Innovation in Branding
COMPANIES SHOULD COMBINE INNOVATION WITH NEW BRAND NAMES

Interview with Al Ries

Do you think innovation is the success mantra for companies like, Gillette, 3M, GM, to name a few?

Gillette has done well with both constant innovation and constant brand building. Some innovations at Gillette and the brands they have spawned are:

The first two-bladed razor . . . . Trac II.

The first adjustable two-bladed razor . . . Atra.

The first three-bladed razor . . . Mach 3.

3M is a company that has been built on innovation, but missed the opportunities to use those innovations to build brands. Most of 3M's innovations were launched with the 3M name, which smothered their ability to dominate an emerging category. The one exception is Post-It Notes, which has been their most successful innovation, thanks primarily to their use of a unique brand name.

If all you do is innovate, then all you do is provide ideas for your competitors to usurp. You need to protect your innovations with unique brand names.

General Motors has also missed the innovation boat. They introduced Saturn, a new brand without any innovations. Saturn has been relatively successful in the marketplace, but it has been a financial disaster for General Motors. Furthermore, a good portion of Saturn's sales have been taken from the company's Chevrolet brand.

The only General Motors innovation to be combined with a new brand name is Hummer. Initially, the brand was successful because it was new and different, but the long-term prospects for Hummer are poor because of the vehicle's high gas consumption.

General Motors did have an innovative idea and a brand success with its On-Star system, but it's too early to tell if the concept will make any money. I have my doubts.

Do you think innovation is restricted to market leaders only, or it is applicable to small players also?

Market leaders tend to fall in love with their brand name and launch only line extensions of their products which is no way to build brands. It's usually the smaller companies that innovate (along with new brand names) and capture most of the market. IBM innovated with the launch of the IBM PC, the first 16-bit serious business computer. But, IBM has lost billions of dollars on personal computers (along with market leadership to Dell and others).They should have combined the innovation with a new brand name.