The Cause and the Cure of Marketing Malpractice

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Thirty thousand new consumer products are launched each year. But over 90% of
them failand thats after marketing professionals have spent massive amounts
of money trying to understand what their customers want. Whats wrong with
this picture !s it that market researchers arent smart enough That advertising
agencies arent creative enough That consumers have "ecome too di#cult to
understand We dont think so. We "elieve$ instead$ that some of the
fundamental paradigms of marketingthe methods that most of us learned to
segment markets$ "uild "rands$ and understand customersare "roken. Were
not alone in that %udgment. &ven 'rocter ( )am"le *&+ ,.). -a.ey$ argua"ly the
"est/positioned person in the world to make this call$ says$ 0We need to reinvent
the way we market to consumers. We need a new model.1
To "uild "rands that mean something to customers$ you need to attach them to
products that mean something to customers. ,nd to do that$ you need to
segment markets in ways that re.ect how customers actually live their lives. !n
this article$ we will propose a way to recon2gure the principles of market
segmentation. Well descri"e how to create products that customers will
consistently value. ,nd 2nally$ we will descri"e how new$ valua"le "rands can "e
"uilt to truly deliver sustained$ pro2ta"le growth.
Broken Paradigms of Market Segmentation
The great 3arvard marketing professor Theodore -evitt used to tell his students$
0'eople dont want to "uy a 4uarter/inch drill. They want a 4uarter/inch hole51
&very marketer we know agrees with -evitts insight. 6et these same people
segment their markets "y type of drill and "y price point7 they measure market
share of drills$ not holes7 and they "enchmark the features and functions of their
drill$ not their hole$ against those of rivals. They then set to work o8ering more
features and functions in the "elief that these will translate into "etter pricing
and market share. When marketers do this$ they often solve the wrong pro"lems$
improving their products in ways that are irrelevant to their customers needs.
9egmenting markets "y type of customer is no "etter. 3aving sliced "usiness
clients into small$ medium$ and large enterprisesor having shoehorned
consumers into age$ gender$ or lifestyle "racketsmarketers "usy themselves
with trying to understand the needs of representative customers in those
segments and then create products that address those needs. The pro"lem is
that customers dont conform their desires to match those of the average
consumer in their demographic segment. When marketers design a product to
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address the needs of a typical customer in a demographically de2ned segment$
therefore$ they cannot know whether any speci2c individual will "uy the product
they can only e;press a likelihood of purchase in pro"a"ilistic terms.
Thus the prevailing methods of segmentation that "udding managers learn in
"usiness schools and then practice in the marketing departments of good
companies are actually a key reason that new product innovation has "ecome a
gam"le in which the odds of winning are horrifyingly low.
There is a "etter way to think a"out market segmentation and new product
innovation. The structure of a market$ seen from the customers point of view$ is
very simple< They %ust need to get things done$ as Ted -evitt said. When people
2nd themselves needing to get a %o" done$ they essentially hire products to do
that %o" for them. The marketers task is therefore to understand what %o"s
periodically arise in customers lives for which they might hire products the
company could make. !f a marketer can understand the %o"$ design a product and
associated e;periences in purchase and use to do that %o"$ and deliver it in a way
that reinforces its intended use$ then when customers 2nd themselves needing
to get that %o" done$ they will hire that product.
9ince most new/product developers dont think in those terms$ theyve "ecome
much too good at creating products that dont help customers do the %o"s they
need to get done. 3eres an all/too/typical e;ample. !n the mid/:990s$ 9cott *ook
presided over the launch of a software product called the =uicken >inancial
'lanner$ which helped customers create a retirement plan. !t .opped. Though it
captured over 90% of retail sales in its product category$ annual revenue never
surpassed ?@ million$ and it was eventually pulled from the market.
