DKV UNPAS Bandung: Al Ries Might Be Dangerous to Your Brand...

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Dan Herman, PhD

In the business world's hall of fame a special place is reserved for Al Ries. He is without any doubt one of the most prominent gurus of strategic thinking. More than 30 years ago, together with his partner Jack Trout, Ries coined the term "Positioning" – a concept which, to these very days, shapes the way of marketing and branding all over the world. Only very few other concepts come close in importance.

Despite the rebellious-revolutionary spirit and the surefooted even vain phrasings which characterized them from the very start of their careers, Ries & Trout did not always grasp in full the magnitude of the revolutions they initiated. Their early books, "Positioning: the battle for your mind", "Marketing Warfare" and "Bottom-Up Marketing", proclaimed in fact, without their authors expressed awareness, the death of the Marketing Approach ("marketing successes are achieved by satisfying the unsatisfied needs of customers"). Furthermore, Ries and Trout suggested an alternative approach which could be named "The Competitive Approach". They drew guidelines for conducting a business in competitive markets for which the Marketing Approach is quite useless. The reason for this incompatibility is simple as it is counter-intuitive. If everybody is trying to satisfy the unsatisfied needs of customers – everybody is doing the same thing and this is a very uncompetitive behavior.

Together and apart, they brought us ideas like the need to focus first on the competitors and only later on customers, the need for strategic focus, the importance of strategic differentiation (a concept borrowed from others), the advantages of adopting an opposite behavior to that of the competitor, of divergent innovation and of primacy in the consumer's mind (because it's better to be first than to be better). Although Ries never said it clearly, he can even be credited with the understanding that the competitive strategy and the brand are two facets of the same coin, rather than the brand being a kind of make-up applied to the product or the company in order to make it more attractive.

Regretfully, Ries's continued influence is becoming today a considerable danger to successful brand building and brand management. Despite his historic importance, in the current business and marketing realities, Al Ries is outdated and limited to the point of damaging.

Despite his often use of terms like Psychology, Perception and the Mind, Ries's entire theoretical account of consumer psychology can be summed up in two principles. The first: People find simple claims easier to understand and learn, than complex claims. The second: People understand new information in terms of what they already know. Undoubtedly true but hardly sufficient for successful strategizing and branding.

Ries has always excelled more in common sense than in psychology, which often defies common sense. For that reason Ries is missing major changes that occurred in recent years in consumers' behavior. Even disregarding these changes Ries simply fails to understand the psychological and social instrumentalities of brands. Unconscious motivations are beyond him. Impulsive purchases evade him. He doesn't get why consumers "buy things they don't need" and other such phenomena which are sources of huge profits to those who do understands them. He doesn't understand brands that where destined to cater for such needs. The secret of Ries's power always lied in his simplistic formulations. He claims to 'universal truths' and formulates Do/Don’t rules that overlook complexities. But our world is a complex world and therefore whoever tries to implement such rules may lead his brand and business to obliteration, no less. In order to justify these severe and harsh statements, I invite you to examine with me the six main tenets of Ries's credo.

Ries says: Innovation should be based on creating a new product category (car) or on diverging an existing category (mini-van) but not on crossbreeding / grafting between categories (car-plane). It is a law of evolution.

That sounds good, but is incorrect. Crossbreeding is very useful in agriculture for creating new species. A Tangelo, to name one example out of many, is a hybrid created by crossbreeding Pomelos and Tangerines. The cellular phone is becoming a device offering rich communication options as well as personal entertainment center by crossbreeding a cellular phone, a walky-talky, an internet connection, a receiver/transmitter of MMS and data, a radio, a MP3 player and more. The PC in general and Windows OS in particular are a crossbreed. A car and a plane or a boat, may not have mixed up but a car and a living room have, in luxury car such as the Maybach. There are crossbreeds/grafts that work and then there are those that don’t. Want a new simple rule? It works when the compromise which the breed demands in the benefits of the different components is smaller than the benefit offered by them combined. If you operate according to Ries – you are reducing your options for innovation.

Ries says: Brands need to focus in one product category. It is not advisable to extend a brand from one category to another. It is best to create a new brand instead.

This is correct only when the brand was originally created with a strong affinity to a certain product category. But this is no must. Virgin is a brand that exists in tens, even hundreds of product categories and is successful in many of them because its promise ("being mischievous, breaking the rules, screwing the big guys and having fun") is not limited to one product category. Another UK brand – Dunhill - exists in many product categories catering to a variety of life style requirements of the modern day gentleman. My own Abstracting technique promises to replace Brand Extension. It assists the creation of brands which have beyond-category benefits and the re-branding of existing brands into such. The model includes seven extents of branding, each consecutive one another step away from product dependency to a higher level of intangible added value.

As I have already mentioned, Ries has a difficulty in understanding brands that offer the consumer a psychological-emotional or a social (rather than tangible-practical) instrumentality for reaching goals / benefits. But let us put aside for a moment the sophisticated brands (although they are the ones yielding their owners the highest profits).

Ries does not like diversified conglomerates but they do make money nonetheless. What about Samsung, Mitsubishi, GE or even HP? Actually every private label of a supermarkets chain exists in tens if not hundreds of product categories and its promise (usually something like "good value for your money" - nothing unique or brilliant) crosses all of them. Even this type of huge profits earning brands fall out of Ries's narrow canon.

