The 22 Immutable laws of Marketing - Al Ries and Jack Trout 1994 edition
The 22 Immutable Laws of Marketing Overall Rating 7/10
Idea: Basic Laws underly the structure of consistently bringing ideas into others heads
Tagline: High level - often abstract ideas as to general marketing strategies
Rereadability: 6/10 Useful when considering overarching Marketing Strategies -
I felt like this book re-iterated a lot of ideas I already had and had thought through in different fields of life - I didn't feel there was anything amazingly different- more of a reminder of xyz.
Useful Ideas:
Time to Read Synopsis : 30
1) The Law of Leadership - It is better to be first than it is to be better
2) The Law of Category - If you can't be first in a category set up a new category you can be first in -
What's the name o fthe third person to fly the Atlantic Ocean solo? If you didn't know Bert hinkler was the second person to fly the Atlantic, you might figure you had no chance at all to know the nam eof the third person. But you do. It's Amelia earhart - Now, is Amelia known as the third person to fly the Atlantic Ocean solo, or as the first woman to do so?
This is counter to flassic marketing thinking, which is brand oriented: How do I get people to prefer my brand? Forget the brand. Think categories. Prospects are on the defensive when it comes to brands. Everyone talks about why their brand is better. But prospects have an open mind when it comes to categories. Everyone is interested in what's new. Few people are interested in what's better.
When you're the first in a new category, promote the category. In essence, you have no competition. DEC told its prospects why they out to buy a mini-computer not a DEC minicomputer.
3) The Law of the mind - It's better to tbe the first in the mind than to be the first in the marketplace.
4) The law of perception - Marketing is not a battle of products, it's a battle of perception -
All truth is relative. Relative to your mind or the mind of another human being. when you say, I'm right and the next person is wrong, all you're really saying is that you're a better perceiver than someone else. Most people think they are better perceivers than others. They have a sense of personal infallibility. their perceptions are always more accurate than those of their neighbors of friends . Truth and perception become fused in the mind, leaving no difference between the two.
truth is norhing more or less than one expert's perception. And who is the expert? It's someone who is perceived to be an expert in the mind of somebody else.
Marketing perople focus on facts because they believe in objective reality. It's also easy for marketing people to assume that truth is on their side. If you think you need the best product to win a marketing batle, then it's easy to believe you have the best product. All that's required is a minor modification of your own perceptions. Changing a prospect's mind is another matter. Minds of customers or prospects are very difficult to change. With a modicum of experience in a product category, a consumer assumes that he or she is right. A perception that exists in the mind is often interpreted as a universal truth. People are seldom, if ever, wrong. At least in their own minds.
Marketing is a battle of perceptions -
The drink that research has proven to taste the best, New Coke, is in third place. The one that research shows tastes the worst, Coca Cola Classic, is in first place. You believe what you want to believe. you taste what you want to taste. Soft drink marketing is a battle of perceptions, not a battle of taste.
5) The law of Focus - The most powerful concept in marketing is owning a word in the prospect's mind.
6) The law of Exclusivity - Two companies cannot own the same word in a prospects mind
7) The law of the ladder - The strategy to use depends on which rung you occupy on the ladder
8) The law of Duality - In the long run, every market becomes a two horse race -
Back in 1969, there were three major brands of a certain product. The leader had about 60 % of the market, the No.2 brand had a 25% share and the No.3 brand had a 6 percent share. The rest of the market included either private label or minor brands. The law of duality suggests that these market shares are unstable. Furthermore, the law predicts that the leader will lose market share and No.2 will gain. Twenty-two years later, the leader dropped down to 45% of the market. The No.2 brand has 40% and No. 3 has 3%. The products are Coca-Cola, Pepsi-Cola, and toyal Crown Cola, respectively, but the principles apply to brands everywhere.
9) The law of the opposite - If you're shooting for second place, your strategy is determined by the leader.
You must discover the essence of the leader and then present the prospect with the opposite. (In other words, don't try to be better, try to be different.) It's often the upstart versus old reliable.
Also in the mouthwash field is an interesting example of the futility of trying to emulate the leader. in 1961 Johnson & Johnson introduced Micrin mouthwash, focusing on its" scientific" virtues. Within months Micrin became the No.2 brand. But with its germ-fighting approach, listerine was also a scientific brand. So in 1965, when Procter & Gamble introduced Scope, it had the "opposite" position to itself. Scope went on to become the No.2 mouthwash. By 1978, when Johnson & Johnson withdrew the product from the market, Micrin's share had fallen to 1%.
Marketing is often a battle for legitimacy. The first brand that captures the concept is often able to portray its competitors as illegitimate pretenders. A good No.2 can't afford to be timid. when you give up focusing on No.1, you make yourself vulnerable not only to the leader but to the rest of the pack. Take the sad story of Burger king in the recent years. Times have been difficult for this No.2 in hamburgers. It has been through many management changes, new owners, and a parade of advertising agencies. It doesn't take much of a history review to see what went wrong.
10) The law of Division - Over time a category will divide and become two or more categories
The law of division even affects countries. In 1776, there were about 35 empires, kingdoms, countries and states in the world. by World war II, the number had doubled. By 1970, there were more than 130 countries. Today, some 190 countries are generally recognized as sovreign nations.
11) The Law of Perspective - Marketing effects take place over an extended period of time -
Is alcohol a stimulant or depressant ? If you visit almost any bar and grill on a Friday night after work, you would swear that alcohol was a stimulant. The noise and laughter are strong evidence of alcohol's stimulating effects. Yet at 4:00 in the morning, when you see a few happy-hour customers sleeping it off in the streets, you'd swear that alcohol is a depressant. Chemically, alcohol is a strong depressant. But in the short term, by depressing a person's inhibitions, alcohol acts like a stimulant. Many marketing moves exhibit the same phenomenon. The long-term effects are often the exact opposite of the short-term effects.