What happened Was the ?A9 price too high Bid the product need to "e easier
to use Cay"e. , more likely e;planation$ however$ is that while the
demographics suggested that lots of families needed a 2nancial plan$
constructing one actually wasnt a %o" that most people were looking to do. The
fact that they should have a 2nancial plan$ or even that they said they should
have a plan$ didnt matter. !n hindsight$ the fact that the design team had had
trou"le 2nding enough 0planners1 to 2ll a focus group should have tipped *ook
o8. Caking it easier and cheaper for customers to do things that they are not
trying to do rarely leads to success.
Designing Products That Do the Job
With few e;ceptions$ every %o" people need or want to do has a social$ a
functional$ and an emotional dimension. !f marketers understand each of these
@
dimensions$ then they can design a product thats precisely targeted to the %o".
!n other words$ the %o"$ not the customer$ is the fundamental unit of analysis for
a marketer who hopes to develop products that customers will "uy.
To see why$ consider one fast/food restaurants e8ort to improve sales of its milk
shakes. D!n this e;ample$ "oth the company and the product have "een
disguised.E !ts marketers 2rst de2ned the market segment "y productmilk
shakesand then segmented it further "y pro2ling the demographic and
personality characteristics of those customers who fre4uently "ought milk
shakes. Fe;t$ they invited people who 2t this pro2le to evaluate whether making
the shakes thicker$ more chocolaty$ cheaper$ or chunkier would satisfy them
"etter. The panelists gave clear feed"ack$ "ut the conse4uent improvements to
the product had no impact on sales.
, new researcher then spent a long day in a restaurant seeking to understand
the %o"s that customers were trying to get done when they hired a milk shake.
3e chronicled when each milk shake was "ought$ what other products the
customers purchased$ whether these consumers were alone or with a group$
whether they consumed the shake on the premises or drove o8 with it$ and so
on. 3e was surprised to 2nd that A0% of all milk shakes were purchased in the
early morning. Cost often$ these early/morning customers were alone7 they did
not "uy anything else7 and they consumed their shakes in their cars.
The researcher then returned to interview the morning customers as they left the
restaurant$ shake in hand$ in an e8ort to understand what caused them to hire a
milk shake. Cost "ought it to do a similar %o"< They faced a long$ "oring
commute and needed something to make the drive more interesting. They
werent yet hungry "ut knew that they would "e "y :0 am7 they wanted to
consume something now that would stave o8 hunger until noon. ,nd they faced
constraints< They were in a hurry$ they were wearing work clothes$ and they had
Dat mostE one free hand.
The researcher in4uired further< 0Tell me a"out a time when you were in the
same situation "ut you didnt "uy a milk shake. What did you "uy instead1
9ometimes$ he learned$ they "ought a "agel. But "agels were too dry. Bagels
with cream cheese or %am resulted in sticky 2ngers and gooey steering wheels.
9ometimes these commuters "ought a "anana$ "ut it didnt last long enough to
solve the "oring/commute pro"lem. Boughnuts didnt carry people past the :0
am hunger attack. The milk shake$ it turned out$ did the %o" "etter than any of
these competitors. !t took people @0 minutes to suck the viscous milk shake
through the thin straw$ addressing the "oring/commute pro"lem. They could
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consume it cleanly with one hand. By :0<00$ they felt less hungry than when
they tried the alternatives. !t didnt matter much that it wasnt a healthy food$
"ecause "ecoming healthy wasnt essential to the %o" they were hiring the milk
shake to do.
The researcher o"served that at other times of the day parents often "ought milk
shakes$ in addition to complete meals$ for their children. What %o" were the
parents trying to do They were e;hausted from repeatedly having to say 0no1 to
their kids. They hired milk shakes as an innocuous way to placate their children
and feel like loving parents. The researcher o"served that the milk shakes didnt
do this %o" very well$ though. 3e saw parents waiting impatiently after they had
2nished their own meals while their children struggled to suck the thick shakes
up through the thin straws.
*ustomers were hiring milk shakes for two very di8erent %o"s. But when
marketers had originally asked individual customers who hired a milk shake for
either or "oth %o"s which of its attri"utes they should improveand when these
responses were averaged with those of other customers in the targeted
demographic segmentit led to a one/siHe/2ts/none product.
