Free Essay

Positioning the Battle for Your Mind

In: Business and Management

Submitted By FrankRoss
Words 30800
Pages 124
redirecting...

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|title |
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|Positioning : The Battle for Your Mind |
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|author |
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|Ries, Al.; Trout, Jack. |
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|publisher |
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|McGraw-Hill Professional |
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|isbn10 | asin |
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|0071359168 |
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|print isbn13 |
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|9780071359160 |
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|ebook isbn13 |
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|9780071374613 |
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|language |
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|English |
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|subject |
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|Positioning (Advertising) |
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|publication date |
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|2000 |
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|lcc |
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|HF5827.2.R53 2000eb |
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|ddc |
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|659.1 |
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|subject |
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|Positioning (Advertising) |
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| |cover |next page > |

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|Page 1 |
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|Introduction |
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|''What we have here is a failure to communicate." |
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|How often have you heard that bromide? "Failure to communicate" is the single, most common, most universal reason given for problems that |
|develop. |
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|Business problems, government problems, labor problems, marriage problems. |
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|If only people took the time to communicate their feelings, to explain their reasons, the assumption is that many of the problems of the |
|world would somehow disappear. People seem to believe any problem can be solved if only the parties sit down and talk. |
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|Unlikely. |
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|Today, communication itself is the problem. We have become the world's first overcommunicated society. Each year, we send more and receive |
|less. |
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|A New Approach to Communication |
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|This book has been written about a new approach to communication called "positioning." And most of the |
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|Page 10 |
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|is the reality." So, too, in advertising, in business and in life. |
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|But what about truth? What about the facts of the situation? |
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|What is truth? What is objective reality? Every human being seems to believe intuitively that he or she alone holds the key to universal |
|truth. When we talk about truth, what truth are we talking about? The view from the inside or the view from the outside? |
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|It does make a difference. In the words of another era, "The customer is always right." And by extension, the seller or communicator is |
|always wrong. |
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|Truth is irrelevant. What matters are the perceptions that exist in the mind. The essence of positioning thinking is to accept the |
|perceptions as reality and then restructure those perceptions to create the position you desire. We later called this process "outside-in" |
|thinking. |
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|It may be cynical to accept the premise that the sender is wrong and the receiver is right. But you really have no other choice. Not if you |
|want to get your message accepted by another human mind. |
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|Besides, who's to say that the view from the inside looking out is any more accurate than the view from the outside looking in? |
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|The study of psychology is very useful in understanding how minds work. Advertising is "psychology in practice." |
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|By turning the process around, by focusing on the prospect rather than the product, you simplify the selection process. You also learn |
|principles and concepts that can greatly increase your communication effectiveness. |
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|Page 100 |
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|The name Eastern puts the airline in the same category with Piedmont, Ozark and Southern. |
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|We ranted and raved about the Eastern name for 20 years until the company finally collapsed into Chapter 11 bankruptcy in March 1989. When |
|Frank Borman (the former astronaut) was Eastern's president, he wrote us a letter admitting that the name is "somewhat provincial and has, |
|in some cases, made it difficult to get national attention." However, he pointed out that "the name now has some 47 years behind it." A bad |
|name doesn't get any better no matter how many years you have been using it. |
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|You see what you expect to see. The passenger who has a bad experience on American or United says, "It was just one of those things." An |
|exception to the good service he or she was expecting. |
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|The passenger who has a bad experience on Eastern says, "It's that Eastern Airlines again." A continuation of the bad service he or she was |
|expecting. |
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|It's not that Eastern hasn't tried. A number of years ago, Eastern brought in some big-league marketing people and pulled out the throttle. |
|Eastern was among the first to "paint the planes." "improve the food" and "dress up the flight attendants" in an effort to improve its |
|reputation. |
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|And Eastern hasn't been bashful when it comes to spending money. Year after year, it has one of the biggest advertising budgets in the |
|industry. In a recent year, Eastern spent more than $20 million on advertising. |
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|For all the money, what do you think of Eastern? Where do you think they fly? Up and down the East Coast, to New York, Boston, Philadelphia,|
|Washington, Miami, right? |
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|Well, Eastern also goes to St. Louis, New Orleans, Atlanta, Denver, Los Angeles, Acapulco, Mexico City. |
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|Look at the problem from just one of Eastern's cities, Indianapolis. From Indianapolis, Eastern flies north to places like Chicago, |
|Milwaukee and Minneapolis. And south to places like Louisville, Atlanta and Fort Lauderdale. They don't happen to fly east. |
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|And then there is the lush San Juan run which Eastern has been serving for more than 30 years. East- |
