The 22 Immutable Laws of Marketing by Al Ries & Jack Trout Audiobook #marketing #alries #jacktrout

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The 22 Immutable Laws of Marketing by Al Ries and Jack Trout

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the 22 immutable laws of marketing
violate them at your own risk I’ll rise
and Jack trout introduction billions of
dollars have been wasted on marketing
programs that couldn’t possibly work no
matter how clever or brilliant or how
big the budgets many managers assume
that a well-designed well executed well
financed marketing program will work
it’s not necessarily so and you don’t
have to look further than IBM General
Motors and Sears Roebuck to find
examples the tools and techniques used
at Sears Roebuck might have been right
sometimes even spectacular and the
managers who ran in the GM programs
might have been the best in the
brightest certainly the best and the
brightest people traditionally have been
attracted to the biggest and the best
companies like GM and IBM but the
program’s themselves were based on
assumptions that were flawed John
Kenneth Galbraith when asked what he
believed was America’s perception of the
country’s giant corporations said that
we feared corporate power today we fear
corporate incompetence all companies are
in trouble especially big companies
General Motors is a good example over
the past decade the company paid a
terrible price for destroying the
identity of its brands it priced them
alike as well as made them look alike 10
share points evaporated which translates
into about ten billion dollars a year in
GM’s problem wasn’t a competitive
problem although competition did
increase it wasn’t a quality problem
although GM obviously wasn’t delivering
top notch quality it was very definitely
a marketing problem when a company makes
a mistake today footprints quickly show
up on its back as competition runs off
with its business to get the business
back the company has to wait for others
to make mistakes and then figure out how
to exploit the situation so how do you
avoid making mistakes in the first place
the easy answer is to make sure your
programs are in tune with the laws of
although we have defined our ideas and
concepts under the marketing banner they
are useful no matter where you are in a
company and no matter what product or
service your company is selling what are
these marketing laws and who brought
them down from Mount Sinai on a set of
stone tablets the fundamental laws of
marketing are those described in this
book but who says so how come two guys
from Connecticut introduction have
discovered what thousands of others have
overlooked there are after all many
sophisticated marketing practitioners
and academics
why have they missed what we think is so
obvious the answer is simple as far as
we can tell almost no one is willing to
admit that there are any laws of
marketing certainly none that are
there are laws of nature so why
shouldn’t there be laws of marketing you
can build a great-looking airplane but
it’s not going to get off the ground
unless it adheres to the laws of physics
especially the law of gravity you can
build an architectural masterpiece on a
sand dune but the first hurricane will
undermine your creation so it follows
that you can build a brilliant marketing
program only to have one of the
immutable laws knock you flat if you
don’t know what they are
perhaps it’s human nature not to admit
there are things you can’t do certainly
most marketers believe that anything is
achievable if you are energetic enough
or creative enough or determined enough
especially if you are willing to spend
enough money
once you open your mind to the
possibility that there are laws of
marketing it’s easy to see what they are
in truth they are obvious we have been
studying what works in marketing and
what doesn’t for more than 25 years what
we have found is that programs that work
are almost always in tune with some
fundamental force in the marketplace
introduction in our books articles
speeches and videos we have analyzed
marketing principles in some detail we
have developed strategic models of the
marketing process including a physical
model of the human mind which we helped
popularize under the Khan
cept of positioning we also developed a
military model of the marketplace which
assigns companies and brands to either
defensive offensive flanking or
guerrilla modes of marketing warfare
after years of working on marketing
principles and problems we have
distilled our findings into the basic
laws that governs success and failure in
the marketplace we call these principles
the immutable laws of marketing and
there are 22 of them violate them at
your own risk
introduction 1 the law of leadership
it’s better to be first than it is to be
better too many people believe that the
basic issue in marketing is convincing
prospects that you have a better product
or service not true if you have a small
market share and you have to do battle
with larger better financed competitors
then your marketing strategy was
probably faulty in the first place you
violated the first law of marketing 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 one 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 second person to fly
the Atlantic Ocean solo was Bert Hinkler
Bert was a better pilot than Charlie he
flew faster he consumed less fuel yet
who has ever heard of Bert Hinkler he
left home and mrs. Hinkler hasn’t heard
from him since in spite of the evidence
superiority of the Lindbergh approach
most companies go the Bert Hinkler route
they wait until a market develops then
they jump in three with a better product
often with their corporate name attached
in today’s competitive environment a
me-too product with a
my extension name has little hope of
becoming a big profitable brand chapter
12 the law of line extension the leading
brand in any category is almost always
the first brand into the prospects mind
Hertz and rental cars IBM in computers
coca-cola in Cola after World War two
Heineken was the first imported beer to
make a name for itself in America so
four decades later what is the number
one imported beer the one that tastes
the best or Heineken there are 425
brands of imported beer sold in America
surely one of these brands must taste
better than Heineken but does it really
today Heineken is still the number one
imported beer with 30 percent of the
market the first domestic light beer was
Miller Lite so what is the largest
selling light beer in America today the
one that tastes the best or the one that
got into the mind first not every first
is going to become successful
however timing is an issue your first
could be too late
for example USA Today is the first
national newspaper but it is unlikely to
succeed it has already lost 800 million
dollars and has never had a profitable
year in a television era it may be too
late for a national newspaper some
firsts are just bad ideas that will
never go anywhere frosty pause the first
ice cream for dogs is unlikely to make
it the dogs love it but the owners for
the 22 immutable laws of marketing are
the ones who buy the groceries and they
think that dogs don’t need an ice cream
of their own they should be happy just
to lick the plates the law of leadership
applies to any product any brand any
category let’s say you didn’t know the
name of the first college founded in
America you can always make a good guess
by substituting leading for first so
what’s the name of the leading college
in America most people would probably
say Harvard which is also the name of
first college founded in America what’s
the name of the second college founded
in America the College of William and
Mary which is only slightly more famous
than Bert Hinkler no two products are
any similar than twins are yet twins
often complain that the first of the to
whom a person meets always remains their
favorite even though the person also
gets to know the other one people tend
to stick with what they’ve got if you
meet someone a little better than your
wife or husband it’s really not worth
making the switch what with attorneys
fees and dividing up the house and kids
the law of leadership also applies to
magazines which is why time leads
Newsweek People leads us and playboy
leads penthouses take TV Guide for
example back in the early 50s the then
powerful Curtis publishing company tried
to field a television listings magazine
to compete with the fledgling TV Guide
even though TV Guide had only a
miniscule head start and despite the
awesome strength of Curtis 5 the law of
leadership the Curtis publication never
really got off the ground
TV Guide had preempted the field the law
of leadership applies equally as well to
hard categories like automobiles and
computers as it does to soft categories
like colleges and beer Jeep was first in
four-wheel drive off the road vehicles
acura was first in luxury japanese cars
IBM was first in mainframe computers Sun
Microsystems was first in workstations
Jeep Acura IBM and Sun are all leading
brands the first minivan was introduced
by Chrysler
today Chrysler has 10% of the car market
and 50% of the minivan market is the
essence of car marketing making better
cars or getting into the market first
the first desktop laser printer was
introduced by a computer company
hewlett-packard today the company has 5%
of the personal computer market and 45%
of the laser printer market Gillette was
the first safety razor tied was the
first laundry detergent
Heys was the first computer modem
leaders all one reason the first brand
tends to maintain its leadership is that
the name often becomes generic Xerox the
first plain paper copier became the name
for all plain paper copiers people will
stand in front of a reco or a sharp for
a Kodak machine and say how do I make a
Xerox copy they will ask for the Kleenex
when the box clearly says Scott they
will offer you a Coke when all they have
is Pepsi Cola how many people ask for
cellophane tape instead 6 the 22
immutable laws of marketing of scotch
tape not many most people use brand
names when they become generic band-aid
fiberglass Formica gore-tex jello Krazy
Glue tips saran wrap velcro to name a
some people will go to great lengths to
turn a brand name into a generic
FedEx this package to the coast if
you’re introducing the first brand in a
new category you should always try to
select a name that can work generically
lawyers advise the opposite but what do
they know about the laws of marketing
not only does the first brand usually
become the leader but also the sales
order of follow up friends often matches
the order of their introductions the
best example is ibuprofen advil was
first nuprin was second mehta proned was
third that’s exactly the sales order
they now enjoy advil has 51% of the
ibuprofen market nuprin has 10% and meta
prin has 1% the fourth brand that
entered the market was Matra nigh bee
even though it has the powerful
prescription name for ibuprofen ma trans
market share is only 15% keep in mind
that Advil was introduced with a same as
the prescription drug mantra in theme
and note the generic substitution
consumers use advil as a generic term
rarely do they use the word ibuprofen
even an MD will tell a patient take two
advil and call me in the morning also
consider Tylenol
the first brand of acid omen afin
tylenol is so far ahead of the
number-two brand that it’s hard to
determine who is number two seven the
law of leadership
if the secret of success is getting into
the prospects mind first what strategy
are most companies committed to the
better product strategy the latest and
hottest subject in the business
management field is benchmarking touted
as the ultimate competitive strategy
benchmarking is the process of comparing
and evaluating your company’s products
against the best in the industry it’s an
essential element in a process often
called total quality management
unfortunately benchmarking doesn’t work
regardless of reality people perceive
the first product into the mind as
superior Marketing is a battle of
perceptions not products so what’s the
name of the first brand of aspirin the
first brand of acid Omen ofin the first
brand of ibuprofen hint substitute
leading for first and you’ll have the
answers to these three questions Charles
Schwab bills itself as America’s largest
discount broker are you surprised that
the Charles Lindberg of the discount
brokerage businesses Charles Schwab Neil
Armstrong was the first person to walk
on the moon who was second Roger
Bannister was the first person to run a
four-minute mile who was second George
Washington was the first president of
the United States who was second
Thomases was the first brand of English
muffin what was second Gatorade was the
first sports drink what was second aitt
the 22 immutable laws of marketing if
you’re second into the prospects mind
are you doomed to languish forever with
Buzz Aldrin John Landy John Adams some
unknown English muffin and some unknown
sports drink
not necessarily fortunately there are
other laws nine the law of leadership –
the law of the category if you can’t be
first in a category set up a new
category you can be
first in ten what’s the name of the
third person to fly the Atlantic Ocean
solo if you didn’t know that Bert
Hinkler was the second person to fly the
Atlantic you might figure you had no
chance at all to know the name of 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 after
Heineken became a big success the people
at n hose or Busch could have said we
should bring in an imported beer too but
they didn’t
instead they said if there’s a market
for a high-priced imported beer maybe
there’s a market for a high-priced
domestic beer and so they started to
promote Michell AAB the first
high-priced domestic beer which today
out sells Heineken two-to-one actually
anheuser-busch also brought in an
imported beer
Carlsberg which has a very good
reputation in Europe in the United
States however the me to Carlsberg never
went anywhere
Miller Lite was the first domestic light
it took an importer five years to say if
there’s a market for a domestic light
beer maybe there’s a market for an
imported light beer the result was
Amstell light which became the largest
selling imported light beer if you
didn’t get into the prospects 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
after IBM became a big success in
computers everybody and his brother
jumped into the field 11 Burroughs
control data General Electric Honeywell
NCR RCA Sperry Snow White and the Seven
Dwarfs they were called which dwarf grew
up to become a worldwide powerhouse with