+nce they understood the %o"s the customers were trying to do$ however$ it
"ecame very clear which improvements to the milk shake would get those %o"s
done even "etter and which were irrelevant. 3ow could they tackle the "oring/
commute %o" Cake the milk shake even thicker$ so it would last longer. ,nd swirl
in tiny chunks of fruit$ adding a dimension of unpredicta"ility and anticipation to
the monotonous morning routine. Iust as important$ the restaurant chain could
deliver the product more e8ectively "y moving the dispensing machine in front
of the counter and selling customers a prepaid swipe card so they could dash in$
0gas up$1 and go without getting stuck in the drive/through lane. ,ddressing the
midday and evening %o" to "e done would entail a very di8erent product$ of
course.
By understanding the %o" and improving the products social$ functional$ and
emotional dimensions so that it did the %o" "etter$ the companys milk shakes
would gain share against the real competitionnot %ust competing chains milk
shakes "ut "ananas$ "oredom$ and "agels. This would grow the category$ which
"rings us to an important point< Io"/de2ned markets are generally much larger
than product categoryJde2ned markets. Carketers who are stuck in the mental
trap that e4uates market siHe with product categories dont understand whom
they are competing against from the customers point of view.
A
Fotice that knowing how to improve the product did not come from
understanding the 0typical1 customer. !t came from understanding the %o". Feed
more evidence
'ierre +midyar did not design eBay for the 0auction psychographic.1 3e founded
it to help people sell personal items. )oogle was designed for the %o" of 2nding
information$ not for a 0search demographic.1 The unit of analysis in the work that
led to 'rocter ( )am"les stunningly successful 9wi8er was the %o" of cleaning
.oors$ not a demographic or psychographic study of people who mop.
Why do so many marketers try to understand the consumer rather than the %o"
+ne reason may "e purely historical< !n some of the markets in which the tools of
modern market research were formulated and tested$ such as feminine hygiene
or "a"y care$ the %o" was so closely aligned with the customer demographic that
if you understood the customer$ you would also understand the %o". This
coincidence is rare$ however. ,ll too fre4uently$ marketers focus on the
customer causes them to target phantom needs.
How a Job Focus Can Grow Product Categories
Few growth markets are created when innovating companies design a product
and position its "rand on a %o" for which no optimal product yet e;ists. !n fact$
companies that historically have segmented and measured the siHe of their
markets "y product category generally 2nd that when they instead segment "y
%o"$ their market is much larger Dand their current share of the %o" is much
smallerE than they had thought. This is great news for smart companies hungry
for growth.
Purpose Brands and Disruptie !nnoations
Knderstanding and targeting %o"s was the key to 9ony founder ,kio Coritas
approach to disruptive innovation. Corita never did conventional market
research. !nstead$ he and his associates spent much of their time watching what
people were trying to get done in their lives$ then asking themselves whether
9onys electronics miniaturiHation technology could help them do these things
"etter$ easier$ and cheaper. Corita would have "adly mis%udged the siHe of his
market had he simply analyHed trends in the num"er of tape players "eing sold
"efore he launched his Walkman. This should trigger an action item on every
marketers to/do list< Turn o8 the computer$ get out of the o#ce$ and o"serve.
*onsider how *hurch ( Bwight used this strategy to grow its "aking soda
"usiness. The company has produced ,rm ( 3ammer "aking soda since the
:LM0s7 its iconic yellow "o; and Nulcans hammer/hefting arm have "ecome
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enduring visual cues for 0the standard of purity.1 !n the late :9M0s$ market
research director Barry )old"latt tells us$ management "egan o"servational
research to understand the diverse circumstances in which consumers found
themselves with a %o" to do where ,rm ( 3ammer could "e hired to help. They
found a few consumers adding the product to laundry detergent$ a few others
mi;ing it into toothpaste$ some sprinkling it on the carpet$ and still others placing
open "o;es in the refrigerator. There was a plethora of %o"s out there needing to
get done$ "ut most customers did not know that they could hire ,rm ( 3ammer
"aking soda for these cleaning and freshening %o"s. The single product %ust
wasnt giving customers the guidance they needed$ given the many %o"s it could
"e hired to do.
