La recomendación del mes, septiembre de 2019
Te presentamos un resumen del libro de Al Ries y Jack Trout titulado Las 22 leyes inmutables del Marketing.
Como forma de honrar el trabajo realizado por estos dos especialistas, si te interesa el libro por las primeras páginas te sugerimos adquirir el libro en formato físico o digital.
The 22 immutable laws of marketing
Violate Them at Your Own Risk!
The Law of Leadership
It’s better to be first than it is to be better.
Many people believe that the basic issue in marketing is convincing prospect that you have a better product or service. Not true. The basic issue in marketing is creating a category you can be first in. It’s the law of Leadership: It’s better to be first than it is to be better.
If you’re introducing the first brand in a new category, you should always try to select a name that can work generically.
If the secret of success is getting into the prospect’s mind first , want strategy are most companies committed to? The better-product strategy.
Regard-less of reality, people perceive the first product into the mind as superior. Marketing is a battle of perceptions, not products.
The Law of the Category
If you can’t be first in a category, set up a new category you can be first in.
If you didn’t get into the prospect’s mind first, don’t give up hope. Find a new category you can be first in. It’s not as difficult as you might think.
IBM was first in computers. DEC was first in minicomputers. If you can’t be first in a category, set up a new category you can be first in.
Tandem was first in fault-tolerant computers and built a $1.9 billion business. So stratus stepped down with the first fault-tolerant minicomputer. Today Stratus is a $500 million company.
There are many different ways to be first. Dell got into the crowed personal computer field by being the first to sell computers by phone.
When you launch a new product, the first question to ask yourself is not “How is this new product better than the competition?” but “First what?” In other words, what category is this new product first in?
This is counter to classic marketing thinking, wich is brand oriented: How do I get people to prefer my brand? Forget the brand. Think categories.
Everyone is interested in what’s new. Few people are interested in what’s better.
When you’re the first category, promote the category. In the early days, Hertz sold rent-a-car service. Coca-Cola sold refreshment. Marketing programs of both companies were more effective back then.
The Law of the Mind
It’s better to be first in the mind than to be first in the marketplace.
Du Mont invented the first commercial television set. Duryea introduced the first automobile. Hurley introduced the first washing machine. All are gone. It’s better to be first in the prospect’s mind than first in the marketplace. IBM wasn’t first in the marketplace with the mainframe computer. Remington Rand was first, with UNIVAC. But thanks to a massive marketing effort, IBM got into the mind first and won the computer battle early.
The law of the mind follows from the law of perception. If marketing is a battle of perception, not product, then the mind takes precedence over the marketplace.
The Law of Perception
Marketing is not a battle of products, it’s a battle of perceptions.
All that exists in the world of marketing are perceptions in the minds of the customer or prospect. The perception is the reality. Everything else is an illusion. All truth is relative. Relative to your mind or the mind of another human being. The only reality you can be sure about is in your own perceptions. Marketing is a manipulation of those perceptions.
Most marketing mistakes stem from the assumption that you’re fighting a product battle rooted in reality. Minds of customers or prospects are very difficult to change. People are seldom, if ever, wrong. At least in their owns minds.
Japanese automobile manufacturers sell the same cars in the United States as they do in Japan. If marketing were a battle of products, you would think the same sales order would hold true for both countries.
After all, the same quality, the same styling, the same horsepower, and roughly the same prices hold true for Japan, Honda is nowhere near the leader. There, Honda is in third place, behind Toyota and Nissan. Toyota sells more than four times as many automobiles in Japan as Honda does.
So what’s the difference between Honda in Japan and Honda in the United States? The products are the same, but the perceptions in customers’ minds are different.
In Japan, Honda got into customers’ minds as a manufacturer of motorcycles, and apparently most people don’t want to buy car from a motorcycles company.
How about an opposite situation? Would Harley-Davidson be successful if it launched a Harley-Davidson automobile?.
Its perception as a motorcycle company would undermine a Harley-Davidson car-no matter how good the product.
Why is campbell’s soup No. 1 in the United States and nowhere in the United Kingdom?
Why is Heinz soup No.1 in the United kingdom and a failure in the United States? Marketing is a battle of perceptions, not products. Marketing is the process of dealing with those perceptions.
Soft-drink marketing is a battle of perceptions, not a battle of taste.
What makes the battle even more difficult is that customers frequently make buying decisions based on second-hand perceptions. Instead of using their own perceptions, they base their buying decisions on someone else’s perception of reality. This is the “everybody knows” principle.
Everybody knows that the Japanese make higher-quality cars than the Americans do. So people make buying decisions based on the fact that everybody knows the Japanese make higher-quality cars. When you ask shoppers whether they have had any personal experience with a product, most often they say they haven’t. And, more often than not, their own experience is often twisted to conform to their perceptions.
If you have had a bad experience with a Japanese car, you’ve just been unlucky, because everybody knows the Japanese make high-quality cars.
