Profile October 08

Al Ries, venerated by marketers since the 70s as a marketing guru, strategist and thought leader, is more commonly known as the father of positioning. The automobile enthusiast was in Singapore recently to attend the Global Brand Forum, and Cherisse Beh asks Ries what first lured him to the ad world, and gets him to pinpoint why marketers need more help with their brand positioning.

Why the personal fascination with advertising and branding?
Most people choose a career based on products or services they particularly like, automobiles, food, insurance, etc. But I was interested in everything and hated to focus all my attention on any one industry. That's why advertising and branding was so attractive. It allowed me to have a narrow focus but at the same time allowed me to get to know many different industries and many different countries.

What is your earliest memory of your being captured or influenced by marketing messages?
Pepsi-Cola made an enormous impact when I was in grade school and high school. At that time, Coca-Cola was sold in 6 oz. bottles. Pepsi-Cola was introduced in 12-oz bottles with the slogan: Pepsi-Cola hits the spot. Twelve full ounces, that's a lot. Twice as much for a nickel, too. 'Pepsi-Cola is the drink for you'. That slogan is more than 60 years old, which proves that an idea that gets into a mind can last forever.

What is the biggest change that you've seen with regards to (i) Advertising (ii) Branding and (iii) PR, say between 20 years ago and now?
In advertising it is the proliferation of media. In addition to the Internet, there are a host of new media which makes the media-selection function more important than it ever was. And for branding, more and more companies are finding that to build a brand, you need to OWN a word in the mind and hopefully, a SINGLE word. As BMW owns "driving", Mercedes-Benz owns "prestige", and  Volvo owns "safety." This is an enormously important conceptual idea that most companies are still only dimly aware of. The PR function has become more important than advertising. Yet most companies don't really appreciate this fact.

Having your daughter work alongside you, how has it been? Just like what you expected or not?

Everyone wants to leave a legacy. It pleases me to see my daughter develop into an astute marketing person and is developing into an excellent television commentator. Perhaps someday she will achieve much more than I ever did. If I did not have a daughter (or son) to work with, I would probably have retired years ago.

In your opinion which is the brand that has done the best job in working it's branding to its best advantage? And why?

BMW. It was a relatively unknown automobile brand competing with the world's best automobile brand, Mercedes-Benz. Today, BMW outsells Mercedes-Benz in America and in most countries of the world. First, it became the opposite of Mercedes-Benz. As Mercedes made big, comfortable cars,  BMW made smaller, more nimble vehicles. In 1975, it launched an advertising campaign bearing the tagline  "The ultimate driving machine" to take advantage of this difference. It has used this message consistently ever since.

In your opinion which brand has a great brand image but is not doing anything to leverage on it? And why?

Coca-Cola it is world's most valuable brand yet it never plays up on its heritage as the original, authentic cola. Every couple of years they change the slogan. The latest concept "The Coke side of life," to me is a meaningless concept. Coca-Cola should own an idea called "The real thing," connoting the authenticity of the product. Incidentally, Coca-Cola share of the soft-drink business in the US has been declining about 1% yearly in the last four or five years.

Some say that the power of marketing and advertising is just overrated. What do you say to this?

The power of marketing is underrated. The power of PR is underrated. The power of advertising is overrated. Companies should pay more attention to marketing, especially PR.

Any thoughts about marketing in Asia?

Line extension is the biggest problem in Asia. We call it the "Japanese disease" because most Japanese companies use one brand name which they put on everything. Sony is a typical example.

Yet Sony is in trouble. In the last 10 years, Sony has had revenues of USD $623.3 billion and net profits after taxes of just USD $10.1 billion or a net profit margin of just 1.6%. That kind of performance would get a CEO fired in America (and in Japan, too.)

The new CEO of Sony is an Englishman, Sir Howard Stringer. When a Japanese company hires an Englishman to run the company, you know the Japanese company is in trouble.

However many other companies have followed the Sony pattern. There are a few Japanese companies, however, that use multiple brands very effectively. Like Toyota with its powerful automobile brandsToyota, Lexus, Prius and Scion are distinct and unique.

Any other thoughts that you'd like to share with us feel free to add on.

It pains me to see many businesses in Asia which think they can be successful by selling products and services "cheaper' than the competition. That only works in the short term. In the long term, after a country becomes economically successful, wages rise and a company's low-cost business moves elsewhere.

The only way to be economically successful in the long term is to build brands, not just cheaper products. That's where marketing comes in and that's why marketing can be the most important function in a company's and a country's economic success.