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|Page 101 |
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|ern used to get the lion's share of this market. Then American Airlines took over Trans Caribbean. So today, who is No. 1 to the San Juan |
|sun? Why American, of course. |
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|You can't hang "the wings of man" on a regional name. When prospects are given a choice, they are going to prefer the national airline, not |
|the regional one. |
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|In 1969, we made a presentation to Mohawk Airlines explaining why they should change their name. (Mohawk is a good name for a haircut, but |
|not an airline.) In 1972, when Mohawk merged with Allegheny Airlines, we urged the surviving airline to change its name. "You're going to |
|have to repaint half your fleet anyway," was one of our arguments, not to mention their nickname, "Agony Airlines." But no, they kept the |
|Allegheny name. (Allegheny, Piedmont, Ozark: why were so many airlines named after mountain ranges?) In October 1979, they finally faced up |
|to reality and changed the name to USAir. Today, US Airways is flying high, while Eastern is grounded. The arguments against this line of |
|thinking are always the same. It's not the name, it's the product, the service, the price. That's not true at all. It's the perception of |
|the product, the perception of the service, the perception of the price. Along with a bad name comes a bad perception. |
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|The airline industry's problem is typical of the difficulty people have in separating reality from perception. Many experienced marketing |
|people look at the Eastern situation in exactly the opposite way. |
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|"It's not the name that gets Eastern into trouble," they say. "It's the poor service, the food, the baggage handling, the surly flight |
|attendants." The perception is the reality. |
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|What do you think of Piedmont Airlines? How about Ozark Airlines? And what about Allegheny? (In a survey of frequent travelers, 3 percent |
|said they would avoid American and 3 percent United. But 26 percent said they would avoid Allegheny and 38 percent said they would avoid |
|Eastern.) |
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|Allegheny, of course, has thrown in the towel and become USAir. Even North Central and Southern gave up. In 1979 the two merged to become |
|Republic Airlines. Now watch them take off. |
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|The Akron Twins |
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|Another common name problem is represented by two companies headquartered in Akron, Ohio. |
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|What does a company do when its name (Good- |
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|Page 102 |
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|rich) is similar to the name of a larger company in the same field (Goodyear)? |
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|There are a lot of companies like B.F. Goodrich that need a name change. The question is, how do you change a corporate name? The worst way |
|to do it is to hire an outside firm to develop a million-dollar name. That way, you get fanciful names like Agilent, Aventis, Navistar, |
|Novartis. (Navistar recently went back to its original International name.) What you should generally do is to develop a product brand name |
|that can eventually serve as a corporate name. For example, that's the strategy that B.F. Goodrich should follow. Introduce a fine brand |
|that could eventually serve as a corporate name. |
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|Goodrich has problems. Research indicates that they could reinvent the wheel and Goodyear would get most of the credit. |
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|Not surprisingly, B. F. Goodrich recognizes the problem. This is how they expressed it a number of years ago in an advertisement: |
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|The curse of Benjamin Franklin Goodrich. His name. It's one of fate's cruel accidents that our biggest competitor's name turns out to be |
|almost identical to our founder's. Goodyear. Goodrich. Awfully confusing. |
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|At the bottom of the ad, it says: "If you want Goodrich, you'll just have to remember Goodrich." |
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|In other words, it's not Goodrich's problem at all. It's your problem. |
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|B. F. Goodrich was the first domestic company to market steel-belted radial-ply tires in the United States. Yet several years later when |
|tire buyers were asked which company makes steel-belted radials, 56 percent named Goodyear, which didn't make them for the domestic market. |
|Only 47 percent said Goodrich, which did. |
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|As they say in Akron, "Goodrich invents it. Firestone develops it. Goodyear sells it." In 1968 Goodyear had sales of $2.9 billion, while B. |
|F. Goodrich's sales were $1.3 billion. A ratio of 2.2 to 1. Ten years later, in 1978, Goodyear had sales of $7.4 billion while B. F. |
|Goodrich had sales of $2.5 billion. A ratio of 2.9 to 1. So the rich get richer. Fair enough. |
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|This document is created from a CHM file automatically by an unregistered copy of CHM-2-Word Pro. |
|The content of this chapter is skipped, please register CHM-2-Word Pro to get full features. |
|For registration information, please refer to: http://www.macrobject.com |

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|Page 104 |
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|It would be a lot easier if the company changed its name to the Fiberglas Corporation. Then if you want fiberglass (with a lowercase "f"), |
|all you have to remember is Fiberglas (with an uppercase "F"). This step would help focus the attention on the company's primary objective. |
|To turn fiberglass from a generic back into a brand name. |
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|What should you do if your name is Hubert or Elmer or Eastern or Goodrich or Owens-Corning Fiberglas? Change it. |
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|The smoothest corporate name change in history was the change from Standard Oil of New Jersey to Exxon. Three factors were crucial: (1) The |
|size of the company. Currently, Exxon is the fourth largest company in America and after its merger with Mobil, it should be the second |
|largest. When you are a big company and you change your name, you get a lot of media attention. In other words, the media does your job for |
|you. (2) The similarity of the Esso and Exxon names. The prospect was able to hook the two names together in the mind. (3) The street |
|visibility of the new Exxon name. The thousands of gasoline stations that changed their name overnight made a strong impression in the minds|
|of gasoline buyers. |
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|But name changing is rare, in spite of the logic. Most companies are convinced they have too much equity in their present name. "Our |
|customers and employees would never accept a new name." |
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|What about Olin and Mobil and Uniroyal and Xerox? And how about Exxon Corporation? It was only a few years ago Exxon changed its name |
|from . . . |
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|Well, do you even remember what Exxon's old name was? No, it wasn't Esso and it wasn't Humble Oil or Enjay, although the company did use |
|these names in its marketing operations. |
