1.122009

brand-building: yohn on ries

Last week’s Ad Age featured a column by brand luminary Al Ries that I just can’t let go without comment.  Ries’s main thesis is that brands must remain narrowly focused in order to dominate their categories.

Having grown up as a brand enthusiast, studying the seminal texts of Trout & Ries and forming my understanding of brand strategy by their insights and edicts, I find myself in the interesting position of taking issue with several points in Ries’s column.  But I feel I must raise some questions.

By stating that “you can’t dominate a category if you expand your brand into many other categories,” Ries seems to be lobbying for limits on businesses that are unacceptable in today’s marketplace.  It’s true, businesses in narrow categories can well afford to keep their brands focused and resist the temptation to expand into new categories.  There are only a certain number of uses of facial tissues, after all, and no shareholder is expecting the Kleenex brand to become a multi billion dollar business.  But in most cases, shouldn’t a company that wants to remain viable not only grow its share of its existing category, but also look for new growth outside of it?  And wouldn’t a smart brand architecture (e.g., the use of endorser or sub-brands) can help strengthen the brand as it grows into new areas?

Ries argues the most reliable measure of the power of a brand is market share.  Really?  Can’t brands prop their share up through promotions and incentives without actually growing?  And isn’t the channel playing an increasingly powerful role in balancing out competing brands, such that market share is less a measure of value to the customer and more a result of purchasing clout (or lack thereof)?  And what about brands that are big but not necessarily strong?  McDonald’s has been the fast feeder market share leader for decades, but only in the last several years have they been able to derive their strength from something more than sizable brand distribution.

Which leads me to my last question – how are we defining “building a brand” here?  Ries points to market share leaders like TurboTax and Taco Bell and praises them for being dominant.  He then flips to Coca-Cola and Nike and uses their value according to Interbrand’s list of 100 most-valuable global brands to prove their strength.  While these measures have their merit, I question whether they are the best bellwethers for brand power.  If a brand is, as Ries states, “a word that stands for something in the mind of prospects,” then shouldn’t brand strength be evaluated on how strongly it stands for that something?  Or how strong of a connection it has with its prospects?

In the end, Ries seems to be saying that building a business is at odds with building a brand.  I guess I simply disagree.   I advocate a “brand-as-business” approach – that is, applying brand understanding to business decision-making about which categories to enter and how.

Care to weigh in?

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  • Your question of definition – how are we defining “building a brand” is a great one. But to me, that question points to a much larger one: How are we defining “category.” “Category” and (more provocatively) “industry” seem to me to be losing relevance. What a company does – the verb that describes how it helps customers – seems to me far more relevant to brand than the category in which it does that thing.

  • I agree…the devil is in the definitions. I think the broad conclusion that Ries makes — that building a ‘brand’ and a ‘business’ can often be two different things — gets at the heart of the difficulties most marketers face, which is that they can often be very successful at what they do (and how they measure it) while the company might not see any tangible benefit from said successes. That’s why I like the ‘brand-as-business’ approach that Denise proposes.