22 Laws of Branding (Part 2)

Welcome to Part 2 of my mini-series covering The 22 Immutable Laws of Branding.

Recap... these are principles everyone building a brand must consider. You could think of them like the ‘laws of physics for branding’.

Ignore them and fall or wield them and fly.

Why are they important? They’re based on core psychological principles that transcend generations and technology.

The laws were posited by Al Ries and Laura Ries (father and daughter duo) at the tail end of the 20th century.

Who? Al Ries is in the Marketing Hall of Fame (yes, that's a thing).

A progressive figure who challenged engrained advertising practices and proved his ideas worthy through the most tangible and indisputable measure of success — customer spend.

Books co-authored by him, including The 22 Immutable Laws of Branding, have been voted the best books “of all time on marketing” in AdAge reader polls.

Laura Ries has helped a 'who's who' list of companies position their brands for growth... including Unliver, Samsung, and Papa John's.

Sadly, Al Ries passed away recently — some 25 or so years after publishing The 22 Immutable Laws of Branding.

This edition of Positioning Playbook is a kind of homage to Al & Laura's work.

I’m breaking down the 22 Immutable Laws of Branding through a startup lens, with fresh case studies.

This is Part 2. If you missed Part 1 you can check it out here.

Let’s jump in! 👇

🏺 The Law of Quality

The law: Quality can be important, but brands are not built by quality alone.

What? Here’s something that’s wild.

You can’t build a high-quality brand solely on a high-quality product.

But, you can build a high-quality brand based on a product that isn’t high-quality.

Relatively speaking.

How is that possible? Psychology.

People’s perception of ‘quality’ is influenced by more factors than the product itself.

Significantly, these three things:

• Domain authority. Is the brand a specialist in the product? Ferrari is perceived to make the best supercars, but ‘Ferrari cognac’ is best left a seating colour option.

• Name. Does the brand name embody the ideology of the product? Think Tesla. It’s rooted in the genius of Nikola Tesla’s electric inventions and breakthroughs.

• Price. Does the price point match the product’s quality proposition? Starbucks could sell coffee for much less, but the perception of their beverages would shift from a luxurious indulgence to a commoditised cup of joe.

To build a ‘quality brand’ these three components must be in place — minimum.

A high-quality product is not an essential component. It certainly helps, but it's not an absolute prerequisite.

Buyers care more about outcomes, or more significantly their perception of outcomes, than the intrinsic material properties of the product itself.

You could take water from the same source and create totally different perceptions of its perceived quality by offering it differently. For example:

1. Aspen Falls water, $3

2. AF water, $1

In many markets, there is no perceptible difference between products that are marketed as low quality vs. high quality in customer testing.

Under these conditions, when the three essential components of domain authority, name, and price are removed — like a ‘blind tasting’ — people struggle to pick out the premium option.

Repeatedly, studies have shown people cannot tell the difference between a $20 bottle of wine and a $200 bottle of wine.

Even if there is an objective difference in the product, higher-quality brands benefit from a disproportionate pricing effect.

A luxury brand can spend an additional 30% increasing the underlying quality of a product vs. the standard option (like a handbag) and then sell it for 300% more.

Forbes magazine recently proclaimed Bernard Arnault (the principal owner of luxury goods conglomerate LMVH Moët Hennessy Louis Vuitton) as the richest person in the world.

This is no accident. The idea of quality is subjective, somewhat irrational, and commands high margins.

This provides the opportunity to turn a flaw into a selling point.

An objectively lower-quality product that takes longer to solve a problem could be positioned as 'slow' — good things take time.

Combined with the right name, price, and domain authority, a high-quality brand can emerge.

👉 Example: Rolex

Luxury watchmakers — like Rolex — sell timepieces that retail for thousands of dollars on the low end. And, much more on the other.

Since they’re high-quality watches, you’d expect they’re pretty good at keeping the time, right? You know… the one and only thing they’re supposed to do. Surely that should be an indicator of quality for a watch?

Nope. In reality, a $20 Casio keeps the time better.

The fact Rolexes don’t keep the time all that well is actually a selling feature of their perceived quality — the consumer is buying into the ideas of tradition, prestige, and hand-crafted horology, not digital scientific precision.