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|The old name of Exxon Corporation was Standard Oil of New Jersey. Amazing what a few years and a few dollars can do. |
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|There is only negative equity in a bad name. When the name is bad, things tend to get worse. When the name is good, things tend to get |
|better. |
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|Continental Confusion |
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|Do you know the difference between a $3.9 billion company called The Continental Group, Inc., and a |
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|Page 105 |
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|$3.1 billion company called The Continental Corporation? Not too many people do until they find out that the Continental Group is the |
|world's largest maker of cans and Continental Corporation is the big insurance company. |
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|"Ah, yes. Continental Can and Continental Insurance. Now I know the companies you meant." |
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|Why would a company drop "can" and "insurance" in favor of the anonymity of "group" and "corporation''? The obvious answer is that these two|
|companies sell more than cans and insurance. |
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|But is it possible to build an identity on a nothing name? Unlikely, especially when you consider the existence of other companies with |
|claims on the Continental name. Especially Continental Airlines. And then there is Continental Oil, Continental Telephone and Continental |
|Grain. Not to mention Continental Illinois Corp. (All billion-dollar companies, by the way.) |
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|[pic] |
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|Both The Continental Group and The Continental Corporation are no longer independent companies. The Continental Group changed its name back |
|to Continental Can and is now part of a dairy and packaging company, Suiza Foods. But they never learn. Recently Continental Grain changed |
|its name to ContiGroup Companies. |
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|Or how about the executive who says to his or her secretary, "Get me Continental on the phone." |
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|It's not just "group" or "corporation" either. In Manhattan alone, there are 235 listings in the telephone directory starting with |
|Continental. |
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|The Too-Appropriate Name |
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|Sometimes a name can be too appropriate. Too graphic, too suggestive. Especially in a product consumed in public. |
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|Take the battle of the bulge. Mead Johnson's Metrecal versus Carnation's Slender. |
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|This document is created from a CHM file automatically by an unregistered copy of CHM-2-Word Pro. |
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|Page 107 |
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|10 |
|The No-Name Trap |
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|"I'm going to L.A.," the corporate executive will say. "And then I have to make a trip to New York." Why is Los Angeles often called L.A., |
|but New York is seldom called N.Y.? |
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|"I worked for GE for a couple of years and then went to Western Union." Why is General Electric often called GE, but Western Union is seldom|
|called WU? |
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|General Motors is often GM, American Motors is often AM, but Ford Motor is almost never FM. |
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|Phonetic Shorthand |
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|The principle at work here is phonetic shorthand. |
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|Ra-di-o Cor-po-ra-tion of A-mer-i-ca is 12 syllables long. No wonder most people use R-C-A, three syllables long. |
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|Gen-er-al E-lec-tric is six syllables long, so most people use G-E, two syllables. |
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|Gen-er-al Mo-tors is often GM. A-mer-i-can Mo- |
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|Page 108 |
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|tors is often AM. But Ford Mo-tor is almost never referred to as FM. The single syllable Ford says it all. |
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|But where there's no phonetic advantage, most people won't use initials. New York and N.Y. are both two syllables long. So while the |
|initials N.Y. are often written, they are seldom spoken. |
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|Los An-ge-les is four syllables long, so L.A. is frequently used. Note, too, that San Fran-cis-co, a four-syllable word, is seldom shortened|
|to "S.F." Why? There's a perfectly good two-syllable word (Frisco) to use as shorthand for San Francisco. Which is why people say "Jer-sey" |
|for New Jersey instead of ''N.J." |
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|When they have a choice of a word or a set of initials, both equal in phonetic length, people will invariably use the word, not the |
|initials. |
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|[pic] |
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|One exception to the use of the initials WU instead of Western Union took place inside the corporation itself. For some reason, insiders |
|consider it hip to use initials instead of names. So around the Western Union water coolers, you would hear not only WU, but also WUCO, |
|pronounced "Woo-Coo," for Western Union Company. (We should know; we worked for the company for more than a decade.) Translating insider |
|talk into language that outsiders can understand is one of the functions of a client's advertising and PR agencies. |
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|Phonetic length can sometimes fool you. The initials WU look a lot shorter than the name Western Union. But phonetically they are exactly |
|the same length. Dou-ble-U U. West-ern Un-ion. (Except for W, every other English language letter is just one syllable.) |
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|While customers refer to companies phonetically, the companies they talk about have a different way of looking at themselves. Companies are |
|visually oriented. They go to a lot of trouble making sure the name looks right without considering how it sounds. |
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|Visual Shorthand |
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|Business people also fall into the same trap. The first thing to go is the given name. When young Edmund |
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|This document is created from a CHM file automatically by an unregistered copy of CHM-2-Word Pro. |
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|Page 11 |
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|2 |
|The Assault on the Mind |
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|As a nation we have fallen in love with the concept of "communication." (In some progressive grade schools even "show and tell" is now being|
|called "communication.") We don't always appreciate the damage being done by our overcommunicated society. |
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|In communication, more is less. Our extravagant use of communication to solve a host of business and social problems has so jammed our |
|channels that only a tiny fraction of all messages actually get through. And not the most important ones either. |
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|One of the remarkable developments in the last 20 years has been the spread of marketing thinking around the world. In many of the developed|