Marketing is not a battle of products. It’s a battle of perceptions.
The Law of Focus
The most powerful concept in marketing is owning a word in the prospect’s mind.
A company can become incredibly successful if it can find a way to own a word in the mind of the prospect. This is the law of focus.
Federal Express was able to put the word overnight into the minds of its prospects because it sacrificed its product line and focused on overnight package delivery only.
In a way, the law of leadership it’s better to be first than to be better enables the first brand or company to own a word in the mind of the prospect.
The leader owns the word that stands for the category. For example, IBM owns computer.
An astute leader will go one step further to solidify its position. Heinz owns the word ketchup.
But Heinz went on to isolate the most important ketchup attribute. “Slowest ketchup in the West” is how the company is preempting the thickness attribute. Own-market share. If you’re not a leader, then your word has to have a narrow focus. Even more important, however, your word has to be “available” in your category. No one else can have a lock on it. The most effective words are simple and benefit oriented. No matter how complicated the product, no matter how complicated the needs of the market, it’s always better to focus on one word or benefit rather than two or three or four.
Words come in different varieties. They Can be benefit related (cavity prevention), service related (home delivery), audience related (younger people), or sales related (preferred brand).
Although we’ve been touting that words stick in the mind, nothing lasts forever. There comes a time when a company must change words.
The essence of marketing is narrowing the focus. You become stronger when you reduce the scope of your operations. You can’t stand for something if you Chase after everything.
You can’t position yourself as an honest politician, because nobody is willing to take the opposite position. You Can, however, position yourself as the pro-business candidate or the prolabor candidate and be instantly accepted as such because there is support for the other side.
Both sides of the abortion issue have focused on single, powerful words- pro-life and pro-choice.
The Law of Exclusivity
Two companies cannot own the same word in the prospect’s mind.
When a competitor owns a word or position in the prospect’s mind, it is futile to attempt to own the same word.
As we mentioned earlier, Volvo owns safety.
Despite the disaster stories, many companies continue to violate the law of exclusivity. Federal Express has walked away from overnight and is in the middle of trying to take worldwide away from DHL.
Can Federal Express ever own the worldwide word? Probably not.
Someone else already owns it: DHL Worldwide Express. To succeed, Federal Express must find a way to narrow the focus against DHL. The company can’t do it by trying to own the same word in the prospect’s mind.
What researchers never tell you is that some other company already owns the idea. They would rather encourage clients to mount massive marketing programs. The theory is that if you spend enough money, you can own the idea. Right? Wrong.
Many people have paid the price for violating the law of exclusivity.
The Law of the Ladder
The strategy to use depends on which rung you occupy on the ladder.
While being first into the prospect’s mind ought to be your primary marketing objective. There are strategies to use for No. 2 and No. 3 brands.
For each category, there is a product ladder in the mind. Take the car rental category. Hertz got into the mind first. Avis got in second and National got in third.
Take Avis, for example. For years the company advertised the high quality of its rent-a-car service. “Finest in rent-a-cars” was one of its campaigns. The reader looked at the ad and wondered, How could they have the finest rent-a-car service when they’re not on the top rung of my
ladder? Then Avis did the one thing you have to do to make progress inside the mind of the prospect. They acknowledged their position on the ladder. “Avis is only No.2 in rent-a-cars. So why go with us? We try harder”.
For 13 years in a row, Avis had lost money. Then, when it admitted to being No.2, it started to make money, lots of money. Shortly thereafter, the company was sold to ITT, which promptly ordered up the advertising theme, “Avis is going to be No.1” No, they’re not, said the prospect. They’re not on the top rung of my ladder. And to make the point, many picked up the phone and called Hertz. The campaign was a disaster.
Many marketing people have misread the Avis story. They assume the company was successful because it tried harder.
But that wasn’t it at all. Avis was successful because it related itself to the position of Hertz in the mind. Many marketers make the same mistake as Avis did.
The mind is selective. Prospects use their ladders in deciding which information to accept and which information to reject. A mind accepts only new data that is consistent with its product ladder in that category. Everything else is ignored. The ultimate product that involves the least amount of pleasure and is purchased once in a lifetime has no rungs on its ladder. Ever hear of Batesville caskets? Probably not, although the brand has almost 50 percent of the market.
There’s a relationship between market share and your position on the ladder in the prospect’s mind. You tend to have twice the market share of the brand below you and half the market share of the brand above you.
I’m a recent year, Acura sold 143,708 cars in the United States, Lexus sold 71,206 cars, and Infiniti sold 34,890. The relationship among the three brands is almost a mathematically correct 4-2-1. (The Acura-Lexus-Infiniti battle is in its early stages). The leader inevitably dominates the No.2 brand and the No.2 brand inevitably smothers No.3. In baby food, it’s Gerber, Beech-Nut, and Heinz. In beer, it’s Budweiser, Miller, and Coors. In long-distance telephone service it’s AT&T, MCI, and Sprint.