Does a sale increase a company's business or decrease it? Obviously, in the short term, a sale increases business. But there's more and more evidence to show that sales decrease business in the long term by educating customers not to buy at "regular" prices.
Aside from the fact that you can buy something for less, what does a sale say to a prospect? It says that your regular prices are too high. After the sale is over, customers tend to avoid a store with a "sale" reputation.
Any sort of couponing, discounts or sales tends to educate consumers to buy only when they can get a deal. What if a company never started couponing in the first place? In the retail field the big winners are the companies that practice "everyday low prices" - companies like Wal-Mar and K Mart and the rapidly growing warehouse outlets.
In the short term, overeating satisfies the psyche, but in the long run it causes obesity and depression. In many other areas of life (spending money, taking drugs, having sex) the long-term effects of your actions are often the opposite of the short-term effects. Why then is it so hard to comprehend that marketing effects take place over an extended period of time. Take line extension - In the short term, line extension invariabl increases sales (but in the long term decreases sales and erodes company image through excessive diversification and unclarity).
12) The law of line extension - There's an irresistible pressure to extend the equity of the brand
One day a company is tightly focused on a single product that is highly profitable. The next day the same company is spread thin over many products and islosing money.
More is less. The more products, the more markets, the more alliances a company makes, the less money it makes. "Full-speed ahead in all directions" seems to be the call from the corporate bridge. When will companies learn that line extension ultimately leads to oblivion?
Less is more. If you want to be successful today, you have to narrow the focus in order to build a position in the prospects mind.
What does IBM stand for? It used to stand for "mainframe computers". Today it stands for everything, which means it stands for nothing.
For many companies, line extension is the easy way out. Launching a new brand requires not only money, but also an idea or concept. For a new brand to succeed, it ought to be first in a new category (Chapter 1: The Law of Leadership). Or the new brand ought to be positioned as an alternative to the leader (Chapter 9: The Law of the Opposite). Companies that wait until a new market has developed often find these two leadership positions already pre-empted. So they fall back on the old reliable line extension approach. The antidote for line extension is corporate courage, a commodity in short supply.
13) The Law of Sacrifice - You have to give up something in order to get something -
There are three things to sacrifice - Product line, target market, and constant change.
Look at cigarette advertisements, especialy old cigarette ads. They invariably show both a man and a woman. Why? In an age when most smokers were men, cigarette manufacturers wanted to broaden their market. We got the men, let's go out and get the women, too. So what did Philip Morriss do? It narrowed the focus to men only. And then it narrowed the focus even more to a man's man, the cowboy. The brand was called Malboro. Today, Malboro is the largest-selling cigarette in the world. In the United States, Malboro is the largest-selling cigarette among men and women.
The target is not the market. That is, the apparent target of your marketing is not the same as the peope who will actually buy your product. Even though Pepsi-Cola's target was the teenager, the market was everybody. The 50-year-old guy who wants to think he's 29 will drink the Pepsi.
Finally, the third sacrifice: constant change. Where is it written that yhou have to change your stretegy every year at budget review time? If you try to follow the twists and turns of the market, you are bound to wind up off the road. The best way to maitain a consistent position is not to change it in the first place.
Good things come to those who sacrifice -
14) The Law of Attributes - For every attribute, there is an opposite, effective attribute
In chapter 6 ( The law of Exclusivity) we made the point that you can't own the same word or position that your competitor owns. You must find your own word to own. You must seek out another attribute. Too often a company attempts to emulate the leader. "They must know what works" goes the rationale, "so let's do something similar". Not good thinking
It's much better to search for an opposite attribute that will allow you to play off against the leader. The key word here is opposite- similar won't do.
Coca-Cola was the original and thus the choice of older people. PEpsi successfully positioned itself as the choice of the younger generation.
Since Crest owned cavities, other toothpastes avoided cavities and jumped on other attributes like taste, whitening, breath protection, and, more recently, baking soda.
Marketing is a battle of ideas. So if you are to succeed, you must have an idea or attribute of your own to focus your efforts around. Without one, you had better have a low price. A very low price.
Some say all attributes are created equal. Some attributes are more important to customers than others. You must try and own the most important attribute.
Cavity prevention is the most important attribute in toothpaste. It's the one to own. But the law of exclusivity points to the simple truth that once an attribute is successfully taken by your competition it's gone. You must move on to a lesser attribute and live with a smaller share of the category. Your job is to seize a different attribute, dramatize the value of your attribute and thus increase your share.
A company that never laughs at new attributes that are exactly the opposite of their current products is Gillette, the world's No.1 razor blade maker. Its dominance revolves around its high-technology razors and cartridge systems. When an upstart from France brought an opposite attribute to the category in the form of a "disposable" razor, Gillette could have laughed and wheeled out its research on how America wants hefty, expensive, high-technology razors. But it didn't. Instead, Gillette jumped in with a disposable razor of its own, Called Good News. By spending heavily, Gillette was able to wind the batter of the disposables. Today the Gillette Good News razor dominates the disposable category, which has grown to dominate the razor blade business. Moral: You can't predict the size of a new attribute's share, so never laugh.
15) The Law of Candor - When you admit a negative the prospect will give you a positive -
With a name like Smucker's, it has to be good -
First and foremost, candor is very disarming. Every negative statement you make about yourself is instantly accepted as truth. Positive statements, on the other hand, are looked at as dubious at best. Expecially in an dvertisement. You have to prove a positive statement to the prospect's satisfaction. No proof is needed for a negative statement.
The law of candor must be used carefully and with great skill. First, your "negative" must widely perceived as a negative. IT has to trigger an instant agreement with your prospect's mind. IF the negative doesn't register quickly, your prospect will be confused and will wonder - What's this all about? Next, you have to shift quickly to the positive. The purpose of candor isn't to appologize. The purpose of candor is to set up a benefit that will convince your prospect. This law only proves the old maxim: Honesty is the best policy.