|countries, advertising volume is approaching U.S. levels. Today, America accounts for less than one-third of the world's advertising volume.|
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|The Transmission Traffic Jam |
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|Take advertising, for example. With only 6 percent of the world's population, America consumes 57 percent of the world's advertising. (And |
|you thought our use of energy was extravagant. Actually, we consume only 33 percent of the world's energy.) |
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|Page 110 |
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|sales of $375 million in a recent year and 13,900 employees. |
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|If you select the next smaller company to every initial company on the Fortune 500 list, you will find the following: Rockwell |
|International, Monsanto, National Steel, Raytheon, Owens-Illinois, United Brands, American Cyanamid, Reynolds Metals, H. J. Heinz, Interco, |
|Hewlett-Packard, Carrier, Marmon, Polaroid, Diamond International, Blue Bell, Sperry & Hutchinson, Witco Chemical, Spencer Foods, Pabst |
|Brewing, Cabot, Hart Schaffner & Marx, Cutler-Hammer, Gardner-Denver, Questor, Arvin Industries and Varian Associates. |
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|Here's the list of 44 "name" companies on the current Fortune 500 list that are just below the "initial" companies. Don't these companies |
|seem more familiar? |
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|Ace Hardware |
|Allied Signal |
|Alltel |
|American Express |
|American Standard |
|Avery Dennison |
|Baltimore Gas & Electric |
|Bankamerica |
|Barnes & Noble |
|Campbell Soup |
|Central & South West |
|Consolidated Natural Gas |
|Consolidated Stores |
|Dana |
|Federated Department Stores |
|Gannett |
|Gateway |
|Harcourt General |
|Inacom |
|Kellogg |
|Kroger |
|Lear |
|Lehman Brothers |
|Masco |
|Merrill Lynch |
|Navistar International |
|Northeast Utilities |
|Owens-Illinois |
|Paccar |
|Phelps Dodge |
|Phillips Petroleum |
|Republic Industries |
|Safeco |
|Safeway |
|Sempra Energy |
|Shaw Industries |
|Sherwin-Williams |
|Tenet Healthcare |
|3Com |
|Transamerica |
|Tricon Global Restaurants |
|United Parcel Service |
|W.W. Grainger |
|Williams |
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|Which list of companies are better known? The name companies, of course. |
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|Some of the initial companies like RCA and CBS are well known, to be sure. But like FDR and JFK, these companies were well known before they|
|dropped their names in favor of initials. |
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|Which companies are likely to grow faster? Again, the name companies. |
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|To test this point, we conducted a survey of both "name" and "initial" companies using a Business Week subscriber list. The results show the|
|value of a name. |
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|The average awareness of the "initial" companies was 49 percent. The average awareness of a matched group of "name" companies was 68 |
|percent, 19 percentage points higher. |
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|What drives big companies into committing corporate suicide? For one thing, the top executives have seen the company's initials on internal |
|memos |
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| |

|This document is created from a CHM file automatically by an unregistered copy of CHM-2-Word Pro. |
|The content of this chapter is skipped, please register CHM-2-Word Pro to get full features. |
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|Page 112 |
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|And, no question about it, today's fad is "initialitus." Look at RCA. Everyone knows that RCA stands for Radio Corporation of America. So |
|the company could use the initials to trigger the "Radio Corporation of America" words buried deep inside the mind. |
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|But now that RCA is legally RCA, what will happen next? Nothing. At least in the next decade or so. The words are already buried in the |
|minds of millions of people. And they'll stay there indefinitely. |
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|RCA as a company, of course, is no longer with us. It was bought by General Electric. Even if your initials stand for something in the short|
|term, as RCA's initials did, you will generally weaken your company in the long term. We predict that many of the no-name companies |
|mentioned in the preceding pages will gradually fade away, generally being bought out by their stronger competitors. Make no mistake about |
|it. Initials make weak brand or company names. |
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|But what about the next generation of prospects? What will they think when they see those strange initials, RCA? |
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|Roman Catholic Archdiocese? |
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|Positioning is like the game of life. A long-term proposition. Name decisions made today may not bear fruit until many, many years in the |
|future. |
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|The Mind Works by Ear |
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|The primary reason name selection errors are so common is that executives live in an ocean of paper. Letters, memos, reports. Swimming in |
|the Xerox sea, it's easy to forget that the mind works aurally. To utter a word, we first translate the letters into sounds. Which is why |
|beginners move their lips when they read. |
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|When you were a child, you first learned to speak and then to read. And you learned to read slowly and laboriously by saying the words out |
|loud as you forced your mind to connect the written word with the aural sound stored in the brain. |
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|By comparison, learning to speak requires much |
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|Page 113 |
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|less effort than learning to read. We store sounds directly and then play them back in various combinations as our mental dexterity |
|improves. |
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|As you grow up, you learn to translate written words into the aural language needed by the brain so rapidly that you are unaware the |
|translation process is taking place. |
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|"The mind works by ear, not by eye." This is one of the most useful conceptual ideas in the entire book. Before you can file away a picture |
|in the mind, you have to verbalize it. Every successful positioning program we studied was a verbally oriented program, not a visual one. |
|(Think small, Avis is No. 2, etc.) It's not that pictures or illustrations weren't used, it's that the purpose of the visuals was to drive |
|verbal ideas into the mind. |
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|Many advertising agencies, on the other hand, still worship the visual. They love to create weird pictures that only cause visual |
|distraction. |
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|Then you read in the paper that 80 percent of learning takes place through the eyes. Of course it does. But reading is only a portion of the|
|learning process. Much learning occurs from visual clues which do not involve reading in the conventional sense at all. As when you learn |
|the emotional state of another person by "reading" body clues. |
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|When words are read, they are not understood until the visual/verbal translator in your brain takes over to make aural sense out of what you|