What’s the maximum number of rungs on a ladder? There seems to be a rule of seven in the prospect’s mind.
According to Harvard psychologist Dr. George A. Miller, the average human mind cannot deal with more than seven units at a time. Which is why seven is a popular number for lists that have to be remembered. Seven-digit phone numbers, the seven wonders of the world, seven-card stud, Snow White and the seven dwarfs, the seven danger signals of cancer.
Sometimes your own ladder, or category, is too msmall. It might be better to be fish in a small pond. In other words, it’s sometimes better to be No.3 on a big ladder than No.1 on a small ladder. The top rung of the lemon-lime soda ladder was occupied by 7-up. (Sprite was on the second rung). In the soft-drink field, however, the cola ladder is much bigger than the lemon-lime ladder. (Almost two out of three soft drinks consumed in America are cola drinks.) So 7-up climbed on the cola ladder with a marketing campaign called “The Uncola”.
As tea is to coffee, 7-up became the alternative to a cola drink. And 7-up sales climbed to where the brand was the third largest-selling soft drink in America.
The ladder is a simple, but powerful, analogy that can help you deal with the critical issues in marketing. Before starting any marketing program, ask yourself the following questions: where are we on the ladder in the prospect’s mind? On the top rung? On the second rung? Or maybe we’re not on the ladder at all. Then make sure your program deals realistically with your position on the ladder. More on how to do this later.
The Law of Duality
In the long run, every market becomes a two-horse race.
A new category is a ladder of many rungs. Gradually, the ladder becomes a two-rung affair. In batteries, it’s Eveready and Duracell. In photographic film, it’s Kodak and Fuji. In rent-cars, it’s Hertz and Avis. In mouthwash, it’s Listerine and Scope. In hamburgers, it’s McDonald’s and Burger King. In sneakers, it’s Nike and Reebok. In toothpaste, it’s Crest and Colgate.
In a maturing industry, third place is a difficult position to be in. Are these results preordained? Of course not. There are other laws of marketing that can also affect the results.
When you’re a weak No.3, like Royal Crown, you aren’t going to make much progress by going out and attacking the two strong leaders. What they could have done is carved out a profitable niche for themselves (chapter 5: The Law of Focus).
Knowing that marketing is a two-horse race in the long run can help you plan strategy in the short run.
It often happens that there is no clearcurt No.2. Take the laptop computer field. Toshiba is in first place with 21 percent of the market. But there are five companies in second place. Zenith,Compaq,NEC,Tandy, and sharp each have between 8 and 10 percent of the market. It ought to be fun to watch six horses come around a turn where there’s room for only two. Toshiba and who? Which one will finish second?
Currently there are 130 laptop brands on the market. The law of duality will see to it that very few of these brands will be around in the twenty-first century.
Look at the history of the automobile in the United States. In 1904, 195 different cars were assembled by 60 companies. Within the following 10 years, 531 companies were formed and 346 perished. By 1923, only 108 car markers remained. This number dropped to 44 by 1927. Today, Ford and General Motors dominate the domestic industry, with Chrysler’s future in doubt.
Successful marketers concentrate on the top two rungs. Jack Welch, the legendary chairman and CEO of General Electric, said recently: “Only businesses that are No.1 or No.2 in their markets could win in the increasingly competitive global arena. Those that could not were fixed, closed, or sold.”
We repeat: The customer believes that marketing is a battle of products. It’s this kind of thinking that keeps the two brands on top: “They must be the best, they’re the ladders.”
The law of the Opposite
If you’re shooting for second place, your strategy is determined by the leader
In strength there is weakness. Wherever the leader is strong, there is an opportunity for a would-be No.2 to turn the tables.
If you want to establish a firm foothold on the second rung of the ladder, study the firm above you. Where is it strong? And how do you turn that strength into a weakness? 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.) When you look at customers in a given product category, there seem to be two kinds of people. There are those who want to buy from the leader and there are those who don’t want to buy from the leader. By positioning yourself against the leader, you take business away
from all the other alternatives to No.1. Yet, too many potential No.2 brands try to emulate the leader. This usually is an error. You must present yourself as the alternative.
The law of the opposite is a two-edge sword. It requires honing in on a weakness that your prospect will quickly acknowledge.
When Beck’s beer arrived in the United States, it had a problem. It couldn’t be the first imported beer (that was Heineken), nor could it be the first German imported beer (that was Lowenbrau). It solved its problem by repositioning Lowenbrau. “You’ve tasted the German beer that’s the most popular in America. Now taste the German beer that’s the most popular in Germany”. Today Beck’s is the second largest-selling European beer in America. (When it comes to beer, Americans trust German mouths more than they do their own mouths.) This is a rare example of overturning the law of leadership and manipulating perceptions in the mind.