126 thousand employees and sales of 14
billion dollars a company often dubbed
the second largest computer company in
the world none of them the most
successful computer company of the 70s
and 80s
was Digital Equipment Corporation IBM
was first in computers dis was first in
many computers many other computer
companies and their entrepreneurial
owners became rich and famous by
following a simple principle 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 dollar business
so Stratus stepped down with the first
fault-tolerant mini computer today
Stratus is a five hundred million dollar
company are the laws of marketing
difficult no they are quite simple
working things out in practice is
another matter
however Cray research went over the top
with the first supercomputer today Cray
is an 800 million dollar company so
convex put two and two together and
launched the first mini supercomputer
today convex is a two hundred million
dollar company sometimes you can turn
and also ran into a winner by inventing
a new category Commodore was just
another manufacturer of home personal
computers that wasn’t going anywhere
until it positioned the 12 to 22
immutable laws of marketing Amiga as the
first multimedia computer today the
Commodore Amiga is a big success with
more than 500 million dollar worth sold
annually there are many different ways
to be first Dell got into the crowded
personal computer field by being the
first to sell computers by phone today
Dell is a 900 million dollar company
when you launch a new product the first
question to ask yourself is not how is
this new product better than the
but first what in other words what
category is this new product first in
Charles Schwab didn’t open a better
brokerage firm he opened the first
discount broker Lear’s was not the first
woman’s magazine it was the first
magazine for the mature woman the
magazine for the woman who wasn’t born
yesterday this is counter to classic
marketing thinking which is brand
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 just old its prospects
why they ought to buy a mini computer
not a dis mini computer in the early
days Hertz sold rental car service
coca-cola sold refreshment marketing
programs of both companies were more
effective back then 13 the law of the
category 3 the law of the mind it’s
better to be first in the mind than to
be first in the marketplace 14 the
world’s first personal computer was the
MIT’s Altair 8800 the law of leadership
would suggest that the MIT’s Altair 8800
an unfortunate choice of names ought to
be the number one personal computer
unfortunately the product is no longer
with us
Dumont invented the first commercial
television set Duryea introduced the
first automobile Hurley introduced the
first washing machine all are gone is
something wrong with the law of
leadership in Chapter 1 no but the law
of the mind modifies it it’s better to
be first in the prospects 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
for example 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 proceedings 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 prospects
mind 15 the conventional solution to the
problem is money that is the resources
to design and build product or service
organizations plus the resources to hold
press conferences attend trade shows run
advertisements and conduct direct mail
programs chapter 22 the law of resources
unfortunately this gives rise to the
perception that the answer to all
marketing questions is the same money
not true more money is wasted in
marketing than in any other human
activity outside of government
activities of course you can’t change a
mind once a mind is made up
it’s like going head-to-head against an
entrenched enemy the charge of the Light
Brigade at balaclava being history’s
most famous example closely followed by
Pickett’s Fiasco at Gettysburg Wang was
first in word processors but the world
passed such machines buy and went on to
computers Wang however wasn’t able to
make the transition in spite of spending
millions of dollars promoting its
personal computers and many computers
Wang is still perceived as a word
processor company Xerox was first in
copiers and then tried to get into the
computer business twenty-five years and
two billion dollars later Xerox is
nowhere in computers you want to change
something in a computer just type over
or delete the existing material you want
to change something in a mind forget it
once a mind is made up
it rarely if ever changes the single
most wasteful thing you can do in
marketing is try to change a mind 16 the
22 immutable laws of marketing that
accounts for the mystery of the well
opinion that can almost instantly appear
in a person’s mind one day you’ve never
heard of a person the next day that
person is famous the overnight sensation
is not an unusual phenomenon 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
favourable 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 one of the mysteries of
marketing is the role of money one day a
few dollars can work a major miracle
the next day millions of dollars can’t
save a company from going under when you
have an open mind to work with even a
small amount of money can go a long way
Apple got off the computer ground with
ninety one thousand dollars contributed
by Mike Markkula Apple’s problem in
getting into its prospects Minds was
helped by its simple easy to remember
name on the other hand Apple’s
competitors had complicated names that
were difficult to remember in the early
days five personal computers were in
position on the launching pad Apple –
Commodore pet MJ 8080 MIT’s Altair 8800
and Radio Shack trs-80 ask yourself
which name is the simplest and easiest
to remember 17 the law of the mind for
the law of perception marketing is not a
battle of products it’s a battle of
perceptions 18 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
we’ll 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 our
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
when you say I’m right and the next
person is wrong all you are really
saying is that you are a better person
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 or friends
truth and perception become fused in the
mind leaving no difference between the
two it’s not easy to see that this is so
to cope with the terrifying reality of
being alone in the universe people
project themselves on the outside world
they live in the arena of books movies
television newspapers magazines they
belong to clubs organizations 19
institutions these outside
representations of the world seem more
real than the reality inside their own
minds people cling firmly to the belief
that reality is the world outside of the
mind and that the individual is one
small speck on a global space ship
actually it’s the opposite
the only reality you can be sure about
is in your own perceptions if the
universe exists it exists inside your
own mind and the minds of others that’s
the reality that marketing programs must
deal with there may well be oceans
rivers cities towns trees and houses out
there but there just isn’t any way for
us to know these things except through
our own perceptions marketing is a
manipulation of those perceptions most
marketing mistakes stem from the
assumption that you are fighting a
product battle rooted in reality all the
laws in this book are derived from the
exact opposite point of view what some
marketing people see as the natural laws
of marketing are based on a flawed
premise that the
is the hero of the marketing program and
that you’ll win or lose based on the
merits of the product which is why the
natural logical way to market a product
is invariably wrong 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
each of us manufacturer distributor
dealer 20 the 22 immutable laws of
marketing prospect customer looks at the
world through a pair of eyes if there is
objective truth out there how would we
know it who would measure it who would
tell us it could only be another person
looking at the same scene through a
different pair of eye windows truth is
nothing more or less than one experts
perception and who is the expert it’s
someone who is perceived to be an expert
in the mind of somebody else if truth is
so elusive why is there so much
discussion in marketing about the so
called facts why are so many marketing
decisions based on factual comparisons
why do so many marketing people assume
that truth is on their side that their
job is to use truth as a weapon to
correct the misperceptions that exist in
the mind of the prospect marketing
people 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
battle 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 prospects
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 it’s easier to see
the power of perception over prod 21 the
law of perception act when the products
are separated by some distance for
example the
three largest selling Japanese imported
cars in America are Honda Toyota and
Nissan most marketing people think the
battle between the three brands is based
on quality styling horsepower and price
not true it’s what people think about a
Honda a Toyota or a Nissan that
determines which brand will win
marketing is a battle of perceptions
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 as they do for the
United States but in 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 if you told friends in New
York you bought a Honda they might ask
you what kind of car did you get a Civic
an Accord ‘april you’d if you told
friends in Tokyo you bought a Honda they
might ask you what kind of motorcycle
did you buy in Japan Honda got into
customers minds as a manufacturer of
motorcycles and apparently most people
22 the 22 immutable laws of marketing
don’t want to buy a car from a
motorcycle company how about an opposite
situation would harley davidson be
successful if it launched a
harley-davidson automobile you might
think it would depend on the car quality
styling horsepower pricing you might
even believe the harley-davidson
reputation for quality would be a plus
we think not it’s perception as a
motorcycle company would undermine a
harley-davidson car no matter how good
the product chapter 12 the law of line
why is camel soup number one in the
United States and nowhere in the United
why is hind soup number one 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 some soft-drink executives
believe that marketing is a battle of
tastes well New Coke is number one in
taste the Coca Cola Company conducted
200,000 taste tests that proved that New
Coke tastes better than Pepsi Cola and
Pepsi tastes better than their original
formula now called Coca Cola classic but
who is winning the marketing battle 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 what makes the battle
even more difficult is that 23 the law
of perception customers frequently make
buying decisions based on secondhand
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 conversely if you have had
a good experience with an American car
you’ve just been lucky because everybody
knows that American cars are poorly made
everybody knows there’s a problem with
Audi cars on November 23rd
1986 CBS broadcast a 60 Minutes segment
called out-of-control it called
attention to a number of complaints
about Oddie’s unintended acceleration
American sales have audist fell through
the floorboards from 60,000 in 1986 to
12,000 in 1991 but have you ever
personally had any problems with
unintended acceleration while test
driving an Audi it is unlikely every
single automobile expert who has tested
the car has failed to duplicate the
complaint yet the perception lingers on
recently Audi has been running
advertisements 24 the 22 immutable laws
of marketing comparing its cars to
comparable cars made by Mercedes and BMW
according to the ads German automotive
experts rated Audi cars ahead of both
Mercedes and BMW do you believe that
probably not is it true does it matter
marketing is not a battle of products
it’s a battle of perceptions 25 the law
of perception 5 the law of focus the
most powerful concept in marketing is
owning a word in the prospects mind 26 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
it’s the ultimate marketing sacrifice
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 but the word the
leader owns is so simple that it’s
invisible the leader owns the word that
stands for the category for example IBM
owns computer this is another way of
saying that
brand becomes a generic name for the
category we need an IBM machine is there
any doubt that a computer is being
requested you can also test the validity
of a leadership claim by a word
association test if the given words are
computer copier chocolate bar and cola
the four most associated words are IBM
Xerox Hershey’s and Coke an astute
leader will go one step further to
solidify 27 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 pre-empting the
thickness attribute owning the word slow
helps Heinz maintain a 50% 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 you don’t have to
be a linguistic genius to find the
winner prego went against leader ragu in
the spaghetti sauce market and captured
a 27% share with an idea borrowed from
Heinz preggos word is thicker 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 some words like
Volkswagens favored new gen are not
worth owning here are a few examples 28
the 22 immutable laws of marketing crest
cavities Mercedes engineering BMW
driving Volvo Safety Domino’s home
delivery pepsi cola
Youth Nordstrom service 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 it’s
not an easy task the recent history of
Lotus Development Corporation
demonstrates the nature of the problem
for a number of years Lotus has owned
the word spreadsheet Lotus was
synonymous with 1-2-3 and spreadsheet
but the world of spreadsheets is getting
competitive and the potential for growth
is limited like other companies Lotus
wants to grow how is the company to get
beyond its single product business
the conventional answer is to expand in
all directions as IBM and Microsoft did
as a matter of fact Lotus did some
conventional line extension with the
purchase of ami pro word processing
software in the introduction of a number
of new software products then Lotus
regrouped to focus on a new concept
called Group where software products for
networked pcs 29 the law of focus Lotus
was the first software company to
develop a successful group where product
if things work out the company will
eventually own a second word in the
minds of its prospects unlike Microsoft
Lotus now has a corporate focus it won’t
