22 Immutable Laws of Branding

Pow to Buì|d a Produot or 5ervìoe
ìnto a Wor|d-U|ass Brand

(1hìs edìtìon oombìnes Ihe 22 lmmutable Laws of Brandlng and
Ihe ll lmmutable Laws of lnternet Brandlng
wìth added ì||ustratìons and text.)
A| R|es and Laura R|es
Dedicated tc Mary Lcu and Scctt.
C0N1 £ N1 5
lntroduotlon lx
1he 22 Immutab|e Laws ef Brand|ng 1
1 The Law of Lxpanslon 3
2 The Law of Contraotlon 8
3 The Law of lubllolty 13
4 The Law of ^dvertlslng 18
5 The Law of the word 22
6 The Law of Credentlals 29
7 The Law of Çuallty 34
8 The Law of the Category 39
9 The Law of the Name 44
10 The Law of Lxtenslons 49
11 The Law of Fellowshlp 56
12 The Law of the Generlo 61
13 The Law of the Company 67
14 The Law of Subbrands 73
15 The Law of Slbllngs 77
16 The Law of Shape 83
17 The Law of Color 86
18 The Law of Borders 91
19 The Law of Conslstenoy 97
20 The Law of Change 101
21 The Law of Mortallty 105
22 The Law of Slngularlty 109
1he 11 Immutab|e Laws ef Internet Brand|ng 111
1 The Law of Llther/0r 113
2 The Law of lnteraotlvlty 126
3 The Law of the Common Name 134
4 The Law of the lroper Name 148
5 The Law of Slngularlty 164
6 The Law of lnternet ^dvertlslng 172
7 The Law of Globallsm 181
8 The Law of Tlme 191
9 The Law of vanlty 198
10 The Law of Dlvergenoe 210
11 The Law of Transformatlon 220
vì U0N1LN15
^bout the ^uthors
A|so by A| Pìes and Laura Pìes
Credlts
Front Cover
Copyrlght
^bout the lubllsher
I N1 R0ßUC1 I 0N
WIaI Is LrandIng? Iron a LusIness µoInI oI vIev, LrandIng
In IIe narkeIµIace Is very sInIIar Io LrandIng on IIe rancI.
A LrandIng µrogran sIouId Le desIgned Io dIIIerenIIaIe
your µroducI Iron aII IIe oIIer caIIIe on IIe range. Lven II
aII IIe oIIer caIIIe on IIe range Iook µreIIy nucI aIIke.
SuccessIuI LrandIng µrograns are Lased on IIe conceµI
oI sInguIarIIy. TIe oLjecIIve Is Io creaIe In IIe nInd oI IIe
µrosµecI IIe µerceµIIon IIaI IIere Is no oIIer µroducI on
IIe narkeI quIIe IIke your µroducI.
Can a successIuI Lrand aµµeaI Io everyLody? No. TIe
sane conceµI oI sInguIarIIy nakes cerIaIn IIaI no one
Lrand can µossILIy Iave a unIversaI aµµeaI.
YeI, LroadenIng IIe Lase, vIdenIng IIe aµµeaI, and
exIendIng IIe IIne are aII µoµuIar Irends In narkeIIng. TIe
sane Iorces IIaI Iry Io Increase a conµany's narkeI sIare
are aIso IIe Iorces IIaI undernIne IIe µover oI IIe Lrand.
II's IIe dIIIerence LeIveen seIIIng and LrandIng. CouId you
seII a S100 RoIex vaIcI? Sure, you couId µroLaLIy seII nII-
IIons oI IIen and In IIe µrocess Increase saIes oI RoIex
vaIcIes. BuI vIaI vouId Iaµµen In IIe Iong Iern Io IIe RoIex
Lrand? A cIeaµ RoIex vouId uIIInaIeIy kIII IIe exµensIve
RoIex Lrand.
TIe sane µrIncIµIes aµµIy Io aInosI every asµecI oI
narkeIIng. In IIe sIorI Iern, convenIIonaI narkeIIng
sIraIegIes (exµansIon and IIne exIensIon) can Increase saIes,
LuI In IIe Iong run IIey usuaIIy undernIne IIe µover oI IIe
Lrand and decrease saIes.
x I N1P00UU1I 0N
ConvenIIonaI narkeIIng Is Lased on seIIIng vIen II
sIouId Le Lased on LrandIng. MarkeIIng Is noI seIIIng. Mar-
keIIng Is LuIIdIng a Lrand In IIe nInd oI IIe µrosµecI. II you
can LuIId a µoverIuI Lrand, you vIII Iave a µoverIuI nar-
keIIng µrogran. II you can'I, IIen aII IIe adverIIsIng, Iancy
µackagIng, saIes µronoIIon, WeL desIgns, and µuLIIc reIa-
IIons In IIe vorId von'I IeIµ you acIIeve your oLjecIIve.
MarkeIIng Is Lrand LuIIdIng. TIe Ivo conceµIs are so
InexIrIcaLIy IInked IIaI II's InµossILIe Io seµaraIe IIen.
IurIIernore, sInce everyIIIng a conµany does can con-
IrILuIe Io IIe Lrand-LuIIdIng µrocess, narkeIIng Is noI a
IuncIIon IIaI can Le consIdered In IsoIaIIon.
MarkeIIng Is vIaI a conµany Is In LusIness Io do. Mar-
keIIng Is a conµany's uIIInaIe oLjecIIve. TIaI's vIy every-
one vIo vorks In a corµoraIIon sIouId Le concerned vIII
narkeIIng, and sµecIIIcaIIy, vIII IIe Iavs oI LrandIng.
II IIe enIIre conµany Is IIe narkeIIng deµarInenI, IIen
IIe enIIre conµany Is IIe LrandIng deµarInenI.
As IIIogIcaI as II nIgII seen, ve can vIsuaIIze a IIne
vIen IIe narkeIIng conceµI IIseII vIII Lecone oLsoIeIe, Io
Le reµIaced Ly a nev conceµI caIIed "LrandIng.¨
WIaI Is acceIeraIIng IIIs Irend Is IIe decIIne oI seIIIng.
SeIIIng, as a µroIessIon and as a IuncIIon, Is sIovIy sInkIng
IIke IIe Ti/anic. Today nosI µroducIs and servIces are
LougII, noI soId. And LrandIng greaIIy IacIIIIaIes IIIs
µrocess. BrandIng "µre-seIIs¨ IIe µroducI or servIce Io IIe
user. BrandIng Is sInµIy a nore eIIIcIenI vay Io seII IIIngs.
TIaI oId exµressIon "NoIIIng Iaµµens unIII soneLody
seIIs soneIIIng¨ Is LeIng reµIaced Ly Ioday's sIogan, "NoII-
Ing Iaµµens unIII soneLody Lrands soneIIIng.¨
Take a suµernarkeI or a drugsIore vIII Lrands IIned uµ
on IIe sIeIves. A IoI oI LuyIng Iakes µIace as cusIoners µIck
and cIoose anong varIous Lrands. BuI vIere's IIe seIIIng?
TIe seIIIng Is In IIe Lrand. In IIIs age oI nuIIInedIa, IIe
verLaI endorsenenI oI a µroducI-essenIIaIIy, IIs guaran-
I N1P00UU1I 0N xì
Iee-Is reµresenIed Ly IIe Lrand nane raIIer IIan Ly IIe
µersonaI reconnendaIIon oI a saIesµerson.
WIaI Ias Leen Irue Ior years In IIe suµernarkeI Is nov
LegInnIng Io caIcI on across IIe narkeIIng Iandscaµe.
LxceµI aI IIe cosneIIc counIers, nosI deµarInenI sIores
seII µroducIs vIIIouI IIe IeIµ oI a saIescIerk. TIe saIes-
cIerks are IIere Io IeIµ rIng uµ saIes, µerIod.
More and nore car deaIers are adoµIIng IIe one-µrIce,
no-IaggIIng SaIurn sIraIegy. BooksIores, µIarnacIes, Led-
and-LaII ouIIeIs are aInosI aII seII-servIce reIaIIers. Lven
sIoe sIores are novIng In IIaI dIrecIIon.
TIe reIaIIIng vorId Is LeconIng one LIg WaI-MarI Suµer-
cenIer. ProducIs are sIocked In deµII, arIIuIIy arranged, and
reasonaLIy µrIced, LuI never "soId.¨
TIere's a seIsnIc sIIII IakIng µIace In IIe vorId oI LusI-
ness. TIe sIIII Iron seIIIng Io LuyIng. TIIs sIIII Is enIanced
Ly, acceIeraIed Ly, and caused Ly Lrands.
TIe essence oI IIe narkeIIng µrocess Is oLvIousIy LuIId-
Ing a Lrand In IIe nInds oI consuners. BuI vIaI, you nay
ask, Is a Lrand?
Sone nanagers LeIIeve IIaI Lrands µossess unIque
IdenIIIIes and quaIIIIes seµaraIe and dIsIIncI Iron IIeIr
conµany or µroducI nanes.
"TIey nade IIeIr nane InIo a Lrand,¨ saId one anaIysI
aLouI a conµany's successIuI narkeIIng µrogran.
TIey nade IIeIr nane InIo a Lrand? WIaI does IIIs sIaIe-
nenI nean? In IruII, noIIIng. On µaµer, IIere Is no dIIIerence
LeIveen a conµany or µroducI nane and a Lrand nane.
OLvIousIy, narkeIIng µeoµIe Iave aII sorIs oI deIInIIIons
Ior conµany nanes, dIvIsIon nanes, Lrand nanes, and
nodeI nanes, noI Io nenIIon suLLrands, negaLrands,
IIanker Lrands, and oIIer varIaIIons.
WIen you Iook InsIde IIe nInd oI IIe µrosµecI, Iovever,
aII oI IIese varIaIIons dIsaµµear. InagIne a cusIoner sayIng
Io a IrIend, "WIaI do you IIInk oI IIIs nev IIanker Lrand?¨
"NoI nucI. I sIIck vIII negaLrands or suLLrands.¨
PeoµIe don'I IaIk IIaI vay. Nor do IIey IIInk IIaI vay.
To µaraµIrase GerIrude SIeIn, "A Lrand Is a Lrand Is a
Lrand.¨
A Lrand nane Is noIIIng LuI a vord In IIe nInd, aILeII a
sµecIaI kInd oI vord. A Lrand nane Is a noun, a µroµer
noun, vIIcI IIke aII µroµer nouns Is usuaIIy sµeIIed vIII a
caµIIaI IeIIer.
Any and every µroµer noun Is a Lrand, vIeIIer II's
ovned Ly an IndIvIduaI, a corµoraIIon, or a connunIIy.
PaIagonIa Is a Lrand nane Ior a cIoIIIng IIne, LuI II's aIso a
Lrand nane Ior IIe IourIsI IndusIrIes oI ArgenIIna and CIIIe
InIeresIed In µronoIIng IraveI Io IIIs µrIsIIne and LeauIIIuI
µIace.
PIIIadeIµIIa Is a Lrand nane Ior IIe IeadIng crean
cIeese, LuI II's aIso a Lrand nane Ior IIe CIIy oI BroIIerIy
Love.
Brands are noI IInIIed Io IIe 2.5 nIIIIon Iradenarks reg-
IsIered vIII IIe U.S. governnenI. Nor IIe addIIIonaI nII-
IIons oI nanes and IogoIyµes regIsIered vIII oIIer counIrIes
around IIe vorId.
Any µroµer noun Is a Lrand. You are a Lrand. And II you
vanI Io Le IruIy successIuI In IIIe, you sIouId consIder yourseII
a Lrand and IoIIov IIe Iavs oI LrandIng ouIIIned In IIIs Look.
TIe µover oI a Lrand IIes In IIs aLIIIIy Io InIIuence µur-
cIasIng LeIavIor. BuI a Lrand nane on a µackage Is noI IIe
sane IIIng as a Lrand nane In a nInd.
TIe cusIoner vIo sIoµs aI a 7-LIeven Io µIck uµ a IoaI
oI Lread and a quarI oI nIIk usuaIIy ends uµ µurcIasIng Ivo
Lranded µroducIs. YeI IIere nIgII Le IIIIIe or no Lrand µreI-
erence In IIe Luyer's nInd. II's jusI a quarI oI nIIk and a IoaI
oI Lread. BoII connodIIy µurcIases.
YeI IIe sane cusIoner nIgII aIso Luy a sIx-µack oI Leer
and a carIon oI cIgareIIes. CIances are IIgI IIaI IIe cus-
Ioner vIII searcI ouI a µarIIcuIar Lrand oI Leer and a µar-
IIcuIar Lrand oI cIgareIIes Io Luy.
xìì I N1P00UU1I 0N
ConvenIIonaI vIsdon suggesIs IIaI Leer and cIgareIIes
are dIIIerenI Iron Lread and nIIk. Beer and cIgareIIes are
Lrand Luys. Bread and nIIk are connodIIy µurcIases.
WIIIe IIIs nay Le IIIeraIIy Irue, II overIooks an Inµor-
IanI consIderaIIon. You can LuIId a Lrand In any caIegory,
IncIudIng Lread and nIIk, as Iong as you IoIIov IIe Iavs oI
LrandIng. Sone conµanIes aIready Iave done so vIII
Lrands IIke LacIaId In nIIk, SIIk In soy nIIk, and LarII
GraIns In Lread.
II IIere ever vas a connodIIy caIegory, II's H
2
O, oIIer-
vIse knovn as vaIer. SInce aInosI every µerson In AnerIca
Ias access Io good, cIean vaIer ouI oI a Iaµ, IIere Is no need
Io Luy vaIer Iron a sIore, LuI nany µeoµIe do.
TIe Lrand nane LvIan Is so µoverIuI IIaI IIe IasI IIne
ve LougII 1.5 IIIers, ve µaId S1.69. TIaI sane day, on a µer-
IIIer LasIs, LvIan vas seIIIng Ior 20 µercenI nore IIan Bud-
veIser and 40 µercenI nore IIan Borden's nIIk. TIaI's IIe
µover oI LrandIng.
WIaI IIIs Look vIII IeIµ you do Is Io aµµIy Lrand IIInk-
Ing or IIe LrandIng µrocess Io your LusIness. In oIIer
vords, Io Iurn your vaIer InIo LvIan, or yourseII InIo IIe
nexI BIII GaIes. AIn IIgI. You can never acIIeve nore IIan
you asµIre Io.
SInce ve vroIe T/c 22 Innu/ab/c Laus oj Erandin¸, IIe
InIerneI Ias arrIved on IIe narkeIIng scene. II's our oµInIon
IIaI IIe InIerneI vIII Iave an enornous InµacI on IIe vay
µroducIs and servIces are narkeIed. Ior exanµIe, 30 µer-
cenI oI aII SouIIvesI AIrIInes IIckeIs are currenIIy soId on
IIe WeL, 50 µercenI oI aII DeII conµuIers are nov soId on
IIe WeL, and an asIoundIng 68 µercenI oI CIsco's orders are
currenIIy Iaken on IIe WeL.
TIe InIerneI Is IIe uIIInaIe In Lrand-cenIered LuyIng.
Consuners are µurcIasIng auIonoLIIes Iron WeLsIIes
vIIIouI ever seeIng IIe cars or goIng Ior a IesI drIve.
WIaI's IaµµenIng In IIe auIonoLIIe IndusIry Is aIso
IaµµenIng In nany oIIer IIeIds. In IInancIaI servIces, Ior
I N1P00UU1I 0N xììì
exanµIe, conµanIes IIke CIarIes ScIvaL, L'Trade, IIdeIIIy,
and Vanguard are oIIerIng dIrecI access, cIeaµer connIs-
sIons, and on-IIne cusIoner servIce, gIvIng IradIIIonaI sIock-
Lrokers a run Ior IIeIr noney.
TIe InIerneI vIII Iave an enornous InµacI on IIe vay
µroducIs and servIces are Lranded. WIy? One reason Is IIaI
InIerneI Lrands are InvIsILIe. BeIore you can vIsII a WeLsIIe,
IIe nane oI IIaI sIIe IIrsI Ias Io Le regIsIered In your nInd.
You can cruIse IIe aIsIes oI a suµernarkeI and µIck uµ
Lrands IIaI Iook InIeresIIng, LuI cruIsIng on IIe InIerneI Is a
IoIaIIy dIIIerenI sIory.
WIII nIIIIons oI sIIes Io cIoose Iron, you µreIIy nucI
Iave Io knov vIere you're goIng LeIore you enLark on your
InIerneI journey. You can, oI course, sIarI your journey aI a
searcI-engIne sIIe. BuI IIaI's onIy a Ienµorary soIuIIon. As
nore and nore Lrands geI enLedded In IIe µrosµecI's nInd,
vIy vouId anyone vanI Io vasIe IIne cIeckIng In vIII a
searcI engIne vIen Ie or sIe can go dIrecIIy Io IIe sIIe?
WIy vouId anyone cIeck ouI vIere Io Luy Looks aI
YaIoo! vIen you can go dIrecIIy Io Anazon.con? TIe Ana-
zon Lrand vas one oI IIe IIrsI Lrands Io Le sIrongIy regIsIered
In IIe nInd oI IIe Look-LuyIng µuLIIc. BuI IIere are cerIaIn Io
Le nany nore Anazon-IIke InIerneI Lrands Io cone.
Hov do you LuIId a Lrand IIke Anazon.con? And Iur-
IIernore, vIII Lrand LuIIdIng on IIe InIerneI Le dIIIerenI
Iron Lrand LuIIdIng In IIe reaI vorId? We IIInk noI. We
IIInk IIaI aII IIe Iavs oI LrandIng aµµIy equaIIy Io IIe InIer-
neI as IIey do In IIe reaI vorId.
RecenIIy, oI course, IIe doIcon Loon Ias Lecone IIe
doIcon LusI. BuI Is IIe InIerneI desIIned Io go IIe vay oI
IIe IuIa Iooµ? HardIy. In our oµInIon, nosI doIcon IaIIures
are LrandIng IaIIures.
º BarnesandNoLIe.con, WaInarI.con, and Sears.con
vIoIaIed InIerneI BrandIng Lav No. 1, IIe Lav oI
LIIIer/Or. None oI IIese sIIes Iave done veII.
xìv I N1P00UU1I 0N
º PeIs.con, Garden.con, eToys.con, IurnIIure.con, LIv-
Ing.con, Hardvare.con, AucIIons.con, and Iundreds
oI oIIer sIIes vIoIaIed InIerneI BrandIng Lav No. 3, IIe
Lav oI IIe Connon Nane.
º Iree-PC, IreeInIerneI.con, and a IosI oI sIIes Lased on
gIvIng µroducIs or servIces avay In order Io seII adverIIs-
Ing Iave gone LankruµI. WIy? TIey vIoIaIed InIerneI
BrandIng Lav No. 6, IIe Lav oI AdverIIsIng.
And so II goes. You can'I LuIId a Lrand In IIe reaI vorId,
and you cerIaInIy can'I LuIId a Lrand on IIe InIerneI, II you
vIoIaIe IIe Iavs oI LrandIng.
On IIe oIIer Iand, IIere are a nunLer oI LIg LrandIng
successes on IIe InIerneI:
º Anazon.con In Looks
º eBay.con In aucIIons
º MonsIer.con In joLs
º AnerIca OnIIne In InIerneI servIce
WIaI dIIIerenIIaIes IIe vInners Iron IIe Iosers? Good
LrandIng. And so ve µredIcI IIaI IIose conµanIes IIaI IoI-
Iov IIe µrIncIµIes oI InIerneI LrandIng vIII Le aLIe Io
deveIoµ successIuI InIerneI Lrands . . . even IIougI IIe
InIerneI IIseII Ias Lecone a graveyard oI Lroken dreans.
WIIcI Is noIIIng nev. In IIe µasI Iundred years IIere
Iave Leen sone Ivo IIousand AnerIcan auIonoLIIe con-
µanIes. Today, Iovever, onIy Ivo renaIn (GeneraI MoIors
and Iord). Does IIaI nean IIaI IIe auIonoLIIe LusIness Is a
Lad LusIness? NoI necessarIIy.
In IIe µasI IvenIy-IIve years IIere Iave Leen sone Ivo
Iundred AnerIcan nanuIacIurers oI µersonaI conµuIers.
Today, Ivo conµanIes donInaIe IIe PC IIeId, DeII ConµuIer
and Conµaq. Does IIaI nean IIe µersonaI conµuIer LusI-
ness Is a Lad LusIness? NoI necessarIIy.
I N1P00UU1I 0N xv
So, Ioo, vIII IIe InIerneI. LIke any oIIer IIgI-µroIIIe
IndusIry, IIe InIerneI Ias aIIracIed IIousands (II noI nII-
IIons) oI µIayers. And nosI vIII IaII.
II your conµany vanIs Io Le a µoverIuI µIayer on IIe
InIerneI, IIen you need Io sIudy LoII IIe InIerneI IIseII and
IIe Iavs oI LrandIng.
In addIIIon, IIere are sone unIque cIrcunsIances aLouI
IIe InIerneI IIaI µose sµecIaI µroLIens Ior LrandIng. TIaI's
vIy ve orIgInaIIy vroIe IIe Look T/c 11 Innu/ab/c Laus oj
In/crnc/ Erandin¸.
SInce IIe Iavs oI LrandIng aµµIy equaIIy Io IIe reaI
vorId and Io IIe InIerneI, ve IeeI IIaI II vouId Le IeIµIuI Io
Iave aII IIe Iavs oI LrandIng In one convenIenI voIune.
Hence IIIs Look.
xvì I N1P00UU1I 0N
1R£
I MMU1ABL£
LAW5 0F
BRANßI N6
TIInk CIevroIeI. WIaI InnedIaIeIy cones Io nInd?
HavIng IrouLIe? II's undersIandaLIe.
CIevroIeI Is a Iarge, snaII, cIeaµ, exµensIve car . . . or
Iruck.
WIen you µuI your Lrand nane on everyIIIng, IIaI nane
Ioses IIs µover. CIevroIeI used Io Le IIe LesI-seIIIng auIono-
LIIe Lrand In AnerIca. No Ionger. Today Iord Is IIe Ieader.
TIInk Iord. Sane µroLIen. Iord and CIevroIeI, once
very µoverIuI Lrands, are LurnIng ouI. SIovIy IeadIng Ior
IIe scraµ Ieaµ.
Iord Luyers IaIk aLouI IIeIr Tauruses. Or IIeIr Broncos.
Or IIeIr LxµIorers. Or IIeIr LscorIs.
CIevroIeI Luyers IaIk aLouI IIeIr . . . WeII, vIaI do
CIevy Luyers IaIk aLouI? LxceµI Ior IIe CorveIIe, IIere are
no sIrong Lrands In IIe resI oI IIe CIevroIeI car IIne. Hence,
IIe Lrand-Inage µroLIen.
CIevroIeI Ias Ien seµaraIe car nodeIs. Iord Ias eIgII.
TIaI's one reason Iord ouIseIIs CIevroIeI. TIe µover oI a
Lrand Is InverseIy µroµorIIonaI Io IIs scoµe.
WIy does CIevroIeI narkeI aII IIose nodeIs? Because II
vanIs Io seII nore cars. And In IIe sIorI Iern, II does. BuI
In IIe Iong Iern, IIe nodeI exµansIon undernInes IIe
Lrand nane In IIe nInd oI IIe consuner.
3
1 1 R£ L AW 0F £ XPAN5 I 0N
The power of a br and l s l nver sel y
pr opor t l onal t o l t s soope.
SIorI Iern versus Iong Iern. Do you Lroaden IIe IIne In
order Io Increase saIes In IIe sIorI Iern? Or do you keeµ a
narrov IIne In order Io LuIId IIe Lrand In IIe nInd and
Increase saIes In IIe IuIure?
Do you LuIId IIe Lrand Ioday In order Io nove nercIan-
dIse Ionorrov? Or do you exµand IIe Lrand Ioday In order
Io nove IIe goods Ioday and see II decIIne Ionorrov?
TIe enµIasIs In nosI conµanIes Is on IIe sIorI Iern.
LIne exIensIon, negaLrandIng, varIaLIe µrIcIng, and a IosI
oI oIIer soµIIsIIcaIed narkeIIng IecInIques are LeIng used
Io nIIk Lrands raIIer IIan LuIId IIen. WIIIe nIIkIng nay
LrIng In easy noney In IIe sIorI Iern, In IIe Iong Iern II
vears dovn IIe Lrand unIII II no Ionger sIands Ior anyIIIng.
WIaI CIevroIeI dId vIII auIonoLIIes, AnerIcan Lxµress
Is doIng vIII credII cards. AnLx used Io Le IIe µrenIer,
µresIIge credII card. MenLersIIµ Iad IIs µrIvIIeges. TIen II
sIarIed Io Lroaden IIs µroducI IIne vIII nev cards and serv-
Ices, µresunaLIy Io Increase IIs narkeI sIare. AnLx's goaI
vas Io Lecone a IInancIaI suµernarkeI.
In 1988, Ior exanµIe, AnerIcan Lxµress Iad a IandIuI
oI cards and 27 µercenI oI IIe narkeI. TIen II sIarIed Io
InIroduce a LIIzzard oI nev cards IncIudIng: SenIor, SIu-
denI, MenLersIIµ MIIes, OµIIna, OµIIna Revards PIus
GoId, DeIIa SkyMIIes OµIIna, OµIIna True Grace, OµIIna
GoII, PurcIasIng, and CorµoraIe LxecuIIve, Io nane a Iev.
TIe goaI, accordIng Io IIe CLO, vas Io Issue IveIve Io III-
Ieen nev cards a year.
AnerIcan Lxµress narkeI sIare Ioday: 18 µercenI.
LevI SIrauss Ias done IIe sane vIII LIue jeans. In order
Io aµµeaI Io a vIder narkeI, LevI InIroduced a µIeIIora oI
dIIIerenI sIyIes and cuIs, IncIudIng Laggy, zIµµered, and
vIde-Ieg jeans. AI one µoInI, LevI's jeans vere avaIIaLIe In
IvenIy-seven dIIIerenI cuIs. And II you couId noI IInd a µaIr
oI jeans oII IIe rack Io III, LevI's vouId even cusIon cuI
jeans Io your exacI neasurenenIs. YeI over IIe µasI seven
4 1PL 22 I MMU1ABLL LAW5 0I BPAN0I NU
years IIe conµany's sIare oI IIe denIn jeans narkeI Ias
IaIIen Iron 31 Io 19 µercenI.
ProcIer & GanLIe Ias done IIe sane vIII IooIIµasIe.
WIen ve vorked Ior CresI, IIe narkeIIng nanager asked
us, "CresI Ias IIIrIy-eIgII SKUs. Do you IIInk IIaI's Ioo
nany or Ioo Iev?¨
"Hov nany IeeII do you Iave In your nouII?¨ ve asked.
"TIIrIy-Ivo.¨
"No IooIIµasIe sIouId Iave nore sIock-keeµIng unIIs
IIan IeeII In one's nouII,¨ ve resµonded.
WIen ve vere asked IIaI quesIIon, CresI Iad 36 µercenI
oI IIe narkeI. Today IIe Lrand Ias nore IIan IIIIy SKUs,
LuI IIs narkeI sIare Ias decIIned Io 25 µercenI. And noI sur-
µrIsIngIy, CresI Ias IosI IIs IeadersIIµ Io CoIgaIe.
Many conµanIes Iry Io jusIIIy IIne exIensIon Ly InvokIng
IIe nasIerLrand, suµerLrand, or negaLrand conceµI.
º CIevroIeI Is IIe negaLrand and Canaro, CaµrIce, Cava-
IIer, CorsIca-BereIIa, CorveIIe, LunIna, MaIILu, MeIro,
MonIe CarIo, and PrIzn are IIe IndIvIduaI Lrands.
º PonIIac Is IIe negaLrand and BonnevIIIe, IIreLIrd, Grand
An, Grand PrIx, and SunIIre are IIe IndIvIduaI Lrands.
º BuIck Is IIe negaLrand and CenIury, LeSaLre, Park
Avenue, and RegaI are IIe IndIvIduaI Lrands.
BuI µeoµIe don'I IIInk IIIs vay. In IIeIr nInds, nosI
µeoµIe Iry Io assIgn one Lrand nane Io eacI µroducI. And
IIey are noI consIsIenI In Iov IIey assIgn sucI nanes. TIey
Iend Io use IIe nane IIaI LesI caµIures IIe essence oI IIe
µroducI. II couId Le IIe negaLrand nane. Or IIe nodeI
nane. Or a nIcknane.
TIe LunIna ovner vIII say, "I drIve a CIevroIeI.¨ TIe
CorveIIe ovner vIII say, "I drIve a VeIIe.¨
TIere are IIousands oI IIny IeeIer-IoIIers In IIe consuner's
1PL LAW 0I LXPAN5I 0N 5
nInd. And IIke IIeIr reaI-IIIe counIerµarIs, LoII sIdes can'I Le
uµ aI IIe sane IIne. On IIe CIevroIeI/LunIna IeeIer-IoIIer, IIe
CIevroIeI sIde Is uµ, so IIe car ovner says, "I drIve a CIevro-
IeI.¨ On IIe CIevroIeI/CorveIIe IeeIer-IoIIer, IIe CorveIIe sIde Is
uµ, so IIe CorveIIe ovner says, "I drIve a VeIIe.¨
MarkeIers consIanIIy run LrandIng µrograns IIaI are In
conIIIcI vIII Iov µeoµIe vanI Io µerceIve IIeIr Lrands. Cus-
Ioners vanI Lrands IIaI are narrov In scoµe and are dIsIIn-
guIsIaLIe Ly a sIngIe vord, IIe sIorIer IIe LeIIer.
BuI narkeIers, In an eIIorI Io dIsIInguIsI IIeIr µroducIs
Iron oIIer sInIIar µroducIs In IIe narkeIµIace, IauncI
rIdIcuIousIy overzeaIous Lrand nanes:
º VaseIIne InIensIve Care sunIan IoIIon
º NeuIrogena oII-Iree acne vasI
º GIIIeIIe CIearGeI anIIµersµIranI
º 1oInson's CIean & CIear oII-Iree IoanIng IacIaI cIeanser
º SI. 1oseµI asµIrIn-Iree IaLIeIs Ior aduIIs
º KIeenex Suµer Dry LaLy dIaµers
º IruII oI IIe Loon Iaundry deIergenI
º HarIey-DavIdson vIne cooIers
º HeInz aII-naIuraI cIeanIng vInegar
MarkeIers oIIen conIuse IIe µover oI a Lrand vIII IIe
saIes generaIed Ly IIaI Lrand. BuI saIes are noI jusI a Iunc-
IIon oI a Lrand's µover. SaIes are aIso a IuncIIon oI IIe
sIrengII or veakness oI a Lrand's conµeIIIIon.
II your conµeIIIIon Is veak or nonexIsIenI, you can
oIIen Increase saIes Ly veakenIng your Lrand. TIaI Is, Ly
exµandIng II over nore segnenIs oI IIe narkeI. You can
IIereIore drav IIe concIusIon IIaI IIne exIensIon vorks.
BuI In so doIng, IIe onIy IIIng you Iave denonsIraIed Is
IIe veakness oI IIe conµeIIIIon. Coca-CoIa Iad noIIIng Io
Iose vIen II IauncIed DIeI Coke, Lecause IIe conµeIIIIon
(PeµsI-CoIa) aIso Iad a IIne-exIended µroducI caIIed DIeI
PeµsI.
WIIIe exIendIng IIe IIne nIgII LrIng added saIes In IIe
sIorI Iern, II runs counIer Io IIe noIIon oI LrandIng. II you
vanI Io LuIId a µoverIuI Lrand In IIe nInds oI consuners,
you need Io conIracI your Lrand, noI exµand II.
In IIe Iong Iern, exµandIng your Lrand vIII dInInIsI
your µover and veaken your Inage.
1PL LAW 0I LXPAN5I 0N 7
2
Lvery snaII Iovn In AnerIca Ias a coIIee sIoµ. In Iarger
cIIIes and Iovns you can oIIen IInd coIIee sIoµs on every
oIIer LIock.
So vIaI can you IInd Io eaI In a coIIee sIoµ? LveryIIIng.
BreakIasI, IuncI, dInner. Pancakes, nuIIIns, IoI dogs, Ian-
Lurgers, sandvIcIes, µIe, Ice crean, and, oI course, coIIee.
WIaI dId Hovard ScIuIIz do? In an IncredILIe LursI oI
LusIness creaIIvIIy, Ie oµened a coIIee sIoµ IIaI sµecIaIIzed
In, oI aII IIIngs, coIIee. In oIIer vords, Ie narroved IIe
Iocus.
Today ScIuIIz's LraIncIIId, SIarLucks, Is a raµIdIy grov-
Ing cIaIn IIaI does Iundreds oI nIIIIons oI doIIars' vorII oI
LusIness annuaIIy. HIs conµany, SIarLucks Corµ., Is vorII
S8.7 LIIIIon on IIe sIock narkeI. And Hovard ScIuIIz ovns
a suLsIanIIaI sIare oI IIaI sIock.
Lvery snaII Iovn In AnerIca Ias a deIIcaIessen. In
Iarger cIIIes and Iovns, you can oIIen IInd deIIs In every
neIgILorIood.
So vIaI can you IInd Io eaI In a deIIcaIessen? LveryIIIng.
Souµs, saIads, IoI and coId sandvIcIes, IIree Iyµes oI roasI
LeeI, Iour Iyµes oI Ian, IIve Iyµes oI cIeese. Hard roIIs, soII
roIIs, Iero roIIs, IIree Iyµes oI µIckIes, Iour Iyµes oI Lread,
IIve Iyµes oI LageIs. PoIaIo cIIµs, µreIzeIs, corn cIIµs.
1 R£ L AW 0F C0N1 RAC1 I 0N
^ br and beoomes st r onger when
you nar r ow l t s f oous.
8
MuIIIns, dougInuIs, cookIes, cakes, candy Lars, Ice crean,
Irozen yogurI. Beer, soda, vaIer, coIIee, Iea, soII drInks oI aII
varIeIIes. Nevsµaµers, cIgareIIes, IoIIery IIckeIs. Lvery
decenI deIIcaIessen µrIdes IIseII on carryIng everyIIIng.
WIaI dId Ired DeLuca do? He narroved IIe Iocus Io
one Iyµe oI sandvIcI, IIe suLnarIne sandvIcI.
Good IIIngs Iaµµen vIen you conIracI your Lrand
raIIer IIan exµand II. TIe IIrsI sIroke oI genIus In DeLuca's
case vas In conIng uµ vIII IIe nane.
Ired DeLuca caIIed IIs cIaIn SuLvay, a greaI nane Ior a
sIore IIaI soId jusI suLnarIne sandvIcIes. II vas a nane
IIaI no consuner couId IorgeI.
TIe second snarI nove concerned oµeraIIons. WIen
you nake onIy suLnarIne sandvIcIes, you geI µreIIy good
aI nakIng suLnarIne sandvIcIes.
TIe average McDonaId's Ias sIxIy or sevenIy IndIvIduaI
IIens on IIe nenu. HaII IIe enµIoyees are Ieenagers, noI yeI
oId or naIure enougI Io IandIe IIe conµIexIIIes oI Ioday's
oµeraIIon. And µeoµIe vonder vIy IIe Iood and servIce
aren'I as good as vIen McDonaId's jusI served IanLurgers,
IrencI IrIes, and soII drInks. (TIe orIgInaI McDonaId's nenu
Iad jusI eIeven IIens, IncIudIng aII sIzes and IIavors.)
SuLvay Ias Lecone IIe eIgIII-IargesI IasI-Iood cIaIn In
IIe UnIIed SIaIes. TIe conµany Ias nore IIan 15,000 unIIs
In sevenIy-IIve counIrIes. SInce SuLvay Is a µrIvaIe con-
µany, ve don'I knov exacIIy Iov µroIIIaLIe II Is, LuI ve do
knov Iov nucI noney Ired DeLuca Ias Leen µayIng IIn-
seII. (He vas Iorced Io dIscIose IIs saIary In a courI case.)
In 1990, Ired DeLuca µaId IInseII S27 nIIIIon. In 1991,
S32 nIIIIon. In 1992, S42 nIIIIon. In 1993, S54 nIIIIon. In
1994, S60 nIIIIon. TIaI's a IoI oI dougI Ior nakIng suLna-
rIne sandvIcIes.
CIarIes Lazarus ovned one sIore, caIIed CIIIdren's
SuµernarI, vIIcI soId Ivo IIIngs: cIIIdren's IurnIIure and
Ioys. BuI Ie vanIed Io grov.
WIaI Is IIe convenIIonaI vay Io grov? AddIng nore
1PL LAW 0I U0N1PAU1I 0N 9
IIIngs Io seII. Sure, Ie couId Iave added LIcycIes, LaLy Iood,
dIaµers, and cIIIdren's cIoIIIng Io IIe sIore. BuI Ie dIdn'I.
InsIead, CIarIes Lazarus IIrev ouI IIe IurnIIure and
Iocused on Ioys.
Good IIIngs Iaµµen vIen you conIracI your Lrand raIIer
IIan exµand II. IIrsI Ie IIIIed IIe enµIy IaII oI IIe sIore vIII
nore Ioys, gIvIng IIe Luyer a greaIer seIecIIon and nore rea-
son Io vIsII IIe sIore. TIen, InsIead oI caIIIng II CIIIdren's
SuµernarI, Lazarus caIIed IIs µIace Toys "R¨ Us.
Today Toys "R¨ Us seIIs 20 µercenI oI aII IIe Ioys soId In
IIe UnIIed SIaIes. And IIe cIaIn Ias Lecone IIe nodeI Ior
IIe sµecIaIIy sIores or caIegory kIIIers on IIe reIaII scene.
Hone DeµoI In Ione suµµIIes. TIe Gaµ In everyday casuaI
cIoIIIng. TIe LInIIed In cIoIIes Ior vorkIng vonen. VIcIo-
rIa's SecreI In IadIes' IIngerIe. PeIsMarI In µeI suµµIIes.
BIockLusIer VIdeo In vIdeo renIaIs. ConµUSA In conµuIers.
IooI Locker In aIIIeIIc sIoes.
Good IIIngs Iaµµen vIen you conIracI raIIer IIan
exµand your LusIness. MosI reIaII caIegory kIIIers IoIIov IIe
sane IIve-sIeµ µaIIern.
1. Narrov IIe Iocus. A µoverIuI LrandIng µrogran aIvays
sIarIs Ly conIracIIng IIe caIegory, noI exµandIng II.
2. SIock In deµII. A IyµIcaI Toys "R¨ Us sIore carrIes 10,000
Ioys versus 3,000 Ioys Ior a Iarge deµarInenI sIore.
3. Buy cIeaµ. Toys "R¨ Us nakes IIs noney LuyIng Ioys,
noI seIIIng Ioys.
4. SeII cIeaµ. WIen you can Luy cIeaµ, you can seII cIeaµ
and sIIII naInIaIn good nargIns.
5. DonInaIe IIe caIegory. TIe uIIInaIe oLjecIIve oI any
LrandIng µrogran Is Io donInaIe a caIegory.
WIen you donInaIe a caIegory, you Lecone exIreneIy
µoverIuI. MIcrosoII Ias 95 µercenI oI IIe vorIdvIde narkeI
Ior deskIoµ conµuIer oµeraIIng sysIens. InIeI Ias 80 µer-
cenI oI IIe vorIdvIde narkeI Ior nIcroµrocessors. Coca-
CoIa Ias 70 µercenI oI IIe vorIdvIde narkeI Ior coIa. And
In order Io donInaIe a caIegory, you nusI narrov your
Lrand's Iocus.
WIy IIen do so Iev narkeIers vanI Io conIracI IIeIr
Lrands? WIy do nosI narkeIers vanI Io exµand IIeIr
Lrands? Because µeoµIe Iook aI successIuI conµanIes and
are Ied asIray. TIey assune IIaI conµanIes are successIuI
Lecause IIey are exµandIng. (SIarLucks, Ior exanµIe, cur-
renIIy Is Lusy geIIIng InIo everyIIIng Iron Ice crean Io LoI-
IIed drInks Io Iea.)
BuI IeI's Iocus on you Ior a nonenI. LeI's say IIaI you
vanI Io Le rIcI. Nov ask yourseII: Can I geI rIcI Ly doIng
vIaI rIcI µeoµIe do?
RIcI µeoµIe Luy exµensIve Iouses and eaI In exµensIve
resIauranIs. TIey drIve RoIIs-Royces and vear RoIex
vaIcIes. TIey vacaIIon on IIe RIvIera.
WouId LuyIng an exµensIve Iouse, a RoIIs-Royce, and a
RoIex nake you rIcI? 1usI IIe oµµosIIe. II's IIkeIy Io nake
you µoor, even LankruµI.
MosI µeoµIe searcI Ior success In aII IIe vrong µIaces.
TIey Iry Io IInd ouI vIaI rIcI and successIuI conµanIes are
currenIIy doIng and IIen Iry Io coµy IIen.
WIaI do rIcI conµanIes do? TIey Luy GuIIsIrean jeIs.
TIey run µrograns IIke enµovernenI, IeadersIIµ IraInIng,
oµen-Look nanagenenI, and IoIaI-quaIIIy nanagenenI.
And IIey IIne-exIend IIeIr Lrands.
WIII LuyIng a GuIIsIrean V jeI Ior S42 nIIIIon nake
your conµany successIuI? UnIIkeIy. WIII exIendIng your
Lrand? 1usI as unIIkeIy.
II you vanI Io Le rIcI, you Iave Io do vIaI rIcI µeoµIe
dId LeIore IIey vere rIcI-you Iave Io IInd ouI vIaI IIey
dId Io Lecone rIcI. II you vanI Io Iave a successIuI con-
µany, you Iave Io do vIaI successIuI conµanIes dId LeIore
IIey vere successIuI.
1PL LAW 0I U0N1PAU1I 0N 11
As II Iaµµens, IIey aII dId IIe sane IIIng. TIey nar-
roved IIeIr Iocus.
WIen DonIno's PIzza IIrsI goI sIarIed, II soId µIzza and
suLnarIne sandvIcIes. WIen LIIIIe Caesars IIrsI goI
sIarIed, II soId µIzza, IrIed sIrInµ, IIsI and cIIµs, and
roasIed cIIcken. WIen Paµa 1oIn's IIrsI goI sIarIed, II soId
µIzza, cIeesesIeak sandvIcIes, suLnarIne sandvIcIes,
IrIed nusIroons, IrIed zuccIInI, saIads, and onIon rIngs.
Nov Iov do you suµµose Ton MonagIan, MIcIaeI and
MarIan IIIIcI, and 1oIn ScInaIIer LuIII DonIno's PIzza, LII-
IIe Caesars, and Paµa 1oIn's InIo LIg µoverIuI Lrands? By
exµandIng IIeIr nenus or conIracIIng IIen?
Good IIIngs Iaµµen vIen you narrov IIe Iocus.
1 R£ L AW 0F PUBL I CI 1 Y
The bl r t h of a br and l s aohl ev ed
wl t h publ l ol t y, not adver t l sl ng.
MosI oI AnerIca's 15,000 adverIIsIng agencIes are connII-
Ied Io IIe conceµI oI LuIIdIng a Lrand vIII adverIIsIng.
"TIe IundanenIaI IIIng ve're aII aLouI Is LuIIdIng Lrand
Ieaders,¨ saId IIe cIIeI execuIIve oI D'Arcy MasIus BenIon &
BovIes recenIIy. "TIe vay Io do IIaI Is Io Iave a suµerIor
undersIandIng oI IIe consuner, vIIcI Ieads Io LeIIer, IresIer,
nore µoverIuI creaIIve vork IIaI uIIInaIeIy LuIIds Lrands.¨
Eui/din¸ brand /cadcrs ui// bc//cr, jrcs/cr crca/ivc uor/'
We IIInk noI. MosI narkeIers conIuse Lrand LuIIdIng vIII
Lrand naInIenance. WIIIe a IeIIy adverIIsIng LudgeI nIgII
Le needed Io naInIaIn IIgI-IIyIng Lrands IIke McDonaId's
and Coca-CoIa, adverIIsIng generaIIy von'I geI a nev Lrand
oII IIe ground.
AnIIa RoddIck LuIII TIe Body SIoµ InIo a najor Lrand
vIII no adverIIsIng aI aII. InsIead sIe IraveIed IIe vorId on
a reIenIIess quesI Ior µuLIIcIIy, µusIIng Ier Ideas aLouI IIe
envIronnenI. II vas IIe endIess IorrenI oI nevsµaµer and
nagazIne arIIcIes, µIus radIo and IeIevIsIon InIervIevs, IIaI
IIIeraIIy creaIed TIe Body SIoµ Lrand.
SIarLucks doesn'I sµend a IIII oI Leans on adverIIsIng
eIIIer. In IIs IIrsI Ien years, IIe conµany sµenI Iess IIan S10
nIIIIon on adverIIsIng, a IrIvIaI anounI Ior a Lrand IIaI
deIIvers S2.6 LIIIIon In annuaI saIes.
13
3
WaI-MarI Lecane IIe vorId's IargesI reIaIIer vIII
annuaI saIes oI nore IIan S200 LIIIIon vIII very IIIIIe adver-
IIsIng. A WaI-MarI sILIIng, San's CIuL, averages S45 nIIIIon
µer sIore vIII aInosI no adverIIsIng.
On IIe oIIer Iand, MIIIer BrevIng sµenI S50 nIIIIon Io
IauncI a Lrand caIIed MIIIer ReguIar. (Or jusI µIaIn MIIIer.)
TIe Lrand generaIed no µuLIIcIIy, aInosI no µerceµIIons In
IIe nInds oI Leer drInkers, and very IIIIIe saIes-S50 nIIIIon
dovn IIe draIn.
WouId LeIIer, IresIer creaIIve vork Iave LuIII a Leer
caIIed MIIIer ReguIar InIo a Lrand Ieader? We IIInk noI.
TIere Is no µuLIIcIIy µoIenIIaI In a reguIar Leer vIII a IIne-
exIended nane IIke MIIIer.
In IIe µasI, II nay Iave Leen Irue IIaI a LeeIy adverIIs-
Ing LudgeI vas IIe key IngredIenI In IIe Lrand-LuIIdIng
µrocess. BuI vIaI vorked In IIe µasI doesn'I necessarIIy
vork Ioday. We IIve In an overconnunIcaIed socIeIy, vIere
eacI oI us geIs III vIII Iundreds oI connercIaI nessages
daIIy.
Today Lrands are Lorn, noI nade. A nev Lrand nusI Le
caµaLIe oI generaIIng IavoraLIe µuLIIcIIy In IIe nedIa or II
von'I Iave a cIance In IIe narkeIµIace.
And jusI Iov do you generaIe µuLIIcIIy? TIe LesI vay Io
generaIe µuLIIcIIy Is Ly LeIng IIrsI. In oIIer vords, Ly LeIng
IIe IIrsI Lrand In a nev caIegory.
º Band-AId, IIe IIrsI adIesIve Landage
º CIarIes ScIvaL, IIe IIrsI dIscounI sIockLrokerage IIrn
º CNN, IIe IIrsI caLIe nevs neIvork
º Conµaq, IIe IIrsI µorIaLIe µersonaI conµuIer
º DonIno's, IIe IIrsI Ione deIIvery µIzza cIaIn
º LSPN, IIe IIrsI caLIe sµorIs neIvork
º Gore-Tex, IIe IIrsI LreaIIaLIe vaIerµrooI cIoII
º HeIneken, IIe IIrsI InµorIed Leer
º HerIz, IIe IIrsI car-renIaI conµany
º InIeI, IIe IIrsI nIcroµrocessor
º 1eII-O, IIe IIrsI geIaIIn desserI
º KenIucky IrIed CIIcken, IIe IIrsI IasI-Iood cIIcken
cIaIn
º Na/iona/ Inquircr, IIe IIrsI suµernarkeI IaLIoId
º P/ayboy, IIe IIrsI nen's nagazIne
º Q-TIµs, IIe IIrsI coIIon svaL
º ReynoIds Wraµ, IIe IIrsI aIunInun IoII
º RoIIerLIade, IIe IIrsI In-IIne skaIe
º SanueI Adans, IIe IIrsI nIcroLreved Leer
º Saran Wraµ, IIe IIrsI µIasIIc Iood vraµ
º Sun MIcrosysIens, IIe IIrsI UnIx vorksIaIIon
º Tinc, IIe IIrsI veekIy nevs nagazIne
º Xerox, IIe IIrsI µIaIn-µaµer coµIer
AII oI IIese Lrands (and nany, nany nore) vere IIrsI In
a nev caIegory and, In IIe µrocess, generaIed enornous
anounIs oI µuLIIcIIy.
TIere's a sIrong reIaIIonsIIµ LeIveen IIe Ivo. TIe nevs
nedIa vanIs Io IaIk aLouI vIaI's nev, vIaI's IIrsI, and vIaI's
IoI, noI vIaI's LeIIer. WIen your Lrand can nake nevs, II
Ias a cIance Io generaIe µuLIIcIIy. And IIe LesI vay Io nake
nevs Is Io announce a nev caIegory, noI a nev µroducI.
WIaI oIIers say aLouI your Lrand Is nucI nore µover-
IuI IIan vIaI you say aLouI II yourseII. TIaI's vIy µuLIIcIIy
In generaI Is nore eIIecIIve IIan adverIIsIng. And vIy, over
1PL LAW 0I PUBLI UI 1Y 15
IIe µasI Ivo decades, µuLIIc reIaIIons Ias ecIIµsed adverIIs-
Ing as IIe nosI eIIecIIve Iorce In LrandIng.
YeI Ior years µuLIIc reIaIIons Ias Leen IreaIed as a sec-
ondary IuncIIon Io adverIIsIng. PR µeoµIe even used Io
neasure IIeIr successes In Ierns oI adverIIsIng sµace. PuL-
IIcIIy sIorIes vere converIed InIo equIvaIenI adverIIsIng
exµendIIures.
Lven vorse, narkeIIng sIraIegIes vere usuaIIy Iornu-
IaIed IIrsI InIo adverIIsIng sIogans. TIen IIe µuLIIc reIaIIons
µeoµIe vere asked Io reInIorce IIe adverIIsIng Ly creaIIng
PR µrograns Io connunIcaIe IIose sIogans.
NoI anynore. Today Lrands are LuIII vIII µuLIIcIIy and
naInIaIned vIII adverIIsIng. TIe carI Is nov drIvIng IIe
Iorse.
So vIy Iasn'I IIe ascendancy oI PR nade nevs In IIe
nedIa? WIy are µuLIIc reIaIIons deµarInenIs In nosI con-
µanIes sIIII suLservIenI Io adverIIsIng deµarInenIs? WIy are
nIne oI IIe Ioµ Ien µuLIIc reIaIIons IIrns sIIII ovned Ly
adverIIsIng agencIes InsIead oI vIce versa?
WIy Iave IIe nedIa Ignored IIe LIggesI nevs sIory In
narkeIIng?
II's IIe grass µIenonenon. NoLody ever noIIces IIe
grass grovIng or µays aIIenIIon Io a Irend IIaI Is sIov In
deveIoµIng.
Take IacsInIIe, Ior exanµIe. Over IIe µasI Ivo decades,
IIe IacsInIIe Ias Lecone an IndIsµensaLIe µarI oI every
conµany's connunIcaIIon µorIIoIIo. AnerIcans vIII send
65 LIIIIon µages oI Iaxes IIIs year, nore IIan 230 µer µerson.
And 50 µercenI oI aII InIernaIIonaI IeIeµIone caIIs are nov
Iax caIIs.
YeI ve don'I renenLer a sIngIe arIIcIe In any oI IIe
najor nanagenenI µuLIIcaIIons on IIe rIse oI IacsInIIe. II
Iaµµened Ioo sIovIy.
On IIe oIIer Iand, IIe oµµosIIe Is Irue oI IIe InIerneI.
TIe rIse oI IIe InIerneI Iaµµened so quIckIy IIaI II creaIed a
LIaze oI µuLIIcIIy, as dId IIe raµId IaII oI InIerneI sIocks.
AdverIIsIng execuIIves In µarIIcuIar are IncIIned Io sIIgII
µuLIIc reIaIIons. "II IIe adverIIsIng Is LrIIIIanI, IIe PR vIII
IaII ouI oI IIaI,¨ saId one µarIIcuIarIy LrIIIIanI adverIIsIng
execuIIve recenIIy.
BuI vIaI vorks In LrandIng Ioday Is µuLIIcIIy, noI
adverIIsIng. TIIs Is esµecIaIIy Irue In IIe IIgI-IecI IIeId. AII
oI IIe LIg gIoLaI narkeIIng µoverIouses-MIcrosoII, InIeI,
DeII, Conµaq, GaIevay, OracIe, CIsco, SAP, and Sun
MIcrosysIens-vere IIrsI creaIed In IIe µages oI T/c \a//
S/rcc/ 1ourna/, Eusincss \cc/, Iorbcs, and Ior/unc. By µuL-
IIcIIy, noI Ly adverIIsIng.
Years ago ve vorked vIII LoIus DeveIoµnenI Corµ. on
LrandIng sIraIegy Ior LoIus NoIes. TIe essence oI IIe sIraI-
egy vas IIe µronoIIon oI NoIes as "IIe IIrsI successIuI
¸roupuarc µroducI.¨ WIII, oI course, IIe enµIasIs on
"grouµvare.¨
TIIs Idea caugII on IIke crazy vIII IIe nedIa, vIIcI ran
sIory aIIer sIory on IIe nev grouµvare conceµI. YeI IyµI-
caIIy IIe LoIus adverIIsIng µeoµIe Ignored IIe grouµvare
Idea In Iavor oI nonsensIcaI adverIIsIng µaLuIun.
II dIdn'I naIIer Lecause µuLIIc reIaIIons Is nore Inµor-
IanI IIan adverIIsIng. As a resuII oI IIe µuLIIcIIy µrogran,
NoIes Lecane an enornous success and uIIInaIeIy IBM
µaId IIe asIoundIng µrIce oI S3.5 LIIIIon Ior LoIus DeveIoµ-
nenI Corµ.
MosI conµanIes deveIoµ IIeIr LrandIng sIraIegIes as II
adverIIsIng vere IIeIr µrInary connunIcaIIons veIIcIe.
TIey're vrong. SIraIegy sIouId Le deveIoµed IIrsI Iron a
µuLIIcIIy µoInI oI vIev.
1PL LAW 0I PUBLI UI 1Y 17
4
18
Your adverIIsIng LudgeI Is IIke a counIry's deIense LudgeI.
TIose nassIve adverIIsIng doIIars don'I Luy you anyIIIng,
IIey jusI keeµ you Iron IosIng narkeI sIare Io your conµe-
IIIIon.
AII oI IIs Ianks, µIanes, and nIssIIes jusI keeµ a counIry
Iron LeIng overrun Ly one oI IIs enenIes.
PuLIIcIIy Is a µoverIuI IooI, LuI sooner or IaIer a Lrand
ouIIIves IIs µuLIIcIIy µoIenIIaI. TIe µrocess nornaIIy goes
IIrougI Ivo dIsIIncI µIases.
PIase one InvoIves IIe InIroducIIon oI IIe nev caIe-
gory-IIe µIaIn-µaµer coµIer, Ior exanµIe, InIroduced Ly
Xerox In 1959. Hundreds oI nagazIne and nevsµaµer arII-
cIes vere vrIIIen aLouI IIe IauncI oI IIe 914 coµIer. Xerox
execuIIves aIso aµµeared on nunerous IeIevIsIon sIovs Io
denonsIraIe IIeIr nev LaLy. MucI vas vrIIIen aLouI IIe
µoIenIIaI oI IIe nev caIegory.
PIase Ivo concerns IIe rIse oI IIe conµany IIaI µIo-
neered IIe nev caIegory. AgaIn, Iundreds oI arIIcIes vere
vrIIIen aLouI IIe narkeIIng and IInancIaI successes oI
Xerox, a conµany IIaI rose Iron IIe asIes oI HaIoId, a
nanuIacIurer oI µIoIograµIIc µaµer.
Today, everyLody knovs IIaI Xerox µIoneered xerogra-
1 R£ L AW 0F AßV£ R1 I 5I N6
0noe bor n, a br and needs adver t l sl ng
t o st ay heal t hy.
µIy and Ias Lecone a gIoLaI Ieader In coµIers. TIere's no
nevs sIory IeII Io IeII, so adverIIsIng Iakes over.
AInosI every successIuI Lrand goes IIrougI IIe sane
µrocess. Brands IIke Conµaq, DeII, SAP, OracIe, CIsco,
MIcrosoII, SIarLucks, and WaI-MarI vere Lorn In a LIaze oI
µuLIIcIIy. As IIe µuLIIcIIy dIes ouI, eacI oI IIese Lrands Ias
Iad Io sIIII Io nassIve adverIIsIng Io deIend IIs µosIIIon.
IIrsI µuLIIcIIy, IIen adverIIsIng Is IIe generaI ruIe.
(AnyLody vIo IIInks adverIIsIng LuIII MIcrosoII InIo a
nacroLrand sIouId go Lack and read CIaµIer 3 agaIn.)
Sooner or IaIer a Ieader Ias Io sIIII IIs LrandIng sIraIegy
Iron µuLIIcIIy Io adverIIsIng. By raIsIng IIe µrIce oI adnIs-
sIon, adverIIsIng nakes II dIIIIcuII Ior a conµeIIIor Io carve
ouI a suLsIanIIaI sIare oI IIe narkeI.
To aIIack a IeavIIy deIended neIgILorIng counIry requIres
suLsIanIIaI nIIIIary exµendIIures. To aIIack a IeavIIy deIended
Lrand Ieader IIke Coca-CoIa, NIke, or McDonaId's requIres suL-
sIanIIaI narkeIIng exµendIIures.
Leaders sIouId noI Iook on IIeIr adverIIsIng LudgeIs as
InvesInenIs IIaI vIII µay dIvIdends. InsIead Ieaders sIouId
Iook on IIeIr adverIIsIng LudgeIs as Insurance IIaI vIII µroIecI
IIen agaInsI Iosses caused Ly conµeIIIIve aIIacks.
WIaI sIouId a Lrand Ieader adverIIse? Brand Ieader-
sIIµ, oI course. LeadersIIµ Is IIe sIngIe nosI InµorIanI
noIIvaIIng IacIor In consuner LeIavIor.
º HeInz, AnerIca's IavorIIe keIcIuµ
º BudveIser, kIng oI Leers
º Coca-CoIa, IIe reaI IIIng
º VIsa, II's everyvIere you vanI Io Le
º BarIIIa, IIaIy's #1 µasIa
º Goodyear, #1 In IIres
1PL LAW 0I A0vLP1I 5I NU 19
TIe IIsI oI Ieaders IIaI adverIIse IIeIr IeadersIIµ Is very
sIorI. MosI Ieaders adverIIse sone asµecI oI IIeIr quaIIIy.
BuI vIaI Iaµµens vIen your adverIIsIng says, "Our
µroducI Is LeIIer¨? WIaI does IIe reader, IIe vIever, or IIe
IIsIener Io IIe adverIIsenenI reaIIy IIInk vIen you nake
IIe cIaIn IIaI you µroduce a LeIIer µroducI?
"TIaI's vIaI IIey aII say.¨
PIck uµ a coµy oI any nagazIne or nevsµaµer and IIIµ
IIrougI IIe adverIIsenenIs. AInosI every ad nakes sone
Iyµe oI LeIIer-µroducI cIaIn. TIaI's vIaI IIey aII say.
BuI vIaI Iaµµens vIen your adverIIsIng says, "Our
µroducI Is IIe Ieader¨? WIaI does IIe µrosµecI IIInk?
"II nusI Le LeIIer.¨
WIo nakes IIe LesI keIcIuµ In AnerIca? Do you reaIIy
LeIIeve HunI's Is IIe LesI? You nIgII, LuI nosI µeoµIe
LeIIeve IIaI HeInz Is IIe LesI. WIy?
HeInz Is IIe Ieader and everyLody knovs IIaI In IIIs
Ireedon-IovIng, denocraIIc, equaI-oµµorIunIIy counIry oI
ours, IIe LeIIer µroducI aIvays vIns.
"I µIedge aIIegIance Io IIe IIag oI IIe UnIIed SIaIes oI
AnerIca, IIe reµuLIIc Ior vIIcI II sIands, and IIe IeadIng
Lrand In eacI caIegory.¨
As yeI, ve AnerIcans don'I do IIe µIedge oI Lrand aIIe-
gIance, LuI ve nIgII as veII. TIaI's Iov sIrong our LeIIeI In
IIe noIIon IIaI IIe LeIIer Lrand vIII vIn.
TIen vIy, you nay ask, don'I nore adverIIsers adverIIse
IeadersIIµ? (SucI cIaIns are quIIe rare.)
TIey do consuner researcI. TIey ask cusIoners vIy
IIey Luy IIe Lrands IIey Luy. And µeoµIe are quIck Io reµIy
IIaI IIey vouId never Luy a Lrand jusI Lecause II's IIe Ieader.
As a naIIer oI IacI, IIey go ouI oI IIeIr vay Io deny II.
"I never Luy a Lrand jusI Lecause II's IIe Ieader.¨
TIen vIy dId you cIoose IIe IeadIng Lrand? WIy do
you drInk Coca-CoIa? Or renI Iron HerIz? Or drInk Bud-
veIser Leer?
1PL LAW 0I A0vLP1I 5I NU 21
"Because II's LeIIer.¨
And nov ve Iave conµIeIed IIe cIrcIe. Lveryone knovs
IIe LeIIer µroducI vIII vIn In IIe narkeIµIace. SInce nosI
µeoµIe vanI Io Luy IIe LeIIer µroducI, nosI µeoµIe Luy IIe
IeadIng Lrand. WIIcI In Iurn keeµs IIaI Lrand IIe Ieader and
gIves IIaI Lrand IIe µerceµIIon IIaI II's IIe LeIIer µroducI.
AdverIIsIng Is a µoverIuI IooI, noI Io LuIId IeadersIIµ oI
a IIedgIIng Lrand, LuI Io naInIaIn IIaI IeadersIIµ once II Is
oLIaIned. ConµanIes IIaI vanI Io µroIecI IIeIr veII-
esIaLIIsIed Lrands sIouId noI IesIIaIe Io use nassIve adver-
IIsIng µrograns Io snoIIer IIe conµeIIIIon.
Indeed, adverIIsIng Is exµensIve. Today II Iakes S2 nII-
IIon or so Io Luy IIIrIy seconds oI adverIIsIng IIne durIng
IIe Suµer BovI. And Ioµ-raIed µrIne-IIne sIovs are
equaIIy rIdIcuIous Iron a noneIary µoInI oI vIev. IP, Ior
exanµIe, cosIs S620,000 Ior a IIIrIy-second connercIaI.
TIen you Iave Io add IIe cosI oI µroducIIon, vIIcI Ias
Leen averagIng S343,000 µer connercIaI.
So vIy sµend IIe noney?
AdverIIsIng nay noI µay Ior IIseII, LuI II you're IIe
Ieader, adverIIsIng vIII nake your conµeIIIor µay IIrougI
IIe nose Ior IIe µrIvIIege oI conµeIIng vIII you. Many
von'I Le aLIe Io aIIord II, IIose vIo can von'I LoIIer.
InsIead IIey'II Le conIenI Io nILLIe on IIe crunLs around
your Iuge µIece oI IIe µIe.
22
WIaI cones Io nInd vIen you IIInk aLouI ovnIng a
Mercedes-Benz?
II you couId µry oµen IIe nInd oI IIe IyµIcaI auIonoLIIe
Luyer, you vouId µroLaLIy IInd IIe vord "µresIIge¨ cIoseIy
IdenIIIIed vIII IIe Lrand. TeII IIe IruII, don'I you assocIaIe
µresIIge vIII IIe Mercedes-Benz Lrand? MosI µeoµIe do.
You nIgII aIso assocIaIe aIIrILuIes IIke cxpcnsivc, Gcr-
nan, uc// cn¸inccrcd, and rc/iab/c vIII IIe Lrand, LuI IIe
core dIIIerenIIaIIon Is µresIIge. LanLorgIInIs are exµensIve,
AudIs are Gernan, Hondas are veII engIneered, and ToyoIas
are reIIaLIe, LuI none oI IIese Lrands conveys IIe µresIIge oI
a Mercedes.
II you vanI Io LuIId a Lrand, you nusI Iocus your
LrandIng eIIorIs on ovnIng a vord In IIe µrosµecI's nInd. A
vord IIaI noLody eIse ovns.
WIaI µresIIge Is Io Mercedes, saIeIy Is Io VoIvo.
VoIvo ovns IIe vord "saIeIy¨ In IIe nInd oI IIe auIonoLIIe
Luyer. And, as a resuII, over IIe µasI decade VoIvo Ias Lecone
IIe IargesI-seIIIng Luroµean Iuxury car In AnerIca.
Once a Lrand ovns a vord, II's aInosI InµossILIe Ior a
conµeIIIor Io Iake IIaI vord avay Iron IIe Lrand. CouId
you LuIId a saIer car IIan a VoIvo? ProLaLIy. Many Lrands
Iave aIready cIaIned Io do so, IncIudIng SaaL, BMW, and
1 R£ L AW 0F 1 R£ W0Rß
^ br and shoul d st r l ve t o own a wor d
l n t he ml nd of t he oonsumer.
5
Mercedes-Benz. CouId one oI IIese oIIer Lrands ovn IIe
vord "saIeIy¨ In IIe nInd? ProLaLIy noI.
WIaI cones Io nInd vIen you IIInk aLouI ovnIng a
BMW?
A car IIaI's Iun Io drIve. TIe uIIInaIe drIvIng nacIIne.
BMW ovns IIe vord "drIvIng¨ In IIe nInd. And, as a resuII,
BMW Ias Lecone IIe second-IargesI-seIIIng Luroµean Iux-
ury car In AnerIca.
YeI none oI IIese IIree Lrands (Mercedes, VoIvo, and
BMW) Is a µerIecI exanµIe oI IIe Iav oI IIe vord sInce IIey
Iave aII recenIIy vIoIaIed IIe Iav. Mercedes Ias noved InIo
Iess exµensIve, Iess µresIIgIous cars. VoIvo InIo sµorIy cars.
And BMW InIo nore IuxurIous cars.
And so II goes. TIe nInuIe a Lrand LegIns Io sIand Ior
soneIIIng In IIe nInd, IIe conµany IIaI ovns IIe Lrand
Iooks Ior vays Io Lroaden IIe Lase, Io geI InIo oIIer nar-
keIs, Io caµIure oIIer aIIrILuIes. TIIs Is a serIous error and
one oI IIe nosI connon nIsIakes In LrandIng.
WIaI's a KIeenex? WIaI vord do you assocIaIe vIII IIe
KIeenex Lrand?
On IIe surIace, KIeenex seens unIocused. II's soII and
µoµs uµ, II's veII knovn and cones In nany dIIIerenI Iorns.
TIere are sµorI KIeenexes, IanIIy-sIze KIeenexes, µsycIe-
deIIc KIeenexes. KIeenex Is Ly Iar IIe IeadIng Lrand oI
µockeI IIssue.
WIaI vord does KIeenex ovn In IIe nInd? KIeenex
ovns IIe caIegory vord. K/ccncx is /issuc.
KIeenex vas IIe IIrsI µockeI IIssue. BeIore KInLerIy-
CIark InIroduced KIeenex, IIere vas no narkeI Ior a µockeI
IIssue. BuI InsIead oI exµandIng Io IoIIeI IIssue and µaµer
IoveIs, KIeenex keµI IannerIng avay aI IIs orIgInaI Iocus.
"Don'I µuI a coId In your µockeI,¨ vas IIe narkeIIng
nessage Ior nany years. TIe µockeI IandkercIIeI vIrIuaIIy
dIsaµµeared Iron IIe narkeI, reµIaced Ly KIeenex IIssues In
IIeIr nany varIaIIons.
WIy don'I IIe nany varIeIIes oI IIssue dIIuIe IIe KIeenex
1PL LAW 0I 1PL W0P0 23
Lrand? Because vIen a µerson Iooks across a roon, sees a
Lox oI ScoII IIssue, and says: "PIease Iand ne a KIeenex,¨
you knov you Iave a soIId Lrand Iocked InIo IIe nInd oI IIe
consuner.
In IIe sane vay IIaI KIeenex ovns IIssue, 1eII-O ovns
geIaIIn desserI, Coca-CoIa ovns coIa, Band-AId ovns adIe-
sIve Landage, Saran Wraµ ovns µIasIIc Iood IIIn, and
RoIIerLIade ovns In-IIne skaIes.
You knov your Lrand ovns IIe caIegory nane vIen
µeoµIe use your Lrand nane generIcaIIy.
"Make ne a Xerox coµy.¨
"I need a Q-TIµ.¨
"Cover IIe µIaIe vIII ReynoIds Wraµ.¨
"Hand ne IIe ScoIcI Iaµe.¨
Nor Is II any secreI Iov IIese Lrands nanaged Io ovn
IIe caIegory vord. TIey vere IIrsI, µIaIn and sInµIe.
Here's IIe caIcI: You can'I Lecone generIc Ly overIakIng
IIe Ieader. PeµsI von'I Lecone generIc Ior coIa even II IIe
Lrand ouIseIIs Coke (as II once dId In IIe suµernarkeI dIs-
IrILuIIon cIanneI). You can onIy Lecone generIc Ly LeIng
IIe IIrsI Lrand and esIaLIIsIIng IIe caIegory.
So vIaI do you do II you veren'I IIe IIrsI In a caIegory?
QuIIe oIIen you can creaIe a nev caIegory Ly sInµIy nar-
rovIng your Iocus.
Lnery AIr IreIgII, sIarIed In 1946, vas IIe IIrsI aIr
cargo carrIer. BuI Lnery IeII InIo IIe CIevroIeI Iraµ. InsIead
oI IocusIng on one Iyµe oI servIce, II oIIered everyIIIng.
OvernIgII, InexµensIve Ivo- or IIree-day servIce, snaII
µackages, Iarge µackages. "WIaIever you vanI Io sIIµ,
Lnery can IandIe II.¨
WIaI dId IederaI Lxµress do? In IIe earIy sevenIIes, II
vas a sIruggIIng µIayer In IIe deIIvery LusIness. BuI In a
sIreak oI LrIIIIance, CLO Ired SnIII decIded Io narrov IIs
Iocus Io overnIgII deIIvery onIy. "WIen II aLsoIuIeIy, µosI-
IIveIy Ias Io Le IIere overnIgII.¨
Today IederaI Lxµress Is a nucI Iarger conµany IIan
Lnery (nov caIIed Lnery WorIdvIde). And "IedLx¨ Ias
Lecone IIe generIc Iern Ior overnIgII deIIvery.