As a product gets old, it often accrues some negative baggage. Take aspirin, a product introduced in 1899. With thousands of medical studies conducted on aspirin, someone was bound to find flaws in the product. Sure enough, they found stomach bleeding-just in time for the 1955 launch of Tylenol.
With all the “stomach bleeding” publicity, Tylenol quickly was able to set itself up as the alternative. “For the millions who should not take aspirin”, said the Tylenol advertising. Today Tylenol outsells aspirin and is the largest-selling single product in American drugstores.
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.
Burger King’s most successful years came when it was on the attack. It opened with “Have it your way”, which tweeted McDonal’s mass-manufacturing approach to hamburgers. Then it hit McDonald’s with “Broiling not frying” and “The whopper beats the Big Mac.” All these programs reinforced the No.2, alternative position.
Then, for some unknown reason, Burger King ignored the law of the opposite. It got timid and stopped attacking McDonald’s. This is no away to stay a strong No.2. Burger King’s sales per unit declined and have never returned to the level they were when it was on the attack.
The law of Division
Over time, a category will divide and become two or more categories
A category starts off as a single entity. Computers, for example. But over time, the category breaks up into other segments. Mainframes, minicomputers, workstations, personal computers, laptops, notebooks, pen computers.
Like the computer, the automobile started off as a single category. Today we have luxury cars, moderately priced cars, and inexpensive cars. Full-size,
intermediates, and compacts. Sports cars, four-wheel-drive vehicles, RVs, and minivans. In the television industry, now we have network, independent, cable, pay, and public television.
Beer started the same way. Today we have imported and domestic beer. Premium and popular priced beers. Light, draft, and dry beers. Even non alcoholic beer.
Look at the music field. It used to be classical and popular music. Billboard, the Bible of the music business, has 11 separate hit lists: classical, contemporary jazz, country, crossover, dance, Latin, Jazz, pop, rap, rhythm and blue, and rock.
Each segment is a separate, distinct entity. Each segment has its own reason for existence. And each segment has its own leader, which is rarely the same as the leader of the original category. IBM is the leader in mainframes, DEC in minus, Sun in workstations, and so on.
Instead of understanding this concept of division, many corporate leaders hold the naive belief that categories are combining. Categories are dividing, not combining.
The way for the leader to maintain its dominance is to address each emerging category with a different brand name, as General Motors did in the early days with Chevrolet, Pontiac, Oldsmobile, Buick, and Cadillac (and recently with Geo and Saturn). Companies make a mistake when they try to take a well-known brand name in another category.
What keeps leaders from launching a different brand to cover a new category is the fear of what will happen to their existing brands.
Timing is also important. You can be too early to exploit a new category. It’s better to be early than late. You can’t get into the prospect’s mind first unless you’re prepared to spend some time waiting for things to develop.
The Law of Perspective
Marketing effects take place over an extended period of time
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.
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.
To maintain volume, retail outlets find they have to run almost continuous sales.
There is no evidence that couponing increases sales in the long run. Any sort of couponing, discounts, or sales tends to educate consumers to buy only when they can get a deal.
In the retail field the big winners are the companies that practice “everyday low prices” companies like Wal-Mart and K Mart and the rapidly growing warehouse outlets. In everyday life there are many examples of short term gains and long-term losses.
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 invariably increases sales. But in the long term, like extension was bound to undermine one or the other brand.
The Law of Line Extension
There’s an irresistible pressure to extend the equity of the brand
By far the most violated law in our book is the law of line extension.
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 is losing money. Take IBM. Years ago when IBM was focused on mainframe computers, the company made a ton of money. Today IBM is into everything and barely breaking even. In addition to selling mainframe computers, IBM markets personal computers, pen computers, workstations, midrange computers, software, networks, telephones, you name it. IBM even tried to get into the home computer market with the PCjr.
Along the way, IBM dropped millions on copiers (sold to Kodak), Rolm (sold to Siemens), Satellite Business Systems (shut down), the Prodigy network (limping along), SAA, TopView, OfficeVision, and OS/2.
When you try to be all things to all people, you inevitably wind up in trouble. “I’d rather be strong somewhere”, said one manager, “than weak everywhere.” In a narrow sense, like extension involves taking the brand name of a successful product and putting it on a new product you plan to introduce. It sounds so logical. “We make A-1, a great sauce that gets the dominant share of the steak business. But people are switching from beef to chicken, so let’s introduce a poultry product.”
But marketing is a battle of perception, not product. In the mind, A-1 is not the brand name, but the steak sauce itself. In spite of an $18 million advertising budget, the A-1 poultry launch was a dismal failure. In the long run and in the presence of serious competition, line extensions almost never work.
Creating flavors is a popular way to try to grab market share. More flavors, more share. Sounds right, but it doesn’t work.