happen overnight but Lotus could develop
a powerful long-term position in the
software field
what overnight did for Federal Express
and safety did for Volvo Group where
could do for Lotus Development
Corporation you can’t take somebody
else’s word what makes the Lotus
strategy plausible is that the group
where word is not owned by any other
company furthermore there is an enormous
industry trend toward networked
computers more than half of all business
computers are connected to a network
there’s even a new magazine called
network computing many companies see the
advantage of owning a single word or
often called the corporate vision but
they neglect to be the first to preempt
the word what won’t work in marketing is
leaving your own word in search of a
word owned by others this was the case
with Atari which owned the words video
game but the business turned out to be
fattish so in 1982 it sailed off in a
new direction
it wanted Atari to mean computers CEO
James Morgan laid it all out
Atari’s strength as a name also tends to
be its weakness it is synonymous with
video games Atari must redefine its
image and broaden its business
definition to electronic consumer
products unfortunately for mr. Morgan’s
strategy a host of 30 the 22 immutable
laws of marketing other companies
including Apple and IBM owned the word
he was after Atari’s diversification was
a disaster
but the real irony was in that another
company arrived in 1986 and took over
the concept Atari walked away from the
company was Nintendo which today has 75%
of a multibillion-dollar market
who knows where Atari is these days 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
some companies accept the need to narrow
the focus and try to accomplish this
strategy in ways that are self-defeating
we’ll focus on the quality end of the
market we won’t get into the low end
where the emphasis is on price the
problem is that customers don’t believe
you unless you restrict your business to
high priced products only like Mercedes
or BMW General Motors tries to sell
quality at all price levels putting
quality on the road is their latest
corporate slogan every GM product
includes the mark of excellence guess
what they’re doing at Ford the same
thing quality is job one say the Ford
ads over at Chrysler Lee Iacocca
proclaimed we don’t want to be the
biggest we just want to be the best
does anyone really believe that Iacocca
doesn’t want to be the biggest this is
great stuff inside the corporation total
quality the path to greatness it makes a
terrific theme at dealer meetings
especially with the trumpet flourish 31
the law of focus ES and the dancers but
outside the corporation the message
falls apart does any company proclaim
itself as the unquiet corporation no
everybody stands for quality as a result
nobody does
you can’t narrow the focus with quality
or any other idea that doesn’t have
proponents for the opposite point of
view you can’t position yourself as an
honest politician because nobody is
willing to take the opposite position
although there are plenty of potential
candidates you can however position
yourself as the pro-business candidate
or the pro-labor candidate and be
instantly accepted as such because there
is support for the other side when you
develop your word to focus on be
prepared to fend off the lawyers they
want to trademark everything you publish
the trick is to get others to use your
word to be a leader you have to have
followers it would be helpful for Lotus
to have other companies get into the
group where business it would make the
category more important and people would
be even more impressed with lotuses
leadership once you have your word you
have to go out of your way to protect it
in the marketplace the case of BMW
illustrates this very well for years BMW
was the ultimate driving machine then
the company decided to broaden its
product line and chase Mercedes with
large 700 series sedans the problem is
how can a living room on wheels be the
ultimate driving machine not only can
you not feel the road but you will also
crush all the pylons in your driving
commercials 30 to the 22 immutable laws
of marketing as a result things started
downhill for BMW luckily it has recently
introduced a new small BMW in his
driving once again the company has
regained its focus the law of focus
applies to whatever you are selling or
even whatever your Unseld example the
anti-drug crusade on television and in
magazines suffers from a lack of focus
there is no one word driven into the
minds of drug users that could begin to
Unseld the drug concept and to drug
advertising is all over the map you’d
think the anti-drug forces who after all
our professionals would have taken a
leaf from the amateurs fighting the
abortion issue both sides of the
abortion issue have focused on single
powerful words pro-life and pro-choice
the anti-drug forces should do the same
focus on a single powerful word what the
campaign ought to do is make drugs what
cigarettes are today socially
unacceptable one word that could do this
is the ultimate downward loser
since drug usage causes all kinds of
losses of job family self-esteem freedom
life a program that said drugs are for
losers could have a very powerful impact
especially on the recreational user who
is more concerned with social status
than with getting high the law of focus
a marketing law could help solve one of
society’s biggest problems 33 the law of
Focus 6 the law of exclusivity to
companies cannot own the same word in
the prospects mind 34 when a competitor
owns a word or position in the prospects
mind it is futile to attempt to own the
same word as we mentioned earlier Volvo
own 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 prospects mind with a
safety message
the Atari story shows the futility of
attempting to move in on the home
computer position against well
entrenched competitors a variation
called game computer might have been
possible because it would have taken
advantage of the perception of Atari as
a creator of compete
games but that’s about it the home
computer position belonged to Apple
Commodore and others 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 competitors position by
making its concept more important
Federal Express has walked away from
overnight and is in the middle of trying
to take worldwide away from DHL
overnight letter used to be emblazoned
on Federal Express envelopes today you
will find FedEx letter instead and its
advertising no longer says when it
absolutely positively has to be there
overnight lately the word that has been
appearing in Federal Express advertising
is worldwide
35 this raises the all-important
question can Federal Express ever own
the worldwide word probably not someone
else already owns it DHL worldwide
Express its concept faster to more of
the world 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
prospects mind another massive marketing
effort aimed at someone else’s word can
be found in bunny land to be specific
the pink energizer bunny that is trying
to take the long-lasting concept away
from Duracell no matter how many bunnies
Eveready throws into the fray Duracell
will still be able to hang on to the
long lasting word Duracell got into the
mind first and preempted the concept
even the dura part of the name
communicates it what often leads
marketers down this booby-trapped Lane
is that wonderful stuff called research
armies of researchers are employed focus
groups conducted questionnaires
tabulated and what comes back in a
three-pound report is a wish list of
attributes that users want from a
product or service so if that’s what
people want that’s what we should give
them what’s the biggest problem people
have with batteries they go dead at the
most inconvenient times
so what’s the number one battery
attribute long-lasting of course if Wang
lasting is what people want that’s what
we should advertise right wrong what
researchers never tell you is that some
other company already owns the idea they
would rather 36 the 22 immutable laws of
marketing encourage clients to mount
massive marketing programs the theory is
that if you spend enough money you can
own the idea right wrong
some years ago Burger King started down
this slippery slope from which it has
never quite recovered a market studies
showed that the most popular attribute
for fast food was fast no big surprise
so Burger King did what most red-blooded
marketers do it turned to its
advertising agency and said if the world
wants fast our advertising should tell
them we’re fast what was overlooked in
the research was that McDonald’s was
already perceived as being the fastest
hamburger chain in the country fast
belonged to McDonald’s undaunted by this
Burger King launched its campaign with
the slogan best food for fast times the
program quickly became a disaster very
nearly on a PA are with the one that
involved herb the advertising agency was
fired management was fired the company
was sold and downward momentum was
maintained many people have paid the
price for violating the law of
exclusivity 37 the law of exclusivity 7
the law of the ladder the strategy to
use depends on which rung you occupy on
the ladder 38 while being first into the
prospects 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 number
two and number three 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 take the
car-rental category
Hertz got into the mind first and wound
up on the top rung Avis got in second
and national got in third 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 take Avis for
example four years the company
advertised the high quality of its Rent
A Car Service finest in Renta 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 number two in Renta cars so
why go with us we try harder for
thirteen years in a row
Avis had lost money then when it
admitted to being number two it started
to make money lots of money shortly
thereafter the company 39 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
Mis read the Avis story they assume the
company was successful because it tried
harder ie it had the better service but
that wasn’t it at all Avis was
successful because it related itself to
the position of Hertz in the mind if
trying harder were the secret of success
Harold Stassen would have been president
many times over many marketers make the
same mistake as Avis did currently
Adelphi University in Garden City Long
Island is comparing itself favorably
with Harvard wait a minute
says the high school senior Adele fee is
not on my college ladder as you might
Adele fee is not very successful in
attracting the top students the mind is
prospects use their ladders in deciding
which information to accept in 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 when Chrysler
compared its cars with Honda very few
people traded in their preludes in a
courts for Plymouth’s and dodges the
headline of one Chrysler ad said
comparing a used Dodge spirit to a new
Honda Accord seemed a little ridiculous
until we saw the results according to
the ad 100 people were 40 the 22
immutable laws of marketing asked to
compare a Dodge spirit with 70,000 miles
on it to a new Honda Accord the majority
58 out of 100 chose the used dodge
ridiculous but not necessarily untrue
what about your products ladder in the
prospects 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
everyday cigarettes
Cola beer toothpaste cereal tend to be
high interest products with many rungs
on their ladders products that are
purchased infrequently furniture
lawnmowers 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 they 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
prospects mind you tend to have twice
the market share of the brand below you
in half the market share of the brand
above you 41 the law of the ladder
for example Acura was the first Japanese
luxury car Lexus was second Infiniti was
third in a recent year Acura sold one
hundred and forty three thousand seven
hundred and eight cars in the United
Lexus sold seventy one thousand two
hundred and six cars an Infiniti sold
thirty four thousand eight hundred and
ninety the relationship among the three
brands is almost a mathematically
correct four – two – one the Acura Lexus
Infiniti battle is in its early stages
where the cars are new and there’s a lot
of interest among the public and the
press in the long run when the products
are no longer exciting another
phenomenon occurs see the next chapter
the law of duality marketing people
often talk about the three leading
brands in a category as if it were a
battle of equals it almost never is the
leader inevitably dominates the number
two brand in the number two brand
inevitably smothers number three in baby
food it’s Gerber Beechnut and Heinz in
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 prospects
mind ask someone to name all the brands
he or she remembers in a given category
rarely will anyone name more than seven
and that’s for a high-interest category
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 forty-two the 22
immutable laws of marketing Seven Dwarfs
the seven danger signals of cancer
sometimes your own ladder or category is
too small it might be better to be a
small fish in a big pond than to be a
big fish in a small
Pond in other words it’s sometimes
better to be number three on a big
ladder than number one on a small ladder
the top rung of the lemon-lime soda
ladder was occupied by 7up 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 7up climbed
on the cola ladder with a marketing
campaign called the uncool ax as tea is
to coffee 7up became the alternative to
a Cola drink and 7up sails climbed to
where the brand was the third-largest
selling soft drink in America
unfortunately in recent years 7up lost
its grip on third place by violating one
of the laws yet to be discussed chapter
12 the law of line extension the latter
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
prospects 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
43 the law of the ladder 8 the law of
duality in the long run every market
becomes a two-horse race 44 early on a
new category is a ladder of many rungs
gradually the latter becomes a two rung
affair in batteries its Eveready in
Duracell in photographic film its Kodak
and Fuji in Renta cars its Hertz and
Avis in mouthwash its Listerine and
scope in hamburgers its McDonald’s and
Burger King in sneakers its Nike and
Reebok in toothpaste its crest and
Colgate 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 in the up
Dart back in 1969 there were three major
brands of a certain product the leader
had about 60% of the market