"IedLx IIIs µackage Io IIe CoasI.¨
WIaI vord does IederaI Lxµress ovn In IIe nInd?
"OvernIgII,¨ oI course.
So vIaI dId IederaI Lxµress do nexI? II venI gIoLaI,
vIere IIe very IIIng II Iad Lecone knovn Ior, overnIgII
deIIvery, Is InµossILIe. (IIve o'cIock In IIe aIIernoon In Nev
York Is aIready Ionorrov nornIng In SIngaµore.) And II goI
InIo Iess exµensIve Ivo- and IIree-day deIIvery. And II
recenIIy LougII a IruckIng conµany.
VIrIuaIIy every narkeIIng nove IederaI Lxµress Ias
nade In IIe IasI dozen years Ias noved IIe conµany Iur-
IIer avay Iron IIe overnIgII conceµI.
Does IIIs exµansIon IurI IIe Lrand? Yes. Does II IurI
IIe conµany? MayLe noI, as Iong as IIere are no conµeII-
Iors asIuIe enougI Io narrov IIe Iocus and µuI IIe sane
squeeze on IederaI Lxµress IIaI IederaI Lxµress µuI on
Lnery AIr IreIgII.
Look aI vIaI Prego dId Io Ragú. Ior years Ragú vas IIe
IeadIng Lrand oI sµagIeIII sauce vIII a narkeI sIare In
excess oI 50 µercenI. LIke Lnery AIr IreIgII, Ragú Iad
nany dIIIerenI varIeIIes.
So vIaI dId Prego do? TIe Lrand narroved IIs Iocus Io one
varIeIy, "IIIck¨ sµagIeIII sauce. WIII IIIs one Iyµe oI sauce
Prego von 27 µercenI oI IIe narkeI. Prego ovns IIe vord
"IIIck¨ In IIe nInd oI IIe sµagIeIII sauce Luyer.
TIe sane µrIncIµIe IoIds Irue In nany dIIIerenI caIe-
gorIes, no naIIer Iov narrov or oLscure IIe IndusIry. In IIe
IInancIaI vorId, a "BIoonLerg¨ Is a IernInaI IIaI µrovIdes
anaIyIIcaI IooIs as veII as InsIanI LusIness nevs and sIock
µrIces. BIoonLerg LP vas IIe IIrsI conµany Io InIroduce a
devIce IIaI vouId IeIµ noney nanagers conIrasI and con-
µare IInancIaI daIa.
Words are IIe key Io Lrand LuIIdIng. ReaIIIy, oI course,
resIs In a vIsuaI vorId oI sIaµes, coIors, IexIures, and
dInensIons. BuI reaIIIy Ias no neanIng vIIIouI IIe conIexI
µrovIded Ly IIe Iunan nInd. TIe nInd gIves neanIng Io
vIsuaI reaIIIy Ly usIng vords. OnIy vIen IIe nInd IIInks
IIaI an oLjecI Is Iarge or snaII, LeauIIIuI or ugIy, dark or
IIgII, does IIaI neanIng arIse.
TIe sane Is Irue oI IIe µroducI or servIce you are seII-
Ing. TIe µroducI IIseII nIgII Iave a vIsuaI reaIIIy. BuI II's IIe
Lrand nane and IIs assocIaIIons IIaI gIve IIe µroducI nean-
Ing In IIe consuner's nInd.
So you can IorgeI aLouI IIe Iaundry IIsI oI vonderIuI
aIIrILuIes your µroducI Ias. You can'I µossILIy assocIaIe
IIen aII vIII your Lrand nane In a Iunan nInd. To geI
InIo IIe consuner's nInd you Iave Io sacrIIIce. You Iave Io
reduce IIe essence oI your Lrand Io a sIngIe IIougII or
aIIrILuIe. An aIIrILuIe IIaI noLody eIse aIready ovns In
your caIegory.
TIe average aduII knovs IIe neanIngs oI µerIaµs 50,000
vords. YeI IIere are aLouI 2.5 nIIIIon regIsIered Iradenarks
In IIe UnIIed SIaIes. And you vanI your Iradenark Io sIand
Ior Iov nany dIIIerenI aIIrILuIes In IIe nInd?
UnIII scIence IIgures ouI a vay Io reµIace Iunan LraIn
IIssue vIII sIIIcon cIIµs, II's a µIysIcaI InµossILIIIIy Ior
nosI Lrands Io go Leyond a sIngIe vord. ConsIder yourseII
Iucky II your Lrand can ovn a vord IIke "saIeIy¨ or "drIvIng¨
or "IIIck¨ or "overnIgII.¨
Many narkeIers knov IIIs and IIey sIIII Iook Io exµand
IIe neanIngs oI IIeIr Lrands. WIy?
GrovII. TIey IeeI Iraµµed In IIeIr µresenI µosIIIons.
TIey vanI Io grov, so IIey IIInk IIey Iave no cIoIce LuI Io
exµand IIeIr Lrands.
BuI vIaI vorks Is noI exµandIng IIe Lrand, LuI exµand-
Ing IIe narkeI. In oIIer vords, InsIead oI novIng Iron
overnIgII Io Ivo- or IIree-day deIIvery, IederaI Lxµress
exµanded IIe narkeI Ior overnIgII deIIvery.
By IocusIng on overnIgII, IederaI Lxµress vas aLIe Io
nake overnIgII IIe In IIIng anong LusIness execuIIves. As
a resuII oI IIs IIgI µrIce and IIasIy µackagIng, µeoµIe
IIougII, "Hey, IIIs µackage nusI Le InµorIanI Lecause II
cane vIa IederaI Lxµress.¨
And overnIgII deIIverIes Looned aIong vIII IIe Ior-
Iunes oI IedLx.
Mercedes enµIoyed a sInIIar sIraIegy. WIaI vas IIe
narkeI Ior exµensIve auIonoLIIes LeIore Mercedes-Benz?
Teeny-IIny.
Mercedes LuIII IIe narkeI Ior exµensIve cars Ly usIng
µresIIge as IIs sIraIegy. BuI you need suLIIeIy In deaIIng vIII a
vord IIke "µresIIge.¨ IIs connoIaIIons nay vork In Lrand
LuIIdIng, LuI IIe vord IIseII does noI. II's noI IIaI µeoµIe aren'I
dyIng Io ovn µresIIge Lrands. TIey jusI IaIe Io adnII II.
To Le successIuI In LrandIng a "µresIIge¨ µroducI or
servIce, you need Io do Ivo IIIngs:
1. You need Io nake your µroducI or servIce nore exµen-
sIve IIan IIe conµeIIIIon.
2. You need Io IInd a code vord Ior µresIIge.
TIe IIrsI µarI vas easy. Mercedes-Benz µrIced IIs veIIcIes
aI aLouI IvIce IIe µrIce oI a conµaraLIe CadIIIac. "Mercedes
cars nusI Le LeIIer IIan CadIIIacs,¨ IIInks IIe Luyer,
"Lecause IIey are IvIce as exµensIve.¨
Mercedes aIso Iound a µoverIuI code vord Ior µresIIge.
"LngIneered IIke no oIIer car In IIe vorId.¨
WIaI overnIgII dId Ior IederaI Lxµress, engIneerIng dId
Ior Mercedes. II exµanded IIe narkeI Ly gIvIng IIe ovner
an excuse Io Luy an exµensIve, µresIIgIous car. InsIead oI a
CadIIIac, IIe car oI cIoIce Ior IIe counIry-cIuL crovd
Lecane a Mercedes.
BuI IIke IederaI Lxµress, Mercedes Ias aIso sIarIed
exµandIng IIe Lrand vIII cIeaµ sµorIs cars, InexµensIve
sedans, and sµorI-uIIIIIy veIIcIes. WIII a nane IIke Mercedes-
Benz, a reµuIaIIon IIke Mercedes-Benz, and a IIsIory IIke
Mercedes-Benz (IIe conµany InvenIed IIe auIonoLIIe), IIe
Lrand sIouId Le IIe IargesI-seIIIng Iuxury car In AnerIca. BuI
II's noI.
Go Lack In IIsIory. By Iar IIe nosI successIuI Lrands are
IIose IIaI keµI a narrov Iocus and IIen exµanded IIe caIe-
gory as oµµosed Io IIose Lrands IIaI IrIed Io exµand IIeIr
nanes InIo oIIer caIegorIes.
WIaI vas IIe narkeI Ior exµensIve µens LeIore MonI-
LIanc? MInuscuIe.
WIaI vas IIe narkeI Ior exµensIve vodka LeIore
SIoIIcInaya and ALsoIuI? NII.
WIaI vas IIe narkeI Ior saIe cars LeIore VoIvo? ZIµ.
II "vIaI Is IIe sIze oI IIe narkeI?¨ Is IIe IIrsI quesIIon
your conµany asks IIseII, IIen you are IakIng IIe vrong
road Io success.
Ask noI vIaI µercenIage oI an exIsIIng narkeI your
Lrand can acIIeve, ask Iov Iarge a narkeI your Lrand can
creaIe Ly narrovIng IIs Iocus and ovnIng a vord In IIe
nInd.
29
CusIoners are susµIcIous. TIey Iend Io dIsLeIIeve nosI
µroducI cIaIns. Your Lrand nIgII IasI Ionger, requIre Iess
naInIenance, and Le easIer Io use, LuI vIo vIII acceµI
cIaIns IIke IIese?
TIere Is one cIaIn, Iovever, IIaI sIouId Iake µrece-
dence over every oIIer cIaIn. II's IIe one cIaIn IIaI eIevaIes
IIe Lrand aLove IIe conµeIIIIon. And nakes every oIIer
cIaIn nucI nore LeIIevaLIe.
II's IIe reaI IIIng. II's IIe cIaIn Io auIIenIIcIIy.
WIen Coca-CoIa IIrsI nade IIIs cIaIn cusIoners
InsIanIIy resµonded. "Yes,¨ IIey agreed. "Coke Is IIe reaI
IIIng. LveryIIIng eIse Is an InIIaIIon.¨
Lven IIougI IIe IasI "reaI IIIng¨ adverIIsIng ran aInosI
IIIrIy years ago, IIe conceµI Ias Lecone cIoseIy assocIaIed
vIII Coca-CoIa. II's IIe Lrand's credenIIaIs.
Lven Ioday, "IIe reaI IIIng¨ Is so cIoseIy assocIaIed vIII
Coca-CoIa IIaI nevsµaµer and nagazIne reµorIers vIII Iry
Io vork IIese vords InIo aInosI every arIIcIe vrIIIen aLouI
IIe conµany.
CredenIIaIs are IIe coIIaIeraI you µuI uµ Io guaranIee
IIe µerIornance oI your Lrand. WIen you Iave IIe rIgII
credenIIaIs, your µrosµecI Is IIkeIy Io LeIIeve aInosI any-
IIIng you say aLouI your Lrand.
1 R£ L AW 0F CR£ ß£ N1 I AL 5
The or uol al l ngr edl ent l n t he suooess of
any br and l s l t s ol al m t o aut hent l ol t y.
6
LeadersIIµ Is IIe nosI dIrecI vay Io esIaLIIsI IIe cre-
denIIaIs oI a Lrand. Coca-CoIa, HerIz, HeInz, VIsa, and
Kodak aII Iave credenIIaIs Lecause IIey are vIdeIy µer-
ceIved Io Le IIe IeadIng Lrands In IIeIr caIegorIes. WIen
you don'I Iave IIe IeadIng Lrand, your LesI sIraIegy Is Io
creaIe a nev caIegory In vIIcI you can cIaIn IeadersIIµ.
WIIcI Is vIaI PoIaroId dId vIen II Lecane IIe Ieader In
IIe nev caIegory oI InsIanI µIoIograµIy. YeI vIen II IrIed
Io IackIe Kodak In convenIIonaI µIoIograµIIc IIIn, PoIaroId
IaIIed nIseraLIy.
Many narkeIers aIIrILuIe PoIaroId's IaIIure Io IIe IacI
IIaI IIe Lrand couIdn'I Le "sIreIcIed¨ Iron InsIanI Io con-
venIIonaI 35nn IIIn. WIIIe Irue, IIIs concIusIon doesn'I
reaIIy descrILe IIe dynanIcs InvoIved.
TIe sInµIe IacI Is IIaI PoIaroId Ias no credenIIaIs In
convenIIonaI 35nn IIIn. WIy Luy your convenIIonaI IIIn
Iron PoIaroId vIen Kodak Is IIe exµerI In IIIs caIegory?
OnIy II you vanI InsIanI IIIn vIII you Luy PoIaroId, II's IIe
conµany IIaI knovs InsIanI µIoIograµIy.
A nunLer oI years ago, PaIrIck SuIIIvan (currenIIy CLO
oI SaIesLogIx) arrIved In our oIIIces vIII a soIIvare µroducI
caIIed AcI. "WIaI does AcI do?¨ ve asked.
"LveryIIIng,¨ PaI reµIIed. "AcI keeµs Irack oI your caIen-
dar, your corresµondence, your naIIIng IIsIs, and your
exµense accounIs. AcI IIIeraIIy does everyIIIng.¨
NoI a good dIrecIIon. We vanIed Io IInd IIe one IIIng
ve couId use Io LuIId a nev caIegory. AIIer nucI dIscussIon
IIe grouµ decIded IIaI IIe nev soIIvare couId LesI Le
descrILed as "conIacI¨ soIIvare. In oIIer vords, soIIvare
desIgned Ior saIesµeoµIe and oIIers vIo do conIacI vork.
"TIe IargesI-seIIIng conIacI soIIvare¨ Lecane IIe cre-
denIIaIs Ior IIe nev Lrand. LveryvIere IIe Lrand nane vas
used, IIe credenIIaIs vere aIso used. In µuLIIcIIy, adverIIs-
Ing, LrocIures, IeIIerIeads, caIIIng cards. Lven on IIe µrod-
ucI Lox IIseII.
Today, AcI Ias 70 µercenI oI IIe conIacI soIIvare narkeI
and Ias Lecone IIe donInanI Lrand In IIe caIegory.
CredenIIaIs are µarIIcuIarIy InµorIanI In IIe µuLIIcIIy
µrocess. ReµorIers and edIIors are quIck Io dIsnIss adverIIs-
Ing cIaIns as µuIIery. BuI IIey readIIy acknovIedge Ieader-
sIIµ and oIIer asµecIs reIaIed Io a Lrand's credenIIaIs.
º II a reµorIer Is doIng a car-renIaI sIory, vIo Is Ie or sIe
IIkeIy Io caII IIrsI? HerIz, exacIIy.
º II a reµorIer Is doIng a coIa sIory, Ie or sIe vIII aInosI
aIvays caII Coca-CoIa.
º II a reµorIer Is doIng a conµuIer soIIvare sIory, Ie or
sIe vIII InvarIaLIy caII MIcrosoII.
Many conµanIes run LrandIng µrograns aInosI devoId
oI credenIIaIs. II you IeaI IIrougI a sIack oI µrInI ads or
vaIcI a serIes oI IeIevIsIon connercIaIs, you'II IInd an end-
Iess µarade oI aInosI neanIngIess LeneIIIs: TasIes greaI,
saves noney, vIIIens IeeII, easy assenLIy, LIgger, snaIIer,
IIgIIer, IasIer, cIeaµer. WIIIe nany oI IIese LeneIIIs nay Le
oI generaI InIeresI Io µrosµecIIve cusIoners, IIey eacI Iack
credILIIIIy so IIey are generaIIy Ignored. "TIaI's vIaI IIey
aII say.¨
WIen IIe LeneIIIs, Iovever, are sIrucIured around sone
asµecI oI a Lrand's credenIIaIs, IIey carry nucI nore
veIgII.
II AcI cIaIns Io nake you nore µroducIIve on IIe road
and cuI your µaµervork In IaII, IIen you Iend Io LeIIeve IIese
cIaIns Lecause "AcI Is IIe IargesI-seIIIng conIacI soIIvare.¨
DaIasIrean dId IIe sane IIIng In naInIenance soII-
vare. LarIy on, DaIasIrean Iound IIseII vIII 32 µercenI oI
IIe narkeI. GranIed IIe narkeI vas snaII. Very, very snaII.
No naIIer. DaIasIrean µronoIed IIseII as "IIe Ieader In
naInIenance soIIvare.¨ TIIs sane IeadersIIµ IIene vas
1PL LAW 0I UPL0LN1I AL5 31
used In aII oI DaIasIrean's IIIeraIure. Today, IIe narkeI Ias
exµIoded and DaIasIrean sIIII donInaIes IIe caIegory. II
IruIy Is IIe Ieader In naInIenance soIIvare.
ConvenIIonaI IIInkIng vouId Iave II oIIervIse. "TIe
narkeI Is snaII. NoLody cares IIaI ve're IIe Ieader. TIey
don'I even care aLouI naInIenance soIIvare IIseII, oIIer-
vIse IIey vouId Le LuyIng nore oI IIIs kInd oI µroducI.
IorgeI IeadersIIµ. We Iave Io concenIraIe aII oI our eIIorIs
on seIIIng IIe LeneIIIs oI IIe caIegory.¨
Never IorgeI IeadersIIµ. No naIIer Iov snaII IIe nar-
keI, don'I geI duµed InIo sInµIy seIIIng IIe LeneIIIs oI IIe
caIegory earIy In IIe LrandIng µrocess.
TIere are aIso IIe Iong-Iern LeneIIIs oI IeadersIIµ.
Because once you geI on Ioµ, II's Iard Io Iose your sµoI. A
vIdeIy µuLIIcIzed sIudy oI IvenIy-IIve IeadIng Lrands In
IvenIy-IIve dIIIerenI µroducI caIegorIes In IIe year 1923
sIoved IIaI IvenIy oI IIe sane IvenIy-IIve Lrands are sIIII
IIe Ieaders In IIeIr caIegorIes Ioday. In sevenIy-IIve years
onIy IIve Lrands IosI IIeIr IeadersIIµ.
Never assune IIaI µeoµIe knov vIIcI Lrand Is IIe
Ieader. TIIs Is esµecIaIIy Irue In IasI-grovIng, nev caIegorIes
IIke conIacI soIIvare and naInIenance soIIvare. MosI nev
µrosµecIs Iave no exµerIence vIII IIe caIegory and IIIIIe
knovIedge oI avaIIaLIe Lrands, so IIey naIuraIIy gravIIaIe Io
IIe IeadIng Lrand.
As IIe caIegory naIures, cusIoners Lecone nore
advenIuresone and nore vIIIIng Io Iry dIIIerenI Lrands IIaI
oIIer seenIngIy unIque advanIages. Leaders oIIen Iave Io
vrIIe oII IIe nore soµIIsIIcaIed cusIoners vIo vIII go ouI
oI IIeIr vay noI Io Luy IIe IeadIng Lrand.
WrIIe IIen oII. You can'I aµµeaI Io everyLody.
NoI aII Lrands can Le Ieaders, aIIIougI every caIegory
oIIers a veaIII oI µossILIIIIIes. Take Leer, Ior exanµIe. Here
are sone caIegorIes Ior Leer IeadersIIµ credenIIaIs:
º TIe IeadIng Leer
º TIe IeadIng IIgII Leer
º TIe IeadIng InµorIed Leer
º TIe IeadIng nIcroLrev
º TIe IeadIng Ice Leer
º TIe IeadIng IIgI-µrIced Leer
º TIe IeadIng MexIcan Leer
º TIe IeadIng Gernan Leer
º TIe IeadIng CanadIan Leer
º TIe IeadIng 1aµanese Leer
Ior aInosI aII oI IIe Iundreds oI conµanIes ve Iave
vorked vIII around IIe vorId, ve Iave Iound sone creden-
IIaIs IIaI couId Le exµIoIIed. II noI, ve creaIed IIe creden-
IIaIs Ly InvenIIng a nev caIegory.
You see credenIIaIs aI vork In everyday IIIe. Hov nany
IInes Iave you vaIked avay Iron a nev resIauranI Lecause
II vas aInosI enµIy? MosI µeoµIe µreIer Io vaII Ior a IaLIe
aI a resIauranI IIaI Is crovded, raIIer IIan eaI In an enµIy
one. II IIIs µIace vas reaIIy good (goes IIe IIInkIng), IIere
vouId Le a IIne ouI IIe door.
TIaI's IIe µover oI credenIIaIs.
1PL LAW 0I UPL0LN1I AL5 33
?
34
WIaI Is quaIIIy?
LveryLody IIInks IIey can IeII a IIgI-quaIIIy µroducI
Iron a Iov-quaIIIy one, LuI In reaIIIy IIIngs are noI aIvays
so oLvIous.
º Does a RoIex keeµ LeIIer IIne IIan a TInex? Are you sure?
º Does a LeIca Iake LeIIer µIcIures IIan a PenIax? Are you
sure?
º Does a Mercedes Iave Iever necIanIcaI µroLIens IIan
a CadIIIac? Are you sure?
º Does HerIz Iave LeIIer servIce IIan AIano? Are you sure?
º Does a MonILIanc µen vrIIe LeIIer IIan a Cross? Are
you sure?
º Does Coca-CoIa IasIe LeIIer IIan PeµsI-CoIa? MosI µeo-
µIe seen Io IIInk so, Lecause Coke ouIseIIs PeµsI. YeI In
LIInd IasIe IesIs nosI µeoµIe µreIer IIe IasIe oI PeµsI.
Connon vIsdon LIanes IIe IesIIng µrocedures. II Coke
ouIseIIs PeµsI, IIere nusI Le soneIIIng vrong vIII a IasIe
IesI IIaI sIovs IIe oµµosIIe.
1 R£ L AW 0F qUAL I 1 Y
Çual l t y l s l mpor t ant , but br ands
ar e not bul l t by qual l t y al one.
QuaIIIy Is a conceµI IIaI Ias IIousands oI adIerenIs.
TIe vay Io LuIId a LeIIer Lrand, goes IIe IIInkIng, Is Ly
LuIIdIng a LeIIer-quaIIIy µroducI.
WIaI seens so InIuIIIveIy Irue In IIeory Is noI aIvays so
In µracIIce. BuIIdIng your Lrand on quaIIIy Is IIke LuIIdIng
your Iouse on sand. You can LuIId quaIIIy InIo your µroducI,
LuI IIaI Ias IIIIIe Io do vIII your success In IIe narkeIµIace.
Years oI oLservaIIon Iave Ied us Io IIIs concIusIon.
TIere Is aInosI no correIaIIon LeIveen success In IIe nar-
keIµIace and success In conµaraIIve IesIIng oI Lrands-
vIeIIer II Le IasIe IesIs, accuracy IesIs, reIIaLIIIIy IesIs,
duraLIIIIy IesIs, or any oIIer IndeµendenI, oLjecIIve IIIrd-
µarIy IesIIng oI Lrands.
Read Consuncr Pcpor/s. And IIen cIeck IIe saIes rank-
Ings oI IIe Lrands IesIed conµared Io IIe nagazIne's quaIIIy
rankIngs. You vIII IInd IIIIIe correIaIIon. As a naIIer oI IacI,
IIe nagazIne's success couId Le aIIrILuIed Io IIs aLIIIIy Io
IInd IIIIIe-knovn Lrands IIaI ouIµerIorn IeadIng Lrands.
In a recenI rankIng oI sIxIeen Lrands oI snaII cars, IIe
nunLer-one Lrand In quaIIIy vas IveIIII In saIes. TIe
nunLer-Ivo Lrand In quaIIIy vas nInII In saIes. TIe nunLer-
IIree Lrand In quaIIIy vas dead IasI In saIes. II quaIIIy Irans-
IaIes InIo saIes, IIe nunLers don'I seen Io sIov II.
LeI's say you venI sIoµµIng Ior an auIonoLIIe Ionor-
rov. Does quaIIIy naIIer? ALsoIuIeIy. MosI car Luyers Iook
Ior IIe LesI-quaIIIy car IIey can aIIord.
BuI vIere does IIe conceµI oI quaIIIy resIde? In IIe
sIovroon? No.
QuaIIIy, or raIIer IIe µerceµIIon oI quaIIIy, resIdes In IIe
nInd oI IIe Luyer. II you vanI Io LuIId a µoverIuI Lrand, you
Iave Io LuIId a µoverIuI µerceµIIon oI quaIIIy In IIe nInd.
As II Iaµµens, IIe LesI vay Io LuIId a quaIIIy µerceµIIon
In IIe nInd Is Ly IoIIovIng IIe Iavs oI LrandIng.
Take IIe Iav oI conIracIIon. WIaI Iaµµens vIen you nar-
rov your Iocus? You Lecone a sµecIaIIsI raIIer IIan a gener-
aIIsI. And a sµecIaIIsI Is generaIIy µerceIved Io knov nore, In
1PL LAW 0I µUALI 1Y 35
oIIer vords Io Iave "IIgIer quaIIIy,¨ IIan a generaIIsI.
Does a cardIoIogIsI knov nore aLouI IIe IearI IIan a
generaI µracIIIIoner oI nedIcIne? MosI µeoµIe IIInk so. Cer-
IaInIy IIe µerceµIIon Is Irue. Iron a narkeIIng µoInI oI
vIev, II reaIIy doesn'I naIIer.
YeI nosI conµanIes vanI Io Le generaI µracIIIIoners.
WIy? TIey vanI Io exµand IIe narkeI Ior IIeIr µroducIs and
servIces. And In doIng so IIey vIoIaIe IIe Iav oI exµansIon.
AnoIIer InµorIanI asµecI oI Lrand LuIIdIng Is IavIng a
LeIIer nane. AII oIIer IacIors LeIng equaI, IIe Lrand vIII
IIe LeIIer nane vIII cone ouI on Ioµ.
BeIng a sµecIaIIsI and IavIng a LeIIer nane go Iand In
Iand. LxµandIng a Lrand and LeIng a generaIIsI Iend Io
desIroy your aLIIIIy Io seIecI a µoverIuI nane.
TIere Is nucI nIsInIornaIIon on IIIs suLjecI In LusI-
ness µuLIIcaIIons Ioday. OnnILus Lrands are veak, noI
sIrong. GeneraI LIecIrIc, GeneraI MoIors, and GeneraI
DynanIcs nIgII Le veII knovn, LuI as Lrands IIey are
veak Lecause IIey're Ioo Lroad In scoµe.
We knov vIaI you are IIInkIng. Sone oI IIese onnILus
Lrands are anong IIe vorId's IeadIng conµanIes In Ierns oI
saIes, µroIIIs, and sIock-narkeI equIIy. And you're rIgII. BuI
a veak Lrand can In IacI Le a saIes success II II conµeIes
vIII even veaker Lrands. Take GeneraI LIecIrIc. MosI oI
GL's conµeIIIors are aIso onnILus Lrands IIke WesIIng-
Iouse, GeneraI MoIors, SIenens, and UnIIed TecInoIogIes.
WIo vIns vIen Ivo veak Lrands conµeIe? A veak Lrand
IIaI jusI Iaµµens Io Le Iess veak IIan IIs conµeIIIor.
WIen GeneraI LIecIrIc IrIed Io conµeIe In naInIrane
conµuIers vIII a sIrong Lrand IIke IBM, IIe GL Lrand vas
a nuIIInIIIIon-doIIar Ioser. ALouI S300 nIIIIon Io Le exacI.
WIen GeneraI LIecIrIc IrIed Io conµeIe In IouseIoId
aµµIIances, IIe GL Lrand vas no naIcI Ior IIe sµecIaIIsIs.
(TIe µroducIs vere suLsequenIIy soId Io BIack & Decker,
vIIcI µronµIIy µroved IIaI an onnILus Lrand IIke BIack &
Decker vas no LeIIer IIan IIe GL Lrand.)
MIIe-vIde Lrands IIke GeneraI LIecIrIc and GeneraI
MoIors Iook sIrong, LuI In reaIIIy are veak. TIey Iook
sIrong Lecause IIey are veII knovn and Iave Leen In LusI-
ness Ior decades. BuI vIen IIey go agaInsI IIe sµecIaIIsIs,
IIey are veak.
AnoIIer IacIor In LuIIdIng a IIgI-quaIIIy µerceµIIon Is
IavIng a IIgI µrIce. RoIex, Häagen-Dazs, Mercedes-Benz,
RoIIs-Royce, MonILIanc, Don PérIgnon, CIIvas RegaI,
ALsoIuI, 1ack DanIeI's, and RIIz-CarIIon are aII Lrands IIaI
LeneIII Iron IIeIr IIgI µrIce.
HIgI µrIce Is a LeneIII Io cusIoners. II aIIovs IIe aIIIu-
enI cusIoner Io oLIaIn µsycIIc saIIsIacIIon Iron IIe µuLIIc
µurcIase and consunµIIon oI a IIgI-end Lrand.
TIe cusIoner vIo vears a RoIex vaIcI doesn'I do so Io
Le nore µuncIuaI. TIe cusIoner vIo vears a RoIex vaIcI
does so Io IeI oIIer µeoµIe knov IIaI Ie or sIe can aIIord Io
Luy a RoIex vaIcI.
WIy do LIue jeans Luyers µay S100 or nore Ior a µaIr oI
ReµIay, BIg SIar, or DIeseI jeans? And vouId IIey µay IIe
sane µrIce II IIe IaLeI vere on IIe InsIde oI IIe jeans
InsIead oI on IIe ouIsIde?
And vIaI does IIe sonneIIer say Io IIe resIauranI cus-
Ioner vIo Ias jusI ordered an eIgIIy-doIIar LoIIIe oI vIne?
"We Iave a IvenIy-doIIar LoIIIe IIaI IasIes jusI as good¨?
NoI IIkeIy. Lven II IIe resIauranI dId Iave a IvenIy-
doIIar LoIIIe IIaI IasIed jusI as good. And even II IIe cus-
Ioner LeIIeved IIe IvenIy-doIIar LoIIIe IasIed jusI as good.
ConvenIIonaI vIsdon oIIen advocaIes narkeIIng a IIgI-
quaIIIy µroducI aI a conµaraLIe µrIce. TIIs Is usuaIIy vIaI
Is neanI Ly a quaIIIy sIraIegy. TIIs Is vIaI Iord neans
vIen II says, "QuaIIIy Is 1oL 1.¨ LveryIIIng eIse, IncIudIng
µrIce, Is equaI, LuI ve are goIng Io vIn Ly IavIng IIe LeIIer-
quaIIIy auIonoLIIe.
NoI IIkeIy. QuaIIIy Is a nIce IIIng Io Iave, LuI Lrands are
noI LuIII Ly quaIIIy aIone.
A LeIIer sIraIegy In a sea oI sInIIar µroducIs vIII sInIIar
1PL LAW 0I µUALI 1Y 37
µrIces Is Io deIILeraIeIy sIarI vIII a IIgIer µrIce. TIen ask your-
seII, WIaI can ve µuI InIo our Lrand Io jusIIIy IIe IIgIer µrIce?
º RoIex nade IIs vaIcIes LIgger and IeavIer vIII a
unIque-IookIng vrIsILand.
º CaIIavay nade IIs drIvers oversIzed.
º MonILIanc nade IIs µens IaIIer.
º Häagen-Dazs added nore LuIIerIaI.
º CIIvas RegaI IeI IIs ScoIcI vIIsky age Ionger.
TIere's noIIIng vrong vIII quaIIIy. We aIvays advIse
our cIIenIs Io LuIId as nucI quaIIIy InIo IIeIr Lrands as IIey
can aIIord. (Hey, II nIgII save you noney on servIce cosIs
IaIer on.) BuI don'I counI on quaIIIy aIone Io LuIId your
Lrand.
To LuIId a quaIIIy Lrand you need Io narrov IIe Iocus
and conLIne IIaI narrov Iocus vIII a LeIIer nane and a
IIgIer µrIce.
39
AccordIng Io IIe Iav oI conIracIIon a Lrand Lecones
sIronger vIen you narrov IIs Iocus. WIaI Iaµµens vIen
you narrov IIe Iocus Io sucI a degree IIaI IIere Is no
Ionger any narkeI Ior IIe Lrand?
TIIs Is µoIenIIaIIy IIe LesI sIIuaIIon oI aII. WIaI you
Iave creaIed Is IIe oµµorIunIIy Io InIroduce a Lrand-nev
caIegory.
º WIaI vas IIe narkeI Ior an exµensIve vodka LeIore
SIoIIcInaya? AInosI noIIIng.
º WIaI vas IIe narkeI Ior exµensIve cars LeIore
Mercedes-Benz? AInosI noIIIng.
º WIaI vas IIe narkeI Ior cIeaµ cars LeIore VoIksvagen?
AInosI noIIIng.
º WIaI vas IIe narkeI Ior Ione µIzza deIIvery LeIore
DonIno's PIzza? AInosI noIIIng.
º WIaI vas IIe narkeI Ior In-IIne skaIes LeIore
RoIIerLIade? AInosI noIIIng.
TIere's a µaradox Iere. BrandIng Is vIdeIy µerceIved as
IIe µrocess oI caµIurIng a LIgger sIare oI an exIsIIng nar-
1 R£ L AW 0F 1 R£ CA1 £ 60RY
^ l eadl ng br and shoul d pr omot e
t he oat egor y, not t he br and.
8
keI. WIIcI Is vIaI Is usuaIIy neanI vIen IIe nevIy
aµµoInIed CLO says, "We Iave Io grov IIe LusIness.¨
YeI IIe nosI eIIIcIenI, nosI µroducIIve, nosI useIuI
asµecI oI LrandIng Ias noIIIng Io do vIII IncreasIng a con-
µany's narkeI sIare.
TIe nosI eIIIcIenI, nosI µroducIIve, nosI useIuI asµecI oI
LrandIng Is creaIIng a nev caIegory. In oIIer vords, narrov-
Ing IIe Iocus Io noIIIng and sIarIIng soneIIIng IoIaIIy nev.
TIaI's IIe vay Io Lecone IIe IIrsI Lrand In a nev caIe-
gory and uIIInaIeIy IIe IeadIng Lrand In a raµIdIy grovIng
nev segnenI oI IIe narkeI.
To LuIId a Lrand In a nonexIsIIng caIegory, Io LuIId sone-
IIIng ouI oI noIIIng, you Iave Io do Ivo IIIngs aI once:
º You Iave Io IauncI IIe Lrand In sucI a vay as Io creaIe
IIe µerceµIIon IIaI IIaI Lrand vas IIe IIrsI, IIe Ieader,
IIe µIoneer, or IIe orIgInaI. InvarIaLIy, you sIouId use
one oI IIese vords Io descrILe your Lrand.
º You Iave Io µronoIe IIe nev caIegory.
"Isn'I II easIer Io jusI µronoIe IIe Lrand and IorgeI
aLouI IIe caIegory?¨ you nIgII Le IIInkIng. LasIer, yes, LuI
noI as eIIecIIve.
WIen AµµIe InIroduced IIs III-IaIed NevIon, II IorgoI
aLouI IIe caIegory nane. AI IIrsI II caIIed IIe NevIon a
"PDA,¨ Ior µersonaI dIgIIaI assIsIanI.
A noIeLook conµuIer, a dIgIIaI ceII µIone, or a dIgIIaI
vaIcI can aII Le consIdered µersonaI dIgIIaI assIsIanIs. PDA
dId noI dIsIInguIsI IIe NevIon Iron aII IIose oIIer µer-
sonaI dIgIIaI assIsIanIs on IIe narkeI.
You knev IIe NevIon vas In IrouLIe vIen AµµIe ran LIg
adverIIsenenIs vIII IIe IeadIIne, "WIaI Is NevIon?¨
BeIIer Io ansver IIaI quesIIon bcjorc you IauncI a nev
Lrand raIIer IIan aj/cr.
CusIoners don'I reaIIy care aLouI nev Lrands, IIey care
aLouI nev caIegorIes. TIey don'I care aLouI DonIno's, IIey
care aLouI vIeIIer or noI IIeIr µIzza vIII arrIve In IIIrIy nIn-
uIes. TIey don'I care aLouI CaIIavay, IIey care aLouI vIeIIer
or noI an oversIze drIver vIII cuI sIrokes oII IIeIr goII scores.
TIey don'I care aLouI PrInce, IIey care aLouI vIeIIer or noI
an oversIze racqueI vIII Inµrove IIeIr IennIs gane.
By IIrsI µreenµIIng IIe caIegory (as PrInce dId vIII IIe
oversIze IennIs racqueI, as CaIIavay dId vIII IIe oversIze
drIver, and as DonIno's dId vIII Ione deIIvery oI µIzza) and
IIen aggressIveIy µronoIIng IIe caIegory, you creaIe LoII a
µoverIuI Lrand and a raµIdIy escaIaIIng narkeI. CaIIavay
GoII ouIseIIs IIe nexI IIree Lrands conLIned.
LaIZI's Is IryIng Io do IIe sane IIIng In IIe resIauranI
LusIness. Average annuaI µer-unII saIes oI IIe unIIs In oµera-
IIon are an asIoundIng S14 nIIIIon. (TIe IIgIesI-grossIng
resIauranI In IIe vorId Is reµorIedIy Tavern on IIe Green In
Nev York CIIy's CenIraI Park, vIIcI does In IIe neIgILor-
Iood oI S35 nIIIIon a year.)
WIII onIy a IandIuI oI unIIs In oµeraIIon, LaIZI's Ias
creaIed an IncredILIe anounI oI excIIenenI In IIe resIau-
ranI IndusIry. YeI IIe conceµI Is sInµIIcIIy IIseII.
LasI year, AnerIcans sµenI S207 LIIIIon on resIauranI
neaIs, a sIzaLIe narkeI. OI IIaI IoIaI, 51 µercenI vas sµenI
Ior IakeouI or Ione deIIvery.
WIaI LIIIIe Caesars dId In µIzza, LaIZI's Is doIng In IIgI-
end vIIIe-IaLIecIoII resIauranI neaIs: narrovIng IIe Iocus
Io IakeouI onIy.
TIaI's IIe vay you LuIId a Lrand. Narrov IIe Iocus Io a
sIIce oI IIe narkeI, vIeIIer II's µIzza IakeouI or gourneI
IakeouI. TIen nake your Lrand nane sIand Ior IIe caIegory
(IIe generIc eIIecI) aI IIe sane IIne IIaI you exµand IIe
caIegory Ly µronoIIng IIe LeneIIIs oI IIe caIegory, noI IIe
Lrand.
WIaI are IIe LeneIIIs oI IakeouI µIzza? II's IIe cIeaµesI
vay Io seII a µIzza. No vaIIers or vaIIresses. No deIIvery
Irucks. As a resuII LIIIIe Caesars can seII a µIzza cIeaµer
IIan IIs conµeIIIIon. II caµIures IIIs conceµI vIII IIs sIo-
1PL LAW 0I 1PL UA1LU0PY 41
gan, "PIzza! PIzza!¨ Or IIe µronIse oI Ivo µIzzas Ior IIe
µrIce oI one.
LaIZI's Ias yeI Io conceµIuaIIze IIe LeneIIIs oI IakeouI
LeeI WeIIIngIon, LuI IIaI's vIaI II sIouId Le vorkIng on.
PronoIe IIe caIegory, noI IIe Lrand. WIaI LaIZI's caIIs IIe
"neaI-narkeI¨ caIegory.
WIen you're IIrsI, you can µreenµI IIe caIegory. You are
IIe onIy Lrand assocIaIed vIII IIe conceµI. You Iave a µov-
erIuI µuLIIcIIy µIaIIorn. You need Io µuI your LrandIng doI-
Iars LeIInd IIe conceµI IIseII, so IIe conceµI vIII Iake oII,
µuIIIng IIe Lrand aIong vIII II.
WIaI Iaµµens vIen conµeIIIIon aµµears, as II
InevIIaLIy does? MosI caIegory Ieaders jusI can'I vaII Io
sIIII InIo a Lrand-LuIIdIng node. TIaI's a nIsIake. Leaders
sIouId conIInue Io µronoIe IIe caIegory, Io Increase IIe
sIze oI IIe µIe raIIer IIan IIeIr sIIce oI IIe µIe.
BosIon CIIcken vas a Iuge III vIen II oµened IIs doors.
II vas IIe IIrsI IasI-Iood resIauranI Io Iocus on roIIsserIe
cIIcken Ior IIe Iake-Ione dInner narkeI. BuI InsIead oI
conIInuIng Io µronoIe roIIsserIe cIIcken, II cIanged IIs
nane Io BosIon MarkeI, added Iurkey, neaIIoaI, and Ian Io
IIe nenu, and IeII InIo IrouLIe.
Leaders geI anIsy as IIeIr 100 µercenI sIare oI IIe InIIIaI
narkeI droµs Io 90 and IIen Io 80 or 70 µercenI as IIe nar-
keI grovs. "We've goI Io IIgII Lack and recaµIure our rIgII-
IuI sIare,¨ IIey say.
TIe rIgIIIuI sIare oI a IeadIng Lrand Is never nore IIan
50 µercenI. TIere's aIvays roon Ior a second Lrand and a
µasseI oI Iesser Lrands. InsIead oI IIgIIIng conµeIIIIve
Lrands, a Ieader sIouId IIgII conµeIIIIve caIegorIes.
"Take IIe Lus,¨ caIegory Ieader GreyIound once saId,
"and Ieave IIe drIvIng Io us.¨
"Take Ione your neaIs Iron LaIZI's,¨ IIe neaI-narkeI caI-
egory Ieader couId say, "and Ieave IIe cookIng Io us.¨
ConIrary Io µoµuIar LeIIeI, vIaI vouId IeIµ LaIZI's (and
every caIegory µIoneer) Is conµeIIIIon. Lven IIougI IIe
Ieader's narkeI sIare nIgII decIIne, IIe rIse oI conµeIIIIve
Lrands can sIInuIaIe consuner InIeresI In IIe caIegory.
One oI PoIaroId's LIggesI nIsIakes vas IorcIng Kodak
ouI oI IIe InsIanI-µIoIograµIy narkeI. AIIIougI II von a
Iev nIIIIon In IIs IavsuII, PoIaroId eIIecIIveIy renoved a
conµeIIIor IIaI couId Iave greaIIy exµanded IIe narkeI. (A
Coke/PeµsI adverIIsIng var LeneIIIs LoII Lrands. II aIIracIs
nedIa aIIenIIon, vIIcI exµands IIe consuner's InIeresI In
IIe coIa caIegory.)
Years ago, 1oInson & 1oInson, IIe IeadIng Lrand oI
LaLy sIanµoo, nounIed a najor narkeIIng canµaIgn Io
seII IIe nerIIs oI IIs sIanµoo Io aduIIs. "You vasI your IaIr
every day, you need a nIId sIanµoo. And vIaI sIanµoo
couId Le nIIder IIan a LaLy sIanµoo?¨
BrIIIIanI. AI one µoInI 1oInson & 1oInson LaLy sIan-
µoo Lecane IIe nunLer-one Lrand oI aduII sIanµoo. II
oIIer LaLy sIanµoo Lrands Iad junµed on IIe aduII Land-
vagon, saIes nIgII Iave gone even IIgIer.
UnIorIunaIeIy Ior 1oInson & 1oInson, IIere ucrc no
oIIer najor LaLy sIanµoo Lrands.
LeadIng Lrands sIouId µronoIe IIe caIegory, noI IIe
Lrand.
1PL LAW 0I 1PL UA1LU0PY 43
44
TIe nosI InµorIanI LrandIng decIsIon you vIII ever nake Is
vIaI Io nane your µroducI or servIce. Because In IIe Iong
run a Lrand Is noIIIng nore IIan a nane.
Don'I conIuse vIaI nakes a Lrand successIuI In IIe
sIorI Iern vIII vIaI nakes a Lrand successIuI In IIe Iong
Iern.
In IIe sIorI Iern, a Lrand needs a unIque Idea or con-
ceµI Io survIve. II needs Io Le IIrsI In a nev caIegory. II
needs Io ovn a vord In IIe nInd.
BuI In IIe Iong Iern, IIe unIque Idea or conceµI dIsaµ-
µears. AII IIaI Is IeII Is IIe dIIIerence LeIveen your Lrand
nane and IIe Lrand nanes oI your conµeIIIors.
Xerox vas IIe IIrsI µIaIn-µaµer coµIer. TIIs unIque Idea
LuIII IIe µoverIuI Xerox Lrand In IIe nInd. BuI Ioday aII
coµIers are µIaIn-µaµer coµIers. TIe dIIIerence LeIveen
Lrands Is noI In IIe µroducIs, LuI In IIe µroducI nanes. Or
raIIer IIe µerceµIIon oI IIe nanes.
In IIe LegInnIng II vas easy Io seII a Xerox 914 coµIer.
AII you Iad Io do vas sIov IIe dIIIerence LeIveen a Xerox
coµy and an ordInary coµy. TIe Xerox coµy vas cIeaner,
sIarµer, and easIer Io read. TIe µaµer Iay IIaI, IeII LeIIer,
and vas nucI easIer Io IandIe and sorI.
9 1 R£ L AW 0F 1 R£ NAM£
l n t he l ong r un a br and l s not hl ng
mor e t han a name.
Today IIose dIIIerences are gone, LuI Xerox Is sIIII IIe
LesI Lrand Ly Iar In IIe coµIer IIeId. One reason Is IIe nane
IIseII.
II's sIorI, unIque, and connoIes IIgI IecInoIogy. TIe
nosI vaIuaLIe asseI oI IIe Xerox CorµoraIIon Is IIe Xerox
nane IIseII.
YeI narkeIers oIIen dIsµarage IIe InµorIance oI IIe
nane. "WIaI reaIIy counIs Is IIe µroducI IIseII and IIe Len-
eIIIs IIe µroducI µrovIdes Io our cusIoners and µrosµecIs.¨
So IIey cone uµ vIII generIc nanes IIke Paµer MasIer.
"WIaI does a nane IIke Xerox nean anyIov? NoIIIng. A
nane IIke Paµer MasIer, on IIe oIIer Iand, IeIµs us con-
nunIcaIe IIe LeneIIIs oI a LeIIer coµIer.¨
Lven vorse, IIey InIroduce IIe nev Lrand as a IIne
exIensIon. "NoLody Ias ever Ieard oI Xerox, a nane IIaI
soneLody jusI InvenIed. On IIe oIIer Iand our IIrn, IIe
HaIoId Conµany, vas Iounded In 1906. We Iave IIousands
oI cusIoners and a good reµuIaIIon. LeI's caII our nev µIaIn-
µaµer coµIer IIe HaIoId Paµer MasIer.¨
"WeII,¨ you nIgII Le IIInkIng, "I vouId never nake a nIs-
Iake IIke IIaI. I vouId never caII a nev µroducI vIII as nucI
µoIenIIaI as IIe 914 coµIer IIe 'HaIoId Paµer MasIer.' ¨
In reIrosµecI, no. In IuIuresµecI, nayLe you vouId. AI
IeasI IIe vasI najorIIy oI IIe conµanIes ve Iave vorked
vIII aInosI aIvays µreIer IIne-exIended generIc nanes Io
unIque nev Lrand nanes.
On a gIoLaI scaIe, IIIs Is IIe LIggesI Issue In IIe LusIness
connunIIy. ConµanIes are dIvIded InIo Ivo canµs: IIose
vIo LeIIeve IIaI IIe essence oI LusIness success Is In IIe con-
IInuIng deveIoµnenI oI suµerIor µroducIs and servIces, and
IIose vIo LeIIeve In LrandIng. TIe µroducI versus IIe Lrand.
TIe µroducI canµ donInaIes IIe narkeIIng scene. "TIe
Lrand nane doesn'I naIIer. WIaI counIs Is Iov IIe µroducI
µerIorns.¨
As µrooI oI IIIs µrIncIµIe, µroducI canµers are quIck Io
1PL LAW 0I 1PL NAML 45
reduce IIe argunenI Io aLsurdIIy. "II IIe µroducI Is no
good, IIe µroducI vIII IaII regardIess oI vIeIIer IIe µroducI
Ias a good Lrand nane or noI.¨
Is a Xerox coµIer LeIIer IIan a Canon coµIer? Hov does
a RIcoI coµIer conµare vIII a SIarµ coµIer?
Have you ever LougII a coµIer? WIIcI Lrand oI coµIer Is
no good? IorgeI coµIers. WIIcI Lrands oI any µroducIs are
no good?
Sure, sone µeoµIe vIII dunµ on sone Lrands. TIey
nIgII even say IIIngs IIke "I'd never Luy a 1aguar.¨ BuI
IIese oµInIons are seIdon unIversaI.
TIe no-good µroducI Is IIe red IerrIng oI narkeIIng. II
Is consIanIIy LeIng used Io jusIIIy IIe no-Lrand sIraIegIes oI
nosI conµanIes.
We don'I nean IIIeraIIy a no-Lrand sIraIegy. A conµany
nIgII ovn Lrands IIaI nIgII Le caIIed Lrands Iron a IegaI
µoInI oI vIev In IIe sense IIaI IIeIr nanes are regIsIered
Iradenarks. BuI IIe conµany's sIraIegIes are Lased on
LuIIdIng IIe LeIIer µroducI or servIce, and IIe Lrand nanes
II uses Io acconµany IIese µroducIs Iave IIIIIe µover In IIe
µrosµecI's nInd.
ProducI canµers donInaIe IIe LasI AsIa econony. VIr-
IuaIIy every AsIan conµany uses a negaLrand, nasIer-
Lrand, or IIne-exIensIon sIraIegy.
WIaI's a MIIsuLIsII? SIxIeen oI IIe one Iundred IargesI
1aµanese conµanIes narkeI µroducIs and servIces under
IIe MIIsuLIsII nane. LveryIIIng Iron auIonoLIIes Io senI-
conducIors Io consuner eIecIronIcs. Iron sµace equIµnenI
Io IransµorI sysIens.
WIaI's a MaIsusIIIa? Sane µroLIen as MIIsuLIsII. LIgII
oI IIe one Iundred IargesI 1aµanese conµanIes narkeI µrod-
ucIs and servIces under IIe MaIsusIIIa nane. LveryIIIng
Iron eIecIrIc equIµnenI Io eIecIronIc µroducIs and conµo-
nenIs. Iron LaIIerIes Io reIrIgeraIIon equIµnenI.
1PL LAW 0I 1PL NAML 47
WIaI's a MIIsuI? Sane µroLIen as MaIsusIIIa. LIgII oI
IIe one Iundred IargesI 1aµanese conµanIes narkeI µrod-
ucIs and servIces under IIe MIIsuI nane.
Conµare 1aµan vIII IIe UnIIed SIaIes. In a recenI year,
IIe Ioµ Iundred conµanIes In IIe UnIIed SIaIes Iad saIes oI
S3.2 IrIIIIon. In IIe sane year, IIe Ioµ Iundred conµanIes In
1aµan Iad saIes oI S2.6 IrIIIIon. NoI IIaI nucI dIIIerence.
TIe reaI dIIIerence Is In µroIIIs. TIe one Iundred AnerI-
can conµanIes Iad µroIIIs on average oI 6.2 µercenI oI
saIes. TIe one Iundred 1aµanese conµanIes Iad µroIIIs on
average oI jusI 0.8 µercenI oI saIes.
TIaI 0.8 µercenI Is IIe average neI µroIII In 1aµan. WIII
so nany conµanIes cIose Io IIe Lreak-even µoInI, you can
Le sure IIaI nany are IosIng noney on a reguIar LasIs.
TIe AsIan µracIIce oI IIeIdIng a vIde varIeIy oI µroducIs
under IIe sane Lrand nane Ias dravn IavoraLIe connenIs
Iron nany LusIness vrIIers vIo don'I aIvays Iook under
IIe IInancIaI covers Io IInd IIe reaI sIory.
Korea Is In even vorse sIaµe. In a recenI year, IIe sIxIy-
IIree IargesI Korean conµanIes Iad saIes oI S409 LIIIIon,
LuI Iad a conLIned neI Ioss oI 0.4 µercenI oI saIes.
Take HyundaI, Ior exanµIe. TIIs S71 LIIIIon Korean
c/acbo/ Lrags aLouI a "cIIµs Io sIIµs¨ sIraIegy. HyundaI
nakes nIcroµrocessors, IeIeconnunIcaIIons saIeIIIIes, µas-
senger cars, connercIaI veIIcIes, suLvays, IIgI-sµeed
IraIns, Iurnkey engIneerIng and consIrucIIon µrojecIs, suµer-
Iankers, and LNG carrIers, anong oIIer µroducIs. AII under
IIe HyundaI nane.
HyundaI nakes everyIIIng exceµI noney.
TIrougIouI AsIa you see IIe sane µaIIern. RanµanI
IIne exIensIons IIaI are desIroyIng Lrands. (WIen you
exµand a Lrand, you reduce IIs µover. WIen you conIracI a
Lrand, you Increase IIs µover.)
Brands are noI jusI soneIIIng Io IIInk aLouI aI narkeI-
Ing neeIIngs. Brands are IIe essence oI IIe conµany IIseII.
A conµany's very exIsIence deµends on LuIIdIng Lrands In
IIe nInd. And so does a counIry's.
LasI AsIa does noI Iave a LankIng µroLIen, a IInancIaI
µroLIen, a noneIary µroLIen, or a µoIIIIcaI µroLIen.
LasI AsIa Ias a LrandIng µroLIen.
49
1 R£ L AW 0F £ X1 £ N5I 0N5
The easl est way t o dest r oy a br and l s
t o put l t s name on ever yt hl ng.
You don'I Iave Io go Io AsIa Io IInd exanµIes oI ranµanI
IIne exIensIon.
More IIan 90 µercenI oI aII nev µroducIs InIroduced In
IIe U.S. grocery and drug Irade are IIne exIensIons. WIIcI
Is IIe najor reason IIaI sIores are cIoked vIII Lrands.
(TIere are 1,300 sIanµoos, 200 cereaIs, 250 soII drInks.)
Scanner daIa IndIcaIes IIaI nany oI IIose IIne exIen-
sIons (aI IeasI In suµernarkeIs) sII on IIe sIeII and gaIIer
dusI. ResearcI Iron Kroger suµernarkeIs In CoIunLus,
OIIo, Iound IIaI oI IIe average 23,000 IIens In a sIore,
6,700 soId In a day, 13,600 soId In a veek, and 17,500 soId In
a nonII, IeavIng 5,500 IIaI soId noIIIng In an enIIre nonII.
TIIs µIeIIora oI IIne exIensIons, In our oµInIon, Is IIe
reason Ior IIe Increased denands Iron reIaIIers Ior Irade
µronoIIons, sIoIIIng Iees, and reIurn µrIvIIeges.
AccordIng Io IndusIry exµerIs, µover Ias Leen sIIIIIng
Iron nanuIacIurers Io reIaIIers. TIe µrInary reason Is IIne
exIensIon. WIII so nany µroducIs Io cIoose Iron, reIaIIers
can Iorce nanuIacIurers Io µay Ior IIe µrIvIIege oI geIIIng
IIeIr µroducIs on IIe sIeII. II one conµany von'I µay, IIe
reIaIIer can aIvays IInd anoIIer conµany IIaI vIII.
No IndusIry Is as IIne-exIended as IIe Leer IndusIry.
BeIore IIe IauncI oI MIIIer LIIe In IIe nId-sevenIIes, IIere
10
vere IIree najor Leer Lrands: BudveIser, MIIIer HIgI LIIe,
and Coors BanqueI.
Today IIese IIree Lrands Iave Lecone IourIeen: Bud-
veIser, Bud LIgII, Bud Dry, Bud Ice, MIIIer HIgI LIIe, MIIIer
LIIe, MIIIer GenuIne DraII, MIIIer GenuIne DraII LIgII, MIIIer
Reserve, MIIIer Reserve LIgII, MIIIer Reserve AnLer AIe,
Coors, Coors LIgII, and Coors LxIra GoId.
Have IIese IourIeen Lrands Increased IIeIr narkeI
sIare over IIaI oLIaIned Ly IIe orIgInaI IIree Lrands? NoI
reaIIy. TIere Ias Leen sone Increase, LuI no greaIer IIan
vIaI you nIgII exµecI. BIg Lrands aIvays µuI µressure on
snaIIer Lrands, In IIe sane vay IIaI Coke and PeµsI Iave
eroded IIe narkeI sIare oI RoyaI Crovn CoIa.
Has IIe avaIIaLIIIIy oI IIese IourIeen varIeIIes oI Bud-
veIser, MIIIer, and Coors Increased Leer consunµIIon? No.
Per caµIIa Leer consunµIIon over IIe µasI IvenIy-IIve years
Ias Leen reIaIIveIy IIaI. (CoIa consunµIIon In IIe sane
µerIod oI IIne Ias aInosI douLIed.)
WIen your cusIoners are noI exacIIy rusIIng ouI Io Luy
your µroducI, vIy vouId you need nore Lrands Io saIIsIy
IIose cusIoners? LogIc suggesIs you vouId need Iever
Lrands.
BuI IIaI's cusIoner IogIc. ManuIacIurer IogIc Is dIIIerenI.
II voIune Is goIng novIere, IIe nanuIacIurer concIudes II
needs nore Lrands Io naInIaIn or Increase saIes. WIen a caI-
egory Is IncreasIng In saIes, IIere are oµµorIunIIIes Ior nev
Lrands, LuI nanuIacIurer IogIc suggesIs IIey're noI needed.
"We are doIng greaI, ve don'I need any nore Lrands.¨
As a resuII, IIe narkeIµIace Is IIIIed vIII IIne exIensIons
In areas vIere IIey are noI needed and Is sIarved Ior nev
Lrands In areas vIere IIey arc needed. IIgure IIaI one ouI.
AnoIIer reason Ior IIe rIse In IIne exIensIons Is a con-
µany's naIuraI InsIIncI Io coµy IIe conµeIIIIon. MIIIer's
InIroducIIon oI MIIIer LIIe vas quIckIy IoIIoved Ly ScIIIIz
LIgII, Coors LIgII, Bud LIgII, BuscI LIgII, MIcIeIoL LIgII,
and PaLsI LIgII. TIe IIgII IIsI Is endIess.
II's µaInIuI Io renenLer and so Iard Io IorgeI. AIIer IIe
InIroducIIon oI MIIIer LIIe, ve rusIed around IIe LrevIng
IndusIry vIII a sInµIe nessage: Keeµ your Leer Lrand
Iocused on IIe reguIar narkeI. TIaI vIII gIve you a Ieg uµ on
1oe SIxµack, vIo consunes an avIuI IoI oI Leer. (You can
see Iov successIuI ve vere vIII our nessage.)
WIy dId MIIIer InIroduce MIIIer ReguIar, a Lrand vIIcI
nosI Leer drInkers Iave never Ieard oI? Because AnIeuser-
BuscI Ias reguIar BudveIser, Coors Ias reguIar Coors, and
MIIIer dIdn'I Iave a reguIar Leer.
Don'I IaugI. TIIs Is IIe vay conµanIes IIInk. TIe con-
µeIIIIon nusI knov soneIIIng ve don'I knov. LeI's do IIe
sane IIIng.
One reason 90 µercenI oI aII nev Lrands are IIne exIen-
sIons Is IIaI nanagenenI neasures resuIIs vIII IIe vrong
end oI IIe ruIer. II neasures onIy IIe success oI IIe exIen-
sIon. II never neasures IIe erosIon oI IIe core Lrand.
And II's noI jusI IIe erosIon, II's aIso IIe IosI oµµorIunI-
IIes. BIg µoverIuI Lrands sIouId Iave narkeI sIares
aµµroacIIng 50 µercenI, IIke Coca-CoIa, HeInz, Poµ-TarIs,
1eII-O, and GerLer's. BuI II's Iard Io IInd nore IIan a Iev
sucI Lrands. MosI LIg Lrands Iave Leen IIne-exIended Io
deaII.
º BudveIser (aII varIeIIes conLIned) Ias aLouI 30 µercenI
oI IIe Leer narkeI.
º MarILoro (a Lrand IIaI cones In aI IeasI a dozen dIIIer-
enI varIeIIes, IncIudIng MarILoro LIgIIs, MarILoro
MedIun, and MarILoro MenIIoI) Ias onIy 30 µercenI oI
IIe cIgareIIe narkeI.
º IBM Ias onIy 6 µercenI oI IIe µersonaI conµuIer narkeI.
WIen Coors vas µIannIng IIe InIroducIIon oI Coors
LIgII, ve asked one oI IIs execuIIves, "WIere Is IIe Coors
LIgII LusIness goIng Io cone Iron?¨
1PL LAW 0I LX1LN5I 0N5 51
"OI, ve're goIng Io Iake II avay Iron BudveIser and
MIIIer.¨
WIen BudveIser vas µIannIng IIe InIroducIIon oI Bud
LIgII, IIe IargeIs vere MIIIer and Coors.
WIen MIIIer vas µIannIng IIe InIroducIIon oI MIIIer
LIIe, IIe IargeIs vere BudveIser and Coors.
MayLe IIIs conceµI Is Ioo conµIIcaIed Ior IIe average
CLO Io undersIand, LuI Isn'I IIe Coors LIgII drInker nore
IIkeIy Io cone Iron Coors? And IIe Bud LIgII drInker Iron
BudveIser? And IIe MIIIer LIIe drInker Iron MIIIer HIgI
LIIe?
CerIaInIy IIe nunLers suLsIanIIaIe IIIs concIusIon.
SInce IIe InIroducIIon oI IIe IIree IIgIIs, IIe IIree reguIar
Leer Lrands Iave aII decIIned suLsIanIIaIIy.
(And vIaI can you say aLouI Coors Rocky MounIaIn
SµrIng WaIer? Born In 1990. DIed In 1992. Mourned Ly no
one. NoI Ioo nany Leer drInkers vanIed Io sIIII Iron Leer
Io vaIer.)
TIe narkeI, you nIgII Le IIInkIng, Is sIIIIIng Iron reg-
uIar Io IIgII Leer. TIaI's Irue. BuI II's reaIIy Ivo narkeIs, and
IIe LesI vay Io caµIure IIose Ivo narkeIs Is vIII Ivo
Lrands.
BuI IIere are no najor Leer Lrands IIaI are noI IIne-
exIended, you nIgII Iave concIuded. And you're rIgII. And
vIaI a vonderIuI oµµorIunIIy Ior soneone vIo under-
sIands IIe Iavs oI LrandIng.
AcIuaIIy, unIII a sIorI IIne ago, IIere vas one: AnsIeI
LIgII, vIIcI Lecane IIe IeadIng Lrand oI InµorIed IIgII
Leer. So vIaI dId HeIneken USA, IIe InµorIer oI AnsIeI
LIgII, do nexI? II InIroduced AnsIeI BIer (reguIar Leer) and
AnsIeI 1870 Leer.
WIo drInks DIeI Coke and DIeI PeµsI? Do you reaIIy suµ-
µose IIaI IIese dIeI coIa drInkers used Io drInk Leer, gInger
aIe, or orange juIce? We don'I.
DIeI Coke cones ouI oI Coca-CoIa's IIde. Sure, IIe dIeI
coIa narkeI Ias Looned, IIanks Io IIe µuLIIc's InIeresI In
Iov-caIorIe µroducIs. BuI vIaI Coca-CoIa sIouId Iave done
vas IauncI a second Lrand.
AcIuaIIy II dId. AIIer IIe success oI DIeI PeµsI, Coca-CoIa
IauncIed TaL. And TaL vas doIng quIIe veII. TIe day DIeI
Coke vas InIroduced, TaL vas IeadIng DIeI PeµsI In narkeI
sIare Ly aLouI 32 µercenI.
Nov vIIcI Is IIe LeIIer nane: DIeI PeµsI or TaL? II IIne
exIensIon Is IIe suµerIor vay Io LuIId a Lrand, vIy dId TaL
Iead DIeI PeµsI Ly nearIy a IIIrd?
OI course, Coke nearIy kIIIed TaL Ly keeµIng NuIra-
sveeI ouI oI IIe Lrand and onIy usIng II In DIeI Coke. BuI
you can'I squeeze a good Idea ouI oI IIe narkeIµIace. TaL
sIIII Iangs In IIere vIII aInosI no µronoIIonaI suµµorI.
WIen IIe Iov-IaI craze III IIe cookIe narkeI, aInosI
every Lrand rusIed ouI vIII a IIne-exIended versIon oI IIs
reguIar cookIe. As a naIIer oI IacI, IIe IIrsI IaI-Iree cookIe
and earIy Ieader vas NaLIsco's IaI Iree IIg NevIons.
NaLIsco aIso IauncIed a nev Lrand oI IaI-Iree cookIe
caIIed SnackWeII's. IaI Iree IIg NevIons vere onIy a nod-
esI success, vIIIe SnackWeII's Lecane IIe sevenII-IargesI-
seIIIng grocery IIen, rIgII LeIInd DIeI Coke.
So vIaI dId SnackWeII's do nexI? You aIready knov IIe
ansver Io IIaI quesIIon. PuI IIs nane on everyIIIng exceµI
IIe kIIcIen sInk. NaIuraIIy, SnackWeII's saIes µronµIIy
µIunneIed.
TIe Issue Is cIear. II's IIe dIIIerence LeIveen LuIIdIng
Lrands and nIIkIng Lrands. MosI nanagers vanI Io nIIk.
"Hov Iar can ve exIend IIe Lrand? LeI's sµend sone serIous
researcI noney and IInd ouI.¨
SIerIIng Drug vas a LIg adverIIser and a LIg Luyer oI
researcI. IIs LIg Lrand vas Bayer asµIrIn, LuI asµIrIn vas
IosIng ouI Io aceIanInoµIen (TyIenoI) and ILuµroIen
(AdvII).
So SIerIIng IauncIed a S116-nIIIIon adverIIsIng and
narkeIIng µrogran Io InIroduce a seIecIIon oI IIve "asµIrIn-
Iree¨ µroducIs. TIe Bayer SeIecI IIne IncIuded IeadacIe-
µaIn reIIeI, reguIar µaIn reIIeI, nIgIIIIne µaIn reIIeI, sInus-
µaIn reIIeI, and a nensIruaI reIIeI IornuIaIIon, aII oI vIIcI
conIaIned eIIIer aceIanInoµIen or ILuµroIen as IIe core
IngredIenI.
ResuIIs vere µaInIuI. TIe IIrsI year Bayer SeIecI soId
S26 nIIIIon vorII oI µaIn reIIevers In a S2.5 LIIIIon narkeI,
or aLouI 1 µercenI oI IIe narkeI. Lven vorse, IIe saIes oI
reguIar Bayer asµIrIn keµI IaIIIng aI aLouI 10 µercenI a year.
WIy Luy Bayer asµIrIn II IIe nanuIacIurer Is IeIIIng you
IIaI IIs "seIecI¨ µroducIs are LeIIer Lecause IIey are
"asµIrIn-Iree¨?
Are consuners sIuµId or noI?
Many nanuIacIurers are IIeIr ovn vorsI enenIes. WIaI
are IIne exIensIons IIke /i¸//, c/car, /ca///y, and ja/-jrcc acIuaIIy
IeIIIng you? TIaI IIe reguIar µroducIs are noI good Ior you.
º HeInz LIgII keIcIuµ? Don'I you suµµose IIIs Ieads cus-
Ioners Io drav IIe concIusIon IIaI keIcIuµ Is Ioaded
vIII caIorIes? (Today, saIsa ouIseIIs keIcIuµ. As nIgII
IoIIovs day, ve are sure Io see In IIe IuIure a Lrand
caIIed Pace LIgII saIsa.)
º HeIInann's LIgII nayonnaIse? Sane quesIIon.
º CanµLeII's HeaIIIy RequesI souµ? ReguIar souµ Is
unIeaIIIy?
º CrysIaI PeµsI? WIaI Is vrong vIII IIe coIor oI reguIar
PeµsI?
SIouId LvIan IauncI SuIIaIe-Iree LvIan sµrIng vaIer?
(CIeck IIe IaLeI, IIere are 10 ng oI suIIaIes In a IIIer oI reg-
uIar LvIan. TIere are µroLaLIy µeoµIe ouI IIere vIo vouId
IIke a suIIaIe-Iree versIon oI IIe Lrand.)
LeI sIeeµIng Lrands IIe. BeIore you IauncI your nexI IIne
exIensIon, ask yourseII vIaI cusIoners oI your currenI
Lrand vIII IIInk vIen IIey see IIe IIne exIensIon.
II IIe narkeI Is novIng ouI Iron under you, sIay vIere
you are and IauncI a second Lrand. II II's noI, sIay vIere
you are and conIInue LuIIdIng your Lrand.
11

Greed oIIen geIs In IIe vay oI connon sense. TIe donI-
nanI Lrand In a caIegory oIIen IrIes Io Lroaden IIs aµµeaI In
order Io caµIure every IasI LII oI narkeI sIare.
II ve served Leer and vIne, IIe CLO oI McDonaIds
once saId, ve nIgII evenIuaIIy Iave 100 µercenI oI IIe
Iood-servIce narkeI.
UnIIkeIy. TIe Iav oI exµansIon suggesIs IIe oµµosIIe.
WIen you Lroaden your Lrand, you veaken II. Look vIaI
Iaµµened vIen McDonaIds IrIed Io Lroaden IIs aµµeaI Io
IIe aduII narkeI vIII IIe ArcI DeIuxe sandvIcI. IIs narkeI
sIare IeII, and uIIInaIeIy II vas Iorced Io dIsconIInue IIe
µroducI.
WIIcI LrIngs us Io IIe Iav oI IeIIovsIIµ. NoI onIy
sIouId IIe donInanI Lrand IoIeraIe conµeIIIors, II sIouId
veIcone IIen. TIe LesI IIIng IIaI Iaµµened Io Coca-CoIa
vas PeµsI-CoIa. (To IIaI end IIs IronIc IIaI IIe Coca-CoIa
Conµany IougII PeµsI-CoIa In IIe courIs over IIe use oI
CoIa In IIs nane. IorIunaIeIy Ior Coke, II IosI, creaIIng a
caIegory vIIcI Ias Leen grovIng IIke gang LusIers ever
sInce.)
CIoIce sIInuIaIes denand. TIe conµeIIIIon LeIveen
Coke and PeµsI nakes cusIoners nore coIa conscIous. Per
caµIIa coIa consunµIIon goes uµ.
1 R£ L AW 0F F £ L L 0W5RI P
l n or der t o bul l d t he oat egor y, a br and
shoul d wel oome ot her br ands.
RenenLer, cusIoners Iave cIoIces, even vIen IIere Is
no conµeIIIIon. TIey can cIoose Io drInk Leer, vaIer, gInger
aIe, or orange juIce InsIead oI a coIa. ConµeIIIIon Increases
IIe noIse IeveI and Iends Io Increase saIes In IIe caIegory.