16) The Law of singularity - In each situation, only one move will produce substantial results
Many marketing people see success as the sum total of a lot of small efforts beautifully executed. They think they can pick and choose from a number of different strategies and still be successful as long as they put enough effort into the program. If they work for the leader in the category, they fritter away their resources on a number of different programs. They seem to think that the best way to grow is the puppy approach - get into everything.If they're not with the leader, they often end up trying to do the same as the leader, but a little better. It's like Saddam Hussein saying that all we have to do is fight a little harder and everything will work out. Trying harder is not the secret of marketing success.
Whether you try hard or try easy, the differences are marginal. Furthermore, the bigger the company, the more the law of averages wipes out any real advantage of the trying-harder approach. History teaches that the only thing that works in marketing is the single, bold stroke. Furthermore, in any given situation there is only one move that will produce substantial results.
Successful generals study the battleground and look for that one bold stroke that is least expected by the enemy. Finding one is difficult. Finding more than one is usually impossible. Military strategist and author B.H. LIDDELL Hart calls this bold stroke "The line of least expectation". The allied invasion came at Normandy, a place whose tide and rocky shore the Germans felt would be an unlikely choice for a landing of any scale. So it is in marketing. Most often there is only one place where a competitor is vulnerable. And that place should be the focus of the entire invading force. What works in marketing is the same as what works in the military: the unexpected.
17) The Law of Unpredictability - Unless you write your competitors' plans, you can't predict the future.
With hundreds of computers and an army of meteorologists, no one can predict the weather three days in advace, so how do you expect to predict your market three years in advance?
Good short-term planning is coming up with that angle or word that differentiates your pdoduct or company. Then you set up a coherent long-term marketing direction that builds a program to maximize that idea or angle. It's not a long-term plan, it's a long-term direction
So what can you do? How can you best cope with unpredictability. While you can't predict the future, you can get a handle on trends, which is a way to take advantage of change. One example of a trend is America's growing orientation toward good health. This trend has opened the door for a number of new products, especially healthier foods. The recent run-away success of Healthy Choice frozen entrees is a clear example of a product that took advantage of this long term trend.
The danger in working with trends is extrapolation. Many companies jump to conclusions about how far a trend will go. If you believed the prognosticators a few years ago, everyone today is eating broiled fish or mequite-barbecued chicken. (Hamburger sales are doing just find, thank you).
Equally bad as extrapolating a trend is the common practice of assuming the future will be a replay of the present. When you assume that nothing will change, you are predicting the future just as surely as when you assume that something will change. Remember Peter's Law : The unexpected always happens.
While tracking trends can be a useful tool in dealing with the unpredictable future, market research can be more of a problem than a help. Research does best at measuring the past. New ideas and concepts are almost impossible to measure. No one has a frame of reference. People don't know what they will do until they face an actual decision.
The classic example of the research conducted before Xerox introduced the plain-paper copier. What came back was the conclusion that no one would pay five cents for a plain-paper copy when they could get a Thermofax copy for a cent and a half.
Xerox ignored the research, and the rest is history.
One way to cope with an unpredictable world is to build an enormous amount of flexibility into your organization. As change comes sweeping through your category, you have to be willing to change and change quickly if you are to survive in the long term.
There's a difference between "Predicting" the future and "taking a chance" on the future. Orville Redenbacher's Gourmet Popping Corn took a chance that people would pay twice as much for a high-end popcorn. Not a bad risk in today's affluent society. No one can predict the future with any degree of certainty. Nor should marketing plans try to.
18) The Law of Success - Success often leads to arrogance and arrogance to failure.
Ego is the enemy of successflu marketing. Objectivity is what's needed. When people become successful, they tend to become less objective. They often substitute their own judgment for what the market wants.
The name didn't make the brand famous (although a bad name might keep the brand from becoming famous). The brand got famous because you made the right marketing moves. In other words, the steps you took were in tune with the fundamental laws of marketing. You got into the mind first. You narrowed the focus. You preempted a powerful attribute. Your success puffs up your ego to such an extent that you put the famous name on other products. Result: Early success and long term failure as illustrated by the failure of Donald Trump. The more you identify with your brand or corporate name, the more likely you are to fall into the line extension trap. "It can't be the name", you might be thinking when things go wrong. "We have a great name" Pride goeth before destruction and a haughty spirit before a fall. Proverbs 16:18.
Actually ego is helpful. It can be an effective driving force in building a business. What hurts in injecting your ego in the marketing process. Brilliant marketers have the ability to think like a prospect thinks. They put themselves into the shoes of their customers. They don't impose their own view of the world on the situation. (Keep in mind that the world is all perception anyway, and the only thing that counts in marketing is the customer's perception.)
If you're a busy CEO, how do you gather objective information on what is really happening? How do you get around the propensity of middl emanagement to tell you what they think you want to hear? How do you get the bad news as well as the good?
One possibility is to go "indiguise" or unannounced. This is especially useful at the distributor or retailer level. In many ways this is analogous to the king who dresses up as a commoner and mingles with his subjects. Reason: to get honest opinions of what's happening.
Another aspect of the problem is the allocation of time. Quite often the CEO's time is taken up with too many United Way meetings, too many industry activities, too many outside board meetings, too many testimonial dinners.
According to one survey, the average CEO spends 18 hours a week on "outside activities". The next time-waster is internal meetings. The average CEO spends 17 hours a week attending corporate meetings and 6 hours a week preparing for those meetings. Sinc eth typical top executive works 61 hours a week, that laves only 20 hours for everything else, including managing the operation and going down to the front. No wonder chief executives delegate the marketing function.
Instead of talking things over, walk out and see for yourself. AS Gorbachev told Reagan, "It is better to see once than to hear a hundred times".
Small companies are mentally closer to the front than big companies. That might be one reason they grew more rapidly in the last decade. They haven't been tainted by the law of success.