the number-two brand had a 25% share and
the number three brand had a six 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 number two will
gain 22 years later the leader dropped
down to 45 percent of the market the
number two brand has 40 percent and
number three has three percent the
products are Coca Cola Pepsi Cola and
royal crown Cola respectively but the
principles apply to brands everywhere
look at the three long-distance
telephone companies AT&T has 65% of the
market MCI has 17% and Sprint has 10%
who will win and who will lose in the
telephone wars while the future 45 is
unknowable chapter 17 the law of
unpredictability a betting person would
put his or her money on MCI MCI has won
the battle with Sprint for second place
so now MCI ought to become the upstart
alternative to old reliable AT&T Sprint
is probably feeling very comfortable on
the third rung of the ladder nine
percent doesn’t sound like much but it
translates to six billion dollar in
annual sales and the market has been
growing rapidly for the long term
however Sprint is in serious trouble
look what happened to royal crown Cola
back in 1969 the Royal Crown Company
revitalized its franchise system 350
bottlers strong and hired the former
president of rival pet foods in a
veteran of both Coke and Pepsi the
company also retained Wells rich Greene
a high-powered New York advertising
agency we’re out to kill Coke and Pepsi
declared Mary Wells Lawrence the
agency’s head
to the royal crown bottlers i hope you
will excuse the word but we’re really
out for the jugular the only brand that
got killed was royal crown in a maturing
industry third place is a difficult
position to be in
take the domestic automobile industry in
spite of heroic measures undertaken by
Lee Iacocca Chrysler is in trouble in
the long run Marketing is a two-car race
take video games in the late 80s the
market was dominated by Nintendo with a
75% share the two also rounds were Sega
and NEC today Nintendo and Sega are neck
and neck and NEC is way 46 the 22
immutable laws of marketing behind in
the long run marketing is a two game
race time frames however can vary the
fast-moving video game market played
itself out in two or three seasons the
long-distance telephone market might
take two or three decades take the
airline industry American Airlines with
20% of the market got its nose out in
front and will probably wind up as the
coca-cola of the skies the interesting
battle is between Delta and United tied
at 18% apiece one of these two will take
off like Pepsi the other is headed down
with royal crown in the long run
marketing is a two airline race are
these results preordained of course not
there are other laws of marketing that
can also affect the results furthermore
your marketing programs can strongly
influence your sales provided they are
in tune with the laws of marketing when
you’re a week number three 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 clear cut
number two what happens next depends
upon how skillful
contenders are take the laptop computer
field Toshiba is in first place with 21%
of the market but there are five
companies in second place 47 the law of
duality Zenith Compaq NEC Tandy and
Sharpe 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
what’s especially tragic from the
economy’s point of view are the
resources wasted in many high visibility
categories like laptop computers
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 21st 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 in 346 perished by 1923 only
108 car makers 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
number one or number two in their
markets could win in the increasingly
competitive global arena those that
could not were fixed closed or sold it’s
this kind of thinking that built
companies like Procter & Gamble into the
powerhouses they are in thirty two of
its forty-four product categories in the
United States
PNG commands the number one or number
two brands early on in a developing
market the number three or number four
positions look attractive sales are
increasing new forty eight the 22
immutable laws of marketing relatively
unsophisticated customers are come
into the market these customers don’t
always know which brands are the leaders
so they pick ones that look interesting
or attractive quite often these turn out
to be the number three or number four
brands as time goes on however these
customers get educated they want the
leading brand based on the naive
assumption that the leading brand must
be better 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 leaders 49 the law
of duality 9 the law of the opposite if
you are shooting for second place your
strategy is determined by the leader 50
in strength there is weakness
wherever the leader is strong there is
an opportunity for a would-be number two
to turn the tables much like a wrestler
uses his opponent’s strength against him
a company should leverage the leaders
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 Coca
Cola is a 100 year old product only 7
people in the history of the world have
known the coke formula which is kept
locked in a safe in Atlanta coca-cola is
the old established product however
using the law of the opposite pepsi-cola
reversed the essence of coca-cola to
become the choice of a new generation
the Pepsi generation 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
number 2 has to appeal to the latter
group in other words by positioning
yourself against the leader you take
business away from all the other
alternatives to number 1
if old people drink coke and 51 young
people drink Pepsi there’s nobody left
to drink royal crown Cola yet too many
potential number two brands try to
emulate the leader this usually is an
error you must present yourself as the
alternative time built its reputation on
colorful writing so Newsweek turned the
idea around and focused on a
straightforward writing style we
separate facts from opinions in other
words Newsweek puts its opinions in the
editorial columns not in the news
columns sometimes you need to be brutal
scope the good tasting mouthwash hung
them medicine breath label on its
Listerine competition but don’t simply
knock the competition the law of the
opposite is a two-edged sword it
requires honing in on a weakness that
your prospect will quickly acknowledge
one whiff of Listerine and you know that
your mouth would smell like a hospital
then quickly twist the sword scope is
the good tasting mouthwash that kills
germs also in the mouthwash field is an
interesting example of the futility of
trying to emulate the leader in 1961
Johnson & Johnson introduced micron math
wash focusing on its scientific virtues
within months micron became the number
two 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 number two mouthwash by 1978
when Johnson & Johnson withdrew 50 to
the 22 immutable laws of marketing the
product from the market Micron’s share
had fallen to 1% 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 löwenbräu
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 all this is academic today
since lowenbrau is now brewed in America
as a product gets old
it often accrues some negative baggage
this is especially true in the medical
field 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 out sells aspirin and is the
largest selling single product in
American drugstores Stolichnaya was able
to hang the label of fake 53 the law of
the opposite Russian vodka on American
vodkas such as Smirnoff samovar and
Wolfe Schmidt by simply pointing out
that they come from places like Hartford
Connecticut skin Lee Pennsylvania and
Lawrenceburg Indiana Stolichnaya comes
from Leningrad Russia making it the real
thing there has to be a ring of truth
about the negative if it is to be
effective one of the classic examples of
hanging a negative on a competitor is an
advertisement that Royal Doulton China
ran about its main US competitor the
headline said it all
Royal Doulton the China of
England versus Lennox the China of
Pomona New Jersey the ad exploited the
fact that many people thought Lennox was
an imported China by repositioning
Lennox where it really belonged in
Pomona New Jersey Royal Doulton was able
to establish itself as the real English
China reason most people have a hard
imagining craftsman making fine white
bone china in a tacky sounding place
like Pomona New Jersey when the folks in
England saw the ad they howled with
laughter it turns out that
stoke-on-trent is just as tacky as
Pomona 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 number two can’t afford to be timid
when you give up focusing on number one
you make yourself vulnerable not only to
the leader but to the rest of the pack
take the sad story of Burger King in
recent years times have been difficult
for this number two in hamburgers 54 the
22 immutable laws of marketing it has
been through many management changes new
owners in a parade of advertising
agencies it doesn’t take much of a
history review to see what went wrong
Burger King’s most successful years came
when it was on the attack it opened with
have it your way
which twit McDonald’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 number two
alternative position then for some
unknown reason Burger King ignored the
law of the opposite
it got timid and stopped attacking
McDonald’s the world was introduced to
Erb the nerd the best food for Fast
Times we do it the way you do it you’ve
got to break the rules and on and on it
even started a program to attract little
kids the mainstay of McDonald’s strength
this is no way to stay a strong number
two Burger King sales per unit declined
and have never returned to the level
they were when it was on the attack
Burger King made the mistake of not
taking the opposite tack 55 the law of
the opposite ten the law of division
over time a category will divide and
become two or more categories 56 like an
amoeba dividing in a petri dish the
marketing arena can be viewed as an
ever-expanding sea of categories
a category starts off as a single entity
computers for example but over time the
category breaks up into other segments
mainframes many computers workstations
personal computers laptops notebooks pen
computers like the computer the
automobile started off as a single
category three brands Chevrolet Ford and
Plymouth dominated the market then the
category divided 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 ABC CBS and NBC once
accounted for 90% of the viewing
audience now we have Network independent
cable pay and public television and soon
we’ll have in store an interactive
television beer started the same way
today we have imported and domestic beer
premium and popular priced beers Lite
draught and dry beers even non-alcoholic
beer the law of division even affects
countries witnessed the mess in
Yugoslavia in 1776 there were about
thirty five empires kingdoms countries
and states in the world by World War two
the number had doubled by 1970 there
were more than 130 countries today 57
some 190 countries are generally
recognized as sovereign nations look at
the music field
it used to be classical in popular music
to stay on top of the popular music
field you could watch your hit parade
which featured the top 10 hits of the
week Radio adopted the same idea with a
top 40 format today top 40 is falling
apart because there isn’t one list
anymore billboard the bible of the music
business has 11 separate
lists classical contemporary jazz
country crossover dance Latin jazz pop
rap rhythm and blues and rock and 11
liters for the 11 categories they
recently included Itzhak Perlman
foreplay Garth Brooks Luciano Pavarotti
Michael Jackson me Mayer necesidad Dave
Grusin Enya Public Enemy Vanessa
Williams and Bruce Springsteen 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 dissing minis
son in workstations and so on instead of
understanding this concept of division
many corporate leaders hold the naive
belief that categories are combining
synergy and it’s kissing cousin the
corporate alliance are the buzzwords in
the boardrooms of America IBM according
to the New York Times is poised to take
advantage of the coming convergence of
whole industries including television
music publishing and computing IBM’s
strongest suit says the times in the 58
the 22 immutable laws of marketing
expected convergence of cable and
telephone networks with computer and
television manufacturers maybe
technology that it has developed to
create extremely high speed networks see
chapter 20 the law of hype it won’t
happen categories are dividing not
combining also look at the much touted
category called financial services in
the future according to the press we
won’t have banks insurance companies
stockbrokers or mortgage lenders will
have financial services companies it
hasn’t happened yet Prudential American
Express and others have fallen into the
financial services trap customers don’t
buy financial services they buy stocks
or life insurance or bank accounts
and they prefer to buy each service from
a different company 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 one
category and used the same brand name in
another category a classic example is
the fate that befell Volkswagen the
company that introduced the small car
category to America its beetle was a big
winner that grabbed 67 percent of the
imported car market in the United States
Volkswagen was so successful that it
began to think it could be like General
Motors and sell bigger 59 the law of
division faster and sporty-er cars so it
swept up whatever models it was making
in Germany and shipped them all to the
United States but unlike GM it used the
same brand Volkswagen for all of its
models different folks for different
folks said the advertising which
featured five different models including
the beetle the 412 sedan the Dasher the
thing and even a station wagon needless
to say the only thing that kept selling
was the small thing the beetle well
Volkswagen found a way to fix that it
stopped selling the beetle in the United
States and started selling a new family
of big fast expensive Volkswagens now
you had the Vanagon the Sirocco the
jetta the golf GL in the Cabriolet it
even built a plant in Pennsylvania to
build these wondrous new cars
unfortunately for Volkswagen the small
car category continued to expand and
since people couldn’t buy a long-lasting
economical VW they shifted to Toyota
Honda and Nissan today Volkswagens 67
percent share has shrunk to less than
four percent Volkswagen isn’t some minor
European brand like Saab or Alfa Romeo
Volkswagen is the largest selling
automotive brand in Europe the