ConµeIIIIon aIso Lroadens IIe caIegory vIIIe aIIovIng
IIe Lrands Io sIay Iocused. II Coca-CoIa aµµeaIs Io oIder
µeoµIe and PeµsI-CoIa Io younger µeoµIe, IIe Ivo Lrands
can sIay Iocused (and µoverIuI) vIIIe aI IIe sane IIne
LroadenIng IIe narkeI.
CusIoners resµond Io conµeIIIIon Lecause cIoIce Is
seen as a najor LeneIII. II IIere Is no cIoIce, cusIoners are
susµIcIous. MayLe IIe caIegory Ias sone IIavs? MayLe IIe
µrIce Is Ioo IIgI? WIo vanIs Io Luy a Lrand II you don'I
Iave anoIIer Lrand Io conµare II vIII?
You seIdon see a LIg, grovIng, dynanIc narkeI vIIIouI
severaI najor Lrands. Take IIe oIIIce suµersIore narkeI.
TIere are IIree LIg Lrands conµeIIng IooII and naII Ior IIIs
narkeI: OIIIce DeµoI, OIIIce Max, and SIaµIes.
So eIIecIIve Ias IIIs conµeIIIIon Leen IIaI IIe nunLer
oI IndeµendenI oIIIce sIaIIonery sIores Ias decIIned Iron
aLouI 10,000 In IIe µasI decade Io 3,000 sIores Ioday.
InsIead oI veIconIng conµeIIIIon, conµanIes oIIen IeeI
IIreaIened Lecause IIey LeIIeve IIaI IuIure narkeI sIares
vIII Le Lased on IIe nerIIs oI IIe IndIvIduaI Lrands. An even
µIayIng IIeId Is noI vIaI nosI conµanIes vanI. TIey vanI
an unIaIr advanIage, a µIayIng IIeId IIIIed Io IIeIr sIde.
TIereIore, IIey IIInk, IeI's Iry Io drIve ouI conµeIIIors
LeIore IIey geI Ioo esIaLIIsIed.
In IIe µrocess, Iovever, IIey IaII vIcIIn Io IIe Iavs oI
LrandIng. LxµansIon, IIne exIensIons, and oIIer sIraIegIes
IIaI Lroaden a Lrand's aµµeaI vIII uIIInaIeIy veaken IIe
Lrand.
MarkeI sIare Is noI Lased on nerII, LuI on IIe µover oI
IIe Lrand In IIe nInd. In IIe Iong run, a Lrand Is noI neces-
sarIIy a IIgIer-quaIIIy µroducI, LuI a IIgIer-quaIIIy nane.
OI course, cusIoners can Iave Ioo nucI cIoIce. TIe
1PL LAW 0I ILLL0W5PI P 57
nore Lrands, IIe nore IIavors, IIe nore varIeIIes, IIe nore
conIusIon In IIe caIegory. And IIe Iover IIe µer caµIIa con-
sunµIIon.
Ior eacI caIegory, Ivo najor Lrands seen Io Le IdeaI.
Coca-CoIa and PeµsI-CoIa In coIa, Ior exanµIe. LIsIerIne
and Scoµe In nouIIvasI. Kodak and IujI In µIoIograµIIc
IIIn. NInIendo and PIaySIaIIon In vIdeo ganes. DuraceII
and LnergIzer In aµµIIance LaIIerIes.
WIen IIere Is Ioo nucI cIoIce, consunµIIon suIIers.
Take vIne, Ior exanµIe. In CaIIIornIa aIone, IIere are nore
IIan 1,000 vInerIes and 5,000 Lrands. \inc Spcc/a/or naga-
zIne µuLIIsIes an annuaI Issue vIII rankIngs oI sone 24,000
IndIvIduaI vInes. (II you drank a LoIIIe a day, II vouId Iake
you nore IIan sIxIy-IIve years Io run IIrougI IIe IoI. TIen
you vouId µroLaLIy Le Ioo oId Io renenLer vIIcI vIne you
IIked IIe LesI.)
WIII aII IIaI cIoIce, you nIgII IIInk IIaI AnerIcans
drInk a IoI oI vIne. BuI ve don'I. TIe µer caµIIa consunµ-
IIon oI vIne In IIe UnIIed SIaIes Is one IenII IIaI oI Irance
and one nInII IIaI oI IIaIy. Lven IIe average Gernan drInks
IIree and a IaII IInes as nucI vIne as IIe average AnerI-
can.
WIII so nany snaII vIneyards, so nany dIIIerenI varI-
eIIes, and a IandIuI oI connoIsseurs vIII IndIvIduaI oµIn-
Ions aLouI IasIe, IIe vIne IndusIry Ias yeI Io see IIe rIse oI
any najor Lrand. "TIaI's jusI IIe vay vIne Is,¨ say IndusIry
exµerIs. "WIne needs nuIIIµIe Lrands, nuIIIµIe vInIages,
nuIIIµIe varIeIIes.¨ TIe noIIo seens Io Le "every acre IIs
ovn Lrand.¨
TIaI nIgII Le IIe Iav oI vIne, LuI II's noI IIe Iav oI
LrandIng. One day sone conµany vIII do In vIne vIaI
ALsoIuI dId In vodka and 1ack DanIeI's dId In vIIskey: LuIId
a LIg, µoverIuI, vorIdvIde Lrand.
You can aIso see IIe Iav oI IeIIovsIIµ aI vork In IIe
reIaII arena. WIere one sIore nay noI nake II, severaI sIores
vIII. InsIead oI LeIng sµread ouI In every secIIon oI a cIIy,
used-car deaIers are oIIen cIusIered aIong "auIonoIIve rov.¨
WIere one deaIer nIgII Iave Iad IrouLIe survIvIng, a Iand-
IuI oI deaIers are µrosµerIng. TIaI's IIe µover oI IeIIovsIIµ.
In any Iarge cIIy, you can see IIe Iav oI IeIIovsIIµ In
acIIon. SInIIar LusInesses Iend Io congregaIe In IIe sane
neIgILorIood. In Nev York CIIy, Ior exanµIe, you vIII IInd
IIe garnenI dIsIrIcI on SevenII Avenue, IIe IInancIaI dIsIrIcI
on WaII SIreeI, IIe dIanond dIsIrIcI on IorIy-sevenII SIreeI,
adverIIsIng agencIes on MadIson Avenue, IIeaIers on Broad-
vay, IIene resIauranIs on WesI IIIIy-sevenII SIreeI, and arI
gaIIerIes In SoHo.
II nakes sense Ior sInIIar LusInesses Io Le IocaIed cIose
IogeIIer. IIrsI, a grouµ oI sInIIar LusInesses aIIracI nore
cusIoners Io an area Lecause IIere Is nore IIan one sIore
Io sIoµ aI. Second, cusIoners can easIIy conµarIson sIoµ
anong sIores. CusIoners IeeI IIaI vIIIouI conµeIIIIon,
conµanIes nay Iake advanIage oI IIen and rIµ IIen oII.
(TIe aIrIInes Iave a reµuIaIIon Ior doIng IIIs.) TIIrd, IavIng
IIe conµeIIIIon nearLy aIIovs conµanIes Io keeµ an eye on
eacI oIIer. ConµanIes are aIvays anxIous Io keeµ Irack oI
Irends In IIeIr IndusIrIes.
PIaneI HoIIyvood dIscovered IIaI one oI IIe LesI Ioca-
IIons In a cIIy Ior IIs resIauranI vas across IIe sIreeI Iron
IIs arcI rIvaI, Hard Rock CaIe. PeoµIe aIIracIed Io IIIs Iyµe
oI IIene resIauranI are aIready dravn Io IIe area IIanks Io
Hard Rock and can Le enIIced Io eaI aI a PIaneI HoIIyvood
across IIe sIreeI. SInIIarIy, IIe LesI IocaIIon Ior a Burger
KIng IrancIIse Is oIIen across IIe sIreeI Iron a McDonaId's
resIauranI.
Take Branson, MIssourI, vIIcI LIIIs IIseII as IIe "nusIc
sIov caµIIaI oI IIe vorId.¨ WIere one nusIc IIeaIer In a
Iovn oI 3,706 µeoµIe nIgII Le Iard-µressed Io nake ends
neeI, IorIy nusIc IIeaIers are veII and µrosµerIng. II's IIe
µover oI IeIIovsIIµ.
Your Lrand sIouId veIcone IeaIIIy conµeIIIIon. II
oIIen LrIngs nore cusIoners InIo IIe caIegory.
1PL LAW 0I ILLL0W5PI P 59
And renenLer, no Lrand can ever ovn IIe enIIre narkeI
(unIess oI course II Is a governnenI-sancIIoned nonoµoIy).
ReaIIsIIcaIIy, Iov nucI narkeI sIare can IIe donInanI
Lrand acIIeve? Our researcI IndIcaIes IIaI 50 µercenI Is
aLouI IIe uµµer IInII.
IederaI Lxµress Ias a 45 µercenI sIare oI IIe donesIIc
overnIgII µackage deIIvery narkeI. Coca-CoIa Ias a 50 µer-
cenI sIare oI IIe donesIIc coIa narkeI. Ior narkeI sIares
IIgIer IIan 50 µercenI, you need Io consIder IauncIIng
nuIIIµIe Lrands. NoI jusI IIne exIensIons, LuI seµaraIe IndI-
vIduaI Lrands. (See CIaµIer 15, "TIe Lav oI SILIIngs.¨)
HIsIory oIIen Ieads us asIray. In IIe µasI, sone oI IIe nosI
successIuI conµanIes (and Lrands) Iad generIc nanes.
º GeneraI MoIors, GeneraI LIecIrIc, GeneraI MIIIs, Gen-
eraI Ioods, GeneraI DynanIcs.
º SIandard OII, SIandard Brands, SIandard RegIsIer Con-
µany, SIandard ProducIs Conµany.
º AnerIcan AIrIInes, AnerIcan MoIors, AnerIcan Broad-
casIIng Conµany, AnerIcan TeIeµIone & TeIegraµI,
AnerIcan Lxµress, AIunInun Conµany oI AnerIca.
º NaIIonaI BroadcasIIng Conµany, NaIIonaI BIscuII Con-
µany, NaIIonaI Car RenIaI.
º InIernaIIonaI BusIness MacIInes, InIernaIIonaI Paµer,
InIernaIIonaI HarvesIer, InIernaIIonaI NIckeI.
Sone conµanIes Iave even IrIed Io conLIne Ivo or nore
oI IIese IoIIy "aII IIIngs Io aII µeoµIe¨ nanes. TIe AnerIcan
GeneraI LIIe and AccIdenI Insurance Conµany, Ior exanµIe.
(We're surµrIsed IIaI noLody IIougII Io use "InIernaIIonaI
GeneraI AnerIcan SIandard ProducIs Conµany.¨)
In IIe µasI, conµanIes IIougII IIey needed LIg, scoµy,
61
1 R£ L AW 0F 1 R£ 6£ N£ RI C
0ne of t he f ast est r out es t o f al l ur e
l s gl vl ng a br and a gener l o name.
12
generIc nanes. And IIe Lrand nane vas aInosI aIvays IIe
conµany nane. (Today sucI an aµµroacI nIgII µroduce
IIe GeneraI GIoLaI Corµ.) And yeI, IIIs nanIng sIraIegy
cIearIy vorked. WIy?
Years ago IIe narkeI vas IIooded vIII connodIIIes
µroduced Ly IIousands oI snaII conµanIes oµeraIIng In a
sIngIe Iovn or regIon. TIe LIg, scoµy, generIc nanes µuI
IIese snaII conµeIIIors In IIeIr µIace.
Many oI IIese GeneraI, SIandard, AnerIcan, NaIIonaI,
and InIernaIIonaI conµanIes are sIIII oµeraIIng (and are sIIII
successIuI) Ioday. Sone oI IIen are anong IIe IargesI and
LesI-knovn Lrands In IIe vorId.
TIe IacI Is, IIese Lrands/conµanIes are successIuI In
sµIIe oI IIeIr nanes.
We LeIIeve IIe µrInary reason Ior IIese corµoraIe suc-
cesses Is IIe sIraIegy and noI IIe nane.
º NaIIonaI BIscuII Conµany vas IIe IIrsI naIIonaI LIscuII
conµany.
º GeneraI LIecIrIc vas IIe IIrsI generaI eIecIrIc conµany.
º InIernaIIonaI HarvesIer vas IIe IIrsI InIernaIIonaI Iar-
vesIer conµany.
BeIng IIrsI In IIe narkeIµIace gave IIese conµanIes
sucI a Iead sIarI and sucI a µoverIuI µresence In IIe nar-
keI IIaI II overcane IIe IIaLIIIIy oI IIeIr generIc nanes.
WIIness IIe sIIII Iron generIc (or generaI) nanes Io sµe-
cIIIc nanes: NaLIsco, AIcoa, NBC, GL, ABC, IBM.
TIere are nany naIIonaI LIscuII conµanIes, LuI onIy
one NaLIsco. TIere are nany aIunInun conµanIes In
AnerIca, LuI onIy one AIcoa. TIere are nany naIIonaI
LroadcasIIng conµanIes, LuI onIy one NBC.
OI course, ve're sure IIaI NBC aIvays consIdered IIseII
IIe NaIIonaI BroadcasIIng Conµany raIIer IIan a "naIIonaI
LroadcasIIng conµany.¨
And IIereIn IIes IIe LIggesI nIsIake nade vIen µIckIng
Lrand nanes. TIe µrocess µroceeds vIsuaIIy raIIer IIan ver-
LaIIy.
LxecuIIves oIIen µass around IIe Loardroon IogoIyµes
oI µrosµecIIve Lrand nanes, seI In Iyµe and nounIed on
Ioancore.
BuI IIe vasI najorIIy oI Lrand connunIcaIIon Iakes
µIace verLaIIy, noI vIsuaIIy. TIe average µerson sµends nIne
IInes as nucI IIne IIsIenIng Io radIo and IeIevIsIon IIan Ie
or sIe does readIng nagazInes and nevsµaµers.
IurIIernore, In order Io gIve neanIng Io IIe µrInIed
vord, IIe nInd µrocesses sounds. TIe µrInIed vord Is sec-
ondary Io IIe sound IIaI II generaIes In IIe reader's nInd.
So Iov can a reader dIIIerenIIaIe IIe sound oI IIe vord
"generaI¨ Iron IIe vord "GeneraI¨? WIII greaI dIIIIcuIIy.
TIe µroLIen vIII a generIc Lrand nane Is IIs InaLIIIIy
Io dIIIerenIIaIe IIe Lrand Iron IIe conµeIIIIon. In IIe Iood
suµµIenenI IIeId, Ior exanµIe, a Lrand caIIed NaIure's
Resource Is sµendIng S5 nIIIIon a year Io Lreak InIo IIIs
grovIng narkeI.
On IIe sIeIves oI your IocaI GNC sIore you'II aIso IInd
IIe IoIIovIng µroducIs:
º NaIure's Ansver º NaIure's BesI
º NaIure's BounIy º NaIure's GaIe
º NaIure's HerL º NaIure's PIus
º NaIure's SecreI º NaIure's SunsIIne ProducIs
º NaIure's Way º NaIure's Works
WIII any oI IIese generIc Lrands Lreak InIo IIe nInd and
Lecone a najor Lrand? UnIIkeIy.
Lven IIe Iegendary Lee Iacocca, IaIIer oI IIe MusIang
and Iorner CLO oI CIrysIer CorµoraIIon (Ivo µoverIuI
nane Lrands), Iook IIe generIc road vIen Ie IauncIed IIs
1PL LAW 0I 1PL ULNLPI U 63
ovn conµany, LV GIoLaI MoIors. LV, Ior eIecIrIc veIIcIe, Is
InIroducIng a S995 eIecIrIc LIcycIe. We can'I see cusIoners
askIng Ior an "LV GIoLaI LIke.¨
WIaI aLouI a Lrand nane, Lee? LIke ScIvInn or Trek or
CannondaIe?
TIe IIgI-IecI IIeId Is Ioaded vIII generIc nanes IIaI are
unIIkeIy Io generaIe nucI In IIe vay oI Lrand IdenIIIy.
SecurIIy SoIIvare SysIens, Pover and DaIa TecInoIogy,
Server TecInoIogy. Conµare IIose nanes Io MIcrosoII, DeII,
and InIeI, and you can see IIe µover oI a Lrand nane over a
generIc nane.
McAIee AssocIaIes, IIe IeadIng naker oI anIIvIrus soII-
vare, recenIIy LougII NeIvork GeneraI Ior S1.3 LIIIIon.
Guess vIaI II cIose Ior a nev nane?
II droµµed McAIee, IIe onIy "nane nane¨ II ovned In
Iavor oI Ivo generIcs: NeIvork AssocIaIes. II knev II Iad a
nane µroLIen so II sµenI S10 nIIIIon on IIe conµany's IIrsI
IeIevIsIon canµaIgn, IncIudIng nore IIan a nIIIIon Ior a
Suµer BovI sµoI.
As IIose IIIrIy seconds IIev Ly, dId IIe vIever Iear IIe
vords "neIvork assocIaIes¨ or "NeIvork AssocIaIes¨?
GenerIc nanes dIsaµµear InIo IIe eIIer. OnIy Lrand nanes
regIsIer In IIe nInd.
1usI Ior Men IaIr coIorIng Is aIso sµendIng a IorIune Iry-
Ing Io LuIId IIs Lrand. AIIer vaIcIIng a IeIevIsIon conner-
cIaI, IIe gray IaIred-nan nIgII IIInk Io IInseII, "WIaI Is
IIe nane oI IIaI IaIr-coIorIng µroducI IIaI's jusI Ior nen?¨
NoLody Is sayIng IIaI you sIouId aIvays InvenI a nev
nane Ior an esIaLIIsIed Lrand, aIIIougI IIaI's oIIen a good
sIraIegy Ior a µroducI or servIce IIaI Is IruIy revoIuIIonary
and unIIkeIy Io Le coµIed Ior sone IIne. Kodak and Xerox
are IIe usuaI susµecIs.
WIaI you sIouId generaIIy do Is Iake a reguIar vord and
use II ouI oI conIexI Io connoIe IIe µrInary aIIrILuIe oI your
Lrand.
BIockLusIer VIdeo Is a µoverIuI Lrand nane. GeneraI
VIdeo RenIaI Is noI.
HoIIyvood Lrags aLouI IIs "LIockLusIers,¨ so BIock-
LusIer VIdeo Lorroved IIe Iern Io suggesI II renIs IIe LesI
novIes.
BudgeI Is a µoverIuI Lrand nane Ior a car-renIaI serv-
Ice. TIe vord suggesIs IIaI II renIs cars aI Iov µrIces. Lov-
CosI Car RenIaI Is noI a good Lrand nane.
ServIce MercIandIse Is a S4 LIIIIon conµany vIII a
GeneraI VIdeo nane. II's Ioo Lad. TIe conµany's conceµI Is
conµeIIIng, LuI IIs generIc nane doons IIe Lrand Io reIa-
IIve oLscurIIy.
TIe Luxury Car Conµany vouId Iave gone novIere, In
our oµInIon. BuI ToyoIa Iook IIe vord "Iuxury,¨ Iveaked a
Iev IeIIers, and cane uµ vIII Lexus, a suµerL Lrand nane
Ior a 1aµanese Iuxury car.
Sone genIus Iook IIe nane oI a sµecIIIc oIIIce µroducI
and used II ouI oI conIexI Io cone uµ vIII SIaµIes, an eIIec-
IIve Lrand nane Ior an oIIIce-suµµIIes conµany. TIe douLIe
enIendre Is µarIIcuIarIy µoverIuI. "Buy your oIIIce sIaµIes
Iron SIaµIes.¨
SoneIInes you can carve ouI a Lrand nane Ly cuIIIng a
generIc In IaII. TIIs oIIen Ias IIe IurIIer advanIage oI cre-
aIIng a sIorI, dIsIIncIIve, easy-Io-renenLer Lrand nane.
InIeIIIgenI CIIµ Conµany Is a Iousy Lrand nane, LuI InIeI
Corµ. Is IerrIIIc.
"InIeIIIgenI CIIµ InsIde¨ Is a Iousy adverIIsIng sIogan. AII
conµuIers Iave InIeIIIgenI cIIµs InsIde, LuI onIy IIe Ioµ-oI-
IIe-IIne µroducIs Iave "InIeI InsIde.¨
One reason IIaI IIne exIensIons Iare so µoorIy In IIe nar-
keIµIace Is IIaI IIey generaIIy conLIne a Lrand nane vIII a
generIc nane. TIe veak generIc nane IaIIs Io creaIe IIe seµ-
araIe IdenIIIy IIaI Is IIe essence oI IIe LrandIng µrocess.
"MIcIeIoL LIgII¨ Is µerceIved In IIe nInd as "MIcIeIoL
IIgII,¨ a vaIered-dovn versIon oI IIe reguIar Leer.
1PL LAW 0I 1PL ULNLPI U 65
TIe nInd doesn'I deaI In IeIIers or vords. II deaIs In
sounds. You can caµIIaIIze aII you vanI, LuI a generIc vord
Is a generIc vord In IIe nInd, no naIIer Iov you sµeII II.
SoneIInes a conµany geIs Iucky. TIe IIne exIensIon
VaseIIne InIensIve Care skIn IoIIon Lecane IIe nunLer-one
Iand IoIIon Lrand Lecause IIe cusIoner InadverIenIIy
IreaIed InIensIve Care as a Lrand nane, noI a descrIµIIve
generIc nane.
Hov do ve knov IIIs Io Le Irue? Because cusIoners caII
IIe µroducI InIensIve Care. "Hand ne IIe InIensIve Care.¨
CusIoners don'I say, "Hand ne IIe VaseIIne.¨ UnIess, oI
course, IIey vanI IIe VaseIIne.
On IIe oIIer Iand, II VaseIIne Iad IoIIoved conven-
IIonaI IIne-exIensIon IIInkIng, II vouId Iave caIIed IIe
Lrand VaseIIne Heavy-DuIy skIn IoIIon. "Hand ne IIe Heavy
DuIy¨ Is noI soneIIIng µeoµIe are IIkeIy Io say. "Heavy duIy¨
Is a generIc Iern.
So vIy dIdn'I CIeseLrougI-Pond's jusI caII IIe Lrand
InIensIve Care In IIe IIrsI µIace? Good quesIIon and good
IIInkIng. You're ready Ior IIe nexI Iav.
67
1 R£ L AW 0F 1 R£ C0MPANY
Br ands ar e br ands. Companl es ar e
oompanl es. Ther e l s a dl f f er enoe.
NoIIIng causes as nucI conIusIon In IIe LrandIng µrocess
as IIe µroµer use oI a conµany nane.
º SIouId IIe conµany nane donInaIe IIe Lrand nane?
Ior exanµIe: MIcrosoII donInaIes MIcrosoII Word.
º SIouId IIe Lrand nane donInaIe IIe conµany nane?
Ior exanµIe: TIde donInaIes ProcIer & GanLIe.
º Or sIouId IIey Le gIven equaI veIgII? Ior exanµIe:
GIIIeIIe Sensor.
TIe Issue oI Iov Io use a conµany nane Is aI IIe sane
IIne sInµIe and conµIIcaIed. SInµIe, Lecause IIe Iavs are
so cIear-cuI. ConµIIcaIed, Lecause nosI conµanIes do noI
IoIIov IIe sInµIe Iavs oI LrandIng and end uµ vIII a sys-
Ien IIaI deIIes IogIc and resuIIs In endIess Lrand-versus-
conµany deLaIes.
Brand nanes sIouId aInosI aIvays Iake µrecedence
over conµany nanes. Consuners Luy Lrands, IIey don'I
Luy conµanIes. So vIen a conµany nane Is used aIone as a
Lrand nane (GL, Coca-CoIa, IBM, Xerox, InIeI), cusIoners
see IIese nanes as Lrands.
13
WIen you conLIne a conµany nane vIII a Lrand nane
In a cIear and consIsIenI IasIIon, IIe Lrand nane Is IIe µrI-
nary nane and IIe conµany nane Is seen as IIe secondary
nane: GeneraI MoIors CadIIIac.
SInµIe oLservaIIon vIII denonsIraIe Iov seIdon cus-
Ioners vIII use a conµany nane . . . vIen IIey Iave Leen
gIven a vIaLIe Lrand nane Io use. "Hov do you IIke ny nev
CadIIIac?¨
NoLody says, "Hov do you IIke ny nev GeneraI MoIors
Iuxury car?¨
WIII IIIs caveaI In nInd, a conµany Is a conµany as Iong
as IIe nane Is noI LeIng used as a Lrand. A Lrand Is a Lrand.
TIere Is a dIIIerence. A conµany Is IIe organIzaIIon IIaI nan-
uIacIures or µroduces IIe Lrand. II Is noI IIe Lrand IIseII.
MIcrosoII Isn'I Word, ProcIer & GanLIe Isn'I TIde. MIcrosoII
µroduces nany µroducIs, one oI vIIcI Is Word. ProcIer &
GanLIe µroduces nany µroducIs, one oI vIIcI Is TIde.
WIIIe IIIs nakes sense, II's noI usuaIIy IIe LesI LrandIng
sIraIegy. UnIess IIere are conµeIIIng reasons Io do oIIer-
vIse, IIe LesI LrandIng sIraIegy sIouId Le Io use IIe con-
µany nane as IIe Lrand nane.
TIe WD-40 Conµany µroduces IIe WD-40 Lrand. TIe
ZIµµo CorµoraIIon µroduces IIe ZIµµo Lrand. TIe Coca-
CoIa Conµany µroduces IIe Coca-CoIa Lrand. NeaI, sInµIe,
sIraIgIIIorvard, easy Io undersIand.
1. WIaI's a Coca-CoIa?
2. WIaI's a ZIµµo?
3. WIaI's a WD-40?
WIen you are a cusIoner or µrosµecI, IIe InsIanI
ansvers IIaI cone Io nInd are:
1. CoIa. 2. WIndµrooI IIgIIer. 3. LuLrIcaIIng sµray.
WIen you are an enµIoyee oI Coca-CoIa, ZIµµo, or WD-
40, on IIe oIIer Iand, IIe ansver Is usuaIIy dIIIerenI. II's IIe
nane on IIe µaycIeck. II's "ny conµany.¨
Managers are enµIoyees, Ioo. TIaI's vIy nanagenenI
Is conµany-orIenIed. And cusIoners are Lrand-orIenIed.
Does IIe consuner care vIeIIer ToyoIa, Honda, or NIs-
san nakes IIe Lexus? ProLaLIy noI. BuI IIe µresIdenI oI
ToyoIa USA cerIaInIy cares.
Does IIe cusIoner care vIeIIer NaLIsco or KraII or Kee-
LIer nakes Oreo cookIes? ProLaLIy noI. BuI IIe NaLIsco nar-
keIIng nanager IandIIng IIe Oreo Lrand cerIaInIy does.
Do you reaIIy care vIeIIer IIe µuLIIsIer oI IIIs Look
vas HarµerBusIness, SInon & ScIusIer, or McGrav-HIII?
(Do you even knov vIIIouI IookIng aI IIe sµIne?)
BuI DavId ConII does. (He Is our edIIor aI HarµerBusI-
ness. And a good one, Ioo.)
TIe vIev Iron IIe InsIde Is IoIaIIy dIIIerenI IIan IIe
vIev Iron IIe ouIsIde. Managers nusI consIanIIy renInd
IIenseIves IIaI cusIoners care onIy aLouI Lrands, noI
aLouI conµanIes.
II goes deeµer IIan IIaI. TIe Lrand Isn'I jusI IIe nane
IIe nanuIacIurer µuIs on IIe µackage. II's IIe µroducI IIseII.
To a cusIoner, Coca-CoIa Is, IIrsI and IorenosI, a dark,
sveeI, reddIsI-Lrovn IIquId. TIe Lrand nane Is IIe vord
cusIoners use Io descrILe IIaI IIquId. WIaI's InsIde IIe LoI-
IIe Is IIe nosI InµorIanI asµecI oI IIe LrandIng µrocess.
Coca-CoIa Is LrandIng IIe IIquId IIseII.
II's noI a coIa nade Ly IIe Coca-CoIa Conµany. TIe coIa
IIseII Is Coca-CoIa, IIe reaI IIIng. TIIs dIsIIncIIon Is aI IIe
IearI oI an eIIecIIve LrandIng sIraIegy.
A conµany IIaI IruIy undersIands LrandIng Iron IIe
cusIoner's µoInI oI vIev vouId Iave never InIroduced a
µroducI caIIed "Nev Coke.¨ Hov can you Iave a nev, µre-
sunaLIy LeIIer Coke? Hov can IIe reaI IIIng Iave Leen
Lad? WIy on earII vouId you ever cIange II? II's IIke InIro-
ducIng Nev God.
1PL LAW 0I 1PL U0MPANY 69
In IIe sane vay, RoIex Is noI IIe Lrand nane oI an
exµensIve sµorIs vaIcI nade Ly IIe RoIex WaIcI Conµany
LId. A RoIex Is vIaI you vraµ around your vrIsI.
º Poµ-TarIs are vIaI you µuI In IIe IoasIer.
º Band-AIds are vIaI you µuI on cuIs.
º TyIenoI Is vIaI you Iake Ior IeadacIes.
MosI Issues InvoIvIng conµany nanes versus Lrand
nanes can Le soIved Ly askIng yourseII Ivo quesIIons:
1. WIaI Is IIe nane oI IIe Lrand?
2. WIaI Is IIe nane oI IIe sIuII InsIde IIe µackagIng?
BoII nanes Iad LeIIer Le IIe sane or you Iave LIg
µroLIens.
LeI's exµIore vIaI Iaµµens vIen you use LoII IIe con-
µany nane and IIe Lrand nane on IIe µackage. LeI's Iook aI
MIcrosoII LxceI.
TIe "MIcrosoII¨ µarI oI IIe nane Is redundanI. NoLody
LuI MIcrosoII nakes LxceI soIIvare. SInce cusIoners Iend
Io sInµIIIy nanes as nucI as µossILIe, MIcrosoII LxceI
quIckIy Lecones LxceI. "LeI's Luy LxceI.¨
MIcrosoII Word Is anoIIer naIIer. "Word¨ Is a generIc
vord. IurIIernore, nany oI MIcrosoII's conµeIIIors Iave
used "vord¨ In IIeIr µroducI nanes. WordPerIecI, Word-
SIar, eIc. As a resuII, cusIoners Iend Io use IIe IuII nane oI
IIe µroducI, "MIcrosoII Word.¨ TIIs Is noI necessarIIy good
Iron IIe conµany's µoInI oI vIev. As a generaI ruIe, you
vanI your Lrand nane Io Le as sIorI and as nenoraLIe as
µossILIe. (SIorI nanes greaIIy Inµrove your vord-oI-nouII
µossILIIIIIes.)
WIen cusIoners IeeI IIey Iave Io use LoII your conµany
1PL LAW 0I 1PL U0MPANY 71
nane and your Lrand nane IogeIIer, you usuaIIy Iave a Lrand-
Ing µroLIen. (NornaIIy Lecause you used a generIc vord Ior
your Lrand nane.) Take CanµLeII's CIunky souµ, Ior exanµIe.
Is IIe µroducI CIunky souµ or cIunky souµ? CusIoners
can'I Le sure, so IIey ask Ior CanµLeII's CIunky souµ.
CanµLeII sIouId Iave used a dIIIerenI Lrand nane.
Take IIe Sony TrInIIron. Is IrInIIron a Iyµe oI caIIode-
ray IuLe or Is TrInIIron a Lrand nane Ior a IeIevIsIon seI?
CusIoners aren'I sure, so IIey ask Ior a Sony TrInIIron.
As Iar as IIe cusIoner Is concerned, IIe easIesI, sInµIesI
vay Is IIe ProcIer & GanLIe vay. Use jusI IIe Lrand nane
LoIdIy on IIe µackage and reIegaIe "TIe ProcIer & GanLIe
Conµany¨ Io IIny Iyµe aI IIe LoIIon. TIaI's Iov IIe con-
µany nane Is IandIed on BoId, CIeer, Ivory, TIde, eIc.
BuI a case can Le nade Ior IIe nIddIe vay. Sone oI
Ioday's nore soµIIsIIcaIed, dIscrInInaIIng cusIoners nIgII
IIke Io knov vIo nakes a µarIIcuIar Lrand. TIey von'I,
Iovever, use LoII nanes IogeIIer. NoLody caIIs an Acura a
"Honda Acura.¨ Or a LIncoIn a "Iord LIncoIn.¨
IurIIernore, IIere Is oIIen InIeresI In IIe Irade (vIIcI
IncIudes reIaIIers and dIsIrILuIors) aLouI IIe conµany
LeIInd a Lrand. Ior exanµIe, vIon do ve order TIde Iron?
Ior nany Lrands one ansver Is Io µuI IIe conµany
nane In snaII Iyµe aLove IIe Lrand nane. CusIoners vIo
are sIrongIy noIIvaIed Io use onIy IIe Lrand nane vIII
IardIy noIIce IIe conµany nane. YeI IIe Irade and Ioday's
nore soµIIsIIcaIed cusIoners vIII Le aLIe Io easIIy IInd IIe
nane oI IIe conµany LeIInd IIe Lrand.
TIe danger, oI course, IIes InsIde IIe corµoraIIon. WIII
IIIs LrandIng sIraIegy, you Iend Io geI InundaIed vIII sug-
gesIIons IIke, "WIy can'I ve nake IIe corµoraIe nane
Iarger? We're vasIIng aII IIese oµµorIunIIIes Io µronoIe our
sIock, Inµrove enµIoyee reIaIIonsIIµs, LuIId a LeIIer reIa-
IIonsIIµ vIII IIe Irade.¨ (On second IIougII, nayLe you
sIouId Ieave IIe conµany nane oII IIe µackage enIIreIy.)
Look vIaI Iaµµened aI GIIIeIIe. BoII IIe Trac II and IIe
AIra razors vere narkeIed vIII IIe conµany nane IIe
sane sIze as IIe Lrand nanes.
NoI a good Idea. TIe Lrand nane sIouId donInaIe IIe
conµany nane.
WIII IIe MacI 3, GIIIeIIe Ias reIurned Io LasIcs. TIe
MacI 3 nane donInaIes.
No Issue In LrandIng Is so IIorougIIy dIscussed as IIe
µroµer roIe and IuncIIon oI IIe conµany nane. And yeI, In
nosI cases, II's a nonIssue.
TIe Lrand IIseII sIouId Le IIe Iocus oI your aIIenIIon. II
you Iave Io use IIe conµany nane, use II. BuI do so In a
decIdedIy secondary vay.
ManagenenI Iends Io InvenI IernInoIogy In order Io gIve
IegIIInacy Io IIe LrandIng noves II vanIs Io nake.
º HoIIday Inn, IIe IeadIng IoIeI/noIeI oµeraIor, vanIed Io
geI InIo IIe uµscaIe IoIeI segnenI.
º CadIIIac, IIe IeadIng uµscaIe donesIIc auIonoLIIe Lrand,
vanIed Io InIroduce a snaIIer car.
º WaIerIord, IIe IeadIng IrIsI crysIaI naker, vanIed Io
narkeI a Iess exµensIve IIne.
º Donna Karan, a Ioµ desIgner, vanIed Io narkeI Iess cosIIy
and nore casuaI cIoIIes.
TyµIcaI IIne-exIensIon sIraIegIes vouId Iave µroduced
Lrand nanes IIke HoIIday Inn DeIuxe, CadIIIac LIgII, Bud-
geI WaIerIord, and KasuaI Karan. Lven IIe nosI caIIov
narkeIIng µeoµIe vouId Iave Iound IIese Lrand nanes dII-
IIcuII Io svaIIov.
WIaI Io do? InvenI a suLLrand. So ve Iave HoIIday Inn
Crovne PIaza, CadIIIac CaIera, MarquIs Ly WaIerIord, and
DKNY. Nov ve can Iave our cake and eaI II, Ioo. We can use
our veII-knovn core Lrand aI IIe sane IIne as ve IauncI sec-
ondary or suLLrands Io nove InIo nev IerrIIory.
73
1 R£ L AW 0F 5UBBRANß5
what br andl ng bul l ds, subbr andl ng
oan dest r oy.
14
BuI vIaI sounds rIgII In IIe Loardroon oIIen doesn'I
nake sense In IIe narkeIµIace.
º DId anyLody ever vaIk InIo a HoIIday Inn and ask IIe
cIerk aI IIe IronI desk: "Don'I you Iave a nore exµensIve
IoIeI I can sIay aI?¨
º DId anyLody ever vaIk InIo a CadIIIac deaIersIIµ and
ask: "Don'I you Iave any snaIIer CadIIIacs?¨ (BIgger
nayLe, LuI noI snaIIer.)
º DId anyLody ever vaIk InIo BIoonIngdaIe's and ask IIe
saIesµerson: "Don'I you Iave any cIeaµ WaIerIord?¨
º DId anyLody ever vaIk InIo a Donna Karan sIovroon
and ask: "TIe suIIs are IoveIy, LuI vIere can I Luy Ier
sveaIµanIs?¨
TIe narkeIIng vorId Is avasI In conceµIuaI IIInkIng
IIaI Ias no reIaIIonsIIµ Io IIe reaI vorId. SuLLrandIng Is
one oI IIose conceµIs.
CusIoner researcI aI HoIIday Inn Crovne PIaza µroduced
vIaI you nIgII Iave exµecIed: "II's a nIce IoIeI, LuI II's a IIIIIe
exµensIve Ior a HoIIday Inn.¨ TIe conµany IInaIIy goI IIe
nessage and Is In IIe µrocess oI cuIIIng IIe negaLrand con-
necIIon. Iron nov on, IIe IoIeIs vIII Le knovn as Crovne
PIaza, µerIod.
A CadIIIac deaIersIIµ Is IIe IasI µIace In IIe vorId vIere
you vouId Iook Ior a snaII car. IIrsI IIey IrIed CInarron,
vIIcI venI novIere and vas evenIuaIIy droµµed. NaIuraIIy,
CadIIIac dIdn'I gIve uµ. IIs IaIesI snaII-car IncarnaIIon Is caIIed
IIe CadIIIac CaIera.
On IIe oIIer Iand, MarquIs Ly WaIerIord Is a LIg suc-
cess, LuI µarIIaIIy aI IIe exµense oI IIe IIgI-µrIced IIne. You
Iave Io vonder II IIere Is a GresIan's Iav oI narkeIIng,
Ioo. Sooner or IaIer, ve exµecI IIe MarquIs IIne Io serIousIy
erode IIe reguIar WaIerIord µroducI.
Donna Karan Ias gone oII In vay Ioo nany dIrecIIons.
In addIIIon Io IIe LasIc IIne, IIere Is Donna Karan
nensvear, DKNY, DKNY nensvear, and DKNY kIds. TIe
conµany Ias aIso goIIen InIo InIInaIe aµµareI and LeauIy
µroducIs. RecenIIy, IIe conµany soId ouI Io LVMH.
CusIoners Iave a cornucoµIa oI cIoIce. SuLLranders
assune oIIervIse. WIy vouId a cusIoner exµecI HoIIday Inn
Io Iave an uµscaIe IoIeI? WouIdn'I IIe cusIoner nore IIkeIy
Iry HIIIon, HyaII, or MarrIoII IIrsI? WIy sµend aII IIaI noney
and sIIII sIay aI a HoIIday Inn! TIe IIInkIng Is, II I an IorkIng
ouI IIe LIg Lucks, I vanI Io sIay vIII a Ioµ IoIeI Lrand.
SuLLrandIng Is an InsIde-ouI LrandIng sIraIegy IIaI
IrIes Io µusI IIe core Lrand InIo nev dIrecIIons. II caµIures
nanagenenI's aIIenIIon Lecause oI vIaI II µronIses, noI
necessarIIy Lecause oI vIaI II deIIvers.
In sµIIe oI IIe suLLrandIng seILack aI HoIIday Inn Crovne
PIaza, IIe conµany Ias noved InIo HoIIday Inn Lxµress, HoI-
Iday Inn SeIecI, HoIIday Inn SunSµree ResorIs, and HoIIday
Inn Garden CourI.
You used Io knov exacIIy vIaI you vouId IInd In a HoII-
day Inn. In IacI, IIaI vas IIe IIene oI IIs Iong-runnIng
adverIIsIng canµaIgn: "TIe LesI surµrIse Is no surµrIse.¨
WIaI's a HoIIday Inn SeIecI? Go aIead. Book a roon
and Le surµrIsed.
SuLLrandIng Ias Iaken IIs sIare oI crIIIcIsn, so IIe nar-
keIIng esIaLIIsInenI Is reIIInkIng IIe conceµI. LeadIng-
edge µracIIIIoners Ioday are nore IIkeIy Io caII IIe conceµI a
nasIerLrand or negaLrand sIraIegy. II's esµecIaIIy µrevaIenI
In IIe auIonoIIve IIeId.
"Iord Is noI our Lrand. Our Lrands are: AsµIre, ConIour,
Crovn VIcIorIa, LscorI, MusIang, ProLe, Taurus, and TIun-
derLIrd.¨ WIaI's a Iord IIen? "A Iord Is a negaLrand.¨
"Dodge Is noI our Lrand. Our Lrands are: Avenger, InIre-
µId, Neon SIeaIII, SIraIus, and VIµer.¨ WIaI's a Dodge IIen?
"A Dodge Is a negaLrand.¨
1PL LAW 0I 5UBBPAN05 75
You can'I aµµIy your ovn LrandIng sysIen Io a narkeI
IIaI sees IIIngs dIIIerenIIy. WIaI IIe nanuIacIurer sees as a
Lrand, IIe cusIoner sees as a nodeI. WIaI IIe nanuIac-
Iurer sees as a negaLrand, IIe cusIoner sees as a Lrand.
(CusIoners don'I undersIand IIe negaLrand conceµI aI aII.)
Lven KeIII CraIn, µuLIIsIer oI Au/ono/ivc Ncus, IIe
IndusIry's LILIe, Is duLIous oI vIaI car-narkeIIng µeoµIe are
IryIng Io do. "A IoI oI IoIks ouI IIere IeII you IIaI IndIvIduaI
nodeIs, noI IIe naneµIaIes, are IIe Lrands. I don'I knov oI
any nodeIs IIaI Iave ads In IIe YeIIov Pages.¨
Can a Lrand Le narkeIed In nore IIan one nodeI? Sure,
as Iong as IIose nodeIs don'I deIracI Iron IIe essence oI IIe
Lrand, IIaI sInguIar Idea or conceµI IIaI seIs II aµarI Iron
aII oIIer Lrands.
WIen you IeeI IIe need Io creaIe suLLrands, you are
cIasIng IIe narkeI, you are noI LuIIdIng IIe Lrand.
TIe essence oI a Lrand Is sone Idea or aIIrILuIe or nar-
keI segnenI you can ovn In IIe nInd. SuLLrandIng Is a
conceµI IIaI Iakes IIe Lrand In exacIIy IIe oµµosIIe dIrec-
IIon. SuLLrandIng desIroys vIaI LrandIng LuIIds.
BrandIng conceµIs IIaI are noI drIven Ly IIe narkeI-
µIace are goIng Io go novIere. SuLLrandIng, nasIerLrand-
Ing, and negaLrandIng are noI cusIoner-drIven conceµIs.
TIey Iave no neanIng In IIe nInds oI nosI consuners.
TIInk sInµIe. TIInk IIke a cusIoner and your Lrand vIII
Lecone nore successIuI.
TIe Iavs oI LrandIng seen Io suggesI IIaI a conµany con-
cenIraIe aII oI IIs resources on a sIngIe Lrand Ior a sIngIe
narkeI. Keeµ IIe Lrand Iocused and Ignore oµµorIunIIIes Io
geI InIo nev IerrIIorIes.
True. BuI IIere cones a IIne vIen a conµany sIouId
IauncI a second Lrand. And µerIaµs a IIIrd, even a IourII
Lrand.
A second-Lrand sIraIegy Is noI Ior every conµany. II
IandIed IncorrecIIy, IIe second Lrand can dIIuIe IIe µover
oI IIe IIrsI Lrand and vasIe resources.
YeI, In sone sIIuaIIons, a IanIIy oI Lrands can Le deveI-
oµed IIaI vIII assure a conµany's conIroI oI a narkeI Ior
nany decades Io cone.
Take IIe Wn. WrIgIey 1r. Conµany. Ior nore IIan a
Iundred years, WrIgIey Ias donInaIed IIe cIevIng gun
narkeI, generaIIng LIIIIons oI doIIars oI µroIIIs. BuI noI
vIII one Lrand. Today WrIgIey Ias a IanIIy oI Lrands.
º BIg Red (a cInnanon-IIavored Lrand)
º DouLIenInI (a µeµµernInI-IIavored Lrand)
º LxIra (a sugar-Iree Lrand)
º IreedenI (a sIIck-Iree Lrand)
77
1 R£ L AW 0F 5I BL I N65
Ther e l s a t l me and a pl aoe t o
l aunoh a seoond br and.
15
º 1uIcy IruII (a IruII-IIavored Lrand)
º SµearnInI (a sµearnInI-IIavored Lrand)
º WInIerIresI (a LreaII-IresIener Lrand)
TIe key Io a IanIIy aµµroacI Is Io nake eacI sILIIng a
unIque IndIvIduaI Lrand vIII IIs ovn IdenIIIy. ResIsI IIe
urge Io gIve IIe Lrands a IanIIy Iook or a IanIIy IdenIIIy.
You vanI Io nake eacI Lrand as dIIIerenI and dIsIIncI as
µossILIe.
TIe WrIgIey aµµroacI Is noI µerIecI. WrIgIey's IIrsI IIree
Lrands (1uIcy IruII, SµearnInI, and DouLIenInI) are Ioo
nucI IIke IIne exIensIons. TIey need IIe WrIgIey nane Io
suµµorI IIeIr generIc Lrand nanes. BIg Red, LxIra, Iree-
denI, and WInIerIresI, Iovever, can sIand on IIeIr ovn,
eacI as IoIaIIy seµaraIe Lrands.
MosI nanagers are Ioo InIernaIIy Iocused Io see IIe
µover oI a seµaraIe IdenIIIy. TIey vanI Io "Iake advanIage
oI IIe equIIy¨ IIeIr Lrand aIready ovns In IIe nInd In order
Io successIuIIy IauncI a nev Lrand.
So IBM IauncIes Lrands IIke IIe IBM PCjr. And NyQuII
IauncIes DayQuII. And BIockLusIer VIdeo IauncIes BIock-
LusIer MusIc. And Toys "R¨ Us IauncIes BaLIes "R¨ Us.
TIne Inc. Lecane IIe vorId's IargesI nagazIne µuL-
IIsIer, noI Ly IauncIIng IIne exIensIons oI IIs core Lrand, LuI
Ly IauncIIng IoIaIIy seµaraIe µuLIIcaIIons. LIke WrIgIey,
TIne Inc. Ias seven µuLIIsIIng µoverIouses.
1. Tinc
2. Ior/unc (noI Tinc jor Eusincss)
3. Lijc (noI Tinc jor Pic/urcs)
4. Spor/s I//us/ra/cd (noI Tinc jor Spor/s)
5. Moncy (noI Tinc jor Iinanccs)
6. Pcop/c (noI Tinc jor Cc/cbri/ics)
7. In/cr/ainncn/ \cc//y (noI Tinc jor In/cr/ainncn/)
(NoLody's µerIecI. So nov ve aIso Iave Di¸i/a/ Tinc,
Tccn Pcop/c, and Spor/s I//us/ra/cd jor Kids.)
And vIaI aLouI ISPN Ma¸azinc? Does anyone exceµI DIs-
ney reaIIy LeIIeve IIaI ISPN Ma¸azinc vIII score any goaIs
agaInsI Spor/s I//us/ra/cd? We cerIaInIy don'I. TIe sIrengII oI a
Lrand IIes In IavIng a seµaraIe, unIque IdenIIIy-noI In LeIng
assocIaIed In IIe nInd vIII a IoIaIIy dIIIerenI caIegory.
HavIng a IoIaIIy seµaraIe IdenIIIy In IIe nInd doesn'I
nean creaIIng a IoIaIIy seµaraIe organIzaIIon Io IandIe eacI
Lrand. Wn. WrIgIey 1r. Conµany doesn'I Iave seven seµa-
raIe nanuIacIurIng µIanIs or seven seµaraIe saIes organIza-
IIons. II Ias seven Lrands and one conµany, one saIes Iorce,
one narkeIIng organIzaIIon.
WIen GeneraI MIIIs decIded Io geI InIo IIe IIaIIan
resIauranI LusIness, II dIdn'I sIarI Iron scraIcI. II used
everyIIIng II Iad Iearned aLouI IIe seaIood resIauranI LusI-
ness Io junµ-sIarI IIs IIaIIan sILIIng. TIe one IIIng II dId noI
do vas Io sµIn oII IIs Red LoLsIer nane. No IIaIIan Red
LoLsIers.
GeneraI MIIIs InvenIed a seµaraIe Lrand caIIed OIIve
Garden. WIII IIIs sIraIegy, IIe conµany vas aLIe Io creaIe
IIe Ivo IargesI IanIIy-resIauranI cIaIns In AnerIca. (SuLse-
quenIIy, IIe Ivo cIaIns vere sµun oII InIo Darden ResIau-
ranIs, Inc., vIIcI InnedIaIeIy Lecane IIe vorId's IargesI
casuaI-dInIng conµany.)
WIen Sara Lee IrIed Io Iake IIs µanIy Iose Lrand InIo
IIe suµernarkeI Irade, II dIdn'I use IIs Hanes nane. Nor dId
II caII IIe nev Lrand Hanes II or Hanes Too.
Sara Lee creaIed a seµaraIe Lrand desIgned Ior suµer-
narkeI dIsIrILuIIon caIIed L'eggs. Packaged In a µIasIIc egg,
IIe µroducI Lecane IIe nunLer-one suµernarkeI Lrand
and IIe nunLer-one µanIy Iose Lrand, vIII 25 µercenI oI
IIe IoIaI µanIy Iose narkeI.
WIen BIack & Decker, IIe vorId's IargesI µover-IooI
nanuIacIurer, vanIed Io geI InIo IIe µroIessIonaI µover-
1PL LAW 0I 5I BLI NU5 79
IooI narkeI, II dIdn'I use IIe BIack & Decker nane. Nor dId
II caII IIe nev µroducI BIack & Decker Pro.
BIack & Decker creaIed a seµaraIe Lrand caIIed DeWaII.
In Iess IIan IIree years, DeWaII Lecane a S350 nIIIIon LusI-
ness, IIe narkeI Ieader In µroIessIonaI IooIs, and IIe
second-IargesI µover-IooI Lrand aIIer BIack & Decker.
In IIe µasI, conµanIes Iave creaIed IanIIIes oI Lrands
Lased on IIe µrIncIµIes LeIInd IIe Iav oI sILIIngs. As IIne goes
Ly, IIey IorgeI vIy IIe Lrands vere creaIed In IIe IIrsI µIace.
InsIead oI naInIaInIng seµaraIe IdenIIIIes, IIe Lrands are
nasIed IogeIIer and a Iayer oI corµoraIe IrosIIng added on
Ioµ. InsIead oI LeconIng sIronger, IIe Lrands Lecone veaker.
GeneraI MoIors used Io narkeI a µIaIanx oI IIve Lrands,
eacI vIII IIs ovn IdenIIIy. CIevroIeI, PonIIac, OIdsnoLIIe,
BuIck, and CadIIIac. Any IveIve-year-oId kId couId sµoI a
CIevy a LIock avay and InsIanIIy IdenIIIy IIe Lrand. Or a
PonIIac. Or an OIdsnoLIIe. Or a BuIck. Or a CadIIIac.
HoIes In IIe IronI Iender? TIaI's a BuIck. IIns on IIe
Lack Ienders? TIaI's a CadIIIac.
No nore. Lven II you vork Ior GeneraI MoIors, ve deIy
you Io sµoI GM cars on IIe sIreeI and IIen correcIIy IdenIIIy
IIe Lrands.
Many CLOs LeIIeve IIaI a sILIIng sIraIegy vorks LesI
vIen IIe organIzaIIon IIseII Is decenIraIIzed. "LeI IIe
Lrands IIgII II ouI anong IIenseIves.¨
NoI so. TIaI LeIIeI Is vIaI goI GeneraI MoIors In Irou-
LIe. ConIroI over IIe Lrands (or dIvIsIons) vas IIIIed and
eacI dIvIsIon aIIoved Io seI IIs ovn course. ResuIIs vere
µredIcIaLIe. LacI dIvIsIon Lroadened IIe scoµe oI IIs Lrand
and IIe vorId ended uµ vIII exµensIve CIevroIeIs, cIeaµ
CadIIIacs, and LevIIderIng Lrand conIusIon.
A sILIIng sIraIegy requIres nore Ioµ-nanagenenI suµer-
vIsIon, noI Iess. TIe urgenI, Iong-Iern need Is Io naInIaIn
IIe seµaraIIon LeIveen IIe Lrands, noI Io nake IIen aII
aIIke. Hunan InsIIncIs vork In IIe oµµosIIe dIrecIIon.
ResuII: AII GeneraI MoIors cars ended uµ vIII IIns.
Nor Is IIere a need Io Iag IIe corµoraIe IdenIIIy on every
Lrand. Does IIe cusIoner Luy a Lexus Lecause II's nade Ly
ToyoIa? Or In sµIIe oI IIe IacI IIaI II's nade Ly ToyoIa?
TIe cusIoner Luys a Lexus. TIaI's IIe µover oI IIe Lexus
Lrand. TIe corµoraIe connecIIon Is IrreIevanI.
In µarIIcuIar, corµoraIe nanagenenI sIouId keeµ IIe
IoIIovIng µrIncIµIes In nInd vIen seIecIIng a sILIIng sIraI-
egy Ior IIs sIaLIe oI Lrands.
1. Iocus on a connon µroducI area. Passenger cars, cIev-
Ing gun, over-IIe-counIer drugs, IIese are sone con-
non µroducI areas around vIIcI Io LuIId a sILIIng µorI-
IoIIo.
2. SeIecI a sIngIe aIIrILuIe Io segnenI. PrIce Is IIe nosI
connon, LuI oIIer aIIrILuIes IncIude dIsIrILuIIon, age,
caIorIes, sex, IIavors. By segnenIIng a sIngIe aIIrILuIe
onIy, you reduce IIe µoIenIIaI conIusIon LeIveen your
Lrands. WIaI you vanI Io avoId Is any overIaµ anong
Lrands. Keeµ eacI Lrand unIque and sµecIaI.
3. SeI uµ rIgId dIsIIncIIons anong Lrands. PrIce Is IIe easI-
esI aIIrILuIe Io segnenI Lecause you can µuI sµecIIIc
nunLers on eacI Lrand. WIen µrIces overIaµ, II's very
dIIIIcuII Io keeµ IIe Lrands seµaraIe. MosI car ovners
conIused OIdsnoLIIe and BuIck Lecause IIeIr µrIce
ranges vere quIIe sInIIar.
4. CreaIe dIIIerenI, noI sInIIar Lrand nanes. You don'I
vanI Io creaIe a IanIIy oI Lrands, you vanI Io creaIe a
IanIIy oI dIIIerenI Lrands. Look aI sone oI CIevroIeI's
nodeI nanes: CavaIIer, Canaro, CorsIca, CaµrIce,
CorveIIe. (RecenIIy IIey droµµed CorsIca and CaµrIce,
LuI IIose "C¨ nanes are sIIII conIusIng.)
One reason IIese nodeI nanes can'I Le Lrands Is IIe
IacI IIaI IIey are Ioo sInIIar. II CIevroIeI vanIed Io cre-
aIe Lrands InsIead oI nodeI nanes, II sIouId Iave used
1PL LAW 0I 5I BLI NU5 81
dIsIIncIIve nanes. AIIIIeraIIon Is IIe curse oI a sILIIng
IanIIy.
5. LauncI a nev sILIIng onIy vIen you can creaIe a nev
caIegory. Nev Lrands sIouId noI Le IauncIed jusI Io IIII
a IoIe In IIe IIne or Io conµeIe dIrecIIy vIII an exIsIIng
conµeIIIor. TIIs µrIncIµIe Is IIe one nosI oIIen vIoIaIed
Ly even IIe IargesI oI conµanIes. Coca-CoIa IauncIed
Mr. PILL, noI Io creaIe a nev caIegory, LuI Io LIock IIe
grovII oI Dr Peµµer. Coca-CoIa IauncIed IruIIoµIa, noI
Io creaIe a nev caIegory, LuI Io LIock IIe grovII oI
SnaµµIe. TIen IIey IauncIed MeIIo YeIIo Io LIock IIe
grovII oI MounIaIn Dev. TIaI dIdn'I vork, so IIey
IauncIed Surge, vIIcI dIdn'I vork eIIIer. AII Iour
Lrands Iave gone novIere.
6. Keeµ conIroI oI IIe sILIIng IanIIy aI IIe IIgIesI IeveI. II
you don'I, you vIII IInd IIaI your µoverIuI, dIsIIncIIve
Lrands vIII sIovIy IaII aµarI. TIey vIII Lecone vIcIIns
oI sILIIng rIvaIry, a µaIIern oI corµoraIe LeIavIor IIaI
deµends uµon coµyIng IIe LesI IeaIures oI a Lrand's sIL-
IIng conµeIIIors. You'II end uµ IIke GeneraI MoIors vIII
a IanIIy oI Lrands IIaI aII Iook aIIke.
A IanIIy oI sILIIng Lrands Is noI a sIraIegy Ior every cor-
µoraIIon. BuI vIere II Is aµµroµrIaIe, a sILIIng sIraIegy can
Le used Io donInaIe a caIegory over IIe Iong Iern.
A IogoIyµe Is a conLInaIIon oI a Iradenark, vIIcI Is a
vIsuaI synLoI oI IIe Lrand, and IIe nane oI IIe Lrand seI In
dIsIIncIIve Iyµe.
LogoIyµes cone In aII sIaµes. Round, square, ovaI, IorI-
zonIaI, verIIcaI. BuI aII sIaµes are noI creaIed equaI In IIe
eyes oI IIe consuner.
SInce IIe eyes oI your cusIoners are nounIed sIde Ly
sIde, IIe IdeaI sIaµe Ior a IogoIyµe Is IorIzonIaI. RougIIy
Ivo and one-IourII unIIs vIde and one unII IIgI.
TIIs IorIzonIaI sIaµe vIII µrovIde IIe naxInun InµacI
Ior your IogoIyµe. TIIs Is Irue vIerever IIe IogoIyµe Is used:
on LuIIdIngs, LrocIures, IeIIerIeads, adverIIsenenIs, or
caIIIng cards.
TIIs IorIzonIaI LIas Is esµecIaIIy InµorIanI vIen a Iogo-
Iyµe Is used on a reIaII esIaLIIsInenI. In IIe neon jungIe, a
verIIcaI IogoIyµe Is aI a severe dIsadvanIage. TIe ArLy's
covLoy-IaI Iogo Is an exanµIe oI IIe µenaIIy oI verIIcaIIIy.
OI equaI InµorIance Io sIaµe Is IegILIIIIy. LogoIyµe
desIgners oIIen go vay overLoard In µIckIng a IyµeIace Io
exµress IIe aIIrILuIe oI a Lrand raIIer IIan IIs aLIIIIy Io Le
cIearIy read.
TyµeIaces cone In IIousands oI sIyIes and veIgIIs, LuI
cusIoners are onIy dInIy avare oI IIe dIIIerences. To µara-
83
1 R£ L AW 0F 5RAP£
^ br and`s l ogot ype shoul d be desl gned
t o f l t t he eyes. Bot h eyes.
16
µIrase DavId OgIIvy, no vonan says, I vouId Iave LougII
IIaI deIergenI exceµI IIey Iad Io go and seI IIe IeadIIne In
IuIura DenILoId.
WIaI IyµeIace does RoIex use In IIs IogoIyµe? RaIµI
Lauren? RoIIs-Royce? SerII or sans serII?
TIe IruII Is, IIe vords (RoIex, RaIµI Lauren, RoIIs-
Royce) are vIaI connunIcaIe IIe µover oI IIe Lrands. TIe
IyµeIaces used In IIeIr IogoIyµes can IeIµ or IInder IIe
connunIcaIIon µrocess, LuI onIy sIIgIIIy.
On IIe oIIer Iand, II IIe IyµeIace Is vIrIuaIIy IIIegILIe,
IIe IogoIyµe Ias IIIIIe or no neanIng In IIe consuner's
nInd. NoI Lecause oI IIe IyµeIace used, LuI Lecause IIe
µrosµecI can'I read IIe vords. LegILIIIIy Is IIe nosI Inµor-
IanI consIderaIIon In seIecIIng a IyµeIace used In a IogoIyµe.
CerIaInIy, IIere are µerceµIuaI dIIIerences In IIe IeeIIngs
IIaI IyµeIaces connunIcaIe. Sans serII IyµeIaces Iook nod-
ern, serII IyµeIaces Iook oId-IasIIoned. BoId IyµeIaces Iook
nascuIIne, IIgII IyµeIaces Iook IenInIne.
BuI IIese dIIIerences Lecone oLvIous onIy Ly exaggera-
IIon. WouId you reaIIy vanI Io seI your Lrand nane In
LIack-IeIIer GoIIIc (IIe IyµeIace used In IIe Ncu Yor/ Tincs
IogoIyµe) In order Io nake your Lrand Iook IIke an oId,
esIaLIIsIed Lrand? We IIInk noI. WIIIe II nay nake a vIsuaI
InµressIon, Iev µrosµecIs vouId Le aLIe Io read (and IIere-
Iore renenLer) IIe nane.
II's a vIcIous cycIe. In order Io geI IIe average µrosµecI
Io noIIce IIe "nood¨ oI IIe IogoIyµe you Iave Io exaggeraIe
IIe cIaracIerIsIIcs oI IIe IyµograµIy. And vIen you do IIaI,
you Iose IIe IogoIyµe's IegILIIIIy. II's noI vorII IIe Irade-oII.
TIe oIIer conµonenI oI IIe IogoIyµe, IIe Iradenark, or
vIsuaI synLoI, Is aIso overraIed. TIe neanIng IIes In IIe
vord, or vords, noI In IIe vIsuaI synLoI.
II's IIe NIke nane IIaI gIves neanIng Io IIe SvoosI
synLoI. TIe SvoosI synLoI doesn'I gIve nucI neanIng Io
IIe NIke Lrand. AIIer a synLoI Ias Leen assocIaIed vIII a
nane Ior a Iong µerIod oI IIne, IIe synLoI can reµresenI IIe
nane, IIrougI a kInd oI "reLus¨ eIIecI. BuI II's sIIII IIe nane
IIaI carrIes IIe Lrand's µover.
So IIe SvoosI sIands Ior NIke. BuI IIe advanIages oI usIng
IIe synLoI aIone are sIIn and occur onIy In cerIaIn sIIuaIIons.
PerIaµs you can see IIe synLoI aI a dIsIance vIere IIe nane
aIone vouId Le unreadaLIe. PerIaµs you can use IIe synLoI on
IIe µroducI IIseII or on arIIcIes oI cIoIIIng vIere IIe nane
vouId Iook Ioo "connercIaI.¨ PerIaµs aIIer sµendIng Iun-
dreds oI nIIIIons a year Ior over a decade Io IInk IIe SvoosI Io
NIke, you can geI avay vIII endIng your connercIaIs vIII
onIy IIe synLoI. BuI vIaI Is IIe advanIage In doIng so?
Conµare SIeII vIII MoLII. SIeII uses a sIeII Iradenark
on IIs gasoIIne sIaIIons vIIIouI IIe vord "SIeII.¨ MoLII uses
a IogoIyµe vIII LIue IeIIers and a red "O¨ Io sµeII IIe vord
"MoLII.¨
Is IIe SIeII aµµroacI suµerIor Io IIe MoLII aµµroacI? We
IIInk noI. TIe LesI you can say Is IIaI IIe SIeII aµµroacI
vorks, IIanks Io a sInµIe nane and an easy-Io-IransIaIe sInµIe
vIsuaI. BuI vIaI are IIe advanIages oI IIe SIeII aµµroacI?
Very Iev. And IIere are sone dIsadvanIages. As µeoµIe
grov uµ and nev µrosµecIs cone InIo IIe narkeIµIace, Iov
vIII IIey Iearn IIaI IIe yeIIov synLoI neans "SIeII¨? Lsµe-
cIaIIy II IIe µrosµecI doesn'I knov IIaI SIeII Is a Lrand
nane Ior a gasoIIne.
A greaI deaI oI eIIorI Ias gone InIo creaIIng eIaLoraIe syn-
LoIs Ior use In IogoIyµes. CresIs, sIIeIds, coaIs oI arns, and
oIIer IeraIdIc synLoIs Iave µoured ouI oI AnerIca's desIgn
sIoµs In greaI µroIusIon. Ior IIe nosI µarI, IIese eIIorIs are
vasIed. TIe µover oI a Lrand nane IIes In IIe neanIng oI IIe
vord In IIe nInd. Ior nosI Lrands, a synLoI Ias IIIIIe or
noIIIng Io do vIII creaIIng IIIs neanIng In IIe nInd.
TIere are onIy a IandIuI oI sInµIe synLoIs IIaI nake
eIIecIIve Iradenarks. (TIe Mercedes IIree-µoInIed sIar Is
one oI IIen.) AI IIIs IaIe daIe, II IIsIory Iasn'I vIIIed you
one oI IIese sInµIe synLoIs, II's µroLaLIy Ioo IaIe Io creaIe
one on your ovn.
1PL LAW 0I 5PAPL 85
86
AnoIIer vay Io nake a Lrand dIsIIncIIve Is vIII coIor. BuI
coIor Is noI an easy aIIrILuIe Io vork vIII. TIere are IIou-
sands oI vords Io cIoose Iron In order Io creaIe a unIque
nane, LuI onIy a IandIuI oI coIors.
TIere are IIve LasIc coIors (red, orange, yeIIov, green,
and LIue) µIus IIe neuIraI coIors (LIack, vIIIe, and gray). II's
LesI Io sIIck Io one oI IIese IIve µrInary coIors raIIer IIan an
InIernedIaIe or nIxed coIor. BuI vIIcI coIor?
Keeµ In nInd IIaI aII coIors are noI creaIed equaI In IIe
eye oI IIe LeIoIder. CoIors on IIe red end oI IIe sµecIrun
are Iocused sIIgIIIy LeIInd IIe reIInas In your eyes. TIere-
Iore, a red coIor aµµears Io nove Iovard your eyes vIIIe
you're IookIng aI II.
CoIors on IIe LIue end oI IIe sµecIrun, on IIe oIIer
Iand, are Iocused sIIgIIIy In IronI oI IIe reIInas In your
eyes. A LIue coIor aµµears Io nove avay Iron you.
Because oI IIese µIysIcaI reasons, red Is IIe coIor oI
energy and excIIenenI. Red Is an In-your-Iace coIor. WIIcI
Is vIy red Is IIe donInanI coIor In 45 µercenI oI aII naIIonaI
IIags. (BIue Is a dIsIIncI second. BIue donInaIes In Iess IIan
20 µercenI oI aII IIags.)
BIue Is IIe oµµosIIe oI red. BIue Is µeaceIuI and IranquII.
BIue Is a IaId-Lack coIor.
1? 1 R£ L AW 0F C0L 0R
^ br and shoul d use a ool or t hat l s t he
opposl t e of l t s maj or oompet l t or `s.
In IIe vorId oI Lrands, red Is a reIaII coIor used Io
aIIracI aIIenIIon. BIue Is a corµoraIe coIor used Io connu-
nIcaIe sIaLIIIIy. Ior exanµIe, Coca-CoIa red and IBM LIue.
TIe oIIer µrInary coIors are In LeIveen. Orange Is
nore IIke red IIan LIue. Green Is nore IIke LIue IIan red.
YeIIov Is IIe neuIraI coIor. BuI Lecause II Is In IIe nId-
dIe oI IIe range oI vaveIengIIs your eyes can deIecI, yeIIov
Is aIso IIe LrIgIIesI coIor. (IIs LrIgIIness Is IIe reason yeI-
Iov Is oIIen used Io connunIcaIe "cauIIon,¨ as In yeIIov
IIgIIs, yeIIov IInes, yeIIov sIgns, eIc.)
Over IIe years, sone coIors Iave Lecone IdenIIIIed vIII
varIous aIIrILuIes, occasIons, and novenenIs.
º WIIIe Is IIe coIor oI µurIIy (as In a vIIIe veddIng
govn).
º BIack Is IIe coIor oI Iuxury (as In 1oInnIe WaIker BIack
LaLeI).
º BIue Is IIe coIor oI IeadersIIµ (as In IIe LIue rILLon
avard Io IIe vInner oI a Iorse sIov).
º PurµIe Is IIe coIor oI royaIIy (as In IIe exµressIon "Lorn
Io IIe µurµIe¨).
º Green Is IIe coIor oI IIe envIronnenI and IeaIII (as In
Greenµeace, HeaIIIy CIoIce, and SnackWeII's).
WIen seIecIIng a coIor Ior a Lrand or a Iogo, nanagers
usuaIIy Iocus on IIe nood IIey vanI Io esIaLIIsI raIIer
IIan IIe unIque IdenIIIy IIey vanI Io creaIe. And vIIIe
nood or Ione can Le InµorIanI, oIIer IacIors sIouId over-
rIde a cIoIce Lased on nood aIone.
Leaders Iave IIrsI cIoIce. NornaIIy IIe LesI coIor Io
seIecI Is IIe one IIaI Is nosI synLoIIc oI IIe caIegory. 1oIn
Deere Is IIe IeadIng Lrand oI Iarn IracIor. Does II surµrIse
you IIaI 1oIn Deere µIcked green, IIe coIor oI grass, Irees,
and agrIcuIIure, as IIe Lrand's sIgnaIure coIor?
1PL LAW 0I U0L0P 87
Ior a IracIor conµany In BrazII, ve vere asked Io
deveIoµ a Lrand nane and coIor. We µIcked IIe nane Max-
Ion as IIe Lrand nane Lecause II seened Io connunIcaIe
"µover,¨ a key aIIrILuIe In a Iarn IracIor. BuI vIaI coIor
sIouId IIIs nev IracIor Lrand use?
1oIn Deere used green. TIe second Lrand In IIe narkeI
used red. So IIe coIor cIoIce vas oLvIous. MaxIon Lecane a
LIue IracIor and a LIue Lrand.