Today$ a family of %o"/focused ,rm ( 3ammer products has greatly grown the
"aking soda product category. These %o"s include<
3elp my mouth feel fresh and clean D,rm ( 3ammer *omplete *are
toothpasteE
BeodoriHe my refrigerator D,rm ( 3ammer >ridge/n/>reeHer "aking sodaE
3elp my underarms stay clean and fresh D,rm ( 3ammer Kltra Ca;
deodorantE
*lean and freshen my carpets D,rm ( 3ammer Nacuum >ree carpet
deodoriHerE
BeodoriHe kitty litter D,rm ( 3ammer 9uper 9coop cat litterE
Cake my clothes smell fresh D,rm ( 3ammer -aundry BetergentE.
The yellow/"o; "aking soda "usiness is now less than :0% of ,rm ( 3ammers
consumer revenue. The companys share price has appreciated at nearly four
times the average rate of its nearest rivals$ '()$ Knilever$ and *olgate/
'almolive. ,lthough the overall ,rm ( 3ammer "rand is valua"le in each
instance$ the key to this e;traordinary growth is a set of %o"/focused products
and a communication strategy that help people realiHe that when they 2nd
themselves needing to get one of these %o"s done$ here is a product that they
can trust to do it well.
Bui"ding Brands That Customers #i"" Hire
9ometimes$ the discovery that one needs to get a %o" done is conscious$ rational$
and e;plicit. ,t other times$ the %o" is so much a part of a routine that customers
arent really consciously aware of it. &ither way$ if consumers are lucky$ when
they discover the %o" they need to do$ a "randed product will e;ist that is
perfectly and unam"iguously suited to do it. We call the "rand of a product that
is tightly associated with the %o" for which it is meant to "e hired a purpose
brand.
M
The history of >ederal &;press illustrates how successful purpose "rands are
"uilt. , %o" had e;isted practically forever< the !/need/to/send/this/from/here/to/
there/with/perfect/certainty/as/fast/as/possi"le %o". 9ome K.9. customers hired
the K.9. 'ostal 9ervices airmail to do this %o"7 a few desperate souls paid
couriers to sit on airplanes. +thers even went so far as to plan ahead so they
could ship via K'9 trucks. But each of these alternatives was kludgy$ e;pensive$
uncertain$ or inconvenient. Because no"ody had yet designed a service to do this
%o" well$ the "rands of the unsatisfactory alternative services "ecame tarnished
when they were hired for this purpose. But after >ederal &;press designed its
service to do that e;act %o"$ and did it wonderfully again and again$ the >ed&;
"rand "egan popping into peoples minds whenever they needed to get that %o"
done. >ed&; "ecame a purpose "randin fact$ it "ecame a ver" in the
international language of "usiness that is ine;trica"ly linked with that speci2c
%o". !t is a very valua"le "rand as a result.
Cost of todays great "rands*rest$ 9tar"ucks$ Pleene;$ eBay$ and Podak$ to
name a fewstarted out as %ust this kind of purpose "rand. The product did the
%o"$ and customers talked a"out it. This is how "rand e4uity is "uilt.
Brand e4uity can "e destroyed when marketers dont tie the "rand to a purpose.
When they seek to "uild a general "rand that does not signal to customers when
they should and should not "uy the product$ marketers run the risk that people
might hire their product to do a %o" it was not designed to do. This causes
customers to distrust the "randas was the case for years with the post o#ce.