The name ‘Rolex’ is synonymous with the idea of exclusive jet-set luxury and the past times of the rich and famous — golf, Formula 1, and tennis.

Their price point supports this. And, their perceived pedigree as a Swiss watchmaker is unmatched globally.

But... are their watches that high-quality, objectively?

Or, do they just look and feel it… by playing into our basic notions and methods of validating what a quality watch should look and feel like?

💈 The Law of the Category

The law: A leading brand should promote the category, not the brand.

What? Most brands only promote themselves. Most brands are not market leaders.

Leading brands promote the category. To the degree they pretty much are the category. At least in the beginning when it’s newly created.

Why? People care less about brands and more about the outcomes of the categories they each represent.

• Uber is a pretty good brand, but people care more about getting a cab booked and instantly en route in a few taps.

• Robinhood is a pretty good brand, but people care more about trading stocks easily and accessibly.

• Calm is a pretty good brand, but people care more about getting to sleep without the aid of drugs (legal or otherwise).

If there is no clear brand ownership or authority in that category, people care less about the brand. They are inextricably linked.

Promoting a category creates more awareness of the intrinsic problem the brand is solving. Promoting a brand creates more awareness of the brand, but less the problem being solved. The overall category size can suffer in the last scenario.

The most accessible way to promote and become the leader of a category is to create it. But, how?

When you introduce a brand-new category, you have a chance to pretty much own the category for a while.

The tricky part? Most of the time there is no opportunity to build a new category.

Narrowing focus to the degree there is no market usually results in no market. But sometimes there is. You have to discover it.

In Peter Thiel terminology, this is “a secret that’s hidden from the outside”.

A category secret. These are the most valuable.

They can start small. To the degree they get overlooked or ignored. But, they can grow super fast.

👉 Example: Gymshark

Founded in 2012, Gymshark is a gym apparel company valued at well north of $1 billion. The founders, Ben Francis and Lewis Morgan, launched the business whilst studying at university.

What was the ‘category secret’ they discovered?

Narrowing brand focus to serve a specific and underserved gym-going market — 18 to 25-year-olds.

Initially, only men. More specifically, gym enthusiasts who grew up on the pulse of social media apps like Instagram and are passionate about fitness, fashion, and music.

Which - as it turns out - is a hulk-sized market.

Ben and Lewis were able to discover this ‘category secret’ because they were solving their own problem.

Ben is a gym junky and said to Esquire:

That’s the new category they created right there — looking good in the gym, for 18-25 year old men.

The next thing they did right was to promote the category, not just the brand.

Interestingly, their products have a kind of natural ability to do that. If they work (i.e. make the wearer look good when working out) it promotes the brand and the category harmoniously.

Upon men (and today women) seeing their peers wearing Gymshark attire, it plants the idea that looking good in the gym is ‘a thing’.

The hurdle is incepting that at scale.

Gymshark nailed this — initially — by asking chizzled YouTubers to wear their product. It worked.

Quickly, demand exceeded supply.

Influencer marketing has been a successful growth channel for them ever since. This approach promotes the category (the outcome of looking good in the gym), not just the brand.

👁️‍🗨️ The Law of the Name

The law: In the long run a brand is nothing more than a name.

What? Picking a name is the single most important branding decision you will make. On a long-enough timescale, a brand is nothing more than a name.

In the beginning, a brand can ride the buzz of the new category, concept, or word it occupies in the mind of the buyer.

Ben and Jerry’s ice cream the year it launched? Helllooooo.

Over time this gradually wears off as the category becomes commoditised and competitors pop up.

Today there are a zillion companies selling delicious ice creams loaded with tasty treats in pint-sized tubs. But, only one Ben and Jerry’s.

👉 Example: Apple

The Steves picked the perfect name with Apple.

Let’s be honest. It’s a pretty old brand name when viewed through the lense of modern technological trends and fads. Facebook stopped being cool loooong ago.

Despite that, it still resonates today. It’s so distinct from competitor brand names it feels like its own category in every market it enters. “It’s Apple”.

They’ve competed in crowded hardware marketplaces against brands like Compaq, Dell, Hewlett-Packard, Acer, Samsung, and IBM for decades.