Is LIue a good coIor Ior a Iarn IracIor? No, LuI II's nore
InµorIanI Io creaIe a seµaraIe Lrand IdenIIIy IIan II Is Io
use IIe rIgII synLoIIc coIor.
HerIz, IIe IIrsI car-renIaI Lrand, µIcked yeIIov. So AvIs,
IIe second Lrand, µIcked red. NaIIonaI venI vIII green.
(Ior years, NaIIonaI gave ouI S&H Green SIanµs Io car-
renIaI cusIoners, a narkeIIng nove IIaI IeIµed assocIaIe
IIe NaIIonaI nane vIII IIe coIor green.)
TIere Is a µoverIuI IogIc Ior seIecIIng a coIor IIaI Is IIe
oµµosIIe oI your najor conµeIIIors. WIen you Ignore IIIs
Iav oI coIor, you do so aI your ovn rIsk.
CoIa Is a reddIsI-Lrovn IIquId, so IIe IogIcaI coIor Ior a
coIa Lrand Is red. WIIcI Is one reason vIy Coca-CoIa Ias
Leen usIng red Ior nore IIan a Iundred years.
PeµsI-CoIa nade a µoor cIoIce. II µIcked red and LIue as
IIe Lrand's coIors. Red Io synLoIIze coIa and LIue Io dIIIer-
enIIaIe IIe Lrand Iron Coca-CoIa. Ior years PeµsI Ias sIrug-
gIed vIII a Iess-IIan-IdeaI resµonse Io Coke's coIor sIraIegy.
Be IonesI. In your nInd's eye, doesn'I IIe vorId seen Io
Le avasI In Coca-CoIa sIgns? And Isn'I II Iard Io µIcIure
nany PeµsI-CoIa sIgns? PeµsI Is ouI IIere, LuI IIe Iack oI a
unIque dIIIerenIIaIIng coIor Iends Io nake PeµsI InvIsILIe In
a sea oI Coca-CoIa red.
RecenIIy PeµsI-CoIa Ias seen IIe IIgII, or raIIer IIe
coIor. II Is doIng vIaI II sIouId Iave done nore IIan IIIIy
years ago. Make IIe Lrand's coIor IIe oµµosIIe oI IIs najor
conµeIIIor's coIor.
1PL LAW 0I U0L0P 89
PeµsI-CoIa Is goIng LIue. PeµsI even venI Io IIe exµense
oI µaInIIng a Concorde suµersonIc jeI LIue Io carry IIe coIor
nessage Io LoIIIers around IIe vorId.
Be IIe oµµosIIe. Kodak Is yeIIov, so IujI Is green.
YeIIov (as In IIe GoIden ArcIes) Is aIso IIe coIor nosI
IdenIIIIed vIII McDonaId's, aIIIougI IIe acIuaI IogoIyµe Is
nosIIy red. BuI vIaI coIor Is Burger KIng?
Burger KIng nade IIe nIsIake oI synLoIIzIng IIe coIors
oI a IanLurger raIIer IIan µIckIng a coIor Io conIrasI vIII
IIe Ieader. Burger KIng conLIned IIe yeIIov oI a Ian-
Lurger Lun vIII IIe orange-red oI IIe neaI. A neaI Iogo-
Iyµe, LuI a Iousy coIor cIoIce.
BudveIser Is red, so vIaI coIor sIouId MIIIer Le?
One oI IIe nany µroLIens vIII IIe nassIve IIne exIen-
sIons narkeIed Ly MIIIer Is IIaI IIey desIroy IIe Lrand's
coIor IdenIIIy. To dIIIerenIIaIe IIe MIIIer IIne exIensIons
Iron eacI oIIer, IIe Lrand uses an array oI coIor conLIna-
IIons. In IIe µrocess MIIIer nIsses an oµµorIunIIy Io dIIIer-
enIIaIe IIs core Lrand Iron BudveIser, IIs key conµeIIIor.
TIInk oI IIe unnIsIakaLIe coIor oI a TIIIany Lox. By
sIandardIzIng on a sIngIe coIor and usIng II consIsIenIIy
over IIe years, you can LuIId a µoverIuI vIsuaI µresence In a
cIuIIer-IIIIed vorId. AI CIrIsInasIIne, every Lrand and
reIaII sIore uses green and red Io ceIeLraIe IIe IoIIday, Iron
M&M's Io Macy's. YeI TIIIany & Co. sIIcks Io LIue, and
Lecones even nore noIIceaLIe under IIe Iree as a resuII.
Wonen Iug IIeIr IusLands as soon as IIey see IIe
roLIn's-egg LIue Lox-vIIIouI oµenIng II IIey knov II vIII
Le vonderIuI.
You Iave µroLaLIy seen nany nore MIIIer cans IIan
TIIIany Loxes, LuI ve vouId LeI IIaI you knov IIe Iue oI a
TIIIany Lox and IIaI you're noI quIIe sure aLouI MIIIer.
WIIIe a sIngIe coIor Is aInosI aIvays IIe LesI coIor sIraI-
egy Ior a Lrand, soneIInes you can nake a case Ior nuIII-
µIe coIors. IederaI Lxµress, IIe IIrsI overnIgII-µackage-
deIIvery conµany, vanIed IIs µackages Io sIand ouI on IIe
recIµIenI's desk. So II conLIned IIe Ivo nosI sIockIng coI-
ors II couId IInd: orange and µurµIe.
WIen a IedLx µackage arrIves, everyLody can see IIaI a
IedLx µackage Ias arrIved. II's IIke an orange-and-µurµIe
suII In a sea oI corµoraIe LIue.
CoIor consIsIency over IIe Iong Iern can IeIµ a Lrand
Lurn IIs vay InIo IIe nInd. Look aI vIaI yeIIov Ias done
Ior CaIerµIIIar, Lrovn Ior UnIIed ParceI ServIce, red Ior
Coca-CoIa, IIe green jackeI Ior IIe MasIers goII IournanenI,
and LIue Ior IBM.
WIaI LIue dId Ior BIg BIue, a unIque coIor can do Ior
your LIg Lrand.
91
1 R£ L AW 0F B0Rß£ R5
Ther e ar e no bar r l er s t o gl obal br andl ng.
^ br and shoul d know no bor der s.
In our consuIIIng vork ve IInd IIaI nosI cIIenIs sIrongIy
LeIIeve Ivo IIIngs:
1. TIeIr Lrands' narkeI sIares cannoI Le suLsIanIIaIIy
Increased In IIeIr Ione counIrIes.
2. TIey need Io grov.
As a resuII oI IIese IroncIad LeIIeIs, IIey InsIsI on
exµandIng IIeIr Lrands InIo oIIer caIegorIes. "II's IIe onIy
vay Io grov,¨ IIey say.
So IIey IaII vIcIIn Io IIe IIrsI Iav oI LrandIng, IIe Iav oI
exµansIon. "Sure,¨ IIey say. "LxµandIng our IIne nay Le
dangerous, LuI II's IIe onIy vay Io grov.¨
II's noI IIe onIy vay Io grov. In IacI, IIe µerIecI soIuIIon Io
acIIevIng LoII goaIs Is Io LuIId a gIoLaI Lrand. TIaI neans:
º Keeµ IIe Lrand's narrov Iocus In IIs Ione counIry.
º Go gIoLaI.
Ior years IIe nagIc vord on nany µroducIs Ias Leen
"InµorIed.¨ Iood, Leer, vIne, IIquor, cIoIIIng, auIonoLIIes,
18
aµµIIances, and nany oIIer IIens Iave LeneIIIed Iron an
InµorIed IaLeI. As II crossIng a Lorder suddenIy Increases
IIe vaIue oI IIe Lrand.
AcIuaIIy, crossIng a Lorder oIIen does add vaIue Io a
Lrand. SInce vaIue IIes In IIe nInd oI IIe consuner, IIe µer-
ceµIIon oI vIere IIe Lrand cane Iron can add or suLIracI
vaIue. Does anyone douLI IIe vaIue oI:
º WaIcIes Iron SvIIzerIand
º WInes Iron Irance
º AuIonoLIIes Iron Gernany
º LIecIronIc µroducIs Iron 1aµan
º CIoIIIng Iron IIaIy
WouId vaIcIes Iron AILanIa, vIne Iron PoIand, cars
Iron Turkey, eIecIronIc µroducIs Iron RussIa, or cIoIIIng
Iron PorIugaI Iave IIe sane µerceµIIons? OLvIousIy noI.
Lvery counIry Ias IIs ovn unIque µerceµIIons. WIen a
Lrand Is In sync vIII IIs ovn counIry's µerceµIIons, IIaI
Lrand Ias IIe µossILIIIIy oI LeconIng a gIoLaI Lrand.
WIerever you IIve In IIe vorId Ioday, cIances are IIgI
IIaI a sIgnIIIcanI nunLer oI µeoµIe are vearIng SvIss
vaIcIes, drIvIng Gernan cars, drInkIng IrencI vInes, µIay-
Ing vIII 1aµanese eIecIronIc µroducIs, and dressIng In IIaI-
Ian cIoIIes. (HoµeIuIIy, noI aII aI IIe sane IIne.)
In sµIIe oI duIIes, IarIIIs, InµorI quoIas, InsµecIIons, regu-
IaIIons, red Iaµe, and µeIIy IarassnenIs, IIe vorId Is Lecon-
Ing one LIg gIoLaI narkeI. And your µroducI Iad LeIIer geI on
IIe gIoLaI Lrandvagon or rIsk IosIng ouI aIIogeIIer.
HeIneken NV Is IIe IeadIng Lrevery In IIe NeIIerIands,
a snaII counIry vIII a µoµuIaIIon oI onIy 15 nIIIIon. YeI Ly
goIng gIoLaI HeIneken NV Ias Lecone IIe second-IargesI
Lrevery In IIe vorId.
Can any Lrevery do IIe sane? OI course noI. To Le suc-
cessIuI as a vorIdvIde Leer Lrand (or any vorIdvIde
Lrand), you need Io do Ivo IIIngs:
1. You need Io Le IIrsI.
2. Your µroducI needs Io III IIe µerceµIIons oI IIs counIry
oI orIgIn.
HeIneken vas IIe IIrsI Leer Lrand Io µursue a gIoLaI
sIraIegy. BuI Leer Is a µroducI cIoseIy assocIaIed vIII Ger-
nany, noI HoIIand.
HeIneken goI Iucky. HoIIand Is cIose Io Gernany, LoII
geograµIIcaIIy and eIInIcaIIy. As a resuII, nany Leer
drInkers IIInk HeIneken Is a Gernan µroducI. (TIe con-
µany Ias Leen knovn Io dIsIrILuIe cardLoard coasIers Io
Lars and resIauranIs vIII IIe vords "µrInIed In Gernany¨
IeaIured on IIe coasIers.)
HeIneken aIso goI Iucky In a second vay. Beck's, IIs
najor Gernan conµeIIIor on IIe gIoLaI narkeI, Is saddIed
vIII an LngIIsI-soundIng nane.
HeIneken goI Iucky In a IIIrd vay. TIe IargesI-seIIIng
Leer In Gernany Is WarsIeIner. NornaIIy, IIe IeadIng Lrand
In a counIry knovn Ior IIe caIegory can Le a LIg success In
IIe resI oI IIe vorId. (WIIness IIe success oI BarIIIa In IIe
U.S. narkeI vIII IIe IIene "IIaIy's #1 µasIa.¨) BuI no Ger-
nan Leer Lrand sIarIIng vIII "War¨ Is goIng Io Iave nucI
oI a cIance on IIe gIoLaI Leer narkeI.
TIere are nany vays Io µIay IIe gIoLaI gane. InsIead oI
aµµeaIIng Io IIe core narkeI, you can aµµeaI Io a dIIIerenI
segnenI oI IIe narkeI. Corona LxIra Ias Lecone a gIoLaI
Iorce Ly assocIaIIng IIe Lrand vIII IIe Loon In MexIcan
cuIsIne. AsaII Leer Ias done IIe sane vIII 1aµanese cuI-
sIne. And TsIngIao Leer vIII CIInese cuIsIne.
Corona LxIra Is a good exanµIe oI IIe skIIIIuI use oI a
counIry's µerceµIIon Io µronoIe a Lrand. Because a vedge
oI cIIrus vas assocIaIed vIII IIe drInkIng oI MexIcan
1PL LAW 0I B0P0LP5 93
IequIIa, IIe InµorIers oI Corona LxIra used IIe sane
Inagery Io IauncI IIe Lrand.
TIe IooIIµIck and IIne on Ioµ oI IIe Corona LoIIIe
Lecane a vIsuaI synLoI IIaI you couId see IaIIvay across a
Lar or resIauranI. "WIaI's IIaI?¨ asked IIe non-Corona-
drInkIng consuner.
"II's Corona LxIra, IIe MexIcan Leer.¨ So successIuI vas
IIIs sIraIegy IIaI IIe Lrand Lecane IIe IargesI-seIIIng
InµorIed Leer In IIe UnIIed SIaIes, IoµµIng even HeIneken.
In a IvIsI, IIs AnerIcan success Ias sIInuIaIed saIes souII
oI IIe Lorder, vIere Corona LxIra Ias Lecone IIe IeadIng
Leer Lrand In MexIco.
TIe µerceµIIon oI a counIry Is InµorIanI. TIere Is no
sucI IIIng as a gIoLaI Lrand vIII a gIoLaI µerceµIIon.
º ToyoIa, Honda, and NIssan are gIoLaI Lrands vIII
1aµanese µerceµIIons.
º Conµaq, InIeI, and MIcrosoII are gIoLaI Lrands vIII
AnerIcan µerceµIIons.
º Don PérIgnon, PerrIer-1ouöI, and CIâIeau MouIon-
RoIIscIIId are gIoLaI Lrands vIII IrencI µerceµIIons.
º GuccI, Versace, and GIorgIo ArnanI are gIoLaI Lrands
vIII IIaIIan µerceµIIons.
WIII sone 62 µercenI oI IIs saIes and 76 µercenI oI IIs
µroIIIs ouIsIde oI NorII AnerIca, Coca-CoIa InsIsIs IIaI II Is
a gIoLaI Lrand, noI an AnerIcan Lrand. And II Is, IIIeraIIy.
(RoLerI GoIzueIa, Coke's IongIIne cIIeI execuIIve, vas Iron
CuLa. IIs currenI CLO, DougIas DaII, Is Iron AusIraIIa.)
BuI II vouId Le a najor narkeIIng nIsIake Ior Coca-
CoIa Io aLandon IIs AnerIcan IerIIage. Lvery Lrand (no
naIIer vIere II Is LoIIIed, assenLIed, nanuIacIured, or µro-
duced) Ias Io Le Iron sonevIere. As AnerIcan cuIIure
(esµecIaIIy In nusIc, IIIn, and IeIevIsIon) Ias µerneaIed IIe
vorId, Coca-CoIa Ias LeneIIIed greaIIy Lecause oI IIs AnerI-
can connecIIon. "II's IIe reaI IIIng,¨ Coke drInkers vIII say
µroudIy vIII accenIs Iron µIaces Iar and vIde.
Lvery Lrand, jusI IIke every µerson, Is Iron sonevIere.
A IIIII-generaIIon IrIsI-AnerIcan nIgII say Ie or sIe Is
"IrIsI.¨ Coca-CoIa, LoIIIed In MexIco, Is sIIII a grIngo Lrand.
TIe sane IoIds Irue Ior LevI's, IIe quInIessenIIaI AnerIcan
Lrand.
II doesn'I naIIer vIere your Lrand Is conceIved,
desIgned, or µroduced, IIs nane and IIs connoIaIIons deIer-
nIne IIs geograµIIc µerceµIIon. Häagen-Dazs nIgII Iave
Leen deveIoµed In Nev 1ersey, LuI IIs orIgIns sound ScandI-
navIan.
A nunLer oI years ago ve neI vIII IIe cIaIrnan oI IIe
SMH Grouµ, IIe conµany IIaI nakes IIe SvaIcI vaIcI.
"WIaI vouId you IIInk aLouI an auIonoLIIe nade In
SvIIzerIand?¨ Ie asked.
"GreaI,¨ ve reµIIed. "We Iave IIe µerIecI adverIIsIng
IeadIIne: Runs IIke a vaIcI.¨
"I'n gIad you IIke IIe conceµI,¨ Ie saId. "We're goIng Io
caII IIe nev µroducI IIe SvaIcI car.¨
"WaII a nInuIe,¨ ve added. "SvaIcI Is an InexµensIve
IasIIon vaIcI you vear a Iev IInes and IIrov In IIe dresser
draver. An auIonoLIIe Is a serIous µroducI and a serIous
InvesInenI. PeoµIe deIIne IIenseIves Ly vIaI IIey drIve. II
you vanI Io gIve your nev car a vaIcI nane, caII II a RoIex.¨
BuI Ie dIdn'I IIsIen. TIe conµany used IIe SvaIcI
nane vIIIe IIe car vas under deveIoµnenI (IIrsI In a joInI
venIure vIII VoIksvagen and IIen IaIer vIII Mercedes-
Benz). RecenIIy, vIser Ieads µrevaIIed and IIe nane vas
cIanged Io IIe SnarI car.
SnarI IIInkIng. TIe SnarI car Is nov avaIIaLIe In Luroµe
as a IueI-eIIIcIenI, Iov-µoIIuIIon car Ior congesIed cIIIes.
TIe cIoIce oI IIe SnarI nane Ior a gIoLaI µroducI IIIus-
IraIes a Irend In gIoLaI LrandIng: IIe use oI LngIIsI vords
Ior Lrands IIaI nay Iave no connecIIon vIII IIe UnIIed
1PL LAW 0I B0P0LP5 95
KIngdon, IIe UnIIed SIaIes, Canada, AusIraIIa, or any oIIer
LngIIsI-sµeakIng counIry.
Take a nev energy drInk InvenIed In AusIrIa. TIe anIno
acId-InIused, caIIeIne-InjecIed, deIoxIIyIng, carLonaIed drInk
vas noI caIIed ¨Po/cr S/icr.¨ InsIead, IIe nanuIacIurer used
IIe LngIIsI vords "Red BuII.¨
Red BuII Ias Lecone an "In¨ drInk In Luroµe and Ias
aIso Lecone a LIg Lrand Iere In IIe UnIIed SIaIes.
TIe Ioµ IIree IIgI-end Lrands oI LIue jeans (S100 and
uµ) aII Iave LngIIsI nanes, LuI none oI IIen are AnerIcan.
ReµIay and DIeseI are nade In IIaIy. And BIg SIar Is Iron
Irance.
LngIIsI Ias Lecone IIe second Ianguage oI IIe vorId. II
you are goIng Io deveIoµ a Lrand nane Ior use on IIe vorId-
vIde narkeI, IIe nane LeIIer vork In LngIIsI. II doesn'I
Iave Io Le an LngIIsI vord, LuI II sIouId sound IIke one.
In addIIIon, care sIouId Le Iaken vIen IransIaIIng Lng-
IIsI sIogans InIo oIIer Ianguages. SoneIInes IIe resuIIs can
Le dIsasIrous. Ior exanµIe: "Cone aIIve vIII IIe PeµsI gen-
eraIIon,¨ IransIaIed InIo CIInese, cones ouI as "PeµsI LrIngs
your ancesIors Lack Iron IIe grave.¨
TIe Perdue sIogan, "II Iakes a sIrong nan Io nake a Ien-
der cIIcken,¨ IransIaIed InIo SµanIsI neans: "II Iakes an
aroused nan Io nake a cIIcken aIIecIIonaIe.¨ And IIe Coors
Leer Iag IIne, "Turn II Ioose,¨ In SµanIsI Lecones "SuIIer
Iron dIarrIea.¨
WIIIe ve encourage one gIoLaI nessage Ior a Lrand,
soneIInes cIanges nusI Le nade Io acconnodaIe Ian-
guages oIIer IIan LngIIsI.
97
19
TIe nosI IrequenIIy vIoIaIed Iav Is IIe Iav oI consIsIency.
A Lrand cannoI geI InIo IIe nInd unIess II sIands Ior
soneIIIng. BuI once a Lrand occuµIes a µosIIIon In IIe
nInd, IIe nanuIacIurer oIIen IIInks oI reasons Io cIange.
"TIe narkeI Is cIangIng,¨ crIes IIe nanuIacIurer,
"cIange IIe Lrand.¨
MarkeIs nay cIange, LuI Lrands sIouIdn'I. Lver. TIey
nay Le LenI sIIgIIIy or gIven a nev sIanI, LuI IIeIr essenIIaI
cIaracIerIsIIcs (once IIose cIaracIerIsIIcs are IIrnIy
µIanIed In IIe nInd) sIouId never Le cIanged.
II IIe narkeI svIngs anoIIer vay, you Iave a cIoIce.
IoIIov IIe Iad and desIroy IIe Lrand. Or Iang In IIere and
Ioµe IIe nerry-go-round cones your vay agaIn. In our
exµerIence, IangIng In IIere Is your LesI aµµroacI.
Tanqueray Is IIe IeadIng IIgI-end gIn. BuI ALsoIuI and
SIoIIcInaya Iave creaIed a Irend Iovard IIgI-end vodkas.
So Tanqueray InIroduces Tanqueray vodka.
WIII Tanqueray vodka cuI InIo IIe ALsoIuI narkeI? OI
course noI.
WIII Tanqueray vodka undernIne IIe Tanqueray gIn
narkeI? UIIInaIeIy, yes.
Tanqueray sIouId sIIck vIII gIn and Ioµe IIe narkeI
svIngs In IIs dIrecIIon.
1 R£ L AW 0F C0N5I 51 £ NCY
^ br and l s not bul l t over nl ght . Suooess
l s measur ed l n deoades, not year s.
Brands are used as µersonaIIIy sIaIenenIs. (Sone nar-
keIIng µeoµIe caII IIese sIaIenenIs "Ladges.¨) Your cIoIce
oI a Ladge Is oIIen deIernIned Ly IIe sIaIenenI you vanI Io
nake Io IrIends, neIgILors, covorkers, or reIaIIves. Sone-
IInes II Is deIernIned Ly IIe sIaIenenI you vanI Io nake Io
yourseII. "I drIve a BMW.¨
As µeoµIe grov uµ, IIey oIIen vanI Io cIange IIeIr µer-
sonaIIIy sIaIenenIs. WIen kIds grov uµ, IIey InevIIaLIy
vanI Io nake a sIaIenenI aLouI IIeIr nevIound naIurIIy Ly
cIangIng Lrands . . . Iron Coca-CoIa Io BudveIser, Ior
exanµIe. II Coca-CoIa decIded Io Iry Io reIaIn IIese cus-
Ioners Ly "novIng vIII IIe narkeI,¨ II vouId IIen IogIcaIIy
InIroduce a µroducI caIIed Coca-CoIa Leer.
As IooIIsI as Coca-CoIa Leer nIgII seen Io you, conceµ-
IuaIIy II's no dIIIerenI Iron Tanqueray vodka, Coors vaIer,
or CrysIaI PeµsI. MarkeIs nay cIange, LuI Lrands sIouId
sIay IIe sane.
In IIe IIquor LusIness, LourLon and vIIskey are knovn
as Lrovn goods and gIn and vodka as vIIIe goods. TIere
nay Le a Irend Iron Lrovn Io vIIIe (and IIere Is), LuI
sIouId Brovn-Iornan InIroduce 1ack DanIeI's vodka? We
IIInk noI.
OI course II dId aIIov IIe InIroducIIon oI 1ack DanIeI's
Leer and 1ack DanIeI's cooIers. TIe Leer venI novIere and
vas kIIIed. TIe cooIers conIInue Io Iang on, LuI vIaI does a
sIssy cooIer Lrand do Io 1ack DanIeI's core Inage?
TIere nay Le a Irend Io MexIcan Iood (and IIere Is), LuI
sIouId a IrencI resIauranI add IajIIas Io IIs nenu? We
IIInk noI.
Brand LuIIdIng Is LorIng vork. WIaI vorks LesI Is
aLsoIuIe consIsIency over an exIended µerIod oI IIne. VoIvo
Ias Leen seIIIng saIeIy Ior IIIrIy-IIve years. BMW Ias Leen
IIe uIIInaIe drIvIng nacIIne Ior IvenIy-IIve years.
WIen µeoµIe do LorIng vork, IIey geI Lored. So every
once In a vIIIe, soneone aI a conµany IIke VoIvo geIs a
1PL LAW 0I U0N5I 51LNUY 99
LrIgII Idea. "WIy sIouId ve IInII ourseIves Io duII, LorIng,
saIe sedans? WIy don'I ve LrancI ouI InIo excIIIng sµorIs
cars?¨
So VoIvo recenIIy IauncIed a IIne oI sµorIs cars and even
a converIILIe. WIaI vIII a ragIoµ do Ior IIe VoIvo Lrand?
NoIIIng-exceµI dIIuIe IIs saIeIy nessage.
MeanvIIIe, BMW InIroduces a sIaIIon vagon versIon oI
IIe uIIInaIe drIvIng nacIIne. "Hey, vIy IInII ourseIves Io
careIree yuµµIes? We need Io Iave a veIIcIe Ior IIe young
urLan µroIessIonaIs vIen IIey grov uµ, geI narrIed, and
Iave kIds.¨ (Have you ever drIven a sIaIIon vagon IIrougI
IIe cones on a IesI Irack?)
WIaI dId IIe sIaIIon vagon do Ior BMW? NoIIIng,
exceµI erode IIe drIvIng Inage In IIe nInd oI IIe consuner.
ConsIsIency LuIII IIe LIIIIe Caesars Lrand, and Iack oI
consIsIency Is In IIe µrocess oI desIroyIng IIe LIIIIe Caesars
Lrand.
"PIzza! PIzza!¨ Lecane IIe cIaIn's raIIyIng cry. WIere
eIse couId you geI Ivo µIzzas Ior IIe µrIce oI one? TIe
µover oI IIIs LrandIng µrogran nade LIIIIe Caesars IIe
second-IargesI µIzza cIaIn In AnerIca.
"WIy sIouId ve IInII ourseIves Io Iake-ouI µIzza onIy?¨
IIe Lored execuIIves asked. So LIIIIe Caesars InIroduced
"DeIIvery. DeIIvery.¨ And µronµIIy IeII Io IIIrd µIace In saIes,
aIIer PIzza HuI and DonIno's PIzza.
II geIs vorse. In order Io Iurn IIe cIaIn around, LIIIIe
Caesars venI LIg. TIe snaII µIzza Lecane a nedIun-sIze
µIzza. TIe nedIun-sIze µIzza Lecane a Iarge µIzza. And IIe
Iarge µIzza Lecane an exIra-Iarge µIzza.
TaIk aLouI conIusIon. "I'd IIke Io order a nedIun-sIze
µIzza, µIease.¨
"Do you vanI a PIzza HuI nedIun, vIIcI Is acIuaIIy our
snaII sIze? Or do you vanI a LIIIIe Caesars nedIun, vIIcI
Is acIuaIIy a PIzza HuI Iarge?¨
"UI . . . do I sIIII geI Ivo µIzzas Ior IIe µrIce oI one?¨
"PIzza! PIzza!? No, ve don'I do IIaI anynore.¨
A µIIy. LIIIIe Caesars Iad one oI IIe LesI Lrands In IIe
µIzza caIegory. TIe onIy Lrand Iocused on IakeouI. TIe onIy
Lrand vIII an IdenIIIy and a nessage. (PIzza! PIzza!) And
nov II Ias noIIIng. AnoIIer vIcIIn oI IIe Iav oI consIsIency.
AcIuaIIy, nany LIIIIe Caesars sIores are drIIIIng Lack Io
IIe Ivo-Ior-one sIraIegy IIaI IIe conµany sIouId never
Iave aLandoned In IIe IIrsI µIace.
McDonaId's Ias Leen a kId-orIenIed IanIIy IanLurger
µIace Ior decades. "WIy sIouId ve IInII ourseIves Io kId-
orIenIed µroducIs? WIy noI InIroduce an aduII IanLurger
Io conµeIe vIII Burger KIng and Wendy's?¨
So IIe ArcI DeIuxe vas Lorn. One Iundred IIIIy nIIIIon
doIIars' vorII oI adverIIsIng IaIer, IIe ArcI DeIuxe Is
decIared a dIsasIer. And McDonaId's quIeIIy decIdes Io droµ
II Iron IIe nenu.
NoIIce one IIIng. II's aIvays IIe µroducI IIaI Is decIared
a IaIIure, never IIe LrandIng conceµI. McDonaId's Is a kId-
orIenIed IanIIy resIauranI. In sucI a seIIIng, an aduII Ian-
Lurger nIgII IasIe good In IIe nouII, LuI II Is noI goIng Io
IasIe good In IIe nInd.
Run uµ a red IIag vIenever you Iear IIe vords: "WIy
sIouId ve IInII ourseIves?¨
You sIouId IInII your Lrand. TIaI's IIe essence oI
LrandIng. Your Lrand Ias Io sIand Ior soneIIIng LoII sIn-
µIe and narrov In IIe nInd. TIIs IInIIaIIon Is IIe essenIIaI
µarI oI IIe LrandIng µrocess.
LInIIaIIon conLIned vIII consIsIency (over decades,
noI years) Is vIaI LuIIds a Lrand.
Rone vasn'I LuIII In a day. NeIIIer Is a Lrand oI
Ronano cIeese.
HavIng Iarµed on IIe Idea oI consIsIency and Iocus, vIy
vouId ve LrIng uµ IIe conceµI oI cIange?
Because noIIIng In IIIe, noIIIng In LrandIng, Is ever
aLsoIuIe. TIere are aIvays exceµIIons Io every ruIe. And IIe
Iav oI cIange Is IIe LIggesI exceµIIon Io IIe Iavs oI LrandIng.
WIere does IIe cIange occur? ConµanIes are oIIen
Iocused on vIaI IIey need Io do InIernaIIy In order Io IacIII-
IaIe IIe cIange oI a Lrand. TIe µrocedures, IIe nanuaIs,
IIe LrocIures, IIe µress conIerences, IIe adverIIsIng, IIe
narkeIIng.
BuI Lrand cIangIng does noI occur InsIde a conµany.
Brand cIangIng occurs InsIde IIe nInd oI IIe consuner. II
you vanI Io cIange your Lrand, keeµ your sIgIIs on your
IargeI: IIe consuner's nInd.
TIere are IIree sIIuaIIons vIere cIangIng your Lrand Is
IeasILIe.
Y0UR BRANß I5 W£AK 0R N0N£XI51£N1 IN 1R£ MINß
TIIs Is IIe easIesI sIIuaIIon oI aII. In essence, IIere Is no
Lrand, so you can do anyIIIng you vanI vIII IIe Lrand
nane. Use II on a IoIaIIy dIIIerenI µroducI In a IoIaIIy dIIIer-
enI caIegory, II you vIII. WIo's Io knov?
101
20 1 R£ L AW 0F CRAN6£
Br ands oan be ohanged, but onl y l nf r equent l y
and onl y ver y oar ef ul l y.
In 1985, InIeI nade a dranaIIc decIsIon Io geI ouI oI D-
RAM (dynanIc randon access nenory) cIIµs In order Io
Iocus on nIcroµrocessors, a µroducI InIeI InvenIed. In IIe
µrocess, InIeI nade IIs nane IIe LesI-knovn vorIdvIde
Lrand oI nIcroµrocessor. "InIeI InsIde¨ Lecane IIe IIene oI
a Lrand-LuIIdIng µrogran oI exceµIIonaI µover. (In nany
cases cusIoners are nore concerned vIII IIe Lrand nane
oI IIe µrocessor IIan IIey are vIII IIe Lrand nane oI IIe
µersonaI conµuIer.)
InIeI cIanged IIs Lrand Iron D-RAMs Io nIcroµrocessors.
BuI exceµI Ior a IandIuI oI conµuIer execuIIves and µurcIas-
Ing agenIs, vIo knev IIaI InIeI used Io sIand Ior D-RAMs?
Y0U WAN1 10 M0V£ Y0UR BRANß
ß0WN 1R£ F00ß CRAIN
II you are µernanenIIy IoverIng IIe µrIce oI your Lrand, you
can oIIen nove II dovn IIe µrIce Iadder vIIIouI IurIIng IIe
Lrand. CusIoners vIII LeIIeve IIey are geIIIng a IoI oI vaIue Ly
µurcIasIng your Lrand. II's noI necessarIIy a Lad nove. MarI-
Loro Iovered IIs cIgareIIe µrIces and gaIned narkeI sIare.
TIere's a IoI oI µresIIge In LuIIdIng RoIIs-Royces, LuI noI
a IoI oI µroIII. SoneIInes µrIces geI ouI oI IIne and µerna-
nenI adjusInenIs need Io Le nade.
GoIng In IIe oIIer dIrecIIon, novIng uµ IIe Iood cIaIn,
Is nucI Iarder II noI InµossILIe. HoIIday Inn Crovne PIaza
vas a dIIIIcuII seII unIII IIe cIaIn droµµed IIe HoIIday Inn
Iron IIe nane.
Y0UR BRANß I5 IN A 5L0W-M0VIN6 FI£Lß ANß 1R£
CRAN6£ I5 60IN6 10 1AK£ PLAC£ 0V£R AN £X1£Nß£ß
P£RI0ß 0F 1IM£
TvenIy-IIve years ago CIIIcorµ (and IIs CIIILank suLsIdIary)
vas aLouI 80 µercenI corµoraIe and 20 µercenI consuner.
Today IIe nunLers are aInosI reversed. CIIIcorµ Is aLouI
30 µercenI corµoraIe and 70 µercenI consuner.
CIIIcorµ Is successIuIIy novIng IIs CIIILank Lrand Iron
a corµoraIe Io a consuner µerceµIIon. BuI IIe key conceµI
Io keeµ In nInd Is IIaI IIIIIe cIange Ias acIuaIIy occurred In
IIe nInd oI IIe LankIng µrosµecI. InsIead oI "cIangIng¨
nInds, CIIIcorµ Ias aIIoved enougI IIne Io µass so IIaI IIe
naIuraI µrocess oI "IorgeIIIng¨ Iakes µIace.
WIaI vorks In LankIng jusI von'I vork In a IasI-novIng
IIeId IIke conµuIers or consuner eIecIronIcs. TIere's noI
enougI IIne Ior IIe "IorgeIIIng¨ µrocess Io Iake µIace.
CusIoners are never vrong. TIaI's one oI IIe nany
Iunan IraIIs IIaI Is so endearIng and yeI so IrusIraIIng
Iron a LrandIng µoInI oI vIev. WIen you Iry Io IeII cus-
Ioners IIaI your Lrand Is dIIIerenI IIan II used Io Le, IIey
vIII rejecI your nessage.
º Xerox conµuIers? No, Xerox Is a coµIer.
º GaIorade energy Lars? No, GaIorade Is a sµorIs drInk.
º Lµson conµuIers? No, Lµson Is a conµuIer µrInIer.
In a Ianous MIIIer LIIe IeIevIsIon connercIaI, IIe Leer
drInker sees an ex-IooILaII µIayer and says, "You're aI . . .
you're aI . . . you're aI . . .¨
"NIck BuonIconII,¨ says IIe IooILaII µIayer IeIµIuIIy.
"No, IIaI's noI II.¨
Iunny and aIso Irue. WIaI you IIInk your Lrand Is
reaIIy doesn'I naIIer. II's onIy vIaI your cusIoner IIInks
your Lrand Is IIaI naIIers.
KenIucky IrIed CIIcken Ias Leen IryIng Io vaIk avay
Iron IIe "IrIed¨ In IIs nane Ior a Iong IIne. IIrsI, II cIanged
IIe nane oI IIe cIaIn Io "KIC,¨ LuI IIaI dIdn'I IeIµ nucI
Lecause cusIoners say Io IIenseIves, "WIaI do IIose InI-
IIaIs sIand Ior?¨ Second, II µronoIed IIs roIIsserIe cIIcken
as IIe IeaIIIIer aIIernaIIve Io IrIed cIIcken.
Guess vIaI Iaµµened? PeoµIe sIIII venI Io KIC Ior IrIed
cIIcken. RecenIIy, KIC IIrev In IIe IoveI and venI Lack Io
1PL LAW 0I UPANUL 103
µronoIIng IrIed cIIcken. "We're goIng Io Lrag aLouI IIe
orIgInaI recIµe,¨ saId one IrancIIsee, "IIe one IIaI LrougII
us Io IIe dance.¨
You can Le sure IIaI IIe conceµI IIaI LrougII your
Lrand Io IIe dance Is sIIII IIrnIy enLedded In your
µrosµecI's nInd.
II you vanI Io cIange your Lrand, IIrsI Iook InIo IIe
µrosµecI's nInd. WIere are you? PerIaµs you're noI In IIe
nInd aI aII. IIne, cIange avay.
BuI II you are In IIe nInd, and II you Iave a unIque and
dIsIIncI µerceµIIon, IIen cIange your Lrand aI your ovn
rIsk. II's goIng Io Le a Iong, dIIIIcuII, exµensIve, and µerIaµs
InµossILIe µrocess.
Don'I say ve dIdn'I varn you.
WIIIe IIe Iavs oI LrandIng are InnuIaLIe, Lrands IIen-
seIves are noI. TIey are Lorn, IIey grov uµ, IIey naIure,
and IIey evenIuaIIy dIe.
II's sad. ConµanIes are vIIIIng Io sµend nIIIIons Io save
an oId Lrand, yeI IIey resIsI sµendIng µennIes Io creaIe a
nev Lrand. Once you undersIand IIe naIure oI LrandIng,
you'II knov vIen II Is IIne Io IeI your oId Lrand dIe a naIu-
raI deaII.
OµµorIunIIIes Ior nev Lrands are consIanIIy LeIng cre-
aIed Ly IIe InvenIIon oI nev caIegorIes. TIe rIse oI IIe µer-
sonaI conµuIer creaIed oµµorIunIIIes Ior Conµaq, DeII,
InIeI, MIcrosoII, and nany oIIer Lrands.
BuI IIe rIse oI IIe µersonaI conµuIer aIso µuI µressure
on esIaLIIsIed nInIconµuIer Lrands IIke DIgIIaI, DaIa Gen-
eraI, and Wang.
II's IIke IIIe IIseII. A nev generaIIon aµµears on IIe scene
and goes oII In excIIIng nev dIrecIIons. Careers are Lorn and
LIosson. MeanvIIIe, IIe oId generaIIon vIIIers and dIes.
Don'I IIgII II. Ior Lrands, IIke µeoµIe, IIere Is a IIne Io
IIve and a IIne Io dIe. TIere Is a IIne Io InvesI In a Lrand
and IIere Is a IIne Io IarvesI a Lrand. And, uIIInaIeIy, IIere
Is a IIne Io µuI IIe Lrand Io sIeeµ.
"TIde's In. DIrI's ouI.¨ TIe rIse oI deIergenI Lrands IIke
105
21 1 R£ L AW 0F M0R1AL I 1 Y
No br and wl l l l l ve f or ever. Lut hanasl a
l s of t en t he best sol ut l on.
ProcIer & GanLIe's TIde µuI µressure on Iaundry soaµ
Lrands IIke RInso, vIIcI evenIuaIIy Iaded avay.
ConµanIes nake serIous errors oI judgnenI vIen IIey
IIgII vIaI sIouId Le a naIuraI µrocess. YeI IIe NursIng
Hone Ior DyIng Brands does a LoonIng LusIness vIII nII-
IIons In adverIIsIng and µronoIIonaI doIIars LeIng sµenI Io
keeµ IernInaIIy III Lrands on IIIe-suµµorI sysIens.
Don'I vasIe noney on vaIkers and vIeeIcIaIrs. Sµend
your noney on IIe nexI generaIIon. InvesI your noney In a
nev Lrand vIII a IuIure.
Many nanagers nake µoor IInancIaI decIsIons Lecause
IIey IaII Io dIsIInguIsI LeIveen Ivo asµecIs oI a Lrand's vaIue.
º Hov veII knovn IIe Lrand Is
º WIaI IIe Lrand sIands Ior
A veII-knovn Lrand IIaI doesn'I sIand Ior anyIIIng (or
sIands Ior soneIIIng IIaI Is oLsoIeIe) Ias no vaIue. A Lrand
IIaI sIands Ior soneIIIng Ias vaIue even II IIe Lrand Is noI
µarIIcuIarIy veII knovn.
You can do soneIIIng vIII a Lrand IIaI sIands Ior
soneIIIng. WIen you sIand Ior soneIIIng, you aI IeasI Iave
IIe oµµorIunIIy Io creaIe a µoverIuI Lrand. TIIs Is esµe-
cIaIIy Irue In IIe area oI µuLIIcIIy.
WIaI's a KraII? WIo knovs? WIen a Lrand Is jusI veII
knovn LuI doesn'I sIand Ior anyIIIng, II doesn'I Iend IIseII Io
µuLIIcIIy and oIIer LrandIng IecInIques. II Ias novIere Io
go LuI dovn.
WIaI's a Kodak? A convenIIonaI canera and conven-
IIonaI µIoIograµIIc IIIn. BuI IIaI narkeI Is sIovIy sIIIIIng
Io dIgIIaI µIoIograµIy.
Look vIaI Iaµµened Io IIe 8nn noIIon µIcIure canera
and IIIn. Ior anaIeurs aI IeasI, IIIn caneras are dead. TIey
Iave Leen aInosI IoIaIIy reµIaced Ly eIecIronIc sysIens
usIng vIdeoIaµe. So Iov dId Kodak Iry Io conµensaIe Ior
IIe Ioss oI IIe anaIeur novIe IIIn LusIness II used Io donI-
naIe? OI course. II µuI IIs Kodak Lrand nane on vIdeoIaµe
casseIIes.
Does IIe Kodak Lrand donInaIe IIe vIdeoIaµe LusIness?
OI course noI. Kodak sIands Ior µIoIograµIy. TIe Kodak
Lrand Ias no µover Leyond IIe reaIn oI convenIIonaI µIo-
IograµIy.
BuI vIdeoIaµe Is onIy a sIde skIrnIsI Io IIe naIn LaIIIe
IIaI Is deveIoµIng LeIveen µIoIograµIIc caneras and dIgI-
IaI caneras. Long Iern, Kodak's LIIIIon-doIIar µIoIograµIIc
LusIness Is In jeoµardy. WIII IIe narkeI go dIgIIaI?
HIsIory Is noI on Kodak's sIde. TIe sIIde ruIe Ias Leen
reµIaced Ly IIe µockeI caIcuIaIor. TIe anaIog conµuIer Ias
Leen reµIaced Ly IIe dIgIIaI conµuIer. TIe record aILun
Ias Leen reµIaced Ly IIe conµacI dIsc. AnaIog ceIIuIar
µIones are LeIng reµIaced Ly dIgIIaI µIones.
In nusIc, IeIevIsIon, and IeIeµIones, IIe Irend Ias Leen
Io dIgIIaI. TIe average auIonoLIIe Ioday Ias nore dIgIIaI
conµuIIng µover IIan an IBM naInIrane Iad noI Ioo
nany years ago.
IIgII or IIee? As you nIgII Iave exµecIed, Kodak Ias
decIded Io do LoII. And, In our oµInIon, Kodak Is nakIng
najor LrandIng nIsIakes on LoII sIdes oI IIe sIreeI.
Take IIe µIoIograµIy sIde oI IIe sIreeI. Kodak Ias Leen
IIe najor drIver In IIe creaIIon oI IIe Advanced PIoIo Sys-
Ien. Based on a nev 24nn IIIn and nev eIecIronIc conIroI
sysIens, APS gIves you a cIoIce oI IIree µrInI IornaIs, µIus
a IoI oI oIIer advanIages. BesIdes Kodak's nassIve uµ-IronI
InvesInenI In APS, IIe scIene requIres µIoIo sIoµs Io
sµend Iundreds oI nIIIIons oI doIIars Ior nev IIIn-
µrocessIng equIµnenI.
(You knov IIaI Kodak sµenI a IoI oI noney on deveIoµ-
Ing IIe APS sysIen, Lecause II even gave II a nev nane, IIe
Kodak AdvanIIx sysIen.)
TIe quesIIon Is oLvIous. WIy sµend aII IIaI noney on
convenIIonaI µIoIograµIy II IIe narkeI Is goIng dIgIIaI?
1PL LAW 0I M0P1ALI 1Y 107
WouIdn'I II Le LeIIer Io IeI IIe oId sysIen dIe a naIuraI deaII
and use IIe noney Io LuIId a nev dIgIIaI Lrand?
MeanvIIIe, on IIe dIgIIaI sIde oI IIe sIreeI, Kodak Is
aIso nakIng a serIous error (and IIIs nIgII Le IIs LIggesI
nIsIake oI aII). InsIead oI IauncIIng a nev Lrand, Kodak Is
venIurIng InIo IIe IIeId vIII IIe Kodak Lrand nane (Kodak
DIgIIaI ScIence).
II vIII never vork. In IIe IIrsI µIace, IIere are Ioo nany
conµeIIIors In IIe narkeI vIII a dIgIIaI reµuIaIIon IIaI
Kodak Iacks. To nane a Iev: Canon, MInoIIa, SIarµ, Sony,
and CasIo. Lven nore InµorIanI, vIen a revoIuIIonary nev
caIegory deveIoµs, IIe InevIIaLIe vInner Is a revoIuIIonary
nev Lrand nane.
WIen nInIaIure eIecIronIc µroducIs Lecane IecInIcaIIy
IeasILIe, IIe vInnIng Lrand vas noI GeneraI LIecIrIc, RCA,
or ZenIII. II vas Sony, a Lrand-nev Lrand.
WIen vIdeoIaµe renIaIs oI noIIon µIcIures Lecane con-
nercIaIIy IeasILIe, IIe vInnIng reIaII Lrand vas noI Sears,
7-LIeven, or any suµernarkeI or drugsIore cIaIn. II vas
BIockLusIer VIdeo, a Lrand-nev Lrand.
WIen µersonaI conµuIers Invaded IIe oIIIce IIeId, IIe
vInnIng Lrand vas noI IBM, AT&T, ITT, HevIeII-Packard,
Texas InsIrunenIs, DIgIIaI, UnIsys, MoIoroIa, Sony, HIIacII,
NLC, Canon, or SIarµ. II vas DeII, a Lrand-nev Lrand.
WIaIever Iaµµened Io RInso WIIIe and RInso BIue?
AInosI none oI IIe soaµ Lrands survIved IIe deIergenI era.
WIII IIe µIoIograµIy Lrands do any LeIIer In IIe dIgIIaI era?
II renaIns Io Le seen, LuI our LesI guess Is no.
º WIaI's a CIevroIeI? A Iarge, snaII, cIeaµ, exµensIve car
or Iruck.
º WIaI's a MIIIer? A reguIar, IIgII, draII, cIeaµ, exµensIve
Leer.
º WIaI's a PanasonIc? AI one µoInI In IIne, PanasonIc vas a
conµuIer, conµuIer µrInIer, IacsInIIe nacIIne, scanner,
IeIeµIone, IeIevIsIon seI, and coµIer, anong oIIer IIIngs.
TIese are aII Lurned-ouI Lrands Lecause IIey Iave IosI
IIeIr sInguIarIIy. TIey couId, oI course, renaIn on IIe nar-
keIIng scene Ior nany years Lecause oI IIe IIne-exIensIon
generosIIy oI IIeIr conµeIIIors. BuI nake no nIsIake aLouI
II. Loss oI sInguIarIIy veakens a Lrand.
WIaI's an AIarI? An AIarI used Io Le a vIdeo gane, IIe
IeadIng vIdeo gane as a naIIer oI IacI. TIen AIarI IrIed Io
Lecone a conµuIer.
WIaI's an AIarI? A Lrand IIaI Ias IosI IIs IIIe Lecause II
IosI IIs sInguIarIIy.
II's IIIs sInguIarIIy IIaI IeIµs a Lrand µerIorn IIs nosI
InµorIanI IuncIIon In socIeIy.
WIaI's a Lrand? A µroµer noun IIaI can Le used In µIace
oI a connon vord.
109
22 1 R£ L AW 0F 5I N6UL ARI 1 Y
The most l mpor t ant aspeot of a br and
l s l t s sl ngl e ml ndedness.
º InsIead oI an InµorIed Leer, you can ask Ior a HeIneken.
º InsIead oI an exµensIve SvIss vaIcI, you can ask Ior a
RoIex.
º InsIead oI a IIIck sµagIeIII sauce, you can ask Ior Prego.
º InsIead oI a saIe car, you can ask Ior a VoIvo.
º InsIead oI a drIvIng nacIIne, you can ask Ior a BMW.
WIaI's a Lrand? A sInguIar Idea or conceµI IIaI you ovn
InsIde IIe nInd oI IIe µrosµecI.
II's as sInµIe and as dIIIIcuII as IIaI.
1R£
I MMU1ABL£
LAW5 0F
I N1£RN£1
BRANßI N6
PuIIIng your Lrand nane on a WeLsIIe doesn'I nake II an
InIerneI Lrand. TIere are Lrands and IIere are InIerneI
Lrands, and IIe Ivo are quIIe dIIIerenI.
II you vanI Io LuIId an InIerneI Lrand, you sIouIdn'I IreaI
IIe InIerneI as a nedIun, you sIouId IreaI II as a LusIness.
BuI IIe InIerneI Is a nedIun, you nIgII Le IIInkIng,
jusI IIke nevsµaµers, nagazInes, radIo, and IeIevIsIon.
MayLe so, LuI II you vanI Io LuIId a µoverIuI InIerneI
Lrand, you vIII Iave Io IreaI IIe InIerneI as an oµµorIunIIy,
noI as a nedIun. You vIII Iave Io IreaI IIe InIerneI as a
IoIaIIy nev LusIness vIere IIe sIaIe Is vIµed cIean and
vIere endIess oµµorIunIIIes avaII IIose vIo can Le IIrsI Io
creaIe nev caIegorIes In IIe nInd.
º II vasn'I ABC, NBC, CNN, IIe Ncu Yor/ Tincs, IIe \a//
S/rcc/ 1ourna/, Tinc nagazIne, Eusincss \cc/, or
Ncusucc/ IIaI creaIed IIe nosI successIuI InIornaIIon
sIIe on IIe InIerneI. II vas YaIoo!
º II vasn'I Barnes & NoLIe, WaIdenLooks, or Borders IIaI
creaIed IIe nosI successIuI LookseIIer on IIe InIerneI. II
vas Anazon.con.
113
1 R£ L AW 0F £ I 1 R£ R/ 0R
The l nt er net oan be a busl ness
or a medl um, but not bot h.
1
º II vasn'I SoIIeLy's or CIrIsIIe's IIaI creaIed IIe nosI
successIuI aucIIon sIIe on IIe InIerneI. II vas eBay.
º II vasn'I AT&T, MIcrosoII, or CaLIevIsIon IIaI LuIII IIe
nosI successIuI µrovIder oI InIerneI servIce. II vas
AnerIca OnIIne.
Lveryone knovs IIe InIerneI vIII cIange IIeIr LusIness as
veII as everyLody eIse's LusIness. BuI Iov? And vIaI can you
do aLouI II? II's easy Io err In one oI Ivo dIIIerenI vays. You can
nake eIIIer Ioo nucI oI IIe InIerneI or Ioo IIIIIe.
You nake Ioo nucI oI IIe NeI vIen you assune IIaI II
vIII conµIeIeIy reµIace IradIIIonaI vays oI doIng LusIness.
No nev nedIun Ias ever done IIaI. TeIevIsIon dIdn'I
reµIace radIo. RadIo dIdn'I reµIace nagazInes. And naga-
zInes dIdn'I reµIace nevsµaµers.
You nake Ioo IIIIIe oI IIe NeI vIen you assune II vIII
noI aIIecI your LusIness aI aII. Lvery nev nedIun Ias Iad
sone eIIecI on every LusIness, as II Ias Iad on exIsIIng
nedIa. RadIo, Ior exanµIe, vas µrInarIIy an enIerIaInnenI
nedIun unIII IIe arrIvaI oI IeIevIsIon. Today radIo Is µrIna-
rIIy a nusIc, nevs, and IaIk nedIun.
GreaI, you nIgII Le IIInkIng. We'II µIay IIe InIerneI
rIgII dovn IIe nIddIe. We'II IreaI II as anoIIer arrov In our
narkeIIng quIver. TIaI vouId Le your LIggesI nIsIake oI aII.
You IracIure your Lrand vIen you Iry Io nake II an InIerneI
Lrand as veII as a µIysIcaI or reaI-vorId Lrand. No Lrand
can Le aII IIIngs Io aII µeoµIe. YeI IIaI Is vIaI nany InIer-
neI exµerIs reconnend.
To quoIe one InIerneI guru: "InIerneI connerce needs
Io Le µarI oI a Lroader eIecIronIc LusIness sIraIegy, a sIraI-
egy IIaI enLraces aII IIe vays IIaI you IeI your cusIoners
do LusIness vIII you eIecIronIcaIIy: Ly IoucI-Ione µIone,
Ly Iax, Ly e-naII, Ly kIosk, vIa IandIeIds, and vIa IIe WeL.¨
Many Lrand ovners IoIIov IIIs sIraIegy. TIey carry IIeIr
1PL LAW 0I LI 1PLP/0P 115
exIsIIng Lrands over Io IIe InIerneI and vaII Ior nIracIes Io
Iaµµen. So ve Iave sIIes IIke IIe IoIIovIng:
º LevI.con, Dockers.con, BarLIe.con
º ABC.con, IorLes.con, WasIIngIonµosI.con
º Iord.con, GM.con, DaInIercIrysIer.con
Does Lrand IanIIIarIIy In IIe "ouIerneI¨ IosIer InIeresI
In IIe InIerneI? A sIudy Ly IorresIer ResearcI anong
sIxIeen- Io IvenIy-Ivo-year-oIds says "no.¨ AccordIng Io IIe
CanLrIdge, MassacIuseIIs-Lased IIrn, "Sone oI IIe IoIIesI
Lrands In IIe oII-IIne vorId Iave no onIIne vaIue.¨
TIaI's noI surµrIsIng. DId any naIIonaIIy recognIzed
nevsµaµer or nagazIne nake IIe IransIIIon Io IeIevIsIon?
No, IIey vere aII IaIIures on IIe IuLe, nosI noIaLIy USA
Today and Good Housc/ccpin¸. (USA Today on TV IosI an
esIInaIed S15 nIIIIon IIe IIrsI year and vas canceIed durIng
IIs second season.)
BusIness nanagers Iave nucI In connon vIII nIIIIary
generaIs vIo IIgII IIeIr nexI var vIII IIe µrevIous var's
veaµons. WIIness IIe vave oI WeLsIIes IIaI nInIc IIe reaI
vorId.
S/a/c nagazIne, InIroduced Ly MIcrosoII vIII a LIaze oI
µuLIIcIIy, Is a IyµIcaI exanµIe. LdIIed Ly a senIceIeLrIIy
(MIcIaeI KInsIey, nade Ianous Ly CNN's Crossjirc), S/a/c
sIruggIed aIong as a WeL versIon oI a convenIIonaI nagazIne,
IncIudIng a convenIIonaI suLscrIµIIon µrIce oI S29.95 a year.
OnIy IvenIy-eIgII IIousand µeoµIe suLscrILed. So S/a/c
svIIcIed Io a nore IyµIcaI WeL suLscrIµIIon µrIce, zero doI-
Iars a year. TraIIIc Io IIe S/a/c sIIe zooned Io 2.4 nIIIIon vIs-
IIors a nonII. TIe quesIIon Is, Iov vIII MIcrosoII nake
noney Ly gIvIng avay IIe nagazIne?
TIe oLvIous ansver Is vIII adverIIsIng, vIIcI ve don'I
IIInk vIII vork eIIIer. Sa/on, anoIIer nagazIne-Iyµe µerIodIcaI,
Ias Leen µuLIIsIed on IIe WeL ever sInce 1995. In sµIIe oI IIe
IacI IIaI II Ias Leen aIIracIIng 2.5 nIIIIon vIsIIors a nonII, IIe
µuLIIcaIIon Is sIIII unµroIIIaLIe. LasI year II µosIed revenues oI
jusI S3.5 nIIIIon, naInIy Iron adverIIsIng.
As a naIIer oI IacI, IIe nagazIne Is noI a good anaIogy
Ior IIe InIerneI. Nor Ior IIaI naIIer are radIo, IeIevIsIon,
Looks, or nevsµaµers. TIe InIerneI Is IIe InIerneI, a unIque
nev nedIun vIII IIs ovn unIque nev needs and requIre-
nenIs. BuIIdIng a Lrand on IIe InIerneI cannoI Le done Ly
usIng IradIIIonaI Lrand-LuIIdIng sIraIegIes.
On IIe InIerneI, you sIouId sIarI IIe Lrand-LuIIdIng
µrocess Ly IorgeIIIng everyIIIng you Iave Iearned In IIe
µasI and askIng yourseII IIese Ivo quesIIons:
1. WIaI vorks on IIe InIerneI?
2. WIaI doesn'I vork on IIe InIerneI?
HoµeIuIIy IIese Iavs vIII µrovIde IIe ansvers you need
Io LuIId a µoverIuI InIerneI Lrand. TIe naIerIaI Is noI
Lased on sIraIegIes IIaI Iave vorked In oIIer nedIa.
RaIIer, II Is Lased on our exµerIence vIII deveIoµIng sIraIe-
gIes Ior dozens oI InIerneI sIarI-uµs. WIaI vorked and vIaI
dIdn'I vork.
WIIcI Ieads Io IIe IIrsI and nosI crucIaI decIsIon you
nusI nake: Ior ny µroducI or servIce, Is IIe InIerneI goIng
Io Le a LusIness or a nedIun?
II IIe InIerneI Is goIng Io Le a LusIness, IIen you nusI
sIarI Iron scraIcI. You nusI deveIoµ a IoIaIIy nev sIraIegy,
a IoIaIIy nev vay oI doIng LusIness, and (nosI InµorIanI oI
aII) a IoIaIIy nev nane.
WIo Is goIng Io vIn IIe InIerneI Look var, Anazon.con,
BarnesandnoLIe.con, or Borders.con? Is IIere any quesIIon
In your nInd IIaI Anazon.con vIII Le IIe LIg vInner? TIere
sIouIdn'I Le. II IIe InIerneI Is a LusIness, µuIIIng your nane on
LoII your µIysIcaI sIore and your WeLsIIe Is a serIous error.
WIo Is goIng Io vIn IIe InIerneI Lank var, CIIILank.con,
CIase.con, or BankoIAnerIca.con?
None oI IIe aLove. TIe Lank var vIII Le von Ly one oI
IIe InIerneI-onIy Lanks. (UnIess, oI course, none oI IIe
InIerneI-onIy Lanks do a good joL oI LrandIng.) WIy? Bank-
Ing Is goIng Io Le a LusIness on IIe InIerneI, noI a nedIun.
II IIe InIerneI Is goIng Io Le a nedIun, IIen you can use
your exIsIIng Lrand nane. TIe InIerneI Lecones a conµIe-
nenI Io or reµIacenenI Ior exIsIIng nedIa, Le IIey radIo,
IeIevIsIon, dIrecI naII, nevsµaµers, or nagazInes.
In IruII, IIe InIerneI Is a good InIornaIIon nedIun, an
eIecIronIc IILrary, II you vIII. Lvery conµany IIaI Ias a sIz-
aLIe LusIness needs a WeLsIIe Io keeµ IIs cusIoners and
µrosµecIs InIorned aLouI IIe range oI µroducIs and serv-
Ices II oIIers, as veII as µrIces, deIIvery daIes, varranIIes,
coIors, sIzes, cusIoner IesIInonIaIs, and so on.
InsIead oI askIng IIe cusIoner Io sIuIIIe IIrougI ouI-oI-
daIe caIaIogs or sµec sIeeIs, a veII-desIgned WeLsIIe can
µresenI uµ-Io-daIe InIornaIIon In a IIerarcIIcaI and InIer-
acIIve vay. (Ior IIe IIrsI IIne, a µaµerIess oIIIce Is vIIIIn
IIe reaIn oI µossILIIIIy.)
TIe WeL sIouId sInµIIIy nany ordInary LusIness Irans-
acIIons. II you vanI Io suLscrILe Io Ncusucc/, once you are
connecIed Io your servIce µrovIder you sIouId Le aLIe Io
Iyµe uuu.ncusucc/.con InIo your Lrovser, go Io IIe
Ncusucc/ sIIe, and suLscrILe. InµuIIIng your nane,
address, and credII card or Lank accounI nunLer sIouId do
II. No cards IaIIIng ouI oI IIe nagazIne, no sIanµs, no IrIµs
Io IIe µosI oIIIce, no µIone caIIs.
In IIIs exanµIe you'II noIIce IIaI IIe µroducI doesn'I
cIange. Ncusucc/ Is sIIII a nagazIne deIIvered veekIy Ly
IIe U.S. PosIaI ServIce. TIe InIerneI Is a nedIun IIaI sIn-
µIIIIes IIe seIIIng oI IIe µroducI. II nIgII aIso aIIov you Io
sanµIe IIe µroducI so you can decIde vIeIIer or noI you
vanI Io suLscrILe.
Ior sone Lrands, oI course, IIe InIerneI vIII reµIace exIsI-
Ing dIsIrILuIIon neIIods. (Any LusIness IIaI reIIes IeavIIy on
IIe IeIeµIone Is a good candIdaIe Ior novIng Io IIe WeL.
IIovers and µIzza deIIvery are Ivo oLvIous candIdaIes.)
TIree LIg Lrands IIaI reIy IeavIIy on IIe µIone (DeII,
CIsco, and CIarIes ScIvaL) are novIng Io IIe InIerneI
usIng IIeIr sane nanes.
DeII ConµuIer Is In IIe µrocess oI sIIIIIng Io seIIIng on
IIe InIerneI. II von'I Iaµµen overnIgII, oI course, LuI you
can vIsuaIIze IIe day vIen nosI oI DeII's LusIness vIII Le
done on IIe NeI. (CurrenIIy IIe InIerneI accounIs Ior aLouI
50 µercenI oI IIe conµany's revenues.)
Ior DeII IIe InIerneI Ias µaId oII In nore vays IIan jusI
Increased revenues. II Ias IeIµed IIe conµany cuI saIes and
adnInIsIraIIve cosIs Iron 15 µercenI oI revenues IIve years
ago Io an esIInaIed 9 µercenI currenIIy.
CIsco SysIens, IIe vorId's IargesI suµµIIer oI neIvork
equIµnenI, Ias aIso noved Io IIe NeI. Today CIsco con-
ducIs nore IIan 75 µercenI oI IIs LusIness over IIe InIerneI.
TIe nove Io IIe InIerneI Ias reduced IIe Iead IIne needed
Io IIII orders Iron IIree veeks Io IIree days. WIIIe IoIaI rev-
enue Ias grovn 500 µercenI, IIe nunLer oI enµIoyees
requIred Io servIce requesIs Ias grovn Ly onIy 1 µercenI.
CIarIes ScIvaL Is aIso sIIIIIng Iron IIe µIone Io IIe
NeI. II Ias Lecone IIe IeadIng onIIne Lroker vIII nore IIan
IIree nIIIIon InIerneI accounIs (and IIousands nore added
daIIy). Today ScIvaL IandIes aLouI 236,000 Irades a day, 80
µercenI oI vIIcI are µIaced eIecIronIcaIIy.
InIIIaIIy, CIarIes ScIvaL IIougII II needed a seµaraIe
nane Ior IIs InIerneI oµeraIIon, so II cane uµ vIII IIe
"eScIvaL¨ nane. RecenIIy IIe conµany sIorIened IIe
nane Io uuu.Sc/uab.con.
TIe ScIvaL sIIuaIIon IIIusIraIes Ivo InµorIanI µrIncI-
µIes. One, IIe sane nane can Le used as Iong as your LusI-
ness vIII Le novIng Io IIe NeI. Tvo, on IIe InIerneI, IIe
sIorIer IIe nane IIe LeIIer. CIarIes ScIvaL Is noI a µarIIc-
uIarIy Iong nane, LuI IIe conµany decIded Io sIorIen II Io
"ScIvaL¨ on IIe WeL.
II you Iave a cIoIce, don'I Iake a cIance on a Iong nane.
WIen µrosµecIs Iave Io Iyµe a nane on a keyLoard, IIey are
goIng Io gravIIaIe Io IIe sIorIer nanes.
MerrIII LyncI Is aIso nakIng a nove Io IIe InIerneI, µre-
sunaLIy usIng LoII IIs exIsIIng nane (uuu.Mcrri//Lync/.con)
and IIs InIIIaIs (uuu.n/.con). TIaI Is a nIsIake. UnIIke CIarIes
ScIvaL, MerrIII LyncI Is noI goIng aII IIe vay. IIs InIerneI
nove Is onIy a IaII sIeµ. TIe IIrn oLvIousIy Ias no InIenIIon oI
gIvIng uµ IIe 14,800 veII-µaId sIockLrokers vIo generaIe nosI
oI IIs LusIness.
TIe MerrIII LyncI WeLsIIe couId IuncIIon as an InIor-
naIIon source Ior IIe cusIoners vIo do LusIness vIII IIs
Lrokers. BuI noI as a seµaraIe LusIness. II MerrIII LyncI
vanIs Io use IIe InIerneI as a LusIness, IIe IIrn needs Io
cone uµ vIII a seµaraIe nane.
WIII 30 Io 35 µercenI oI aII sIock Irades Ly IndIvIduaIs
aIready on IIe InIerneI, MerrIII LyncI Is In a dIIIerenI µosI-
IIon IIan ScIvaL. II onIy Ias Iour cIoIces:
1. Do noIIIng. NoI a Lad Idea. TIere vIII aIvays Le µeoµIe
vIo vanI IIe µersonaI aIIenIIon oI a IInancIaI consuII-
anI. IurIIernore, Ly doIng noIIIng MerrIII LyncI can
µorIray IIe negaIIve sIde oI InIerneI IradIng. II's Iard Io
LadnouII IIe CIarIes ScIvaL conµeIIIIon vIen you
are oIIerIng IIe sane servIces as IIey are.
2. Make IIe sane nove IIaI CIarIes ScIvaL dId and sIIII
IIe LusIness Io IIe InIerneI. II's µroLaLIy Ioo IaIe In IIe
gane Ior IIIs Io vork. IurIIernore, vIaI does IIe IIrn
do vIII IIs IourIeen IIousand Lrokers and IIs reµuIaIIon
Ior servIce?
3. SeI uµ an InIerneI Lrokerage LusIness vIII a seµaraIe
nane. TIIs Is vIaI MerrIII LyncI sIouId Iave done . . .
years ago.
4. Use IIe MerrIII LyncI nane on LoII LusInesses, vIIcI Is
vIaI IIey are doIng. TIIs Is a "IooI-In-LoII-canµs¨ sIraI-
egy IIaI vIII never vork. In IIe Iong run II vIII undernIne
IIe reµuIaIIon oI MerrIII LyncI. II vas noI Iong ago IIaI
MerrIII's Lrokerage cIIeI, 1oIn SIeIIens, µuLIIcIy sIaIed
IIaI "IIe do-II-yourseII nodeI oI InvesIIng, cenIered on
InIerneI IradIng, sIouId Le regarded as a serIous IIreaI Io
AnerIcans' IInancIaI IIves.¨
TrusI Is an InµorIanI IngredIenI In any reIaII LusIness. II
your cusIoners don'I IrusI you, IIey are unIIkeIy Io conIInue
Io do LusIness vIII you. You undernIne IIaI IrusI Ly sµeak-
Ing ouI oI LoII sIdes oI your nouII. A conµany sIouId Iake
a sIand and sIIck vIII II. TIaI's IIe vay Io LuIId raµµorI
vIII cusIoners over a Iong µerIod oI IIne. SoneIInes II's
nore InµorIanI Io Le consIsIenI IIan Io Le "rIgII.¨
In any IndusIry, IIere's roon Ior nuIIIµIe aµµroacIes,
LuI IIere nay noI Le roon Ior nuIIIµIe aµµroacIes In IIe
sane conµany under one Lrand. Ior nany snaIIer conµa-
nIes, IIe LesI sIraIegy nIgII Le Io nove Iock, sIock, and Lar-
reI Io IIe WeL.
Hoover's, Inc. sIarIed ouI as a LooksIore and IIen a µuL-
IIsIer oI LusIness Looks. IIs IIrsI Look, Hoovcr´s Handboo/
1991. Proji/cs oj Ovcr 500 Major Corpora/ions, vas an enor-
nous success. TIe conµany venI on Io µuLIIsI a nunLer oI
oIIer LusIness and reIerence Looks.
Today, Iovever, Hoover's, Inc. Is µrInarIIy an InIerneI
conµany seIIIng corµoraIe µroIIIes and oIIer reIerence
naIerIaI Io a vIde range oI conµanIes and InsIIIuIIons.
LIgIIy-Iour µercenI oI IIe conµany's revenues nov cone
Iron IIs WeL servIces.
ProvIdenI AnerIcan vas a snaII HarIIord Insurance
conµany IIaI decIded Io junµ on IIe NeI. So II soId oII IIs
IradIIIonaI undervrIIIng LusIness and severed IIs reIaIIon-
sIIµs vIII sone IvenIy IIousand agenIs. TIen II cIanged IIs
nane Io HeaIIIAxIs.con and Lecane an InIerneI conµany
seIIIng IeaIII Insurance Iron a varIeIy oI najor carrIers aI
µrIces 15 µercenI Iover IIan II Iad Leen seIIIng oII-IIne.
RecenIIy HeaIIIAxIs neIanorµIosed InIo an ASP seIIIng
Insurance IecInoIogy soIIvare on-IIne.
Larry LaIIan vas an aucIIoneer sµecIaIIzIng In seIIIng
reµossessed sIngIe-IanIIy Iones Iron IoIeI LaIIroons
across IIe counIry. In sµIIe oI LoonIng saIes oI S600 nIIIIon
a year, Ie decIded Io sIuI dovn IIs conµany's IourIeen
LrancI oIIIces and nove Io IIe InIerneI. He IIred a sIaII oI
IvenIy-Ivo conµuIer exµerIs and renaned IIe conµany
"HoneLId.con.¨ In a IesI oI IIe sIIe Ie soId 136 ouI oI 147
Iones over IIe WeL aI µrIces IIaI averaged 97 µercenI oI IIsI.
Larger conµanIes are LIg enougI Io Iave IIe resources
Io suµµorI LoII an InIerneI LusIness and an oII-IIne LusI-
ness. In generaI, Iovever, IIey need Io dIIIerenIIaIe
LeIveen IIe Ivo Ly gIvIng IIeIr InIerneI LusIness a dIIIer-
enI nane.