|have seen. |
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|In the same way, a musician learns to read music and hear the sound in his or her head, just as if someone were actually playing the tune on|
|an instrument. |
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|Try to memorize a poem without reading it out loud. It's far easier to memorize written material if we reinforce the aural component, the |
|working language of the brain. |
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|Which is why not only names, but also headlines, slogans and themes should be examined for their aural qualities. Even if you plan to use |
|them in printed material only. |
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|Did you think that Hubert and Elmer were bad names? If so, you must have translated the printed words into their aural equivalents. Because |
|Hubert and Elmer don't look bad. They only sound bad. |
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|This document is created from a CHM file automatically by an unregistered copy of CHM-2-Word Pro. |
|The content of this chapter is skipped, please register CHM-2-Word Pro to get full features. |
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|Page 115 |
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|greater. Much, much greater. When Corn Products Company changed its name to CPC International, it found little recognition of the CPC name. |
|The initials CPC are not phonetically shorter than Corn Products. Both are three syllables long, so the CPC initials were seldom used until |
|the name change was made. Ask someone in the business if they are familiar with CPC International. See if they don't say, "Oh, you mean Corn|
|Products Company?" |
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|As the years go by, the AT&T name gets weaker. The "telephone" part of the name is all right, but "telegraph" is now an obsolete word. |
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|In our initial-happy society, the first question the mind normally asks itself is, "What do those initials stand for?" |
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|The mind sees the letters AT&T and says, "Ah, American Telephone & Telegraph." |
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|But what reply does the mind get when it sees TRW? Obviously, there are a fair number of people who remember the Thompson Ramo Wooldridge |
|Corporation. And TRW is a $3 billion company, so it gets a lot of press and does a lot of advertising. But would those advertising dollars |
|work harder if TRW had a "name" name instead of an initial name? |
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|Some companies put sets of initials in series. How about trying to remember the D-M-E Corporation, a subsidiary of VSI Corporation? |
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|We're not trying to suggest that companies shouldn't change their names. Quite the contrary. Nothing remains the same for very long. Times |
|change. Products become obsolete. Markets come and go. And mergers are often necessary. So the time comes when a company must change its |
|name. |
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|U.S. Rubber was a worldwide corporation that marketed many products not made of rubber. Eaton |
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|Page 116 |
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|Yale & Towne was the result of a merger that produced a big company with a complicated name. Socony-Mobil was saddled with a first name that|
|originally stood for Standard Oil Company of New York. |
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|All of these names have been changed for sound marketing reasons. The traditional "foot-in-the-past" approach could have produced USR |
|Corporation, EY&T Company and SM Inc. Three marketing monstrosities. |
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|Instead, "forgetting the past" created three new modern corporate identities. Uniroyal, Eaton and Mobil. The marketing strengths of these |
|names speak for themselves. These companies successfully forgot the past and positioned themselves against the future. |
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|A company gets successful and then buys a Gulfstream V jet. You can't reverse the process and buy the jet first on the assumption that this |
|is going to make you successful. If you make your name famous, you can then use your initials. But you can't reverse the process. |
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|The Confusion between Cause and Effect |
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|In spite of the drawbacks, companies are lured to initials like moths to a candle. The success of the IBMs of this world seem to be proof |
|that initials are effective. It's the classic confusion between cause and effect. |
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|International Business Machines became so rich and famous (the cause) that everyone knew what company you were talking about when you used |
|its initials (the effect). |
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|When you try to reverse the procedure, it doesn't work. You can't use the initials of a company that is only modestly successful (the cause)|
|and then expect it to become rich and famous (the effect). |
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|It's like trying to become rich and famous by buying limousines and corporate jets. First, you have to |
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|This document is created from a CHM file automatically by an unregistered copy of CHM-2-Word Pro. |
|The content of this chapter is skipped, please register CHM-2-Word Pro to get full features. |
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|Page 118 |
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|and Sabena (Société Anonyme Belge d'Exploitation de la Navigation Aérienne). |
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|Often organizations will select names that form acronyms with meaning. Two examples: CARE (Committee for Aid and Rehabilitation in Europe) |
|and est (Erhardt Sensitivity Training). |
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|Other companies aren't so lucky. When General Aniline & Film changed its name to GAF, it obviously forgot that the acronym sounds like |
|"clumsy error." GAF is a gaffe in more ways than one. |
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|SAP is another initial company with an unfortunate acronym. Sure, the company is currently successful because its enterprise resource |
|planning software is a hot product in today's high-tech world. But in the long run, the name itself will tend to undermine the company's |
|performance. Baan is another company in the same field with a similar problem. Neither of these names is as bad as Sappi, the world's |
|largest producer of woodfree coated paper. |
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|The other thing people tend to forget when they pick a name is finding it in the telephone directory. Since you seldom look up your own name|
|in a phone book, you might not realize how hard it is to locate. |
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|Take USM Corporation, for example. In the Manhattan telephone directory, there are seven pages of listings starting with "US." So you ought |
|to be able to find USM somewhere between US Lithograph and US Nature Products Corp. |
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|But, of course, it's not there. Those US listings stand for "United States," as in the United States Lithograph Inc. The US in USM doesn't |
|stand for anything. So following standard rules for alphabetizing, the phone company puts all initial names up front. |