19) The Law of Failure - Failure is to be expected and accepted.
The hugely successful WAl-Mart has another approach that enables the company to deal with failure. It's called Sam Walton's "ready, fire, aim" approach. It's an outgrowh of his penchant for constant tinkering.
Walton was well aware taht nobody hits the target every time. But at Wal-Mart, people aren't punished if their experiments fail. As WAl-Mart's chief executive said in a Business week article, "If you learn something and you're trying for something, then you probably get credito for it. But woe to the person who makes the same mistake twice."
Wal-Mart is different from many large corporations because, so far, it appears to be free of an insidious disease called the "personal agenda" that can creep into any corporation. Marketing decisions are often made first with the decision maker's career in mind and second with the impact on the competition or the enemy in mind. There is a built-in conflict between the personal and the corporate agenda. This leads to a failure to take risks (It's hard to be first in a new category without sticking your neck out.) When the senior executive has a high salary and a short time to retirement, a bold move is highly unlikely.
Even junior executives often make "safe" decisions so as not to disrupt their progress up the corporate ladder. Nobody has ever been fired for a bold move they didn't make. In some American companies nothing gets done unless it benefits the personal agenda of someone in top management. This severely limits the potential marketing moves a company can make. An idea gets rejected not because it isn't fundamentally sound but because no one in top management will personally benefit from its success.
One way to defuse the personal agenda factor is to bring it out in the open. 3M usese the "champion" system to publicly identify the person who will benefit from the success of a new produt or venture. The successful introduction of 3M's Post-it Notes illustrates how the concept works. Art Fry is the 3M scientist who championed the Post-it Notes product, which took almost a dozen years to bring to market.
While the 3M system works, in theory the ideal environment would allow managers to judge a concept on its merits, not on whom the concept would benefit. If the company is going to operate in an ideal way, it will take tamwork, esprit de corps, and a self-sacrificing leader. One immediately thinks of Patton and his Third Army and its dash across FRance. No army in history took as much territory and as many prisoners in as short a period of time. Patton's reward ? Eisenhower fired him.
20) The Law of Hype - The situation is often the opposite of the way it appears in the press -
When things are going well, a company doesn't need the hype. When you need the hype, it usually means you're in trouble.
Forget the front page - If you're looking for clues to the future, look in the back of the paper for those innocuous little stories.
( I'm reminded of the story of the Industrialist who was reading the paper in the morning and in the back of the paper read that Starbucks was opening a branch in Ulaan Batar in Mongolia - The idea that starbucks would go to Mongolia so completely was outside of his worldview and view of Mongolia that he got on his private plane that day and went there. He ended up investing heavily in Mongolia before significant chinese investment and did very well on his investment).
But, for the most part, hype is hype. Real revolutions don't arrive at high noon with marching bands and coverage on the 6:00pm news. Real revolutions arrive unannounced in the middle of the night and kind of sneak up on you.
21) The Law of Acceleration - Successful programs are not built on fads, They're build on trends -
A Fad is a wave in the ocean, and a trend is the tide. A Fad gets a lot of hype, and a trend gets very litte. Like a wave, a fad is very visible, but it goes up and down in a big hurry. Like the tide, a trend is almost invisible, but it's very powerful over the long term.
A fad is a short-term phenomenon that might be profitable, but a fad doesn't last long enough to do a company much good. Furthermore, a company often tends to gear up as if a fad were a trend. As a result, the company is often stuck with a lot of staff, expensive manufacturing facilities, and distribution networks.
Here's the paradox. If you were faced with a rapidly rising business, with all the characteristics of a fad, the best thing you could do would be to dampen the fad. by dempening the fad, you stretch the fac out and it becomes more like a trend.
You see this in the toy business. Some owners of hot toys want to put their hot toy name on everything. The result is that it becomes an enourmous fad that is ound to collapse. When everybody has a Ninja turtle, nobody wants one anymore.
On the other hand, the Barbie doll is a trend. When Barbie was invented years ago, the doll was never heavily merchandised into toher areas. As a result, the Barbie doll as become a long-term trend in the toy business.
The most successful entertainers are the ones who control their appearances. They don't overextend themselves. They're not all over the place. They don't wear out their welcome
Forget fads. And when they appear, try to dampen them. One way to maintain a long-term demand for your product is to never totally satisfy the demand. But the best, most profitable thing to ride in marketing is a long-term trend.
22) The Law of Resources - Without adequate funding an idea won't get off the ground.
Even the bst idea in the world won't go very far withoug the money to get it off the ground. Inventors, entrepreneurs, and assorted idea generators seem to think that all their good ideas need is professional marketing help. Nothing could be further from the truth. Marketing is a game fought in the mind of the prospect. You need money to get into a mind. And you need money to stay in the mind once you get there. You'll get further with a mediocre idea and a million dollars than with a great idea alone.
Some entrepreneurs see advertising as the solution to the problem of getting into prospects' minds. Advertising is expensive. It cost $9,000 a minute to fight World War II. It cost $22,000 a minute to fight the Vietnam War. A one-minute commercial on the NFL Super BOwl will cost you $1,5 million.
Steve Jobs and Steve Wozniak had a great idea. But it was Mike Markkula's $91,000 that put Apple Computer on the map. (For his money, Markkula got one-third of Apple. He should have held out for half.)
Ideas without money are worthless. Well..not quite. But you have to use your idea to find the money , not the marketing help. The marketing can come later.
First get the idea, then go get the money to exploit it.
The more successful marketers front load their investment. In other words, they take no profit for two or three years as they plow all earnings back into marketing. Money makes the marketing world go round. If you want to be successful today, you'll have to find the money you need to spin those marketing wheels.
Piece of Wisdom and saying I had written at the end of the book: (When something doesn't make sense) "That's like if you fuck a snake and get an elephant".