Such categories are highly commoditised. Margins can be thin.

But, for Apple they are really sweet and juicy. Punters pay a premium for devices “Designed by Apple in California”.

Love this retro look. 👇

🤝 The Law of Fellowship

The law: In order to build a category, a brand should welcome other brands.

What? Companies that create a new category make more money if powerful competitors emerge to compete with them.

This sounds counterintuitive, but it’s often true. Without intense competition, a category grows slower. With it, it grows faster.

How so?

Intense competition creates noise. It raises awareness of the category, persistently, and legitmises it. Prospective customers are drawn in by the conversational gravity and objection-diminishing properties of FOMO, credibility, and social proof.

Classic examples:

• Coca-Cola vs. Pepsi

• McDonald’s vs. Burger King

• Nintendo vs. SEGA

“Choice stimulates demand”… as Al and Laura Ries put it.

Without competition, buyers are suspicious.

They ask themselves questions like “Is this for real?” and “Does it work?” and “Am I being over-charged?” and “Maybe its flawed”…. “How do I compare?”

Competition also tends to broaden customer demographics and buyer personas. In the console wars, Nintendo pitched their consoles to younger children. SEGA pitched them to teenagers.

👉 Example: Coca-Cola

Coca-Cola and Pepsi have fought intense marketing battles over the decades.

This is often critiqued through the lense of ‘who is winning’ at regular intervals by analysing shifts in market share.

But, that’s a distraction. The real answer is both. They have both won.

Their revenues both grew by many billions of dollars over the course of the 20th century as the cola market exploded with fizzling effect.

This was not driven completely by the intrinsic appeal of cola.

Their intense competition with one another through stunts like Pepsi’s ‘win a harrier fighter jet’ competition drew attention.

This stimulated demand. The cola market grew accordingly.

This phenomenon is part of the reason why there are streets, neighbourhoods, and even entire cities over-weighted with companies from the same category.

My favourite example of this is Las Vegas.

The Golden Gate is cited as the city’s first official casino. Opened in 1906, on this basis they could immediately lay claim to 100% of the city’s casino market.

Today, there are over 60 major casinos in Las Vegas. The Golden Gate’s share of the market has dwindled to a fraction of 1%.

Despite this, they make more money, because the number of gamblers visiting Las Vegas has shot up like a runaway jackpot over the last 100+ years. Punters are attracted by choice.

This raises a prudent question. How many competitors are favourable for a company to maintain a dominant slice of market share as the category grows?

Coca-Cola’s market share prospered with one major challenger. The Golden Gate disappeared into relative obscurity up against dozens.

“Two major brands seem to be ideal”… according to Al and Laura Ries.

This dynamic reduces buyer confusion, producing a larger per capita consumption of the category (though there are exceptions) while sustaining the dominant players as the focal point of it.

🔛 The Law of the Generic

The law: One of the fastest routes to failure is giving a brand a generic name.

What? Brands should not have generic names like the ‘General Laptop Company’ or ‘International Soda Machines’. This does not resonate with buyers. It’s forgetful.

Now, you’re probably wondering… what about companies like International Business Machines, General Mills, General Electric, and the National Broadcasting Company?

They did pretty well, right?

Yes, they did. And, this is something Al and Laura address in the book:

It worked ‘back in the day’ because quality control was a competitive advantage in a marketplace that lacked it. Today, this is not the case.

"Tesla" is vastly more energising than a generic name like “International Electric Vehicles”. "Netflix" is 10X more binge-inducing than “General Entertainment Company”.

Companies from 'ye olde era', such as the National Biscuit Corporation and General Motors may still be thriving, but this is in spite of their generic names.

This is mostly down to inertia. Their size and scale meant they had a competitive moat in their business model to continue to carve out market share.

Decades ago, they recognised their generic pitfall and took steps to make their brands more appealing.

The National Biscuit Company, for instance, became Nabisco — a more catchy and distinctive name.

The National Broadcasting Company re-branded as NBC. International Business Machines became the memorable acronym IBM.

👉 Example: Essential Products

Essential got off to a rosy start. Led by Android creator Andy Rubin and $300m in venture capital, according to TC the company set out to “go head-to-head against the new iPhone with its own premium Android handset”… the Essential Phone.

