I was googling and came across this from a book called

The 22 Immutable Laws of Branding
How to Build a Product or Service into a World-Class Brand
by Al Ries and Laura Ries

comments?

Chapter One
The Law of Expansion

The power of a brand is inversely proportional to its scope.

Think Chevrolet. What immediately comes to mind?

Having trouble? It's understandable.

Chevrolet is a large, small, cheap, expensive car ... or truck. When you put your brand name on everything, that name loses its power. Chevrolet used to be the best-selling automobile brand in America. No longer. Today Ford is the leader.

Think Ford. Same problem. Ford and Chevrolet, once very powerful brands, are burning out. Slowly heading for the scrap heap.

Ford buyers talk about their Tauruses. Or their Broncos. Or their Explorers. Or their Escorts.

Chevrolet buyers talk about their ... Well, what do Chevy buyers talk about? Except for the Corvette, there are no strong brands in the rest of the Chevrolet car line. Hence, Chevy's brand-image problem.

Chevrolet has ten separate car models. Ford has eight. That's one reason Ford outsells Chevrolet. The power of a brand is inversely proportional to its scope. Why does Chevrolet market all those models? Because it wants to sell more cars. And in the short term, it does. But in the long term, it undermines its brand name in the mind of the consumer.

Short term versus long term. Do you broaden the line in order to increase sales in the short term? Or do you keep a narrow line in order to build the brand in the mind and increase sales in the future?

Do you build the brand today in order to move merchandise tomorrow? Or do you expand the brand today in order to move the goods today and see it decline tomorrow?

The emphasis in most companies is on the short term. Line extension, megabranding, variable pricing, and a host of other sophisticated marketing techniques are being used to milk brands rather than build them. While milking may bring in easy money in the short term, in the long term it wears down the brand until it no longer stands for anything.

What Chevrolet did with automobiles, American Express is doing with credit cards. AmEx used to be the premier, prestige credit card. Membership had its privileges. Then it started to broaden its product line with new cards and services, presumably to increase its market share. AmEx's goal was to become a financial supermarket.

In 1988, for example, American Express had a handful of cards and 27 percent of the market. Then it started to introduce a blizzard of new cards including: Senior, Student, Membership Miles, Optima, Optima Rewards Plus Gold, Delta SkyMiles Optima, Optima True Grace, Optima Golf, Purchasing, and Corporate Executive, to name a few. The goal, according to the CEO, was to issue twelve to fifteen new cards a year.

American Express market share today: 18 percent.

Levi Strauss has done the same with blue jeans. In order to appeal to a wider market, Levi introduced a plethora of different styles and cuts, including baggy, zippered, and wide-leg jeans. At one point, Levi's jeans were available in twenty-seven different cuts. And if you could not find a pair of jeans off the rack to fit, Levi's would even custom cut jeans to your exact measurements. Yet over the past seven years the company's share of the denim jeans market has fallen from 31 to 19 percent.

Procter & Gamble has done the same with toothpaste.

 

mercedes didnt become the largest financial concern in germany with the image it has by selling a "broad horizon" of cars... nope, they've always been expensive, and models have slowly and not so largely changed, and they continue to be strong. BMW is about the same way.

 

What that article doesnt talk about though is the influx of new companies and their affect on those companies.

 

What is Toyota's image regarding style and price? Bland and fairly inexpensive, but then you have the Supra which wasnt bland nor inexpensive, and the MR2, Celica, Solaria. Plus they make trucks and SUVs, which can get pricey. Yet Toyota grew due to the lost Chevy sales.

The only way you're going to create a positive image how they're going to suggest (or so it seems) is with speciality brands - luxury brands, truck brands (GMC), youth brands (Scion), etc. - and then each brand is not moving a lot of product, but you'd have a lot of brands.

So do you divide your company in 10 smaller divisions and market each division, or do you consolidate under a large umbrella like a Chevy or a Toyota and push one brand more often?

 

I think the author fails to take in a lot of variables in the analysis. Nothing happens in a vacuum, and like the guy above said, none of the competitive environments in those industries have remained static over all these years.

 

Oddly enough, Harley-Davidson, the poster child for the effectiveness of a brand, has as many or more models as Chevrolet:

Sportster
Dyna
Softail
Fat Boy
V-Rod
Road King
Electra Glide
etc... etc... etc...


Erm... I question the author's smarts...

 

Ya, but it's still a Harley (whether that is good or bad depends upon your point of view), and there is nothing else like it anywhere.

Ok, there's a lot of pretenders out there now, but they're just that - pretenders.

 

GM has always had a bit of a problem with focusing on short-term profits rather than long-term potential.

Why else do they offer thousands upon thousands in rebates for their models instead of using just SOME of that money toward improving the perceived quality and long-term durability of their cars, and thus while it may not translate to immediately increased profits, their reputation would finally start to improve.

I mean I guess they are doing this to an extent with some models, but not even close to all models, and even the ones they are doing this on it's kind of a half-hearted effort IMO.

 

True...

And there's no dearth of folks who will buy into Harley's image. Make no mistake, it's image they're buying... and paying a LOT for.

 

That outlook has glaring flaws in many areas.

1. It doesn't consider brands whose strength is in offering a good variety. A traditional strength of both Ford & Chevy.

2. It doesn't take into consideration the demand of the product. Ford has seen huge success of both it's Mustang and Taurus at some points, while Chevy has seen it's Caprice Classic, it's Citation, even it's Lumina all become very successful due to demand.

3. It doesn't take into effect "Halo" or new and different models. That article is fine with selling vacuums or dishwashers, but an eycatching new car design or a new "halo" model will bring curious people into showrooms. They may or may not buy that car, but a number of them are likely to drive off in something else on the lot.