Idea: Basic Laws underly the structure of consistently bringing ideas into others heads
Tagline: High level - often abstract ideas as to general marketing strategies
Rereadability: 6/10 Useful when considering overarching Marketing Strategies -
I felt like this book re-iterated a lot of ideas I already had and had thought through in different fields of life - I didn't feel there was anything amazingly different- more of a reminder of xyz.
Useful Ideas:
- Forget the front page - If you're looking for clues to the future, look in the back of the paper for those innocuous little stories.
- You need to be associated with one basic concept in the customer's head to be effective.
- Look for trends and ride them like a wave. Either disregard or fan down fads to prolong them.
- Piece of Wisdom and saying I had written at the end of the book not related to the book in any way - : (When something doesn't make sense) "That's like if you fuck a snake and get an elephant".
Time to Read Synopsis : 30
1) The Law of Leadership - It is better to be first than it is to be better
2) The Law of Category - If you can't be first in a category set up a new category you can be first in -
What's the name o fthe third person to fly the Atlantic Ocean solo? If you didn't know Bert hinkler was the second person to fly the Atlantic, you might figure you had no chance at all to know the nam eof the third person. But you do. It's Amelia earhart - Now, is Amelia known as the third person to fly the Atlantic Ocean solo, or as the first woman to do so?
This is counter to flassic marketing thinking, which is brand oriented: How do I get people to prefer my brand? Forget the brand. Think categories. Prospects are on the defensive when it comes to brands. Everyone talks about why their brand is better. But prospects have an open mind when it comes to categories. Everyone is interested in what's new. Few people are interested in what's better.
When you're the first in a new category, promote the category. In essence, you have no competition. DEC told its prospects why they out to buy a mini-computer not a DEC minicomputer.
3) The Law of the mind - It's better to tbe the first in the mind than to be the first in the marketplace.
4) The law of perception - Marketing is not a battle of products, it's a battle of perception -
All truth is relative. Relative to your mind or the mind of another human being. when you say, I'm right and the next person is wrong, all you're really saying is that you're a better perceiver than someone else. Most people think they are better perceivers than others. They have a sense of personal infallibility. their perceptions are always more accurate than those of their neighbors of friends . Truth and perception become fused in the mind, leaving no difference between the two.
truth is norhing more or less than one expert's perception. And who is the expert? It's someone who is perceived to be an expert in the mind of somebody else.
Marketing perople focus on facts because they believe in objective reality. It's also easy for marketing people to assume that truth is on their side. If you think you need the best product to win a marketing batle, then it's easy to believe you have the best product. All that's required is a minor modification of your own perceptions. Changing a prospect's mind is another matter. Minds of customers or prospects are very difficult to change. With a modicum of experience in a product category, a consumer assumes that he or she is right. A perception that exists in the mind is often interpreted as a universal truth. People are seldom, if ever, wrong. At least in their own minds.
Marketing is a battle of perceptions -
The drink that research has proven to taste the best, New Coke, is in third place. The one that research shows tastes the worst, Coca Cola Classic, is in first place. You believe what you want to believe. you taste what you want to taste. Soft drink marketing is a battle of perceptions, not a battle of taste.
5) The law of Focus - The most powerful concept in marketing is owning a word in the prospect's mind.
6) The law of Exclusivity - Two companies cannot own the same word in a prospects mind
7) The law of the ladder - The strategy to use depends on which rung you occupy on the ladder
8) The law of Duality - In the long run, every market becomes a two horse race -
Back in 1969, there were three major brands of a certain product. The leader had about 60 % of the market, the No.2 brand had a 25% share and the No.3 brand had a 6 percent share. The rest of the market included either private label or minor brands. The law of duality suggests that these market shares are unstable. Furthermore, the law predicts that the leader will lose market share and No.2 will gain. Twenty-two years later, the leader dropped down to 45% of the market. The No.2 brand has 40% and No. 3 has 3%. The products are Coca-Cola, Pepsi-Cola, and toyal Crown Cola, respectively, but the principles apply to brands everywhere.
9) The law of the opposite - If you're shooting for second place, your strategy is determined by the leader.
You must discover the essence of the leader and then present the prospect with the opposite. (In other words, don't try to be better, try to be different.) It's often the upstart versus old reliable.
Also in the mouthwash field is an interesting example of the futility of trying to emulate the leader. in 1961 Johnson & Johnson introduced Micrin mouthwash, focusing on its" scientific" virtues. Within months Micrin became the No.2 brand. But with its germ-fighting approach, listerine was also a scientific brand. So in 1965, when Procter & Gamble introduced Scope, it had the "opposite" position to itself. Scope went on to become the No.2 mouthwash. By 1978, when Johnson & Johnson withdrew the product from the market, Micrin's share had fallen to 1%.
Marketing is often a battle for legitimacy. The first brand that captures the concept is often able to portray its competitors as illegitimate pretenders. A good No.2 can't afford to be timid. when you give up focusing on No.1, you make yourself vulnerable not only to the leader but to the rest of the pack. Take the sad story of Burger king in the recent years. Times have been difficult for this No.2 in hamburgers. It has been through many management changes, new owners, and a parade of advertising agencies. It doesn't take much of a history review to see what went wrong.
10) The law of Division - Over time a category will divide and become two or more categories
The law of division even affects countries. In 1776, there were about 35 empires, kingdoms, countries and states in the world. by World war II, the number had doubled. By 1970, there were more than 130 countries. Today, some 190 countries are generally recognized as sovreign nations.
11) The Law of Perspective - Marketing effects take place over an extended period of time -
Is alcohol a stimulant or depressant ? If you visit almost any bar and grill on a Friday night after work, you would swear that alcohol was a stimulant. The noise and laughter are strong evidence of alcohol's stimulating effects. Yet at 4:00 in the morning, when you see a few happy-hour customers sleeping it off in the streets, you'd swear that alcohol is a depressant. Chemically, alcohol is a strong depressant. But in the short term, by depressing a person's inhibitions, alcohol acts like a stimulant. Many marketing moves exhibit the same phenomenon. The long-term effects are often the exact opposite of the short-term effects.
