Just in time for the start of CK's Book Club at MarketingProf's Daily Fix, I finished reading The Origin of Brands, Al and Laura Ries' engaging book that makes the case for divergence as a natural, evolutionary marketing process.
There are some good discussions happening now at the Book Club, so check it out and jump in, even if you haven't read the book.
In a chapter called "The Power of Pruning," Al and Laura talk about keeping it simple and focused when developing a mission statement or corporate catch-phrase. They give a few examples gone awry -- UPS saying it's in the "logistics" business, rather than the "parcel delivery business." They also criticize companies who say they are in the "financial services" business, rather than the narrower banking services, insurance or stock brokerage.
I'm not a big fan of corporate-speak, but does this mean, then, that American Express is wrong to call itself a travel services business? Should they, instead, separate their credit card business from their other services by inventing totally new names for their non-credit card operations? Wouldn't they be throwing away the value and trust they've worked so long and hard to build for the AmEx brand?
If a company is entering a new arena that's only peripherally related to its core business, must they come up with a new name? Al and Laura criticize Motorola for entering the cell phone business using the Motorola name. Because it is known for a wide range of electronics and communications products, they say it failed to register in the public's mind as a leader in cell phones. They point to Nokia as the company that took the leadership spot in cell phones, since that's all the Nokia brand does.
I'm not sure if it's quite that simple. Could it be that Motorola didn't do a good job offering features and designs that consumers wanted? Or perhaps they didn't have good dealer incentives. Maybe Nokia did a better job at word-of-mouth and public relations. It could have even been the advertising.
Throughout the book, Al and Laura cite case after case of divergent brands succeeding with new brand names. I have to believe there are examples of companies taking a solid brand name and successfully putting it on a divergent product or brand. I don't have the time to do the research now, even with the internet, but I'm sure they're out there. Maybe you can think of some.
It seems to me that a company should think hard and long before discarding a respected name they've spent years and millions to build. Certainly, if Ford were to go into the food business, I'd question the wisdom of putting the Ford name on a box of cereal. And I'd be reluctant to trust the results of an MRI done by a Disney scanner.
But some brand names are worth keeping, even when launching a divergent product.