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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.

The 22 Immutable Laws of Branding
How to Build a Product or Service into a World-Class Brand. Copyright © by Al Ries. Reprinted by permission of HarperCollins Publishers, Inc. All rights reserved. Available now wherever books are sold.

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Excerpted from The 22 Immutable Laws of Branding: How to Build a Product or Service into a World-Class Brand by Al Ries, Laura Ries
All rights reserved by the original copyright owners. Excerpts are provided for display purposes only and may not be reproduced, reprinted or distributed without the written permission of the publisher.