, clear purpose "rand is like a two/sided compass. +ne side guides customers to
the right products. The other side guides the companys product designers$
marketers$ and advertisers as they develop and market improved and new
versions of their products. , good purpose "rand clari2es which features and
functions are relevant to the %o" and which potential improvements will prove
irrelevant. The price premium that the "rand commands is the wage that
customers are willing to pay the "rand for providing this guidance on "oth sides
of the compass.
The need to feel a certain wayto feel macho$ sassy$ pampered$ or prestigious
is a %o" that arises in many of our lives on occasion. When we 2nd ourselves
needing to do one of these %o"s$ we can hire a "randed product whose purpose is
to provide such feelings. )ucci$ ,"solut$ Cont"lanc$ and Nirgin$ for e;ample$ are
purpose "rands. They link customers who have one of these %o"s to do with
e;periences in purchase and use that do those %o"s well. These might "e called
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aspirational %o"s. !n some aspirational situations$ it is the "rand itself$ more than
the functional dimensions of the product$ that gets the %o" done.
The $o"e of %dertising
Cuch advertising is wasted in the mistaken "elief that it alone can "uild "rands.
,dvertising cannot "uild "rands$ "ut it can tell people a"out an e;isting "randed
products a"ility to do a %o" well. Thats what the managers at Knilevers ,sian
operations found out when they identi2ed an important %o" that arose in the lives
of many o#ce workers at around A<00 in the afternoon. Brained of physical and
emotional energy$ people still had to get a lot done "efore their workday ended.
They needed something to "oost their productivity$ and they were hiring a range
of ca8einated drinks$ candy "ars$ stretch "reaks$ and conversation to do this %o"$
with mi;ed results.
Knilever designed a microwava"le soup whose properties were tailored to that
%o"4uick to 2;$ nutritious "ut not too 2lling$ it can "e consumed at your desk
"ut gives you a "it of a "reak when you go to heat it up. !t was launched into the
workplace under the descriptive "rand 9oupy 9na;. The results were mediocre.
+n a hunch$ the "rands managers then relaunched the product with
advertisements showing lethargic workers perking up after using the product and
renamed the "rand 9oupy 9na;A<00. The reaction of people who saw the
advertisements was$ 0Thats e;actly what happens to me at A<0051 They needed
something to help them consciously discover "oth the %o" and the product they
could hire to do it. The tagline and ads transformed a "rand that had "een a
simple description of a product into a purpose "rand that clari2ed the nature of
the %o" and the product that was designed to do it$ and the product has "ecome
very successful.
Fote the role that advertising played in this process. ,dvertising clari2ed the
nature of the %o" and helped more people realiHe that they had the %o" to do. !t
informed people that there was a product designed to do that %o" and gave the
product a name people could remem"er. ,dvertising is not a su"stitute for
designing products that do speci2c %o"s and ensuring that improvements in their
features and functions are relevant to that %o". The fact is that most great "rands
were "uilt "efore their owners started advertising. Think of Bisney$ 3arley/
Bavidson$ eBay$ and )oogle. &ach "rand developed a sterling reputation "efore
much was spent on advertising.
,dvertising that attempts to short/circuit this process and "uild$ as if from
scratch$ a "rand that people will trust is a fools errand. >ord$ Fissan$ Cacys$ and
many other companies invest hundreds of millions to keep the corporate name
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or their products names in the general consciousness of the "uying pu"lic. Cost
of these companies products arent designed to do speci2c %o"s and therefore
arent usually di8erentiated from the competition. These 2rms have few purpose
"rands in their portfolios and no apparent strategies to create them. Their
managers are unintentionally transferring "illions in pro2ts to "randing agencies
in the vain hope that they can "uy their way to glory. What is worse$ many
companies have decided that "uilding new "rands is so e;pensive they will no
longer do so. Brand "uilding "y advertising is indeed prohi"itively e;pensive. But
thats "ecause its the wrong way to "uild a "rand.