VW sells in the United States are the
same as the ones it sells in Europe only
the minds of the people buying them are
different in America
Volkswagen means small and ugly nobody
here wants to buy a big beautiful
Volkswagen Chapter four
the law of perception one of Volkswagens
competitors Honda decided to go up
market rather than use the Honda name in
60 the 22 immutable laws of marketing
the luxury car market it introduced the
Acura it even took the expensive step of
setting up separate Acura dealerships to
avoid confusion with Honda the Acura
became the first Japanese luxury car in
the United States where today Honda
sells many more accurate than Volkswagen
sells Volkswagens Honda now has the
leading brand in two categories what
keeps leaders from launching a different
brand to cover a new category is the
fear of what will happen to their
existing brands General Motors was slow
to react to the super premium category
that Mercedes and BMW established one
reason was that a new brand on top of
Cadillac would enraged GM’s Cadillac
dealers eventually GM tried to take
Cadillac upmarket with the $54,000 a
landy it bombed why would anyone spend
that kind of money on a so-called
since their neighbors would probably
think they paid only $30,000 or so no
prestige a better strategy for General
Motors might have been to put a new
brand into the Mercedes market they
might have brought back the classic
LaSalle timing is also important you can
be too early to exploit a new category
back in the 50s the Nash Rambler was
America’s first small car but American
Motors didn’t have either the courage or
the money to hang in there long enough
for the category to develop it’s better
to be early than late you can’t get into
the prospects mind first unless you are
prepared to spend some time waiting for
things to develop 11 the law of
prospective marketing effects take place
over an extended period of time
62 is alcohol a stimulant or a
depressant if you visit almost any bar
and grill on a Friday night after work
you’d swear that alcohol was a stimulant
the noise and laughter are strong
evidence of alcohol stimulating effects
yet at 4 o’clock in the morning when you
see a few happy our 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 assail
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 sales 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 it’s
not unusual to walk down a retail block
and find a dozen stores in a row with
sale signs in their windows have the
automobile rebate programs increased 63
sales the rise of auto rebates have
coincided with a decline in auto sales
u.s. vehicle sales have declined for
five straight years in a row the largest
furniture company in the New York City
area Siemens has been running a sale
every week
recently Siemens went bankrupt there is
no evidence that couponing increases
sales in the long run many companies
find they need a quarterly dose of
couponing to keep sales on an even keel
once they stop couponing sales drop off
in other words you keep those coupons
rolling out not to increase sales but to
keep sales from
falling off if you stop couponing is a
drug you continue to do it because the
withdrawal symptoms are just too painful
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
every day low prices companies like
Walmart and Kmart and the rapidly
growing warehouse outlets yet almost
everywhere you look you see yo-yo
pricing the airlines and the
supermarkets are two examples recently
however Procter & Gamble made a bold
move to establish uniform pricing which
could become the start of a trend in
everyday life there are many examples of
short-term gains in long term losses
crime being a typical example if you rob
a bank for $100,000 and wind up spending
10 years in jail you either made 60 for
the 22 immutable laws of marketing 100
thousand dollars for a day’s work or 10
thousand dollars a year for 10 years of
labor it depends on your point of view
inflation can give an economy a
short-term jolt but in the long run
inflation leads to recession the nuts in
Brazil haven’t figured this out yet 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
beautifly an extension invariably
increases sales dear industry clearly
illustrates this effect in the early 70s
Miller High Life was barreling along
with sales increases averaging 27
percent a year
Miller’s success was fueled by Miller
time a blue-collar campaign focused on
rewarding yourself
at the end of the day with a Miller beer
then Miller got greedy and in 1974
introduced Miller Lite a brilliant
concept chapter two the law of the
category buried under a line extended
name in the short term the two Millers
could coexist the blue-collar beer high
life and the yuppie beer light but in
the long term line extension was bound
to undermine one or the other brand the
high-water mark for Miller High Life was
1979 five years after the introduction
of Miller Lite 20 to him in those five
years Miller High Life Samuel sales
almost tripled from eight point six
million to twenty three point six
million barrels sixty-five the law of
perspective this was the short-term
effect of line extension the long-term
effect was grim from a high of twenty
three point six million barrels in 1979
Miller High Life declined thirteen years
in a row to just five point eight
million barrels in 1991 and the decline
is bound to continue nor has Miller Lite
been immune to the ravages of line
extension in 1986 the brewer introduced
Miller Genuine Draft the brand took
because it was the first beer in a new
category unfortunately the brand also
carried the Miller name see the next
chapter the law of line extension
history repeats itself five years later
Miller Lite peaked in sales and then
started to decline once started the
decline is almost impossible to stop
unless you know what to look for it’s
hard to see the effects of line
extension especially for managers
focused on their next quarterly report
if a bullet took five years to reach a
target very few criminals would be
convicted of homicide the same thing
that happened to Miller happened to
Mitchell AB three years after the
introduction of Mitchell lob light
regular Mitchell lob peaked in sales and
then declined eleven years in a row
today the for Mitchell aa bind regular
light dry and classic dark cell 25%
fewer barrels than Mitch
alone did in 1978 the Year Mitchell of
Light was introduced the same thing
happened to course the introduction of
Coors Light caused the collapse of
course regular which today sells
one-fourth of what it used to even the
king is down after annual sales
increases stretching back to the end of
prohibition but visor 66 the 22
immutable laws of marketing has been
slipping the last three years in a row
the cause Bud Light you might be
thinking that Miller Coors and
anheuser-busch had to line extend
because Light beer has taken over the
market if you believe what you read in
the papers you’d think that everyone is
drinking Light beer not true today 18
years after the introduction of Miller
Lite Light beer still accounts for only
31% of the beer market in other areas of
marketing the short-term / long-term
line extension effects occur much more
rapidly coca-cola clothes were
introduced by murjani in 1985 two years
later wholesale volume reached 250
million dollars the following year the
line dried up virtually overnight
saddling murjani with millions of
dollars worth of inventory what happened
to coca-cola clothes also happened to
Donald Trump at first the Donald was
successful then he branched out and put
his name on anything the banks would
lend him money for what’s a Trump a
hotel three casinos two condominiums one
airline one shopping center Fortune
magazine called Trump an investor with a
keen eye for cash flow and asset values
a smart marketer a cunning wheeler
dealer Time and Newsweek put the Donald
on their covers today Trump is one point
four billion dollar in debt what made
him successful in the short term is
exactly what caused him to fail in the
long term line extension it looks easy
but marketing is not a game for amateurs
67 the law of perspective
12 the law of line extension there’s an
irresistible pressure to extend the
equity of the brand 68 if violating any
of our laws was a punishable offense a
large portion of corporate America would
be in jail by far the most violated law
in our book is the law of line extension
what’s even more diabolical is that line
extension is a process that takes place
continuously with almost no conscious
effort on the part of the corporation
it’s like a closet or a desk drawer that
fills up with almost no effort on your
part 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
1991 for example IBM’s revenues were 65
billion dollars yet the company wound up
losing 2.8 billion dollars that’s almost
8 million dollars a day in addition to
selling mainframe computers IBM markets
personal computers pen computers
workstations mid-range computers
software networks telephones you name it
IBM even tried to get into the home
computer market with the pc-jr along the
way IBM dropped millions on copiers sold
to Kodak ROM sold to Siemens
satellite business systems shut down the
prodigy Network limping along sa a top
view office vision and OS / – when a
company becomes incredibly successful it
invariably plants the seeds for its
future problems 69 take Microsoft the
most successful company in the software
field even though the company is 150th
the size of General Motors Microsoft’s
stock is worth more than GM’s
what is Microsoft’s strategy in a word
more Microsoft Corp said it is
aggressively seeking the dominant share
in every major software applications
category in the personal computer field
said The Wall Street Journal recently
michael maples senior vice-president of
microsoft’s applications division
suggested that microsoft might be able
to achieve as much as a 70% share in
every major applications category
continued the journal whom does that
sound like
sounds like IBM Microsoft is setting
itself up as the next IBM with all the
negative implications the name suggests
Microsoft is the leader in personal
computer operating systems but it trails
the leaders in each of the following
major categories spreadsheets Lotus is
the leader word processing WordPerfect
is the leader and business graphics
Harvard graphics from SPC software
publishing is the leader Microsoft keeps
puffing itself up by expanding into new
categories such as pen computers
recently Microsoft bought Fox software
for 170 million dollar in order to get
into the database software field what do
you bet the company kills the Fox and
changes it to Microsoft
there are ominous signs of softness in
Microsoft’s strategy The Economist
reported in early 1992 mr. gates is
putting together a range of products
based 70 the 22 immutable laws of
marketing on a common core of technology
that will compete across virtually the
whole of the software industry from big
computers to small ones and from
operating systems in the information
engine room to graphics programs that
draw every picture for executives nobody
in the software industry has yet managed
a venture of that complexity though iBM
has tried and failed 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 then weak
everywhere in a narrow sense line
extension involves taking the brand name
of a successful product
eg a1 steak sauce and putting it on a
new product you plan to introduce eg a1
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 a1 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 a1
asks the diner nobody replies a 1 watt
in spite of an 18 million dollar
advertising budget the a1 poultry launch
was a dismal failure there are as many
ways to line extend as there are
galaxies in the universe and new ways
get invented 71 the law of line
extension every day 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 7up was simply the
lemon lime on Cola it had a 5.7 percent
share of the soft drink market then the
company added 7up gold cherry 7up and
assorted diet versions today 7up s share
is down to 2.5% wherever you look you
will find line extensions which is one
reason why stores are choked with
friends there are 1300 shampoos 200
cereals 250 soft drinks invariably the
leader in any category is the brand that
is not line extended take baby food for
example Gerber has 72% of the market way
ahead of Beechnut in Heinz the two line
extended brands in spite of evidence
that line extensions don’t
work companies continue to pump them out
here are some examples ivory soap ivory
shampoo lifesavers candy lifesavers gum
big lighters big pantyhose Chanel Chanel
Furman tank ragin tank ray vodka Coors
beer Coors water Heinz ketchup Heinz
baby food USA Today USA Today on TV 72
the 22 immutable laws of marketing
adidas running shoes Adidas cologne
pierre cardin clothing pierre cardin
wine Levi’s blue jeans
Levi’s shoes Colgate Palmolive we want
to leverage our basic core brands and
trade on our brand names to extend into
new categories Eadie Fogarty president
Campbell Soup Company leveraging and
extending high-quality repeat purchase
brand names is always preferred over
launching a new name David W Johnson CEO
del Monte we’re dedicated to the single
brand concept we’re going to keep
extending the Del Monte name into new
areas U and McDonald president ultra
there will be soups pastas salad
dressings soda fruit juices and a new
thicker diet drink called ultra
slim-fast plus Daniel Abraham Chairman
good luck and good night mr. Abraham
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 chapter 11 the
law of perspective management is also
blinded by an intense loyalty to the
company or brand
why else would PepsiCo have introduced
Crystal Pepsi in spite of the failures
of pepsi light and pepsi am 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 73 the law of line
extension 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 why is Sears Roebuck in trouble
because the company tried to be all
things to all people
Sears was big in hard goods so it went
into soft goods and then fashion the
company even hired Cheryl Tiegs do
fashion models really buy their mini
skirts at Sears in the conventional view
a business strategy usually consists of
developing an all-encompassing vision in
other words what concept or idea is big
enough to hold all of a company’s
products and services on the market
today as well as those that are planned
for the future in the conventional view
strategy is a tent you stake out a tent
big enough so it can hold everything you
might possibly want to get into iBM has
erected an enormous computer tent
