Read: October 2015
Within the incredibly simple and easy reading lies timeless wisdom about marketing. I also loved the case studies from the early 90s, when this book was published (Coke, Apple, IBM, GM, etc). It was fascinating to connect the dots on companies that were around then and still around now using the 22 laws as a reference. Equally interesting were the Donald Trump stories sprinkled throughout the book. Turns out he was as controversial then as he is now.
1. The Law of Leadership – It’s better to be first than it is to be better
The basic issue in marketing is creating a category you can be first in. It’s such 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 you self two questions:
1. What’s the name of the first person to fly the Atlantic Ocean solo? Charles Lindbergh.
2. What’s the name of the second person to fly the Atlantic Ocean solo? ……? (Bert Hinkler)
The leading brand in any category is almost always the first brand into the prospect’s mind.
Some first are just bad ideas that will never go anywhere.
The law of leadership applies to any product, any brand, any category (e.g. first colleague founded in America is also the leading college in America – Harvard. Second college? The College of William and Mary.)
People tend to stick with what they’ve got.
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.
One reason the first brand tends to maintain its leadership is that the name often becomes generic. Most people use brand names when they become generic: Band-Aid, Fiberglas, Jello, Velcro. If you’re introducing the first brand in a new category, you should always try to select a name that can work generically.
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.
2. The Law of the Category – If you can’t be first in a category, set up a new category you can be first in.
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 out 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?
If you didn’t get into the prospect’s mind first, don’t give up hope. Find a new category you can be first in. It’s not as difficult as you might think.
If you can’t be first in a category, set up a new category you can be first in.
FIRST WHAT? When you launch a new product, the first question to ask yourself is not “How is this new product better than the competition?” but “First What?” In other words, what category is this new product first in?
Charles Schwab didn’t open a better brokerage firm. He opened the first discount broker.
This is counter to classic marketing thinking, which is brand oriented: How do I get people to prefer my brand? Forget the brand. Think categories. Prospects are on the defensive when it comes to brands. Everyone talks about why their brand is better. But prospects have an open mind when it comes to categories. Everyone is interested in what’s new.
When you’re first in a new category, promote the category. In essence, you have no competition. DEC told its prospects why they ought to by a mini-computer, not a DEC minicomputer.
In the early days, Hertz sold rent-a-car service. Coco-Cola sold refreshment. Marketing programs of both companies were more effective back then.
3. The Law of the Mind – It’s better to be first in the mind than to be first in the marketplace.
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.
If you want to make a big impression on a another person, you cannot worm you r 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. You cannot become a different person in their minds.
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 $91,000 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.
Ask yourself, which name is the simplest and easiest to remember?
4. The Law of Perception – Marketing is not a battle of products, it’s a battle of perceptions.
Marketing people are preoccupied with doing research and “getting the facts.” There is no objective reality. There are no facts. There are no best products. all that exists in the world of marketing are perceptions in the minds of the customer or prospect. The perception is the reality. Everything else is an illusion.
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 the marketing programs must deal with.
There may well be oceans, reverse, 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’re fighting a product battle rooted in reality. All the laws in this book are derived from the exact opposite point of view.
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.
Truth is nothing more or less than one expert’s perception. And who is the expert? It’s someone who is perceived to be an expert in the mind of somebody else.
Minds of customers or prospects are very difficult to change. With a modicum of experience in a product category, a consumer assumes that he or she is right. A perception that exists in the mind is often interpreted as a universal truth. People are seldom, if ever, wrong. At least in their own minds.
What’s the different between Honda in Japan and Honda in the US? 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 care did you get? a Civic? an Accord? a Prelude?” 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 don’t want to buy a car from a motorcycle company.
Marketing is a battle of perceptions, not products. Marketing is the process of dealing with those perceptions.
What makes the battle eve more difficult is that customer frequently make buying decisions based on second-hand perceptions. Instead of using their own perceptions, they base their buying decisions on someone else’s perception of reality. This is the “everybody knows” principle.
5. The Law of Focus – The most powerful concept in marketing is owning a word in the prospect’s mind.
A company can become incredibly successful if it can find a way to own a word in the mind of the prospect. Not a complicated word. Not an invented one. The simple words are best, words taken right out of the dictionary.
You “burn” your way into the mind by narrowing the focus to a single word or concept. 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.
An astute leader will go one step further to solidify its position. Heinz owns the word ketchup. But Heinz went on to isolate the most important ketchup attribute. “Slowest ketchup in the West” is how the company is preempting the thickness attribute. 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.
Most effective words = Simple + Benefit-oriented.
It’s always better to focus on one word or benefit rather than two or three or four.
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 “safe” care implies better design and engineering.
Create – cavities
Mercedes – engineering
BMW – driving
Volvo – safety
Domino’s – home delivery
Pepsi-Cola – youth
Words come in different varieties:
Benefit related (cavity prevention)
Service related (home delivery)
Audience related (younger people)
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.