Anvay, IIe vorId's IargesI dIrecI-saIes conµany vIII S3
LIIIIon In annuaI saIes, decIded Io Iake IIs unIque dIsIrILu-
IIon sysIen Io IIe InIerneI. BuI noI vIII IIe Anvay nane.
IIs nev InIerneI nane Is QuIxIar.con.
ProcIer & GanLIe Is usIng IIe WeL Io seII LeauIy µrod-
ucIs, LuI noI vIII OII oI OIay or any oI IIs oIIer Lrand
nanes. InsIead, P&G Ias creaIed a nev nane (ReIIecI.con)
and a nev sIraIegy. TIe sIIe vIII aIIov consuners Io "µer-
sonaIIze¨ IIeIr seIecIIon oI LeauIy µroducIs.
Hov can you IeII vIeIIer IIe InIerneI Is a LusIness or a
nedIun Ior your Lrand? You need Io ask yourseII IIe IoI-
IovIng quesIIons:
1. Is the brund tungible or intungible? Ior IangILIe µrod-
ucIs IIe InIerneI Iends Io Le an InIornaIIon nedIun. Ior
InIangILIe µroducIs, a LusIness. InIangILIe µroducIs IIaI
are µarIIcuIarIy aµµroµrIaIe Ior InIerneI LrandIng IncIude
LankIng, Insurance, sIock Lrokerage, and IIe IIke.
We exµecI IInancIaI servIces oI aII Iyµes Io nove Io
IIe NeI. TIe savIngs can Le suLsIanIIaI. AnerIcan
Lxµress esIInaIes IIaI II saves S1.00 every IIne a card-
IoIder cIecks a LaIance on IIe WeL raIIer IIan over IIe
µIone.
TraveI Is anoIIer caIegory IIaI Is novIng Io IIe WeL.
In IIe year 2001, IraveIers sµenI S14 LIIIIon LuyIng IIck-
eIs on IIe InIerneI, anounIIng Io 14 µercenI oI IIeIr
IoIaI aIrIIne sµendIng.
2. Is the brund lushionuble or not? Ior IasIIonaLIe µrod-
ucIs IIe InIerneI Iends Io Le a nedIun. Ior oIIer µrod-
ucIs, a LusIness. CIoIIIng Is generaIIy IasIIonaLIe, vIIIe
conµuIers are generaIIy noI. WIere IasIIon Is IIe µrI-
nary IacIor, II's dIIIIcuII Io InagIne nucI LusIness goIng
Io IIe WeL.
We don'I µredIcI nucI success Ior NordsIron-
sIoes.con, even IIougI IIe sIIe vas IauncIed vIII a
S17 nIIIIon adverIIsIng canµaIgn. TIe connercIaIs are
anusIng, LuI IIe µrosµecI Is unIIkeIy Io do nucI sIoe
LuyIng on IIe InIerneI. TIere are IIree najor quesIIons
a sIoe sIIe can'I ansver. WIII IIey III? WIII IIey Iook
good on ny IeeI? Are IIey goIng Io Le conIorIaLIe?
3. Is the product uvuiluble in thousunds ol vuriutions?
II so, IIe InIerneI Iends Io Le a LusIness. Books, Ior
exanµIe. II's Iard Ior an exIsIIng reIaII esIaLIIsInenI Io
conµeIe In a caIegory vIII a LevIIderIng array oI
cIoIces. TIere's no vay, Ior exanµIe, IIaI a LooksIore
couId sIock aII IIe IIIIes avaIIaLIe aI Anazon.con.
AnoIIer caIegory IIaI seens IIkeIy Io nove Io IIe
WeL Is oIIIce suµµIIes. AgaIn, IIe cIoIces are so over-
vIeInIng IIaI no one µIysIcaI sIore can carry every-
IIIng a conµany nIgII vanI Io Luy.
ProducI varIaIIon Is IIkeIy Io Lecone a najor LaIIIe-
ground In an InIerneI-donInaIed econony. LxcIudIng
Iood sIores, rougIIy IaII IIe µeoµIe vIo sIoµ aI any
gIven sIore Ioday vaIk ouI vIIIouI LuyIng anyIIIng. TIe
najor reason: TIe sIore dIdn'I Iave In sIock IIe µroducI
IIe cusIoner vas IookIng Ior.
Nov IIaI cusIoners Iave IIe aLIIIIy Io IInd anyIIIng
IIey vanI on IIe WeL, nanuIacIurers need Io resµond
In one oI Ivo vays.
II µIysIcaI sIores are your najor dIsIrILuIIon cIan-
neI, IIen you need Io reduce IIe µroducI varIeIy you
oIIer. Conµaq's LesI resµonse Io DeII, Ior exanµIe,
vouId Iave Leen Io reduce IIs µroducI IIne and µronoIe
a IandIuI oI conµuIer µroducIs avaIIaLIe oII IIe sIeII In
reIaII conµuIer sIores. WIen you nake Ioo nany varIa-
IIons, you can Le sure IIaI IIe one nodeI IIe µrosµecI
vanIs von'I Le In sIock.
II IIe InIerneI Is your najor dIsIrILuIIon cIanneI,
IIen you vanI Io µronoIe IIe vIde range oI nodeIs,
sIzes, and coIors you Iave avaIIaLIe.
4. Is low price u signilicunt luctor in the brund's pur-
chuse? II so, IIe InIerneI Iends Io Le a LusIness-
eBay.con and PrIceIIne.con, Ior exanµIe.
TIe aLIIIIy oI IIe Luyer Io quIckIy cIeck µrIces on a
Iarge nunLer oI sIIes Is nakIng IIe InIerneI a very µrIce-
sensIIIve nedIun. TIere are even sIIes, IIke MySInon.con
and DeaITIne.con, IIaI vIII conµare µrIces anong oIIer
sIIes Ly sendIng ouI roLoIs, or "LoIs,¨ Io cIeck IIe µrIces.
Heaven IeIµ you II you don'I Iave a conµeIIIIve µrIce.
Because oI IIIs µrIce µressure, one oI IIe LIggesI
cIaIIenges Ior LuIIdIng a Lrand on IIe NeI Is IryIng Io
IIgure ouI Iov Io nake noney. TIIs vIII Le a crIIIcaI
Issue Ior nany Lrands.
AuIonoLIIes are anoIIer caIegory vIere IIe InIerneI
Is IIkeIy Io cIange LuyIng µaIIerns. CarµoInI.nsn.con,
AuIoLyIeI.con, and oIIer car-LuyIng sIIes are LegInnIng
Io esIaLIIsI IIenseIves as Lrands. TIe reason Is sInµIe:
II's easy Io nake µrIce conµarIsons on IIe NeI. And IIere
Isn'I any IaggIIng vIII a saIesµerson.
5. Are shipping costs u signilicunt luctor us compured
to the purchuse price? II so, IIe InIerneI Iends Io Le a
nedIun. GrocerIes, Ior exanµIe. WeLvan Ias aIready
IaIIed and Peaµod.con Is sIruggIIng. II's unIIkeIy IIaI
any nass-narkeI InIerneI sIIe vIII Le aLIe Io LuIId a suc-
cessIuI LusIness and a successIuI Lrand seIIIng grocerIes.
TIe nIIknan used Io deIIver IresI nIIk every norn-
Ing. We're sure IIaI nany IanIIIes vouId IIke IIeIr nIIk
deIIvered Ioday, LuI IIey can'I geI II. WIy? II's noI eco-
nonIcaI anynore.
TIe grocery cIerk used Io go In IIe Lack and geI your
seIecIIons oII IIe sIeIves, LuI noI anynore. SeII-servIce
Is a IoI nore econonIcaI.
In IIe InIerneI era, are ve goIng Io go Lackvard? Is
seII-servIce dead? We don'I IIInk so. YeI nany narkeI-
Ing exµerIs are sayIng IIe oµµosIIe. "TIe grocery sIore
as ve knov II Is goIng ouI oI LusIness,¨ saId Iorner
ProcIer & GanLIe Lrand nanager Doug HaII.
IuIurIsI IaIII Poµcorn goes even IurIIer. By IIe
year 2010, sIe µredIcIs, 90 µercenI oI aII consuner µrod-
ucIs vIII Le Ione-deIIvered. "TIey'II µuI a reIrIgeraIor In
your garage and Lar code your kIIcIen. Lvery veek
IIey'II resIock your IavorIIes, vIIIouI your ever IavIng
Io reorder. TIey'II even µIck uµ your dry cIeanIng, reIurn
your vIdeoIaµes, vIaIever you need.¨
TIe InIerneI Is IIe LIggesI IecInoIogIcaI deveIoµnenI
oI IIe IvenIIeII cenIury, LuI IeI's noI geI carrIed avay. 1usI
Lecause soneIIIng Is µossILIe doesn'I nake II IIkeIy Io
occur. TIe grocery LusIness Ias IIree sIrIkes agaInsI II: (1)
IIgI seIecIIon cosIs, IIaI Is, IIe cosIs InvoIved In µIckIng
and µackIng µroducIs In IIe vareIouse, (2) IIgI deIIvery
cosIs, and (3) Iov nargIns. TIe average suµernarkeI
cIaIn nakes 1 or 2 µercenI neI µroIII on saIes.
II's Iard Io see Iov an InIerneI conµany couId aLsorL
IIe addIIIonaI cosIs InvoIved In µIckIng, µackIng, and deIIv-
ery and sIIII nake noney In a Iov-nargIn LusIness. A nIcIe
narkeI, Io Le sure, LuI noI a naInsIrean Lrand.
Hoµe sµrIngs eIernaI. VenIure caµIIaIIsIs doIed ouI an
asIoundIng S275 nIIIIon Io IauncI WeLvan, an InIerneI gro-
cery conµany. In addIIIon, IIe conµany nanaged Io IIre as
IIs cIIeI execuIIve George SIaIeen, IIe Iorner Iead oI
Andersen ConsuIIIng (nov AccenIure).
Sone consuIIanIs cIaIn IIaI you need LoII an InIerneI
µresence and a reIaII µresence Io Le successIuI In IIe IuIure,
IIe so-caIIed cIIck and norIar sIraIegy. OIIervIse, goes IIe
argunenI, Iov couId you reIurn IIens you ordered on IIe
NeI? TIaI's one reason sone exµerIs Iave IooIIsIIy µre-
dIcIed IIaI BarnesandnoLIe.con vIII evenIuaIIy ouIseII
Anazon.con.
Don'I LeIIeve II. PeoµIe don'I Luy IIIngs Lased on Iov
easy IIey are Io reIurn. II's a IacIor, oI course, LuI noI IIe
µrInary IacIor In decIdIng vIere Io Luy. ReµuIaIIon, seIec-
IIon, and µrIce are Iar nore InµorIanI. II's InµossILIe Io
LuIId a reµuIaIIon as a sIore vIII greaI seIecIIon and Iov
µrIces II you are scIIzoµIrenIc, IIaI Is, II you Iave LoII
µIysIcaI sIores and InIerneI sIIes. AII you are doIng Is con-
IusIng µeoµIe.
WIII Sears.con Lecone a LIg success? UnIIkeIy.
No one IacIor, oI course, vIII deIernIne vIeIIer your
Lrand sIouId Le a LusIness on IIe InIerneI or vIeIIer IIe
NeI Is jusI anoIIer nedIun Io µronoIe your Lrand. You
Iave Io careIuIIy consIder aII IIe IacIors LeIore you decIde.
BuI decIde you sIouId LeIore sone oIIer Lrand LeaIs
you Io IIe µuncI.
126
NoI sInce IeIevIsIon Iook oII In IIe earIy IIIIIes Ias IIe
naIIon seen sucI a IecInoIogIcaI revoIuIIon as IIe InIerneI.
Ior a IIne, InIerneI usage vas IIIeraIIy douLIIng every
nonII.
TIere Is a reIaIIonsIIµ LeIveen IeIevIsIon and IIe InIer-
neI. LacI Is a connunIcaIIons nedIun. And noIIIng on earII
aIIecIs nore µeoµIe In a nore µoverIuI vay IIan IIe InIro-
ducIIon oI a najor nev nass-connunIcaIIons nedIun.
Over IIe course oI Iunan IIsIory, IIere Iave Leen IIve
sucI InIroducIIons:
1. TIe Look
2. TIe nevsµaµer, or µerIodIcaI, vIIcI IncIudes nagazInes
3. RadIo
4. TeIevIsIon
5. TIe InIerneI
(WIIIe IIe IeIeµIone Is a connunIcaIIon devIce and Ias
Iad a Iong-IasIIng eIIecI on µeoµIe's IIves, II does noI µossess
IIe cIaracIerIsIIcs oI a nass-connunIcaIIons nedIun.)
1 R£ L AW 0F I N1 £ RAC1 I VI 1 Y
wl t hout l t , your websl t e and your
br and wl l l go nowher e.
2
1PL LAW 0I I N1LPAU1I vI 1Y 127
LIIe geIs conµIIcaIed. TIe nev nedIun does noI
reµIace IIe oId. RaIIer, IIe nev nedIun Is Iayered on Ioµ oI
IIe oId nedIa, Iorever cIangIng and nodIIyIng aII oI IIe
exIsIIng nedIa.
º TIe orIgInaI nass-connunIcaIIons nedIun, oI course,
vas IIe Iunan voIce, sIIII an unusuaIIy eIIecIIve vay Io
send a nessage. LacI najor nedIun Io IoIIov Lecane
µoverIuI In IIs ovn rIgII Lecause IIe nedIun µossessed
a unIque and IIgIIy µrIzed aIIrILuIe.
º TIe Look multiplied IIe nunLer oI µeoµIe IIaI couId
Le reacIed Ly a sIngIe IndIvIduaI. NoI onIy couId nII-
IIons oI µeoµIe sIare Ideas and conceµIs, LuI IIese Ideas
couId aIso easIIy IIov Iron one generaIIon Io IIe nexI.
º TIe µerIodIcaI added IIe aIIrILuIe oI news. Large nun-
Lers oI µeoµIe couId sIare nevs oI IIe IaIesI evenIs In
IIeIr cIIy or counIry and evenIuaIIy IIe vorId. In
essence, IIe µerIodIcaI Iook IIe µrInIIng µrocess used In
Look µroducIIon and greaIIy sµed II uµ. WIere a Look
couId Iake nonIIs Io µroduce (and sIIII does, unIorIu-
naIeIy), a nevsµaµer couId Le µroduced overnIgII.
º RadIo added IIe aIIrILuIe oI IIe humun voice. Nevs and
enIerIaInnenI couId Le connunIcaIed vIII enoIIon
and µersonaIIIy. A Iong IIne oI ceIeLrIIIes Iave used IIe
enoIIonaI µover oI radIo Io connunIcaIe In an exceµ-
IIonaIIy eIIecIIve vay-WInsIon CIurcIIII, IrankIIn D.
RooseveII, RusI LInLaugI, Dr. Laura ScIIessInger, and
Hovard SIern, Io nane a Iev.
º TeIevIsIon added IIe aIIrILuIe oI motion. RadIo, vIII
novIng µIcIures, II you vIII. MoIIon µIcIures, oI course,
vere IIe µrecursor oI IeIevIsIon and sIIII reµresenI nucI
oI TV's conIenI. MovIes vere, and sIIII are, a µoverIuI,
enoIIonaI nedIun, LuI noI a nass-connunIcaIIons
nedIun. You Iave Io go Io a IIeaIer Io see a IIIn vIen
II Is IIrsI reIeased.
º And IIe InIerneI? WIaI aIIrILuIe does IIe InIerneI LrIng
Io IIe connunIcaIIons IaLIe?
II IIe InIerneI Is goIng Io Iake IIs µIace aIongsIde IIe
oIIer najor nedIa, II vIII Le Lecause II exµIoIIs a IoIaIIy
nev aIIrILuIe.
We LeIIeve IIaI IIsIory vIII rank IIe InIerneI as IIe greaI-
esI oI aII nedIa. And IIe reason Is sInµIe. TIe InIerneI Is IIe
onIy nass-connunIcaIIons nedIun IIaI aIIovs inteructiv-
ity. (TIe organIzaIIon IIaI vas Iorned Io µronoIe InIerneI
adverIIsIng Is caIIed, aµµroµrIaIeIy enougI, IIe InIeracIIve
AdverIIsIng Bureau.)
On IIe InIerneI a Lrand IIves or dIes In an InIeracIIve
envIronnenI. In IIe Iong run, InIeracIIvIIy vIII deIIne vIaI
vorks on IIe InIerneI and vIaI doesn'I vork. TIe secreI Io
LrandIng on IIe InIerneI Is your aLIIIIy Io µresenI your
Lrand In sucI a vay IIaI your cusIoners and µrosµecIs can
InIeracI vIII your nessage. You'II Iave Io IIrov ouI nany
oI IIe IradIIIonaI vays oI Lrand LuIIdIng.
Take adverIIsIng, Ior exanµIe. WIII IradIIIonaI adverIIs-
Ing Le eIIecIIve on IIe InIerneI? OI course noI.
Iace IIe IacIs. PeoµIe generaIIy dIsIIke adverIIsIng. WIy
do µeoµIe Iove IIe TV renoIe conIroI or zaµµer? II aIIovs
quIck cIanneI surIIng vIen ads aµµear.
WIII IIe InIerneI, your µrosµecIs Iave IoIaI conIroI oI
vIaI IIey see, read, and Iear. Is IIere any reason Io douLI
IIaI IIey von'I Iurn oII your adverIIsIng nessage as soon as
II sIarIs?
AIong vIII adverIIsIng, nany oI IIe IradIIIonaI Iorns oI
connunIcaIIon are jusI noI goIng Io nake II on IIe NeI. Take
nevsµaµers and nagazInes as anoIIer exanµIe. WIy vouId
you assune IIaI you couId µuLIIsI a successIuI nagazIne or
nevsµaµer on IIe InIerneI? WIere Is IIe InIeracIIvIIy?
ALouI IIe onIy "InIeracIIvIIy¨ a nevsµaµer or nagazIne
IornaI aIIovs on IIe NeI Is IIe aLIIIIy Io read sIorIes In any
order you cIoose. BuI you can do IIaI nov vIII a µaµer
µuLIIcaIIon. (Many nevsµaµer readers sIarI vIII IIe sµorIs
secIIon. And P/ayboy "readers¨ Iave Leen knovn Io sIarI
vIII IIe cenIerIoId.)
PuIIIng a µrInI nagazIne on radIo or IeIevIsIon never
vorked eIIIer. LIIeraIIy dozens oI µuLIIcaIIons IrIed Io Iake
IIeIr successIuI µrInI µerIodIcaIs InIo IIe radIo and IeIevI-
sIon arena. TIey aII IaIIed. WIy? TIe essence oI radIo Is IIe
Iunan voIce and IIe essence oI IeIevIsIon Is noIIon. A
µrInIed µIece jusI sIIs IIere, II says noIIIng and doesn'I nove.
S/a/c Isn'I IIe onIy InIerneI nagazIne IIaI Is sIovIy sIIµ-
µIng ouI oI sIgII. Sa/on nagazIne vas voIed IIe LesI WeL-
sIIe oI 1996 Ly Tinc nagazIne, yeI IIe on-IIne µuLIIcaIIon
conIInues Io Iose noney: S40 nIIIIon sInce IIs IoundIng In
1995. "TIe IuIure oI nedIa Is on-IIne,¨ argues Sa/on µuL-
IIsIer MIcIaeI O'DonneII. We Leg Io dIIIer. PrInI Is µrInI, IIe
InIerneI Is IIe InIerneI. TryIng Io conLIne IIe Ivo Is a serI-
ous sIraIegIc error.
TIeSIreeI.con Is a nevsµaµer IornaI IryIng Io nake II
on IIe InIerneI. In sµIIe oI a raII oI µuLIIcIIy generaIed Ly IIs
coIounder 1anes Craner, IIe sIIe conIInues Io generaIe
noIIIng LuI red Ink. In IIe year 2000, TIeSIreeI.con Iad
S23.3 nIIIIon In revenues (nosIIy Iron adverIIsIng) and
nanaged Io Iose S69.1 nIIIIon.
AdverIIsIng Is dryIng uµ on IIe InIerneI as nore and
nore conµanIes recognIze IIe IuIIIIIy oI adverIIsIng In an
InIeracIIve nedIun. WIere do InIerneI sIIes sµend nosI oI
IIeIr ovn adverIIsIng doIIars? SurµrIsIngIy, II Is noI on IIe
NeI LuI In IIe IradIIIonaI nedIa oI IeIevIsIon, nevsµaµers,
and radIo.
One successIuI µuLIIcaIIon on IIe WeL Is IIe InIeracIIve
LdIIIon oI IIe \a// S/rcc/ 1ourna/, vIIcI currenIIy Ias
aInosI 600,000 µayIng readers. One reason Ior IIs reIaIIve
success, oI course, Is IIe µrIce. TIe InIeracIIve LdIIIon oI
IIe 1ourna/ Is a LIg LargaIn. WIIIe IIe reguIar µaµer suL-
scrIµIIon goes Ior S175 a year, IIe InIeracIIve LdIIIon Is jusI
S59 a year and onIy S29 a year II you are aIready a µrInI suL-
scrILer.
We vonder vIeIIer or noI Dov 1ones vouId Iave Leen
LeIIer oII IauncIIng an InIerneI µuLIIcaIIon under a dIIIerenI
nane and vIII greaIer InIeracIIvIIy.
PerIaµs IIe nosI successIuI InIerneI µuLIIcaIIon Is Con-
suncr Pcpor/s On/inc, vIII 590,000 suLscrILers. TIaI nakes
sense Lecause "InIeracIIvIIy¨ Is an InµorIanI asµecI oI Iov a
suLscrILer nIgII use IIe on-IIne µuLIIcaIIon. II you vanI Io
Luy a reIrIgeraIor, you can key In "reIrIgeraIor¨ and IInd ouI
vIaI Lrands IIe nonµroIII organIzaIIon reconnends. YeI
IIe on-IIne µuLIIcaIIon Ias Leen a nIxed LIessIng Ior Con-
suncr Pcpor/s. In Ivo years, IIe nunLer oI suLscrILers Io IIe
µrInI µuLIIcaIIon Ias droµµed Iron 4.5 nIIIIon Io 4 nIIIIon.
In IIIs connecIIon, Iook aI IIe success oI 60 Minu/cs, a
IeIevIsIon sIov IIaI vas nunLer one In IIe NIeIsen raIIngs
Ior a nunLer oI years. AIIIougI 60 Minu/cs Ias a nagazIne-
IIke Iook, II vas creaIed esµecIaIIy Ior IeIevIsIon usIng a
µersonaIIIy-drIven IornaI. IurIIernore, 60 Minu/cs dId noI
Iock IIseII InIo an exIsIIng nagazIne nane.
WIaI vorks In one nedIun von'I necessarIIy vork In
anoIIer. As a naIIer oI IacI, cIances are greaI IIaI one
nedIun's success vIII Le anoIIer nedIun's IaIIure.
º WIaI nevsµaµer aIso Lecane a successIuI nagazIne
Lrand? None IIaI ve knov oI. (TIe \a// S/rcc/ 1ourna/
IInkered vIII a µuLIIcaIIon caIIed IIe \a// S/rcc/ 1ourna/
Ma¸azinc, LuI IIe µuLIIcaIIon venI novIere.) TIe onIy
successIuI nevsµaµer "nagazInes¨ are IIe ones µuL-
IIsIed on Sunday and gIven avay Iree vIII IIe µaµers.
NoI exacIIy our Idea oI successIuI Lrands.
º WIaI successIuI IeIevIsIon Lrand aIso Lecane a success-
IuI caLIe IeIevIsIon Lrand? None IIaI ve knov oI.
TIe LIg caLIe IeIevIsIon Lrands-HBO, LSPN, CNN,
A&L, MTV, QVC, SIovIIne, and NIckeIodeon-vere noI
IIne exIensIons oI LroadcasI Lrands. TIey vere nev Lrands
creaIed esµecIaIIy Ior caLIe.
YeI Ioo nany conµanIes Iock IIenseIves InIo IIe µasI.
TIey Iook Ior vays Io use yesIerday's nane on Ionorrov's
nedIun. Nevs Corµ., Ior exanµIe, IIe ovner oI TV Guidc
nagazIne, Is usIng IIe TV Guidc nane on a caLIe cIanneI as
veII as an InIerneI Lrand caIIed TV GuIde OnIIne. NeIIIer
sIraIegy Is goIng Io vork very veII.
II you vanI Io LuIId a Lrand on IIe InIerneI, you need Io
LuIId a nev Lrand desIgned sµecIIIcaIIy Ior IIe nev nedIun.
In oIIer vords, you Iave Io LuIId InIeracIIvIIy InIo your sIIe,
and you generaIIy need a nev nane.
II Lears reµeaIIng. TIe dIIIerence LeIveen IIe InIerneI
and every oIIer nedIun Is InIeracIIvIIy. UnIess your sIIe Ias
IIIs crucIaI IngredIenI, II Is goIng Io geI IosI In cyLersµace.
TIe conµeIIIIon Is InIense. TIere are aIready nany
nore doIcon WeLsIIes IIan IIere are regIsIered Iradenarks
IIIed In IIe UnIIed SIaIes.
InIeracIIvIIy Is noI jusI IIe aLIIIIy Io seIecI Iron a nenu.
(You can do IIaI vIII a Look or a nagazIne Ly IookIng aI IIe
Index. You can aIso do IIaI vIII a µIone Ly µressIng nunLers.
You can do IIaI In a resIauranI Ly askIng Ior IIe vIne IIsI.)
InIeracIIvIIy Is IIe aLIIIIy Io Iyµe In your InsIrucIIons
and Iave IIe sIIe deIIver IIe InIornaIIon you requesIed In
IIe Iorn you requesIed II. CIeck ouI Anazon.con. Tyµe In a
suLjecI and IIe sIIe vIII µresenI a IIsI oI Looks IIaI naIcI
your caIegory. You can do IIe sane vIII auIIors or a IIIIe.
(InsIead oI askIng Ior IIe vIne IIsI, Iry askIng IIe son-
neIIer Ior a IIsI oI aII IrencI red vInes IIaI cosI Iess IIan
S40 a LoIIIe. TIere's no InIeracIIvIIy In a resIauranI nenu
and no sense oI Iunor In a sonneIIer.)
InIeracIIvIIy Is aIso IIe aLIIIIy oI IIe sIIe Io IurnIsI addI-
IIonaI InIornaIIon Lased on your orIgInaI query. SeIecI a
Look Io µurcIase aI Anazon.con and IIe sIIe vIII gIve you
IIe nanes oI aI IeasI IIree oIIer Looks LougII Ly µrevIous
Luyers oI IIe Look you ordered.
InIeracIIvIIy Is aIso IIe aLIIIIy Io add your ovn InIorna-
IIon Io IIe sIIe. TIe LesI InIerneI sIIes are Ivo-vay sIreeIs.
AI Anazon.con you can raIe Looks Ly gIvIng IIen any-
vIere Iron one Io IIve sIars, and In addIIIon you can suLnII
sIorI revIevs, vIIcI are µosIed vIIIIn Iours under IIe
Look you revIeved.
InIeracIIvIIy Is aIso IIe aLIIIIy oI a sIIe Io IandIe con-
µIex µrIcIng sIIuaIIons aInosI InsIanIaneousIy. Take aIrIIne
IIckeIs, Ior exanµIe. An aIrIIne sIIe Is aLIe Io seIecI Iron a
nuIIIIude oI Iares, IIIgIIs, daIes, and condIIIons and gIve
you a µrIce on IIe sµoI, vIIcI you can eIIIer acceµI or
decIIne. TIey can even reconnend a IIIgII scIeduIe IIaI
oIIers IIe IovesI µrIced Iare. (TIe CIsco sIIe Is anoIIer InIer-
neI oµeraIIon IIaI nakes good use oI IIIs on-IIe-sµoI µrIc-
Ing IecInoIogy.)
InIeracIIvIIy Is aIso IIe aLIIIIy oI IIe sIIe Io µerIorn a
vIde varIeIy oI IesIs: InIeIIIgence IesIs, drIvIng IesIs, occuµa-
IIonaI aµIIIude IesIs, µsycIoIogIcaI IesIs. Sone oI IIese
areas are goIng Io Iurn InIo LIg Lrands and LIg LusInesses.
InIeracIIvIIy Is aIso IIe aLIIIIy oI IIe sIIe Io conducI auc-
IIons oI aII Iyµes. PrIceIIne.con and eBay are Ivo LIg Lrands
IIaI Iave aIready Iaken advanIage oI IIIs caµaLIIIIy. (Cur-
renIIy eBay Is vorII S12 LIIIIon on IIe sIock narkeI. And
PrIceIIne.con Is vorII S672 nIIIIon.)
InIeracIIvIIy Is aIso IIe aLIIIIy oI IIe sIIe Io dIagnose a
sIIuaIIon and suggesI renedIes. We vorked vIII a Ianous
µersonaIIIy Io deveIoµ a µersonaI WeLsIIe. TIe IIrsI screen
vas goIng Io Le a nenu oI varIous µroLIens IIaI an IndIvId-
uaI nIgII Le exµerIencIng.
"Don'I do II IIaI vay,¨ ve suggesIed. "Make IIe screen
InIeracIIve. Ask IIe µerson a serIes oI quesIIons, IIen IeI
your conµuIer IeII IIe IndIvIduaI vIaI IIs or Ier µroLIen
nIgII Le.¨
InIeracIIvIIy Is a µoverIuI neIaµIor Ior IIe µaIIenI-
docIor or IIe sIudenI-IeacIer reIaIIonsIIµ.
You vIsII a nedIcaI docIor and descrILe your synµIons.
TIe docIor dIagnoses your µroLIen and µrescrILes aµµro-
µrIaIe IreaInenI. TIIs Is IIe kInd oI InIeracIIvIIy IIaI Is µos-
sILIe on IIe InIerneI.
WIII IIe InIerneI sµavn successIuI nedIcaI and educa-
IIonaI Lrands? WIy, oI course. TIese are dIscIµIInes Lased
on InIeracIIvIIy.
CaµeIIaUnIversIIy.con, Ior exanµIe, oIIers IIve Iundred
courses In IorIy areas oI sµecIaIIzaIIon, IncIudIng an MBA
µrogran vIII exIensIve InsIrucIIon In e-LusIness oµeraIIon
and nanagenenI. You can Le sure IIere vIII Le nany nore
CaµeIIas Io cone.
ConIrasI corresµondence courses Ly naII vIII InIerneI
educaIIonaI venIures. TIe LesI IIaI currenI corresµondence
courses can acconµIIsI Is a veekIy or senIveekIy dose oI
InIeracIIvIIy. TIe InIerneI can greaIIy sµeed uµ IIe µrocess.
134
TIe nosI InµorIanI narkeIIng decIsIon you can nake Is
vIaI Io nane IIe µroducI.
So ve saId In Posi/ionin¸. T/c Ea///c jor Your Mind, a
Look µuLIIsIed In 1981. So Iov does IIe InIerneI cIange
IIe roIe oI IIe Lrand nane?
In IIe µosIIIonIng age, IIe nane vas InµorIanI. In IIe
InIerneI age, IIe nane Is crIIIcaI.
TIere's a reason Ior IIaI. In µre-InIerneI days, a Lrand
aIvays Iad a vIsuaI conµonenI. WIIIe IIe nane vas IIe
nosI InµorIanI eIenenI, IIe vIsuaI aIso InIIuenced IIe
Lrand's µurcIase. TIe sIaµe oI a Coca-CoIa LoIIIe, IIe coI-
ors on a Lox oI Kodak IIIn, IIe IyµograµIy oI an InIeI Iogo-
Iyµe, IIe Iook and IocaIIon oI a McDonaId's resIauranI.
TIe InIerneI vIµes ouI IIe vIsuaI. To Iaµ InIo a WeLsIIe,
you Iyµe In a vord. No µIcIures, no coIors, no IyµograµIy,
no Iook, no IocaIIon.
II IIe nane Is crIIIcaI, IIen vIy are nosI Lrand nanes
on IIe WeL so Lad? TIaI's µuIIIng II nIIdIy. MosI InIerneI
Lrand nanes are noI Lad: TIey're IerrILIe.
Sone IyµIcaI InIerneI Lrands IncIude AdverIIsIng.con,
Buy.con, ConnunIIIes.con, CookIng.con, CruIse.con, Desk-
Ioµ.con, eToys.con, IIover.con, Garden.con, Gear.con,
GIIIs.con, Hardvare.con, HIII.con, HonePage.con,
1 R£ L AW 0F 1 R£ C0MM0N NAM£
The kl ss of deat h f or an l nt er net
br and l s a oommon name.
3
Inages.con, IndIvIduaI.con, IMoIors.con, IngredIenIs.con,
Lav.con, MaII.con, MorIgage.con, OIIIce.con, PeIs.con,
PIone.con, PosIcard.con, SaIes.con, Songs.con, SµorIs.con,
TIckeIs.con, VoIe.con, WeaIIer.con, WIne.con, Wonen.con.
None oI IIese are snaII, InsIgnIIIcanI conµanIes. Major
corµoraIIons or venIure caµIIaIIsIs Iave IeavIIy Iunded
IIen aII. Many aIso Iaµµed InIo IIe sIock narkeI. To cIIe
Iour exanµIes: PeIs.con raIsed S50 nIIIIon In an InIIIaI µuL-
IIc oIIerIng, MorIgage.con raIsed S60 nIIIIon, IMoIors
raIsed S137 nIIIIon, and eToys raIsed S166 nIIIIon. AII Iour
doIcons are nov LankruµI or Iave sIuI dovn oµeraIIons.
WIaI's vrong vIII IIese Lrand nanes? TIey're aII con-
non, or generIc, nanes.
A connon noun Is a vord IIaI desIgnaIes any one oI a
cIass oI LeIngs or IIIngs. Cars Is a connon noun.
A µroµer noun Is a vord IIaI desIgnaIes a µarIIcuIar
LeIng or IIIng. Mcrccdcs-Ecnz Is a µroµer noun.
TradIIIonaIIy, Lrand nanes Iave Leen µroµer nouns. (II
you vere a Ianguage µurIsI or vork Ior IIe U.S. Tradenark
DeµarInenI, you vouId caII Lrand nanes "µroµer adjec-
IIves,¨ as In "Mercedes-Benz cars.¨ BuI nosI µeoµIe use
Lrand nanes as nouns. TIey vIII say, "I drIve a Mercedes,¨
noI "I drIve a Mercedes car.¨)
TIe LesI-knovn, nosI vaIuaLIe Lrand nanes In IIe
vorId are aII µroµer nouns, noI connon or generIc nanes.
TIere are sevenIy-IIve vorIdvIde Lrands vorII nore IIan
S1 LIIIIon eacI, accordIng Io InIerLrand, a Lrand consuIIIng
grouµ. And none oI IIese are connon or generIc nanes.
TyµIcaI Lrands on IIe Ioµ sevenIy-IIve IIsI IncIude Coca-
CoIa, MIcrosoII, Iord, DIsney, InIeI, McDonaId's, MarILoro,
NokIa, NescaIé, HevIeII-Packard, GIIIeIIe, Kodak, and Sony.
(TogeIIer, IIe sevenIy-IIve Lrands, accordIng Io InIerLrand,
are vorII an IncredILIe S912.1 LIIIIon.)
A Iev years Iron nov are you IIkeIy Io IInd CoIa.con,
SoIIvare.con, Cars.con, KIds.con, CIIµs.con, HanLurg-
ers.con, CIgareIIes.con, CeIIµIones.con, CoIIee.con, Con-
1PL LAW 0I 1PL U0MM0N NAML 135
µuIers.con, Razors.con, PIoIos.con, or LIecIronIcs.con on
IIe IIsI oI IIe vorId's nosI vaIuaLIe nanes? We IIInk noI.
"BuI IIe InIerneI Is dIIIerenI¨ Is IIe cry you Iear Iron
IIIrIy-year-oId CLOs nanagIng InIerneI sIarI-uµs. You don'I
Iave Io vear suIIs, you don'I Iave Io vear IIes, you don'I
Iave Io vear sIoes, you don'I Iave Io nake noney, you geI
sIock oµIIons vorII nIIIIons, and you can use generIc
nanes Ior your WeLsIIes.
BuI Is II? Is IIe InIerneI reaIIy dIIIerenI vIen II cones Io
Lrand nanes? So Iar II doesn'I seen Io Le.
º TIe IeadIng InIerneI servIce µrovIder Is noI ISP.con. II's
AOL.
º TIe IeadIng searcI engIne on IIe NeI Is noI
SearcIengIne.con. II's YaIoo!
º TIe IeadIng reIaIIer oI Looks on IIe NeI Is noI Books.con.
II's Anazon.con.
º TIe IeadIng joL-searcI sIIe on IIe NeI Is noI 1oLs.con.
II's MonsIer.con.
º TIe IeadIng aucIIon sIIe on IIe NeI Is noI AucIIon.con.
II's eBay.
º TIe IeadIng aIrIIne-IIckeI LId sIIe on IIe NeI Is noI AIr-
IIneIIckeILId.con. II's PrIceIIne.con.
º TIe IeadIng IraveI sIIe on IIe NeI Is noI TraveI.con. II's
LxµedIa.con.
º TIe IeadIng eIecIronIc greeIIng card Is noI GreeIIng-
Card.con. II's BIuenounIaIn.con.
As II Iaµµens, IIere are Ivo InIerneI nanes on InIerLrand's
IIsI oI IIe sevenIy-IIve nosI vaIuaLIe Lrands. AOL, vorII S4.5
LIIIIon, and YaIoo!, vorII S4.4 LIIIIon. You'II noIIce IIaI LoII
AOL and YaIoo! are µroµer nouns, noI connon nouns.
In sµIIe oI aII IIe evIdence Io IIe conIrary, vIy do nosI
InIerneI execuIIves conIInue Io µreIer usIng connon nanes
raIIer IIan µroµer nanes Ior IIeIr WeLsIIes? TIere are
IIree reasons.
1. WIen IIe InIerneI vas nev, vIen IIere vere Iev sIIes uµ
and runnIng, vIen Iev µeoµIe knev IIe nanes oI any
WeLsIIes, a connon nane vas an advanIage. You vanIed
Io Iook Ior a sIIe seIIIng sIoes, you Iyµed In "sIoes.con.¨
II vas IIke an oId-IasIIoned grocery sIore. You vanIed
crackers, you asked Ior IIe crackers. You vanIed oaIneaI
cookIes, you asked Ior IIe oaIneaI cookIes. Today, Iov-
ever, IIere are nany Lrands oI cookIes and nany Lrands
oI crackers In a suµernarkeI. You don'I ask Ior crackers,
you ask Ior RIIz crackers. You don'I ask Ior oaIneaI cook-
Ies, you ask Ior PeµµerIdge Iarn oaIneaI cookIes.
2. WIen IIe InIerneI vas nev, nany conµanIes junµed on
IIe InIerneI vIII connon nanes. AIIer aII, a connon
nane vas IIe IasIesI, nosI dIrecI vay Io connunIcaIe
vIaI IIe sIIe vas aII aLouI. TIe connon nane aIso
nade II easIer Ior users Io navIgaIe IIe NeI.
TIe advanIages oI a connon nane IasIed Ior aLouI
Ivo veeks as IIousands and IIen Iundreds oI IIou-
sands oI InIerneI sIIes vere seI uµ. Today, vIII nore
IIan IIve nIIIIon doIcons In oµeraIIon, IIe advanIages
oI a connon nane Ior an InIerneI sIIe are nII.
3. Nov IIaI IIe NeI Ias Leen around Ior a Iev years, InIer-
neI conµanIes are IavIng IrouLIe geIIIng Leyond IIe
nInd-seI oI IIose earIy days. TIey sIIII IIInk a connon
nane Is IIe LesI aµµroacI. In sone vays, IIIs Is a seII-
reInIorcIng sIIuaIIon. As everyone IauncIes connon
nane sIIes, every nevconer IIInks IIIs nusI Le IIe vay
Io go. And so IIaI's IIe vay IIey go.
WIII IIs Candid Cancra, AIIen IunI exµIoIIed Iunan
naIure Io do vIaI oIIers are doIng regardIess oI vIeIIer
or noI II nakes sense. HIs IavorIIe eµIsode InvoIves an eIe-
vaIor vIere IIe IIrsI µerson goes InIo IIe car and Iaces IIe
IronI. TIe nexI IIree µeoµIe, aII Candid Cancra conIeder-
aIes, geI InIo IIe eIevaIor and Iace IIe rear. By IIe IIne IIe
IIIII µerson cones In, IIe IIrsI one IeeIs so unconIorIaLIe
IIaI Ie Iurns around and aIso Iaces IIe rear.
Iace IIe IacIs. 1usI Lecause nosI sIIes use connon
nanes doesn'I nean IIaI a connon nane Is IIe LesI
sIraIegy Ior your sIIe. II onIy neans IIaI nosI InIerneI
oµeraIors are under grouµ µressure Io conIorn.
One oI IIe reasons Ior IIe doIcon dIsasIer Is IIe aInosI
unIversaI use oI connon-nane WeLsIIes. Sone sanµIes oI
IIIs connon-noun crazIness are as IoIIovs:
º In auIonoLIIes: AuIoConnecI.con, AuIosIIe.con, AuIo-
Trader.con, AuIoveL.con, Cars.con, CarsDIrecI.con,
and CarOrder.con.
º In LankIng: LLank.con, TeIeLank.con, and NeILank.con.
º In dIanonds: eDIanonds.con, InIerneIDIanonds.con,
and WorIdDIanonds.con.
º In enµIoynenI: ConµuIer1oLs.con, GoIajoL.con,
HeadIunIer.neI, and 1oLs.con.
º In IacsInIIe: eIax.con, Iax.con, and 1Iax.con.
º In IInance: 401k.con, eCoverage.con, eCredII.con,
LoansdIrecI.con, eHeaIIIInsurance.con, eLoan.con,
LoanvIse.con, MorIgage.con, and SIudenIIoan.con.
º In IurnIIure: BeHone.con, DecoraIevIIIsIyIe.con,
LzsIoµ.con, IurnIIure.con, IurnIIureIInd.con, IurnI-
IureonIIne.con, HouseneI.con, and LIvIng.con.
º In grocerIes: Iood.con, NeIGrocer.con, and HoneGro-
cer.con.
º In IeaIII and nuIrIIIon: eDIeIs.con, eNuIrIIIon.con,
HeaIIIQuIck.con, and onHeaIII.con.
º In µeIs: PeIco.con, PeIs.con, and PeIsIore.con.
º In µosIage: L-SIanµ.con, SIanµs.con, and SInµIe-
µosIage.con.
º In µrescrIµIIon drugs: DrugsIore.con, YourPIarnacy.con,
and Rx.con.
º In reaI esIaIe: CyLerIones.con, eProµerIy.con,
GoodIone.con, HoneadvIsor.con, HoneLId.con,
HonegaIn.con, Hones.con, Honeseekers.con, Hone-
sIore.con, MyIone.con, OurIouse.con, Ovners.con,
ReaILsIaIe.con, and ReaIIor.con.
º In sIoµµIng: ISIoµSIoµ.con, Buy.con, BuyIINov.con,
NeInarkeI.con, NovOnSµecIaI.con, SIoµNov.con,
and SIoµµIng.con.
º In IraveI: CIeaµIIckeIs.con, LovesIIare.con, TraveIHoI-
Iday.con, and TrIµ.con.
TIese are noI generIc nanes µIcked aI randon Iron IIe
nIIIIons oI doIcons on IIe InIerneI. Many oI IIese doIcons
are no Ionger vIII us, oI course, LuI aII oI IIen vere serIous
sIIes Lacked Ly serIous venIure caµIIaIIsIs and suµµorIed Ly
nIIIIons oI doIIars' vorII oI adverIIsIng.
º ArI.con vas sµendIng S18 nIIIIon a year on adverIIsIng.
º AuIoConnecI.con vas sµendIng S15 nIIIIon a year on
adverIIsIng.
º CarsDIrecI vas sµendIng S30 nIIIIon a year on adverIIsIng.
º DrugsIore.con vas sµendIng S30 nIIIIon a year on adver-
IIsIng.
º HonesIore.con vas sµendIng S20 nIIIIon a year on adver-
IIsIng.
º LIvIng.con vas sµendIng S20 nIIIIon a year on adverIIsIng.
º PeIs.con vas sµendIng S20 nIIIIon a year on adverIIsIng.
º PeIsIore.con vas sµendIng S10 nIIIIon a year on adver-
IIsIng.
º ReaILsIaIe.con vas sµendIng S13 nIIIIon a year on
adverIIsIng.
º Rx.con vas sµendIng S13 nIIIIon a year on adverIIsIng.
TIese ConnonNane.cons vere jusI a snaII sanµIe oI
IIe IIousands oI InIerneI conµanIes IryIng Io sµend IIeIr
vay InIo IIe µrosµecI's nInd. Ior IIe nosI µarI II vas
noney dovn IIe raI IoIe. TIere's no vay IIaI even a snaII
µercenIage oI IIese connon-nane sIIes couId nake II.
(II's a sIgn oI IIe IInes IIaI one oI IIe nosI IeavIIy
Iyµed adverIIsIng agencIes sµecIaIIzIng In IIe InIerneI IIeId
caIIs IIseII Agency.con.)
WIII sone oI IIese generIc nanes Le successIuI? Sure. In
IIe Iand oI IIe LIInd, IIe one-eyed nan Is kIng. NoLody Is
goIng Io sIoµ drInkIng Leer Lecause aII oI IIe Leer Lrands
use generIc nanes. NoLody Is goIng Io sIoµ LuyIng on IIe
WeL jusI Lecause aII IIe InIerneI Lrands are generIc.
In IIe aLsence oI conµeIIIIon, µeoµIe vIII Luy Iron a
sIIe vIII a connon nane. BuI as sIIes are seI uµ vIII
sIrong "µroµer¨ Lrand nanes, IIe connon-nane sIIes are
goIng Io dry uµ and LIov avay.
You Iave Io vIn In IIe nInd. And IIe nInd IreaIs con-
non or generIc nanes as reµresenIaIIve oI aII IIe sIIes In IIe
caIegory. NoI jusI a sIngIe sIIe.
In IIe Iunan nInd aII auIonoIIve sIIes are "car doI-
cons.¨ Hov couId Cars.con ever esIaLIIsI a sInguIar Iden-
IIIy seµaraIe Iron IIe oIIer car doIcons?
In IIe nInd aII IurnIIure sIIes are "IurnIIure doIcons.¨
Hov couId IurnIIure.con ever esIaLIIsI a sInguIar IdenIIIy
seµaraIe Iron IIe resI oI IIe IurnIIure doIcons?
TIe vasI najorIIy oI Lrand nanes on IIe WeL are µureIy
generIc nanes. MosI oI IIese sIIes are nov LankruµI or ouI
oI LusIness.
WIaI's an eToys? An e-Ioy Is a Ioy µurcIased on IIe InIer-
neI. An eToys Is a conµany IIaI seIIs e-Ioys on IIe InIerneI.
TIe nane eToys Is a veak Lrand nane, yeI IIe sIock nar-
keI IIInks dIIIerenIIy. On IIe IIrsI day IIaI eToys venI µuLIIc,
IIe sIock µrIce nearIy quadruµIed In vaIue, nakIng IIe con-
µany vorII S7.7 LIIIIon, 35 µercenI greaIer IIan IIaI oI IIs reIaII
rIvaI, Toys "R¨ Us Inc. (In IIs IasI IIscaI year eToys IosI S73 nII-
IIon on revenues oI S34.7 nIIIIon.)
One oI IIe µroLIens vIII a connon nane IIke eToys Is
IIe aLIIIIy oI conµeIIIIon Io junµ In IIe narkeIµIace and
cIaIn sInIIar nanes.
º eToy.con
º IToy.con
º IToys.con
º Toy.con
º Toys.con
º ToysIore.con
º IToysIore.con
º eToysIore.con
NaIuraIIy eToys IrIed Io regIsIer IIese and oIIer sInIIar
nanes. BuI vIere do you sIoµ? And Iov nucI vIII II cosI?
And vIII IIe IegaI sysIen aIIov one conµany Io ovn aII IIe
sIIes vIII "Ioy¨ In IIe nane?
WIaI's an L'Trade? An e-Irade Is a sIock µurcIase or
saIe nade on IIe InIerneI. An L'Trade Is a conµany IIaI
IandIes e-Irades on IIe InIerneI.
A generIc nane IIke L'Trade Is veak. TIe nInd IIInks
verLaIIy, noI vIsuaIIy. L-Irade Is IIe nane oI IIe caIegory,
noI IIe conµany. IurIIernore, you can'I use an asIerIsk In
IIe acIuaI sIIe nane. In order Io reacI L'Trade, you Iave Io
Iyµe In vvv.eIrade.con.
Lven IIougI L'Trade Ias IIe enornous advanIage oI
LeIng IIrsI on IIe InIerneI, IIe conµany Ias aIready IaIIen
Io second µIace In Ierns oI cusIoner-IradIng voIune onIIne.
(CIarIes ScIvaL Is IIe Ieader.)
MassIve adverIIsIng In IIe nass nedIa Is keeµIng
L'Trade In IIe gane. BuI vIII sIock IradIng dovn, L'Trade
Ias Leen IosIng noney. In a recenI year, IIe conµany IosI
S242 nIIIIon on revenues oI S1.3 LIIIIon. Hov Iong II can
conIInue Io exµand IIs servIces vIIIe aI IIe sane IIne IosIng
noney Is a quesIIon IIaI onIy IIe IuIure can ansver.
Hov can ve Le so sure IIaI µroµer nanes vIII µrevaII
over connon nanes as Lrand nanes on IIe InIerneI? TIe
onIy µrooI ve can oIIer you Is a Iundred years oI IIsIory. In
IIe µasI cenIury, Iov nany connon nanes Iave Lecone
successIuI Lrands?
Very, very Iev.
Iev caIegorIes In IIe ouIerneI, as oµµosed Io IIe InIer-
neI, are donInaIed Ly generIc Lrand nanes. InvarIaLIy IIey
are donInaIed Ly µroµer or "nane¨ nanes.
º In auIonoLIIes, ve Iave Iord, CIevroIeI, CIrysIer,
VoIvo, and Mercedes-Benz.
º In LankIng, ve Iave CIIILank, CIase ManIaIIan, and
WeIIs Iargo.
º In drugsIores, ve Iave CVS, Lckerd, RIIe-AId, WaI-
green's, and Osco.
º In IurnIIure, ve Iave Ikea, LIIan AIIen, LevIIz, RocIe-
BoLoIs, and MaurIce VIIIency.
º In grocerIes, ve Iave Kroger, SaIevay, WInn-DIxIe, PuL-
IIx, and PaIInark.
º In deµarInenI sIores ve Iave Macy's, Saks IIIII Avenue,
MarsIaII IIeId, NordsIron, and NeInan-Marcus.
º In dIscounI sIores ve Iave WaI-MarI, KnarI, and TargeI.
BuI IIe InIerneI Is dIIIerenI, you nIgII Le IIInkIng.
TIere nusI Le a reason Ior IIe rasI oI generIc nanes.
TIe InIerneI Is dIIIerenI, LuI IIe nInd oI IIe µrosµecI
sIays IIe sane. To Le successIuI you Iave Io µosIIIon your
Lrand nane In IIe nInd.
WIaI nanagers oIIen IorgeI Is IIaI IIe nInd IreaIs a
generIc or connon vord as IIe nane Ior a caIegory oI
IIIngs, noI as one µarIIcuIar IIIng or Lrand.
No auIonoLIIe deaIer vouId caII IIs or Ier deaIersIIµ
"Cars.¨ WIy noI? InagIne IIe IoIIovIng conversaIIon.
"WIere dId you Luy your nev car?¨
"AI Cars®.¨
"HuI. WIaI dId you say? I asked you vIaI deaIersIIµ
you LougII your nev car Iron.¨
WIII IIIeraIIy IIousands oI WeLsIIes usIng generIc nanes,
you can exµecI IIe sane Iyµe oI dIaIog Io occur.
"WIaI dIscounI Lroker do you use on IIe InIerneI?¨
"MydIscounILroker.¨
"I knov, LuI vIaI's IIs nane?¨
"MydIscounILroker.¨
"I aIready asked you IIaI.¨
TIIs Is noI a IaugIIng naIIer. II denonsIraIes IIe vay
IIe nInd vorks. Words geI µuI InIo caIegorIes. A connon
nane geIs µuI InIo a dIIIerenI caIegory IIan a µroµer nane.
TIe conedy Iean oI ALLoII and CosIeIIo Lased IIeIr
cIassIc LaseLaII rouIIne on IIe conIusIon IIaI can occur
vIen one cIass oI vords Is suLsIIIuIed Ior anoIIer.
"LeI's see, ve Iave on IIe Lags, WIo's on IIrsI. WIaI's on
second. I Don'I Knov Is on IIIrd.¨
"TIaI's vIaI I vanI Io IInd ouI. WIo's on IIrsI?¨
"Yes.¨
"I nean, IIe IeIIov's nane?¨
"WIo.¨
"TIe IIrsI Lasenan?¨
"WIo.¨
"TIe guy µIayIng IIrsI?¨
"WIo Is on IIrsI.¨
"I'n askIng you, vIo's on IIrsI?¨
"TIaI's IIe nan's nane.¨
"TIaI's vIo's nane?¨
"Yes.¨
Many conµanIes In IIe µasI Iundred years Iave IrIed Io
use connon-Iyµe nouns as Lrand nanes In IIeIr caIegorIes.
1usI cIeck IIe Iradenark regIsIer. TIere's a IosI oI Lrand
nanes IIaI Iave IrIed Io µreenµI a caIegory Ly usIng a
connon-soundIng nane. Sone exanµIes:
º ToasI'en IoasIer µasIrIes
º SoII & DrI deodoranI
º SoII 'N GenIIe IoIIeI IIssue
º SoII SIave sIavIng crean
º NIce 'N SoII IacIaI IIssues
º NA nonaIcoIoIIc Leer
º BaLy's CIoIce dIsµosaLIe dIaµers
º KId Care adIesIve Landages
TeII IIe IruII. Do any oI IIese generIc Lrand nanes rIng
a LeII vIII you? ProLaLIy noI. II's Iard Io renenLer a Lrand
IIaI uses a connon nane.
One oI IIe LesI exanµIes oI IIe IuIIIIIy oI IryIng Io LuIId
a Lrand vIII a connon nane Is LIIe, IIe IIrsI IIgII Leer.
WIen MIIIer BrevIng InIroduced LIIe Leer, IIere vas no
"MIIIer¨ on IIe can. And no conµeIIIor couId use IIe vord
"LIIe¨ on a Leer Lrand eIIIer Lecause MIIIer ovned IIe
Iradenark.
MIIIer IauncIed LIIe vIII a nassIve adverIIsIng µrogran
and IIe segnenI Iook oII. As you nIgII Iave exµecIed, nany
conµeIIIors junµed In vIII generIc versIons oI IIeIr ovn.
ScIIIIz LIgII, Coors LIgII, Bud LIgII.
Lven IIougI MIIIer vas IIrsI vIII LIIe Leer, even IIougI
LIIe Iad IIe LeneIII oI Irenendous anounIs oI adverIIsIng
and µuLIIcIIy, MIIIer vas Iorced Io IIrov In IIe IoveI and
renane IIe µroducI MIIIer LIIe.
You can see IIe µroLIen. TIe Leer drInker goes InIo IIe
Lar and says, "GIve ne a LIIe Leer.¨ And IIe LarIender says,
"IIne. WIaI kInd oI IIgII Leer do you vanI?¨
Sone caIegorIes, oI course, are Ioaded vIII nosIIy
generIc Lrand nanes. (Grouµ µressure aI vork.) WIaI Is
InIeresIIng Is IIaI In IIese caIegorIes, generaIIy no one
Lrand vIII donInaIe IIe caIegory. BreakIasI cereaIs are a
good exanµIe-Lrands IIke Corn IIakes, Bran IIakes,
IrosIed IIakes, and 100´ GranoIa.
Take IIe "Lran¨ caIegory. TIere are dozens oI "Lran¨
Lrands IryIng Io caµIure IIe caIegory. Sone exanµIes:
º KeIIogg's AII-Bran
º KeIIogg's Bran IIakes
º KeIIogg's 40+ Bran IIakes
º KeIIogg's RaIsIn Bran
º NaLIsco 100´ Bran
º PosI Bran IIakes
º PosI RaIsIn Bran
º ToIaI RaIsIn Bran
As a resuII oI IIe overvIeInIng reIIance on connon
nanes, IIe cereaI caIegory Ias no cIear-cuI Lrand Ieader.
TIe IargesI-seIIIng cereaI Lrand Ias a narkeI sIare oI aLouI
6 µercenI. (CIeerIos Is one oI IIe Iev cereaI Lrands IIaI
doesn'I use a connon nane.)
II connon nanes don'I vork on IIe ouIerneI, vIy
sIouId IIey vork on IIe InIerneI? TIe µroLIen Is exacIIy
IIe sane. Hov do I geI IIe µrosµecI Io renenLer ny Lrand
nane and assocIaIe II vIII sone µosIIIve aIIrILuIe?
WIen you use a connon nane as a Lrand nane, you
Iave IIIIIe cIance Io do eIIIer. IIrsI, IIe µrosµecI can'I dII-
IerenIIaIe LeIveen your sIIe nane and IIe caIegory nane.
Second, you can'I assocIaIe a sµecIIIc aIIrILuIe vIII IIe
nane Lecause IIe nane sIands Ior IIe enIIre caIegory, noI
jusI your sIIe.
Sone sIIes Iry Io soIve IIIs µroLIen Ly conLInIng IIe
aIIrILuIe vIII IIe connon noun. InsIead oI Books.con, IIe
Lrand nane Lecones AIIBooks4Less.con. Or µerIaµs
CIeaµIIckeIs.con or LovesIIare.con.
IronIcaIIy, IIIs Is a LrandIng sIraIegy IIaI can Iave a
nodIcun oI success In IIe ouIerneI LuI noI on IIe InIerneI.
II you're drIvIng dovn IIe road and see a sIgn IIaI says "AII
Books 4 Less,¨ you knov vIaI IIe sIore Is seIIIng and vIy
you nIgII vanI Io sIoµ IIere. (A cIaIn naned "AII Books 4
Less,¨ on IIe oIIer Iand, Is sIIII noI goIng Io ouIseII Barnes
& NoLIe, WaIdenLooks, or Borders.)
On IIe InIerneI you don'I drIve dovn IIe road and you
don'I see IIe AIIBooks4Less sIgn. You are goIng Io Iave Io
renenLer IIe nane and IIaI's noI goIng Io Le easy.
You ask your nInd, "WIo seIIs aII Looks Ior Iess on IIe
NeI?¨ And IIe ansver cones Lack "Anazon.con.¨
In IIe sIorI Iern, Iovever, nany µrosµecIs are usIng
searcI engInes Io IInd sIIes IIaI nIgII InIeresI IIen. So a
nane IIke AIIBooks4Less.con couId conceIvaLIy aIIracI a
IaIr nunLer oI IIIs. BuI IIaI's onIy In IIe sIorI Iern.
TIe vIoIe Idea oI LrandIng, on IIe InIerneI or eIse-
vIere, Is Io Lurn your nane In IIe nInd. WIen you can
successIuIIy do IIaI, IIere's no need Ior IIe µrosµecI Io use a
searcI engIne Io IInd your WeLsIIe. So In IIe Iong run, your
InIerneI Lrand nane vIII Iave Io sIand on IIs ovn. And a
connon nane Is a very veak IoundaIIon Io sIand on.
"Cars¨ Is noI a good nane Ior an auIonoIIve deaIersIIµ.
And Cars.con Is noI a good nane Ior a WeLsIIe IIaI seIIs
cars. NeIIIer Is MydIscounILroker.con a good nane Ior a
sIockLroker on IIe InIerneI.
And vIaI do you suµµose InIerneI.con Is aII aLouI?
TIIs Is a Lrand IIaI Ias Ivo sIrIkes agaInsI II. InIerneI.con
Is a connon noun used Ior a WeLsIIe IIaI IrIes Io aµµeaI Io
everyLody Ior everyIIIng. (You can Iear IIe sIouIs oI joy In
IIe corrIdors aI InIerneI.con. "Wov! We vere aLIe Io regIs-
Ier IIe LesI nane on IIe NeI.¨ Don'I Le Ioo sure.)
WIaI's your ovn nane? Brovn, 1ones, SnIII? WouId
you consIder cIangIng your nane Io a generIc? II you dId, a
µIone conversaIIon nIgII sound IIke IIIs:
"HeIIo, IIIs Is Sone Person.¨
"I knov IIaI, LuI vIaI's your nane?¨
In sµIIe oI our argunenIs Io IIe conIrary, IIere vIII Le
InIense µressure InsIde nosI organIzaIIons Io Iake IIe con-
non-nane rouIe. II's IIe IennIng eIIecI. Once IIe crovd
Iakes oII In one dIrecIIon, everyone jusI naIuraIIy joIns In
and IoIIovs. TIere's sone µsycIoIogIcaI saIIsIacIIon In IoI-
IovIng IIe crovd. In arI, In nusIc, In cIoIIIng, and In InIer-
neI Lrand nanes.
"II Is LeIIer Ior your reµuIaIIon Io IaII convenIIonaIIy,¨
1oIn Maynard Keynes once saId, "IIan II Is Io succeed
unconvenIIonaIIy.¨
Don'I say ve dIdn'I varn you.
148
TIe IorrenI oI generIc Lrand nanes on IIe InIerneI µrovIdes
Ioµe Ior IIe IaIe sIarIers. II you can IauncI a WeLsIIe vIII a
good Idea and a good Lrand nane, you are In a good Iong-
Iern µosIIIon. You can vaII unIII IIe generIc sIIe nanes
droµ ouI oI sIgII and IIen junµ In and vIn LIg.
Make no nIsIake aLouI II. Your nane sIands aIone on
IIe InIerneI and Is Ly Iar your nosI vaIuaLIe asseI. TIIs Is
one oI IIe najor dIIIerences LeIveen IIe InIerneI and IIe
µIysIcaI vorId.
In IIe µIysIcaI vorId, IIere are nany cIues Io a con-
µany's µurµose. LocaIIon, vIndov dIsµIays, even IIe sIze and
arcIIIecIure oI IIe LuIIdIng. A IoIeI Iooks IIke a IoIeI, a Lank
Iooks IIke a Lank, and a resIauranI Iooks IIke a resIauranI.
Lven In IIe IndusIrIaI IIeId, you seIdon are exµosed Io
jusI IIe conµany's nane. A LrocIure or dIrecI-naII µIece
vIII usuaIIy Iave µIcIures IIaI esIaLIIsI IIe conµany's µrod-
ucI IIne or servIce.
On IIe InIerneI, Iovever, IIe nane sIands aIone. UnIII
you geI Io IIe sIIe, you von'I IInd any cIues Io vIaI IIe sIIe
acIuaIIy does.
In IIe µIysIcaI vorId, a nedIocre nane can soneIInes
vork Lecause IIe µIysIcaI cIues conLIne Io esIaLIIsI IIe
conµany's IdenIIIy. A vaIcI sIore Iooks IIke a vaIcI sIore.
1 R£ L AW 0F 1 R£ PR0P£ R NAM£
Your name st ands al one on t he l nt er net ,
so you`d bet t er have a good one.
4
TIe IocaIIon and vIsuaI Iook oI a reIaII sIore, Ior exan-
µIe, can Le so unIque IIaI cusIoners oIIen IorgeI IIe sIore's
nane. "II's IIe reµaIr sIoµ aI IIe corner oI LIgIIy-sevenII
SIreeI and York Avenue.¨
Lven a droII nane can vork In a reIaII envIronnenI.
"TIe MaIIress IIrn¨ Ior a LeddIng sIoµ, Ior exanµIe. "TIe
Money SIore¨ Ior a Ione-Ioan conµany. "GeneraI NuIrIIIon
CenIers¨ Ior a IeaIII-suµµIenenI sIore. Nanes IIke IIese
never sIand aIone. TIey aIvays carry a veaIII oI cIues IIaI
connunIcaIe IIeIr reaI µurµose.
In IIe eIecIronIc vorId, IIere are no cIues. TIere are no
Looks In IIe vIndov IIaI IeII you IIaI Anazon.con Is a
LooksIore. No IraveI µosIers IIaI IeII you IIaI PrIceIIne.con
seIIs aIrIIne IIckeIs. No greeIIng cards IIaI IeII you vIaI
BIuenounIaIn.con does.
TIIs Is vIaI Ieads InIerneI conµanIes asIray. SIraIgII
InIo IIe generIc Iraµ.
TIe Iure oI IIe generIc Is so µoverIuI IIaI sone conµa-
nIes Iave µaId enornous suns Ior nanes IIaI In IIe Iong run
vIII Iurn ouI Io Le useIess. A Los AngeIes conµany LougII
BusIness.con Ior S7.5 nIIIIon. (To vIon II nay concern: II
you Iad LougII IIIs Look Ior S18.95, you vouId Iave saved
yourseII S7,499,981.05). Sone oIIer recenI µurcIases:
º WIne.con vas LougII Ior S3 nIIIIon.
º TeIeµIone.con vas LougII Ior S1.75 nIIIIon.
º BIngo.con vas LougII Ior S1.1 nIIIIon.
º WaIIsIreeI.con vas LougII Ior S1.03 nIIIIon.
º Drugs.con vas LougII Ior S823,456.
º UnIversIIy.con vas LougII Ior S530,000.
II's vorse IIan IuIIµ nanIa In HoIIand or IruIIIe nadness
In Irance. TIe IaIesI LId on IIe Loans.con nane vas S3
1PL LAW 0I 1PL PP0PLP NAML 149
nIIIIon. (II you ovn a connon InIerneI nane, our advIce Is
Io seII II LeIore IIe nanIa neIIs avay.)
Lven aI IIIs earIy sIage, IIe µover oI a µroµer nane as
oµµosed Io a connon nane Ior an InIerneI Lrand Ias Leen
cIearIy denonsIraIed. TIe LIg earIy vInners (AOL, Ana-
zon.con, eBay, PrIceIIne.con, YaIoo!) Iave aII Leen µroµer
nanes raIIer IIan connon nanes.
TIere's a IoI oI conIusIon on IIIs Issue. PeoµIe see a
nane IIke PrIceIIne and assune II's a connon or generIc
nane, LuI II's noI. TIe generIc nane Ior IIe caIegory Is
"IIckeIs¨ or reaIIy "nane-your-ovn-µrIce aIrIIne IIckeIs.¨
TIckeIs.con Is a connon nane used Ior a WeLsIIe IIaI, In
our oµInIon, Is noI goIng Io Iake oII.
("PrIce¨ and "IIne¨ are connon vords, oI course, LuI
IIey are used ouI oI conIexI and In conLInaIIon Io creaIe
IIe µroµer nane "PrIceIIne,¨ vIIcI Lecones an eIIecIIve
InIerneI Lrand nane.)
Lvery connon nane can aIso Le a µroµer nane II used
Io IdenIIIy a sIngIe µerson, µIace, or IIIng. BIrd Is a connon
nane, LuI II's aIso a µroµer nane, as In Larry BIrd or TveeIy
BIrd.
WIen you are cIoosIng a Lrand nane Ior your WeLsIIe,
IIe IIrsI IIIng Io ask yourseII Is, vIaI's IIe generIc nane Ior
IIe caIegory? TIen IIaI's IIe one nane you don'I vanI Io
use Ior your sIIe.
InvarIaLIy a sInguIar µroµer nane vIII Iurn ouI Io Le a
LeIIer nane Ior your sIIe IIan a generIc.
IVIIIage.con, Ior exanµIe, Is a LeIIer nane Ior a WeLsIIe
devoIed Io vonen IIan Wonen.con. (Yes, IIere Is a WeL-
sIIe caIIed Wonen.con, and II sµenI nIIIIons Io µronoIe IIs
nane LeIore seIIIng ouI Io a rIvaI.
AsIIon.con Is a LeIIer nane Ior a WeLsIIe IIaI seIIs Iux-
ury goods IIan CyLerIuxury.con, eLuxury.con, or IIrsI-
jeveIry.con.
In IIe µIysIcaI vorId, IIe sane LrandIng µrIncIµIes aµµIy.
TIe µroµer nane Is suµerIor Io IIe connon or generIc nane.
º McDonaId's Is a LeIIer nane IIan Burger KIng.
º HerIz Is a LeIIer nane IIan NaIIonaI Car RenIaI. (AII IIe
car renIaI nanes you see In an aIrIIne IernInaI are naIIonaI
car renIaI conµanIes, LuI IIere's onIy one HerIz.)
º Tinc Is a LeIIer nane IIan Ncusucc/ or U.S. Ncus &
\or/d Pcpor/.
º KraII Is a LeIIer nane IIan GeneraI Ioods, so vIen
KraII GeneraI Ioods decIded Io sInµIIIy IIeIr nane,
IIey caIIed IIe conµany KraII and noI GeneraI Ioods.
TIere are degrees oI connonness, oI course. "Burger
KIng¨ Is noI a IoIaIIy connon nane. TIe HanLurger PIace
vouId Le a IoIaIIy connon nane Ior a IasI-Iood esIaLIIsI-
nenI IIaI IeaIures Lurgers.
TIere are degrees oI µroµerness, Ioo. McDonaId's and
HerIz are nore "µroµer¨ IIan Tinc nagazIne. Tinc Is a
connon nane used ouI oI conIexI Io creaIe a µroµer nane.
In IIe sane vay, Anazon and YaIoo! are nore "µroµer¨
IIan PrIceIIne and eBay, vIIcI are connon vords used ouI oI
conIexI. (AII dIsIIncIIons are reIaIIve, oI course. Lven Anazon
and YaIoo! can Le connon vords. A yaIoo Is a LruIIsI crea-
Iure and an anazon Is a IaII, vIgorous, sIrong-vIIIed vonan.)
So Iov "µroµer¨ sIouId your WeLsIIe nane Le?
II aII deµends. IIrsI, and nosI InµorIanI oI aII, you vanI
your WeLsIIe nane Io Le µerceIved as a µroµer nane. TIen
IoµeIuIIy you vanI your nane Io Le nore "µroµer¨ IIan your
conµeIIIors'. BuI you aIso vanI Io consIder oIIer IacIors.
1. 1R£ NAM£ 5R0ULß B£ 5R0R1.
In generaI, IIe sIorIer IIe LeIIer. SIorIness Is an aIIrILuIe even
nore InµorIanI Ior an InIerneI Lrand IIan an ouIerneI Lrand.