Carketing mavens are fond of saying that "rands are hollow words into which
meaning gets stu8ed. Beware. &;ecutives who think that "rand advertising is an
e8ective mechanism for stu#ng meaning into some word they have chosen to
"e their "rand generally succeed in stu#ng it full of vagueness. The ad agencies
and media companies win "ig in this game$ "ut the companies whose "rands are
getting stu8ed generally 2nd themselves trapped in an e;pensive$ endless arms
race with competitors whose "rands are compara"ly vague.
The e;ceptions to this "rand/"uilding rule are the purpose "rands for aspirational
%o"s$ where the "rand must "e "uilt through images in advertising. The method
for "rand "uilding that is appropriate for these %o"s$ however$ has "een wantonly
and wastefully misapplied to the rest of the world of "randing.
&'tending()r Destro*ing(Brand &+uit*
+nce a strong purpose "rand has "een created$ people within the company
inevita"ly want to leverage it "y applying it to other products. &;ecutives should
consider these proposals carefully. There are rules a"out the types of e;tensions
that will reinforce the "randand the types that will erode it.
!f a company chooses to e;tend a "rand onto other products that can "e hired to
do the same %o"$ it can do so without concern that the e;tension will compromise
what the "rand does. >or e;ample$ 9onys porta"le *B player$ although a
di8erent product than its original Walkman/"randed radio and cassette players$
was positioned on the same %o" Dthe help/me/escape/the/chaos/in/my/world %o"E.
9o the new product caused the Walkman "rand to pop even more instinctively
into customers minds when they needed to get that %o" done. 3ad 9ony not
"een asleep at the switch$ a Walkman/"randed C'G player would have further
enhanced this purpose "rand. !t might even have kept ,pples i'od purpose
"rand from preempting that %o".
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The fact that purpose "rands are %o" speci2c means that when a purpose "rand
is e;tended onto products that target di8erent %o"s$ it will lose its clear meaning
as a purpose "rand and develop a di8erent character insteadan endorser
brand. ,n endorser "rand can impart a general sense of 4uality$ and it there"y
creates some value in a marketing e4uation. But general endorser "rands lose
their a"ility to guide people who have a particular %o" to do to products that were
designed to do it. Without appropriate guidance$ customers will "egin using
endorser/"randed products to do %o"s they werent designed to do. The resulting
"ad e;perience will cause customers to distrust the "rand. 3ence$ the value of
an endorser "rand will erode unless the company adds a second word to its
"rand architecturea purpose "rand alongside the endorser "rand. Bi8erent
%o"s demand di8erent purpose "rands.
Carriott !nternationals e;ecutives followed this principle when they sought to
leverage the Carriott "rand to address di8erent %o"s for which a hotel might "e
hired. Carriott had "uilt its hotel "rand around full/service facilities that were
good to hire for large meetings. When it decided to e;tend its "rand to other
types of hotels$ it adopted a two/word "rand architecture that appended to the
Carriott endorsement a purpose "rand for each of the di8erent %o"s its new hotel
chains were intended to do. 3ence$ individual "usiness travelers who need to
hire a clean$ 4uiet place to get work done in the evening can hire *ourtyard "y
Carriottthe hotel designed "y "usiness travelers for "usiness travelers. -onger/
term travelers can hire Residence !nn "y Carriott$ and so on. &ven though these
hotels were not constructed and decorated to the same premium standard as
full/service Carriott hotels$ the new chains actually reinforce the endorser
4ualities of the Carriott "rand "ecause they do the %o"s well that they are hired
to do.
Cilwaukee &lectric Tool has "uilt purpose "rands with twoand only twoof the
products in its line of power tools. The Cilwaukee 9awHall is a reciprocating saw
that tradesmen hire when they need to cut through a wall 4uickly and arent sure
whats under the surface. 'lum"ers hire Cilwaukees 3ole 3awg$ a right/angle
drill$ when they need to drill a hole in a tight space. *ompetitors like Black (
Becker$ Bosch$ and Cakita o8er reciprocating saws and right/angle drills with
compara"le performance and price$ "ut none of them has a purpose "rand that
pops into a tradesmans mind when he has one of these %o"s to do. Cilwaukee
has owned more than L0% of these two %o" markets for decades.