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|Generally speaking, it's a pretty depressing place. Look at a sample from the Rs: RHA Productions, RH Cleaners, RH Cosmetics, RH Cosmetics |
|Corp., R&H Custom Upholstering, RH Garage, etc. As a matter of fact, there 27 listings starting with RH alone. |
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|We were wrong. As we wrote earlier, alphabet soup names are alive and well. |
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|Fortunately, more and more companies are recognizing the dangers of the no-name trap. You can expect to see fewer and fewer MBPXLs. |
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|Page 119 |
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|11 |
|The Free-Ride Trap |
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|Take a product called Alka-Seltzer Plus. Let's see if we can visualize how Alka-Seltzer Plus might have gotten its name. |
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|A bunch of the boys are sitting around a conference table trying to name a new cold remedy designed to compete with Dristan and Contac. |
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|"I have it," says Harry. "Let's call it Alka-Seltzer Plus. That way we can take advantage of the $20 million a year we're already spending |
|on the Alka-Seltzer name." |
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|Customers are easily confused. The initial reaction to Alka-Seltzer Plus was that it was an improved form of Alka-Seltzer rather than a new |
|cold remedy. So the company made the Plus part of the name bigger. They should have given the brand a totally new name. |
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|"Good thinking, Harry," and another money-saving idea is instantly accepted, as most money-saving ideas usually are. |
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|But lo and behold, instead of eating into the Dristan and Contac market, the new product turns around and eats into the Alka-Seltzer market.|
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|Every so often the makers of Alka-Seltzer Plus redesign the bottle. The "Alka-Seltzer" gets smaller and smaller, and the "Plus" gets bigger |
|and bigger. |
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|A better name for the product would have been |
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|This document is created from a CHM file automatically by an unregistered copy of CHM-2-Word Pro. |
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|Page 120 |
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|Bromo-Seltzer Plus. That way they could have taken business away from the competition. |
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|The Conglomeration of the Corporation |
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|In the product era life was simpler. Each company specialized in a single line. The name told it all. |
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|Standard Oil, Singer, U.S. Steel, New York Central, Metro-Goldwyn-Mayer. |
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|[pic] |
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|What happened in plain-paper copiers was a repeat of what happened in mainframe computers. After Xerox got into the mind first and |
|established the premier position in copiers, a fistful of big companies jumped into the field: IBM, Kodak, 3M, Pitney-Bowes and |
|Addressograph-Multigraph. None of these companies succeeded for the same reason that few of the dwarfs succeeded in the main-frame field. |
|Their names conjured up the wrong positions in the mind. IBM means main-frame computers, Kodak means film photography, 3M means tape, |
|Pitney-Bowes means postage meters and Addressograph-Multigraph used to mean printers. Why invent a new name when you can get a free ride on |
|your existing name? Why indeed? So you can establish a new position in the mind. |
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|But technological progress created opportunities. So companies started branching into new fields. |
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|Enter the conglomerate. The company that specializes in nothing. By development or acquisition, the conglomerate is prepared to enter any |
|field in which it thinks it can make a buck. |
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|Take General Electric. GE makes everything from jet engines to nuclear power plants to plastics. |
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|RCA is in satellite communications, solid-state electronics and rent-a-cars. |
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|Many people pooh-pooh the conglomerate. Companies should "stick to their knitting," they say. But conglomerates have provided the capital to|
|sustain vigorous competition in the marketplace. If it weren't for the conglomerates, we would be a nation of semi-monopolies. |
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|Take office copiers, for example. Xerox, the pioneer in the plain-paper field, now faces competition from a computer manufacturer (IBM), |
|from a photo company (Kodak), from a mining company (3M), from a postage-meter company (Pitney-Bowes), from a mailing-list company |
|(Addressograph-Multigraph). |
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|Even when conglomerates grow by acquisition |
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|Page 121 |
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|(RCA's purchase of Hertz, ITT's purchase of Avis), they provide the money needed to sustain growth and competition. |
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|Otherwise, when the original founders retired or died, the tax bite would leave the company too weak to defend its turf. |
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|The typical life cycle of a corporation starts with an entrepreneur with an idea. If successful, you can count on two things, death and |
|taxes, to ensure that the operation will end up as part of a conglomerate. |
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|Two Different Strategies |
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|Because companies grow by two different strategies (internal development or external acquisition), two different "name" strategies are |
|evolving. Corporate egos dictate the strategies. |
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|PricewaterhouseCoopers is our favorite ego name. No one loses face. |
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|When a company develops a product internally, it usually puts the corporate name on the product. For example, General Electric computers. |
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|When a company develops a product by external acquisition, it usually keeps the existing name. RCA kept the Hertz name. ITT kept the Avis |
|name. |
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|But not always. |
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|[pic] |
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|Even today, Hertz and Avis are still powerful brands because they stand for a specific position in the mind, while the conglomerates that |
|bought them (RCA and ITT) are weak brands. When you put your name on everything, you undermine your strength in the long term. |
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|When Sperry-Rand developed a computer line internally, they called the product Univac. When Xerox went into computers by external |
|acquisition, they changed the name from Scientific Data Systems to Xerox Data Systems. |
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|Corporate egos aside, when should a company use the house name and when should they select a new name? (You can't really disregard corporate|
|egos. Try |
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|This document is created from a CHM file automatically by an unregistered copy of CHM-2-Word Pro. |