You Iave Io keyLoard IIe WeLsIIe nane InIo your con-
µuIer. TIaI's vIy IIe sIIe nane sIouId Le LoII sIorI and
easy Io sµeII.
Many InIerneI Lrands Iave Ivo sIrIkes agaInsI IIen.
TIey are LoII Ioo generIc and Ioo Iong. As a resuII, IIey are
Iard Io renenLer and Iard Io sµeII. Sone exanµIes:
º ArIsourceonIIne.con.
º DoIcondIrecIory.con
º eBusInessIsLusIness.con
º LxµressauIoµarIs.con
º InIeracIIveLrokers.con
º GIIICerIIIIcaIes.con
º OnIIneOIIIceSuµµIIes.con
º TreasurecIesIonIIne.con
SIarIIng vIII IIe generIc nane Ior IIe caIegory and con-
densIng II Is a good vay Io kIII Ivo LIrds vIII one sIone. You
creaIe a µroµer nane IIaI's aIso sIorI and easy Io sµeII.
CNLT.con, Ior exanµIe, Iook IIe generIc Iern "conµuIer
neIvork¨ and sIorIened II Io CNLT, creaIIng a sIorI, µroµer
nane IIaI's aIso easy Io sµeII.
Sandoz needed a Lrand nane Ior IIs over-IIe-counIer IIu
IIeraµy µroducI. So IIe conµany reversed IIe vord order
and condensed IIe nane Io TIeraIIu. TIe µroducI venI on
Io Lecone IIe IeadIng Lrand In IIs caIegory.
NaLIsco needed a Lrand nane Ior IIs vanIIIa vaIers, so II
caIIed IIen NIIIa. And IIe µoverIuI Lrand nane 1eII-O Is
jusI a sIorIened versIon oI geIaIIn desserI.
NaLIsco IIseII Is a Lrand nane consIrucIed Ly condensIng
IIs Iorner generIc nane, NaIIonaI BIscuII Conµany. (TIere
are nany naIIonaI LIscuII conµanIes, LuI onIy one NaLIsco.)
BarnesandnoLIe.con IInaIIy IIrev In IIe IoveI on IIeIr
Iong, dIIIIcuII-Io-sµeII nane and sIorIened II Io Ln.con.
Morgan SIanIey Dean WIIIer Is an enornousIy success-
IuI IInancIaI conµany, LuI MorgansIanIeydeanvIIIer.con Is
noI goIng Io nake II on IIe InIerneI. TIe conµany sIorI-
ened IIe nane Io nsdv.con.
(TIe nanes Ln.con and nsdv.con are noI good eIIIer,
Lecause IIey are Iard Io renenLer.)
TIe veII-knovn consuIIIng IIrn Booz AIIen & HanIIIon
oLvIousIy couIdn'I use IIs Iong, conµIIcaIed nane on IIe
InIerneI, so IIe IIrn IauncIed BaI.con. (NoI a µarIIcuIarIy
euµIonIous cIoIce.) And vIaI aLouI nanes IIke DeIoIIIe &
ToucIe? Or PrIcevaIerIouseCooµers?
TIe InIerneI vIII Iorce nany conµanIes Io Iake anoIIer
Iook aI IIeIr nanes. TIIs Is Irue even Ior conµanIes Ior
vIIcI IIe InIerneI Is a nedIun and noI a LusIness. InsIead
oI IauncIIng BaI.con, µerIaµs Booz AIIen & HanIIIon
sIouId Iave cIanged IIe consuIIIng IIrn's nane Io Booz
AIIen and IauncIed a sIIe caIIed BoozAIIen.con.
And vIaI aLouI nanes IIke: AIIegIeny, AIIegIeny TeIe-
dyne, AIIegIance, AnIeuser-BuscI, BauscI & LonL,
CanandaIgua Brands, DI GIorgIo, HarnIscIIeger, Hayes
Lennerz, HeIIIg-Meyers, LeucadIa NaIIonaI, MarsI &
McCIennan, PIIIIIµs-Van Heusen, RoIn & Haas, ScIerIng-
PIougI, SnurIII-SIone, SodexIo MarrIoII ServIces, Synovus
IInancIaI, TecunseI ProducIs, TIAA-CRLI, Transnon-
IaIgne, WacIovIa, WackenIuI, WeyerIauser.
AII oI IIese conµanIes vIII Iave dIIIIcuIIy IransIerrIng
IIeIr nanes Io IIe InIerneI. And IIese are noI snaII conµa-
nIes eIIIer. TIey are aII ranked In Ior/unc nagazIne's IIsI oI
IIe one IIousand IargesI AnerIcan conµanIes.
Because oI IIe InIerneI, nany conµanIes vIII Iave Io sIn-
µIIIy IIeIr nanes. You Iave Io nIssµeII a nane and address
µreIIy LadIy LeIore IIe PosIaI ServIce vIII reIuse Io deIIver
your IeIIer. To reacI a WeLsIIe, Iovever, you Iave Io Le µer-
IecI. You can'I droµ one oI IIe µerIods or Ieave ouI a IyµIen.
One vay Io Iave your cake and eaI II Ioo Is Ly usIng
LoII a nane and a nIcknane on IIe WeL. CIarIes ScIvaL Is
IIe IeadIng dIscounI Lrokerage IIrn, LuI on IIe WeL IIe
conµany uses LoII CIarIesScIvaL.con and ScIvaL.con,
aIIIougI II µronoIes onIy ScIvaL.con.
Ask 1eeves Is one oI IIe IeadIng searcI-engIne sIIes on
IIe InIerneI, LuI II vIseIy oµeraIes vIII Ivo sIIe nanes:
Ask1eeves.con and Ask.con.
WIen you Iave Io cIoose LeIveen severaI Lrand nanes
IIaI seen equaIIy good, IIe snarIesI nane Io µIck Is usuaIIy
IIe one IIaI aIso Ias a good nIcknane.
PeoµIe IeeI cIoser Io a Lrand vIen IIey are aLIe Io use
IIe Lrand's nIcknane InsIead oI IIs IuII nane.
º Beener, noI BMW
º CIevy, noI CIevroIeI
º Coke, noI Coca-CoIa
º Bud, noI BudveIser
º IedLx, noI IederaI Lxµress
º Mac, noI MacInIosI
2. 1R£ NAM£ 5R0ULß B£ 5IMPL£.
SInµIe Is noI IIe sane as sIorI. SInµIIcIIy Ias Io do vIII
IIe aIµIaLeIIcaI consIrucIIon oI IIe Lrand nane. A sInµIe
vord uses onIy a Iev IeIIers oI IIe aIµIaLeI and arranges
IIen In conLInaIIons IIaI reµeaI IIenseIves.
ScIvaL Is a sIorI nane (sIx IeIIers), LuI II Is noI a sIn-
µIe nane Lecause II uses sIx IeIIers oI IIe aIµIaLeI. TIIs Is
one reason IIaI ScIvaL Is noI a µarIIcuIarIy easy nane Io
sµeII.
MIssIssIµµI Is a Iong nane (eIeven IeIIers), LuI II Is aIso a
sInµIe nane Lecause II uses onIy Iour IeIIers oI IIe aIµIa-
LeI. WIIcI Is vIy nosI µeoµIe can sµeII MIssIssIµµI.
Coca-CoIa Is LoII a sIorI nane and sInµIe nane.
AIIIougI IIe nane Ias eIgII IeIIers, II Is Iorned Ly usIng
onIy Iour IeIIers oI IIe aIµIaLeI. IurIIernore, IIe nane
reµeaIs IIe "co¨ syIIaLIe.
PeµsI-CoIa, on IIe oIIer Iand, Is a nucI nore conµII-
caIed nane IIan Coca-CoIa. PeµsI-CoIa uses eIgII IeIIers oI
IIe aIµIaLeI Io Iorn a nIne-IeIIer vord.
AuIoLyIeI.con, Ior exanµIe, suIIers Iron IIe sane µroL-
Ien. LIke IIe PeµsI-CoIa nane, II Iakes eIgII IeIIers oI IIe
aIµIaLeI Io Iorn IIe nane. IurIIernore, Iov do you
"µarse¨ IIe nane? Is II AuIo Ly TeI or AuIo ByIeI? And vIaI
Is a ByIeI anyvay?
Lven IIougI IIe AuIoLyIeI WeLsIIe Ias a µroµer nane,
aIong vIII an earIy Iead In IIe car caIegory, ve don'I LeIIeve
II vIII Lecone IIe µrenIer sIIe In IIs caIegory.
Sone µeoµIe Iave crIIIcIzed NIssan's decIsIon Io cIange
IIs U.S. Lrand Iron DaIsun Io NIssan. BuI Iron a Lrand-
nane µoInI oI vIev, NIssan Is IIe suµerIor nane. AIIIougI
LoII Lrand nanes use sIx IeIIers, IIe DaIsun nane requIres
sIx IeIIers oI IIe aIµIaLeI and IIe NIssan nane onIy Iour.
(You IardIy Iear anyone use IIe DaIsun nane anynore.)
3. 1R£ NAM£ 5R0ULß 5U66£51 1R£ CA1£60RY.
Here's IIe µaradox. To Lecone a LIg Lrand on IIe WeL, you
need a µroµer nane. On IIe oIIer Iand, IIe nane sIouId sug-
gesI IIe caIegory vIIIouI IaIIIng InIo IIe generIc nane Iraµ.
TIIs Is noI an easy IIne Io vaIk. SIorIenIng IIe generIc
nane Is one vay Io acIIeve LoII oLjecIIves (CNLT, NIIIa,
and 1eII-O, Ior exanµIe).
AnoIIer aµµroacI Is Io add an "oII-IIe-vaII¨ vord Io IIe
nane oI IIe caIegory. PIaneIRx, Ior exanµIe. (We vouId
Iave µreIerred a dIIIerenI vord IIan p/anc/, vIIcI Ias Leen
overused. In addIIIon Io IIe aIIIng PIaneI HoIIyvood cIaIn,
IIere are Ivo oIIer vouId-Le µIaneI Lrands on IIe InIerneI:
PeI PIaneI and PIaneI OuIdoors.)
DrugDeµoI.con nIgII aIso Iave Leen a LeIIer nane Ior an
InIerneI drugsIore IIan eIIIer Drugs.con or DrugsIore.con.
II's aIIIIeraIIve and nInIcs LoII IIe Hone DeµoI and IIe
OIIIce DeµoI Lrands In IIe µIysIcaI vorId.
We IeIµed a conµany IIaI vas µIannIng Io seII adverIIs-
Ing sµecIaIIIes on IIe WeL cone uµ vIII IIe nane Brand-
BuIIders.con. (TIe conµany seIIs IaIs, T-sIIrIs, µens,
LInders, and oIIer naIerIaI used In corµoraIe Lrand-
LuIIdIng µrojecIs.) TIen ve agreed vIII IIe cIIenI Io nake IIe
nane nore IInger IrIendIy Ly sIorIenIng II Io Branders.con.
4. 1R£ NAM£ 5R0ULß B£ UNIqU£.
UnIque Is IIe key cIaracIerIsIIc IIaI nakes a nane neno-
raLIe. TIIs Is Irue Ior aII Lrand nanes, esµecIaIIy IIose used
on IIe WeL. Ask1eeves.con and DrKooµ.con are Ivo InIer-
neI Lrand nanes IIaI are LoII unIque and nenoraLIe.
No nane, oI course, Is IoIaIIy unIque unIess you creaIe II
Iron scraIcI, IIke Acura, Lexus, Kodak, or Xerox.
Ask1eeves.con Is assocIaIed vIII IIe LuIIer and
DrKooµ.con vIII IIe Iorner surgeon generaI oI IIe UnIIed
SIaIes. BuI IIese are sInguIar IndIvIduaIs vIo are noI goIng
Io Le conIused vIII IIe WeLsIIes IIaI carry IIeIr nanes.
As a naIIer oI IacI, LoII IndIvIduaIs suggesI IIe Iunc-
IIons oI IIeIr sIIes-Ask 1eeves Ior IIndIng InIornaIIon and
Dr. Kooµ Ior nedIcaI InIornaIIon.
BuI Iov unIque Is More.con, a sIIe IIaI sµenI S20 nII-
IIon Io IeII you IIey seII IeaIII, LeauIy, and veIIness µrod-
ucIs? Or MyWay.con or CIeckOuI.con or IndIvIduaI.con or
Ovners.con or YouDecIde.con or InduIge.con or TIIs.con
or Resµond.con? Or any oI a Iundred dIIIerenI sIIes LeIng
Lacked Ly nIIIIons oI doIIars' vorII oI venIure caµIIaI and
µronoIed vIII nIIIIons oI doIIars' vorII oI adverIIsIng?
A WaIIIan, MassacIuseIIs, conµany sµenI S20 nIIIIon
In IeIevIsIon and radIo adverIIsenenIs Io IauncI a gIII-
LuyIng servIce caIIed Send.con. Hov Is anyone goIng Io
renenLer IIe nane?
LeI's say you vanIed Io Luy a µresenI Ior your IrIend
CIarIIe Ior CIrIsInas. Do you go Io Buy.con, PresenI.con,
GIII.con, or vIaI?
By deIInIIIon a connon or generIc nane Is noI unIque.
II does noI reIer Io a sµecIIIc µerson, µIace, or IIIng IIke a
µroµer nane does. TIereIore, a connon nane used as a
WeLsIIe nane Ior IIe generIc caIegory Is noI nenoraLIe.
5. 1R£ NAM£ 5R0ULß B£ ALLI1£RA1IV£.
WIy do you IIInk cIIIdren nove IIeIr IIµs vIen IIey read?
TIey are converIIng IIe vIsuaI synLoIs reµresenIed Ly IIe
IeIIers and vords InIo sounds IIaI can Le µrocessed Ly IIeIr
LraIns. TIe nInd vorks vIII IIe sounds oI vords, noI vIII
IIe vIsuaIs and IIeIr sIaµes.
WIen you grov uµ, you Iearn noI Io nove your IIµs
vIen you're readIng. BuI IIIs doesn'I cIange IIe vay your
nInd vorks. II sIIII vorks vIII IIe sounds oI vords.
II you vanI µeoµIe Io renenLer soneIIIng, rIyne II Ior
IIen. "II IIe gIove don'I III, you nusI acquII.¨
Iogdog.con Is an InµrovenenI over IIe Lrand's orIgInaI
nane, vIIcI vas SµorIsIIe.con.
AIIIIeraIIon Is anoIIer sure-IIre vay Io Inµrove your
Lrand's nenoraLIIIIy. Many reaI-vorId Lrand nanes are
aIIIIeraIIve. Sone exanµIes:
º Bed, BaII & Beyond
º BIockLusIer
º BIg BerIIa
º Coca-CoIa
º DIrI DevII
º VoIvo
º WeIgII WaIcIers
In our searcI oI acIIve, veII-µronoIed InIerneI Lrands,
ve couId IInd very Iev IIaI used aIIIIeraIIon. (One oI IIe rea-
sons ve IIked BrandBuIIders as a nane vas IIs aIIIIeraIIon.)
TIe sane µrIncIµIe aµµIIes vIII LaLIes. GIve your nevLorn
kId a Iead sIarI. PIck a IIrsI nane IIaI's aIIIIeraIIve vIII your
IasI nane. II's a IacI IIaI nany Ianous ceIeLrIIIes Iave aIIIIera-
IIve nanes: AIan AIda, RonaId Reagan, RoLerI RedIord, TIna
Turner, MarIIyn Monroe, CIarIIe CIaµIIn, SIaron SIone, GreIa
GarLo, DorIs Day, SyIvesIer SIaIIone, Susan Sarandon, Ted
Turner, MIckey Mouse, DonaId Duck.
6. 1R£ NAM£ 5R0ULß B£ 5P£AKABL£.
WIen vas IIe IasI IIne you LougII soneIIIng Lecause you
read an adverIIsenenI or a nevs IIen aLouI II? Many µeoµIe
are Iard µuI Io renenLer a sIngIe IIen IIey LougII Lecause
oI an ad.
Does IIIs nean IIaI adverIIsIng Is IneIIecIIve? NoI neces-
sarIIy. MosI µeoµIe Luy µroducIs or servIces Lecause IIey
Iear aLouI IIese IIIngs Iron IrIends, neIgILors, or reIaIIves.
Word oI nouII Is IIe nosI eIIecIIve nedIun In your
enIIre connunIcaIIons arsenaI. BuI Iov does IIe IIrsI
nouII geI IIe vord Io µass aIong? Iron µuLIIcIIy or adver-
IIsIng, oI course.
As a ruIe oI IIunL, IIere are Ien vord-oI-nouII recon-
nendaIIons Ior every µuLIIcIIy or adverIIsIng "III.¨ TIIs Ien-
Io-one raIIo IoIds Ior nany dIIIerenI µroducIs and servIces.
As eIIecIIve as vord oI nouII Is, you can'I LuIId a Lrand Ly
nouII aIone. You Iave goI Io gIve IIaI IIrsI nouII soneIIIng
Io vork vIII. UnIorIunaIeIy, Ioo nany conµanIes use InIerneI
Lrand nanes IIaI are unsµeakaLIe. And nany oIIers are
connon nanes IIaI dIscourage vord-oI-nouII usage.
"WIere dId you Luy your nev conµuIer?¨
"II vas OnsaIe.¨
"I knov you goI a good deaI, LuI vIere?¨
"OnsaIe.¨
OnsaIe.con nIgII Le a dIIIIcuII nane Io use In ordInary
conversaIIon, LuI nany oIIer WeLsIIes are even vorse.
TIey're aIso Iard Io µronounce and sµeII. Sone exanµIes:
LnIreµreneur.con, ConcIerge.con, CyLerIuxury.con,
OnvIa.con, InandI.con, BrodIa.con, IWon.con, IOvn.con,
RIcIosIeI.con, zUnIversIIy.con, SIaLang.con, uBId.con,
Cozone.con, GIIILnµorIa.con, IParIy.con, eHov.con,
TraveIocIIy.con, AdornIs.con, 2Key.con.
WIen soneone reconnends a µIysIcaI Lrand or a reaI-
vorId reIaII sIore, you don'I Iave Io renenLer exacIIy Iov Io
sµeII IIe nane In order Io IInd IIe sIore. Is II ALercronLIe &
IIIcI or ALacronLy & IIncI? II doesn'I naIIer In IIe naII, II
does naIIer on IIe WeL.
TIaI's vIy an InIerneI Lrand sIouId aIvays Iry Io IIne
uµ aII µossILIe sµeIIIng varIaIIons oI IIs nane. 2Key and
TvoKey, Ior exanµIe.
(RougIIy 10 µercenI oI IIe LuyIng µuLIIc suIIers Iron
sone Iorn oI dysIexIa. WIy vrIIe oII-or raIIer, sµeII oII-
IIe dysIexIa narkeI?)
AnoIIer µroLIen Is IIe nIxIng oI IeIIers and nunLers.
Very Iev ouIerneI Lrands use LoII. (We couId IIInk oI onIy
3M, 3Con, and 1-800-ILOWLRS.)
QuIIe a Iev InIerneI Lrands, on IIe oIIer Iand, nake
IIIs nIsIake: 1sIBuy.con, 123greeIIngs.con, 123IeI.con,
Hov2.con, NeI2µIonedIrecI.con, Poµ2II.con, CIIck2AsIa.con,
SIoµ2gIve.con, MP3.con, 4anyIIIng.con, 4cIarIIy.con,
Iax4Iree.con, Oµus360.con, 800.con, 911gIIIs.con.
WIy do nosI µeoµIe IInd II easIer Io renenLer IIeIr
µIone nunLer IIan IIeIr IIcense µIaIe nunLer, even IIougI
IIey are LoII aLouI IIe sane IengII? Because IIcense µIaIes
usuaIIy use LoII nunLers and IeIIers, vIIcI nakes IIen
nucI nore dIIIIcuII Io recaII. WIIIe IIe conLInaIIon can
soneIInes nake cuIe vanIIy µIaIes (321GO), IIey nake
µoor Lrand nanes.
And dId you ever Iry Io renenLer a CanadIan µosIaI code
IIke H3B 2Y7? A nIxIure oI IeIIers and nunLers Is usuaIIy
nucI Iarder Io recaII IIan eIIIer IeIIers or nunLers aIone.
One oI IIe reasons IIaI conµanIes seIecI unsµeakaLIe
Lrand nanes Ias Io do vIII IIe seIecIIon µrocess.
MosI Lrand nanes are seIecIed vIsuaIIy, usuaIIy Iron a
IIsI oI nanes µrInIed on oversIzed sIeeIs oI vIIIe µaµer
µasIed on cardLoard.
TIaI's noI IIe vay µrosµecIs deaI vIII Lrand nanes.
TIey usuaIIy Iear IIen verLaIIy Iron IrIends, neIgILors,
reIaIIves, and covorkers. Lven IIe nedIa exµosure oI Lrand
nanes Is IeavIIy veIgIIed Io verLaI raIIer IIan vIsuaI
nedIa. NearIy 90 µercenI oI IIe average µerson's nedIa IIne
Is sµenI IIsIenIng Io radIo or IeIevIsIon versus Iess IIan 10
µercenI readIng nevsµaµers or nagazInes.
In case you're vonderIng, IIe vords you Iear In a IeIevI-
sIon connercIaI are Iar nore IIkeIy Io nake an InµressIon
In your nInd IIan IIe vords you read on IIe screen. (TIe
sµoken vord conveys enoIIon and secondary neanIngs,
vIIIe IIe µrInIed vord jusI sIIs enoIIonIess on IIe µage or
on IIe TV screen.)
WIen you seIecI a Lrand nane, you sIouId IIsIen Io IIe
µroµosed nane LeIng sµoken, and noI jusI sIare aI IIe vord
on a Loard. You can'I Iear caµIIaI IeIIers or IIe sound oI a
cIrcIe ®. To Le eIIecIIve, a Lrand nane needs Io sound IIke a
µroµer nane or a vord IIaI conjures uµ a µarIIcuIar WeL-
sIIe, noI jusI a generIc caIegory.
?. 1R£ NAM£ 5R0ULß B£ 5R0CKIN6.
II you vanI µrosµecIs Io renenLer your InIerneI Lrand, you
need Io nake IIe nane IIseII "sIockIng.¨
TIe LesI Lrand nanes Iave aIvays Iad an eIenenI oI
sIock or surµrIse. DIeHard, IIe IargesI seIIIng auIonoLIIe
LaIIery, Ior exanµIe. Häagen-Dazs, IIe IeadIng µrenIun Ice
crean. DIeseI, IIe IasIIonaLIe Lrand oI jeans.
II's easy Io go overLoard and nake IIe nane so sIockIng
IIaI II oIIends µeoµIe. IUBU Is a Lrand nane IIaI cones
cIose Io IIe edge, aIIIougI younger µeoµIe are usuaIIy nore
IoIeranI oI IruIy sIockIng nanes.
PeoµIe soneIInes ask us vIy ve caII our Iavs "InnuI-
aLIe.¨ Aren'I sone oI your Iavs nuIaLIe? MayLe so, ve reµIy,
LuI Io nake II In IIe Look LusIness you need a sIockIng IIIIe.
T/c 22 Gcncra//y Acccp/cd Laus oj Erandin¸ Is jusI noI goIng
Io go anyvIere aI Barnes & NoLIe, Borders, or Anazon.con.
One oI IIe nosI dIIIIcuII Iasks In µuLIIc reIaIIons Is geI-
IIng a LusIness Look revIeved In IIe nedIa. We're goIng Io
Iry as Iard as µossILIe, LuI IIe odds are IIaI IIIs Look vIII
µroLaLIy Le IIe eIgIII Look ve Iave vrIIIen IIaI vIII noI Le
revIeved Ly IIe \a// S/rcc/ 1ourna/.
BuI IIe 1ourna/ dId revIev a Look enIIIIed Lcadcrs/ip
Sccrc/s oj A//i/a //c Hun. Iour Iundred years Iron nov, vIII
IIe 25II-cenIury \a// S/rcc/ 1ourna/ revIev a dIgIIaI Look
enIIIIed Lcadcrs/ip Sccrc/s oj Ado/j Hi//cr? CouId Le.
An eIenenI oI "sIock¨ nakes a nane nore nenoraLIe
Lecause II µuIs IIe µover oI enoIIon Io vork. To a cerIaIn
exIenI, you renenLer evenIs In your ovn IIIe Lased on IIe
degree oI enoIIonaI InvoIvenenI. Your graduaIIon day, your
veddIng day, IIe day 1oIn I. Kennedy vas sIoI, IIe day IIe
TvIn Tovers vere desIroyed.
You nay Iave Iaken dozens oI vacaIIons In your IIIeIIne,
nosI oI vIIcI renaIn In your nInd as Iuzzy nenorIes. TIe
vacaIIons you vIII never IorgeI, Iovever, are IIe ones IIaI
conIaIn sIrong enoIIonaI eIenenIs. An auIonoLIIe accIdenI,
an overIurned saIILoaI, IIe day you sIeµµed on a sea urcIIn.
You see IIe sane µaIIern on IIe InIerneI. Connon nanes
IIke CookIng.con and IurnIIure.con are LIand and carry no
sIock or enoIIonaI InvoIvenenI. TIey're Iard Io renenLer.
II's nanes IIaI Iave a LII oI LIIe Io IIen IIaI vIII Iurn
ouI Io Le IIe LeIIer Lrand nanes on IIe InIerneI. Nanes IIke
YaIoo! and Anazon.con. TIese are nanes IIaI sIIr uµ sone
enoIIonaI resµonse.
One good LrandIng sIraIegy Ior any InIerneI conµany Is Io
InnedIaIeIy Iock IIe "sIockIng¨ nane InIo LoII IIe caIegory
and IIe LeneIII. Anazon.con Ias µronoIed IIseII as "LarII's
LIggesI LooksIore.¨ TIIs sIraIegy vorks on severaI IeveIs. TIe
Anazon Is IIe LarII's "LIggesI¨ rIver, and IIe aIIIIeraIIon oI
"LIggesI LooksIore¨ nakes IIe µIrase nore nenoraLIe.
II you don'I Iock your sIockIng nane InIo eIIIer a caIe-
gory or a LeneIII, you vasIe IIe µover oI IIe nane. We
aIvays IIougII IIaI ProdIgy vas a good nane Ior an InIer-
neI servIce µrovIder, LuI noI Ior a generaI sIIe. ProdIgy, In
our oµInIon, sIouId Iave Leen dIrecIed aI cIIIdren.
OIIer nenoraLIe nanes are MoIIeyIooI and LarIILInk.
(AIIIougI vIen LarIIIInk acquIred MIndSµrIng, II sIouId
Iave used IIe MIndSµrIng nane, vIIcI Is nore sIockIng.)
AIso nenoraLIe Lecause IIey are sIockIng are HoInaII, IIe
nosI µoµuIar Iree e-naII servIce, and MonsIer.con, IIe
IeadIng WeLsIIe Ior joL IIsIIngs.
8. 1R£ NAM£ 5R0ULß B£ P£R50NALIZ£ß.
OLvIousIy, every InIerneI Lrand cannoI acconnodaIe aII oI
IIese eIgII nanIng sIraIegIes, IncIudIng µersonaIIzaIIon.
BuI vIen IIe sIIuaIIon aIIovs II, you sIouId consIder nan-
Ing your sIIe aIIer an IndIvIduaI.
TIIs sIraIegy Ias a nunLer oI advanIages. IIrsI oI aII, II
assures you a WeLsIIe vIII a µroµer nane raIIer IIan a
connon nane. Second, II enIances IIe µuLIIcIIy µoIenIIaI
oI your sIIe.
Many reaI-vorId Lrands Iave evoIved Iron IndIvIduaIs.
Iord, CIrysIer, CIevroIeI, PonIIac, OIds(noLIIe), BuIck, CadII-
Iac, CaIvIn KIeIn, RaIµI Lauren, Tonny HIIIIger, Donna
Karan, LIz CIaILorne, L.L. Bean, BoeIng, IorLes, Goodyear,
GIIIeIIe, HeInz, HerIz, and OrvIIIe RedenLacIer, Io nane a Iev.
InIIIaIIy DeII ConµuIer soId IIs µroducIs under IIe PC
LInIIed Lrand nane. BuI uIIInaIeIy IIe conµany reaIIzed
IIaI IIe µroµer nane (DeII) vas nucI sIronger IIan IIe
generIc nane (PC LInIIed), so II svIIcIed.
You enIance IIe µuLIIcIIy µoIenIIaI oI a Lrand vIen you
use IIe Iounder's nane as IIe Lrand nane. Look aI aII IIe µuL-
IIcIIy MIcIaeI DeII Ias receIved, µuLIIcIIy IIaI dIrecIIy LeneIIIs
IIe Lrand. HIs conµeIIIor Mr. Conµaq seIdon geIs nenIIoned.
And vIere vouId IIe Trunµ Lrands Le vIIIouI TIe
DonaId? NovIere, Lecause DonaId doesn'I IIke Io sµend
noney vIen Ie can geI soneIIIng Ior Iree. Don'I knock PR.
DonaId Trunµ's vIIrIvInd acIIvIIIes on LeIaII oI IIs Lrands
are vIaI Ias nade IIen successIuI.
Brands are coId, sIIenI, and IIIeIess. OnIy a µerson can arIIc-
uIaIe IIe Lrand's sIraIegy, µosIIIon, and oLjecIIves. TIe nedIa
vanI Io InIervIev µeoµIe, noI Lrands. And vIenever µossILIe,
IIe nedIa vanI Io InIervIev IIe CLO, noI IIe Lrand nanager.
ReIax and enjoy II. II you are IIe CLO and you vanI your
Lrand Io Lecone Ianous, you Iave Io Lecone Ianous, Ioo.
TIe nosI Ianous Lrands usuaIIy aIso Iave ceIeLrIIy CLOs.
MIcrosoII and BIII GaIes. Sun MIcrosysIens and ScoII
McNeaIey. OracIe and Larry LIIIson. AµµIe and SIeve 1oLs.
Sane on IIe InIerneI. AOL and SIeve Case. Anazon.con
and 1eII Bezos. YaIoo! and 1erry Yang and DavId IIIo.
SInµIIIy IIIngs. Make II easy Ior LoII your µrosµecIs
and IIe nedIa Io assocIaIe IIe cIIeI execuIIve vIII IIe WeL-
sIIe. GIve IIen LoII IIe sane nane.
º DonaId Trunµ and Trunµ.con
º MIcIaeI DeII and DeII.con
º CIarIes ScIvaL and ScIvaL.con
AII LrandIng vork sIarIs vIII IIe nane. II you µIck a
nane IIaI naIcIes nosI oI IIese eIgII nanIng sIraIegIes,
IIen you vIII Le veII on your vay Io LuIIdIng a successIuI
InIerneI Lrand.
164
TIere's one LIg dIIIerence LeIveen LrandIng on IIe InIerneI
and LrandIng In IIe reaI vorId.
In IIe reaI vorId, IIere Is aIvays roon Ior a nunLer Ivo
Lrand.
º DuraceII and LnergIzer
º Kodak and IujI
º HerIz and AvIs
º NIke and ReeLok
º Goodyear and MIcIeIIn
TIere's a reason vIy nunLer Ivo Lrands can Iead a
IeaIIIy IIIe on IIe ouIerneI. TIey serve a need, noI jusI Ior
IIe consuner, LuI aIso Ior IIe Irade.
WouId a suµernarkeI jusI sIock Coca-CoIa and noI a
second Lrand? No. TIe second Lrand gIves IIe suµernarkeI
sone Ieverage agaInsI IIe Ieader. "II Coca-CoIa von'I µarIIcI-
µaIe In our veekIy µronoIIon, ve'II ask PeµsI-CoIa.¨
TIe unsµoken InµIIcaIIon oI every requesI nade Ly IIe
Irade Is, II you Iurn IIIs deaI dovn, ve'II oIIer II Io your con-
µeIIIor. TIe nunLer Ivo Lrand IIIIs a reaI need Ior IIe Irade.
WouId aIrIIne IernInaI nanagenenI sIgn an excIusIve
1 R£ L AW 0F 5I N6UL ARI 1 Y
^t al l oost s you shoul d av ol d bel ng
seoond l n your oat egor y.
5
deaI vIII HerIz, IIe IeadIng car renIaI Lrand? NoI II IIey
vanIed Io Iave sone Ieverage on IIe nunLer oI cars avaII-
aLIe Ior renI, IIe Iours oI servIce, IIe µrIcIng, and so IorII.
Say IIere's a McDonaId's on IIe corner oI a IIgIIy desIraLIe
IasI-Iood sIIe. TIe reaI-esIaIe deveIoµer across IIe sIreeI can'I
seII IIe sIIe Io MIckey D, so Ie or sIe Iurns Io Burger KIng.
TIe aIrIIne IernInaI, IIe suµernarkeI, IIe drugsIore, IIe
naII oµeraIor, even IIe reaI-esIaIe deveIoµer-aII cone
LeIveen IIe cusIoner and IIe Lrand. TIese nIddIenen, or
IIe Irade II you vIII, Iave a sIrong need Ior nunLer Ivo
Lrands, even II IIe nunLer Ivo Lrand Is essenIIaIIy IIe
sane. II's noI a µroducI need. II's a Ieverage need.
You IInd a sInIIar need In IIe IndusIrIaI IIeId, nosI con-
µanIes InsIsI on "a second source oI suµµIy.¨ WIaI II IIeIr
µrInary suµµIIer Is ouI on sIrIke? II a conµany dIdn'I Iave a
second source oI suµµIy Ior a µarIIcuIar µarI, II nIgII Iave
Io sIuI dovn IIs µroducIIon IIne.
"NoIIIng cones LeIveen ne and ny CaIvIns,¨ Brooke
SIIeIds once saId. On IIe InIerneI noIIIng cones LeIveen
IIe cusIoner and IIe Lrand. TIere are no nIddIenen, no
Irade, no reaI esIaIe deveIoµers, no need Ior Ieverage agaInsI
IIe Ieader. II's vIaI BIII GaIes caIIs "IrIcIIon-Iree caµIIaIIsn.¨
As a resuII, IIe InIerneI Is nore IIke a IooILaII gane or a
µoIIIIcaI conIesI. II's IIe Lav oI SInguIarIIy. Second µIace Is
no µIace.
Or as a NIke IeIevIsIon connercIaI once saId aLouI IIe
OIynµIcs, "you don'I vIn sIIver, you Iose goId.¨ On IIe InIer-
neI, IIere are no sIIver or Lronze nedaIs.
On IIe InIerneI, nonoµoIIes vIII ruIe. TIere Is no roon
on IIe InIerneI Ior nunLer-Ivo Lrands. TIe InIerneI vIII
oµeraIe nore IIke IIe conµuIer soIIvare IndusIry, In vIIcI
every caIegory Iends Io Le donInaIed Ly a sIngIe Lrand.
º In PC oµeraIIng sysIens, II's WIndovs.
º In PC vord-µrocessIng soIIvare, II's Word.
º In PC sµreadsIeeI soIIvare, II's LxceI.
1PL LAW 0I 5I NUULAPI 1Y 165
º In PC µresenIaIIon soIIvare, II's PoverPoInI.
º In PC accounIIng soIIvare, II's QuIcken.
º In PC Iax-µreµaraIIon soIIvare, II's TurLoTax.
MIcIaeI MauLoussIn, cIIeI InvesInenI sIraIegIsI aI CredII
SuIsse IIrsI BosIon, Iound IIaI InIerneI sIIes adIere Io a
naIIenaIIcaI vaIuaIIon sysIen so rIgId, II resenLIes µaIIerns
Iound In naIure. TIe µaIIern suggesIs IIaI IIere nay Le Iever
uIIInaIe vInners IIan nany InvesIors exµecI.
As sone sIIes geI LIgger, Mr. MauLoussIn argues, IIey
aIIracI nore users, and IIe nore users IIey aIIracI, IIe
rIcIer and nore useIuI IIey Lecone, aIIracIIng nore users.
TIIs µroduces a "vInner-Iake-aII¨ ouIcone: a IandIuI oI
WeLsIIes vIII aInosI aII IIe LusIness, and IIe resI vIII nexI
Io noIIIng, I.e., IIe Lav oI SInguIarIIy.
One oI IIe nany advanIages oI IrIcIIon-Iree reIaIIIng Is
IIaI IIere Is no one In LeIveen IIe cusIoner and IIe nanu-
IacIurer IakIng a cuI oI IIe IransacIIon. TIe µrIce you µay
Ior IIe Iack oI IrIcIIon, Iovever, Is IIe vIrIuaI dIsaµµearance
oI IIe second Lrand.
Ior nany µroducIs, II's IIe reIaIIer IIaI Is resµonsILIe
Ior IIe sIrengII oI IIe second Lrand. No reIaIIer vanIs Io Le
IoIaIIy deµendenI on a sIngIe Lrand In eacI caIegory. To do
so vouId Le Io µuI IIe reIaIIer aI IIe nercy oI IIe nanuIac-
Iurer. TIe second Lrand keeµs IIe IIrsI Lrand IonesI.
Ior IIe nosI µarI, IIere seens Io Le a cordIaI reIaIIon-
sIIµ LeIveen nanuIacIurers and reIaIIers, LuI desµIIe IIe
surIace IrIendIIness, IIere are oIIen deeµ dIsagreenenIs
aLouI µrIces, µaynenI Ierns, sIockIng Iees, co-oµ adverIIsIng
aIIovances, and reIurn µrIvIIeges. In IIe reIaII vorId, you
don'I IIgII IIre vIII IIre. You IIgII IIre vIII a second Lrand.
On IIe WeL IIe sIIuaIIon Is dIIIerenI. TIe reaI vorId Is
IIe second Lrand. WIen Anazon.con oIIers LesI-seIIers aI
40 µercenI oII, IIe Look Luyer nenIaIIy conµares IIe Ana-
zon deaI vIII IIe 30 µercenI oII one can IInd aI nosI LrIck-
and-norIar LooksIores.
WIen BarnesandnoLIe.con (nov Ln.con) says "ne,
Ioo,¨ IIe µrosµecI yavns. TIere jusI Isn'I any reason Io
svIIcI, unIess Anazon.con suIIers a Lreakdovn In servIce
or µrIcIng.
TIere's anoIIer reason vIy IIe WeL µuIs IIe second
Lrand under µressure. In IIe µIysIcaI vorId, one Lrand's
success creaIes a Irend In IIe oµµosIIe dIrecIIon. TIIs Is
esµecIaIIy Irue Ior a IasIIon-orIenIed Lrand.
"No one goes IIere anynore,¨ saId YogI Berra. "II's geI-
IIng Ioo µoµuIar.¨ NoI as nany µeoµIe vear RaIµI Lauren
anynore eIIIer, II vas geIIIng Ioo µoµuIar. Nov a IoI oI
IoIks are InIo Tonny HIIIIger.
II II's Tonny Ioday, you can Le sure IIaI Ionorrov II
vIII Le soneLody IoIaIIy dIIIerenI. TIaI's IIe µover oI IIe
second-Lrand aµµroacI.
BuI IIe WeL Iacks IIe vIsILIIIIy oI IIe µIysIcaI vorId. II
everyone LougII IIeIr Looks Iron Anazon.con, Iov vouId
you knov? II's IIIs Iack oI vIsILIIIIy IIaI nuIes IIe LackIasI
agaInsI a Lrand Ieader.
In reaIIIy, oI course, IIere are nany second Lrands on IIe
InIerneI. NoI onIy seconds, LuI IIIrds, IourIIs, IIIIIs, and
even sIxIIs. In IurnIIure Ior exanµIe, ve Iave BeIone.con,
DecoraIevIIIsIyIe.con, Dvr.con, IurnIIure.con, IurnIIure-
IInd.con, IurnIIureonIIne.con, HoneDecoraIors.con,
HonePorIIoIIo.con, HouseneI.con, LIvIng.con, and nany
nore IIaI ve don'I knov aLouI.
Does IIIs nean IIaI IIe IurnIIure caIegory Is dIIIerenI
Iron Looks? TIaI IIe IurnIIure caIegory nIgII Iave nany
Lrands, LuI IIaI IIe Look caIegory vIII Le donInaIed Ly one
Lrand, µresunaLIy Anazon.con?
NoI aI aII. II onIy neans IIaI IIere Is no cIear-cuI IurnI-
Iure Ieader Ioday. BuI Ionorrov Is anoIIer naIIer. In aII
IIkeIIIood, one IurnIIure Lrand vIII geI ouI In IronI oI IIe
µack and go on Io donInaIe IIe caIegory. WIaI Iaµµened In
Looks Is IIkeIy Io Iaµµen In IurnIIure.
HIsIory sIeds sone IIgII on IIIs µrocess. In 1910, IIere
vere 508 AnerIcan auIonoLIIe conµanIes. Today IIere are
jusI Ivo: GeneraI MoIors and Iord.
In 1985, IIere vere aInosI a Iundred conµanIes nak-
Ing dIsk drIves. Today, Ivo conµanIes, QuanIun and Sea-
gaIe, donInaIe IIe dIsk-drIve narkeI on a vorIdvIde LasIs.
In 1990, IIere vere sone Ivo Iundred conµanIes nak-
Ing µersonaI conµuIers. Today, Ivo Lrands (Conµaq and
DeII) donInaIe IIe caIegory.
In IIe reaI vorId, ve caII IIIs µrocess "IIe Iav oI duaI-
IIy.¨ In IIe Iong run, Ivo Lrands vIII donInaIe IIe caIegory,
µuIIIng IIe IIIrd Lrand under enornous µressure.
º Conµaq and DeII donInaIe IIe µersonaI-conµuIer narkeI,
µuIIIng IIe IBM Lrand under µressure. IBM, vIIcI vas
IosIng nIIIIons on µersonaI conµuIers, recenIIy announced
IIaI IIey vouId vIIIdrav Iron IIe reIaII narkeI.
º Coca-CoIa and PeµsI-CoIa donInaIe IIe coIa narkeI,
µuIIIng IIe squeeze on IIe RoyaI Crovn Lrand. RC CoIa
Ias Leen sIeadIIy IosIng narkeI sIare.
º Kodak and IujI donInaIe IIe µIoIograµIIc IIIn narkeI,
vIrIuaIIy sIuIIIng ouI AgIa and drIvIng IIe Lrand oII
nosI sIeIves.
II doesn'I geI any LeIIer Ior a Lrand LurIed In IIe µack.
As IIne goes on, oµµorIunIIIes dIsaµµear. TIe Ieaders
Lecone nore IIxed In IIeIr µosIIIons. TIe Ionger a Lrand
renaIns an aIso-ran, IIe Iess IIkeIy II Is Io caIcI uµ.
SuLsIIIuIe "sInguIarIIy¨ Ior duaIIIy and you Iave a Iong-
Iern µIcIure oI IIe InIerneI. IrIcIIon-Iree reIaIIIng Ias
eIInInaIed IIe IuncIIon oI IIe second Lrand.
Take Looks, Ior exanµIe. WIII eIIIer Borders.con or
Ln.con overIake Anazon.con? UnIIkeIy, unIess Anazon.con
nakes a najor nIsIake.
WIII eIIIer Borders.con or Ln.con cIose IIe gaµ vIII Ana-
zon.con? TIaI's unIIkeIy, Ioo. WIaI Is Iar nore IIkeIy Io Iaµµen
Is IIaI Anazon.con vIII Increase IIs sIare oI IIe onIIne Look
narkeI, µuIIIng severe µressure on LoII Borders.con and
Ln.con. TIe Iav oI sInguIarIIy aI vork.
BuI sIay Iuned. Anazon.con Is In IIe µrocess oI nakIng
IIaI najor nIsIake IIaI vIII oµen IIe door Ior IIs Look con-
µeIIIors (see IIe Lav oI VanIIy).
Is IIere any Ioµe Ior a Lrand LurIed In second µIace? OI
course IIere Is. BuI IIe IIgIesI Iorn oI sIraIegIc IIInkIng Is
Io IIrsI Iook aI your sIIuaIIon vIII a coId eye.
TIe InµossILIe Is InµossILIe. II II's goIng Io Le InµossI-
LIe Io nake µrogress Iead-on agaInsI an Anazon.con, IIen
you nusI Lack oII and Iry a dIIIerenI aµµroacI.
WIaI nIgII IIaI aµµroacI Le? II IIe Iavs oI LrandIng
are InnuIaLIe (and ve IIInk IIey are), IIen you nusI do
exacIIy IIe sane IIIng IIaI Anazon.con dId. You nusI Le
IIrsI In a nev caIegory.
You can aIvays creaIe an oµµorIunIIy Io Le IIrsI In a nev
caIegory Ly narrovIng your Iocus and Ly aµµeaIIng Io a seg-
nenI oI IIe narkeI. II's as sInµIe as IIaI.
InsIead oI duµIIcaIIng Anazon.con's sIIe, a LeIIer sIraIegy
Ior Ln.con vouId Iave Leen Io narrov IIe Iocus and sµecIaIIze
In a caIegory oI Looks. BusIness Looks, Ior exanµIe.
WIIcI LrIngs uµ IIe Lav oI LIIIer/Or. II IIe WeL vas
goIng Io Le a LusIness Ior Borders and Barnes & NoLIe, IIen
IIey vouId Iave needed dIIIerenI nanes on IIeIr WeLsIIes.
WIII IIe sane nanes, II Is Iarder Io creaIe IdenIIIIes on IIe
WeL IIaI are dIsIIncI and dIIIerenI Iron IIeIr IdenIIIIes In
IIe µIysIcaI vorId. LIne exIensIon sIrIkes agaIn.
AcIuaIIy a nunLer oI InIerneI conµanIes are IryIng Io
conµeIe vIII Anazon.con Ly doIng exacIIy as ve Iave jusI
suggesIed, Ly narrovIng IIeIr Iocus.
º AIILrIs.con In IIe used-Look caIegory.
º MedsIIe.con In IIe nedIcaI-Look caIegory.
º VarsIIyLooks.con In IIe IexILook caIegory.
In eacI oI IIese caIegorIes, oI course, IIere are a nunLer oI
oIIer InIerneI Lrands. So vIIcI Lrand vIII Le IIe vInner In
eacI caIegory? II von'I necessarIIy Le IIe Lrand IIaI vas IIrsI
In IIe narkeIµIace. II von'I necessarIIy Le IIe Lrand IIaI vas
IIrsI Io Lecone µroIIIaLIe. TIe vInner vIII Le IIe IIrsI Lrand Io
esIaLIIsI a donInanI µosIIIon In IIe µrosµecI's nInd. TIen IIe
Lav oI SInguIarIIy vIII Iake over and danµen IIe narkeI
sIares oI IIe runners-uµ. NoIIIng succeeds IIke success.
WIen LuIIdIng an InIerneI Lrand, you Iave Io IIInk caIe-
gory IIrsI and Lrand second. CusIoners are noI µrInarIIy InIer-
esIed In conµanIes, In Lrands, or even In WeLsIIes. TIey are
µrInarIIy InIeresIed In caIegorIes. TIey are noI µrInarIIy InIer-
esIed In LuyIng a VoIvo, Ior exanµIe. TIey Luy a VoIvo In order
Io geI a saIe car. VoIvo Is IIe Ieader In a nenIaI caIegory caIIed
"saIe cars.¨
WIaI's a CIevroIeI? In IruII, a CIevroIeI Is a Iarge,
snaII, cIeaµ, exµensIve car or Iruck. One reason Ior IIe con-
IInuIng decIIne oI CIevroIeI saIes Is IIe IacI IIaI GeneraI
MoIors Ias negIecIed Io deIIne IIe nenIaI caIegory IIaI
CIevroIeI Is suµµosed Io occuµy.
II you vanI Io Le IIe Ieader In a caIegory, you IIrsI Iave
Io IeII IIe µrosµecI vIaI IIe caIegory Is. Take a Ivo-µage
adverIIsenenI Iron a recenI Issue oI IIe Harvard Eusincss
Pcvicu. TIere vere onIy IIIIeen vords In IIe enIIre ad and
Iere Is every one oI IIen.
The lnternet ls a blank oanvas.
You hold the brush.
lntendohange.oom
lntendohange
lmage : bulld : relnvent
WIII IIe reader oI IIIs InIendcIange.con adverIIsenenI
Iave any Idea vIaI IIe caIegory Is? We douLI II. WIIcI
nIgII Le one reason IIe WeLsIIe IoIded In 1uIy 2000. II
never IurIs Io IeII IIe reader exacIIy vIere Io IIIe your
Lrand nane In IIe nInd. Books, aucIIons, vIaIever.
"LarII's LIggesI LooksIore¨ noI onIy sIakes ouI a caIegory
Ior Anazon.con, LuI aIso nakes a sIrong cIaIn Ior Ieader-
sIIµ In IIe caIegory. "Inage, LuIId, reInvenI¨ does neIIIer.
In sunnary, don'I geI dIscouraged II you're noI IIe don-
InanI Lrand In a caIegory. 1usI cIanneI your LrandIng
eIIorIs In a dIIIerenI dIrecIIon. 1usI narrov your Iocus.
You can aIvays creaIe a µoverIuI Lrand Ly narrovIng
IIe Iocus on IIe Ieader. TIe InIerneI Is an enornous
nedIun. TIe oµµorIunIIIes Io narrov IIe Iocus are asIro-
nonIcaI.
In IIe reaI vorId, nany narrovIy Iocused Lrands Iave
Leen exIraordInarIIy successIuI In conµeIIng vIII narkeI
Ieaders.
Back In IIe earIy eIgIIIes, IBM vas IIe nosI µoverIuI
conµany In IIe vorId. II nade IIe nosI noney and Iad IIe
LesI reµuIaIIon. IBM vas aIso IIe IIrsI conµany Io InIroduce
a serIous 16-LII oIIIce µersonaI conµuIer, IIe IBM PC. So Is
IBM IIe Ieader In PCs Ioday? No, DeII ConµuIer Is.
UnIIke IBM, DeII nade onIy one µroducI (µersonaI con-
µuIers) narkeIed Io one segnenI (IIe LusIness connunIIy)
and soId IIrougI one dIsIrILuIIon cIanneI (dIrecI Io cus-
Ioners). YeI Ioday DeII ouIseIIs aII oIIer conµeIIIors In µer-
sonaI conµuIers. Less oIIen yIeIds nucI nore.
WIaI DeII dId In µersonaI conµuIers, Sun MIcrosysIens
dId In vorksIaIIons. By IocusIng on UNIX vorksIaIIons,
Sun LuIII a µoverIuI Lrand and a µroIIIaLIe conµany. You
don'I Iave Io Iave a IuII IIne Io Le successIuI.
WIen IIe WeL naIures, oI course, IIere vIII Le oµµorIu-
nIIIes Ior nunLer-Ivo Lrands. UnIII IIaI day arrIves, you
need Io Le IIe IeadIng Lrand In your caIegory or Iook Ior an
oµµorIunIIy Io narrov IIe Iocus In order Io creaIe a nev
caIegory you can Le IIe Ieader In.
172
DeaII and Iaxes used Io Le IIe onIy cerIaInIIes In IIIe. Today
you can add one nore: adverIIsIng.
AdverIIsIng nessages are uLIquIIous. LveryvIere you
Iurn you'II IInd an adverIIsIng nessage. Iron IeIevIsIon Io
IaxIcaLs Io T-sIIrIs. Iron LIIILoards Io Luses Io LaIIroons.
(Nov you can'I even Iake a Ieak vIIIouI LeIng exµosed Io
adverIIsIng.) In sone cIrcIes, eIevaIors are consIdered IIe
nexI IasI-rIsIng adverIIsIng nedIun.
Lvery najor auIo race, goII IournanenI, and IennIs
IournanenI Ias a corµoraIe sµonsor. AII IIe LovI ganes are
aIready Iaken, Iron IIe HooIers HuIa BovI In HavaII Io IIe
AT&T Rose BovI In Pasadena Io IIe NokIa Sugar BovI In
Nev OrIeans.
SµorIs arenas around IIe counIry are raµIdIy seIIIng
IIeIr nanes Ior adverIIsIng µurµoses. In San IrancIsco,
CandIesIIck Park Is nov 3Con SIadIun. TIe WasIIngIon
RedskIns' Landover SIadIun Is nov IedLx IIeId. InIerneI
conµanIes are aIso geIIIng InIo IIe acI. TIe BaIIInore
Ravens soId IIe nanIng rIgIIs Ior IIeIr NaIIonaI IooILaII
League sIadIun Io PSINeI In a IvenIy-year deaI Ior S105
nIIIIon.
BuI IIe noIIer oI aII nanIng deaIs Iaµµened In AIIanIa.
NanIng rIgIIs Ior IIe cIIy's nev LaskeILaII and Iockey sIa-
1 R£ L AW 0F I N1 £ RN£ 1 AßV£ R1 I 5I N6
^dver t l sl ng of f t he Net wl l l be a l ot bl gger
t han adv er t l sl ng on t he Net .
6
dIun vere soId Io PIIIIµs NV In a µackage deaI esIInaIed Io
Le vorII S200 nIIIIon over IvenIy years. (TIe nev PIIIIµs
Arena cosI onIy S140.5 nIIIIon Io LuIId.)
WIen IIe nane on IIe sIadIun Is vorII nore IIan IIe
µIysIcaI sIadIun IIseII, you knov IIaI ve IIve In an
adverIIsIng-orIenIed vorId.
TIe IradIIIonaI nedIa, oI course, Iave Leen saIuraIed
vIII adverIIsIng Ior as Iong as ve can renenLer.
TIe average nagazIne Is 60 µercenI adverIIsIng. TIe
average nevsµaµer Is 70 µercenI adverIIsIng. BuI µrInI
nedIa are aI IeasI µarIIaIIy suµµorIed Ly suLscrILers. RadIo
and LroadcasI IeIevIsIon are aInosI IoIaIIy suµµorIed Ly IIe
adverIIsIng revenues IIey generaIe.
And IIey generaIe a IoI oI revenue. In a recenI year,
adverIIsers sµenI S49 LIIIIon on LroadcasI TV adverIIsIng
and S17 LIIIIon on radIo adverIIsIng.
CaLIe IeIevIsIon vas once IouIed as IIe IIrsI ad-Iree
connunIcaIIons nedIun, LuI IIaI dIdn'I IasI very Iong.
Today caLIe TV Is aInosI as saIuraIed vIII adverIIsIng as
reguIar TV.
WIII LIIIIons and LIIIIons oI adverIIsIng doIIars cIasIng
every avaIIaLIe nedIun, you can'I LIane IIe InIerneI IoIks
Ior IryIng Io Iaµ InIo IIIs Ireasure Irove. TIe InIerneI vas
goIng Io Le anoIIer adverIIsIng nedIun, LuI LIgger and LeI-
Ier and evenIuaIIy nore revardIng IIan IeIevIsIon.
InIIIaIIy, aI IeasI, adverIIsIng suµµorIed aII IIe conner-
cIaI WeLsIIes. TIe gane µIan vas sInµIe: "We vIII gIve avay
IIe conIenI In order Io drav IraIIIc, vIIcI ve can IIen use
Io seII adverIIsIng.¨ LxacIIy IIe vay IeIevIsIon and radIo cur-
renIIy vork.
So ve Iad Iree Lrovsers, Iree searcI engInes, Iree eIec-
IronIc naII, Iree eIecIronIc greeIIng cards, Iree InIerneI
access. Lven Iree µIone caIIs and Iree Iax reIurns.
InsIead oI µayIng AnerIca OnIIne S23.90 a nonII, you
used Io Le aLIe Io sIgn uµ vIII NeIZero and geI Ien Iours oI
InIerneI servIce µer nonII Ior noIIIng. TIe caIcI: You Iad Io
1PL LAW 0I I N1LPNL1 A0vLP1I 5I NU 173
IIII ouI a quesIIonnaIre IIaI reveaIed your denograµIIc InIor-
naIIon and agree Io µuI uµ vIII an onsIaugII oI adverIIsIng
nessages. (Today NeIZero Ias nerged vIII 1uno and cIanged
IIs nane Io UnIIed OnIIne, and II cIarges S9.95 a nonII.)
TIere vas even Iree Leer on IIe NeI. MIIIer BrevIng
gave avay Ivo nIIIIon eIecIronIc couµons eacI good Ior one
sIx-µack oI any MIIIer Leer Lrand.
TIe greaI InIerneI gIveavay reacIed IIs zenIII vIen a con-
µany caIIed Iree-PC announced a µIan Io gIve avay Ien IIou-
sand Conµaq conµuIers IIaI µernanenIIy dIsµIay on-screen
ads. More IIan a nIIIIon µeoµIe voIunIeered Io Iake one.
II "Iree¨ Isn'I a LIg enougI cone-on, Iov aLouI "µay¨? A
nunLer oI WeLsIIes oIIered Io µay you Ior exµosIng yourseII
Io adverIIsIng vIIIe you surIed IIe NeI.
AIIAdvanIage.con oIIered Io µay you IIIIy cenIs an Iour
(uµ Io Ien Iours a nonII). MyPoInIs.con gave you eIIIer
casI or µoInIs IIaI couId Le excIanged Ior IIIngs IIke Iree
novIe renIaIs, gIII cerIIIIcaIes, skI-IIII IIckeIs, even exoIIc
vacaIIons. (SurI IIe WeL Ioday, surI HavaII Ionorrov.)
Many WeLsIIes IeaIured gIveavays oI one kInd or anoIIer.
PIaneIRx.con gave avay 672 PaIn V organIzers (one an Iour,
every day, Ior Iour veeks). Lycos.con Is a µorIaI IIaI Iad a
Lucky NunLers Gane you couId µIay uµ Io Iour IInes a day.
1usI µIck sIx nunLers and cross your IIngers. You couId Iave
von one oI 5,000 µrIzes, IncIudIng a grand µrIze oI S5 nIIIIon.
TIe reaIIy LIg noney vas LeIng IIrovn around Ly IIe
CBS-Lacked WeLsIIe IWon.con. TIe µorIaI vas gIvIng avay
S10,000 a day, S1 nIIIIon a nonII, and a cooI S10 nIIIIon on
Iax day, AµrII 15, 2000. (GeI II? I von.)
WIaI IIe gIveavay Iad Io do vIII IIe WeLsIIe renaIns a
nysIery. UnIIke YouLeI.con, IWon.con Is noI a ganLIIng
sIIe. RaIIer, II Is a µorIaI IIaI oIIers e-naII, searcI servIces,
and onIIne sIoµµIng, as veII as conIenI Iron CBS WeLsIIes
IncIudIng SµorIsLIne USA and MarkeIWaIcI.con. AII
IInanced vIII S100 nIIIIon oI CBS noney.
BesIdes IIe gIveavays, nany sIIes sµenI a IorIune on
IauncI µarIIes. PIxeIon.con, a CaIIIornIa conµany IIaI
µIanned Io InIroduce a nev InIerneI-LroadcasI IecInoIogy,
raIsed S23 nIIIIon oI venIure caµIIaI and IIen µronµIIy
sµenI S10 nIIIIon oI IIaI on a IauncI µarIy. CaIIed IBasI '99,
IIe day-Iong Las Vegas µarIy vas IeadIIned Ly TIe WIo,
aIong vIII oIIer acIs IIaI IncIuded KIss, NaIaIIe CoIe, IIe
DIxIe CIIcks, Tony BenneII, and LeAnn RInes.
II von'I surµrIse you Io Iearn IIaI PIxeIon.con Is no Ionger
vIII us. II dId surµrIse IIe InvesIors, Iovever, vIen IIey Iound
ouI IIaI IIe Iounder vas a convIcIed con arIIsI and a IugIIIve
Iron IIe Iav.
TIIs IIurry oI sµendIng vas desIgned Io aIIracI nIIIIons
oI WeL vIsIIors vIo couId IIen Le soId oII Io conµanIes as
adverIIsIng cIaIIeI. As a naIIer oI IacI, InIerneI oµeraIors
vere drooIIng over IIe adverIIsIng rIcIes soon Io IaII IIeIr
vay. IorresIer ResearcI, a IIgI-IecI consuIIIng IIrn, µre-
dIcIed IIaI adverIIsIng sµendIng on IIe InIerneI vouId junµ
Iron S2 LIIIIon In 1999 Io S22 LIIIIon In 2004, or 8 µercenI oI
IoIaI sµendIng. TIIs vouId nean IIaI IIe InIerneI µassed
IIe nagazIne nedIun and vas neck and neck vIII radIo.
Don'I LeIIeve a vord oI II. TIe InIerneI vouId Le IIe IIrsI
nev nedIun IIaI vIII noI Le donInaIed Ly adverIIsIng.
LeI us reµeaI IIaI sIaIenenI. TIe InIerneI vIII Le IIe
IIrsI nev nedIun IIaI vIII noI Le donInaIed Ly adverIIsIng,
and IIe reason Is sInµIe.
TIe InIerneI Is InIeracIIve. Ior IIe IIrsI IIne, IIe user Is
In cIarge, noI IIe ovner oI IIe nedIun. TIe user can
decIde vIere Io go, vIaI Io Iook aI, and vIaI Io read. AI
nany sIIes, IIe user can decIde Iov Io µIck and arrange IIe
naIerIaI Io LesI III IIaI user's needs.
AdverIIsIng Is noI soneIIIng IIaI µeoµIe Iook Iorvard
Io. TIey Iend Io Iave an underIyIng resenInenI Iovard
adverIIsIng. TIey see II as an InIrusIon InIo IIeIr sµace, an
InvasIon oI IIeIr µrIvacy. "1unk naII¨ Is IIe µoµuIar Iern Ior
dIrecI-naII adverIIsIng.
(II nagazInes vere InIeracIIve, IIe IIrsI IIIng readers
vouId do Is Io µuI aII IIe edIIorIaI naIerIaI uµ IronI and aII
IIe adverIIsIng In IIe Lack.)
InIIIaIIy, oI course, µeoµIe vere curIous aLouI IIIs nev
nedIun caIIed IIe InIerneI. And IIey vere Iaµµy Io cIIck on
Lanner ads Io see vIaI IIe Luzz vas aII aLouI.
BuI IIIngs are cIangIng. Surveys sIov IIaI IIe nunLer
oI µeoµIe vIo cIIck on InIerneI ads Ias Leen droµµIng
sIeadIIy. AccordIng Io NIeIsen/NeIRaIIngs, vIIcI Iracks IIe
eIIecIIveness oI InIerneI adverIIsIng, IIe cIIck raIe In Ivo
years droµµed Iron 1.35 µercenI Io 0.3 µercenI.
InIerneI adverIIsIng raIes Iave aIso Leen droµµIng, noI a
sIgn oI a IeaIIIy nedIun. AccordIng Io one researcI IIrn,
IIe cosI Ior Lanner ads Ias droµµed Iron S20 µer IIousand
IasI year Io aLouI S10 µer IIousand IIIs year.
Ior a nunLer oI years, IIe IargesI adverIIser on IIe
InIerneI Ias Leen GeneraI MoIors, vIIcI Is currenIIy sµend-
Ing aLouI S50 nIIIIon a year on WeL adverIIsIng, or aLouI
2 µercenI oI IIs annuaI adverIIsIng LudgeI. (AII IIIs adverIIs-
Ing dIdn'I IeIµ GM nucI. IIs sIare oI IIe donesIIc auIono-
LIIe narkeI Ias decIIned Io 27 µercenI, IIs IovesI IeveI sInce
IIe IIIrIIes.)
One IndIcaIIon oI IIe user's aIIIIude Iovard InIerneI
adverIIsIng Is IIe raµId rIse oI ad-LIockIng soIIvare. Knovn
Ly nanes IIke AI Guard, 1unkLusIer Proxy, InIernuIe, and
WeL WasIer, IIese µrograns vork Ly LIockIng ads LeIore IIey
aµµear on IIe user's screen. OIIen IIey sµeed uµ conµuIer
µerIornance Lecause IIey skIµ IIe IIIes IIaI conIaIn ads
Ioaded vIII graµIIcs, nakIng µage IoadIng Iar quIcker.
Lven IIe S3 LIIIIon oI currenI InIerneI adverIIsIng Is a duLI-
ous nunLer. II IncIudes connIssIons µaId Io sucI conµanIes
as DouLIecIIck, IIe IeadIng seIIer oI adverIIsIng on IIe NeI.
DouLIecIIck Is aµIIy naned. InsIead oI IIe IradIIIonaI
adverIIsIng agency's 15 µercenI connIssIon, DouLIecIIck
Iakes 35 µercenI Io 50 µercenI oI IIe InIerneI adverIIsIng II
seIIs. MayLe TrIµIecIIck vouId Le a nore aµµroµrIaIe nane.
NoI aII InIerneI adverIIsIng revenues reµresenI reaI
noney eIIIer. Sone sIIes svaµ adverIIsIng vIII eacI oIIer,
aIIovIng eacI doIcon Io Look ad revenues. (TIe kId vIo
Irades a S50,000 dog Ior Ivo S25,000 caIs Isn'I reaIIy receIv-
Ing S50,000 In revenue.)
Don'I Le nIsIed eIIIer Ly IIe aµµarenI anaIogIes vIII
IIe µrInI and LroadcasI nedIa. TIe InIerneI Is noI jusI
anoIIer nedIun. II II vere, II vouId noI Le IIe revoIuIIon-
ary nedIun IIaI nany µeoµIe, IncIudIng us, LeIIeve II Is
goIng Io Le. As sucI, you sIouId exµecI Io see a revoIuIIon,
noI jusI a reµIay oI IIe µasI.
Was IeIevIsIon a revoIuIIonary nev nedIun? NoI reaIIy.
DId II cIange your IIIe In any sIgnIIIcanI vay? NoI reaIIy.
Lven IeIevIsIon's IIgIIy IouIed Ione sIoµµIng neIvorks
dIdn'I anounI Io very nucI. "RadIo vIII µIcIures¨ vas IIe
judgnenI oI nany connenIaIors.
You can'I Iave II LoII vays. TIe InIerneI cannoI Le a
revoIuIIonary nev nedIun IIaI oµeraIes In exacIIy IIe
sane vay as IradIIIonaI nedIa. WIere's IIe revoIuIIon?
II's sIarIng us In IIe Iace. TIe InIerneI Is InIeracIIve, and
IIaI's IIe revoIuIIonary asµecI oI IIe nedIun. Ior IIe IIrsI
IIne IIe IargeI Is In cIarge, noI IIe sIooIer. And vIaI IIe
IargeI deIInIIeIy does noI vanI Is nore adverIIsIng arrovs
sIoI In IIs dIrecIIon.
WIaI µeoµIe do vanI Is InIornaIIon. PrIces, sIzes,
veIgIIs, sIIµµIng daIes, µroducI conµarIsons. AII µresenIed
In an InIeracIIve IornaI.
We're noI negaIIve aLouI adverIIsIng. QuIIe IIe conIrary.
TIe InIerneI vIII conIInue Io sµavn an enornous Increase
In adverIIsIng voIune, exceµI IIaI II vIII Le oII IIe NeI
raIIer IIan on IIe NeI. TIIs adverIIsIng vIII Le "Iune-In¨-
or raIIer "Iyµe-In¨-adverIIsIng IIaI vIII dIrecI you Io IIe
nanes oI sµecIIIc InIerneI sIIes.
Ior a couµIe oI years, IIe InIerneI drove uµ adverIIsIng
on IIe ouIerneI, esµecIaIIy on radIo and IeIevIsIon. RadIo, In
µarIIcuIar, vas red-IoI, vIII IIree years oI douLIe-dIgII
Increases In a rov.
TIen IIe doIcon dIsasIer III, IoIIoved Ly IIe IerrorIsI
aIIacks, and aII adverIIsIng exµendIIures are dovn. BuI ve
exµecI IIaI as IIe econony Inµroves, adverIIsIng voIune
vIII Increase, vIII doIcons nakIng a sIrong coneLack.
Suµer BovI Sunday vas a µarIIcuIar IavorIIe oI InIerneI
adverIIsers. OI IIe 36 conµanIes IIaI LougII adverIIsIng
IIne on Suµer BovI XXXIV, 17, or aInosI IaII, vere doI-
cons. TIe NIL exIravaganza dIdn'I cone cIeaµ, eIIIer. TIe
average cosI Ior a IIIrIy-second connercIaI vas nore IIan
S2 nIIIIon, an Increase oI 25 µercenI over Suµer BovI
XXXIII.
TIe reason IIe InIerneI Ias resuIIed In dranaIIc Increases
In ouIerneI adverIIsIng Ias Io do vIII IIe naIure oI IIe Iunan
nInd.
One oI IIe nosI renarkaLIe cIaracIerIsIIcs oI IIe Iunan
nInd Is IIs aLIIIIy Io IorgeI.
Sone IIIngs, oI course, are never IorgoIIen. A crueI InsuII
In IIgI scIooI. GeIIIng dunµed Ly a Iover. BeIng IIred Iron
a joL. II aII deµends on IIe enoIIonaI InµacI oI IIe evenI.
A µerson vIo can renenLer aII IIe deIaIIs oI an enLar-
rassIng evenI IIaI Iaµµened severaI decades ago nIgII easIIy
IorgeI IIe undervear Lrand Ie or sIe µuI on IIIs nornIng.
An InIerneI Lrand suIIers Iron IIIs aLIIIIy oI IIe nInd Io
IorgeI In Ivo dIIIerenI vays. IIrsI, IIe Lrand Is InvIsILIe on a
daIIy LasIs. Many Lrands In IIe µIysIcaI vorId LeneIII Iron
a daIIy dose oI vIsuaI reInIorcenenI. SIeII, SIarLucks,
MoLII, Coca-CoIa, McDonaId's, TyIenoI. TIere are IIIeraIIy
IIousands oI Lrands IIaI a µerson vIII reguIarIy see on IIe
IIgIvays, In IIe suµernarkeIs, In IIe drugsIores.
An InIerneI Lrand, on IIe oIIer Iand, vIII never sud-
denIy aµµear LeIore you unIess you sunnon II Io do so. OuI
oI sIgII, ouI oI nInd.
Second, an InIerneI Lrand (IIke nosI Lrands) suIIers
Iron a Iack oI enoIIonaI InvoIvenenI. Sone µeoµIe IaII In
Iove vIII IIeIr Lrands. MosI do noI.
Ior nosI µeoµIe a Lrand Is noIIIng nore IIan a guaranIee
oI quaIIIy and a sysIen Ior savIng IIne. A vay oI nakIng sure
IIaI IIe µroducIs you Luy are decenI vIIIouI IavIng Io sµend
an InordInaIe anounI oI IIne conµarIng one µroducI vIII
anoIIer. NoI Ioo nany µeoµIe IaII In Iove vIII a LoIIIe oI HeInz
keIcIuµ. WIIcI Is vIy HeInz needs IIe vIsILIIIIy on suµernar-
keI sIeIves and resIauranI IaLIes Io keeµ IIe Lrand aIIve.
