy firm that he runs with his daughter, Laura Ries. In an email interview, he describes how and when advertising should be targeted to build categories.

Edited excerpts:

Whether ads build categories more and not just brands

It depends on the brand’s position in the marketplace. In general, leading brands should promote the category. They are probably getting the maximum percentage of the category anyway (for example, Coca-Cola Co. in cola).

On the other hand, brands that are also-rans should generally promote their brands. In particular, they should find a way to become the opposite of the leader. In the US, for example, PepsiCo, Inc. promotes Pepsi cola as a cola for younger people, since Coca-Cola is the old established cola brand (‘Your parents drank Coca-Cola’). As a general rule, leaders should ignore the competition and promote the category. Also-rans should position themselves against the leaders.

Examples swing both ways: Red Bull is a good example of a brand which promoted the category (energy drink) almost exclusively. Over time, Red Bull became synonymous with the category. A prospect thinks, “I want an energy drink", and the first brand that comes to mind is Red Bull. In our?terminology,?Red?Bull?owns the “energy drink category".

An also-ran brand called Monster decided to be the opposite of Red Bull. Since Red Bull comes in a small 8.3oz (approx. 250ml) can, Monster was packaged in a 16oz can, almost twice as large. Even the name (Monster) was selected to remind consumers that this is the energy drink that comes in a big can.

As a result, Monster became the second largest brand in the energy drink category, no small feat since there are some 200 brands of energy drinks in the US market today.

Listerine is the largest selling mouthwash. Its advertising was focused on the germ-killing aspects of a brand that “tastes bad". So Procter & Gamble Co. launched a brand that was the opposite of Listerine, a good-tasting mouthwash called Scope. Very shortly thereafter, Scope became the second largest selling mouthwash brand.

Hertz Corp. is the leading car rental company. As the first car rental company, it is strongly identified with the category. And the category is strongly identified with airline terminals where Hertz is by far the leading brand.

So, Enterprise Rent-A-Car Co. did the opposite. It located in suburbs and positioned the brand as the best choice for “insurance replacement". In other words, if your car is damaged or stolen and you have an insurance policy that covers a replacement car, then that’s the market Enterprise concentrated on (in particular, they made friends with insurance agents). In the process, Enterprise became the largest car rental company in the US.

On dying categories

Brands are strongly associated with their categories and can seldom be switched from one category to another.

Polaroid, for example, invented instant photography and is strongly associated with the category. But the category is dying, first because of the one-hour photo development shops and, more recently, the rise of the digital camera. So, Polaroid tried to take its brand name into many other categories, including photographic film. Nothing worked. The company went bankrupt.

Wang was strongly associated with the word processing category. As a matter of fact, it was the No. 1 brand in the category. But the personal computer wiped out the word processing category. Wang tried to move its brand name into personal computers. It didn’t work. The company went bankrupt.

On first-brand advantage

In general, to own a category, you have to be the first brand into the mind. Red Bull in energy drinks. Lipton in tea. Nescafe in instant coffee. The iPod in MP3 players. Amazon in Internet books. EBay in Internet auctions.

The first brand into the mind is perceived to be the original. All the other brands are copies of the original. It’s the difference between a Van Gogh painting and a copy of a Van Gogh painting. You can’t be better than the original.

On brand valuation

Brand value is based on the difference that consumers will pay for the brand versus what they would pay for a commodity. The difference between the price of Coca-Cola and the price of a supermarket brand of cola (it’s about 50 cents, or Rs20, a can versus 25 cents a can). To get the brand valuation, you need to calculate that difference multiplied by the number of consumers over the lifetime of the brand.

In Coca-Cola’s case, the brand is valued—according to brand valuation company Interbrand—at $65.3 billion.