You can’t take somebody else’s word.
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.
“Total Quality, the Path to Greatness” makes a terrific theme at meetings, but outside the corporation, the message falls apart. Does any company proclaim itself as the “inequality” 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 accept as such because there is support for the other side.
The trick is to get others to use your word (To be a leader you have to have followers). It would make the category more important and people would be even more impressed with your company.
Once you have your word, you have to go out of your way to protect it in the marketplace.
Both sides of the abortion issue have focused on single, powerful words–– pro-life and pro-choice. 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 down word, ‘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.
6. The Law of Exclusivity – Two companies cannot own the same word in the prospect’s mind
Despite the disaster stories, many companies continue to violate the law of exclusivity. You can’t change people’s minds once they are made up. In fact, what you often do is reinforce your competitor’s position by making its concept more important.
e.g. FedEx walking away from ‘overnight’ and is [was] in th middle of trying to take ‘worldwide’ away from DHL.
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 researchers never tell you is that some other company already owns the idea.
7. The Law of the Ladder – The strategy to us depends on which run you occupy on the ladder
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 run 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 run of the ladder you occupy. The higher the better, of course.
“Avis is only No.2 in rent-a-cars. So why go with us? We try harder”. For 13 years in a row, Avis had lost money. Then, when it admitted to being No. 2, it started to make money, lots of money.
Avis was successful because it related itself to the position of Hertz in mind.
The mind is selective. Prospects use their ladders in deciding which information to accept and reject. In general, a mind accepts only new data that is consistent with its product ladder in that category. Everything else is ignored.
High interest products -> many rungs on the ladder
Low interest products -> few rungs
High personal pride products -> many rungs
Infrequent purchases/unpleasant experiences -> few rungs (e.g. Automobile batteries, tires, life insurance)
Ultimate product that involves the least amount of pleasure and purchased once in a lifetime -> no runs -> Batesvillle caskets (50% of the market).
There’s a relationship between market share and you position on the leader in the prospect’s mind. You tend to have twice the market share of the brand below you and half the market share of the brand above you.
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 No. 2 brand and the No.2 brand inevitably smothers No. 3.
What’s the maximum number of rungs on a ladder? There seems to be a rule of seven in the prospect’s mind.
It’s sometimes better to be No. 3 on a big ladder than No. 1 on a small ladder:
The top rung of the lemon-lime soda ladder was occupied by 7-Up. In the soft-drink field, the cola ladder is much bigger than the lemon-lime ladder. So 7-Up climbed on the cola ladder with a marketing campaign called “The Uncola.”
Before starting any marketing program, ask yourself the following questions: Where are we on the ladder in the prospect’s mind? On the top run? On the second rung? Or maybe we’re not on the ladder at all.
8. The Law of Duality – In the long run, ever market becomes a two-horse race.
When you take the long view of marketing, you find the battle usually winds up as a titanic struggle between two major players–– usually the old reliable brand and the upstart.
e.g. Video games. In the late eighties, the market was dominated by Nintendo with a 75% share. The two also-rans were Sega and NEC. Today Nintendo and Sega are neck and neck, and NEC is way behind.
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 clearcut No. 2. What happens next depends upon how skilful the contenders are.
Successful marketers concentrate on the top two rungs.
Early on, in a developing marketing, the No. 3 or No. 4 positions look attractive. Sales are increasing. New customers do’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 No. 3 or No. 4 brands. As time goes on, however, these customers get educated. They want to be the leading brand, based on the naive assumption that the leading brand must be better.
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.”
9. The Law of the Opposite – If you’re shooting for second place, your strategy is determined by the leader.
In strength there is weakness. Wherever the leader is strong, there is an opportunity for a would-be No.2 to the turn the tables.
If you want to establish a firm foothold on the second rung of the ladder, study the firm above you. Where is it strong? And how do you turn that strength into a weakness?
You must discover the seance 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 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 No. 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 No. 1. If old people drink Coke and young people drink Pepsi, there’s nobody left to drink Royal Crown cola (no.3).
Yet, too many potential No. 2 brands try to emulate the leader. This usually is an error. You must present yourself as the alternative.
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 known that your mouth would smell like a hospital.) Then quickly twist the sword. (Scope is the good-tasting mouthwash that kills germs.)
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 aspiring, 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 Tylenol advertising. Today Tylenol outsells aspiring and is the largest-selling single product in American drugstores.
There has to be a ring of truth about the negative if it is to be effective. Class example of hanging a negative on a competitor is an advertisement that Royal Dolton China ran about it’s main US competitor (“Royal Dolton, the china of Stoke-onTrent, England, vs. Lenox, the china of 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 No. 2 can’t afford to be timid. When you give up focusing on No. 1, you make yourself vulnerable not only to the leader but to the rest of the pack.
10. The Law of Division – Over time, a category will divide and become two or more categories.
Like an amoeba diving 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, minicomputers, workstations, PCs, laptops, pen computers [UD: love how dated this reads].