Back in 1978, when 7-up was simply the lemon-lime uncola, it had a 5.7 percent share of the soft drink market. Then the company added 7-Up Gold, Cherry 7-up, and assorted diet versions. Today 7-Up’s share is down to 2.5 percent.
Invariably, the leader in any category is the brand that is not line extended. Take baby food, for example. Gerber has 72 percent of the market, way ahead of Beech-Nut and Heinz, the two line-extended brands.
Why does top management believe that line extension works, in spite of the overwhelming evidence to the contrary? One reason is that while line extension is a loser in the long term, it can be a winner in the short term.
More is less. The more products, the more markets, the more alliances a company makes, the less money it makes.
Less is more. If you want to be successful today, you have to narrow the focus in order to build a position in the prospect’s mind.
What does IBM stand for? It used to stand for “mainframe computers.” Today it stands for everything, which means it stands for nothing.
Why is Sears, Roebuck in trouble? Because the company tried to be all things to all people. In the conventional view, strategy is a tent. From a strategic point of view, you have to be much more selective, picking and choosing the area in which to pitch your tent.
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. Or the new brand ought to be positioned as and alternative to the leader.
Companies that wait until a new market has developed often find these two leadership positions already preempted. So they fall back on the old reliable line extension approach.
The antidote for line extension is corporate courage, a commodity in short supply.
The Law of Sacrifice
You have to give up something in order to get something
The law of sacrifice is the opposite of the law of line extension. If you want to be successful today, you should give something up.
There are three things to sacrifice: product line, target market, and constant change. From a marketing point of view, what did Federal Express do? It concentrated on one service: small packages overnight.
The power of the sacrifice for Federal Express was in being able to put the word overnight in the mind of the prospect.
Then what did Federal Express do? The company threw away its overnight position by buying Tiger International’s Flying Tiger cargo line for $880 million. Now Federal Express is a worldwide air cargo company without a worldwide position. In just 21 months Federal Express lost $1.1 billion in its international operations.
Marketing is a game of mental warfare. It’s a battle of perceptions, not products or services. It’s bad enough that Federal Express walked away from the “overnight” idea. What’s worse is that it didn’t replace the idea with a new one.
Eveready was the long-time leader in batteries. Then P.R. Mallory introduced a line of alkaline batteries only. The company gave the line a
batter name: Duracell The power of the sacrifice for Duracell was in being able to put the “long-lasting battery” idea in the mind of the prospect. Duracell lasts twice as long as Eveready, said the advertising.
Eveready was forced to change the name of its alkaline battery to “the Energizer”. But it was too late. Duracell had already become the leader in the battery market.
The world of business is populated by big, highly diversified generalists and small, narrowly focused specialists.
The generalist is weak. Take kraft, for example. Everybody thinks kraft is a strong brand name. In jellies and jams, kraft has 9 percent of the market. But Smucker’s has 35 percent.
Kraft means everything, but with a name like Smucker’s makes. In mayonnaise, Kraft has 18 percent of the market. But Hellman’s has 42 percent.
Take the retail industry. Which retailers are in trouble today? The department stores. And what’s a department store? A place that sells everything. That’s a recipe for disaster.
Let’s discuss the second sacrifice, target market, where is it written that you have to appeal to everybody? Take the cola field. In the late fifties, Coke outsold Pepsi more than five to one.
What could Pepsi-Cola do to go against Coke’s powerful position? In the early sixties Pepsi-Cola finally developed a strategy based on the concept of sacrifice. The company sacrificed everything except the teenage market. Then it brilliantly exploited this market by hiring its icons: Michael Jackson, Lionel Richie, Don Johnson. Within one generation, Pepsi closed the gap. Today it is only 10 percent behind Coca-Cola in total U.S. cola sales. (In the supermarket, Pepsi-Cola actually outsells Coca-Cola)
There seems to be an almost religious belief that the wider net catches more customers, in
spite of many examples to the contrary. Look at cigarette advertisements, especially old cigarette ads. They invariably show both a man and 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 Morris do? It narrowed the focus to men only. And then it narrowed the focus even more to a man’s man, the cowboy.
The target is not the market. That is, the apparent target of your marketing is not the same as the people 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.
The target of Marlboro advertising is the cowboy, but the market is everybody. Do you know how many cowboys are left in America? Very few. (They’ve all been smoking Marlboros.)
Finally, the third sacrifice: constant change. People Express had a brilliant “narrow” position to start with. It was the no-frills airline that
flew to no-frills cities at no-frills prices. What did People Express do after it became successful? It tried to be all things to all people. People Express promptly lost altitude and only escaped bankruptcy court by selling itself to Texas Air, which did it for them.
White Castle, on the other hand, has never changed its position. Sells the same “frozen sliders” at unbelievably low prices. Good things come to those who sacrifice.
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 seek out another attribute.