Does a sale increase a company's business or decrease it? Obviously, in the short term, a sale increases business. But there's more and more evidence to show that sales decrease business in the long term by educating customers not to buy at "regular" prices.
Aside from the fact that you can buy something for less, what does a sale say to a prospect? It says that your regular prices are too high. After the sale is over, customers tend to avoid a store with a "sale" reputation.
Any sort of couponing, discounts or sales tends to educate consumers to buy only when they can get a deal. What if a company never started couponing in the first place? In the retail field the big winners are the companies that practice "everyday low prices" - companies like Wal-Mar and K Mart and the rapidly growing warehouse outlets.
In the short term, overeating satisfies the psyche, but in the long run it causes obesity and depression. In many other areas of life (spending money, taking drugs, having sex) the long-term effects of your actions are often the opposite of the short-term effects. Why then is it so hard to comprehend that marketing effects take place over an extended period of time. Take line extension - In the short term, line extension invariabl increases sales (but in the long term decreases sales and erodes company image through excessive diversification and unclarity).
12) The law of line extension - There's an irresistible pressure to extend the equity of the brand
One day a company is tightly focused on a single product that is highly profitable. The next day the same company is spread thin over many products and islosing money.
More is less. The more products, the more markets, the more alliances a company makes, the less money it makes. "Full-speed ahead in all directions" seems to be the call from the corporate bridge. When will companies learn that line extension ultimately leads to oblivion?
Less is more. If you want to be successful today, you have to narrow the focus in order to build a position in the prospects mind.
What does IBM stand for? It used to stand for "mainframe computers". Today it stands for everything, which means it stands for nothing.
For many companies, line extension is the easy way out. Launching a new brand requires not only money, but also an idea or concept. For a new brand to succeed, it ought to be first in a new category (Chapter 1: The Law of Leadership). Or the new brand ought to be positioned as an alternative to the leader (Chapter 9: The Law of the Opposite). Companies that wait until a new market has developed often find these two leadership positions already pre-empted. So they fall back on the old reliable line extension approach. The antidote for line extension is corporate courage, a commodity in short supply.
13) The Law of Sacrifice - You have to give up something in order to get something -
There are three things to sacrifice - Product line, target market, and constant change.
Look at cigarette advertisements, especialy old cigarette ads. They invariably show both a man and a woman. Why? In an age when most smokers were men, cigarette manufacturers wanted to broaden their market. We got the men, let's go out and get the women, too. So what did Philip Morriss do? It narrowed the focus to men only. And then it narrowed the focus even more to a man's man, the cowboy. The brand was called Malboro. Today, Malboro is the largest-selling cigarette in the world. In the United States, Malboro is the largest-selling cigarette among men and women.
The target is not the market. That is, the apparent target of your marketing is not the same as the peope who will actually buy your product. Even though Pepsi-Cola's target was the teenager, the market was everybody. The 50-year-old guy who wants to think he's 29 will drink the Pepsi.
Finally, the third sacrifice: constant change. Where is it written that yhou have to change your stretegy every year at budget review time? If you try to follow the twists and turns of the market, you are bound to wind up off the road. The best way to maitain a consistent position is not to change it in the first place.
Good things come to those who sacrifice -
14) The Law of Attributes - For every attribute, there is an opposite, effective attribute
In chapter 6 ( The law of Exclusivity) we made the point that you can't own the same word or position that your competitor owns. You must find your own word to own. You must seek out another attribute. Too often a company attempts to emulate the leader. "They must know what works" goes the rationale, "so let's do something similar". Not good thinking
It's much better to search for an opposite attribute that will allow you to play off against the leader. The key word here is opposite- similar won't do.
Coca-Cola was the original and thus the choice of older people. PEpsi successfully positioned itself as the choice of the younger generation.
Since Crest owned cavities, other toothpastes avoided cavities and jumped on other attributes like taste, whitening, breath protection, and, more recently, baking soda.
Marketing is a battle of ideas. So if you are to succeed, you must have an idea or attribute of your own to focus your efforts around. Without one, you had better have a low price. A very low price.
Some say all attributes are created equal. Some attributes are more important to customers than others. You must try and own the most important attribute.
Cavity prevention is the most important attribute in toothpaste. It's the one to own. But the law of exclusivity points to the simple truth that once an attribute is successfully taken by your competition it's gone. You must move on to a lesser attribute and live with a smaller share of the category. Your job is to seize a different attribute, dramatize the value of your attribute and thus increase your share.
A company that never laughs at new attributes that are exactly the opposite of their current products is Gillette, the world's No.1 razor blade maker. Its dominance revolves around its high-technology razors and cartridge systems. When an upstart from France brought an opposite attribute to the category in the form of a "disposable" razor, Gillette could have laughed and wheeled out its research on how America wants hefty, expensive, high-technology razors. But it didn't. Instead, Gillette jumped in with a disposable razor of its own, Called Good News. By spending heavily, Gillette was able to wind the batter of the disposables. Today the Gillette Good News razor dominates the disposable category, which has grown to dominate the razor blade business. Moral: You can't predict the size of a new attribute's share, so never laugh.
15) The Law of Candor - When you admit a negative the prospect will give you a positive -
With a name like Smucker's, it has to be good -
First and foremost, candor is very disarming. Every negative statement you make about yourself is instantly accepted as truth. Positive statements, on the other hand, are looked at as dubious at best. Expecially in an dvertisement. You have to prove a positive statement to the prospect's satisfaction. No proof is needed for a negative statement.
The law of candor must be used carefully and with great skill. First, your "negative" must widely perceived as a negative. IT has to trigger an instant agreement with your prospect's mind. IF the negative doesn't register quickly, your prospect will be confused and will wonder - What's this all about? Next, you have to shift quickly to the positive. The purpose of candor isn't to appologize. The purpose of candor is to set up a benefit that will convince your prospect. This law only proves the old maxim: Honesty is the best policy.