WIaI does an InIerneI Lrand need Io do Io sIay aIIve? II
aIso needs vIsILIIIIy In IIe reaI, or µIysIcaI, vorId.
TIe LesI and nosI cosI-eIIecIIve vay Io acIIeve vIsILIIIIy
Is vIII µuLIIcIIy. TIe IIrsI Lrand In a nev InIerneI caIegory
Is generaIIy LIessed Ly a LIIzzard oI µuLIIcIIy. Anazon.con,
PrIceIIne.con, and BIuenounIaIn.con are µrIne exanµIes.
Sone sIIes are caµaLIe oI generaIIng µuLIIcIIy on a con-
IInuIng LasIs. TIe crazy aucIIons IIaI Iaµµen every day on
eBay are an endIess source oI sIorIes. A recenI IeadIIne In
IIe Na/iona/ Inquircr. "He Luys S3 µIckIe jar aI garage saIe
& seIIs II Ior S44,000.¨ (On eBay, naIuraIIy.)
TIe InIerneI IIseII vIII sµavn an enornous Increase In
PR acIIvIIy. "1usI as neIvork TV LuIII IIe adverIIsIng LusI-
ness,¨ says Ray GauIke, Iorner µresIdenI oI IIe PuLIIc ReIa-
IIons SocIeIy oI AnerIca, "IIe InIerneI IecInoIogy Ias IIe
caµacIIy Io dranaIIcaIIy LuIId IIe PR LusIness.¨
Sooner or IaIer, Iovever, nany InIerneI Lrands vIII
exIausI IIeIr µuLIIcIIy µoIenIIaI. AI IIIs µoInI IIey vIII need
Io sIIII IIeIr enµIasIs Iron µuLIIcIIy Io adverIIsIng. Hov
eIse are you goIng Io keeµ an InvIsILIe InIerneI Lrand aIIve?
PuLIIcIIy IIrsI, adverIIsIng second Is IIe generaI ruIe,
and II aµµIIes Io aII LrandIng µrograns, esµecIaIIy Ior InIer-
neI Lrands. (A nucI nore deIaIIed dIscussIon oI IIe reIa-
IIonsIIµ LeIveen µuLIIcIIy and adverIIsIng Is conIaIned In
IIIs Look under IIe Lav oI PuLIIcIIy and IIe Lav oI Adver-
IIsIng.)
As IIe InIerneI grovs uµ, you are goIng Io see an exµIo-
sIon In ouIerneI adverIIsIng. And nucI oI IIIs adverIIsIng
vIII Le dIrecIed aI creaIIng cusIoners Ior InIerneI Lrands.
In µarIIcuIar, radIo vIII Iurn ouI Io Le IIe µrInary
nedIun Ior doIcon adverIIsIng. RadIo's µerceIved negaIIve,
IIe Iack oI vIsuaIs, Is noI a dIsadvanIage Ior an InIerneI
Lrand. TIere are no vIsuaI aIIrILuIes oI an InIerneI Lrand.
No yeIIov IIesI IIaI IeIµs IdenIIIy Perdue cIIcken. No radI-
aIor grIIIs IIaI do IIe sane Ior Mercedes-Benz auIonoLIIes.
TIe onIy IIIng your nInd needs Io renenLer Io Iog on Io a
sIIe Is IIe nane.
On IIe InIerneI IIe nane Is everyIIIng. A verLaI
nedIun IIke radIo Is µerIecI Ior drIvIng an InIerneI nane
InIo IIe nInd. AdverIIsIng nIgII Le vIIaIIy InµorIanI Ior
drIvIng µrosµecIs Io your sIIe, LuI once IIey geI IIere you
can IorgeI aLouI usIng IIen as Iunan Iodder Ior your
adverIIsIng nessages.
On IIe InIerneI, InIeracIIvIIy Is kIng. AdverIIsIng Is
soneIIIng IIaI µrosµecIs µuI uµ vIII, noI soneIIIng IIey
searcI ouI. InIeracIIvIIy gIves IIen a cIoIce, and In our
oµInIon nosI µeoµIe vIII use IIIs cIoIce Io Iurn oII IIe
adverIIsIng and Iurn on IIe InIornaIIon.
II you vanI Io LuIId a Lrand on IIe NeI, IorgeI aLouI Iry-
Ing Io aIIracI adverIIsIng Io your WeLsIIe.
Make your Lrand a source oI InIornaIIon IIaI µrosµecIs
cannoI IInd eIsevIere. Or a µIace Io Luy IIIngs IIey cannoI
IInd eIsevIere. Or a µIace Io Luy IIIngs aI µrIces IIey can-
noI IInd eIsevIere. Or a µIace Io neeI µeoµIe IIey cannoI
neeI eIsevIere.
Don'I nake your sIIe an excuse Io run adverIIsIng IIaI
µeoµIe Iave aIready seen In nevsµaµers and nagazInes or
Ieard on radIo or TV.
TIe InIerneI Is a revoIuIIonary nev InIeracIIve nedIun.
And vIen µeoµIe InIeracI vIII adverIIsIng, IIey generaIIy
Iurn II oII.
One oI IIe najor IacIors drIvIng IIe gIoLaI econony oI IIe
nIneIIes vas IIe coIIaµse oI connunIsn In IIe IaIe eIgIIIes.
InsIead oI a vorId dIvIded InIo arned canµs, everyLody
vas suddenIy In IIe sane LoaI.
InsIead oI IradIng InsuIIs, IIe najor counIrIes oI IIe
gIoLe sIarIed Io Irade µroducIs and servIces.
BuI vIaI caused IIe IaII oI connunIsn? In our oµInIon,
II vasn'I IIe nassIve nIIIIary LuIIduµ In IIe WesI, aIIIougI
IIaI nIgII Iave Leen necessary Ior deIensIve µurµoses. In
our oµInIon, II vas IeIevIsIon.
II you vIsIIed IIe USSR LeIore IIs IaII, you knov IIaI IIe
µoµuIaIIon vas under InIense µuLIIcIIy µressure Io LeIIeve
IIaI everyIIIng vas suµerIor In IIe UnIon oI SocIaIIsI SovIeI
ReµuLIIcs. Iree IeaIII care, joLs Ior aII, IousIng Ior every-
Lody.
To IIe ouIsIder, II vasn'I Irue. TIere vere a IoI oI ruLIes,
LuI noIIIng Io Luy, as one Iook aI IIe nosIIy enµIy sIeIves
In IIe sIores vouId Iave IoId you. NoI Io nenIIon IIe Iong
IIne vIenever a sIore goI a sIIµnenI oI a desIraLIe IIen.
SovIeI auIIorIIIes, oI course, LIocked WesIern nevsµa-
µers and nagazInes Iron crossIng IIeIr Lorders, LuI IIey
couIdn'I LIock WesIern IeIevIsIon sIgnaIs.
TeIevIsIon LrougII IruII Io IIe SovIeI µeoµIe. WIen IIey
181
1 R£ L AW 0F 6L 0BAL I 5M
The l nt er net wl l l demol l sh al l bar r l er s,
al l boundar l es, al l bor der s.
?
vere aLIe Io see IIe µroIusIon oI goods and servIces In IIe
WesIern counIrIes, IIey IosI IIeIr IaIII In connunIsn.
"TIe nedIun Is IIe nessage¨ Is IIe Ianous dIcIun oI
MarsIaII McLuIan. II you deIIne "nessage¨ sInµIy as "con-
IenI¨ or "InIornaIIon,¨ McLuIan µoInIed ouI, you nIss one
oI IIe nosI InµorIanI IeaIures oI any nedIun: IIs µover Io
cIange IIe course and IuncIIonIng oI Iunan reIaIIons and
acIIvIIIes.
TIe nessage oI IIe IeIevIsIon nedIun vas "caµIIaIIsn.¨
As Iong as IIe SovIeI UnIon vas InIIIIraIed Ly IeIevIsIon sIg-
naIs Iron IIe WesI, IIere vas no vay Io keeµ connunIsn
aIIve. II Iad Io gIve vay Io a narkeI-drIven econony Lased
on a Iree-enIerµrIse sysIen. TV IIIeraIIy IeIµed cIange IIe
course oI Iunan IIsIory.
WIaI Is IIe "nessage¨ oI IIe InIerneI nedIun? We
LeIIeve IIe nessage Is "gIoLaIIsn.¨ UIIInaIeIy, IIe InIerneI
vIII drIve IIe cIIIzens oI IIe vorId InIo one InIerconnecIed
gIoLaI econony. "TIe gIoLaI vIIIage,¨ In MarsIaII McLuIan's
vocaLuIary.
II nay veII Le IIaI IIe LIggesI Irend oI IIe IvenIy-IIrsI
cenIury vIII Iurn ouI Io Le gIoLaIIsn. WIaI IIe InIerneI
IaII vrougII Is IIe gIoLaI vIIIage. TIe nedIun, aIIer aII, Is
IIe nessage.
AnerIca, vIII 59 µercenI oI aII Iones connecIed, Is IIe
donInanI dog In InIerneI usage. TIIrIy-sIx µercenI oI IIe
vorId's InIerneI µoµuIaIIon IIves In IIe UnIIed SIaIes. BuI
IIere are oIIer counIrIes vIere InIerneI usage Is acIuaIIy
IIgIer. Canada Ias 60 µercenI oI aII Iones connecIed. Sve-
den Ias 65 µercenI. II our donesIIc exµerIence Is any guIde,
usage sIouId exµIode In every deveIoµed counIry oI IIe
vorId. WIen IIaI Iaµµens, IIe vorId vIII Lecone one LIg
gIoLaI narkeIµIace.
TIe µoIenIIaI Is avesone. AnerIca Is Ly Iar IIe IargesI
econony In IIe vorId vIII IIe greaIesI ouIµuI oI goods and
servIces and IIe IIgIesI sIandard oI IIvIng. YeI IIe UnIIed
SIaIes accounIs Ior Iess IIan 5 µercenI oI IIe vorId's µoµuIa-
IIon, a µercenIage IIaI decIInes annuaIIy.
II you're a LusInessµerson In AnerIca, vIere does IIe
reaI oµµorIunIIy IIe? In IIe donesIIc narkeI or In IIe 95 µer-
cenI oI IIe vorId IIaI doesn'I IIve In one oI IIe IIIIy sIaIes?
OLvIousIy IIe gIoLaI narkeI Is goIng Io Le Iar nore
InµorIanI IIan IIe donesIIc narkeI Io IIe success oI
aInosI every AnerIcan conµany. II von'I Iaµµen overnIgII,
LuI II vIII Iaµµen.
TIere's a Iong vay Io go. CurrenIIy IIe UnIIed SIaIes
exµorIs onIy 11 µercenI oI IIs gross donesIIc µroducI. (II
aIso exµorIs caµIIaI Io oIIer counIrIes, vIere IIe noney Is
used Io LuIId µIanIs, dIsIrILuIIon sysIens, and nosI Inµor-
IanI oI aII, Lrands.)
WIaI nakes IIe AnerIcan econonIc sysIen so gIoLaIIy
µoverIuI Is noI IIe µIysIcaI µroducIs or IIe µIanIs or IIe
sysIens, II's IIe Lrands IIenseIves: MIcrosoII, InIeI, DeII,
CIsco, Coca-CoIa, HerIz. TIese and oIIer AnerIcan Lrands
donInaIe a IosI oI caIegorIes on IIe vorIdvIde scene.
TIIs Is noI a one-vay sIreeI, Iovever. TIe InIerneI Is noI
jusI an oµµorIunIIy Io exµorI AnerIcan Lrands and AnerI-
can cuIIures overseas. TIe oµµosIIe Is aIso IIkeIy Io Iaµµen.
II's aIready Iaµµened In nany caIegorIes.
º WIIIe McDonaId's Ias carrIed AnerIcan IasI Iood
around IIe vorId, IIe IruII Is IIaI a Iarge nunLer oI
AnerIcans are eaIIng IIaIIan, MexIcan, CIInese, IrencI,
and 1aµanese Iood.
º WIIIe DIsney Ias jusI sIgned a deaI Ior a nev IIene µark In
Hong Kong, IIe IruII Is IIaI IIe nosI µoµuIar cIaracIers
anong IIe kIddIe crovd In AnerIca are noI MIckey Mouse
or DonaId Duck. TIey're Pokénon cIaracIers Iron 1aµan.
º SIarLucks Is a Luroµean-sIyIe coIIee Iouse LIended vIII
an AnerIcan Lrand nane.
1PL LAW 0I UL0BALI 5M 183
º LvIan Iron Irance sIarIed IIe Irend Iovard Lranded
LoIIIed vaIer, vIIcI Ias Lecone an enornous caIegory
In IIe UnIIed SIaIes.
º VoIksvagen Iron Gernany and ToyoIa Iron 1aµan sIarIed
IIe Irend Iovard snaII cars In AnerIca.
º Mercedes-Benz and BMW Iron Gernany sIarIed IIe
Irend Iovard snaII uIIraIuxury cars In IIe U.S.
º AI IIe IIgI end oI IIe narkeI, vIne Iron Irance,
vaIcIes Iron SvIIzerIand, and cIoIIIng Iron IIaIy Iave
Iad a najor InµacI In IIe AnerIcan narkeI.
AnerIca Ias aIvays Leen a neIIIng µoI Ior µeoµIe, LuI II
Ias aIso Lecone a neIIIng µoI Ior µroducIs Iron around IIe
vorId. WIII IIe rIse oI IIe InIerneI, IIaI Irend Is goIng Io
acceIeraIe. TIe nedIun Is IIe nessage.
Many WeLsIIes Iere In AnerIca aIready do a consIder-
aLIe anounI oI LusIness ouIsIde IIe UnIIed SIaIes. WIII IIe
µurcIase oI Ivo Luroµean conµeIIIors, Anazon.con Ias
Lecone IIe IeadIng onIIne LookseIIer In IIe UK and Ger-
nany. SaIes ouIsIde IIe UnIIed SIaIes currenIIy accounI Ior
22 µercenI oI Anazon's saIes.
TIIs Is a droµ In IIe LuckeI. TIe µoIenIIaI Is nucI,
nucI greaIer. WIaI IIe µosIaI servIce dId Ior IIe Sears,
RoeLuck caIaIog, IIe InIerneI vIII do Ior IIe AnerIcan LusI-
ness connunIIy. Or, Ior IIaI naIIer, any LusIness oµeraIIng
In any counIry anyvIere In IIe vorId. TIe InIerneI Iurns
IIe vorId InIo one gIanI sIoµµIng naII.
BuI IIke In any sIoµµIng naII, you can'I vIn vIII jusI a
LeIIer µroducI or servIce. You need a LeIIer Lrand.
TIe Iong-Iern vInners on IIe InIerneI vIII Le IIose
Lrands IIaI can Iranscend Lorders. TIIs Is anoIIer knock on
generIc nanes.
WIaI does IurnIIure.con nean In SouII AnerIca? II
cerIaInIy doesn'I nean nucb/cs, IIe SµanIsI vord Ior IurnI-
Iure. Or nobi/iário, IIe PorIuguese vord Ior IIe sane IIIng.
Anazon.con neans boo/s In vIrIuaIIy every counIry oI
IIe vorId. BuI Books.con neans boo/s onIy In IIe 6 µer-
cenI oI IIe vorId vIere LngIIsI Is IIe naIIve Ianguage.
As IIe vorId noves Iovard a gIoLaI narkeIµIace, von'I
conµanIes need Io geI rId oI IIeIr naIIonaI IdenIIIIes and
nove Iovard Lrands vIII gIoLaI IdenIIIIes?
NoI necessarIIy. Lvery Lrand, IncIudIng gIoLaI Lrands,
needs Io cone Iron sonevIere. In oIIer vords, even a
gIoLaI Lrand needs a naIIonaI IdenIIIy.
º Burger KIng Is a gIoLaI Lrand vIII an AnerIcan IdenIIIy.
º VoIvo Is a gIoLaI Lrand vIII a SvedIsI IdenIIIy.
º RoIex Is a gIoLaI Lrand vIII a SvIss IdenIIIy.
LIke a µerson, every Lrand needs Io cone Iron sone-
vIere. No naIIer vIere IIe Lrand Is nade, narkeIed, or soId.
A NIssan nade In AnerIca Ly AnerIcan vorkers Is sIIII a
1aµanese Lrand oI auIonoLIIe. A NIke nade In MaIaysIa Ly
MaIaysIan vorkers Is sIIII an AnerIcan aIIIeIIc-sIoe Lrand.
WIaI's nore InµorIanI, IIe µroducI or IIe Lrand? TIe
IacI IIaI a µroducI can naInIaIn a naIIonaI IdenIIIy vIen
IIe µroducI In quesIIon Ias never seI IooI In IIaI counIry
sIouId IeII you IIaI IIe Lrand Is nore InµorIanI.
GIoLaI Lrand LuIIders sIouId keeµ In nInd IIaI naIIonaI
IdenIIIy Is a Ivo-edged svord. II can IeIµ or IurI your
Lrand, deµendIng uµon IIe caIegory.
AnerIcan µersonaI conµuIers (LuIII In AsIa or vIII
AsIan µarIs) are µoverIuI Lrands on IIe gIoLaI narkeIµIace.
AnerIcan auIonoLIIes, no naIIer vIere IIey are LuIII, are
nedIocre Lrands everyvIere exceµI In AnerIca.
WIaI IIe gIoLaI narkeI Is IeIIIng us Is IIaI AnerIcans
knov Iov Io LuIId conµuIers LuI don'I knov Iov Io LuIId
cars. Is II Irue? II doesn'I naIIer. WIen II cones Io LuIIdIng
Lrands, µerceµIIon Is nore InµorIanI IIan reaIIIy.
II's Iard enougI Io cIange IIe µerceµIIon oI a conµany.
II's InµossILIe Ior one conµany Io cIange IIe µerceµIIon oI
a counIry. WIen you IauncI your InIerneI Lrand, you
sIouId Iry Io naIcI your µroducI or servIce vIII your coun-
Iry's µerceµIIon.
º II ve vanIed Io seI uµ a cIoIIIng sIIe on IIe InIerneI, ve
vouId µroLaLIy nove Io IIaIy and gIve IIe sIIe an IIaIIan
nane.
º II ve vanIed Io seII vIne on IIe NeI, ve vouId nove Io
Irance.
º II ve vanIed Io seII vaIcIes on IIe NeI, ve vouId nove
Io SvIIzerIand.
AI IeasI IIaI's IIe IIeory. In µracIIce II's dIIIerenI. Knov-
Ing soneIIIng aLouI governnenI reguIaIIons Ior vIne In
Irance, ve vouId µroLaLIy cIoose CIIIe or AusIraIIa
InsIead.
Don'I overIook IIe Iess deveIoµed counIrIes oI IIe vorId.
TIese naIIons reµresenI Irenendous oµµorIunIIIes Ior gIoLaI
Lrand LuIIders vIerever IIey are IocaIed. In IIe Iess deveIoµed
counIrIes, reIaII nargIns are oIIen IIgIer, Iever µroducIs are
avaIIaLIe, and even Iever µroducIs are on dIsµIay.
Ior µeoµIe In sone oI IIese counIrIes, nany InIerneI
sIIes vIII Iook IIke IIe Sears, RoeLuck caIaIog aI WaI-MarI
µrIces.
Is II unIaIr Io Iake advanIage oI µeoµIe In deveIoµIng
naIIons? II oIIerIng a LeIIer seIecIIon oI LeIIer µroducIs aI
Iover µrIces Is unIaIr, IIen ve don'I knov IIe neanIng oI
IIe vord.
SIIµµIng IIe µroducIs (or µerIaµs ve sIouId say "IIyIng¨
IIe µroducIs) Isn'I goIng Io Le IIe µroLIen you nIgII IIInk II
Is. TIe µosIaI servIce vIII aIrnaII a coµy oI IIe Look you are
readIng Io an address In Luroµe Ior Iess IIan S10, vIIcI Is
aLouI IIe reIaII nargIn oI IIIs Look In a donesIIc LooksIore.
And cosIs are Lound Io cone dovn dranaIIcaIIy as gIoLaI-
Isn caIcIes IIre and denand Ior aIr sIIµnenIs soars.
One reaI LarrIer Io gIoLaIIsn Is red Iaµe-Iaxes, duIIes,
cusIons Iorns, and µaµervork In generaI. TIese are IIe
IIIngs IIaI are goIng Io cIog uµ IIe sysIen and sIov II dovn.
BuI you can'I sIoµ µrogress. In IIne, IIe µaµer LarrIers vIII
cone dovn, Ioo.
AnoIIer LarrIer Io gIoLaIIsn Is Ianguage. TIe IIrsI decI-
sIon a gIoLaI Lrand LuIIder nusI nake Is IIe Ianguage ques-
IIon. Do you use LngIIsI, or do you IransIaIe your sIIe InIo
varIous dIIIerenI Ianguages? Do you seI uµ IoIaIIy dIIIerenI
sIIes Ior dIIIerenI counIrIes? YaIoo! IauncIed YaIoo! en
LsµanoI In 1998 and YaIoo! BrazII In 1999. Today YaIoo!
Ias IvenIy-IIree dIIIerenI counIry sIIes.
TIe IransIaIIon µroLIen can Le daunIIng. Hov nany
dIIIerenI Ianguages and/or counIrIes sIIes sIouId you
deveIoµ? TIere are IIIeraIIy IIousands oI Ianguages In use
Ly IIe 6 LIIIIon µeoµIe In IIe vorId. II you counI onIy IIe
Ianguages used Ly a sIgnIIIcanI nunLer oI µeoµIe (say a nII-
IIon or nore), IIere are sIIII 220 dIIIerenI Ianguages. To Le a
IruIy gIoLaI Lrand, you vouId need WeLsIIes In a suLsIanIIaI
µercenIage oI IIose 220 Ianguages.
ConµIIcaIIng IIIs decIsIon Is IIe Iong-Iern Irend Iovard
LngIIsI as IIe second Ianguage oI IIe vorId. In nany coun-
IrIes, LngIIsI Is aIready IIe Ianguage oI LusIness.
(TIe ScandInavIan regIon oI a Luroµean conµany, Ior
exanµIe, vIII InevIIaLIy IoId IIs neeIIngs In LngIIsI. Reµre-
senIaIIves Iron Norvay, Sveden, IInIand, and Dennark
nay noI undersIand one anoIIer vIen IIey sµeak IIeIr
naIIve Ianguages, LuI IIey aII knov LngIIsI.)
In IIe Iong Iern you are IIkeIy Io IInd successIuI exan-
µIes oI LoII sIngIe-Ianguage and nuIIIµIe-Ianguage sIIes.
LIIIer sIraIegy can vork. II aII deµends uµon IIe Iyµe oI
µroducI or IIe Iyµe oI servIce oIIered.
Ior IIgI-IecI µroducIs and servIces or Ior Lrands
aµµeaIIng Io IIe IIgI-end segnenI oI IIe narkeI, IIe sIngIe-
Ianguage sIraIegy nIgII Le LesI. CIsco.con Is an exanµIe.
Ior Iov-IecI µroducIs and servIces or Ior Lrands aµµeaI-
Ing Io IIe naInsIrean narkeI, a nuIIIµIe-Ianguage sIraIegy
nIgII Le LesI. YaIoo! en LsµanoI Is an exanµIe.
(WIIIe IIe IIInkIng aI YaIoo! Is sound, one µarI oI IIs
sIraIegy Is IIaved. TIe IIne exIensIon nane creaIes IIe
InµressIon IIaI YaIoo! en LsµanoI Is noI an auIIenIIc
Lrand. RaIIer, II's a grIngo Lrand In dIsguIse.)
Keeµ In nInd, Iovever, a LasIc IeneI oI narkeIIng:
TIere Is never onIy one vay Io do anyIIIng. MosI µeoµIe
µreIer Lrands, LuI IIere Is sIIII a narkeI Ior µrIvaIe IaLeIs.
MosI µeoµIe µreIer sµecIaIIy sIores, LuI IIere sIIII Is a nar-
keI Ior deµarInenI sIores. MosI µeoµIe µreIer caIIeInaIed
coIa, reguIar Leer, and coIIee, LuI IIere Is sIIII a narkeI Ior
decaIIeInaIed coIa, IIgII Leer, and Iea.
WIIcIever Ianguage decIsIon you nake, you can Le sure
IIere vIII Le aI IeasI one conµeIIIor goIng In IIe oµµosIIe
dIrecIIon. So Le II. You can'I aµµeaI Io everyone. TIere Is
never onIy one vay Io do anyIIIng.
II you nusI err, Iovever, err on IIe sIde oI an LngIIsI-
onIy sIIe. II vIII seen nore uµscaIe and cIIc. TIne vIII aIso
Le on your sIde. Lvery day nore IIan Ien IIousand µeoµIe
In non-LngIIsI-sµeakIng counIrIes Iearn Io sµeak IIe Lng-
IIsI Ianguage. IurIIernore, LngIIsI Is IIe Ianguage oI nore
IIan 80 µercenI oI IIe InIornaIIon sIored on conµuIers.
TIere Is aIso a vorIdvIde Irend Iovard IIe use oI
LngIIsI-soundIng Lrand nanes, even vIen IIose Lrands are
soId µrInarIIy In non-LngIIsI-sµeakIng counIrIes.
º Ho//yuood Is a Lrand nane Ior a BrazIIIan cIgareIIe and
aIso Ior a IrencI cIevIng gun.
º Mon/ana Is a Lrand nane Ior a MexIcan cIgareIIe.
º Pcd Eu// Is a Lrand nane Ior an AusIrIan energy drInk
IIaI Ias Lecone a vorIdvIde Lrand.
º Eoxnan Is a Lrand nane Ior a SvedIsI onIIne nusIc
conµany.
º S/arMcdia Is a Lrand nane Ior a SµanIsI- and PorIuguese-
Ianguage WeL µorIaI.
Take a vaIk dovn IIe naIn sIoµµIng sIreeI oI aInosI
any najor cIIy In IIe vorId. A suLsIanIIaI nunLer oI IocaIIy
ovned sIores seIIIng IocaIIy nade goods nosIIy Io IocaI µeo-
µIe vIII Iave LngIIsI nanes.
In CoµenIagen, Ior exanµIe, ve noIIced IIaI aLouI IaII IIe
sIores on IIe naIn sIoµµIng sIreeI use LngIIsI nanes. Sone oI
IIese are IrancIIse oµeraIIons IIke McDonaId's, SuLvay, and
AIIIeIe's IooI. BuI nosI are IocaIIy ovned sIores vIII nanes
IIke InsµIraIIon, PIaneI IooILaII, and London House.
In a TeI AvIv naII, ve noIIced IIve sIores In a rov vIII
IIe IoIIovIng nanes: GoId SIoµ, Haµµy TIe, HaµµyIIne,
RoyaIIy, and Make Uµ Iorever.
TIe Irend Io LngIIsI nanes vIII oLvIousIy LeneIII aII
U.S. Lrands. BeIore you decIde Io go vIII a nuIIIµIe-
Ianguage aµµroacI, ask yourseII vIeIIer IIIs Irend vIII
nake a sIngIe-Ianguage (LngIIsI) aµµroacI your LesI overaII
cIoIce Ior IIe IuIure.
Sone µeoµIe IIInk IIaI gIoLaIIsn vIII Le nore oI a cuI-
IuraI µroLIen IIan a Ianguage µroLIen. TIaI you Iave Io
adaµI your µroducI or servIce Io IIe cuIIures oI IIe coun-
IrIes you are goIng Io seII In. We dIsagree.
Hov dId Coca-CoIa, McDonaId's, LevI SIrauss, and SuLvay
adaµI IIeIr Lrands Io IocaI cuIIuraI sIandards? TIey dIdn'I, and
IIey greaIIy LeneIIIed Lecause IIey dIdn'I.
TIe nedIun Is IIe nessage. And IIe nessage Is IIe
IonogenIzaIIon oI cuIIures around IIe vorId. TIaI's vIaI
gIoLaIIsn Is aII aLouI. TIaI's neIIIer good nor Lad. TIaI's a IacI.
WIen SIarMedIa vas IryIng Io raIse caµIIaI Io IauncI
IIe IIrsI gIoLaI InIerneI µorIaI In SµanIsI and PorIuguese,
IIe conµany goI IIe usuaI argunenIs.
"LaIInos IIke Io Iave µersonaI conIacI vIII eacI oIIer.
NoLody's goIng Io cIaI onIIne. PeoµIe vanI Io IaIk on IIe
µIone. LaIIn AnerIcans are so dIIIerenI Iron eacI oIIer, no
ArgenIIne vIII ever vanI Io IaIk Io soneLody Iron Peru.¨
SIarMedIa, oI course, Lecane a roarIng success. LaIInos
dId Iearn Io cIaI onIIne. PeoµIe are nore aIIke IIan dIIIerenI,
even IIougI IIe cuIIure crovd IIkes Io µreIend oIIervIse.
GIoLaIIsn Ias LeneIIIed Iron a nunLer oI IecInoIogIcaI
deveIoµnenIs, noIaLIy IIe jeI µIane and IIe IacsInIIe
nacIIne. BuI IIese deveIoµnenIs µaIe In conµarIson vIII
IIe cIanges IIe InIerneI vIII LrIng.
So IasIen your seaI LeIIs and geI ready Ior IIe rIde oI
your IIIe.
HasIe nakes vasIe, LuI vasIe Is oIIen IIe nosI InµorIanI
IngredIenI In a successIuI InIerneI IauncI.
II you vanI Io Le successIuI In LusIness . . . In Lrand-
Ing . . . In IIIe . . . you Iave Io geI InIo IIe nInd IIrsI. NoIIce
ve saId "nInd,¨ noI "narkeIµIace.¨
BeIng IIrsI In IIe narkeIµIace doesn'I Luy you anyIIIng
exceµI a IIcense Io Iry Io geI In IIe nInd IIrsI. II you IIrov
avay IIaI oµµorIunIIy Ly LeIng Ioo concerned vIII geIIIng
aII IIe deIaIIs rIgII, you'II never geI II Lack. (PerIecIIon In
InIInIIe IIne Is vorII noIIIng.)
WIaI nany nanagers are caIIIng "IIe IIrsI-nover advan-
Iage¨ Is a nyII. TIere Is no auIonaIIc advanIage Io LeIng
IIe IIrsI nover In a caIegory unIess you can nake eIIecIIve
use oI IIe exIra IIne Io vork your vay InIo IIe µrosµecI's
nInd.
A sIraIegy IIaI nany Iarge conµanIes use eIIecIIveIy Is
Io quIckIy junµ on an Idea deveIoµed Ly a snaIIer conµany.
WIII IIs greaIer resources, IIe Iarger conµany can oIIen vIn
"IIe LaIIIe oI IIe nInd¨ and creaIe IIe µerceµIIon IIaI II vas
IIrsI In IIe narkeIµIace.
II you are IIe CLO oI a snaIIer conµany, Levare. You
need Io nove exceµIIonaIIy IasI. Be quIck or Le dead. Mar-
keIµIace DarvInIsn Is survIvaI oI IIe IasIesI.
191
1 R£ L AW 0F 1 I M£
1ust do l t . You have t o be f ast . You have
t o be f l r st . You have t o be f ooused.
8
IIrsI In IIe nInd doesn'I nean "earIy¨ In IIe nInd
eIIIer. Too nany conµanIes are saIIsIIed vIII LeIng "one oI
IIe IIrsI¨ Lrands In IIe caIegory. TIaI's noI IIe sane as geI-
IIng InIo IIe nInd IIrsI and creaIIng IIe µerceµIIon IIaI you
are IIe Ieader.
º YaIoo! vas InIroduced In 1994 as IIe IIrsI searcI engIne
on IIe InIerneI. Today YaIoo! Is IIe IeadIng searcI
engIne and second onIy Io AOL In IIe rankIngs oI nosI-
vIsIIed WeLsIIes.
º eBay vas InIroduced In 1995 as IIe IIrsI aucIIon sIIe on
IIe InIerneI. Today eBay Is Ly Iar IIe IeadIng aucIIon
sIIe on IIe NeI, vIII 264 nIIIIon IIens IIsIed Ior saIe IasI
year In sone eIgII IIousand µroducI caIegorIes.
º Anazon.con vas InIroduced In 1995 as IIe IIrsI Look-
sIore on IIe InIerneI. CurrenIIy IIe conµany seIIs aInosI
S2 LIIIIon doIIars' vorII oI Looks a year, nany IInes IIaI
oI IIs nearesI conµeIIIor, BarnesandnoLIe.con. 1eII
Bezos, Anazon.con's Iounder, vas naned Tinc naga-
zIne's µerson oI IIe year Ior 1999.
º BIuenounIaIn.con vas InIroduced In 1996 as IIe IIrsI
eIecIronIc greeIIng-card sIIe. CurrenIIy IIe sIIe receIves 10
nIIIIon unIque vIsIIors a nonII, nore IIan aII IIs conµeII-
Iors conLIned. TIe sIIe vas soId Ior S780 nIIIIon Io LxcIIe
C Hone, vIo recenIIy resoId II Io AnerIcan GreeIIngs.
º PrIceIIne.con vas InIroduced In 1998 as IIe IIrsI con-
µany Io seII aIrIIne IIckeIs on IIe InIerneI vIII a "nane-
your-ovn-µrIce¨ LIddIng sysIen. Today PrIceIIne.con Is
Iar and avay IIe IeadIng sIIe on IIe WeL Ior dIscounI
aIrIIne IIckeIs and IoIeI roons. Lvery seven seconds,
soneone nanes IIeIr ovn µrIce aI PrIceIIne.con.
IIve conµanIes, IIve Lrands, IIve InIerneI "IIrsIs.¨ And
IIve narkeI Ieaders vIose Lrands donInaIe IIeIr caIegorIes.
Were YaIoo!, eBay, Anazon.con, BIuenounIaIn.con,
and PrIceIIne.con IIIeraIIy IIrsI In IIeIr caIegorIes? Ana-
zon.con vas noI, and ve're noI sure aLouI IIe oIIer Iour.
WIaI you can Le sure aLouI Is IIaI IIe Ideas Ior IIese
sIIes occurred Io nany oIIer µeoµIe aI aLouI IIe sane IIne.
HIsIory sIovs IIaI Ideas Iend Io arrIve In a varIeIy oI nInds
aI aµµroxInaIeIy IIe sane IIne.
TIe auIonoLIIe vas "InvenIed¨ In Gernany aI aLouI IIe
sane IIne as enIreµreneurs In Irance, LngIand, IIaIy, and
AnerIca vere vorkIng on nany oI IIe sane seII-µroµeIIed
conceµIs.
TIe aIrµIane vas "InvenIed¨ In AnerIca, LuI nany
IrencI µeoµIe IIougII IIe aIrµIane vas InvenIed In Irance
unIII IIey read aLouI IIe WrIgII LroIIers acconµIIsIIng IIe
sane IeaI severaI years earIIer.
WouId ve sIIII IIInk IIe vorId Is IIaI II II veren'I Ior
CIrIsIoµIer CoIunLus? OI course noI. SoneLody eIse
vouId Iave dIscovered AnerIca and reaIIzed IIe vorId vas
round.
WouId ve sIIII Le connunIcaIIng vIII snoke sIgnaIs II
II veren'I Ior AIexander GraIan BeII? OI course noI. Sone-
Lody eIse vouId Iave InvenIed IIe IeIeµIone.
WouId ve sIIII Le usIng TIernoIax coµIers II II veren'I
Ior CIesIer CarIson? OI course noI. SoneLody eIse vouId
Iave InvenIed xerograµIy.
TIere's a LIg dIIIerence LeIveen IavIng an IdIe IIougII
on a Sunday aIIernoon and IavIng a successIuI Lrand on IIe
InIerneI on Monday nornIng. Ideas (and IIose IdIe
IIougIIs IIaI InIIIaIe IIen) are a dIne a dozen. II Iakes
Iard vork and, even nore InµorIanI, a sense oI urgency Io
µuI an Idea Io vork on IIe NeI.
You can'I davdIe. By IIIs ve nean endIess IesIIng, Iocus
grouµs, narkeI surveys. TIIs Is a µarIIcuIar µroLIen Ior an
InIerneI Lrand.
WIy vere nosI oI IIe successIuI InIerneI sIIes IauncIed
Ly snaII, venIure-caµIIaI-Lacked conµanIes raIIer IIan Ior-
1PL LAW 0I 1I ML 193
/unc 500 IIrns? A LIg conµany IaIes Io do anyIIIng vIIIouI
IIrsI anassIng a nound oI narkeI researcI.
TIe InIerneI Is novIng Ioo IasI Io Le neasured. II's a
nev IndusIry. KnovIedge Is scarce. Iev µeoµIe knov vIaI
IIey vanI, vIaI IIey vouId use, vIaI IIey vouId Le vIIIIng
Io µay Ior . . . unIII IIey are gIven a reaI-vorId cIoIce.
BIg conµanIes oIIen IaII Io exµIoII nev oµµorIunIIIes
Lecause IIey are "µerIecIIonIsIs.¨ TIey von'I reIease a nev
µroducI, a nev servIce, or an InIerneI sIIe "unIII ve geI II
rIgII.¨
GeIIIng II rIgII nakes no sense Iron a LrandIng µoInI oI
vIev. AnyIIIng vorII doIng Is vorII doIng In a IaII-assed
vay. AnyIIIng noI vorII doIng Is noI vorII doIng In a µer-
IecI vay.
Take YaIoo!, IIe nosI vaIuaLIe Lrand on IIe InIerneI.
YaIoo! Is LasIcaIIy a searcI engIne. II vIII IInd vIaIever you
vanI Io IInd on IIe InIerneI.
YaIoo! Is IIe Ioµ searcI engIne In aInosI every najor
counIry In IIe vorId. II generaIes 40 µercenI oI aII searcI
reIerraIs vorIdvIde.
DId YaIoo! deveIoµ IIs ovn searcI-engIne IecInoIogy?
No. In order Io nove raµIdIy, II ouIsourced IIs searcI-engIne
IecInoIogy, IIrsI Iron Oµen Source, IIen Iron AIIaVIsIa,
LeIore IInaIIy seIIIIng on InkIonI.
TIe IeadIng searcI engIne dIdn'I deveIoµ IIs ovn searcI-
engIne IecInoIogy? Does IIaI surµrIse you? II sIouIdn'I. You
don'I vIn Ly LeIng LeIIer. You vIn Ly LeIng IIrsI. YaIoo! suc-
ceeded Lecause IIey "rusIed IIe neI.¨
One oI IIe aLIdIng nyIIs oI AnerIcan LusIness Is IIaI
you vIn Ly LeIng LeIIer. ManagenenI connIIs LIIIIons oI
doIIars In IIeIr searcI Ior LeIIer µroducIs or servIces Io nar-
keI. TIey "LencInark¨ IIeIr exIsIIng µroducIs and servIces
agaInsI IIeIr najor conµeIIIors. No nev µroducI or servIce
geIs IauncIed unIess II Ias a sIgnIIIcanI, IangILIe advanIage.
ResuII: NIne ouI oI Ien nev µroducIs IaII. WIy? NoI, In
our oµInIon, Lecause oI a quaIIIy deIIcIency. II's Lecause oI a
IInIng deIIcIency. TIey dIdn'I geI IIaI nev µroducI or serv-
Ice ouI In IIe narkeIµIace IasI enougI.
BIg conµanIes oIIen Iack a sense oI urgency vIen II
cones Io InIroducIng nev µroducIs or nev Ideas. Sone-
IInes you can deIecI IIaI In IIeIr µuLIIc sIaIenenIs. "MayLe
ve are reIaIIveIy IaIe,¨ saId RuµerI MurdocI, CLO oI Nevs
Corµ., vIen Ie recenIIy announced IIe conµany's IIrsI
InIerneI InvesInenI, "LuI onIy Ly a year or Ivo.¨
OnIy Ly a year or Ivo? In Iess IIan Ivo years, PrIce-
IIne.con venI Iron noIIIng Io narkeI IeadersIIµ oI a nev
caIegory on IIe InIerneI.
Carµe dIen. WIere vouId MIcrosoII Le Ioday II BIII
GaIes Iadn'I droµµed ouI oI Harvard In IIs IresInan year Io
go Io AILuquerque, Nev MexIco, Io deveIoµ an oµeraIIng
sysIen Ior IIe vorId's IIrsI µersonaI conµuIer?
Carµe dIen. WIere vouId DeII ConµuIer Le Ioday II
MIcIaeI DeII Iadn'I droµµed ouI oI IIe UnIversIIy oI Texas
In IIs soµIonore year Io sIarI a conµany seIIIng conµuIers
dIrecIIy Io LusInesses.
Carµe dIen. Today Is IIe LesI day oI your IIIe Io IauncI
an InIerneI conµany Lased on a nev Idea or conceµI. One
IIaI noLody eIse Is usIng.
Have you ever Ieard oI NorIIernLIgII.con? You're noI
aIone. More IIan 99 µercenI oI WeL users are noI IanIIIar
vIII IIe sIIe.
NorIIern LIgII TecInoIogy LLC vas IIe IargesI searcI
engIne on IIe InIerneI, In IIe sense IIaI II Indexed sone 330
nIIIIon WeL µages. TIaI's Iar nore IIan YaIoo!, LxcIIe,
Lycos, or InIoseek. PIus NorIIern LIgII conµIIed IIe con-
IenIs oI sone sIx IIousand IuII-IexI sources sucI as LusIness
nagazInes, Irade journaIs, nedIcaI µuLIIcaIIons, InvesInenI
daIaLases, and nevs vIres.
TIe µroLIen vasn'I IIe sIIe. TIe µroLIen vas IIe IIn-
Ing. NorIIern LIgII dIdn'I geI Iurned on unIII IIree years
aIIer IIe YaIoo! IauncI. TIaI's nucI Ioo IaIe. NoI onIy vas
YaIoo! gaIIerIng nonenIun, LuI IIe nev searcI sIIe aIso
Iad Io conµeIe vIII AIIaVIsIa, LxcIIe, InIoseek, and Lycos.
TIe µroLIen vasn'I IIe noney. NorIIern LIgII vas
IInanced vIII S50 nIIIIon In venIure caµIIaI, Iar nore IIan
YaIoo! Iad Io vork vIII.
II's Lad enougI Io sIarI In second µIace. II's vorse Io
sIarI aI IIe Lack oI IIe µack. In nany sIIuaIIons II's aInosI
IoµeIess.
So vIaI do you do II you're IaIe? Too nany nanagers
µuI on IIeIr AvIs IaIs and say "We Iave Io Iry Iarder.¨ NoI
good enougI. (RenenLer IIe Lav oI SInguIarIIy.)
ParadoxIcaIIy, II's never Ioo IaIe. BuI you can'I IauncI In
IIe year 2003 a greaI Idea, cIrca 1995. II you geI InIo IIe
gane IaIe, you Iave Io narrov your Iocus. MIcIaeI DeII vas
IaIe, very IaIe, InIo µersonaI conµuIers. So Ie decIded Io
Iocus on seIIIng µersonaI conµuIers Ly IeIeµIone. A good
sIraIegy. Today DeII ConµuIer Is IIe vorId's IargesI nanu-
IacIurer oI µersonaI conµuIers.
MIcIaeI DeII dIdn'I nake IIe sane nIsIake vIen IIe
InIerneI arrIved. HIs conµany vas IIe IIrsI Io seII µersonaI
conµuIers on IIe WeL. AIso a good sIraIegy.
Nor Is II ever enougI jusI Io nove raµIdIy vIIIouI a LasI-
caIIy good Idea. TIne Warner vas one oI IIe IIrsI conµanIes
Io seI uµ an InIerneI sIIe. Hence IIe nane, PaIIIInder.
BuI vIaI's a PaIIIInder? AI IIrsI IIe sIIe vas noIIIng
nore IIan a coIIecIIon oI InIornaIIon µuIIed Iron varIous
TIne Warner nagazInes: Tinc, Pcop/c, Ior/unc, Moncy,
In/cr/ainncn/ \cc//y, and oIIers. AIIer IIe µurcIase oI
Turner BroadcasIIng SysIen, IIe conµany added CNN,
CNNsI and CNNIn Io IIe sIIe. TIey even nanaged Io seII
AnerIcan Lxµress on IIsIIng Travc/ & Lcisurc nagazIne on
IIe sIIe as veII as Asia \cc/, a Hong Kong µuLIIcaIIon, nov
deceased.
AIIer InvesIIng a reµorIed S75 nIIIIon In IIe sIIe, TIne
Warner recenIIy sIuI II dovn. WIaI's a PaIIIInder? TIe onIy
neanIng IIe nane Iad vas IIaI II vas a sIIe Ior TIne
Warner µuLIIcaIIons. BuI Iev µeoµIe care vIo µuLIIsIes a
nagazIne (unIess 1oIn I. Kennedy 1r. Is InvoIved, and as
soon as Ie vas gone, Gcor¸c nagazIne vas gone, Ioo). TIey
onIy care aLouI IIe nagazIne IIseII.
NoLody reads Ior/unc Lecause TIne Warner µuLIIsIes
II. TIey read Ior/unc In sµIIe oI IIe IacI IIaI TIne Warner
µuLIIsIes II. TIe nane oI IIe conµany IIaI µuLIIsIes IIe
nagazIne Is IrreIevanI Io IIe average reader. Ior/unc Is IIe
Lrand, noI TIne Warner.
AIIer TIne Warner gave uµ on PaIIIInder, IIe conµany
reIreaIed Io IndIvIduaI sIIes Ior eacI oI IIs najor µuLIIca-
IIons. AIso noI a good sIraIegy. (LIne-exIensIon sIIes oI nag-
azIne Lrands nIgII Le good Ior seIIIng a Iev suLscrIµIIons,
LuI IIey are noI IIe vay Io LuIId a µoverIuI µresence on IIe
WeL.)
TIne Warner LIIIs IIseII as IIe "vorId's IorenosI nedIa
conµany.¨ Hov couId Ivo yaIoos Iron SIanIord LeaI IIe
vorId's IorenosI nedIa conµany?
Lasy. AII you need Io do Is Io geI your sIraIegy rIgII and
your IInIng rIgII. BoII are requIred. One vIIIouI IIe oIIer
von'I vork.
P.S.: You µroLaLIy noIIced IIaI II vas AOL IIaI Iook
over TIne Warner and noI vIce versa.
198
Success In LusIness doesn'I jusI sIov uµ on IIe LoIIon IIne
oI IIe µroIII-and-Ioss coIunn, II aIso goes Io IIe Ioµ. Suc-
cess In LusIness InIIaIes IIe egos oI Ioµ nanagenenI.
SuµreneIy successIuI conµanIes LeIIeve IIey can do
anyIIIng. TIey can IauncI any µroducI InIo any narkeI.
TIey can nake any nerger vork. II's jusI a quesIIon oI Iav-
Ing IIe vIIIµover and IIe resources Io IIrov InIo IIe Iask.
WIaI Is II IIaI ve vanI Io do? Is IIe quesIIon IIaI nanage-
nenI usuaIIy asks IIseII.
HIsIory Iasn'I Leen kInd Io IIIs Iyµe oI IIInkIng. Over-
conIIdenI nanagenenI Ias Leen resµonsILIe Ior nosI oI IIe
narkeIIng dIsasIers oI IIe µasI decades.
º GeneraI LIecIrIc couIdn'I crack IIe naInIrane conµuIer
narkeI In sµIIe oI IIs reµuIaIIon Ior LrIIIIanI nanagenenI.
º Sears, RoeLuck's "socks and sIocks¨ sIraIegy oI seIIIng
Lrokerage accounIs, Insurance, and reaI esIaIe In IIs
reIaII sIores venI novIere.
º Xerox couIdn'I duµIIcaIe IIs coµIer success In conµuIers.
º IBM, on IIe oIIer Iand, couIdn'I exIend IIs conµuIer
success Io coµIers.
1 R£ L AW 0F VANI 1 Y
The bl ggest ml st ake of al l l s bel l evl ng
you oan do any t hl ng.
9
º Kodak IosI IIs Iocus vIen II IrIed Io geI InIo InsIanI µIo-
IograµIy.
º PoIaroId, on IIe oIIer Iand, Iared no LeIIer In conven-
IIonaI 35nn IIIn.
GeI IIe µIcIure? As soon as a conµany Is successIuI In
one area, II IrIes Io nove InIo anoIIer. GeneraIIy vIII IIIIIe
or no success.
TIe µroLIen Is usuaIIy noI IIe nev µroducI or servIce
LeIng oIIered. Xerox nay veII Iave Iad IIe LesI conµuIer
µroducI on IIe narkeI. TIe µroLIen Is In IIe nInd oI IIe
µrosµecI. "WIaI does a coµIer conµany knov aLouI con-
µuIers?¨
In oIIer vords, IIe µroLIen Is noI a µroducI µroLIen,
II's a µerceµIIon µroLIen. TIe nosI dIIIIcuII µroLIen In
LusIness Ioday Is IryIng Io cIange a µerceµIIon IIaI exIsIs In
IIe nInd oI a cusIoner or µrosµecI. Once a µerceµIIon Is
sIrongIy IeId In IIe nInd, II can aInosI never Le cIanged.
(AnyLody vIo Ias ever Leen narrIed knovs IIe dIIIIcuIIy oI
cIangIng a µerceµIIon In anoIIer µerson's nInd.)
WIaI's a CadIIIac? In IIe nInd oI IIe car Luyer, II's a "LIg
car.¨ BuI IIe narkeI sIarIed sIIIIIng Io snaIIer cars. So naI-
uraIIy CadIIIac IrIed Io seII a snaII CadIIIac caIIed IIe CaI-
era, vIII very IIIIIe success. On IIe oIIer Iand, IIe CadIIIac
LscaIade, a LIg SUV, Iooks IIke II Is goIng Io Le an enornous
success.
WIaI's a VoIksvagen? In IIe nInd oI IIe car Luyer, II's a
"snaII car.¨ BuI IIs cusIoners nov Iave IanIIIes. So naIu-
raIIy VoIksvagen IrIed Io seII a Iarger VoIksvagen caIIed IIe
PassaI, vIII very IIIIIe success.
CadIIIac couIdn'I seII snaII CadIIIacs. And VoIksvagen
couIdn'I seII LIg VoIksvagens.
Once you sIand Ior soneIIIng In IIe µrosµecI's nInd, II's
Iard Io cIange vIaI you sIand Ior. VoIksvagen sIands Ior
snaII. CadIIIac sIands Ior LIg. Can you cIange IIese µerceµ-
1PL LAW 0I vANI 1Y 199
IIons? (And, IurIIernore, vIy vouId you vanI Io?)
UnIIkeIy. YeI IIey keeµ IryIng. BeIore IIe CaIera IauncI,
CadIIIac IrIed seIIIng IIe CInarron, anoIIer snaIIer CadIIIac.
PredIcIaLIy IIe CInarron aIso never goI ouI oI IIe garage.
TIe IoIks aI LIncoIn ougII Io Le IaugIIng aI CadIIIac's
µredIcanenI, LuI IIey're noI. TIey Ioo are Lusy InIroducIng
IIe nev snaII LIncoIn (LS Ior LIncoIn SnaII, oI course).
MeanvIIIe IIe IIree-and-a-IaII-Ion LIncoIn NavIgaIor Is
doIng greaI. WIen a nev µroducI naIcIes IIe µerceµIIons
IIaI aIready exIsI In IIe nInd, IIe nev µroducI can Le
exceedIngIy successIuI.
WIen VoIksvagen LrougII Lack IIe BeeIIe, IIeIr orIgI-
naI snaII car, saIes exµIoded. As you nIgII exµecI, IIe suc-
cess oI IIe Nev BeeIIe aIso venI Io IIeIr Ieads. TIere's no
reason ve can'I seII S60,000 cars vIII IIe VoIksvagen nane
on IIen, saId one VW execuIIve recenIIy. Yes, IIere Is. Peo-
µIe von'I Luy IIen.
WIII IIe onIIne vorId Le any dIIIerenI IIan IIe oII-IIne
vorId? We IIInk noI. To Le successIuI on IIe InIerneI you
sIIII Iave Io do LusIness vIII Iunan nInds. Once you sIand
Ior soneIIIng In a nInd, II's Iard Io cIange IIe µerceµIIon
oI vIaI you sIand Ior.
Anazon.con vas IIe IIrsI InIerneI sIIe Io seII Looks and
nusIc CDs. TIe sIIe Is a roarIng success, vIII currenI saIes
oI S3.1 LIIIIon annuaIIy (aILeII vIII Iosses In IIe µasI year oI
S567 nIIIIon).
So vIaI Is Anazon.con doIng nexI? You knov vIaI
IIey're doIng nexI. TIey're In IIe µrocess oI IurnIng IIen-
seIves InIo a "desIInaIIon sIIe¨ vIere cusIoners can IInd
anyIIIng IIey couId µossILIy vanI.
º DVDs and vIdeoIaµes
º LIecIronIcs and soIIvare
º Toys and vIdeo ganes
º Hone InµrovenenI µroducIs
º A gIII-regIsIry sysIen
º L-cards
º AucIIons, IncIudIng a joInI venIure vIII SoIIeLy's (Ana-
zon sµenI S45 nIIIIon Ior a 1.7 µercenI sIake In SoIIeLy's)
º zSIoµs, vIere IIousands oI snaII nercIanIs can do
LusIness under IIe Anazon.con Lanner
º CredII cards In a coLranded arrangenenI vIII NexICard
Inc. (Anazon.con aIso sµenI S22.5 nIIIIon Ior a varranI
IIaI IeIs II acquIre 9.9 µercenI oI IIe credII-card conµany)
º AuIonoLIIes In a deaI vIII CarsDIrecI.con
Wov! WIaI a IIsI. BuI, Iey, II you're "µerson oI IIe year,¨
you ougII Io Le aLIe Io do aII oI IIese IIIngs.
Anazon.con used Io use IIe IIene "LarII's BIggesI
BooksIore.¨ No Ionger. TIey've cIanged II. TIe nev IIene Is
"LarII's BIggesI SeIecIIon.¨
Person oI IIe year 1eII Bezos, CLO oI Anazon.con,
says, "II's very naIuraI Ior a cusIoner Io vonder, can you
reaIIy Le IIe LesI µIace Io Luy nusIc, Looks, and eIecIron-
Ics? In IIe µIysIcaI vorId, IIe ansver Is aInosI aIvays no.
BuI on IIe InIerneI aII IIe µIysIcaI consIraInIs go avay.¨ (A
sIgn oI IIe IInes: TIe conµany recenIIy regIsIered "Ana-
zoneveryvIere.neI as a WeLsIIe nane.)
AII IIe µIysIcaI consIraInIs nay go avay on IIe InIer-
neI, LuI vIaI aLouI IIe nenIaI consIraInIs? WIaI aLouI IIe
nInd oI IIe µrosµecI? WIaI's an Anazon.con?
II Xerox Is coµIers, IBM Is conµuIers, CadIIIac Is LIg
cars, and VoIksvagen Is snaII cars, IIen Anazon.con Is an
InIerneI LooksIore.
II Anazon.con Is an InIerneI LooksIore, IIen Iov cone
IIe sIIe Ias aIso Leen aLIe Io successIuIIy seII nusIc CDs?
And II IIey can successIuIIy seII nusIc CDs, vIy can'I IIey
aIso seII Ioys and eIecIronIcs?
Look around your connunIIy aI LIg LooksIores IIke
Borders or WaIdenLooks. Do IIey seII Ioys and eIecIronIcs?
No. BuI IIey do seII nusIc CDs. Lrgo: TIe cusIoner assocI-
aIes nusIc CDs vIII LooksIores.
"TIere's no reason Ior Anazon noI Io seII oIIer ner-
cIandIse,¨ saId BIII GaIes recenIIy. Yes, IIere Is. II's caIIed
"µerceµIIon,¨ and II's a crIIIcaI aIIrILuIe oI IIe Iunan nInd.
Anazon.con neans InIerneI LooksIore. NoI aucIIons, gIIIs,
Ione-InµrovenenI µroducIs, Ioys, vIdeo ganes, eIecIron-
Ics, soIIvare, DVDs, or vIdeoIaµes.
You see Anazon.con IIInkIng aII over IIe µIysIcaI vorId.
BIockLusIer neans vIdeo renIaIs. "TIere's no reason Ior BIock-
LusIer VIdeo noI Io seII oIIer nercIandIse,¨ soneone aI corµo-
raIe IeadquarIers µroLaLIy nuIIered Io IIenseIves a nunLer
oI years ago. So BIockLusIer MusIc vas Lorn.
AIIer years oI Iosses, IIe conµany IInaIIy Iaced IIe
nusIc and sµun oII IIe dIvIsIon In 1999. TIe nev nane:
WIereIouse MusIc.
"You'II see nore Anazon-IIke cases In vIIcI a conµany
IIaI Is sIrong In one onIIne area exµands IIs µroducI oIIer-
Ings,¨ adds BIII GaIes. Sure, you vIII. LIne exIensIon Is very
µoµuIar In corµoraIe AnerIca, aInosI as µoµuIar as sIock
oµIIons and corµoraIe jeIs. BoII Ieed IIe corµoraIe ego.
WIaI Is IerrILIy conIusIng Is IIe IacI IIaI IIne exIensIon can
vork . . . In IIe sIorI Iern. BuI aInosI never In IIe Iong Iern.
TIIs Is esµecIaIIy Irue II you are IIe IIrsI In a nev caIe-
gory. WIen you are IIe IIrsI, vIen you donInaIe a nev caI-
egory, you can Le successIuI In IIe sIorI Iern IakIng IIe
IIne-exIensIon rouIe. You nay µay IIe µrIce IaIer, LuI you
can easIIy IooI yourseII InIo IIInkIng IIaI you are goIng In
IIe rIgII dIrecIIon vIen you Lroaden your aµµroacI.
Take YaIoo!, Ior exanµIe. IncredILIy IIe conµany's nIs-
sIon sIaIenenI Is "Io Le aII IIIngs Io aII µeoµIe¨ (a µIrase
reµorIedIy reµeaIed as a nanIra Ly nany YaIoo! execuIIves).
SIarIIng as a searcI engIne on IIe InIerneI, YaIoo! Ias nov
exµanded IIs WeLsIIe Io IncIude IIe IoIIovIng IeaIures: auc-
IIons, caIendars, cIaI roons, cIassIIIeds, e-naII, ganes, naµs,
nevs, µager servIces, µeoµIe searcIes, µersonaIs, radIo, sIoµ-
µIng, sµorIs, sIock quoIes, veaIIer reµorIs, and yeIIov µages.
To IurIIer IIs goaI oI LeIng aII IIIngs Io aII µeoµIe, YaIoo!
Ias aIso sµenI a snaII IorIune on a raII oI acquIsIIIons.
º S5 LIIIIon Ior BroadcasI.con, a servIce IIaI deIIvers
audIo and vIdeo over IIe InIerneI
º S3.7 LIIIIon Ior GeoCIIIes, a Ione-µage servIce
º S130 nIIIIon Ior Lnconµass, a IecInoIogy conµany IIaI
nakes soIIvare Io nore easIIy IInk consuners Io InIer-
neI servIces
º S80 nIIIIon Ior OnIIne AnyvIere, a IecInoIogy IIaI
aIIovs IIe conµany Io deIIver InIornaIIon and servIces
Io a vIde varIeIy oI non-PC devIces
Is YaIoo! successIuI? (SIIIy quesIIon, IIe conµany Is
vorII S11 LIIIIon on IIe sIock narkeI.)
Sure, YaIoo! Is successIuI, LuI IIe Lrand Iad IIe enornous
advanIage oI LeIng IIe IIrsI searcI engIne on IIe InIerneI. As a
resuII, YaIoo! receIved an InordInaIe anounI oI µuLIIcIIy.
YaIoo! Lecane a ceIeLrIIy Lrand. In one sevenIeen-
nonII µerIod, In sIx IIousand dIIIerenI nevs nedIa, YaIoo!
receIved an asIoundIng IorIy-IIve IIousand cIIaIIons, Iar
greaIer IIan any oIIer InIerneI sIIe.
NoIIIng succeeds IIke excess. WIII enougI IavoraLIe
nedIa nenIIons, MussoIInI MerIoI nIgII Lecone a µoµuIar
Lrand oI IIaIIan vIne.
BuI noIIIng IasIs Iorever. TIe nedIa vIII nove on Io IIe
nexI IoI InIerneI Lrand, IeavIng YaIoo! In IIe unconIorI-
aLIe µosIIIon oI IavIng Io sµend IIs ovn noney Io connu-
nIcaIe IIs IdenIIIy.
WIaI's a YaIoo!? NoI an easy quesIIon Io ansver vIen
you are "aII IIIngs Io aII µeoµIe.¨
Leaders Iend Io seII-desIrucI vIen IIey LIov IIenseIves
uµ. WIen you Iry Io Le everyIIIng, you end uµ LeIng noIIIng.
AµµIe sIarIed as a µersonaI conµuIer Iardvare con-
µany, IIen noved InIo soIIvare, oµeraIIng sysIens, and µer-
sonaI dIgIIaI assIsIanIs. AµµIe IosI IIs vay, IIs CLO, and
aInosI IIs enIIre exIsIence unIII SIeve 1oLs reIook IIe reIns
and reIocused AµµIe on IIs core LusIness, easy-Io-use and
"InsaneIy greaI¨ µersonaI conµuIers.
BuI everyLody vanIs Io grov, and you can'I LIane IIen.
So vIaI sIouId an InIerneI Lrand IIke Anazon.con do?
TIere are IIve IundanenIaI LrandIng sIraIegIes Ior a Ieader
In any caIegory.
1. K££P Y0UR BRANß F0CU5£ß.
TIere are nore IIan 22 nIIIIon doIcon sIIes regIsIered on
IIe InIerneI, and you vanI your sIIe Io sIand Ior nore IIan
one IIIng? Anazon.con sIouId sIay Iocused on Looks and
nusIc CDs. AIIer aII, IIe sIIe accounIs Ior jusI 8 µercenI oI
IIe S25 LIIIIon Look narkeI In IIe UnIIed SIaIes.
2. INCR£A5£ Y0UR 5RAR£ 0F 1R£ MARK£1.
TIe IIne Io IIInk aLouI geIIIng InIo anoIIer LusIness Is
aIIer you donInaIe IIe LusIness you're aIready In. UnIII
Anazon.con Ias aI IeasI 25 µercenI oI IIe Look narkeI, II
sIouId sIIck Io IIs knIIIIng. IIs sIorI-Iern sIraIegy sIouId
Iocus on IIndIng vays Io Increase IIs 8 µercenI narkeI sIare.
3. £XPANß Y0UR MARK£1.
Leaders sIouId IIgure ouI Iov Io exµand IIeIr narkeI, knov-
Ing IIaI nany oI IIe LeneIIIs oI a Iarger narkeI vIII IIov Io
IIen. WIaI aLouI Look cIuLs, cIaI roons vIII auIIors, and
oIIer Look-LuIIdIng acIIvIIIes, IncIudIng Anazon-sµonsored
senInars Ly Ianous auIIors?
4. 60 6L0BAL.
Sure, IIe InIerneI Is a vorIdvIde InIornaIIon and con-
nunIcaIIons neIvork aIready, LuI Anazon.con's sIare oI
IIe Look narkeI ouIsIde IIe UnIIed SIaIes Is nInuscuIe.
(CurrenIIy IIe conµany seIIs onIy 22 µercenI oI IIs Looks
overseas.)
Anazon.con sIouId nake a najor eIIorI Io reacI cus-
Ioners In IIe resI oI IIe vorId. As LngIIsI Lecones IIe
LusIness Ianguage oI IIe vorId, IIe narkeI Ior Looks In
LngIIsI sIouId skyrockeI.
WIy sIoµ aI LngIIsI? Anazon.con sIouId Iake IIs InIer-
neI exµerIIse InIo aII IIe najor Ianguages oI IIe vorId.
TIInkIng oIIen sIoµs aI IIe Lorder. TIe nosI successIuI
conµanIes Ioday IreaI IIe vorId as IIeIr oysIer.
5. ß0MINA1£ 1R£ CA1£60RY.
Ior a IeadIng Lrand, a 25 µercenI narkeI sIare sIouId Le a
conservaIIve goaI. WIII a quarIer oI IIe U.S. Look narkeI,
Anazon.con vouId rack uµ saIes oI S6.3 LIIIIon, enougI Io
µuI IIe conµany on IIe Ior/unc 500 IIsI, aIead oI sucI con-
µanIes as SouIIvesI AIrIInes, Avon ProducIs, CanµLeII
Souµ, SIervIn-WIIIIans, Ryder SysIens, NordsIron, Ovens
CornIng, BIack & Decker, and HersIey Ioods.
NoIIIng vorks In LrandIng as veII as narkeI donIna-
IIon. Coca-CoIa In coIa, HerIz In car renIaIs, BudveIser In
Leer, Goodyear In IIres, MIcrosoII In µersonaI conµuIer
oµeraIIng sysIens, InIeI In nIcroµrocessors, CIsco In neI-
vorkIng equIµnenI, OracIe In daIaLase soIIvare, InIuII In
µersonaI IInance soIIvare.
Anazon.con Ias a once-In-a-IIIeIIne oµµorIunIIy Io
donInaIe IIe Look LusIness on a vorIdvIde scaIe. WIy
IIrov avay IIIs oµµorIunIIy In order Io cIase a dozen oIIer
narkeIs, none oI vIIcI IIey are IIkeIy Io donInaIe?
SIIII, vIen IIe vanIIy Lug LIIes you, II's Iard Io resIsI.
"We can geI InIo IIese oIIer narkeIs. We Iave IIe µroducIs,
ve Iave IIe µeoµIe, ve Iave IIe sysIens, ve Iave IIe
nonenIun, and ve Iave IIe esµrII de corµs. WIy noI?¨
WIy noI? You nay Iave everyIIIng goIng Ior you,
IncIudIng IIe µroducIs, IIe µeoµIe, and IIe sysIens, LuI you
Iack one IIIng. You Iack IIe µerceµIIon.
TIe Issue In LrandIng, InIerneI or oIIervIse, aIvays
LoIIs dovn Io IIe sane IIIng: µroducI versus µerceµIIon.
Many nanagers LeIIeve II's onIy necessary Io deIIver a
LeIIer µroducI or servIce Io vIn. BuI Lrands IIke Coca-CoIa,
HerIz, BudveIser, and Goodyear are sIrong noI Lecause
IIey Iave IIe LesI µroducI or servIce (aIIIougI IIey nIgII
Iave) LuI Lecause IIey are narkeI Ieaders IIaI donInaIe
IIeIr caIegorIes.
WIIcI scenarIo seens nore IIkeIy, A or B?
ScenarIo A: TIe conµany creaIes a LeIIer µroducI or
servIce and consequenIIy acIIeves narkeI IeadersIIµ.
ScenarIo B: TIe conµany acIIeves narkeI Ieader-
sIIµ (usuaIIy Ly LeIng IIrsI In a nev caIegory) and
IIen suLsequenIIy acIIeves IIe µerceµIIon oI IavIng
IIe LeIIer µroducI or servIce.
LogIc suggesIs ScenarIo A, LuI IIsIory Is overvIeIn-
IngIy on IIe sIde oI ScenarIo B. LeadersIIµ IIrsI, µerceµIIon
second.
AIIaVIsIa LIIIs IIseII as "IIe nosI µoverIuI and useIuI
guIde Io IIe NeI.¨ We Iave no reason Io douLI IIeIr cIaIn.
BuI Is IIIs enougI Io enaLIe AIIaVIsIa Io vresIIe IIe µorIaI
IeadersIIµ avay Iron YaIoo!? NoI In our oµInIon.
LeadersIIµ IIrsI, µerceµIIon second. To Iry Io reverse
IIIs sequence Is aInosI InµossILIe.
WIaI II you do everyIIIng rIgII? WIaI II you are IIe IIrsI
In a nev caIegory and suLsequenIIy go on Io donInaIe IIaI
caIegory donesIIcaIIy? TIen you sIouId Iry Io exµand IIe
narkeI In IIe U.S. aI IIe sane IIne IIaI you Iake your
Lrand Io IIe gIoLaI narkeI.
Coca-CoIa dId aII oI IIese IIIngs. BuI vIaI's nexI? Are
IIere no second acIs In LrandIng IIsIory?
MosI assuredIy IIere are. A conµany can do Ivo IIIngs
aI once (keeµ a narrov Iocus and exµand IIs LusIness) Ly
IIe sInµIe sIraIegy oI IauncIIng a second, or even a IIIrd
and IourII, Lrand.
º Coca-CoIa ovns Coca-CoIa, IIe IeadIng coIa, and SµrIIe,
IIe IeadIng Ienon-IIne soda.
º AnIeuser-BuscI ovns BudveIser, IIe IeadIng reguIar
Leer, MIcIeIoL, IIe IeadIng µrenIun Leer, and BuscI,
IIe IeadIng Iov-µrIce Leer.
º Darden ResIauranIs ovns OIIve Garden, IIe IeadIng IIaI-
Ian resIauranI cIaIn, and Red LoLsIer, IIe IeadIng
seaIood resIauranI cIaIn. (Darden Is IIe vorId's IargesI
casuaI dInIng conµany.)
º ToyoIa aIso ovns Lexus.
º BIack & Decker aIso ovns DeWaII.
º LevI SIrauss ovns LoII LevI's and Dockers.
º TIe Gaµ aIso ovns Banana ReµuLIIc and OId Navy.
AnerIca OnIIne Is usIng IIe sane nuIIIµIe-Lrand sIraI-
egy on IIe InIerneI. AOL Is IIs µrenIun Lrand Ior vIIcI
suLscrILers µay S23.90 a nonII. TIe servIce IncIudes nIne-
Ieen seµaraIe IoµIc cIanneIs, IIIIeen IIousand cIaI roons,
and ICQ, a µoµuIar InsIanI nessagIng caµaLIIIIy. Con-
µuServe Is IIe conµany's vaIue Lrand. II's a good deaI. Ior
S19.95 a nonII, ConµuServe gIves you everyIIIng AOL
gIves you exceµI Ior IIe AOL e-naII address.
InsIead oI IauncIIng second Lrands, Iovever, nosI
conµanIes Iake IIe vanIIy rouIe InsIead. "WIaI's vrong
vIII our nane? We're Ianous. WIy do ve need a second
Lrand? We can use our ovn nane on IIaI IIne exIensIon.¨
Sone conµanIes IIaI µracIIce IIne exIensIon seen Io Le
successIuI, aI IeasI In IIe sIorI Iern. MIcrosoII Is a good
exanµIe.
