If you ever wanted to know the basic “laws” of marketing, this book is for you. Although this marketing book is corporate-oriented, it’s still recommended to anyone who’s trying to learn marketing.
Date Finished: 19/01/2014
Here’s a link to the Amazon page.
The Law of Leadership
It’s better to be first than it is to be better
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. It’s much easier to get into the mind first than to try to convince someone you have a better product than the one that did get there first.
You can demonstrate the law of leadership by asking yourself two questions:
- What’s the name of the first person to fly the Atlantic Ocean solo? Charles Lindbergh, right?
- What’s the name of the second person to fly the Atlantic Ocean solo? Not so easy to answer, is it?
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.
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, 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.
The Law of the Mind
It’s better to be first in the mind than to be first in the marketplace
Is something wrong with the law of leadership? No, but the law of the mind modifies it. It’s better to be first in the prospect’s mind than first in the marketplace. Which, if anything, understates the importance of being first in the mind. Being first in the mind is everything in marketing. Being first in the marketplace is important only to the extent that it allows you to get in the mind first.
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.
Thousands of would-be entrepreneurs are tripped up every year by this law. Someone has an idea or concept he or she believes will revolutionize an industry, as well it may. The problem is getting the idea or concept into the prospect’s mind.
You can’t change a mind once a mind is made up.
If you want to make a big impression on another person, you cannot worm your way into their mind and then slowly build up a favorable opinion over a period of time. The mind doesn’t work that way. You have to blast your way into the mind.
The reason you blast instead of worm is that people don’t like to change their minds. Once they perceive you one way, that’s it. They kind of file you away in their minds as a certain kind of person. You cannot become a different person in their minds.
The Law of Perception
Marketing is not a battle of products, it’s a battle of perceptions
Many people think marketing is a battle of products. In the long run, they figure, the best product will win.
Marketing people are preoccupied with doing research and “getting the facts.” They analyze the situation to make sure that truth is on their side. Then they sail confidently into the marketing arena, secure in the knowledge that they have the best product and that ultimately the best product will win.
It’s an illusion. There is no objective reality. There are no facts. There are no best products. 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.
Only by studying how perceptions are formed in the mind and focusing your marketing programs on those perceptions can you overcome your basically incorrect marketing instincts.
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.
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.
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. Not a complicated word. Not an invented one. The simple words are best, words taken right out of the dictionary.
This is the law of focus. You “burn” your way into the mind by narrowing the focus to a single word or concept. It’s the ultimate marketing sacrifice.
The leader owns the word that stands for the category.
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.
Also, there’s the halo effect. If you strongly establish one benefit, the prospect is likely to give you a lot of other benefits, too. A “thicker” spaghetti sauce implies quality, nourishing ingredients, value, and so on. A “safer” car implies better design and engineering.
Whether the result of a deliberate program or not, most successful companies (or brands) are the ones that “own a word” in the mind of the prospect.
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.
The Law of Exclusivity
Two companies cannot own the same word in the prospect’s mind
Volvo owns safety. Many other automobile companies, including Mercedes-Benz and General Motors, have tried to run marketing campaigns based on safety. Yet no one except Volvo has succeeded in getting into the prospect’s mind with a safety message.
Despite the disaster stories, many companies continue to violate the law of exclusivity. You can’t change people’s minds once they are made up. In fact, what you often do is reinforce your competitor’s position by making its concept more important.
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, the battle isn’t lost if you fail in this endeavor. There are strategies to use for No. 2 and No. 3 brands.
All products are not created equal. There’s a hierarchy in the mind that prospects use in making decisions. For each category, there is a product ladder in the mind. On each rung is a brand name.
Your marketing strategy should depend on how soon you got into the mind and consequently which rung of the ladder you occupy. The higher the better, of course.
The mind is selective. Prospects use their ladders in deciding which information to accept and which information to reject. In general, a mind accepts only new data that is consistent with its product ladder in that category. Everything else is ignored.
What about your product’s ladder in the prospect’s mind? How many rungs are there on your ladder? It depends on whether your product is a high-interest or a low-interest product. Products you use every day (cigarettes, cola, beer, toothpaste, cereal) tend to be high-interest products with many rungs on their ladders. Products that are purchased infrequently (furniture,lawn mowers, luggage) usually have few rungs on their ladders.
Products that involve a great deal of personal pride (automobiles, watches, cameras) are also high-interest products with many rungs on their ladders even though they are purchased infrequently.
Products that are purchased infrequently and involve an unpleasant experience usually have very few rungs on their ladders. Automobile batteries, tires, and life insurance are three examples.
The, ultimate product that involves the least amount of pleasure and is purchased once in a lifetime has no rungs on its ladder.
The Law of Duality
In the long run, every market becomes a two-horse race
Early on, a new category is a ladder of many rungs. Gradually, the ladder becomes a twoung affair.
When you take the long view of marketing, you find the battle usually winds up as a titanic struggle between two major players—usually the old reliable brand and the upstart.
The Law of the Opposite
If you are shooting for second place, your strategy is determined by the leader
Wherever the leader is strong, there is an opportunity for a would-be No. 2 to turn the tables.
Much like a wrestler uses his opponent’s strength against him, a company should leverage the leader’s strength into a weakness.
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.) It’s often the upstart versus old reliable.