nothing in the computer field today or
in the future will fall outside the IBM
tent this is a recipe for disaster
as new companies new products new ideas
invade the computer arena iBM is going
to get blown away
you can’t defend a rapidly growing
market like computers even if you are a
financial powerhouse like IBM from a
strategic point of view use 70 for the
22 immutable laws of marketing have to
be much more selective picking and
choosing the area in which to pitch your
tent strategically General Motors is in
the same boat as IBM GM is into anything
and everything on Wheels
sedans sports cars cheap cars expensive
trucks minivans even electric cars so
what is GM’s business strategy if it
runs on the road or off the road will
chase it 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
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 75
the law of line extension 13 the law of
sacrifice you have to give up something
in order to get something 76 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 take Emory
air freight Emory was in the air freight
services business anything you wanted to
ship you could ship via Emory small
packages large packages overnight
service delayed service from a marketing
point of view what did Federal Express
do it concentrated on one service small
packages overnight today Federal Express
is a much bigger company than Emory the
power of the sacrifice for Federal
Express was in being able to put the
word overnight in the mind of the
prospect when it absolutely positively
had to be there overnight you would call
Federal Express
then what did Federal Express do the
company did the same thing Emery did it
threw away its overnight positioned by
buying Tiger internationals flying tiger
cargo line for 880 million dollars now
Federal Express is a worldwide air cargo
company without a worldwide position in
just 21 months Federal Express lost 1.1
billion dollar in its international
operations 77 marketing is a game of
mental warfare it’s a battle of
perceptions not products or services in
the mind of the prospect Federal Express
is the overnight company Federal Express
owns the overnight position when the
market turned international Federal
Express faced a classic marketing
dilemma should it try to take a domestic
name into the international field or
should it create a new worldwide name
furthermore how should it deal with DHL
the company that got into the
international field first 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 ever Eddie was the longtime
leader in batteries but new technology
arrived as it does in most industries
the first technology to change the
battery business was the heavy-duty
battery what would you call your
heavy-duty battery if you had the number
one name in batteries you’d probably
call it the Eveready heavy-duty battery
which is whatever Eddie did then the
alkaline battery arrived again Eveready
called its alkaline battery the Eveready
alkaline battery it seemed to make sense
then PR Mallory introduced a line of
alkaline batteries only furthermore the
company gave the line a better 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 ever Eddie said the advertising
Eveready was forced to change the name
of its Alka 78 the 22 immutable laws of
marketing line battery to the
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 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 take
craft for example everybody thinks craft
is a strong brand name in jellies and
gems craft has 9% of the market but
Smuckers has 35% Kraft means everything
but with a name like Smuckers it has to
be jelly or Jam because that’s all
Smuckers makes in mayonnaise Kraft has
18% of the market but Hellmann’s has 42%
Kraft does have a leading brand in terms
of market share however its name isn’t
Kraft it’s Philadelphia Philadelphia
brand cream cheese has 70% of the cream
cheese market 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
Campo LJ Hooker and Gimbels all wound up
in bankruptcy court Ames department
stores filed for bankruptcy Hill’s
department stores filed for bankruptcy
Macy’s the owner of the world’s largest
store filed for bankruptcy interstate
department stores also went bankrupt so
79 the law of sacrifice the company
looked at the books and decided to focus
on the only product it made money on
choice as long as Interstate was going
to focus on choice it decided to change
its name to Toys R Us
today Toys R Us does twenty percent of
the retail toy business in the country
very profitably – in its last fiscal
year Toys R Us made three hundred and
26 million dollars on sales of 5.5
billion dollars many retail chains are
successfully patterning themselves on
the toys-r-us formula a narrow focus
with in-depth stock staples office
supplies and Blockbuster Video are two
recent examples 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
woollen cotton clothing for young
swingers Victoria’s Secret
sexy undergarments footlocker
athletic shoes Banana Republic Safari
wear when a clothing chain with a name
like Banana Republic can be successful
you know we live in the age of the
specialist let’s discuss the second
sacrifice target market where is it
written that you have to appeal to
everybody take the cola filled Coca Cola
got into the prospects mind first and
built a powerful position in 80 the 22
immutable laws of marketing the late 50s
for example coke outsold Pepsi more than
5 to 1 what could Pepsi Cola do to go
against cokes powerful position in the
early 60s 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 out
sells Coca Cola in spite of Pepsi colas
success however the pressure for
enlarging the tenth is always present
recently it succumbed to temptation
according to Advertising Age Pepsi Cola
Co has outgrown the Pepsi generation in
a major marketing shift flagship Pepsi
will be pitched as this
soft drink for the masses gotta have it
is Pepsi’s new theme the advertising
shows older people like Yogi Berra and
Regis Philbin drinking Pepsi the one
drawback of Pepsi advertising in the
past has been a little too much focus on
youth says Phil Dusenberry of Pepsi zat
agency bebe do we could have made
greater gains had we expanded our
horizons to cast a wider net and catch
more people according to Fortune
magazine coca-cola is the world’s most
powerful trademark when an also-ran like
Pepsi Cola develops a narrowly focused
strategy that puts it within an eyelash
of the leader why would it change it’s
powerful strategy 81 the law of
sacrifice why indeed there seems to be
an almost religious belief that the
wider net catches more customers in
spite of many examples to the contrary
take Budweiser for example when we go
out to develop a plan for Budweiser we
have to cover everybody above 21 years
of age whether they’re male female black
white says August Bush for look at
cigarette advertisements especially 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 them in let’s go out and
get the women – 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 brand
was called Marlboro today Marlboro is
the largest selling cigarette in the
world in the United States Marlboro 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 people
who will actually buy your product even
though PepsiCo TLAs 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 we’re 82 the
22 immutable laws of marketing 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 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 people used to get on a
people Express plane and say where are
we going
they didn’t care as long as it was cheap
enough what did people Express do after
it became successful it tried to be all
things to all people it invested in new
equipment like 747 s it started to fly
the heavily traveled routes to places
like Chicago and Denver
not to mention Europe it bought Frontier
Airlines it added frills like first
class sections 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 a White Castle
today not only looks the same as a White
Castle did 60 years ago
it also sells the same frozen sliders at
unbelievably low prices would you
believe the average White Castle does
more than 1 million dollars a year in
revenues that’s more than Burger King
and not too far behind McDonald’s good
things come to those who sacrifice 83
the law of sacrifice 14 the law of
attributes for every attribute there is
an opposite effective attribute 84 in
Chapter six
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 to often
accompany 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
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
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 in 85
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 for many years IBM dominated the
world of computers with its attributes
of big and powerful companies that tried
to move in on those attributes had
little success
RCA G UNIVAC Burroughs Honeywell NCR and
control data lost a lot of money on
mainframe computers then an upstart from
Boston went for the attribute of small
in the mini computer was born they
probably left in Armonk because they
knew corporate America wanted big and
powerful today small has grown to such
proportions that
beam’s vast mainframe empire is in
serious trouble a company that never
laughs at new attributes that are
exactly the opposite of their current
products is Gillette the world’s number
one 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
Gillette jumped in with a disposable
razor of its own called good news by
spending heavily Gillette was able to
win the battle of the disposables today
the Gillette good news razor dominates
the disposable category which has grown
to dominate the razor blade business
morale you can’t predict the 86 the 22
immutable laws of marketing size of a
new attributes chair so never laughs
Burger King was unsuccessful when it
tried to take the attribute fast from
what should Burger King have done use
the opposite attribute the exact
opposite attribute slow won’t do for a
fast food place although there is an
element of slowness in Burger King’s
broiling concept a single trip to any
mcdonald’s should be enough to find
another attribute that mcdonald’s owns
kids this is indeed the place to which
kids dragged their parents and
McDonald’s has the swing sets to prove
it this sets up an opportunity vividly
demonstrated by the Coke and Pepsi
battle 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 that generally
works out to be everyone over the age of
10 not a bad market to make the concept
Burger King would have to invoke the law
of sacrifice and give all the little
kids to McDonald’s while this might mean
getting rid of a few swing sets it also
allows Burger King to hang kittyland on
chapter 9 the law of the opposite to
drive the concept into prospects Minds
burgerking would need a term it could be
grow up grow up to the flame-broiled
taste of Burger King the new concept for
Burger King would strike fear and terror
in the boardroom at McDonald’s always a
good sign of an effective program 87 the
law of attributes 15 the law of kender
when you admit a negative the prospect
will give you a positive 88 it goes
against corporate and human nature to
admit a problem for years the power of
positive thinking has been drummed into
us think positive has been the subject
of endless books and articles so it may
come as a surprise to you that one of
the most effective ways to get into a
prospects mind is to first admit a
negative and then twist it into a
avis is only number two in rent-a-cars
with a name like Smuckers it has to be
good the 1970 VW will stay ugly longer
joy the most expensive perfume in the
world what’s going on here why does a
dose of honesty work so well in the
marketing process 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
especially in an advertisement you have
to prove a positive statement to the
prospects satisfaction no proof is
needed for a negative statement the 1970
VW will stay ugly longer a car that ugly
must be reliable thinks the prospect joy
the most expensive perfume in the world
if people are willing to pay 375 dollars
an ounce it must be a sensational
perfume with a name like Smuckers it has
to be good most companies especially
family companies would never make fun of
their own name
yet the Schmucker family did which is
one reason why Smuckers is the 89
number one brand of jams and jellies 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 which is one reason why you
won’t find beer brands like Gabe lingers
garage and grazetti ik in your
supermarket today
Avis is only number two in Renta cars so
why go with them they must try harder
everybody knew that Avis was second in
Renta cars so why go with the obvious
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 no program did this as
brilliantly as the Avis number 2 program
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 you’re selling idea
some years ago scope entered the
mouthwash market with a 90 the 22
immutable laws of marketing good tasting
thus exploiting Listerine Struhl e
terrible taste
what should Listerine do it certainly
couldn’t tell people that Listerine
Stace wasn’t all that bad that would
raise a red flag that would reinforce a
negative perception things could get
worse instead Listerine brilliantly
invoked the law of kender the taste you
hate twice a day not only did the
company admit the product tasted bad it
admitted that people actually hated it
now that’s honesty this setup 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 as another example General Foods
admitted that Grape Nuts cereal was a
learned pleasure and advised consumers
to try it for a week sales went up 23%
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
prospects 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 91 the
law of candor 16 the law of singularity
in each situation only one move will
produce substantial results 92 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 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
successful general 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 BH
Liddell Hart calls this bold stroke the
line of least expectation the allied
invasion came at Normandy a place whose
tight and rocky shore the Germans felt
would be an unlikely choice for a
landing of any scale ninety-three 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 the
automobile industry is an interesting
case in point
for years the leaders main strength was
in the middle of the line with brands
like Chevrolet Pontiac Oldsmobile Buick
and Cadillac General Motors easily beat
back frontal assaults by Ford Chrysler
and American Motors the Etzel Fiasco is