Except, that didn’t quite work out. The company shuttered a few years later.

Like any company that fails, there were numerous issues rooted in management, product, and go-to-market strategy.

But, the brand name — Essential Phone — crosses uncomfortably into generic territory.

It sold poorly.

🏗️ The Law of Extensions

The law: The easiest way to destroy a brand is to put its name on everything.

What? This law stipulates the more products you use a brand name for, the weaker it becomes. How so?

Typically, a brand will emerge from doing one thing really well — like Dyson with upright vacuum cleaners.

Once its a big success, it’s tempting to leverage this brand power in new product line extensions (e.g. Dyson with its washing machines).

The term ‘line extension’ can most obviously be appreciated in a supermarket. Go to the toothpaste aisle, there are a zillion different types of Colgate (except the original!).

Go to the beer aisle (in the US), there’s Budweiser, Budweiser Select, Budweiser Zero, Bud Light, Bud Light Lime, Bud Light Chelada, Bud Light Seltzer, Bud Light Platinum and more. You get the frothy picture.

These are all line extensions. Derivative offerings of the original.

Al and Laura Ries argue the more a brand is used like this, the weaker it becomes.

Its focus gets diluted, by trying to accomplish too many things. Which, can leave an opening for a new brand to satisfy its original appeal.

👉 Example: Facebook

You know what isn’t cool? A billion… line extensions.

I actually remember when Facebook was cool. That was back in my ‘dorm room’ in the mid-2000s, when it was sweeping through the coming-of-age millennial scene.

Nowadays, not so much.

It’s been line and brand extended to such a degree it feels more like a generic utility brand like ConEd or AT&T than a brand that encapsulated the zeitgeist of an entirely new generation. Like TikTok, Snapchat, or BeReal, more recently.

When you look at how enthusiastically ‘Facebook’ has been slapped onto new products that are extensions of the core social offering, it’s not hard to see why.

Here’s a flavour:

Facebook Messenger, Facebook Messenger Kids, Facebook Live, Facebook Gaming, Facebook News, Facebook Portal.

The list goes on longer than my newsfeed. Like Bud, there’s also a Facebook Lite!

It’s no wonder Mark rebranded the parent company to Meta.

"Facebook Metaverse" would lack virtual pizzazz.

↪️ The Law of Subbrands

The law: What branding builds, sub-branding can destroy.

What? This law stipulates a subbrand (e.g. Uber Eats) undermines the power of the core brand (e.g. Uber) and fails to resonate with consumers as much as a new, standalone brand could (e.g. DoorDash).

Why? Subbrands are often created when a company wants to attract net new customer spend by leveraging an established brand (it already owns) in a new category or market segment.

A subbrand is basically the offspring of a parent brand. Kind of its own thing, but embodying obvious traits from the parent.

"Eats" could theoretically be its own brand. Instead, it's "Uber Eats".

The logic behind this is utilising an established brand creates a unique go-to-market advantage — "we do not have to build a brand from scratch so our customer acquisition cost will be lower."

Which, introduces a whole new problem.

One that can be much more costly in the long run:

• Consumers associate the core brand with X, the subbrand offers Y

This dynamic creates awkward tension. A compromise that both undermines the potency of the new subbrand and dilutes the core brand.

The buyer's subconscious starts to question things like "is an Uber car going to take me to get my food?" and "I want food delivered, but if it's being delivered by car that sounds slower than by someone on a bike who can cut through traffic."

Does this sound similar to the Law of Line Extensions?

It is, sort of. There's a bit of overlap.

Line extension names tend to be plainer and generic, weighting more focus on the core brand (e.g. Coca-Cola Zero).

Subbrands generally get created when a line extension approach would feel too cringe or awkward.

👉 Example: Dolce & Gabanna

In the early 90s, high-end fashion label Dolce & Gabanna wanted to tap into a lower-price point fashion market (e.g. middle-class skewing budgets vs. the top 1% they were used to).

BUT... a line extension-style name like "Dolce & Gabanna Budget" or "Dolce Everyday" just wouldn't fly off clothing hangers.