Too often a company attempts to emulate the leader. “They must know what works” “So let’s do something similar.” Not good thinking. It’s much better to search for an opposite attribute- similar won’t do. Coca-Cola was the original and thus the choice of older people. Pepsi successful positioned
itself as the choice of the younger generation. Since crest owned cavities, other toothpastes 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 not 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. Once an attribute is successful taken. You must move on to a lesser attribute and live with a smaller share of the category. Your job is to size a different attribute, dramatize the value of your attribute, and thus increase your share.
For many years IBM dominated the world of computers with its attributes of “big” and “powerful.”
Then an upstart from Boston went for the attribute of “small” and the minicomputer was born. Today “small” has grown to such proportions that IBM’s vast mainframe empire is in serious trouble.
A company that never laughs at new attribute that is Gillette, the world’s No.1 razor blade marker. 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. By spending heavily, Gillette was able to win the battle of the disposables.
Moral: You can’t predict the size of a new attribute’s share, so never laugh.
Burger King was unsuccessful when it tried to take the attribute “fast” from McDonald’s. A single trip to any McDonald’s should be enough to find another attribute that McDonald’s owns: “kids.” If McDonald’s owns kids, then Burger King has the opportunity to position itself for the older
crowd, which includes any kid who doesn’t want to be perceived as a kid. To make the concept work, Burger King would give all the little kids to McDonald’s. To drive the concept into prospect’s minds, Burger King would need a term. It could be grown up. Grow up to the flame-broiled taste of Burger King.
The Law of Candor
When you admit a negative, the prospect will give you a positive.
“Avis is only No.2 in rent-a-cars.”
“With a name like Smucker’s, it has to be good”
“The 1970 VW will stay ugly longer.”
“Joy. The most expensive perfume in the world.”
Why does a dose of honesty works so well in the marketing process? Every negative statement you make about yourself is instantly accepted as truth. Positive statements, on are looked at as dubious at best. If your name is bad, you have two choices: change the name or make fun of it. The one thing
you can’t do is to ignore a bad name.
“Avis is only No.2 in rent-a-cars.” So why go with them? They must try harder. Everybody knew that Avis was second in rent-a-cars.
When a company starts a message by admitting a problem, people tend to, almost instinctively, open their minds.
Some years ago, Scope entered the mouthwash market with a “good-tasting” mouthwash, thus exploiting Listerine’s truly terrible taste. What should Listerine do? It certainly couldn’t tell people that Listerine’s taste “wasn’t all that bad.” Instead, Listerine brilliantly invoked the law of candor: “The taste you hate twice a day” Not only did the company admit the product tasted bad, it admitted that people actually hated it. This set up the selling idea that Listerine “kills a lot of germs.” The prospect figured that anything that tastes like disinfectant must indeed be a germ killer. A crisis passed with the help of a heavy dose of candor.
Honesty is the best policy.
The Law of Singularity
In each situation, only one move will produce substantial results.
History teaches that the only thing that works in marketing is the single, bold stroke.
In marketing often there is only one place where a competitor is vulnerable. And that place should be the focus of the entire invading force.
The automobile industry is an interesting case in point. For years, the leader’s main strength was in the middle of the line.
GM’s dominance became legendary. What works in marketing is the same as what works in the military: the unexpected. In recent years there have been only two strong moves made against GM. The Japanese came at the low end with small cars like Toyota, Datsun, and Honda. The Germans came at the high end with super premium cars like Mercedes and BMW.
With the success of Japanese and German flanking attacks, General Motors was under pressure to commit resources in an attempt to shore up the bottom and the top of its lines. In an effort to save money and maintain profits, GM made the fateful decision to build many of its midrange cars using the same body style. Suddenly, no one could tell a Chevrolet from a Pontiac or an Oldsmobile or a Buick. They all looked alike. It’s look-alike cars weakened General Motors in the middle and opened up a move for Ford as it broke through with the European-styled Taurus and Sable.
And then the Japanese jumped in with Acura, Lexus, and Infiniti. Now General Motors is weak across the board.
Because of the high cost of mistakes, management can’t afford to delegate important marketing decisions. That’s what happened at General Motors.
When the financial people took over, the marketing programs collapsed. Their interest was in the numbers, not the brands.
It’s hard to find that single move if you’re hanging around headquarters and not involved in the process.
The Law of Unpredictability
Unless you write your competitors’ plans, you can’t predict the future.
Yet marketing plans based on what will happen in the future are usually wrong.
IBM developed a massive marketing plan to hook up all PCs to its mainframes. The company called it OfficeVision. Yet the plan is dead in the water thanks to developments at Sun Microsystems, Microsoft, and other companies. You might say that OfficeVision foresaw everything but the competition.
Failure to forecast competitive reaction is a major reason for marketing failures. Most companies live from quarterly report to quarterly report. That’s a recipe for problems. Tom Monaghan’s short-term angle at Domino’s Pizza was to come up with that “home delivery” idea and build a system that delivered pizzas quickly and efficiently. His long-term direction was to build the first nationwide home delivery chain as rapidly as possible.
