This latest book by Al Ries and his daughter Laura extends their previous work on positioning, brands, categories, being first in a category, and why publicity is more important now than advertising.
The authors draw an extended analogy to Charles Darwin's Origin of Species that runs through out the book.
In the business world Categories like computers evolve slowly through competition but also diverge rapidly through specialization. Over time those species that have won look quite different (lion vs. a tiger, for example). The same diverging is true with categories like computers where we now have desktops, laptops, palmtops.
The authors draw the parallel that this concept of divergence of the species also applies to categories in business. Understanding this similarity, they say, is your key to success in business. You just have to create new categories, and then dominate that category. But this book develops this positioning logic in ways that seemed much clearer to me than their previous works.
To succeed, you (the business owner/manager) must CREATE NEW CATEGORIES (palmtops), and doing this is MORE IMPORTANT than your creation of new brands (Sharp Zaurus). Creating a brand is more important because you must end up being 1st or 2nd in that category to be successful. (Sounds like Jack Welch's thinking of 'We're going to be 1, 2 or 3 in an industry, or else we sell that subsidiary.')
Through a slow elaboration of proof after proof, chapter after chapter, the Ries authors convince you to see the logic of what they have been advocating for the last 20 or so years on positioning, categories, brands and publicity. As a reader I found this slow elaboration of proofs to be slow reading, however, I'm sure it's required for the skeptics (advertising account reps, I'm sure).
In regards to publicity, they recommend a way to create a new category. This methodology requires the use of slow build up publicity rather than fast splurge advertising.
If you accept their thinking on categories and brands, and I do, then you will be against mergers that take companies into unrelated fields, and you will be against line extensions that weaken your brand. The chapter on "Pruning" was especially enlightening in this regard. Toyota's development of Lexus was a great example of how to create a new category. The company can sell off Lexus and not hurt the Toyota brand. The authors have other examples of good creation of categories. But their examples of poorly thought out brands was quite extensive, and sometimes overwhelming.
There are three big rewards from reading this book. First, you will get a deep grounding in why you must create Categories first, then create the first brand in that category. Second, in reading all the elaboration you will develop a working knowledge of seeing brands and categories, and where companies fit in that category.
In this manner when you see that McDonalds is adding DVD rentals (yesterday's WSJ) you will know that this is CONVERGENCE and it is bad. They should be DIVERGING instead. Such convergence will dilute their brand of hamburgers, fries, and shakes. Should we now call them "Blockaburger?"
In fact, I found it interesting that the authors described how In And Out hamburgers in California now has higher per store sales than McDonalds and that McDonalds per store sales are static, and perhaps dropping if their figures weren't deflated for inflation. Again, there's lots of examples and details.
And the third reward from reading this book is that the last three chapters of the book provide a methodology (albeit somewhat abstract) for you to follow. You will learn to DIVERGE NOT CONVERGE, create the Category first, then create a brand to be first in that category. You will learn that its OK to be second in an industry, if you only... well, you'll have to read the book to get all the other details.
This book is highly recommended.
John Dunbar
Sugar Land, TX
