Cleaning Up Brand Clutter

I worked for Coke for a long time. On the beverage side, I remember being responsible for 26 kinds of Coke: Diet Coke, Cherry Coke, Diet-cherry Coke, Caffeine-free Diet Coke, and so on.

Then there was a time when Coke owned a movie studio: Columbia Pictures. I was associated with that, and I remember one year when we tried to launch more than 20 new movies. It was almost one a week for a stretch. It was just too many.

What was the key insight that turned you around?

People live in a whole-life environment. They don't spend all their time choosing among different Tide brands, or wondering about different car models. Marketers tend to think that people don't do anything except obsess about their particular product categories.

If you ask people in a vacuum, "Would you like more choices in category X?" people will almost always say yes. But if you ask them, "Would you be willing to cut back on some of your favorite activities to spend more time evaluating choices in category X?" then the answer is almost certainly going to be no. It's just that marketers seldom ask that second question.

So aside from cutting back on the number of brands, what should smart marketers do?

Make simplicity a selling point. Look at BMW. They've got the 3-series, the 5-series, and the 7-series. You know instinctively which is the entry-level car and which is the top of the line. You know that the 540 model has a more powerful engine than the 528. Acura used to have different names for all its cars. There was the Integra, the Vigor, and the Legend, among others. It was confusing. Acura's sales went up when the company scrapped those names and just went with a very straightforward numbering system.

In the book, we also urge people to concentrate on the four R's: replace, repackage, reposition, and replenish. The last three are self-evident, but the first one is the R that many people find hardest to do.

We're so used to thinking of new products as incremental. They will somehow find a little extra space on the shelf -- and in consumers' spending patterns -- without displacing anything. But the really great new products aren't incremental. They wipe out the justification for an existing product and replace it entirely.

AOL became so successful because it was really a replacement product, even if the company never said so. It replaced phone calls to a stockbroker or calls to an airline. It wasn't until 1998 that the company began talking directly about replacement and simplicity as part of the story: "Searching made simple. Personal news made simple. Shopping made simple."

As hugely successful as AOL has been, we'll never know how much faster penetration might have occurred -- or how much more people might have been willing to pay -- if it had been positioned as a replacement.

George Anders (ganders@fastcompany.com) is a Fast Company senior editor.