Week 10 Summary – Brand Management and New Product Development
A brand is a singular idea or concept that you own inside the mind of a prospect.
Ries and Trout, The 22 Immutable Laws of Branding
The Law of Expansion
• The power of the brand is inversely proportional to its scope
• In the long run expanding a brand may diminish its power and weaken its image
For example American Express lost a lot of market share since it was not able to focus on
its market niche well. It was a prestige company but it partnered up with other stores that
made them lose market share
The Law of Contraction
• A brand becomes stronger when you narrow its focus
– Narrow focus
– Stock in depth
– Buy cheap
– Sell cheap
– Dominate the category
The Law of Publicity
• The birth of a brand is achieved with publicity, not advertising.
• What others say is more powerful than what you say.
• It is better to be first than to be better, because being first generates publicity.
The Law of Advertising
• Once born, a brand needs advertising to stay healthy.
• Advertising dollars keep you from losing share to competitors, because it makes
it difficult for them to pay the price of competing with you.
• Advertise brand leadership not quality
• For consumers, leadership = quality
For example, Coca-Cola
The Law of the Word
A brand should strive to own a word in the mind of the consumer.
e.g., Kraft Dinner, Q-tips
The Law of Credentials
The crucial ingredient in the success of any brand is in its claim to authenticity
Coke – “the real thing”
If not the leading brand in a category, then create a category: eg. PolaroidThe Law of Quality
• Quality is important, but brands are not built by quality alone.
• Almost no correlation between success in the marketplace and comparative
testing of products
• Quality resides in the mind of the buyer
• Follow the laws of branding to build that perception: contraction = specialist =
The Law of Extensions
• The easiest way to destroy a brand is to put its name on everything.
• Line extensions can erode core brands
• Building brands versus milking brands
The Law of Fellowship
• In order to build the category, a brand should welcome other brands.
• Two major brands is ideal – makes consumers more conscious of the category
Similar Businesses Locate Together
The Law of Siblings
• There is a time and a place to launch a second brand.
• Make each sibling a unique individual brand with its own identity
– Focus on a common product area
– Select an attribute to segment eg. price
– Set up rigid distinctions among brands
– Create different brand names
The Law of Shape
• A brand‟s logotype should be designed to fit the needs. Both size
• Because eyes are side by side, the ideal shape is horizontal.
The Law of Colour
• A brand should use a colour that is the opposite of its major competitor‟s.
• White – colour of purity
• Black – colour of luxury
• Blue – colour of leadership
• Purple – colour of royalty
• Green – colour of the environment and health
• Red – colour of excitement and energy
The Law of Mortality
• No brand can live forever. Euthanasia is often the best solution.
• They are born, they mature and they eventually die. New Product Development
Product Innovation – Key Themes
Superior product innovation leads to features that better fit customer segment benefits
and increase shareholder value. The product development process must produce the
innovations that drive profit, shareholder value, customer value, brand reputation and
Reality of New Product Innovation
Over the last decade, 86% of new product launches by 108 companies were simple
product-line extensions and imitations. Why??
The remaining 14% were new generation, new market innovations… but these new
market products generated 60% of the profits!
W. Chan Kim and Renee Mauborgne, Blue Ocean Strategy, Harvard Business School
Press, Cambridge MA, 2005
“Everything should be made as simple as possible, but not simpler.”
Blue Ocean Strategy
RED OCEAN STRATEGY BLUE OCEAN STRATEGY