Ries says: It is better to be first (In the consumer's mind) than to be better.

Ries gives ample examples like the fact we all remember the name of the first man walking on the moon, but not the second one. He interprets this to suggest that we will remember and pay attention only to the pioneer of a category. This is part of the Positioning theory. But the Positioning theory, right from the start, was not in line with the up to date knowledge of how the memory works. Positioning is based on a metaphor of mountains with tops that you can "conquer" and "own". There is no basis for such an idea. The consumer may recognize Rolls-Royce as a prestige brand, but this will not lead him to perceive Bentley is any less prestigious. While brands may be associated with just one concept (the best are not, think Ferrari) - it doesn't work both ways. The consumer doesn't limit himself to only one brand of prestigious cars. Similarly in fashion, Gucci and others didn’t block the relatively newcomer Prada from breaking into awareness. No one can have exclusivity on any "top", concept or word, in the consumer's mind. This metaphor is inappropriate and misleading the marketing people who use it.

Moreover, the rapidly spreading "Fear of missing out" (FoMO) that is becoming a primary motivation driving consumer behavior, encourages consumers to seek the new. I spotted FoMO for the first time in 1998 and have been researching it ever since. This motivation leads to an unprecedented willingness to try and adopt novelties, often simply because they are… new. Not only does Ries not account for the fundamental changes that occurred in consumers' behavior – appears that he doesn't even notice them. Even worse, his way of thinking is idealistic rather than businesslike. Even if Me-Too products will never become category leaders, as Ries claims, and even if Coca-Cola energy drink KMX will not ever outperform Red Bull, still the second and even the third ranking brands in the market can make handsome profits. So what is wrong with that?

Ries says: Take a word and built it a brand. A brand should "own" a word in the consumer's mind.

We already dealt with the ownership issue, but why a "word"? Will any word do? If you are about to implement this rule by Ries, you may spend a lot of money associating your brand with a "word" that will not bring you any gain. You can decide for instance, that your word would be "leadership" or "cutting edge" (but be careful friends! The most attractive words have a lot of takers!). Let's even say that you succeeded and that now market research shows that consumers indeed associate the word you chose with your brand – why do I claim that it can be useless? If your word is not associated with the consumer's buying consideration (and if the consumer does not use the very word in his thinking – even if she does use implicitly that criterion), it would have no effect whatsoever upon choosing your brand.

The consumer's buying considerations are sometimes conscious and oftentimes not. They may be conscious but not verbal. Ries is a man of words but the consumers aren't necessarily. What you want in fact is that your target audience will have very a clear anticipation (that can be unverbalized, just felt) for some benefit forthcoming your brand. Such anticipation makes the consumer smile when your brand comes to mind. All strong brands arouse their specific anticipation, preferably unique to them. In fact, such anticipation is THE defining characteristic of brands.

Ries says: Brands take off slowly and their success is measured in decades. Brands which take off fast – die fast.

Ries obviously haven't heard about Harry Potter, or about Nokia which became a world market leader in only a few years, or about the Easy Group, which was established only in 2000 and is already a successful concern that incorporates a dozen of companies in diverse areas like aviation, cellular communication, hotels, banking, etc'. Simply put: Ries is wrong. There are brands which take off very fast. Some of them, not all of them, really do behave like meteors and are very successful for a short period of time. In recent years many companies opt to do it purposely, realizing that it is more probable in today's markets to make it big for the short run. Strategically, it is possible in many categories to launch consecutive blockbusters and have, in the long run, a high average market share and to hold consumer loyalty effectively. They usually do it combining long and short term brands in novel architectures. I have recently introduced a comprehensive methodology for creating and managing Short Term Brands (STB) in a masterful and profitable manner.

Ries says: Advertising, because of its increasing lack of credibility, is nearly incapable of building a brand. PR is more effective than advertising in imprinting a brand concept in the consumer's mind. The role of advertisement is to remind the consumer something already known in order to reinforce it.

This peculiar claim already drew a lot of fire, as it was meant to. But seriously now. You can expect a very limited control over messages you send to the market via PR. Journalists will have their own mind and agenda. How then, can PR be used as the major means for evoking and shaping a specific anticipation in the consumer's mind? Ries goes on to claim that limited resources to support an emerging but yet unprofitable brand for a long period of time is another reason to count on PR. But the media's interest in a new brand is brief at best! There can be no doubt that advertising does a better job than PR, more precisely and faster, in evoking and shaping specific anticipations. However, advertising is not always necessary. Some outstanding brands like Starbucks and Zara took off without any considerable advertising budgets. This is possible especially with retail brands where the consumer has opportunities to grasp the brand's promise at the selling points. There yet another type of brands which crates for their costumers opportunities to meet encouraging the formation of a community. These brands' promise travel by buzz and they sometime become a kind of cult, like Harley-Davidson, Saturn, Linux and Vans.

Admittedly, it is a bit sad. The world has changed and Al Ries stayed focused, but behind. But hey, you have your brand to worry about, which means giving up the seductive simplicity of Al Ries's generalizations and rules.

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Dan Herman, PhD, creates Unique Success Formulas for companies and brands.

To find out more, visit his Web site: www.danherman.com.

Dan Herman offers a range of workshops. Find out more here (pdf-file).