Re: Branding?

From: James Santagata <jms_at_tribalnoise.com>
Date: Tue 21 Mar 2000 00:10:57 +0000

JAMES SANTAGATA WROTE:
> I also would not agree with the premise that eBay is
> "brandless", let alone an example of Brand "X"
> vanquishing its foes. Rather eBay is the leading brand
> in its category, that of web-based auctions

TO WHICH ROB FRANKEL REPLIED:
> Actually, your points about EBay and Yahoo serve to
> illustrate the illusion of first movers being
> well-branded. They're not. They were simply the
> first to achieve awareness.

THEN JAMES SANTAGATA RESPONDED:
> It is true that both eBay and Yahoo have enjoyed first
> mover advantages, but it doesn't follow that these
> companies are, therefore, brandless.

TO WHICH KIM BROOKS REPLIED:
> I don't think Frankel was saying that first mover = no
> brand. He was saying that they are successful and
> well-recognized because they are first movers, not
> because they have a strong brand.

In an earlier post, I made the observation that eBay
and Yahoo were, in fact, examples of strong brands. I
based this on my definition that a strong brand is
associated with and interchangeable with the category
it occupies. In fact, the more closely associated the
brand is with the category, the better. Nobody buys or
carries mini, personal, compact stereos. They buy and
carry WALKMANS. Sony invented and created the category.
We don't make photocopies, we make xeroxes and so on.

In eBay's case, eBay = online auctions & online
auctions = eBay. I did not say that eBay or Yahoo did
the best job possible in articulating or strengthening
their positions, but nevertheless their positions are
strong and yield a solid brand because they own these
categories. Perhaps they were lucky or perhaps they
walked into this brand category as Rob posited, through
being a "first mover".

But even my views on this "first mover" issue differ
from Rob's. He says, "your [James Santagata's] points
about EBay and Yahoo serve to illustrate the illusion
of first movers being well-branded. They're not. They
were simply the first to achieve awareness."

My point is that eBay and Yahoo's brands are _not_
illusions, but are, in fact, strong brands. They could
be stronger. But they are still strong brands.

What eBay and Yahoo actually illustrate is my point
that a first mover has the advantage of creating or
defining a category, such that their product becomes
intertwined with that category. They own it. You cannot
be stronger than this. Of course, being intertwined is
not the end of creating a brand. It is only a
beginning, but a powerful beginning at that. From this
point on, the company must make sure that every action,
interaction and message that touches the consumer base
are consistent and support this position. I think on
that point we all agree.

Now brand extension, which I term "bland extension" is
always a temptation as well as a risk. The one saving
grace in "bland extension" as in branding in general is
that the strength of a brand is _relative_. If your
competitors are worse at branding than you are, you can
be successful until you come across someone who
understands the basics.

We saw this in the Olympics some years back with the
Jamaican bobsled team. They were the best their country
had to offer, but when pitted against world class
competitors like Austria and Germany, reality quickly
settles in.

Call me a skeptic, but I guess overall I am not
convinced in the advantages of being "brandless" or
that there are any special advantages or mystical
powers associated with being a "brand x". In fact, I
don't believe in the "brand x" anymore than I believe
in Santa Claus or free lunches. It's a great concept,
but I don't see evidence to substantiante it.

> I disagree with Santagata's examples that associating
> a particular name with a particular category equals a
> good brand. Again, that's recognition, not branding.

I ask you to offer the following survey to family and
friends and note their responses:

1) Name THE internet auction company (eBay)
2) Name THE internet bookstore (Amazon)
3) Name THE internet search engine (Yahoo)

I would be surprised if anyone answered differently.
Even outside the US, perhaps even in Germany and Japan
I would expect that these same answers would be
returned.

In this case, each company owns their category. That is
not the end of branding, but it is a powerful first
step. From there additional, consistent efforts are
necessary to solidify the brand.

> RECOGNITION MEANS: Name a grocery store = Safeway.
> Kudos to you, Safeway, you got the recognition because
> you have a million locations & flyers in every Sunday's
> paper.

Again, recognition means that we have heard the brand.
"Yeah, I've heard of Valvoline". But valvoline is a
brand of motor oil not shampoo. Sony is a highly
recognized brand as well, but it's not associated with
automobiles. Recognition and branding are two different
concepts, indeed.

> BRANDING MEANS: Tell me something about Larry's
> Market = they are upscale with many imported goods
> that I can't find anywhere else, and they have the
> best quality & selection so I'm willing to pay more.
> Kudos to you, Larry's Marketing, you have created a
> message, I have absorbed it, my experience in the
> market has reinforced that brand image.

Again, branding is relative. If your competition is
inept, you can be sloppy and get away with a lot of
mistakes. If the competition relies heavily on "bland
extension", you've got a great chance to mop up with
them.

But I still maintain that branding starts with owning a
category. I'm not overly familiar with regional
supermarkets, but on the west coast (Northern
California) I will give you an example of owning a
category.

Want organic foods? Shop at Whole Foods.
Want a low price leader? Shop at Lucky's.
Want fair priced, "different" items? Shop at Trader Joe's.
Want items in bulk at a cheap price? Shop at Costco.

In each case, these stores have staked out a particular
category. Of course, more work is necessary. If Whole
Foods starts selling apples marinated in DDT or agent
orange they have a problem. If Lucky's start selling
$1,000 bottles of wine or sells items out of line with
their category, there are problems again.

> HUGE difference here in recognition and branding.
> Branding is specifically a message that YOU pick, YOU
> communicate, the customer ABSORBS and AGREES WITH.
> Branding means you pick a value that resonates with the
> market, then consistently communicate & fulfill that
> statement.
>
> You can have low recognition and high branding (Rolls
> Royce - not the first car company that comes to mind,
> but everyone has a strong associated value with their
> name).

Rolls Royce owns that category -- super expensive
automobiles. Yes, they make jet engines as well, but
the category of super expensive automobiles is theirs.

Again, the foundation of a good, solid brand is the
category. It is not the end of the branding process,
but it is critically important.

> Back to the original questions, I would describe eBay
> as low-branded or no-brand, because if you were to ask
> a big focus group, "What do you know about eBay?", they
> would probably say:
> "I bought a book there and it was great"
> "I tried to buy a baseball card and I got screwed"
> "I read that they get phony bids"
> "You can save a lot of money"
> "They have everything there you could ever want"
> "It's mostly crap, like a big garage sale"
> "I'm not sure what they sell"
> "They have Beanie Babies I can't find anywhere else"

Whatever you get from eBay, the fact is, if you want an
online auction, you go to eBay. eBay is THE online
auction space.

> Get it? There is no consistent message that you can
> name.

Again, eBay is THE online auction space.

> Because they don't articulate a message in their
> ads or on the site, so the message is defined by the
> users.

I agree with you here. eBay doesn't exploit their
strengths. They don't build on it. This is analogous to
many athletes. They could be stronger or faster if they
worked harder, but the fact is, they are still
relatively stronger and faster than others, although on
an absolute basis, they have not reached their true
potential.

And so it is with eBay and many brands at that.

> That's why I originally put forth that they are
> brandless, yet high-recognition and successful. Yes?

I'm sorry. I remain unconvinced. I am open to changing
my position, but I would like to see some strong
arguments and perhaps some emperical data. Even
anecdotes would do.


James Santagata




Received on Mon Mar 20 2000 - 18:10:57 CST