4. People do actually have views when you say Chevrolet or Ford. Like walking into an applience store, both names have a number of different items, but also like the applience store, you are there for the value, the selection, and the price. What pops into your mind when someone says Wal-Mart? What pops into your mind when someone says Marcius-Neuman?

5. Chevy and Ford are FAR from headed to the scrap heap. The problems they have now isn't related to marketing. It's related to product, yet another point that's missed here. For the better part of a decade, both bulldozed large majorities of their development budgets to trucks, and gave only the bare minimum to cars. Even before the truck craze, very little money went to Chevrolet. When the Malibu came out a couple of years ago, it was the 1st all new Chevy with more than 2 seats since the 1980s.

That philosophy works when your focus is specialized brands. Mercedes Benz, Porsche, even Daewoo and currently Saturn come to mind. These are also brands that sell in very small numbers.

Essentially, what the article promotes is the discredited "Brand Management" of the former GM management, which they are still recovering from nearly 3 years later. The idea behind Brand Management was to create a unifying theme for each brand in style & marketing phlosophy instead of creating cars with their own identity. This is the mentality that proposed making Corvette it's own GM division because it didn't fit in with what Chevrolet was "supposed" to be.

The automotive industry is unique from just about anything else. Where every other manufactured good is need or convience based, automobiles are purely a luxury. Also, the automobile is the most expensive purchase, next to a home, that a person's going to make. Automobiles come in a variety of configuations and purposes, far more than any other applience, unlike soap, jeans, or contact lenses which are essentially the same items made doing the same thing with a heavy emphasis on marketing to separate it from the pack.


BTW: as for Ford, Ford has traditionally outsold Chevrolet ever since anyone began comparing the 2, probally back in the 1930s. It has nothing to do with how many models Ford has or doesn't have. A good argument can be made that now that Chevrolet has more models than ever, it's actually within spitting distance of Ford's sales total.

 

I think what is missing is balance.

Harley sells because they market AMAZINGLY well and have an OK product. They are not on the bleeding edge technologically, and it's fair to say that they intentionally avoid the bleeding edge. Harley does not sell tons of bikes because their customers are the type that read Consumer's Reports or make spreadsheets comparing the specifications of their prospective motorcycle purchases, because there is no damned reason on the planet to buy a V-Rod if you want a high-performance motorcycle... BUT there IS a COMPELLING reason to buy a "Hot-Rod" Harley Davidson. That's brand doing the talking, not objective numbers related to horsepower and handling, because for half the price a Hayabusa will kick the ever-loving **** out of a V-Rod in every objective measurement you could ever come up with. The Yamaha Warrior would do the same thing for far less money than a V-Rod also (maybe not to the extent a Busa will... but the point is still valid... especially since the Warrior and the V-Rod are far more similar than the Busa and the V-Rod).

On the other side, Chevrolet's product continues to improve, but what they don't provide (except for Corvette.... notice how that statement keeps coming up???) is a feeling of community.

Now... how do you provide a feeling of community? Well, that's the hard part. Camaro, which (like so many other ways) would be the next best candidate for a community-type atmosphere, was/is treated kind of like an unwanted stepchild at many levels of the organization... interestingly enough, it still has a ferocious following.

That type of capital is very expensive to purchase. To see it not be exploited by GM as a whole is painful. There are certain, very vocal, and very committed individuals within GM where Camaro is concerned. What there seems to be lacking is the next logical leap that says:

"You know, we've got something here. 3 years after we killed the damned thing, the websites supporting it are still going strong. Maybe we aren't going to sell 150,000 of these a year for 5 years... but we might be able to sell 80,000 or 50,000 of them and breed lots and lots of sales of our other vehicles by taking that strong extra step into turning the Camaro brand into something akin to Corvette or Harley Davidson."

First step... GM needs to stop talking badly about the car externally. Camaro's heritage needs to be talked UP, not DOWN. The "30-year-nap" comment was nothing short of atrocious. Harley Davidson executives NEVER talk badly about their product... and oh boy did they have some awful products for a while there.

Second, a "thank you" for the top would sure be helpful to help us continue to weather the storm. Bob has a blog. Bob oughta use it. "Keep the faith" would be a wonderful central theme, along with a mention of how loyal Camaro customers that have stayed around this long really are and that it's appreciated.

Third, start building the brand. Copy Harley Davidson... owner's groups... merchandise... newsletters... events... newsletters... INVOLVEMENT. Build the image of family. Lutz oughta fly one of his planes down to Bowling Green for this year's event. Trust me, he's got NOTHING better to do than build up Chevrolet, because the automotive war vs. the Japanese is going to be one by two vehicle lines if it is ever going to be won:

Chevrolet and Cadillac.



Finally, appliances don't provide a feeling of community. Impala, Malibu, Cobalt, Venture and Aveo are appliances. Nobody ever gets all fired up about the last toaster they bought.

They CAN however, benefit from the feeling of community due to the trucks, Corvette... and a revitalized Camaro... and feel that benefit on the showroom floor with greater sales.

 

Good post guys

 

It worked for the Red Sox... why not the Camaro?

"Why Not Camaro?" to lift a line from Mr. Schilling.

 

This is quite the problem. Heritage seems to be unimportant at GM today, pull out the bulldozer and bury another familar model name. Then look at the increased ad expenditures spent trying to make the consumer aware of this new name. Money that could have been spent on even more new product instead. Many of the GM names have great brand equity-hopefully someone will realize this and capitalize on it. In the long run, it will cost far less to maintain and support already successful brands than try to nuture along something totally new.

 

HOLY COW PX!!!!

That is the best damned post you've ever written.

If I were you, I'd cut and paste it on Bob's Blog immediately! Really.