What can Tiger Woods do to rebuild his brand? Win

Why are marketers obsessed with sex in advertising? “Marketing people do what interests them personally," explains Laura Ries, a leading marketing strategist and bestselling author. "Since many marketing people, especially in creative departments, are very young, the thing that interests them the most is sex. So they try to find a way to use sex in their advertising.

"Sex is helpful when the product is related to sex (condoms, clothing, etc). It’s not going to help a cement company sell cement.”

Since 1994, Ries has run Ries & Ries, a consulting firm, with her partner, father, and legendary marketing guru Al Ries. Together they provide consultancy services to Fortune 500 companies on brand strategy and are the authors of five books that have been bestsellers around the world.

In this interview, Laura Ries speaks to DNA on marketing, brand names, Tiger Woods, and even Barack Hussein Obama, president of the United States. Excerpts:

“Marketing is focus” is something you have always maintained. But in the recent past, that seems to be not true. Apple is the biggest music seller in the world and it’s not a music company. Nokia is the biggest camera seller in the world, though it has not sold a single standalone camera till date...

First of all, you need to look at the “big picture” versus the details. Is Apple in the music business? Of course not. If Apple opened iTunes all by itself, the website would have been an utter failure. Apple is in the music player business. It was the first “high-capacity” MP3 player. By dominating this market (70% share in the US) Apple was able to also sell recorded music through its website.

Nokia is not in the camera business. It’s in the cellphone business. An automobile manufacturer that sells radio as an automobile accessory is not in the radio business. It’s in the automobile business. The camera is just an accessory to the cellphone.

Look at the success of Nokia, a company that focused on cellphones, versus Motorola, the company that pioneered the cellphone. Normally the first in the category [Motorola] should have been the leader, but it’s not. Why? Motorola was unfocused. It also made network equipment, personal computers, and a host of other products under the Motorola name.

What about Apple? It’s in the computer business, the music player business, the cellphone business. Isn’t Apple unfocused?

No, it’s not. Because each of its businesses uses a different brand name. Macintosh for computers, the iPod for music players, iPhone for cellphones.

A multi-brand focus is the answer for a company that wants to keep its core brand focused and still expand into other businesses.

Look at the success of Procter & Gamble, a company that had a net profit margin of 17% last year. It has 22 brands that each do more than a billion dollars worth of business a year.

With the rise of the social media (websites like Facebook, Twitter, etc) in the recent past, a lot of marketing experts have been calling for a social media strategy for products and services. But you don’t seem to agree. You recently wrote on your blog, “Social media is a tool and a tactic. Not a strategy.”

What brand has ever been created by a social media strategy? None that I can think of. It’s PR in the traditional media that has created most of today’s most successful brands: Google, Amazon, Yahoo, eBay, Starbucks, BlackBerry, iPhone, iPod, etc.

Note, too, Toyota’s problems in the US market. One might have thought that it was blogs, tweets, and other social media tactics that damaged the Toyota brand. But that’s not what actually happened. In spite of the fact that Toyota was getting reports of “unintended acceleration” for years, the company’s troubles did not start until the major media [newspaper, radio and television] reported on the problems.

It’s like warfare which is also a combination of strategy and tactics. The tactics of war might change (yesterday it was tanks, today it is airpower), but the strategies never change.

You haven’t been a fan of using market research, especially when it comes to predicting future behaviour. Why is that? Can you give us some examples?

Consumers don’t know what they would buy until they are actually given a choice with real products in real retail situations.

Xerox, for example, ran a research study to see if companies would buy a “plain-paper copier” that produced copies for 5 cents a copy versus 1 cent for the coated paper copiers which were then on the market. The research came back: Absolutely not!

Xerox introduced the product anyway and the 914 (named because it handled paper 9 by 14 inches) went on to become the most profitable single product ever introduced by any company anywhere in the world.

Red Bull was another product that was researched before it was launched. Consumers hated the name, hated the taste, and hated the packaging. Today, Red Bull does $3.5 billion in worldwide sales.

A lot of high-fidelity brands — those that have a certain aura and a feel-good experience associated with them — tend to become mass market in the long run. Is that a good thing?

Generally not. Look at Rolex. The company has consistently maintained its high-end position and the brand dominates the Swiss watch business, accounting for about 25% of total sales.
Most companies want to expand their markets. So what do they do with a high-end brand? They lower the price and, in the long run, tend to destroy the brand.

Take the case of cellphone pioneer Motorola. It had a very successful brand called StarTac, which sold for $1,400. So what did they do next? They came out with cheap versions of the StarTac and eventually destroyed the brand. What they should have done is to come up with a second, less-expensive brand.