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|Page 123 |
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|septic, Colgate Toothbrushes and Colgate Toothpowder. Also Palmolive Liquid Detergent, Palmolive Rapid Shave, Palmolive Shaving Cream and |
|Palmolive Soap. |
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|You won't find any house names in the Procter & Gamble lineup. [To consumers, Proctor, the iron, is as well known as Procter, the gamble.] |
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|Procter & Gamble carefully positions each product so that it occupies a unique niche in the mind. For example: Tide makes clothes "white." |
|Cheer makes them "whiter than white." And Bold makes them "bright." |
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|What can we say? Procter & Gamble has pretty much given up on separate brands for separate products and has joined the line-extension crowd.|
|(Their latest is the effort to extend the Oil of Olay brand into a general cosmetics brand.) Has Procter & Gamble done well lately? Of |
|course not. |
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|With fewer brands (51 major brands versus 65 for Colgate-Palmolive) Procter & Gamble does twice as much business and makes three times as |
|much profit as Colgate-Palmolive. |
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|While it's fashionable on Madison Avenue these days to pooh-pooh Procter & Gamble advertising, it's interesting to note that Procter & |
|Gamble makes more money every year than all of America's 6,000 advertising agencies combined. |
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|A New Product Needs a New Name |
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|When a really new product comes along, it's almost always a mistake to hang a well-known name on it. |
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|The reason is obvious. A well-known name got well known because it stood for something. It occupies a position in the prospect's mind. A |
|really well-known name sits on the top rung of a sharply defined ladder. |
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|The new product, if it's going to be successful, is |
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|Page 124 |
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|going to require a new ladder. New ladder, new name. It's as simple as that. |
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|This Xerox computer advertisement nails the problem, but not the solution. Over the years, Xerox lost several billion dollars on their |
|computer division until they finally threw in the towel and shifted their positioning efforts to ''the document company." Everything that |
|doesn't make a copy is pretty much gone. |
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|Yet the pressures to go with the well-known name are enormous. "A well-known name has built-in acceptance. Our customers and prospects know |
|us and our company, and they will be more likely to accept our new product if we have our name on it." The logic is overwhelming. |
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|Yet history has destroyed this illusion. |
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|Xerox spent almost a billion dollars for a profitable computer company with a perfectly good name, Scientific Data Systems. Then what did |
|Xerox do? Of course. They changed the name of the company from Scientific Data Systems to Xerox Data Systems. |
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|Why? Obviously because Xerox was the better and more widely known name. And not only better known, but Xerox had a marketing mystique. A |
|corporate Cinderella, Xerox could do no wrong. |
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|The Teeter-Totter Principle |
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|When you look into the prospect's mind, you can see what went wrong. |
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|It's the teeter-totter principle. One name can't stand for two distinctly different products. When one goes up, the other goes down. |
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|Xerox means copier, not computer. (If you asked your secretary to get you a Xerox copy, you'd be upset if you got a reel of mag tape.) |
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|Even Xerox knew this. |
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|"Funny. You don't look like a Xerox machine," said the headline of one of their computer ads. |
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| |

|This document is created from a CHM file automatically by an unregistered copy of CHM-2-Word Pro. |
|The content of this chapter is skipped, please register CHM-2-Word Pro to get full features. |
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|Page 126 |
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|[pic] |
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|The rapid rise of "nobody" John McCain illustrates the publicity advantages of anonymity. Steve Forbes, on the other hand, was well known |
|for his 1996 campaign and therefore got much less favorable publicity in the year 2000. McCain lost, in our opinion, because he did not |
|think through and refine his position. George Bush was the "compassionate conservative," but what was John McCain and what did he stand for?|
|Being all things to everybody doesn't work in politics either. |
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|The rapid rise of "nobody" Jimmy Carter in the midst of a host of somebodies is proof that politics is a different game today. The old |
|maxims are no longer valid. |
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|Richard Nixon may be the best-known political name in the world. But almost any nobody could beat him. The defeats of well-known political |
|figures like Bella Abzug and Clifford Case are further proof that just being well known is no longer enough. You need a position. |
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|A position that hopefully doesn't back you into the loser's corner. As age did to Senator Case and abrasiveness did to Ms. Abzug. |
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|Publicity is like eating. Nothing kills the appetite quite as much as a hearty meal. And nothing kills the publicity potential of a product |
|or a person quite as much as a cover story in a national magazine. |
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|The media are constantly looking for the new and different, the fresh young face. |
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|In dealing with media, you must conserve your anonymity until you are ready to spend it. And then when you spend it, spend it big. Always |
|keeping in mind the objective is not publicity or communication for its own sake. But publicity to achieve a position in the prospect's |
|mind. |
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|An unknown company with an unknown product has much more to gain from publicity than a well-known company with an established product. |
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|"In the future everyone will be famous for 15 minutes," Andy Warhol once predicted. |
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|When your 15 minutes arrive, make the most of every 60 seconds. |
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|Page 127 |
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|12 |
|The Line-Extension Trap |
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|When the marketing history of the past decade is written, the single most significant trend will have to be line extension. That is, taking |
|the name of an established product and using it on a new one. (The free-ride trap carried to its ultimate conclusion.) |
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|Dial soap. Dial deodorant. |
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|Life Savers candy. Life Savers gum. |