a typical example GM’s dominance became
legendary what works in marketing is the
same as what works in the military the
unexpected Hannibal came over the Alps a
route deemed impossible to scale Hitler
came around the Maginot Line and sent
his Panzer divisions through the
Ardennes terrain the French generals
thought impossible to Traverse with
tanks as a matter of fact he did it
twice once in the Battle of France and
again in the Battle of the Bulge in
recent years there have been only two
strong moves made against GM both were
flanking moves around the GM Maginot
Line 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
Cadillacs were too cheap to block the
high-priced German imports in an effort
to save money and maintain profits 94
the 22 immutable laws of marketing GM
made the fateful decision to build many
of its mid-range 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 its look-alike cars weakened
General Motors in the middle and opened
up a move for Ford as it broke through
with the European style taurus and sable
and then the Japanese jumped in with
Acura Lexus and Infiniti now General
Motors is weak across the board look at
Coke at present coca-cola is fighting a
two-front battle with classic and new
while coca-cola classic has regained a
lot of its original strength new coke an
Edsel from Atlanta is barely hanging on
we’ve seen endless slogans for coca-cola
we have a taste for you the real choice
catch the wave red white and you you
can’t beat the feeling and now you can’t
beat the real thing nothing has moved
the needle very much
the folks at coca-cola keep trying
they’ve even hired a Hollywood talent
agency to contribute creative ideas any
day now the new shooters will parade
into an Atlanta conference room and
paper the wall with a new set of slogans
top coke management will then sit around
and discuss the latest batch of creative
moves while it’s theoretically possible
to stumble across the right idea if you
haphazardly generate all the ideas you
can possibly think of it’s not an
efficient way to work 95 the law of
singularity coke needs to make progress
beyond just buying business as we see it
coke has only one two-part move to make
one part is a step backward the other is
a step forward
first of all coke has to bite the bullet
and drop new coke not because it’s a
loser or an embarrassment but because
the existence of new coke blocks the
company from effectively using the only
weapon it has
with new coke safely tucked away in the
archives coke would be able to invoke
the law of focus and bring back the
concept of the real thing and use it
against Pepsi to pull the trigger coke
could go on television and say to the
Pepsi generation alright kids we’re not
going to push you when you’re ready for
the real thing we’ve got it for you that
would be the beginning of the end of the
Pepsi generation if Pepsi Cola hadn’t
already killed it off all by itself not
only is this idea simple and powerful
but it’s really the only move available
to coke
it exploits the only words that Coke
owns in the minds of its prospects the
real thing to find that singular idea or
concept marketing managers have to know
what’s happening in the marketplace they
have to be down at the front in the mud
of the battle they have to know what’s
working and what isn’t
they have to be involved because of the
high cost of mistakes management can’t
afford to delegate important marketing
decisions that’s what happened at
General Motors 96 the 22 immutable laws
of marketing when the financial people
took over the marketing programs
collapsed their interest was in the
numbers not the brand’s the irony is
that the numbers went south along with
the brand’s it’s hard to find that
single move if you are hanging around
headquarters and not involved in the
process 97 the law of singularity 17 the
law of unpredictability unless you write
your competitors plans you can’t predict
the future
98 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
with hundreds of computers in an army of
meteorologists no one can predict the
weather three days in advance so how do
you expect to predict your market three
years in advance IBM developed a massive
marketing plan to hook up all pcs to its
mainframes the company called it office
vision yet the plan is dead in the water
thanks to developments at Sun Mike
systems Microsoft and other companies
you might say that office vision foresaw
everything but the competition failure
to forecast competitive reaction is a
major reason for marketing failures when
Pickett was asked which Confederate
leader was responsible for the defeat at
Gettysburg he replied I’ve always
thought the Yankees had something to do
with it
yet there are those who would say that
America’s big problem is the lack of the
long view that American management is
too short term in its thinking won’t
eliminating long-term plans make things
even worse on the surface those concerns
are real but it’s important to
understand what is meant by long term
versus short term most of corporate
America’s problems are not related to
short term marketing thinking the
problem is short term financial thinking
most companies live from quarterly
report to quarterly report that’s a
recipe for problems companies 99 that
live by the numbers die by the numbers
Harold geneen of ITT fame is one man in
recent times who best exemplifies this
approach he would wheel and deal and
beat up his managers for ever-increasing
Janine’s efforts resulted in a house of
cards that eventually fell apart today
ITT is a shell of what it once was good
accounting bad marketing General Motors
was doing fine until the financial folks
took over and put the focus on the
numbers instead of the brand’s they
allowed Alfred P Sloan splen of
differentiated brands to fall apart
every division head in order to make
their short-term numbers started to
chase the middle of the market 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 Tom Monaghan
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 nation
why’d home delivery chain as rapidly as
possible Monahan couldn’t own the words
home delivery until he had enough
franchisees to afford national
advertising he accomplished both
objectives and today Domino’s is a 2.6 5
billion dollar company with a 4% share
of the home delivery business 100 the 22
immutable laws of marketing Monahan did
it all without a complex 10-year plan 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
runaway success of healthy choice frozen
entrees is a clear example of a product
that took advantage of this long-term
trend ConAgra introduced healthy choice
in March 1989 years earlier however
there were plenty of low sodium low fat
Lite brands on the market but these
healthy ideas were buried under line
extension names 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 entrees it
is violating the law of sacrifice the
danger in working with trends is
extrapolation many companies jump to
conclusions about how far a trend will
go if you believe the prognosticators of
a few years ago everyone today is eating
broiled fish or mesquite barbecued
hamburger sales are doing just fine
thank you
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
101 the law of unpredictability you are
predicting the future just as surely as
when you assume that something will
change remember Peters 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 is 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 thermo fax 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
yesterday General Motors was slow to
react to the small car trend it has cost
the company dearly today iBM is slow to
acknowledge the trend away from
mainframes it could cost the company
at present the workstation is a real
threat to both mainframes and
mini-computers it offers enormous power
at very low cost
if IBM is going to protect its computer
leadership the company must become a
serious player in a category dominated
by Sun Microsystems and hewlett-packard
102 the 22 immutable laws of marketing a
natural move would be to introduce a new
generic IBM’s best opportunity might be
to name its new line of high powered
workstations PMS just as it did with its
very successful pcs p.m. could stand for
impersonal mainframe these two generic
words dramatically capture the speed and
power of these new desktop machines they
are also words that IBM owns in the mind
the combination would be very powerful
the only problem with a concept like
this probably lies inside IBM itself the
term personal mainframe would strike
terror in IBM’s mainframe division as
well as in its personal computer
we suggest that the phones would ring in
the case would quickly be made that a
personal mainframe would undermine these
two important sources of income it’s
probably true that a personal mainframe
product would undermine IBM’s two other
main sources of revenue but 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 one final note
that’s worth mentioning 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 103 the law of
unpredictability 18 the law of success
success often leads to arrogance and
arrogance to failure 104 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 Donald Trump and Robert Maxwell
are two examples of people blinded by
early success and untainted by humility
and when you are blind
it is indeed hard to focus mr. Trump’s
strategy was to put his name on
everything committing the cardinal sin
of line extension denial seems to go
hand in hand with a big ego when we
first met the Donald his opening remarks
were about how people accuse him of
having a big ego he went on to state
that it was totally untrue he did not
have a big ego all the while it was hard
to avoid noticing a 3-foot high brass
tea sitting on the floor next to his
desk so much for the sermon 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
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 105
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
in 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 in a
haughty spirit before a fall proverbs 16
: 18 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 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 customers perception as their
success is mounted companies like
General Motors Sears Roebuck and IBM
became 106 the 22 immutable laws of
arrogant they felt they could do
anything they wanted to in the
marketplace success leads to failure
consider Digital Equipment Corporation
the company that brought us the mini
computer starting from scratch this
became an enormous ly successful 14
billion dollar company Dex founder is
Kenneth Olsen his success made Ken such
a believer in his own view of the
computer world that he poo-pooed the
personal computer then open systems and
finally reduced instruction set
computing risk in other words can Olson
ignored three of the biggest
developments in the computer category a
trend is like the tide you don’t fight
it today Ken Olson is out 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
the shootout at General Motors between
Roger Smith and Ross parrot illustrates
the point when he was on the GM board
Ross parrot spent his weekends visiting
dealers and buying cars he was critical
of Roger Smith for not doing the same
we’ve got to nuke the GM system parrot
said he 107 the law of success advocated
atom bombing the heated garages
chauffeur-driven limousines executive
dining rooms chauffeur-driven limousines
for a company trying to sell cars 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 middle management 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 in
disguise 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 like King’s
chief executives rarely get honest
opinions from their ministers there’s
too much intrigue going on at the court
another aspect of the problem is the
allocation of time quite often the CEOs
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 in six hours a week preparing
for those meetings since the typical top
executive works 61 hours a week that
leaves only 20 hours for everything else
108 the 22 immutable laws of marketing
including managing the operation and
going down to the front
no wonder chief executives delegate the
marketing function that’s a mistake
marketing is too important to be turned
over to an underling if you delegate
anything you should delegate the
chairmanship of the next fundraising
the vice president of the United States
not the president attends the state
the next thing to cut back on are the
meetings 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 mentaly 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 109 the
law of success 19 the law of failure
failure is to be expected and accepted
110 too many companies try to fix things
rather than drop things let’s reorganize
to save the situation is there
of life 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
American Motors should have abandoned
passenger cars and focused on jeep 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 their consensus
management style tends to eliminate the
ego since a large number of people have
a small piece of a big decision
there is no stigma that can be
considered career damaging in other
words it’s a lot easier to live with we
were all wrong then 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 the
hugely successful Walmart has another
approach that enables the company to
deal with failure it’s called Sam
Waltons ready fire aim approach it’s an
outgrowth of his penchant for constant
tinkering Walton was well aware that
nobody hits the target every time but at
Walmart people aren’t punished if their
experiments fail as Walmart’s chief
executive said in a Business Week
article if you learn some 111 thing and
you’re trying something then you
probably get credit for it
but woe to the person who makes the same
mistake twice
Walmart 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 makers 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 in a
short time to retirement a bold move is
highly unlikely even junior executives
often make safe decisions so as to not
disrupt their progress up the corporate
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 three
amuses the champion system to publicly
identify the person who will benefit
from the success of a new product or
venture the 112 the 22 immutable laws of
marketing successful introduction of 3ms
posted notes illustrates how the concept
works art FRA is the 3m scientist who
championed the posted 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 a company is going to operate
in an ideal way it will take teamwork