AIIer donInaIIng IIe µersonaI conµuIer oµeraIIng sys-
Ien LusIness, MIcrosoII Ias gone InIo a raII oI dIIIerenI LusI-
nesses, aII under IIe MIcrosoII nane. "II MIcrosoII can do II,
vIy can'I ve?¨ Is a consIanI reIraIn oI our consuIIIng cIIenIs.
Our ansver: You're noI MIcrosoII. WIen you Iave 95
µercenI oI a narkeI, vIen you are vorII S332 LIIIIon on IIe
sIock narkeI, you are exIreneIy µoverIuI. You can do
aInosI anyIIIng and sIIII aµµear Io Le successIuI.
LeadersIIµ cIanges IIe ruIes oI IIe gane. Try IeIIIng
your sµouse, "II BIII CIInIon can do II, vIy can'I I?¨
MosI CLOs are noI BIII CIInIon eIIIer. TIey are noI IIe
Iorner Ieader oI IIe nosI µoverIuI counIry In IIe vorId.
TIey Iave Io IoIIov ordInary ruIes.
Leaders, esµecIaIIy donInanI Ieaders IIke MIcrosoII, can
Lreak aII IIe Iavs and sIIII sIay on Ioµ . . . Ior nov.
Look agaIn aI YaIoo!, a conµany IIaI Is IoIIovIng IIe
MIcrosoII gane µIan. Iorner CLO TInoIIy KoogIe saId: "In
onIIne connerce and sIoµµIng you can exµecI Io see us
exIend aggressIveIy Ly LroadenIng and deeµenIng IIe range
oI consuner LuyIng, IransacIIon, and IuIIIIInenI servIces
ve µrovIde across aII najor caIegorIes.¨ (MayLe IIIs Is one
reason IIaI KoogIe Is gone.)
Don'I Le Ioo crIIIcaI oI YaIoo!'s LeIavIor. You onIy IIve
once. BeIng young and rIcI and IooIIsI Is a IoI nore Iun
IIan LeIng oId and vIse.
Many sIIes are goIng In IIe sane dIrecIIon, LuI vIIIouI
YaIoo!'s µoverIuI Lrand-nane recognIIIon. TIey IncIude
Buy.con, SIoµµIng.con, SIoµnov.con, and a IosI oI oIIer
coµycaI sIIes. "AnyIIIng you vanI Io Luy, ve can geI II Ior
you aI a dIscounI.¨
WIaI does a sIIe IIke BuyIINov.con seII? 1eveIry, con-
suner eIecIronIcs, Ioys, kIIcIen equIµnenI, Ione decoraI-
Ing µroducIs, sµorIIng goods, IooIs, µeI suµµIIes, garden
suµµIIes, gIIIs, Iuxury IIens. "You nane II, ve've goI II.¨(II
sIouId cone as no surµrIse IIaI BuyIINov.con Is no Ionger
vIII us.)
Snaµ.con goes one sIeµ IurIIer. NoI onIy can you Luy
everyIIIng Ly vIsIIIng IIe Snaµ sIIe, LuI you can Luy II Iron
any sIore. "Any µroducI. Any sIore. Any IIne. Snaµ sIoµ-
µIng¨ Is IIe IIene. VanIIy Is vorkIng overIIne aI Snaµ.con.
As InIerneI Iever cooIs dovn, as IIe InIerneI Lecones
jusI one oI IIe µIaces you can go Io Luy IIIngs, IIose generIc
sIIes IIaI seII everyIIIng Io everyLody are unIIkeIy Io Le vIII
us. YaIoo!, on IIe oIIer Iand, Is In no danger Lecause II Ias
a µoverIuI, donInanI µosIIIon In IIe µorIaI caIegory. As
does Anazon.con In IIe Looks and nusIc caIegory.
A quesIIon renaIns Ior Ieader Lrands IIke YaIoo! and
Anazon.con. WouId IIese conµanIes Iave Leen LeIIer oII
vIII a nuIIIµIe-Lrand sIraIegy raIIer IIan a IIne-exIensIon
sIraIegy?
We IIInk so. BuI II Is geIIIng Iarder and Iarder Io IInd
Ieaders IIaI vanI Io InIroduce second Lrands.
TIeIr vanIIy Ieads IIen asIray.
210
WIenever a nev nedIun IIIs Iovn, IIe cry goes uµ, "Con-
vergence, convergence. WIaI Is IIIs nev nedIun goIng Io
converge vIII?¨
WIen IeIevIsIon III Iovn, IIere vere sIorIes everyvIere
aLouI IIe convergence oI TV vIII nagazInes and nevsµa-
µers. You veren'I goIng Io geI your nagazInes In IIe naII
anynore. WIen you vanIed an Issue, you vouId III IIe LuI-
Ion on your TV seI and IIe Issue vouId Le µrInIed ouI In
your IIvIng roon. (We don'I nake IIese IIIngs uµ. We jusI
reµorI IIe IacIs.)
WIen IIe InIerneI arrIved, IIe sane Iyµe oI sIorIes
aµµeared. Nov you can surI IIe NeI vIIIe you vaIcI TV.
(MIcrosoII's WeLTV Is IIe IeadIng suµµIIer oI IIIs servIce.)
Many conµanIes Iave IrIed Io conLIne a IeIevIsIon seI
vIII a µersonaI conµuIer, vIII a noIaLIe Iack oI success-
AµµIe, GaIevay, and oIIers.
Convergence Ias Lecone an oLsessIon aI MIcrosoII.
"Has WIIIIan H. GaIes Lecone IIe CaµIaIn AIaL oI IIe
InIornaIIon age?¨ asked IIe Ncu Yor/ Tincs recenIIy. "Mr.
GaIes' vIIIe vIaIe renaIns an eIusIve dIgIIaI seI-Ioµ caLIe
Lox IIaI IIs conµany, IIe MIcrosoII CorµoraIIon, Is IoµIng
vIII re-creaIe IIe µersonaI conµuIer IndusIry Ly LIendIng
1 R£ L AW 0F ßI V£ R6£ NC£
Lver y one t al ks about oonver genoe, whl l e
j ust t he opposl t e l s happenl ng.
10
IIe PC, IIe InIerneI and IIe IeIevIsIon seI InIo a IevIaIIan
IIvIng-roon enIerIaInnenI and InIornaIIon nacIIne.¨
TIe PC, IIe InIerneI, and IIe IeIevIsIon seI vIII con-
LIne? II vIII never Iaµµen. TecInoIogIes don'I converge.
TIey dIverge.
Many InIerneI Lranders are IaIIIng InIo IIe convergence
Iraµ. TIey Iook Ior vays Io LIend IIe reaI vorId vIII IIe
InIerneI vorId. TIeIr IngenuIIy knovs no Lounds.
º Nevsµaµers and nagazInes on IIe InIerneI
º RadIo and IeIevIsIon on IIe InIerneI
º InIerneI servIce on your IeIeµIone or Iron your PaInPIIoI
º IacsInIIe and IeIeµIone servIce Iron your conµuIer or
IeIevIsIon seI
TIe nedIa Iave Leen IannIng IIe convergence IIre Ior a
Iong IIne. AccordIng Io a 1993 arIIcIe In IIe \a// S/rcc/ 1ourna/:
Shook ls a oommon feellng these days among leaders
of flve of the world`s blggest lndustrles: oomputlng,
oommunloatlons, oonsumer eleotronlos, entertalnment
and publlshlng. Under a oommon teohnologloal lash÷
the lnoreaslng ablllty to oheaply oonvey huge ohunks of
vldeo, sound, graphlos and text ln dlgltal form÷they are
transformlng and oonverglng.
TIe Ncu Yor/ Tincs µuI II IIIs vay IIe sane year:
Dlgltal oonvergenoe ls not a futurlstlo prospeot or a oholoe
to be made among other oholoes; lt ls an onrushlng traln.
The dlgltallzatlon of all forms of lnformatlon (lnoludlng the
transmlsslon of sensatlons) has proven ltself to be aoou
rate, eoonomloal, eoologloally wlse, unlversally applloable,
easy to use, and fast as llght.
1PL LAW 0I 0I vLPULNUL 211
Ior/unc vas jusI as enIIusIasIIc In 1993:
Convergenoe wlll be the buzzword for the rest of the
deoade. Thls lsn`t just about oable and telephone hop
plng lnto bed together. lt`s about the oultures and oorpo
ratlons of major lndustrles÷teleoommunloatlons
(lnoludlng the longdlstanoe oompanles), oable, oomput
ers, entertalnment, oonsumer eleotronlos, publlshlng,
and even retalllng÷oomblnlng lnto one megalndustry
that wlll provlde lnformatlon, entertalnment, goods, and
servloes to your home and offloe.
TIe nedIa are µuIIIng IIeIr noney vIere IIeIr nouIIs
are. In Luroµe, IIe \a// S/rcc/ 1ourna/ µuLIIsIes a nonIIIy
nagazIne InserI caIIed "Convergence.¨ Eusincss \cc/ runs
an annuaI conIerence enIIIIed "TIe GIoLaI Convergence
SunnII.¨
WIII IIe nedIa runnIng oII aI IIe nouII aLouI IIe con-
vergence conceµI, Is II any vonder IIaI nany corµoraIIons
vere aII Ioo eager Io junµ on IIe convergence Landvagon?
WIen asked Ly Ior/unc nagazIne vIaI unIque oµµorIu-
nIIIes Conµaq vas IookIng aI, IIe nev CLO, MIcIaeI CaµeI-
Ias, saId: "You'II sIarI Io see devIces converge. WIo In IIe
vorId doesn'I vanI Io Iave IIeIr PaInPIIoI, IIeIr IeIeµIone,
and IIeIr CD µIayer aII vraµµed InIo one so IIey don'I Iave
Io carry IIree IIIngs on IIeIr LeII?¨
II vIII never Iaµµen. TecInoIogIes don'I converge. TIey
dIverge. YeI IIe Iyµe narcIes on.
AccordIng Io Ianous IuIurIsI IaIII Poµcorn, "Soneday
In IIe near IuIure I'II Le vaIcIIng A//y McEca/. I IIke IIe ouI-
III sIe's vearIng. So I µuI ny Iand on IIe TV screen and
sIe'II InIerruµI IIe µrogran and say, 'IaIII, do you IIke vIaI
I'n vearIng?' 'YeaI,' I'II say. 'I IIke your suII.' And sIe'II say,
'Here are IIe coIors II cones In.' I'II IeII AIIy IIaI I'II Iake jusI
navy or LIack, nayLe LoII. And sIe'II say, 'No you von'I,
IaIII. You've aIready goI Ioo nany navy and LIack ouIIIIs In
your cIoseI rIgII nov. I IIInk you sIouId Iry red IIIs IIne.'
And I'II say okay, and IIe nexI day IIe red suII Is deIIvered,
In ny sIze, Io ny Ione.¨
WIen asked Iov soon IIIs vouId Iaµµen, IIe Ianous
IuIurIsI reµIIed, "WIIIIn IIe nexI IIve years.¨
Don'I IoId your LreaII. AIIy McBeaI vIII Le Iucky II Ier
TV sIov Is sIIII on In IIve years, never nInd Ier µersonaI
sIoµµIng advIce servIce.
WIIIe IeIevIsIon seIs and IeIeµIones are suµµosedIy
LeconIng conµuIers, conµuIers are suµµosedIy LeconIng
aµµIIances IIaI can receIve IeIevIsIon and radIo µrogran-
nIng as veII as IeIeµIone caIIs.
BroadcasI.con, Ior exanµIe, oIIers IIve LroadcasIs oI
nore IIan IIIrIy IeIevIsIon sIaIIons and 370 radIo sIaIIons.
AII avaIIaLIe on your conµuIer IIrougI IIe nagIc oI IIe
InIerneI. MeanvIIIe, rIvaI ReaI NeIvorks Ias µuI IogeIIer
nore IIan 1,100 IIve sIaIIons on IIeIr IIneuµ. ConµeIIIor
InIerVU Ias µuI IogeIIer a neIvork Iocused on LusIness
servIces.
WIII µeoµIe vaIcI IeIevIsIon µrogrannIng on IIeIr con-
µuIers? Sure, sone µeoµIe vIII, LuI nosI IeIevIsIon vIevIng
Is IIkeIy Io conIInue Io Le done on TV seIs.
TIe IruII Is, IecInoIogIes dIverge. TIey don'I converge.
A quIck Iook aI IIsIory vaIIdaIes IIe dIvIsIon IIeory.
º RadIo used Io Le jusI radIo. Today ve Iave AM radIo
and IM radIo. We aIso Iave µorIaLIe radIos, car radIos,
IeadseI radIos, cIock radIos, caLIe radIo, and saIeIIIIe
radIo. RadIo dIdn'I conLIne vIII anoIIer nedIun. II
dIverged.
º TeIevIsIon used Io Le jusI IeIevIsIon. Today ve Iave
LroadcasI TV, caLIe TV, saIeIIIIe TV, µay-µer-vIev TV.
TeIevIsIon dIdn'I conLIne vIII anoIIer nedIun. II
dIverged.
º TIe IeIeµIone used Io Le jusI IIe IeIeµIone. Today ve
Iave reguIar IeIeµIones, cordIess IeIeµIones, car
µIones, ceII µIones, and saIeIIIIe µIones. AIso anaIog
and dIgIIaI µIones. TIe IeIeµIone dIdn'I conLIne vIII
anoIIer connunIcaIIons IecInoIogy. II dIverged.
º TIe conµuIer used Io Le jusI a conµuIer. Today ve Iave
naInIrane conµuIers, nIdrange conµuIers, nInIcon-
µuIers, neIvork conµuIers, µersonaI conµuIers, noIe-
Look conµuIers, and IandIeId conµuIers. TIe conµuIer
dIdn'I conLIne vIII anoIIer IecInoIogy. II dIverged.
PeoµIe oIIen conIuse vIaI's µossILIe vIII vIaI's µracII-
caI. AIIer NeII ArnsIrong and Buzz AIdrIn vaIked on IIe
noon In 1969, IIe nedIa vere IIIIed vIII sIorIes aLouI
IuIure coIonIsIs In sµace. WIere IIey vouId IIve. WIaI IIey
vouId eaI. Hov IIey vouId vork.
(TIe noon Is a greaI µIace Io vIsII, LuI Iov nany µeoµIe
vouId vanI Io IIve IIere?)
WIaI's µossILIe von'I Iaµµen jusI Lecause II's µossILIe.
II aIso Ias Io Le µracIIcaI. A conµuIer and TV conLInaIIon
vouId seen IIke a naIuraI, LuI AµµIe, TosIILa, GaIevay, and
oIIers Iave IauncIed conLInaIIon µroducIs IIaI IaIIed.
RecenIIy PIIIIµs venI one sIeµ IurIIer. In addIIIon Io a
conµuIer and a IeIevIsIon Iuner, IIe PIIIIµs DVX8000 Iea-
Iures an IM/AM radIo and a CD/DVD µIayer. WIaI nore
couId you vanI?
SInµIIcIIy, ease oI use, reIIaLIIIIy, IIgII veIgII, µroIec-
IIon agaInsI earIy oLsoIescence, and Iov cosI, Ior exanµIe.
InsIead oI accessIng IIe InIerneI Iron your Ione IeIevI-
sIon seI, II Is nucI nore IIkeIy IIaI you vIII soneday Iave
an InIerneI aµµIIance. An eIecIronIc nacIIne devoIed Io
InIerneI connecIIons onIy, esµecIaIIy Ior e-naII use.
AcIuaIIy, IIere are a nunLer oI sucI µroducIs on IIe nar-
keI, rangIng In µrIce Iron S100 Io S200 µIus IIe servIce Iee.
TIey IncIude IIe MaIISIaIIon Ly CIdco, TeIMaII Ly SIarµ LIec-
IronIc, IIe MaIIBug Ly LandeI TeIecon, and IIe PosIBox Iron
VTecI IndusIrIes. (TIe BIackBerry Is anoIIer dIvergence
devIce IIaI Ias quIIe a Iev enIIusIasIIc users.)
WIy are dIvergence µroducIs generaIIy vInners and
convergence µroducIs generaIIy Iosers? One reason Is IIaI
convergence µroducIs are aIvays a conµronIse. TIe InIeI
nIcroµrocessor InsIde IIe PIIIIµs DVX8000 sIouId Le good
Ior IIree years or so. TIe Ione-IIeaIer IaII oI IIe nacIIne
sIouId IasI IvenIy years.
BeIore IeIevIsIons conLIne vIII conµuIers, you vouId
IIInk TV seIs vouId conLIne vIII vIdeocasseIIe recorders.
You can Luy conLInaIIon TV/VCRs, oI course, LuI nosI
µeoµIe don'I. RecenIIy ve vIsIIed a consuner eIecIronIcs
sIore IIaI Iad a vaII IuII oI sucI µroducIs.
"Hov are saIes oI your conLInaIIon IeIevIsIon/VCRs?¨
ve asked IIe cIerk. "InIInIIesInaI,¨ Ie reµIIed.
Nor are nany conLInaIIon vasIer/dryers soId. Or nIcro-
vave/sIoves. Or IeIeµIone/IeIeµIone ansverIng nacIInes.
Or coµIer/µrInIer/Iax nacIInes.
TIe one gIInner oI Ioµe Ior IIe convergence conceµI Is
IIe cIock radIo. LnIIusIasIs are Iond oI cIIIng IIe cIock
radIo as a LrIIIIanI exanµIe oI IIe µover oI convergence
IIInkIng. BuI In sone vays, a cIock radIo Is noI a duaI Iunc-
IIon devIce aI aII. RaIIer, II's a sIngIe-IuncIIon nusIc aIarn
cIock, a vay oI geIIIng you ouI oI Led In IIe nornIng vIII-
ouI IIe sIock oI an earII-sIaIIerIng noIse. NoI nany µeoµIe
use IIeIr cIock radIos as a vay Io µIay IIe radIo.
OIIer IIan IIe cIock radIo, IIe IIsIory oI convergence
µroducIs Ias Leen raIIer dIsnaI. AIIer WorId War II, IIe Ivo
LIggesI IndusIrIes In AnerIca vere IIe auIonoIIve IndusIry
and IIe aIrµIane IndusIry. Sure enougI, µundIIs IIougII IIaI
IIe car vas goIng Io converge vIII IIe µIane.
In 1946, Ted HaII InIroduced IIs IIyIng Car, vIIcI vas
receIved Ly a vIIdIy enIIusIasIIc µuLIIc. Roads soon vouId
Lecone oLsoIeIe, IraIIIc jans a IIIng oI IIe µasI. You couId go
anyvIere, anyIIne, vIII conµIeIe Ireedon oI novenenI.
Lvery najor aIrcraII nanuIacIurer In AnerIca Ioµed Io casI
In on HaII's InvenIIon. TIe Iucky Luyer vas ConvaIr.
In 1uIy oI IIaI year, ConvaIr InIroduced HaII's IIIgII oI
Iancy as IIe ConvaIr ModeI 118 ConvAIrCar. Conµany nan-
agenenI conIIdenIIy µredIcIed nInInun saIes oI 160,000
unIIs a year. TIe µrIce vas S1,500 µIus an exIra cIarge Ior IIe
vIngs, vIIcI vouId aIso Le avaIIaLIe Ior renIaI aI any aIrµorI.
In sµIIe oI IIe Iyµe, onIy Ivo ConvAIrCars vere ever
LuIII. BoII are nov saId Io resI In a vareIouse In LI Cajon,
CaIIIornIa.
TIree years IaIer, MouIIon TayIor InIroduced IIe Aero-
car, a sµorIy runaLouI vIII deIacIaLIe vIngs and IaII. TIe
Aerocar receIved a Irenendous anounI oI µuLIIcIIy aI IIe
IIne. TIe Iord MoIor Conµany consIdered nass-µroducIng
II. BuI TayIor's Aerocar neI vIII IIe sane µredIcIaLIe IaIe
as HaII's IIyIng Car.
II's dIvergence IIaI aInosI aIvays IrIunµIs, noI conver-
gence. Today ve Iave nany Iyµes oI aIrµIanes (jeI µIanes,
µroµ µIanes, IeIIcoµIers) and nany Iyµes oI auIonoLIIes
(sedans, converIILIes, sIaIIon vagons, sµorI uIIIIIy veIIcIes),
LuI aInosI no IIyIng cars.
WouId-Le convergenIsIs sIouId aIso sIudy IIe conLIna-
IIon auIonoLIIe/LoaI InIroduced vIII greaI IanIare Ly
AnµIIcar, a Gernan conµany. LIke aII convergence µrod-
ucIs, IIe AnµIIcar µerIorned neIIIer IuncIIon very veII.
"DrIves IIke a LoaI, IIoaIs IIke a car,¨ vas IIe Luyers' verdIcI.
Bad Ideas never reaIIy dIe. PauI MoIIer Ias sµenI IIIrIy-
IIve years deveIoµIng IIe Skycar, a µersonaI IIyIng nacIIne
IIaI Is as easy Io use as a car. Today, S50 nIIIIon, IorIy-IIree
µaIenIs, and IIree vIves IaIer, IIs drean Is ready Ior IIIIoII.
Don'I IaugI. WIaI vIII Iook IooIIsI severaI decades Iron
nov Is oIIen Iaken serIousIy Ioday. As recenIIy as 1une 24,
1999, IIe \a// S/rcc/ 1ourna/ ran a najor arIIcIe on MoIIer's
sky drean on IIe IronI µage oI IIs MarkeIµIace secIIon.
(ProIessor MoIIer Ias Iaken sevenIy-Ivo orders, vIII a
S5,000 deµosII, Ior IIe Skycar.)
WIaI noIIvaIes MoIIer aIso noIIvaIes MIcrosoII. TIe
conµany µoured nIIIIons oI doIIars InIo WeLTV, a najor
eIIorI Io Iurn AnerIca's 100 nIIIIon IeIevIsIon-ovnIng
IouseIoIds InIo InIerneI exµIorers.
Sure, WeLTV Is cIosIng In on 1 µercenI oI IIe narkeI,
LuI does any convergence µroducI Iave nucI oI a IuIure?
TIere's a IoI oI evIdence IIaI nIxIng "InIeracIIvIIy,¨ an
InIerneI aIIrILuIe, vIII IIe "µassIvIIy¨ oI IIe IeIevIsIon exµe-
rIence jusI Isn'I goIng Io vork. TIne Warner InIroduced IIe
IuII ServIce NeIvork, IIe IIrsI dIgIIaI InIeracIIve TV neIvork,
In OrIando, IIorIda, In 1994 and sIuI II dovn Ivo years IaIer.
A conµany caIIed ACTV vas Iounded In 1989 Io LrIng
InIeracIIve TV Io IIe µuLIIc. On average IIe conµany Ias
IosI S7 nIIIIon a year Ior IIe µasI decade. IInaIIy, ACTV Is
roIIIng ouI IIs IIrsI µroducI In µarInersIIµ vIII Iox SµorIs.
Ior S10 a nonII, Iox Ians vIII Le aLIe Io use IIeIr renoIe
conIroI Io cIIck on Io dIIIerenI canera angIes, µuII uµ sIaIs,
or cuI Io InsIanI reµIays aI any IIne durIng IIe gane.
WIII IIe average coucI µoIaIo vanI Io µuI dovn IIs Bud
LIgII Iong enougI Io cIange IIe canera angIe? We don'I
IIInk so. AI IeasI noI vIen II's IIIrd dovn and goaI Io go Ior
IIe Ione Iean.
TV dIrecIors geI µaId LIg Lucks Io do IIaI Ior us. WIy
vouId IIe average vIever vanI Io do II Ior noIIIng?
NoI onIy IIaI. SµendIng IIe IIne IIgurIng ouI IIe LesI
canera angIe vIII cause IIe vaIcIer Io nIss IIe µIay. NoI Io
nenIIon IIe IrusIraIIons oI IIe oIIer µeoµIe In IIe roon vIo
do noI Iave IIe renoIe conIroI In IIeIr Iands.
TecInoIogy Iends Io IrIunµI over IogIc. "II you LuIId II,
IIey vIII cone.¨ BIII GaIes, IIe nanager oI IIe IIgI-IecInoIogy
Iean, Is geIIIng IIs µIayers InvoIved In convergence In a LIg
vay. In addIIIon Io IIs WeLTV InvesInenI, GaIes µuI S5 LIIIIon
oI MIcrosoII's noney InIo AT&T Io IeIµ IIe conµany µurcIase
a caLIe TV oµeraIIon. In reIurn, AT&T Ias agreed Io IIcense a
nInInun oI IIve nIIIIon coµIes oI MIcrosoII's WIndovs CL
oµeraIIng sysIen.
TIe Ivo conµanIes Ioµed IIaI a GeneraI InsIrunenI
seI-Ioµ Lox, IIe DTC-5000, vouId Le IIe enIry µoInI Ior aII
IIe dIgIIaI InIornaIIon IIovIng InIo IIe Ione. In addIIIon Io
IIve Iundred cIanneIs oI InIeracIIve caLIe, IIe DTC-5000
vouId aIso IandIe IeIeµIone servIce, vIdeo on denand,
sIereo audIo, vIdeo ganes, and InIerneI access.
RecenIIy AT&T Lacked ouI oI IIs connIInenI Io
MIcrosoII, IeavIng 240,000 oI IIose advanced seI-Ioµ Loxes
gaIIerIng dusI In a vareIouse.
TIe Skycar, IIe AnµIIcar, IIe seI-Ioµ Lox. BIIIIons oI
doIIars Iave Leen vasIed cIasIng IIe convergence drean.
BuI vIy do ve nake sucI a IederaI case ouI oI IIe conver-
gence IoIIIes?
Because Lrands cannoI Le LuIII vIII convergence IIInkIng.
UnIess you can cIearIy see IIe IaIIacy LeIInd IIe conver-
gence conceµI, you are unIIkeIy Io LuIId a successIuI InIerneI
Lrand. MosI InIerneI Ideas, nosI InIerneI Lrands, nosI
InIerneI conµanIes are Lased on convergence conceµIs.
TIaI's vIy nosI InIerneI Lrands are IIkeIy Io IaII.
º WIaI II you couId IInd Ione seIecIIon, Ione LuyIng,
Ione seIIIng, and Ione norIgages aI one-easy-Io-use
WeLsIIe? (HoneadvIsor.con)
º WIaI II you couId use your conµuIer Io IIsIen Io radIo
LroadcasIs? AII you need are sµeakers or IeadµIones
and audIo soIIvare. (SµInner.con, InagIneradIo.con,
NeIradIo.con)
º WIaI II you couId use your conµuIer Io vaIcI IeIevIsIon
LroadcasIs? (WInTV, AT1 TecInoIogIes)
º WIaI II you couId use your noLIIe µIone Io surI IIe
WeL, send and receIve e-naII, and IransIer daIa Io a PC?
(NeoPoInI, NexIeI, SµrInI PCS)
º WIaI II you couId use your conµuIer Io IIsIen Io nusIc?
(MP3.con)
"PeoµIe used Io Iave Io go Io IIree or Iour dIIIerenI
µIaces Io geI soneIIIng done¨ Is IIe µrenIse oI nany oI our
cIIenIs. "WIII our nev WeLsIIe, IIey'II Le aLIe Io do one-sIoµ
sIoµµIng.¨ (WIooµs. AnoIIer cIIenI IIaI needs Io geI IIe
convergence sµeecI.)
We geI our IaIr cuI and our cIoIIes dry-cIeaned aI Ivo
dIIIerenI µIaces, LuI ve're quIIe sure IIaI doesn'I sµeII
"oµµorIunIIy¨ Ior sone vouId-Le enIreµreneur. (We used Io
geI our IaIr cuI and our naIIs done aI one µIace. Nov ve go
Io Ivo dIIIerenI µIaces. TIaI's dIvergence In acIIon.)
WIy do IIIngs dIvIde? DIvergence Is consIsIenI vIII IIe
Iavs oI naIure, convergence Is noI.
In µIysIcs, Ior InsIance, IIe Iav oI enIroµy says IIe
degree oI dIsorder In a cIosed sysIen aIvays Increases. By
conIrasI, a µaIIern oI convergence vouId nake IIIngs nore
orderIy.
In LIoIogy, IIe Iav oI evoIuIIon IoIds IIaI nev sµecIes
are creaIed Ly dIvergence oI a sIngIe sµecIes. Convergence,
InsIead, suggesIs IIaI IIe conLInIng oI Ivo sµecIes vIII
yIeId a nev one.
InvarIaLIy In naIure you see IIIngs dIvIde and noI con-
verge. We Iave Iundreds oI varIeIIes oI dogs and Iundreds
oI varIeIIes oI caIs, LuI very Iev caIdogs, or cIIckenducks,
or Iorsecovs.
A conµany goes agaInsI IIe Iavs oI naIure vIen II IrIes Io
LuIId an InIerneI Lrand on IIe convergence conceµI. "Are you
geIIIng IIree dIIIerenI kInds oI eIecIronIc nessages-voIce-
naII, e-naII, and Iax? IIne, ve can IIx IIaI Ior you.¨
TIese nev aII-In-one servIces are caIIed "unIIIed nessag-
Ing sIIes.¨ InsIead oI IavIng Io dIaI InIo your voIce-naII,
oµen your e-naII, or cIeck your Iax nacIIne, you jusI go Io
IIe sµonsor's WeL µage and geI aII your nessages (Mes-
sagescIIck.con, OneLox.con, TeIeLoI.con, nReacI.con).
WIaI's vrong vIII a unIIIed nessagIng servIce? NoII-
Ing, exceµI II drIves IIke a LoaI and IIoaIs IIke a car.
220
In LusIness IIere Is never onIy one vay Io do anyIIIng.
º Sone µeoµIe µreIer Io sIoµ In sµecIaIIy sIores, sone
µeoµIe In deµarInenI sIores.
º Sone µeoµIe µreIer Io sIoµ In suµernarkeIs, sone In
neIgILorIood sIores.
º Sone µeoµIe Iove sIoµµIng naIIs, sone don'I.
º Sone µeoµIe Iove Io Luy Iron caIaIogs, sone don'I.
º Sone µeoµIe go Io WaI-MarI Lecause IIe µrIces are Iov.
Sone µeoµIe go Io NeInan-Marcus Lecause IIe µrIces
are IIgI.
º Sone µeoµIe vIII Iurn Io IIe InIerneI Ior nucI oI IIeIr
sIoµµIng, InIornaIIon, and connunIcaIIon needs.
Sone µeoµIe von'I.
º Sone µroducIs and servIces vIII Le soId or dIsIrILuIed µrI-
narIIy over IIe InIerneI. Sone µroducIs and servIces von'I.
II your µroducI or servIce Is In IIe IaIIer caIegory, you
nIgII IIInk IIaI you Iave noIIIng Io gaIn Iron IIe NeI. BuI,
In our oµInIon, you vouId Le vrong.
1 R£ L AW 0F 1 RAN5 F 0RMA1 I 0N
The l nt er net r ev ol ut l on wl l l t r ansf or m
al l aspeot s of our l l ves.
11
TIe InIerneI vIII aIIecI your LusIness vIeIIer you junµ
on IIe WeL or noI. WIaI cIanges vIII IIe InIerneI LrIng Io
your LusIness and your IIIe? TIe IuIure Is aIvays Iuzzy, LuI
Iere are sone µredIcIIons.
1. PAP£R ßIR£C10RI£5 AR£ ß00M£ß.
You von'I Le surµrIsed Io Iearn IIaI IIe Incyc/opacdia Eri-
/annica, µuLIIsIed sInce 1768, vIII no Ionger Le avaIIaLIe In
a µaµer versIon. Iron nov on IIe encycIoµedIa vIII onIy Le
avaIIaLIe onIIne or on CD-ROM.
TIe conµanIes IIaI µuLIIsI "yeIIov µages¨ IeIeµIone
dIrecIorIes ougII Io Le concerned. TIe IIngers IIaI used Io
go vaIkIng IIougI IIose dIrecIorIes are nov novIng Io IIe
keyLoard.
"InIornaIIon aI your IIngerIIµs,¨ saId MIcrosoII In IIs
earIy adverIIsIng eIIorIs. And II's Irue. TIe µIunLer, IIe eIec-
IrIcIan, IIe veIerInarIan, and IIe auIo deaIer can Le nore
quIckIy Iound and evaIuaIed on an eIecIronIc dIrecIory IIan
on a µaµer one.
WIaI vIII Iaµµen Io IIe S12 LIIIIon IIaI conµanIes
sµend annuaIIy on yeIIov-µages adverIIsIng? Good quesIIon.
We'd Le concerned II ve nade our IIvIng µuLIIsIIng or seII-
Ing sµace In a µaµer dIrecIory.
Paµer dIrecIorIes are dooned Lecause oI IIe InIeracIIv-
IIy oI IIe InIerneI. TIe user can nanIµuIaIe a sIngIe con-
µuIer daIaLase In IIIeraIIy IIousands oI vays.
IurIIernore, IIe daIaLase can Le uµdaIed daIIy, even
IourIy. A IyµIcaI "yeIIov µages¨ dIrecIory cones ouI once a
year and Is ouI-oI-daIe IIe day II Iands on your doorsIeµ.
Lven sone greaI µaµer InsIIIuIIons are goIng Io Iave
IrouLIe conµeIIng In IIe IuIure. TIe 116-year-oId IuII
Oxjord In¸/is/ Dic/ionary couId cease Io exIsI aIIer II goes
onIIne on a suLscrIµIIon LasIs. TIe dIcIIonary, vIIcI runs Io
IvenIy voIunes and cosIs S2,900, Is a dInosaur In IIe InIer-
neI age.
1PL LAW 0I 1PAN5I0PMA1I 0N 221
2. PAP£R CA1AL065 FAC£ AN UNC£R1AIN FU1UR£.
MaIILoxes across IIe counIy are sIuIIed vIII counIIess caIa-
Iogs every day. AccordIng Io one esIInaIe, 17.6 LIIIIon caIa-
Iogs vere naIIed In IIe U.S. IasI year. TIaI's sIxIy-Iour caIa-
Iogs Ior every nan, vonan, and cIIId.
TIaI nay cIange. CaIaIogs oI aII Iyµes vIII IInd IIen-
seIves under severe eIecIronIc conµeIIIIon. TIere are a nun-
Ler oI reasons vIy a WeL caIaIog Is suµerIor Io a µaµer one.
An eIecIronIc caIaIog can Le InIeracIIve. You can sorI Ly
Iyµes, Ly sIzes, Ly coIors, Ly µrIces, Ly veIgIIs, and so on.
TIInk Anazon.con, Ior exanµIe. You can sorI Ly auIIor, Ly
IIIIe, Ly suLjecI, Ly caIegory. In conIrasI, a µaµer caIaIog oI
Looks Is so InµracIIcaI IIaI Iev are µrInIed and dIsIrILuIed,
exceµI Ior narrov seIecIIons.
IurIIernore, an eIecIronIc caIaIog Is nucI Iess exµen-
sIve Io dIsIrILuIe. Once IIe naIerIaI Is conµosed In an eIec-
IronIc IornaI, IIe cosI oI dIsIrILuIIon Is essenIIaIIy zero.
ManuIacIurIng a µaµer caIaIog, Iovever, can Le cosIIy. 1usI
Io µrInI IIose 17.6 LIIIIon naII-order nIssIIes requIres 3.35
nIIIIon Ions oI µaµer.
So vIaI do you do II you're L.L. Bean? Good quesIIon.
SaIes Iave Leen essenIIaIIy IIaI aI L.L. Bean Ior IIe IasI
Iev years. TIaI µuIs µressure on IIe LoIIon IIne Lecause
IIe conµany µrInIs and naIIs caIaIogs IIIrIy IInes a year.
And µrInIIng and naIIIng cosIs conIInue Io rIse.
So L.L. Bean oµens uµ a WeLsIIe Io seII IIe sane ner-
cIandIse Iound In IIe caIaIog. Is IIIs a good Idea or noI?
Yes and no. In generaI, vIen you Lroaden IIe scoµe oI a
Lrand, you veaken IIe Lrand. In IIe Iong run, nuIIIµIe dIs-
IrILuIIon cIanneIs suLsIanIIaIIy Increase cosIs and do noI
do nucI Io Increase saIes.
A IuIIy IuncIIonIng WeLsIIe vIII conµuIer Iardvare
and servIce µeoµIe Lacked Ly a µrogrannIng sIaII Is noI an
InexµensIve µroµosIIIon.
To geI IIe conµany novIng agaIn, L.L. Bean Is oµenIng
a cIaIn oI reIaII sIores, In addIIIon Io IIs nIne IacIory ouIIeI
sIores. OuIIeIs are one IIIng, IIey IeIµ you geI rId oI IeII-
overs. WIen you oµen reIaII sIores, Iovever, you are con-
µeIIng dIrecIIy vIII yourseII, never a good Idea.
A LeIIer soIuIIon Ior L.L. Bean and oIIer caIaIog conµa-
nIes Is Io sIIII IIe enIIre oµeraIIon Io IIe WeL. Don'I Iry Io
naInIaIn Ivo exµensIve dIsIrILuIIon cIanneIs Ior a Lrand
vIose narkeI Is IInIIed.
You can'I do IIIs overnIgII. You need IransIIIon IIne.
We vouId graduaIIy reduce IIe nunLer oI caIaIogs naIIed
and sIIII sone oI IIe savIngs InIo µuLIIcIIy and adverIIsIng
µrograns Ior IIe WeLsIIe. You need a vay Io drIve µrosµecIs
Io your sIIe.
One oI IIe najor advanIages oI orderIng µroducIs Iron
a conµuIer raIIer IIan Iron a caIaIog Is IIe InIeracIIvIIy oI
IIe WeLsIIe. You knov InsIanIIy vIeIIer or noI IIe µroducI
Is In sIock In IIe coIor and sIze you vanI.
TIIs, oI course, Is onIy a IIeoreIIcaI advanIage. Many
sIIes Iave yeI Io InIegraIe IIeIr vareIousIng oµeraIIons vIII
IIeIr order-enIry sysIens. WIen you caII Io order Iron a
caIaIog, InevIIaLIy aI IeasI one oI IIe IIens you vanI Is ouI
oI sIock or Lack-ordered.
SIouId every caIaIog conµany sIIII Io IIe WeL? OI
course noI. TIere Is never onIy one vay Io do anyIIIng. Ior
cerIaIn µroducIs In cerIaIn caIegorIes, IIe LeIIer sIraIegy
nIgII Le Io renaIn a caIaIog-onIy conµany. As caIaIog
naIIIngs Iaµer oII, IIe renaInIng conµanIes In IIe IIeId
vIII IInd IIaI IIeIr IndIvIduaI caIaIogs Iave Lecone nore
µroducIIve.
3. 1R£ £LAB0RA1£ FULL-C0L0R BR0CRUR£ WILL
B£C0M£ £XC££ßIN6LY RAR£.
Many conµanIes vIII reIIInk IIeIr use oI exµensIve
LrocIures, vIIcI are vIrIuaIIy ouI-oI-daIe IIe day IIey
cone oII IIe µress. II's a IoI nore eIIIcIenI Io IeI a µrosµecI
sIroII IIrougI your WeLsIIe Io Iook aI IIe sane InIornaIIon.
II soneIIIng caIcIes IIe µrosµecI's eye, IIey can aIvays
µrInI ouI IIe µage usIng one oI IIe nany InexµensIve coIor
µrInIers nov on IIe narkeI.
One vay Io µronoIe a senInar, Ior exanµIe, Is Io send ouI
InexµensIve nass naIIIngs (µosIcards nayLe) and IIen InvIIe
µrosµecIs Io geI aII IIe deIaIIs on your WeLsIIe.
AnnuaI reµorIs oI corµoraIIons are anoIIer caIegory oI
µrInIed LrocIure IIaI Is Ieaded Ior exIIncIIon. II nay Iake a
vIIIe, Iovever, Ior IIe SecurIIIes and LxcIange ConnIs-
sIon Io cIange IIe reguIaIIons IIaI govern IIeIr use.
4. CLA55IFI£ß AßV£R1I5IN6 WILL 5RIF1 10 1R£ W£B.
A LIg cIunk oI nevsµaµers' revenues cones Iron IIeIr cIas-
sIIIed adverIIsIng. TIIs Is a caIegory IIaI vIII cone under
Innense µressure Iron IIe WeL. Houses, aµarInenIs, and
joL IIsIIngs, In µarIIcuIar.
Take IIe IeIµ-vanIed caIegory, Ior exanµIe. TIe IIrsI
WeLsIIe Io IackIe IIIs caIegory vas MonsIer.con, vIIcI
Ioday Ieads IIe WeL In onIIne joL IIsIIngs.
MonsIer.con LoasIs 800,000 joL ads and a daIaLase oI
16 nIIIIon resunes. WIaI's nore, MonsIer.con Is µroIIIaLIe,
IavIng racked uµ IveIve consecuIIve µroIIIaLIe quarIers. In
a recenI quarIer, IIe sIIe generaIed S33 nIIIIon In oµeraIIng
µroIII on S129 nIIIIon In revenue.
Long Iern, IIe InIerneI vIII serIousIy erode cIassIIIed
adverIIsIng, a najor source oI IocaI nevsµaµer revenues.
WIaI sIouId IIe Dai/y Eu¸/c do aLouI IIIs?
In reIrosµecI IIe ansver Is easy. Oµen a joL-IIsIIng WeL-
sIIe LeIore MonsIer.con cane on IIe scene. WIo knovs
nore aLouI IIe IeIµ-vanIed narkeI IIan IIe nevsµaµer
IndusIry? TIe conµanIes IIaI sµend noney Ioday vIII
MonsIer.con Iave Leen IIeIr cusIoners Ior years.
TIaI's IIe vay II oIIen Is. TIe µeoµIe vIo knov IIe nosI
aLouI a gIven narkeI or IndusIry are oIIen IIe IeasI IIkeIy Io
see cIange conIng. TIe noIIo oI nany najor corµoraIIons
Is: "Hear no cIange. See no cIange. Sµeak no cIange.¨
5. 1R£ P051AL 5£RVIC£ W0N'1 B£ ß£LIV£RIN6 A5
MUCR MAIL.
TIe vords "LeIIer CarrIer¨ used Io Le µronInenIIy dIs-
µIayed on µosIaI servIce unIIorns. No nore. Today IIe aver-
age IeIIer carrIer doesn'I carry very nany IeIIers. TIaI LusI-
ness Ias gone eIecIronIc, eIIIer Io µIone, IacsInIIe, or
e-naII.
In a recenI year, nore IIan Iour IrIIIIon e-naII nessages
vere senI, nore IIan IorIy IInes IIe 99.7 LIIIIon µIeces oI
IIrsI-cIass naII deIIvered Ly IIe µosIaI servIce.
TIe IargesI segnenI oI IIrsI-cIass naII Ioday Is LIIIs,
InvoIces, and IInancIaI sIaIenenIs. TIe sendIng and µayIng
oI LIIIs aIone accounIs Ior S17 LIIIIon, or aInosI 30 µercenI
oI IIe µosIaI servIce's revenue. TIaI segnenI Is goIng Io Le
esµecIaIIy vuIneraLIe Io IIe InIerneI.
Look aI vIaI Iaµµens vIen a conµany LIIIs a cusIoner
Ior a µroducI or servIce IIe cusIoner Ias ordered-Ior
exanµIe, a IeIeµIone conµany's nonIIIy µIone LIII.
TIe IeIeµIone conµany's naInIrane conµuIer µrInIs ouI
an InvoIce, vIIcI Is sIuIIed InIo an enveIoµe, and IIrsI-cIass
µosIage Is aµµIIed. AIIer IIe µosIaI servIce deIIvers IIe LIII, IIe
cusIoner vrIIes a cIeck, µuIs II In IIe reIurn enveIoµe, and
adds a IIrsI-cIass µosIage sIanµ. AIIer IIe µosIaI servIce deIIv-
ers IIe enveIoµe, IIe µIone conµany oµens IIe enveIoµe and
deµosIIs IIe cIeck In IIs Lank accounI. (So Iar IIe roundIrIµ
µosIage aIone Ias cosI sIxIy-eIgII cenIs, nInus IIe µosIaI ser-
vIce's snaII dIscounI Ior µresorIed IIrsI-cIass naII.)
WIaI Iaµµens nexI Is IIe InIeresIIng µarI. TIe Lank's
conµuIers nake an uµvard adjusInenI In IIe anounI oI
noney In IIe µIone conµany's accounI and a dovnvard
adjusInenI In IIe anounI oI noney In IIe cusIoner's
accounI. (TIIs, oI course, Is IIe case vIen LoII IIe seIIer
and Luyer use IIe sane Lank. OIIervIse sone IransacIIons
LeIveen Lanks are necessary.)
AII IIaI µaµervork, aII IIaI µosIage, aII IIaI Iunan
eIIorI jusI Io sIIII a nunLer In a conµuIer Iron CoIunn A
Io CoIunn B.
PeoµIe IorgeI IIaI noney, Ior IIe nosI µarI, Is noI sIeeI
engravIngs µrInIed on µaµer. II's noI even goId In a vauII.
Money Is eIecIronIc LIIs oI InIornaIIon sIored on conµuIers
around IIe vorId. To sIIII noney Iron one accounI Io
anoIIer, you sIIII IIe LIIs.
TIe sendIng and µayIng oI LIIIs onIIne Is an Idea vIose
IIne Ias cone. We Ioresee a consIanI rIse In eIecIronIc Lank-
Ing and a consIanI decIIne In IIe nunLer oI µIeces oI IIrsI-
cIass naII senI and receIved. TIIs Is a Irend IIaI can'I Le sIoµµed.
II you IIInk IIaI can'I Iaµµen soon, Iook aI IIe µIenon-
enaI rIse In e-naII, vIIcI Is IncreasIng aI IIe raIe oI aInosI
50 µercenI a year. Can e-LankIng Le Iar LeIInd?
AccordIng Io a recenI reµorI Issued Ly IIe GeneraI
AccounIIng OIIIce, "TIe PosIaI ServIce nay Le nearIng IIe
end oI an era.¨
6. FINANCIAL 5£RVIC£5 0F ALL 1YP£5 WILL 5RIF1 10
1R£ W£B.
Because noney Is noIIIng nore IIan LIIs on a conµuIer,
IIe enIIre IInancIaI servIces IndusIry Is Ieaded Ior IIe
InIerneI.
II jusI nakes sense Io Iave your Lank accounI In your
Ledroon or oIIIce, vIere you can cIeck InvoIces, µay LIIIs,
sIIII Iunds, and Lorrov noney, aII Ly nanIµuIaIIng LIIs on a
Lank's conµuIer.
TIe conµuIer revoIuIIonIzed IIe LankIng IndusIry once
LeIore vIII IIe InIroducIIon oI IIe auIonaIed IeIIer
nacIIne. WIaI IIe ATM Ias sIarIed, IIe conµuIer (In con-
LInaIIon vIII IIe InIerneI) vIII IInIsI. TIere's no reason
vIy LankIng and nosI IInancIaI IransacIIons, IncIudIng
Insurance and sIock Lrokerage, sIouId noI Le IandIed on
IIe InIerneI.
SIIIIIng IInancIaI IransacIIons Io IIe InIerneI can resuII
In suLsIanIIaI savIngs. II cosIs, on average, one-IenII as
nucI Ior a Lank Io IandIe a IInancIaI IransacIIon on IIe
WeL as II does on an ATM nacIIne. And one-IorIIeII as
nucI on IIe WeL as vIII a IeIIer In IIe Lank IIseII.
TIaI's IIe IIµ oI IIe IInancIaI IceLerg. TIe reaI savIngs
vIII cone Iron InvoIcIng and LIII µayIng. ALouI sevenIy LII-
IIon cIecks are Issued In IIe UnIIed SIaIes every year. (TIaI's
260 cIecks Ior every µerson.) MucI oI IIIs µaµer LIIzzard
can Le easIIy noved Io IIe NeI, savIng noney and Inµrov-
Ing IIe record keeµIng oI LoII LusInesses and IndIvIduaIs.
One concern, oI course, Is IIe InaLIIIIy oI your conµuIer
Io deaI ouI reaI noney IIe vay an ATM nacIIne does. BuI
IIIs nIgII noI Iurn ouI Io Le nucI oI a µroLIen. Paµer
noney Is decIInIng In InµorIance as nore µeoµIe sIIII Io
credII, deLII, and cIeck cards Ior IIe LuIk oI IIeIr µur-
cIases.
You can sµend a veek on IIe road (and ve Iave) vIII-
ouI usIng µaµer noney, vIII IIe exceµIIon oI snaII LIIIs Ior
IIµs, IaxIs, and nevsµaµers. And even IaxIcaL conµanIes are
sIarIIng Io Iake credII cards.
II vIII µroLaLIy Le sone IIne LeIore LeII-nen aI IoIeIs
or µorIers aI aIrµorIs svIµe credII cards. (WIII credII cards,
IIey vouId Iave Io decIare aII oI IIeIr IIµ Incone on IIeIr
Iax reIurns.)
?. 1R£ PARC£L ß£LIV£RY BU5IN£55 WILL 50AR.
TIe InIerneI vIII greaIIy sIInuIaIe LusIness Ior aII oI IIe
µarceI deIIvery conµanIes. UPS (UnIIed ParceI ServIce)
nIgII vanI Io consIder cIangIng IIs nane Io IPS (InIerneI
ParceI ServIce).
As a resuII oI IIe Increases In µarceI voIune, you can
exµecI deIIvery µrIces Io IoId sIeady or even decIIne.
TIe veak IInk In IIe sysIen Is IIe IronI door oI IIe cus-
Ioner. WIII so nany DINK (douLIe Incone, no kIds) IanI-
IIes In IIe counIry, nany cusIoners vIII noI Le Ione vIen
IIe deIIvery µerson arrIves.
Sone conµanIes are aIready vorkIng on IIIs µroLIen.
SnarILox, Ior exanµIe, Is a Iocked, reInIorced Lox IIaI
cones In varIous sIzes and sIIs ouIsIde your Ione. To aIIov
access Io aII deIIvery servIces, IIe devIce vIII Le vIred Io IIe
InIerneI. WIen IIe Lox ovner nakes an onIIne µurcIase,
sµecIaI soIIvare vIII creaIe and IransnII a code Ior eacI
order. A deIIvery drIver can µuncI In IIe code on a keyµad
Io unIock IIe Lox and nake IIe deIIvery.
8. IN1£RN£1 R£1AILIN6 WILL B£C0M£ A PRIC£ 6AM£.
WIII nosI µroducIs Le LougII In cyLersµace? ProLaLIy noI.
BuI IIe InIerneI vIII drasIIcaIIy cIange IIe Iocus oI nosI
reIaIIers.
Sone reIaIIers are vorrIed. Hone DeµoI, vIIcI Is on
IIe verge oI seIIIng IIs ovn µroducIs over IIe InIerneI, Is
raµµIng IIe knuckIes oI suµµIIers IIaI Iave sInIIar dreans.
TIe reIaIIer recenIIy senI a IeIIer Io aII oI IIs vendors IeIIIng
IIen Io IIInk IvIce LeIore seIIIng IIeIr IooIs and equIµnenI
dIrecIIy Io consuners IIrougI IIeIr WeLsIIes.
"We IIInk II Is sIorIsIgIIed Ior vendors Io Ignore IIe
added vaIue IIaI our reIaII sIores conIrILuIe Io IIe saIes oI
IIeIr µroducIs,¨ sIaIed IIe Hone DeµoI IeIIer.
TIe conµany Is vorrIed IIaI IIeIr vendors vIII seII µrod-
ucIs on IIe WeL aI µrIces Iover IIan Hone DeµoI. And IIey
sIouId Le vorrIed. TIe InIerneI Is InIerenIIy a Iess exµensIve
vay Io dIsIrILuIe a µroducI or servIce.
TIe reIaII µrIce gane causes nany µroLIens Ior nanu-
IacIurers. ReIaIIers oIIen denand excIusIvIIy In IIeIr IerrIIo-
rIes so IIey can adverIIse "IIe IovesI µrIce In Iovn.¨ Manu-
IacIurers go aIong vIII IIese denands Ly µroducIng a
LevIIderIng varIeIy oI nodeIs, coIors, and sIzes. (MaIIress
and LeddIng nakers are noIorIous In IIIs resµecI.)
WaI-MarI and IIe nass nercIandIsers are knovn Ior
denandIng sµecIaI sIzes so IIey can geI LIgger dIscounIs
and cusIoners can'I as easIIy conµare µrIces vIII IIe sane
µroducIs aI oIIer reIaII sIores. TIen IIere are sµecIaI µur-
cIases, end-oI-µroducI runs, oLsoIeIe µroducIs, nanuIac-
Iurers' seconds, and a IosI oI oIIer sIraIegIes Ior generaIIng
Iov µrIces on IIe reIaII IIoor. TIere are aIso gray-narkeI
µroducIs LrougII In Iron oIIer counIrIes. (WIIcI Is vIy
you nIgII see a MacI 3 razor In CosIco vIII IIe µackage
µrInIed In IrencI.)
TIe InIerneI vIII cIange IIe naIure oI reIaIIIng Ly
µuIIIng IIe µIug on nany oI IIese "µrIce¨ µronoIIons. II aII
IIe cusIoner reaIIy vanIs Is IIe aLsoIuIe IovesI µrIce, IIen
IIe µIace Io sIoµ Is IIe NeI.
InsIead oI readIng a IoI oI dIIIerenI ads or drIvIng Iron
sIore Io sIore, a µrosµecI can sII dovn aI a keyLoard and
quIckIy conµare µrIces on a sInIIar IIen Iron a Iarge nun-
Ler oI sources.
IurIIernore, you can aIso use an "agenI¨ Io IeIµ you.
AgenI conµanIes IIke CIIckTIeBuIIon, DeaIPIIoI, and
RUSure Iave deveIoµed soIIvare IIaI vIII scan varIous
sIoµµIng sIIes Ior µrIce and deIIvery daIa, IIen sorI IIe
InIornaIIon (nosI oIIen Ly µrIce).
DeaITIne.con, Ior exanµIe, adverIIses IIaI II IeIµs you
IInd "exacIIy vIaI you vanI, aI IIe µrIce you vanI, vIer-
ever you vanI.¨ BookPrIcer.con vIII IeIµ you IInd "IIe Iov-
esI µrIce Ior any Look In under 30 seconds.¨
SµeakIng oI Looks, Anazon.con vas dIscounIIng LesI-
seIIers Ly uµ Io 40 µercenI. BooksanIIIIon.con knocks 46
µercenI oII LesIseIIers. (Sone µuLIIsIers don'I gIve IIeIr
ovn auIIors IIaI LIg a dIscounI. We sIouId knov.)
TIen IIere's Buy.con vIII IIe Iag IIne "TIe IovesI
µrIces on LarII.¨ TIe conµany Is ruIIIessIy connIIIed Io
LeIng IIe µrIce Ieader, even II IIIs neans IosIng noney on
every saIe. IIs IecInoIogy searcIes conµeIIIors' sIIes Io
nake sure Buy.con Ias IIe IovesI µrIces on IIe WeL.
RecenIIy IIe PaIn III OrganIzer soId Ior S249 on Buy.con,
S330 aI ConµUSA, and S369 aI IIe nanuIacIurer's ovn
WeLsIIe.
Buy.con vas IIe IasIesI-grovIng conµany In U.S. IIs-
Iory. UnIorIunaIeIy, II Iasn'I IIgured ouI Iov Io nake
noney. In a recenI year IIe conµany dId S788 nIIIIon In
saIes, yeI nanaged Io Iose S133 nIIIIon. WIII Buy.con
Lecone BankruµI.con?
And Iook aI IIe µersonaI conµuIer narkeI. WIII DeII
and GaIevay doIng a LIg LusIness on IIe WeL, µIysIcaI
reIaIIers seIIIng PCs Iave Leen under µressure.
ConµUSA, IIe onIy µIysIcaI reIaIIer devoIed naInIy Io
µersonaI conµuIers, cIosed 14 oI IIs 211 suµersIores. TIe
Good Guys, vIIcI oµeraIes eIgIIy consuner eIecIronIcs
sIores In IIe WesI, announced IIaI II vas IeavIng IIe PC
LusIness aIIogeIIer.
Bear vIII us. PIysIcaI reIaIIIng Ias noIIIng Io Iear Iron
IIe InIerneI. BuI II Ias Io cIange IIs currenI enµIasIs on
Iov µrIce. II Ias Io IInd a nev Iocus.
9. 0U1£RN£1 R£1AILIN6 WILL B£C0M£ A
5£RVIC£ 6AM£.
1usI as IIe rIse oI naIIonaI Lrands µuI µressure on Sears Io
cIange IIs sIraIegy, IIe rIse oI IIe InIerneI vIII µuI µressure
on reIaIIers Io cIange IIeIr sIraIegIes, Ioo.
WIaI reIaII sIraIegIes vIII vork In IIe sIadov oI IIe
InIerneI? We LeIIeve IIe successIuI reIaIIer oI IIe IuIure vIII
need Io µIay a servIce gane, noI a µrIce gane. WIaI you
nIgII caII IIe NordsIron aµµroacI. (TIere's no vay a µIys-
IcaI reIaIIer can conµeIe vIII an InIerneI reIaIIer on µrIce.)
TIe successIuI ouIerneI reIaIIer oI IIe IuIure vIII Iave Io
enµIasIze IIe IvIn asµecIs oI IIe µIysIcaI exµerIence:
ToucI and TIne, or vIaI ve Iave Leen caIIIng "T 'n' T.¨
TIe ToucI asµecI oI IIe T 'n' T sIraIegy InvoIves IIe aLII-
IIy oI IIe µrosµecI Io IoId, IeeI, IasIe, sneII, IandIe, and Iry
IIe µroducI, noI jusI see and read aLouI II. (AIIer aII, you
can see IIe µroducI In IuII coIor on IIe InIerneI.)
Many reIaIIers vIII Iave Io nake IIeIr sIores a IoI nore
"IoucI¨ IrIendIy. Too nany µroducIs are Iocked In gIass caL-
IneIs or enIonLed In µackagIng IIaI greaIIy dIscourages
IandIIng.
In IIIs connecIIon, SaIurn's success In creaIIng a nore
cusIoner-IrIendIy envIronnenI Is a good µaIIern Ior nany
IradIIIonaI reIaIIers Io adoµI.
TIe SIarµer Inage aIso µIaces a IIgI vaIue on IIe IoucI
asµecI oI IIs sIores. CusIoners are encouraged Io IoucI and
Iry IIe varIeIy oI eIecIronIc devIces In IIe sIore.
TIe SeµIora cosneIIc cIaIn Is anoIIer exanµIe oI IIe
IuIure oI reIaIIIng. WIII IIs aIIracIIve envIronnenI, IeIµIuI
sIaII, and conµIeIe IInes, SeµIora µrovIdes everyIIIng a cos-
neIIc Luyer nIgII vanI-exceµI Iov µrIces. II you vanI IIe
aLsoIuIe IovesI cosneIIc µrIce, you'II Iave Io go Io IIe NeI.
MoIIon-µIcIure exIILIIors Iave gone IIrougI IIIs sane
µrocess as IIey Iave uµgraded IIeIr IacIIIIIes Io conµeIe
vIII HBO, SIovIIne, and Iree novIes on IeIevIsIon. Nov
you vIII IInd snaIIer IIeaIers, Iarger, nore conIorIaLIe
seaIs, nuIIIµIex screens. Lven IIe µoµcorn Is geIIIng LeIIer.
PrIce Isn'I everyIIIng. You can drInk Leer cIeaµer aI
Ione, LuI every nIgII IIe Lars In our neIgILorIood are
IIIIed vIII IvenIysoneIIIngs sµendIng IIeIr LundIes on Bud
LIgII.
TIe TIne asµecI oI IIe T 'n' T sIraIegy seens oLvIous.
UnIIke on IIe NeI, you save IIne vIen you Luy Iron a µIys-
IcaI reIaIIer Lecause you don'I Iave Io vaII Ior IedLx or
UPS Io deIIver your µurcIase.
YeI, IIe IIne IaII oI an eIIecIIve T 'n' T sIraIegy Is nore
suLIIe IIan IIaI. In IIeory you don'I vaII Ior your µurcIases
vIen you Luy aI reIaII. BuI In µracIIce IIe µrosµecI Is oIIen
IrusIraIed Lecause IIe sIore Is ouI oI sIock. "Cone Lack nexI
veek vIen our nev sIIµnenI vIII Le In.¨
TIe cusIoner oI IIe IuIure vIII noI IoIeraIe a µIysIcaI
reIaIIer vIII IrequenI ouI-oI-sIock µroLIens. Many oI IIese
µroLIens, oI course, sIen Iron IIe reIaIIer's enµIasIs on
Iov µrIce, vIIcI Ieads Io sµecIaI deaIs and sµecIaI µur-
cIases. ALandonIng a Iov-µrIce sIraIegy neans IIaI a
reIaIIer can concenIraIe on keeµIng IIs InvenIory uµ-Io-daIe
and conµIeIe.
NoI counIIng suµernarkeIs, convenIence sIores, and
sInIIar esIaLIIsInenIs, rougIIy IaII IIe µrosµecIs vaIk ouI
oI a generaI reIaII sIore vIIIouI LuyIng anyIIIng. TIe najor
reason Is IIaI IIe sIore dIdn'I Iave In sIock vIaI IIe cus-
Ioner vanIed.
MosI LusIness vIII µroLaLIy noI Le conducIed over IIe
WeL. BuI IIe InIerneI revoIuIIon vIII Iorce every LusIness Io
adjusI IIs sIraIegy. Iron a µrIce gane Io a servIce gane. T 'n'
T, II you vIII.
10. IN1£RN£1 5£ARCR £N6IN£5 WILL ß£CLIN£
IN IMP0R1ANC£.
SearcI engInes IIke YaIoo! are Lusy addIng IuncIIons vIen
IIey sIouId Le LaIIenIng dovn IIe IaIcIes Ior IIe rougI
vaIer aIead. SearcI engInes (or µorIaIs) are goIng Io Le Iess
InµorIanI In IIe IuIure IIan IIey vere In IIe µasI.
TIInk oI II IIIs vay. PeoµIe geI Io knov IIe InIerneI
Lrands IIey vanI Io do LusIness vIII. WIen IIey do, IIey
vIII go sIraIgII Io IIe sIIe InsIead oI nakIng a deIour
IIrougI a searcI engIne. II ve vanI Io Luy a Look, ve go Io
Anazon.con. We don'I go Io YaIoo! Io IInd ouI vIo on IIe
NeI seIIs Looks.
TIIs vIev oI IIe IuIure Is consIsIenI vIII one's ovn µer-
sonaI exµerIence In IIe reaI vorId. LeI's say you nove Io a
nev connunIIy. You nIgII µIck uµ IIe yeIIov µages (µaµer
searcI engIne) every IIne you go ouI sIoµµIng. AIIer you
Lecone IanIIIar vIII IIe sIores In your nev connunIIy,
you nake nosI oI your IrIµs vIIIouI IIrsI consuIIIng IIe yeI-
Iov µages.
YaIoo! Is IIe veIcone vagon on IIe InIerneI. GreaI Ior
IIe nev arrIvaI, LuI Iess InµorIanI Ior IIe exµerIenced
InIerneI user.
11. 1R£ IN1£RN£1 WILL CRAN6£ MANY A5P£C15 0F 1R£
1£L£PR0N£ INßU51RY.
In nany vays, IIe InIerneI and IIe IeIeµIone are sInIIar.
BoII are InIornaIIon and connunIcaIIons nedIa, LuI IIe
µercenIages are dIIIerenI.
II IIe InIerneI Is 80 µercenI InIornaIIon and 20 µercenI
connunIcaIIons, IIe IeIeµIone Is IIe oµµosIIe. TvenIy µer-
cenI InIornaIIon and 80 µercenI connunIcaIIons.
TIe InIornaIIon segnenI oI IIe IeIeµIone nedIun Is a
Iarge LusIness In IIseII even IIougI II accounIs Ior onIy 20
µercenI or so oI aII µIone caIIs. TIe vIsILIe synLoI oI IIIs
InIornaIIon segnenI, oI course, Is IIe yeIIov µages. "LeI
your IIngers do IIe vaIkIng.¨
TIaI vIII cIange. TIe InIerneI vIII Lecone a dIrecI con-
µeIIIor Io IIe IeIeµIone. (IorIunaIeIy Ior IIe µIone conµa-
nIes, nosI µeoµIe vIII conIInue Io use µIone IInes Io con-
necI Io IIe InIerneI.)
On IIe connunIcaIIons sIde, e-naII vIII reµIace nany
µIone and Iax caIIs. On IIe InIornaIIon sIde, IIe NeI vIII
Lecone an eIecIronIc yeIIov µages.
WIaI IeIevIsIon dId Io radIo, IIe InIerneI vIII do Io IIe
IeIeµIone. TV vIrIuaIIy vIµed ouI enIerIaInnenI on radIo.
TIe InIerneI vIII do IIe sane Ior InIornaIIon on IIe IeIe-
µIone. IorgeI 777-IILM and IIe Ien nInuIes II Iakes Io geI
µIayIng IInes Ior your IavorIIe novIe.
Ior nany µeoµIe IIe cIange couIdn'I cone Ioo soon.
Hov nany Iours Iave you sµenI µuncIIng In nunLers Iry-
Ing Io reacI soneone In CorµoraIe AnerIca Io IeIµ you?
TIe auIonaIed caII-rouIIng sysIens used Ly nosI naIIonaI
conµanIes are a dIsgrace.
IIrsI IIey ansver your caII vIII a varIeIy oI oµIIons.
AIIer µuncIIng In an endIess serIes oI nunLers, you geI IIe
IoIIovIng nessage: "AII oI our reµresenIaIIves are currenIIy
IeIµIng oIIer cusIoners, IIe nexI avaIIaLIe agenI vIII Le
vIII you sIorIIy.¨
By renovIng IIe Iunan InIerIace, IIe InIerneI µronIses
Io greaIIy sµeed uµ IIe InIornaIIon IuncIIons IornerIy Ian-
dIed on IIe µIone.
AIrIIne reservaIIons, novIe IIckeIs, reservaIIons Ior rock
concerIs and sµorIIng evenIs, and resIauranI Iours and reser-
vaIIons are jusI sone oI IIe InIornaIIon-reIaIed IransacIIons
IIaI vIII Le novIng Iron IIe µIone Io IIe NeI.
12. 1R£R£ WILL B£ 5P££ß BUMP5 0N 1R£ IN1£RN£1.
In sµIIe oI our rosy µredIcIIons, IIe InIerneI Iaces Ivo sµeed
Lunµs In IIe near IuIure.
One Is IIe InIerneI LuLLIe IIseII. 1usI Lecause Ivo guys
under IIIrIy sIarI a WeLsIIe vIII S30 nIIIIon In venIure-
caµIIaI Iunds doesn'I auIonaIIcaIIy nake IIe sIIe vorII S3
LIIIIon. TIe LuLLIe Ias LursI.
In sµIIe oI IIs enornous acceµIance, II's goIng Io Le dIIII-
cuII Io nake noney on IIe NeI. TIe InIerneI Is a IIgI-
voIune, Iov-nargIn nedIun. In oIIer vords, a µrIce gane.
InvesIors dIdn'I IruIy undersIand IIe naIure oI IIIs nedIun.
WIIIe IIe InIerneI Is vIIdIy µoµuIar, II vIII noI Le vIIdIy
µroIIIaLIe. And µroIII Is vIaI WaII SIreeI uIIInaIeIy seeks.
TIe InIerneI vIII survIve and µrosµer. BuI nany InIerneI
conµanIes vIII noI.
TIe second sµeed Lunµ aIong IIe vay Is IIe Iax Issue.
CurrenIIy IIere Is a noraIorIun on sIaIe and IederaI Iaxes.
TIaI vIII cIange. TIe 46 sIaIes, 4,831 cIIIes, and 1,151
counIIes IIaI Inµose saIes Iaxes are noI goIng Io gIve IIe
InIerneI a Iree rIde Iorever. Sooner or IaIer IIey are goIng Io
vanI IIeIr cuI.
TIe conµuIer ve recenIIy µurcIased on IIe NeI vouId
Iave cosI S111.72 nore (Io cover Iaxes) II LougII IocaIIy.
Sooner or IaIer, IIe governor, IIe nayor, or IIe counIy Iax
connIssIoner Is goIng Io vanI Io geI IIs or Ier Iands on
IIaI S111.72. You can counI on II.
WIaI's nexI? WIaI vIII cone aIIer IIe InIerneI? WIaI
vIII Le IIe IecInoIogIcaI revoIuIIon oI IIe IIrsI decade oI IIe
nexI nIIIennIun? WIo knovs?
º II couId Le IIe oµIIcaI conµuIer vIII µIoIons carryIng
IIe LaII In µIace oI eIecIrons. SucI a deveIoµnenI couId
drasIIcaIIy reduce IIe sIze and Increase IIe sµeed and
nenory caµacIIIes oI aII conµuIIng devIces, nakIng a
nockery oI Moore's Iav.
º II couId Le a nev engIne, IIgII In veIgII, IIgIIy eIIIcIenI,
and uIIraµoverIuI. SucI a deveIoµnenI couId revoIu-
IIonIze IIe IransµorIaIIon IndusIrIes: auIonoIIve, aIr-
craII, sIIµµIng, raIIroad.
º II couId Le a nev deveIoµnenI In geneIIcs, esµecIaIIy In
IIe IIeId oI agrIcuIIure. SucI a deveIoµnenI couId revo-
IuIIonIze IIe vay croµs are µIanIed, grovn, and Iar-
vesIed.
WIaIever IIe IuIure LrIngs, you can Le sure oI one
IIIng: II vIII Le a desIaLIIIzIng deveIoµnenI. II vIII cIange
IIe vay you nanage your LusIness and IIe vay you LuIId
your Lrands.
And IIere vIII Le nore InnuIaLIe Iavs oI LrandIng.
About the Author
Positioning The 22 Immutable Laws of
Marketing
A|so by A| Pìes and Laura Pìes
The Fall of ^dvertlslng and the Rlse of lR
A|so by A| Pìes
Foous: The Future of Your Company Depends on lt
The 22 lmmutable Laws of Marketlng'
Horse Sense'
BottomUp Marketlng'
Marketlng warfare'
losltlonlng: The Battle for Your Mlnd'
'wlth 1aok Trout
Credits
Text designed by Nancy Singer Olaguera
This edition combines 1he 22 Immutable Laws of Branding and
1he 11 Immutable Laws of Internet Branding with added illustra-
tions and text.
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