!nterestingly$ Cilwaukee o8ers under its endorser "rand a full range of power
tools$ including circular saws$ pistol/grip drills$ sanders$ and %igsaws. While the
dura"ility and relative price of these products are compara"le to those of the
:0
9awHall and 3ole 3awg$ Cilwaukee has not "uilt purpose "rands for any of these
other products. The market share of each is in the low single digitsa testament
to the clarifying value of purpose "rands versus the general connotation of
4uality that endorser "rands confer. !ndeed$ a clear purpose "rand is usually a
more formida"le competitive "arrier than superior product performance
"ecause competitors can copy performance much more easily than they can
copy purpose "rands.
The tri"ulations and successes of '()s *rest "rand is a story of products that
ace the customer %o"$ lose their focus$ and then "ounce "ack to "ecome strong
purpose "rands again. !ntroduced in the mid/:9O0s$ *rest was a classic
disruptive technology. !ts >luoristan/reinforced toothpaste made cavity/
preventing .uoride treatments cheap and easy to apply at home$ replacing an
e;pensive and inconvenient trip to the dentist. ,lthough '() could have
positioned the new product under its e;isting toothpaste "rand$ )leem$ its
managers chose instead to "uild a new purpose "rand$ *rest$ which was uni4uely
positioned on a %o". Cothers who wanted to prevent cavities in their childrens
teeth knew when they saw or heard the word 0*rest1 that this product was
designed to do that %o". Because it did the %o" so well$ mothers grew to trust the
product and in fact "ecame suspicious of the a"ility of products without the *rest
"rand to do that %o". This unam"iguous association made it a very valua"le
"rand$ and *rest passed all its K.9. rivals to "ecome the clear market leader in
toothpaste for a generation.
But one cannot sustain victory "y standing still. *ompetitors eventually copied
*rests cavity prevention a"ilities$ turning cavity prevention into a commodity.
*rest lost share as competitors innovated in other areas$ including .avor$
mouthfeel$ and commonsense ingredients like "aking soda. '() "egan copying
and advertising these attri"utes. But unlike Carriott$ '() did not append
purpose "rands to the general endorsement of *rest$ and the "rand "egan losing
its distinctiveness.
,t the end of the :990s$ new *rest e;ecutives "rought two disruptions to market$
each with its own clear purpose "rand. They ac4uired a start/up named Br. Iohns
and re"randed its .agship electric tooth"rush as the *rest 9pinBrush$ which they
sold for ?Ofar "elow the price of competitors models of the time. They also
launched *rest Whitestrips$ which allowed people to whiten their teeth at home
for a mere ?@O$ far less than dentists charged. With these purpose/"randed
innovations$ *rest generated su"stantial new growth and regained share
leadership in the entire tooth care category.
::
The e;hi"it 0&;tending Brands Without Bestroying Them1 diagrams the two ways
marketers can e;tend a purpose "rand without eroding its value. The 2rst option
is to move up the vertical a;is "y developing di8erent products that address a
common %o". This is what 9ony did with its Walkman porta"le *B player. When
*rest was still a clear purpose "rand$ '() could have gone this route "y$ say$
introducing a *rest/"rand .uoride mouth rinse. The "rand would have retained
its clarity of purpose. But '() did not$ allowing Iohnson ( Iohnson to insert yet
another "rand$ ,*T Dits own .uoride mouth rinseE$ into the cavity/prevention %o"
space. Because '() pursued the second option$ e;tending its "rand along the
horiHontal a;is to other %o"s Dwhitening$ "reath freshening$ and so onE$ the
purpose "rand morphed into an endorser "rand.