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|Kleenex tissue. Kleenex towels. |
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|Line extension has swept through the advertising and marketing community like Sherman through Georgia. And for some very sound reasons. |
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|[pic] |
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|[pic] |
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|One of the loonier line extensions of recent years was Miller clear beer. |
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|Logic is on the side of line extension. Arguments of economics. Trade acceptance. Consumer acceptance. Lower advertising costs. Increased |
|income. The corporate image. |
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|Inside-Out Thinking |
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|As we said, logic is on the side of line extension. Truth, unfortunately, is not. |
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|This document is created from a CHM file automatically by an unregistered copy of CHM-2-Word Pro. |
|The content of this chapter is skipped, please register CHM-2-Word Pro to get full features. |
|For registration information, please refer to: http://www.macrobject.com |

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|Page 129 |
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|Both Dial and Bayer hold strong positions inside the prospect's mind. |
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|But what does it mean to own a position in the mind? Simply this: the brand name becomes a surrogate or substitute for the generic name. |
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|"Get me a Coke." |
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|"Where is the Bayer?" |
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|"Hand me the Dial." |
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|The stronger the position, the more often this substitution takes place. Some brands are so strong they are practically generic. Fiberglas, |
|Formica, Jello, Kleenex, Band-Aid, Sanka. "Generic" brand names are, of course, close to the edge, so they have to be handled carefully or |
|Uncle Sam will take your goodies away. |
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|From a communication point of view, the generic brand name is very efficient. One word serves in place of two. When you have a generic brand|
|name, you can afford to ignore the brand and promote the category. |
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|"Coffee keeps you awake? Drink Sanka brand." (You can see the heavy hand of the lawyers at work here. The theme would work better without |
|the redundant word "brand.") |
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|"Serve your family low-calorie Jello instead of cake or pie." |
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|[pic] |
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|[pic] |
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|Bayer didn't give up. After the failure of the Bayer non-aspirin brand, they launched the Bayer Select line. Five different pain-relief |
|products, none of which contains aspirin, all under the Bayer name. They spent $110 million launching the Bayer Select line. First year |
|sales: $25 million. |
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|From the prospect's point of view, line extension works against the generic brand position. It blurs the sharp focus of the brand in the |
|mind. No longer can the prospect say "Bayer" if he or she wants aspirin. Or "Dial" if one wants soap. |
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|In a sense, line extension educates the prospect to the fact that Bayer is nothing but a brand name. It |
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|Page 13 |
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|receive four or more TV stations. (A third can receive ten or more.) |
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|The average American family watches television 7 hours and 22 minutes a day. (More than 51 hours a week.) |
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|Like motion pictures, the TV picture is really a still picture which changes 30 times a second. Which means the average American family is |
|exposed to some 795,000 television pictures a day. |
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|Not only are we being pictured to death, we are being formed to death. Take that Xerox machine down the hall. American business currently |
|has more than 324 billion documents on hand. Each year another 72 billion are added to the pile. (Just to print the forms costs more than $4|
|billion a year.) |
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|Down the halls at the Pentagon, copy machines crank out 350,000 pages a day for distribution throughout the Defense Department. Equal to |
|1,000 good-sized novels. |
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|In spite of the rapid adoption of the personal computer by U.S. businesses, we're still drowning in paper. The average office worker uses |
|250 pounds of copy paper a year. The "paperless office" seems a long way off. |
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|"World War II will end," said Field Marshal Montgomery, "when the warring nations run out-of paper." |
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|Take packaging. An 8-ounce package of Total breakfast cereal contains 1,268 words of copy on the box. Plus an offer for a free booklet on |
|nutrition. (Which contains another 3,200 words.) |
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|The assault on the mind takes place in many different ways. The U.S. Congress passes some 500 laws a year (that's bad enough), but |
|regulatory agencies promulgate some 10,000 new rules and regulations in the same amount of time. |
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|The Code of Federal Regulations now contains |
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|This document is created from a CHM file automatically by an unregistered copy of CHM-2-Word Pro. |
|The content of this chapter is skipped, please register CHM-2-Word Pro to get full features. |
|For registration information, please refer to: http://www.macrobject.com |

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|Page 131 |
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|"Terrific thinking, J. C." And another logical inside-out decision is made. |
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|But when the tables are turned, the name makes no sense because the mind of the prospect is organized differently. The prospect thinks in |
|terms of products. |
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|It should come as no surprise that in terms of brand preference (the battery ladder in the mind of the prospect) the DieHard sits on the top|
|rung and JCPenney is way down the line. |
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|But doesn't a big retailer like JCPenney sell a lot of batteries? Of course, but as everyone knows, many products with the wrong name are |
|sold "in spite of" rather than "because of." |
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|On the other hand, doesn't the prospect have difficulty remembering that the DieHard battery can only be bought at Sears? Yes, it is a |
|problem for Sears and not everyone who might want to buy the DieHard will be able to make the connection. But it's better to establish a |
|position in the prospect's mind first and then worry about how to establish a retail connection later. |
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|In positioning, the shortest distance between two points is not necessarily the best strategy. The obvious name isn't always the best name. |
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