esprit de corps and a self-sacrificing
leader one immediately thinks of Patton
and his Third Army in its – 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 113 the law of
failure 20 the law of hype the situation
is often the opposite of the way it
appears in the press 114 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
young and inexperienced reporters and
editors tend to be more impressed by
what they read in other publications
than by what they gather themselves once
the hype starts it often continues on
and on no soft drink has received more
hype than new coke by one estimate New
Coke received more than 1 billion dollar
worth of free publicity add to that the
hundreds of millions of dollars spent to
launch the brand and new coke should
have been the world’s most successful
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 newspaper
has received more hype than USA Today at
its launch in 1982 were the President of
the United States the Speaker of the
House of Representatives and the
majority leader of the US Senate the
residue of this initial hype is still so
great that most people cannot believe
USA Today is a loser no computer has
received more hype than the next
computer demand for press conference
credentials was so great that Steve Jobs
had to print tickets in advance even
though the auditorium 115 could hold
several thousand people all the seats
were filled Steve Jobs makes television
news as well as the cover of many major
publications IBM Ross parrot and Canon
have invested one hundred and thirty
million dollars 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 US Football
League video text 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
polyester was going to make wool
obsolete video text was going to make
newspapers obsolete the personal
helicopter was going to make the roads
and highways obsolete the Tucker 48 with
its Cyclops eye headlight would
revolutionize the way Detroit makes
automobiles only 51 were ever built in
the heavily touted office of the future
everything was going to be integrated
into one ball of computer wax the last
time we looked there were separate
typewriters now called personal
computers separate laser printers
separate fax machines separate copy
machines separate postal meters the
office of the future is aptly named a
concept that will remain forever in the
future these predictions violate the law
of unpredictability no one can predict
the future
not even a sophisticated 116 the 22
immutable laws of marketing 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 in the Soviet Union
not really it was only after the process
had started that the press jumped on the
crumbling Communist Empire story
contrast the first Tucker with the first
toyopet that hit the shores of
California did the Los Angeles Times do
a story on how Japanese imports were
going to shake up the auto industry not
at all the only stories that made the
news were about the little cars from
Japan that fell apart because they
weren’t up to the rigors of American
roads 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 a
TNT here comes the competition no they
pretty much ignored little MCI when Sun
Microsystems shipped its first work
station did the press note the
significance of the event that some day
work stations would rattle the cages at
IBM and disk
no the press ignored Sunday forget the
front page if you are looking for clues
to the future look in the back of the
paper for those innocuous little stories
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 117
the law of hype boom until a year and a
half later when Lotus 1-2-3
in the news usually on the front page
the latest example is a front page story
in The Wall Street Journal the
videophone era may finally be near
bringing big changes this is the third
try for AT&T in the 70s it failed with
the picture phone at $100 a month in the
80s it failed with a picture phone
meeting service at 2,300 dollars an hour
in the 90s AT&T is hustling $1500 video
phones it’s easy to see why the video
phone hasn’t made much progress who
wants to get dressed up to make a phone
call what isn’t so easy to see is why
the videophone gets so much hype there’s
a clue in the subhead of the journal
article an alternative to travel lookout
American Airlines United and Delta your
days are numbered the hype really isn’t
about the videophone at all it’s about
the coming revolution in the travel
industry over the years the greatest
hype has been for those developments
that promise to single-handedly change
an entire industry preferably one that’s
vital to the American economy remember
the helicopter hype after World War 2
every garage would house a helicopter
making roads bridges and the entire
automo 118 the 22 immutable laws of mark
kidding bio industry obsolete overnight
did Donald Trump get a helicopter did
you get yours
Donald actually did get his but he had
to give it back to the bank 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 from time to time
no-frills food makes the headlines it is
reported that this development will
revolutionize the packaged goods
industry brands are out people will read
the labels and buy products on their
merits rather than on the size of the
brand’s advertising budget it’s all hype
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 not that there isn’t a
grain of truth in every overhype story
anyone with 580 thousand dollar plus tax
can buy a little five-seat Bell
Helicopter the pen computer might be
attractive to a narrow segment of the
market especially the traveling
salesperson crowd the video phone could
revolutionize the phone sex industry and
there’s a substantial market for mobile
homes and recreational vehicles all
manufactured on assembly lines 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 119 the law
of hype 21 the law of acceleration
successful programs are not built on
fads they’re built on trends 120 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 a fashion on the
other hand is a fad that repeats itself
examples short skirts for women in
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 what happened to
Atari is typical in this respect and
look how calico industries handled the
Cabbage Patch Kids
those homely dolls hit the market in
1983 and started to take off
Coleco strategy was to milk the kids for
all they were worth hundreds of Cabbage
Patch novelties flooded the toy stores
pins pencils crayon box –is games
clothing two years later calico racked
up sales of seven hundred and seventy
six million dollars in profits of 83
million dollars then the bottom dropped
out of the Cabbage Patch Kids by 1988
Kalika went into chapter 11
Coleco died but the kids live on
acquired by 121 Hasbro in 1989 the
Cabbage Patch Kids are now being handled
conservatively today they’re doing quite
well 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 fat 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 enormous
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 fence 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 they
don’t overextend themselves they’re not
all over the place they don’t wear out
their welcome 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 Elvis appeared it was an
event of enormous impact Elvis himself
contributed to this strategy by 122 the
22 immutable laws of marketing
overdosing early and severely dampening
his future appearances likewise Marilyn
Monroe and James Dean 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 write in marketing is a long
term trend
123 the law of acceleration 22 the law
of resources without adequate funding an
idea won’t get off the ground
124 if you have a good idea and you’ve
picked up this book with the thought in
mind that all you need is a little
marketing help this chapter will throw
cold water on that thought even the best
idea in the world won’t go very far
without the money to get it off the
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 will
get further with a mediocre idea in 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 nine thousand
dollars a minute to fight World War two
it cost twenty two thousand dollars a
minute to fight the Vietnam War a
one-minute commercial on the NFL Super
Bowl will cost you 1.5 million dollars
Steve Jobs and Steve Wozniak had a great
idea but it was Mike mark EULA’s $91,000
that put Apple Computer on the map for
his money
markula got one-third of ‘evil 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 publicity as a cheap
way 125 of getting into prospects minds
free advertising is how they see it
publicity isn’t free rule of thumb 5 10
to 20 a small public relations agency
will want $5,000 a month to promote your
product a medium-sized agency $10,000 a
month and a big-time agency $20,000 a
month 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 some
entrepreneurs see corporate America is
ready willing and financially able to
get their offspring off the ground good
luck you will need it very few outside
ideas are ever accepted by large
companies your only real hope is finding
a smaller company and persuading it of
the merits of your idea 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 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 in too many programs chapter
five the law of focus competition is
fierce the giant corporations put a lot
of money behind their brands Procter &
Gamble and Philip Morris each spent more
than two billion dollars a year on
advertising General Motors spends 1.5
billion dollars a year life can be
unfair for the smaller market are facing
larger competitors consider a and M pet
products a 126 the 22 immutable laws of
marketing small company in Houston Texas
A&M invented clumping cat litter one of
the most important breakthroughs in the
category the concept is simple when cats
use the litter box this new type of
litter clumps the waste into balls which
are easily scooped out and disposed of
there is no need to replace the entire
box the brand called scoop away took off
wherever it was introduced this quickly
got the attention of golden cat
corporation which has the number-one cat
litter brand tidy cat recognizing a
threatening idea when they see one
golden cat introduced their own version
of clumping cat litter called tidy scoop
not only did they jump on A&M s idea
they also borrowed the scoop part of
their brand name how unfair can you be
the winner of this cat fight will
probably be determined by money who has
the most money to drive in the idea
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 but there is still a need for
adequate funding for a technical product
to pay for brochures sales presentations
and trade shows as well as advertising
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 georgette most Becker married
Commerce Secretary Robert most Becker
127 the law of resources in 1985 three
years later
mismos Becker bought La Prairie a Swiss
cosmetics firm for 30 1.5 million
dollars where did she get the money from
everyone venture capitalists La Prairie
distributors in Switzerland and Japan
plus her own in her husband’s resources
in the first year under georgette most
backers control la prairies sales were
up 30% then she sold out at a hefty
profit you can divorce the money
Frances Lear arrived in New York in 1985
at the age of 61 freshly divorced from
her television producer husband Norman
all in the family Lear she was
determined to launch a magazine for
women over 40 she was prepared to spend
twenty five million dollars of her
expected one hundred and twelve million
dollar settlement on the project by its
fifth issue Lear’s magazine had three
hundred and fifty thousand readers 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 so
far we’ve been talking about smaller
companies and their fundraising
strategies what about a rich company how
should it approach the law of resources
the answer is simple spend enough in war
the military always airs on the high
side do you 128 the 22 immutable laws of
marketing know how many rations were
left after Operation Desert Storm a lot
so it is in marketing you can’t save
your way to success
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 129 the law of resources warning
130 we would be remiss if we did not
warn our readers about the potential
dangers of trying to apply the laws of
marketing within an existing
organization many of these laws fly in
the face of corporate ego conventional
wisdom and the Malcolm Baldrige Awards
the law of perception runs counter to
the corporate culture of most companies
we’re trying to be better is deeply
ingrained people are forever running
around and benchmarking the leader in
the category and then setting out to
beat their specs
it’s what the quality movement is all
about 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 if you have any doubts
just stroll down the aisles of any
supermarket what you will find is
variation upon variation of sizes
flavors and forms it boggles the mind
why this happens is painfully obvious
nobody wants to focus large companies
have offices filled with young bright
marketing people do you expect them to
just sit there and do nothing they feel
compelled to tinker and make
improvements after all how can they make
their mark on the organization so beware
those young bright marketing people will
not take kindly to any efforts to
curtail their tinkering the law of
focused suggests zoning a word in the
prospects Minds what word does your
company own in the minds of your
I don’t know might be your response we
make a variety of products for many
different industries so beware you have
some pruning to do which isn’t going to
be easy to sell to the powers that be
the law of perspective will frustrate
anyone looking for quick marketing
victories companies want to see instant
results so beware those accountants will
give you a hard time in the short term
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
line extension makes eminent sense in
the board 131 morning room you won’t
find one director in a dozen who would
be willing to challenge management on
this critical issue so beware management
will not take kindly to any efforts to
curtail their equity expansions you may
just have to wait them out management is
mutable but the laws of marketing are
not thus are you duly warned if you
violate the immutable laws you run the
risk of failure if you apply the
immutable laws you run the risk of being
bad mouthed ignored or even ostracized
have patience the immutable laws of
marketing will help you achieve success
and success is the best revenge of all

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