Monaghan couldn’t own the words home delivery until he had enough franchisees to afford national advertising.
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. Healthy choice frozen entrées is a product that took advantage of this long-term trend.
ConAgra introduced healthy choice in March 1989. ConAgra was the first to use a simple name and concept to take advantage of a trend that has been going on for years. Unfortunately, ConAgra is well on its way to confusing things with a wide array of healthy choice line extensions that go way beyond entrées. It is violating the law of sacrifice.
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. 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. Yesterday, General Motors was slow to acknowledge the trend away from mainframes. It could cost the company dearly.
At present, the workstation is a real threat to both mainframes and minicomputers. It offers enormous power at very low cost.
A Company must be flexible enough to attack itself with a new idea. Change isn’t easy, but it’s the only way to cope with an unpredictable future.
No one can predict the future with any degree of certainty. Nor should marketing plans try to.
The Law of success
Success often leads to arrogance, and arrogance to failure.
Ego is the enemy of successful marketing.
When people become successful, they tend to become less objective. When a brand is successful, the company assumes the name is the primary reason for the brand’s success. Actually it’s the opposite. The name didn’t make the brand famous. The brand got famous because you made the right marketing moves.
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.
Tom Monaghan of Domino’s Pizza is one of the few executives who have recognized how ego can lead you astray. “You start thinking you can do anything. I was that way back in the early days. I got into frozen pizzas for a while and that was a disaster. If I hadn’t messed around with those frozen pizzas for the better part of a year, trying to sell them in bars and restaurants, Domino’s probably would have a lot more stores by now”
Brilliant marketers have the ability to think like a prospect thinks. They put themselves in the shoes of their customers. As their successes mounted, companies like General Motors, Sears, Roebuck and IBM became arrogant. They felt they could do anything they wanted to in the marketplace.
Success leads to failure.
Like Kings, chief executives rarely get honest opinions from their ministers.
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.
No wonder chief executives delegate the marketing function. That’s a mistake. Instead of talking things over, walk out and see for yourself. Small companies are mentally closer to the front than big companies.
The Law of Failure
Failure is to be expected and accepted.
Too many companies try to fix things rather than drop things.
Admitting a mistake and not doing anything about it is bad for your career. A better strategy is to recognize failure early and cut your losses.
IBM should have dropped copiers and Xerox should have dropped computers years before they finally recognized their mistakes.
The Japanese seem to be able to admit a mistake early and then make the necessary changes.
Since a large number of people have a small piece of a big decision, there is no stigma that can be considered career damaging.
It’s a lot easier to live with “we were all wrong” than the devastating “I was wrong” This egoless approach is a major factor in making the Japanese such relentless marketers. It’s not that they don’t make mistakes, but when they do, they admit them, fix them, and just keep coming.
At Wal-Mart, people aren’t punished if their experiments fail. If you learn something and you’re trying something, then you probably get credit for it. But woe to the person who makes the same mistake twice.”
Wal-Mart is different from many large corporations because, marketing decisions are often made first with the decision marker’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.
When the senior executive has a high salary and a short time to retirement, a bold move is highly unlikely.
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 benefits from its success.
One way to defuse the personal agenda factor is to bring it out in the open. 3M uses the “champion” system to publicly identify the person who will benefit from the success of a new product 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 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 a company is going to operate in an ideal way, it will take teamwork, esprit de corps, and a self-sacrificing leader. 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.
The Law of Hype
The situation is often the opposite of the way it appears in the press.
When IBM was successful, the company said very little. Now it throws a lot of press conferences.
When things are going well, a company doesn’t need the hype. When you need the hype, it usually means you’re in trouble.
No soft drink has received more hype than New Coke. New Coke received more than $1 billion worth of free publicity. New Coke should have been the world’s most successful product. It didn’t happen. Less than 60 days after the launch, Coca-Cola was forced to come back with the original
formula, now called Coca-Cola Classic. Today Classic outsells New about 15 to 1.
No computer has received more hype than the NeXt computer. Will NeXt be a winner? Of course not. Where is the opening? NeXt is the first in a new
category of what?
History is filled with marketing failures that were successful in the press. The Tucker 48, the U.S. Football League, Videotext, the automated factory, the personal helicopter, the manufactured home, the picture phone, polyester suits. The essence of the hype was not just that the new product was going to be successful. The essence of the hype was that existing products would now be obsolete.
Polyester was going to make wool obsolete. Videotext was going to make newspapers obsolete. The personal helicopter was going to make the roads and highways obsolete. The tucker 48 with its “cyclop’s eye” headlight would revolutionize the way Detroit makes automobiles. (Only 51 were ever built.)