16) The Law of singularity - In each situation, only one move will produce substantial results
Many marketing people see success as the sum total of a lot of small efforts beautifully executed. They think they can pick and choose from a number of different strategies and still be successful as long as they put enough effort into the program. If they work for the leader in the category, they fritter away their resources on a number of different programs. They seem to think that the best way to grow is the puppy approach - get into everything.If they're not with the leader, they often end up trying to do the same as the leader, but a little better. It's like Saddam Hussein saying that all we have to do is fight a little harder and everything will work out. Trying harder is not the secret of marketing success.
Whether you try hard or try easy, the differences are marginal. Furthermore, the bigger the company, the more the law of averages wipes out any real advantage of the trying-harder approach. History teaches that the only thing that works in marketing is the single, bold stroke. Furthermore, in any given situation there is only one move that will produce substantial results.
Successful generals study the battleground and look for that one bold stroke that is least expected by the enemy. Finding one is difficult. Finding more than one is usually impossible. Military strategist and author B.H. LIDDELL Hart calls this bold stroke "The line of least expectation". The allied invasion came at Normandy, a place whose tide and rocky shore the Germans felt would be an unlikely choice for a landing of any scale. So it is in marketing. Most often there is only one place where a competitor is vulnerable. And that place should be the focus of the entire invading force. What works in marketing is the same as what works in the military: the unexpected.
17) The Law of Unpredictability - Unless you write your competitors' plans, you can't predict the future.
With hundreds of computers and an army of meteorologists, no one can predict the weather three days in advace, so how do you expect to predict your market three years in advance?
Good short-term planning is coming up with that angle or word that differentiates your pdoduct or company. Then you set up a coherent long-term marketing direction that builds a program to maximize that idea or angle. It's not a long-term plan, it's a long-term direction
So what can you do? How can you best cope with unpredictability. While you can't predict the future, you can get a handle on trends, which is a way to take advantage of change. One example of a trend is America's growing orientation toward good health. This trend has opened the door for a number of new products, especially healthier foods. The recent run-away success of Healthy Choice frozen entrees is a clear example of a product that took advantage of this long term trend.
The danger in working with trends is extrapolation. Many companies jump to conclusions about how far a trend will go. If you believed the prognosticators a few years ago, everyone today is eating broiled fish or mequite-barbecued chicken. (Hamburger sales are doing just find, thank you).
Equally bad as extrapolating a trend is the common practice of assuming the future will be a replay of the present. When you assume that nothing will change, you are predicting the future just as surely as when you assume that something will change. Remember Peter's Law : The unexpected always happens.
While tracking trends can be a useful tool in dealing with the unpredictable future, market research can be more of a problem than a help. Research does best at measuring the past. New ideas and concepts are almost impossible to measure. No one has a frame of reference. People don't know what they will do until they face an actual decision.
The classic example of the research conducted before Xerox introduced the plain-paper copier. What came back was the conclusion that no one would pay five cents for a plain-paper copy when they could get a Thermofax copy for a cent and a half.
Xerox ignored the research, and the rest is history.
One way to cope with an unpredictable world is to build an enormous amount of flexibility into your organization. As change comes sweeping through your category, you have to be willing to change and change quickly if you are to survive in the long term.
There's a difference between "Predicting" the future and "taking a chance" on the future. Orville Redenbacher's Gourmet Popping Corn took a chance that people would pay twice as much for a high-end popcorn. Not a bad risk in today's affluent society. No one can predict the future with any degree of certainty. Nor should marketing plans try to.
18) The Law of Success - Success often leads to arrogance and arrogance to failure.
Ego is the enemy of successflu marketing. Objectivity is what's needed. When people become successful, they tend to become less objective. They often substitute their own judgment for what the market wants.
The name didn't make the brand famous (although a bad name might keep the brand from becoming famous). The brand got famous because you made the right marketing moves. In other words, the steps you took were in tune with the fundamental laws of marketing. You got into the mind first. You narrowed the focus. You preempted a powerful attribute. Your success puffs up your ego to such an extent that you put the famous name on other products. Result: Early success and long term failure as illustrated by the failure of Donald Trump. The more you identify with your brand or corporate name, the more likely you are to fall into the line extension trap. "It can't be the name", you might be thinking when things go wrong. "We have a great name" Pride goeth before destruction and a haughty spirit before a fall. Proverbs 16:18.
Actually ego is helpful. It can be an effective driving force in building a business. What hurts in injecting your ego in the marketing process. Brilliant marketers have the ability to think like a prospect thinks. They put themselves into the shoes of their customers. They don't impose their own view of the world on the situation. (Keep in mind that the world is all perception anyway, and the only thing that counts in marketing is the customer's perception.)
If you're a busy CEO, how do you gather objective information on what is really happening? How do you get around the propensity of middl emanagement to tell you what they think you want to hear? How do you get the bad news as well as the good?
One possibility is to go "indiguise" or unannounced. This is especially useful at the distributor or retailer level. In many ways this is analogous to the king who dresses up as a commoner and mingles with his subjects. Reason: to get honest opinions of what's happening.
Another aspect of the problem is the allocation of time. Quite often the CEO's time is taken up with too many United Way meetings, too many industry activities, too many outside board meetings, too many testimonial dinners.
According to one survey, the average CEO spends 18 hours a week on "outside activities". The next time-waster is internal meetings. The average CEO spends 17 hours a week attending corporate meetings and 6 hours a week preparing for those meetings. Sinc eth typical top executive works 61 hours a week, that laves only 20 hours for everything else, including managing the operation and going down to the front. No wonder chief executives delegate the marketing function.
Instead of talking things over, walk out and see for yourself. AS Gorbachev told Reagan, "It is better to see once than to hear a hundred times".