I wanted to talk to you a little about brand names. You have been very particular about brand names. Which are the biggest naming disasters you know of?

The biggest naming mistake is line-extension names. Xerox computers. IBM copiers. Hewlett-Packard computers. Sony computers. There are far too many to list. As a matter of fact, some 90% of all products introduced have line-extension names.

The other common naming mistake is “generic” brand names. To compete with Starbucks, for example, a company launched a high-end coffee chain called Seattle’s Best Coffee. This couldn’t possibly work.

Every new brand needs two names: 1. A generic name for the category, and 2. A unique brand name.

For example: 1. High-capacity MP3 player. 2. iPod. Or: 1. Touchscreen smartphone. 2. iPhone. Or: 1. Wireless email. 2. BlackBerry.

What are the other things that need to be kept in mind while naming a brand?

One of the most important aspects of picking a brand name is making sure that people can spell the name after hearing it (not reading it). This greatly helps “word of mouth”. If a friend recommends a store, restaurant, or brand and you can’t figure out how to spell the word, you are unlikely to remember the name.

Hollywood is one place where names really matter. And that is why many movie stars have replaced their birth names with more euphonious names.

What are your views on a brand like Starbucks, which went from 1,886 stores in 1998 to 16,226 stores ten years later? The company is in a lot of trouble. What can they do to revive the brand?

Strategy is a long-term concept. A good strategy should last for decades, not years. As a result, you can’t change a strategy to cope with short-term changes in the market.

The US economy has been hit hard by the recession. General Motors and Chrysler went bankrupt and the third automobile company is losing money. Many of our financial institutions needed a bailout.

Starbucks is a high-end coffee brand. When the economy is down, one might expect Starbucks’ sales and profits would be down, too. But to say that the company is in a lot of trouble is really not accurate.

Starbucks sales over the past couple of years have been relatively flat. Net profit margins were down to 3% in 2008 and 4% in 2009 (from an average of about 7% in the preceding decade). When the economy comes back, Starbucks will be back too.

But look at what happens to a company that loses its focus. Take Sony, for example. Sony is a company that is really in trouble. Last year, it lost $1 billion. And its net profit margin over the past decade was just 1.4%. That’s one reason why Sony is now run by an Englishman, Sir Howard Stringer.

Taking a different turn, what do you think Tiger Woods can do to rebuild his brand? If he were to take you on as his brand adviser, what are the five things you would suggest to him?

Win. Everybody loves a winner. Nobody loves a loser. If he can win on the golf course, he will rebuild his image quickly. If not, he will be widely regarded as a career failure.

Around the time Barack Obama became president of the United States, you wrote, “Obama, the new king of branding.” What made him that? And do you still think the Obama brand works? Or has it run into trouble? And if yes, what can he do to restore his brand to the original days of glory?

Focus. Barack Obama built his entire campaign around one word: Change. “Change you can believe in.” Very, very few politicians have ever done that. It proved to us that the most important conceptual idea in marketing is “focus”.

Getting elected and running a country are two different things. I think he is running the country into the ground, but that’s another matter. He would have to be a lot more conservative to appeal to the majority of the American public.

What is this fascination that marketers have with using sex in advertising. In India recently, a cement company used a bikini-clad babe in their advertisement. Does sex in advertising help?

Marketing people do what interests them personally. Since many marketing people, especially in creative departments, are very young, the thing that interests them the most is sex. So they try to find a way to use sex in their advertising.

Sex is helpful when the product is related to sex (condoms, clothing, etc.) It’s not going to help a cement company sell cement.

Along similar lines, does celebrity advertising work. Or is it more like we don’t know what to do with our brand so let’s get a celebrity to come and tell the world, hey, buy this product.

Using a celebrity is a tactic, which may or may not work. It depends on the situation. For example, a celebrity is helpful in attracting attention to an advertisement, especially a television commercial. But unless the celebrity is perceived to have some experience with the brand being advertised, the advertising doesn’t usually work.

What, according to you, are the five most important things companies must do to build strong brands and to nurture strong brands?

We call our strategy “FOCVS.” F for being first in the mind. O for being the opposite of the leader if you can’t be first. C for being category oriented. In other words, the objective is first and always to dominate a category. V for “visual hammer”. In addition to owning a word in the mind, a verbal nail, you need a visual hammer to hammer that word in the mind.

S is for second brand. Keep your core brand focused and launch a second brand if you want to expand into a new category.