No one can predict the future, not even a sophisticated reporter for the Wall Street Journal. The only revolutions you can predict are the ones that have already started. Did anyone predict the overthrow of communism and the Soviet Union? Not really. It was only after the process had started that the press jumped on the story.
Did the Los Angeles Times do a story on how Japanese imports were going to shake up the auto industry? Not at all. (Toyopet, of course, went on to become a big winner after changing the cars and changing the car’s name to Toyota.)
When MCI got started by launching a microwave service between Chicago and St. Louis, did the press say, “watch out, AT&T, here comes the competitions?” No, they pretty much ignored little MCI. When Sun Microsystems shipped its first workstations, did the press note the significance of the event, that someday workstations would rattle the cages at IBM and DEC? No, the press ignored Sun. Neither the personal computer nor the facsimile machine took off like a rocket. The personal computer was introduced in 1974. It took six years for IBM to strike back with the PC. Even
the PC didn’t boom until a year and a half later, when Lotus 1-2-3 hit the market.
Capturing the imagination of the public is not the phone, now called the videophone. Ever since its introduction at the 1964 New York World’s Fair, the picturephone has been in the news. This is the third try for AT&T. In the seventies, it failed with the picturephone at $100 a month. In the eighties, it failed with a picturephone meetings service at $2300 an hour. In the nineties, AT&T is hustling $1500 videophone.
Over the years, the greatest hype has been for those developments that promise to single-handedly change an entire industry. Remember the helicopter hype after World War II?
Then there was the manufactured-home hype. It was reported that the single most expensive product a family ever buys could be made on the assembly line, revolutionizing the construction industry.
The latest overhyped development is that of the pen computer, which will revolutionize the personal computer field and make computers accessible to everyone whether they can type or not. It’s all hype. But, for the most part, hype is hype. Real revolutions don’t arrive at high noon with marching
bands and coverage on the 6:00 P.M. news. Real revolutions arrive unannounced in the middle of the night and kind of sneak up on you.
The Law of Acceleration
Successful programs are not built on fads, they’re built 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 little.
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 had were a trend. As a result, the company is often stuck with a lot of staff, expensive manufacturing facilities, and distribution networks. (A fashion, on the other hand, is a fad that repeats itself. Example: short skirts for women and double breasted suits for men. Halley’s Comet is a fashion because it comes back every 75 years or so.)
When the fad disappears, a company often goes into a deep financial shock.) 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 dampening the fad, you stretch the fad 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 results is that it becomes an enormous fad that is bound to collapse. When everybody has a Ninja turtle, nobody wants one anymore. The Ninja turtle is a good example of a fad that collapses in a hurry because the owner of the concept got greedy. The owner fans the fad rather than dampening it.
On the other hand, the Barbie doll is a trend. When Barbie was invented years ago, the doll was never heavily merchandised into other areas. As a result, the Barbie doll has become a long-term trend in the toy business.
The most successful entertainers are the ones who control their appearances.
Elvis Presley’s manager, Colonel Parker, made a deliberate attempt to restrict the number of appearances and records the king made. As a result, every time Elvia appeared, it was an event of enormous impact.
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.
The Law of resources
Without adequate funding an idea won’t get off the ground.
Even the best idea in the world won’t go every far without 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.
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. Some entrepreneurs see venture capitalists as the solution to their money problems. But only a tiny percentage succeed in finding the funding they need this way. Remember: An idea without money is worthless. Be prepared to give away a lot for the funding.
In marketing, the rich often get richer because they have the the resources to drive their ideas into the mind. Their problem is separating the good ideas from the bad ones, and avoiding spending money on too many products and too many programs.
Unlike a consumer product, a technical or business product has to raise less marketing money because the prospect list is shorter and media is less expensive.
Here is the bottom line. First get the idea, then go get the money to exploit it. You can marry the money.You can divorce the money. You can find the money at home. You can share your idea by franchising it.
The more successful marketers take no profit for two or three years as they plow all earnings back into marketing.
Money makes the marketing world go round.
The law of perception most companies are forever “benchmarking” the leader in the category and then setting out to “beat their specs.”
The law of leadership is tough for many to swallow. Most people want to believe they got to the top by being better, not by being first.
So beware! Management won’t take kindly to any suggestions that will take the emphasis off their better product strategy.
The law of sacrifice could cause you problems. Offering everything for everybody is deeply ingrained in most organizations.
Nobody wants to focus.
The law of focus suggest owning a word in the prospect’s minds. What word does you company own in the minds of your prospects? “I don’t know” might be your response.
The law of perspective will frustrate anyone looking for quick marketing victories. Companies want to see instant results.
The law of line extension is the most dangerous law of all to deal with. In this case, you have to be prepared to demolish what management holds to be a basic truth: Big successful brands have an equity that can be exploited to encompass different kinds of products.
So beware! Management will not take kindly to any efforts to curtail their equity expansions.
Have patience. The immutable laws of marketing will help you achieve success. And success is the best revenge of all.