#h* Strong Purpose Brands %re So $are
)iven the power that purpose "rands have in creating opportunities for
di8erentiation$ premium pricing$ and growth$ isnt it odd that so few companies
have a deli"erate strategy for creating them
*onsider the automo"ile industry. There are a signi2cant num"er of di8erent %o"s
that people who purchase cars need to get done$ "ut only a few companies have
staked out any of these %o" markets with purpose "rands. Range Rover Duntil
recently$ at leastE was a clear and valua"le purpose "rand Dthe take/me/
anywhere/with/total/dependa"ility %o"E. The Nolvo "rand is positioned on the
:@
safety %o". 'orsche$ BCW$ Cercedes$ Bentley$ and Rolls/Royce are associated
with various aspirational %o"s. The Toyota endorser "rand has earned the
connotation of relia"ility. But for so much of the rest !ts hard to know what they
mean.
To illustrate< *layton *hristensen recently needed to deliver on a long/promised
commitment to "uy a car as a college graduation gift for his daughter ,nnie.
There were functional and emotional dimensions to the %o". The car needed to "e
stylish and fun to drive$ to "e sure. But even more important$ as his "eloved
daughter was venturing o8 into the cold$ cruel world$ the "ig %o" *lay needed to
get done was to know that she was safe and for his sweet ,nnie to "e reminded
fre4uently$ as she owned$ drove$ and serviced the car$ that her dad loves and
cares for her. , hands/free telephone in the car would "e a must$ not an option. ,
version of )Cs +n9tar service$ which called not %ust the police "ut *lay in the
event of an accident$ would "e important. , system that reminded the
occasionally a"sentminded ,nnie when she needed to have the car serviced
would take a load o8 her dads mind. !f that service were delivered as a prepaid
gift from her father$ it would take another load o8 *lays mind "ecause he$ too$ is
occasionally a"sentminded. 9hould *lay have hired a Taurus$ &scape$ *avalier$
Feon$ 'riHm$ *orolla$ *amry$ ,valon$ 9entra$ *ivic$ ,ccord$ 9enator$ 9onata$ or
something else The "illions of dollars that automakers spent advertising these
"rands$ seeking somehow to create su"tle di8erentiations in image$ helped *lay
not at all. >inding the "est package to hire was very time/consuming and
inconvenient$ and the resulting product did the %o" a"out as unsatisfactorily as
the milk shake had done$ a few years earlier.
>ocusing a product and its "rand on a %o" creates di8erentiation. The ru"$
however$ is that when a company communicates the %o" a "randed product was
designed to do perfectly$ it is also communicating what %o"s the product should
not "e hired to do. >ocus is scaryat least the carmakers seem to think so. They
deli"erately create words as "rands that have no meaning in any language$ with
no tie to any %o"$ in the myopic hope that each individual model will "e hired "y
every customer for every %o". The results of this strategy speak for themselves.
!n the face of compelling evidence that purpose/"randed products that do
speci2c %o"s well command premium pricing and compete in markets that are
much larger than those de2ned "y product categories$ the automakers products
are su"stantially undi8erentiated$ the average su""rand commands less than a
:% market share$ and most automakers are losing money. 9ome"ody gave these
folks the wrong recipe for prosperity.
S S S
:G
&;ecutives everywhere are charged with generating pro2ta"le growth. Rightly$
they "elieve that "rands are the vehicles for meeting their growth and pro2t
targets. But success in "rand "uilding remains rare. Why Fot for lack of e8ort or
resources. For for lack of opportunity in the marketplace. The root pro"lem is
that the theories in practice for market segmentation and "rand "uilding are
riddled with .awed assumptions. -a.ey is right. The model is "roken. Weve tried
to illustrate a way out of the death spiral of serial product failure$ missed
opportunity$ and s4uandered wealth. Carketers who choose to "reak with the
"roken past will "e rewarded not only with successful "rands "ut with pro2ta"ly
growing "usinesses as well.
D, compilation "y< 'rofessor 9ameer Pulkarni$ @0:A$ strictly for private circulation only$
originally pu"lished in 3BR/@00O$ authors< Clayton M. Christensen, Scott Cook, and Taddy HallE
:A