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. A potential No. 2 has to appeal to the latter group.
By positioning yourself against the leader, you take business away from all the other alternatives to No. 1.
Marketing is often a battle for legitimacy. The firstbrand 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.
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.
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.
The way for the leader to maintain its dominance is to address each emerging category with a different brand name.
Companies make a mistake when they try to take a well-known brand name in one category and use the same brand name in another category.
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.
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.
To maintain volume, retail outlets find they have to run almost continuous sales.
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?
Why then is it so hard to comprehend that marketing effects take place over an extended period of time?
The Law of Line Extension
There’s an irresistible pressure to extend the equity of the brand
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, line extension involves taking the brand name of a successful product (e.g., A-1 steak sauce) and putting it on a new product you plan to introduce (e.g., A-1 poultry sauce).
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. And what better name to use than A-1. That way people will know the poultry sauce comes from the makers of that great steak sauce, A-1.”
But marketing is a battle of perception, not product. In the mind, A-1 is not the brand name, but the steak sauce itself. “Would you pass me the A-1?” asks the diner. Nobody replies: “A-1 what?”
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.
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.
First, the product line. Where is it written that the more you have to sell, the more you sell?
The full line is a luxury for a loser. If you want to be successful, you have to reduce your product line, not expand it.
Marketing is a game of mental warfare. It’s a battle of perceptions, not products or services.
The world of business is populated by big, highly diversified generalists and small, narrowly focused specialists. If line extension and diversification were effective marketing strategies, you’d expect to see the generalists riding high. But they’re not. Most of them are in trouble.
The generalist is weak.
In the retail field generally, the big successes are the specialists:
- The Limited. Upscale clothing for working women.
- The Gap. Casual clothing for the young at heart.
- Benetton. Wool and cotton clothing for young swingers.
- Victoria’s Secret. Sexy undergarments.
- Foot Locker. Athletic shoes.
- Banana Republic. Safari wear.
Let’s discuss the second sacrifice, target market. Where is it written that you have to appeal to everybody?
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.
Finally, the third sacrifice: constant change. Where is it written that you have to change your strategy 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 maintain a consistent position is not to change it in the first place.
The Law of Attributes
For every attribute, there is an opposite, effective 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.
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. 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.
The Law of Candor
When you admit a negative, the prospect will give you a positive
Marketing is often a search for the obvious. Since you can’t change a mind once it’s made up, your marketing efforts have to be devoted to using ideas and concepts already installed in the brain. You have to use your marketing programs to “rub it in.”
Positive thinking has been highly overrated. The explosive growth of communications in our society has made people defensive and cautious about companies trying to sell them anything. Admitting a problem is something that very few companies do.
When a company starts a message by admitting a problem, people tend to, almost instinctively, open their minds.
Think about the times that someone came to you with a problem and how quickly you got involved and wanted to help. Now think about people starting off a conversation about some wonderful things they are doing. You probably were a lot less interested.
Now with that mind open, you’re in a position to drive in the positive, which is your selling idea.
One final note: The law of candor must be used carefully and with great skill. First, your “negative” must be 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 apologize. 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.
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. 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 a 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.
Most often there is only one place where a competitor is vulnerable. And that place should be the focus of the entire invading force.
The Law of Unpredictability
Unless you write your competitor’s plans, you can’t predict the future
Implicit in most marketing plans is an assumption about the future. Yet marketing plans based on what will happen in the future are usually wrong.
Failure to forecast competitive reaction is a major reason for marketing failures.
Good short-term planning is coming up with that angle or word that differentiates your product 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.
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.
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 of a few years ago, everyone today is eating broiled fish or mesquite-barbecued chicken.
Equally as 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.
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.
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.
Success is often the fatal element behind the rash of line extensions. When a brand is successful, the company assumes the name is the primary reason for the brand’s success. So they promptly look for other products to plaster the name on.
Actually it’s the opposite. 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.
The more you identify with your brand or corporate name, the more likely you are to fall into the line extension trap.
Actually, ego is helpful. It can be an effective driving force in building a business. What hurts is injecting your ego in the marketing process. Brilliant marketers have the ability to think like a prospect thinks. They put themselves in 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.)
The bigger the company, the more likely it is that the chief executive has lost touch with the front lines. This might be the single most important factor limiting the growth of a corporation. All other factors favor size. Marketing is war, and the first principle of warfare is the principle of force. The larger army, the larger company, has the advantage.
But the larger company gives up some of that advantage if it cannot keep itself focused on the marketing battle that takes place in the mind of the customer.
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.
The Law of Failure
Failure is to be expected and accepted
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.
If a company is going to operate in an ideal way, it will take teamwork, esprit de corps, and a self-sacrificing leader.
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.
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 fad were a trend. As a result, the company is often stuck with a lot of staff, expensive manufacturing facilities, and distribution networks.
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.
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 very 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.
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.
Remember: An idea without money is worthless. Be prepared to give away a lot for the funding.
Here is the bottom line. First get the idea, then go get the money to exploit it. Here are some short cuts you could take:
- You can marry the money.
- You can divorce the money.
- You can find the money at home. Donald Trump would never have gotten anywhere without Dad’s millions behind him.
- You can “share” your idea by franchising it. Tom Monaghan was able to put Domino’s Pizza on the map by pursuing an aggressive program of franchising his home delivery idea.
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.