SO... Dolce & Gabanna launched the lower-priced subbrand "D&G" line of clothing in 1994. Seemingly the logic was that it embodied the Dolce and Gabanna core brand, but that it was differentiated enough to not dilute its prestige or cannibalise sales.

Unfortunately, it didn't quite work out.

2012 was "The End of D&G" as Vogue put it. Why?

Subbrands often make sense from a management perspective ("let's leverage an existing asset"). But not so much from a consumer's perspective ("why should I buy this?").

When you create a subbrand you're going to receive interest from customers of the core brand. And, attract a new community of customers that changes the overall vibe.

This has consequences — value perception, sales cannibalization, etc.

To paraphrase Al and Laura Ries... how many people walk into the Dolce and Gabanna boutique on 5th Avenue and ask "Do you have any cheaper dresses I can check out?"

That is not why they buy Dolce and Gabanna.

A cheaper subbrand undermines the core brand's prestige and pricing power.

🏢 The Law of the Company

The law: Brands are brands. Companies are companies. There is a difference.

What? Companies produce brands. Consumers buy brands, not companies.

The optimum strategy is to use the company name as the brand name. This is one of the advantages startups have in their branding tool chest vs. conglomerates.

Doing this aligns the positioning of the company and the product exactly.

For example: Twitter.

The company name and the brand name are the same.

Plus... shorter names significantly improve word-of-mouth virality. Stitching on a company name reduces the impact of this (e.g. Linkedin vs. Microsoft LinkedIn).

If this is not possible, the next best strategy is to keep the company name and the brand name separate.

For example: Google. It's part of Alphabet but the company name is not marketed to consumers). It's just "Google" not "Alphabet Google".

Otherwise, it can get messy. Why?

• Should the company name dominate the brand name? e.g. Jack Daniels old no.7

• Should the brand name dominate the company name? e.g. Big Mac

• Should they be given equal weight? e.g. Microsoft Bing

This affects how buyers perceive value.

If the company name dominates the brand name, the company's positioning dominates over the brand (and the same is true in reverse). If they are given an equal weight it can cause confusion.

The implications of this require some pretty complex brand gymnastics in order to navigate optimally (if at all possible).

There are a variety of scenarios in which a company name can be helpful in supporting a brand name (e.g. the Marvel logo on a movie poster of a superhero you've never heard of before).

The key to executing this effectively is balance, necessity, and simplicity.

But, that's easier said than done.

👉 Example: Meta

If you open a Meta owned app like Instagram, WhatsApp, and Messenger, you are presented with the Meta logo in addition to the logo of the app.

It just kind of slides in there presumptively and uninvited, like a randomer gatecrashing your DMs.

Outside of fleeting interaction moments like this, consumers have no real value connection to the company name Meta.

Some will have a vague idea of what Meta is and won't care too much ("meh"). Some will be confused ("WTF?"). Some will raise objections against it ("is Zuck stalking me across all these freakin apps!?")

It adds no real value. So, why is it there?

I can't speak for Meta directly, but branding strategy decisions like this usually happen due to a difference between internal objectives (Meta management) vs. external objectives (Meta consumers).

From a company management perspective, plastering the company logo on a portfolio of products like this helps to raise awareness with:

• B2B and trade suppliers

• Press

• Investors

• Hiring candidates

• Their own professional profile

This conflicts with the objectives of consumers, which in the case of the Meta suite of apps is to connect with the world and (somewhat paradoxically) escape from it.

Anything that distracts or detracts from this is a friction point.

📘 Playbook

• 🏺 The Law of Quality. Quality can be important, but brands are not built by quality alone.

• 💈 The Law of the Category. A leading brand should promote the category, not the brand.

• 👁️‍🗨️ The Law of the Name. In the long run a brand is nothing more than a name.

• 🤝 The Law of Fellowship. In order to build a category, a brand should welcome other brands.

• 🔛 The Law of the Generic. One of the fastest routes to failure is giving a brand a generic name.

• 🏗️ The Law of Extensions. The easiest way to destroy a brand is to put its name on everything.

• ↪️ The Law of Subbrands. What branding builds, sub-branding can destroy.

• 🏢 The Law of the Company. Brands are brands. Companies are companies. There is a difference.

That's it for Part 2!

👉 Here's Part 3 of the 22 Laws of Branding.