Small companies are mentally closer to the front than big companies. That might be one reason they grew more rapidly in the last decade. They haven't been tainted by the law of success.
19) The Law of Failure - Failure is to be expected and accepted.
The hugely successful WAl-Mart has another approach that enables the company to deal with failure. It's called Sam Walton's "ready, fire, aim" approach. It's an outgrowh of his penchant for constant tinkering.
Walton was well aware taht nobody hits the target every time. But at Wal-Mart, people aren't punished if their experiments fail. As WAl-Mart's chief executive said in a Business week article, "If you learn something and you're trying for something, then you probably get credito for it. But woe to the person who makes the same mistake twice."
Wal-Mart is different from many large corporations because, so far, it appears to be free of an insidious disease called the "personal agenda" that can creep into any corporation. Marketing decisions are often made first with the decision maker's career in mind and second with the impact on the competition or the enemy in mind. There is a built-in conflict between the personal and the corporate agenda. This leads to a failure to take risks (It's hard to be first in a new category without sticking your neck out.) When the senior executive has a high salary and a short time to retirement, a bold move is highly unlikely.
Even junior executives often make "safe" decisions so as not to disrupt their progress up the corporate ladder. Nobody has ever been fired for a bold move they didn't make. In some American companies nothing gets done unless it benefits the personal agenda of someone in top management. This severely limits the potential marketing moves a company can make. An idea gets rejected not because it isn't fundamentally sound but because no one in top management will personally benefit from its success.
One way to defuse the personal agenda factor is to bring it out in the open. 3M usese the "champion" system to publicly identify the person who will benefit from the success of a new produt or venture. The successful introduction of 3M's Post-it Notes illustrates how the concept works. Art Fry is the 3M scientist who championed the Post-it Notes product, which took almost a dozen years to bring to market.
While the 3M system works, in theory the ideal environment would allow managers to judge a concept on its merits, not on whom the concept would benefit. If the company is going to operate in an ideal way, it will take tamwork, esprit de corps, and a self-sacrificing leader. One immediately thinks of Patton and his Third Army and its dash across FRance. No army in history took as much territory and as many prisoners in as short a period of time. Patton's reward ? Eisenhower fired him.
20) The Law of Hype - The situation is often the opposite of the way it appears in the press -
When things are going well, a company doesn't need the hype. When you need the hype, it usually means you're in trouble.
Forget the front page - If you're looking for clues to the future, look in the back of the paper for those innocuous little stories.
( I'm reminded of the story of the Industrialist who was reading the paper in the morning and in the back of the paper read that Starbucks was opening a branch in Ulaan Batar in Mongolia - The idea that starbucks would go to Mongolia so completely was outside of his worldview and view of Mongolia that he got on his private plane that day and went there. He ended up investing heavily in Mongolia before significant chinese investment and did very well on his investment).
But, for the most part, hype is hype. Real revolutions don't arrive at high noon with marching bands and coverage on the 6:00pm news. Real revolutions arrive unannounced in the middle of the night and kind of sneak up on you.
21) The Law of Acceleration - Successful programs are not built on fads, They're build on trends -
A Fad is a wave in the ocean, and a trend is the tide. A Fad gets a lot of hype, and a trend gets very litte. Like a wave, a fad is very visible, but it goes up and down in a big hurry. Like the tide, a trend is almost invisible, but it's very powerful over the long term.
A fad is a short-term phenomenon that might be profitable, but a fad doesn't last long enough to do a company much good. Furthermore, a company often tends to gear up as if a fad were a trend. As a result, the company is often stuck with a lot of staff, expensive manufacturing facilities, and distribution networks.
Here's the paradox. If you were faced with a rapidly rising business, with all the characteristics of a fad, the best thing you could do would be to dampen the fad. by dempening the fad, you stretch the fac out and it becomes more like a trend.
You see this in the toy business. Some owners of hot toys want to put their hot toy name on everything. The result is that it becomes an enourmous fad that is ound to collapse. When everybody has a Ninja turtle, nobody wants one anymore.
On the other hand, the Barbie doll is a trend. When Barbie was invented years ago, the doll was never heavily merchandised into toher areas. As a result, the Barbie doll as become a long-term trend in the toy business.
The most successful entertainers are the ones who control their appearances. They don't overextend themselves. They're not all over the place. They don't wear out their welcome
Forget fads. And when they appear, try to dampen them. One way to maintain a long-term demand for your product is to never totally satisfy the demand. But the best, most profitable thing to ride in marketing is a long-term trend.
22) The Law of Resources - Without adequate funding an idea won't get off the ground.
Even the bst idea in the world won't go very far withoug the money to get it off the ground. Inventors, entrepreneurs, and assorted idea generators seem to think that all their good ideas need is professional marketing help. Nothing could be further from the truth. Marketing is a game fought in the mind of the prospect. You need money to get into a mind. And you need money to stay in the mind once you get there. You'll get further with a mediocre idea and a million dollars than with a great idea alone.
Some entrepreneurs see advertising as the solution to the problem of getting into prospects' minds. Advertising is expensive. It cost $9,000 a minute to fight World War II. It cost $22,000 a minute to fight the Vietnam War. A one-minute commercial on the NFL Super BOwl will cost you $1,5 million.
Steve Jobs and Steve Wozniak had a great idea. But it was Mike Markkula's $91,000 that put Apple Computer on the map. (For his money, Markkula got one-third of Apple. He should have held out for half.)
Ideas without money are worthless. Well..not quite. But you have to use your idea to find the money , not the marketing help. The marketing can come later.
First get the idea, then go get the money to exploit it.
The more successful marketers front load their investment. In other words, they take no profit for two or three years as they plow all earnings back into marketing. Money makes the marketing world go round. If you want to be successful today, you'll have to find the money you need to spin those marketing wheels.
Piece of Wisdom and saying I had written at the end of the book: (When something doesn't make sense) "That's like if you fuck a snake and get an elephant".