In the TV industry, ABC, CBS, and NBC once accounted for 90% of the viewing audience. Now we have network, independent, cable, pay, and public TV [UD: streaming, etc].
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.
Instead of understanding this concept of division, many corporate leaders hold the naive belief that categories are combining. ‘Synergy’ and its kissing cousin the ‘corporate alliance’ are the buzzwords in the boardrooms of America.
The way for the leader to maintain its dominance is to address each energy category with a different brand name, as GM did in the early days with Chevrolet, Pontiac, Oldsmobile, Buick, and Cadillac.
Companies make a mistake when they try to take a well-known brand name in one category and use the same brand name in another category.
It’s better to be early than late. Toucan’t get into the prospect’s mind first unless you’re prepared to spend some time waiting for things to develop.
11. The Law of Perspective – Marketing effects take place over an extended period of time.
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.
Any sort of coupons, discounts, or sales tends to educate consumers to buy only when they can get a deal. What if a company never started coupon in the first place? In the retail field the big winners are the companies that practice “everyday low prices”–– companies like Wal-Mark and K Mart and the rapidly growing warehouse outlets.
Inflation can give an economy a short-term jolt, but in the long run, inflation leads to recession.
Line extension invariable increases sales. But in the long term, line extension undermines one or the other brand.
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 b convicted of homicide.)
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 [UD: 1993] Trump is $1.4 billion 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.
12. The Law of Line Extension – There’s an irresistible pressure to extend the equity of the brand.
By far the most violated law in our book is the law of line extension. What’s even more diabolical is that line extension is a process that takes place continuously, with almost noconsciodus effort on the part of the corporation.
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. Yet the company wound up losing $2.8 billion.
Along the way, IBM dropped millions on copiers (sold to Kodak), Rolm (sold to Siemens), Satellite Business Systems (shut down), the Prodigy network (limping along), SAA, TopView, OfficeVision, and OS/2.
When a company becomes incredibly successful, it invariably plants the seeds for its future problems.
In a narrow sense, line extension involves taking the brand name of a successful product and putting it on a new product you plan to introduce.
But marketing is a battle of perception, not product.
There are as many ways to line extend as there are galaxies in the universe. And new ways get invented every day. In the long run and in the presence of serious competition., line extensions almost never work.
More is less. The more products, the more markets, the more alliances a company makes, the less money it makes.
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 the first in a new category (Law of Leadership). Or the new brand ought to be positioned as an alternative to the leader (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.
13. The Law of Sacrifice – You have to give up something in order to get something
The law of sacrifice is the opposite of the law of line extension. There are three things to sacrifice:
1. Product line
2. Target Market
3. Constant Change
The full line is a luxury for a loser. You have to reduce your product line, not expand it.
Marketing is a game of mental warfare. It’s a battle of perceptions, not products or services.
If line extension and diversification were effective marketing strategies, you’d expect the generalists to be riding high. But they’re not. Most of them are in trouble.
The target is not the market. That is, the apparent target of your marketing is not the same as the people who will actually buy your product. Even though Pepsi’s target was the teenager, the market was everybody. The 50-year old guy who wants to think he’s 29 will drink the Pepsi.
If you try to follow 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.
14. The Law of Attributes – For every attribute, there is an opposite, effective attribute
You must find your own word to won. Your must seek out another attribute that your competitor doesn’t own.
It’s much better to search for an opposite attribute that will allow you to play off against the leader. The key word here is ‘opposite’ – ‘similar’ won’t do.
Marketing is a battle of ideas. So if you are to succeed, you must have an idea or attribute of your own to focus your efforts around.
You must try and own the most important attribute.
e.g. Cavity prevention is the most important attribute in toothpaste. It’s the one to own. But the law of exclusivity says that once an attribute is successfully taken by your competition, it’s gone. You must move on to a lesser attribute and live with a smaller share of the category. Your job is to seize a different attribute, dramatise the value of your attribute, and thus increase your share:
– Tastes Good
– Whitens Teeth
– Freshens Breath
15. The Law of Candor – When you admit a negative, the prospect will give you a positive
One of the most effective ways to get into a prospect’s mind is to first admit a negative and then twist it into a positive.
“Avis is only No. 2 in rent-a-cars.”
“With a name like Smucker’s, it has to be good.”
“The 1970 VW will stay ugly longer.”
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 ad.
You have to prove a positive statement to the prospect’s satisfaction. No proof is needed for a negative statement.
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 brilliant as the Avis No. 2 program.
Your “negative” must be widely perceived as a negative. It has to trigger an instant agreement with your prospect’s mind. If the negative doesn’t register quickly, your prospect will be confused and will wonder, “What’s this all about?”
Next, you have to shift quickly to the positive. The purpose of cantor isn’t to apologise, it’s to set up a benefit that will convince your prospect.
16. The Law of Singularity – In each situation, only one move will produce substantial results.
Trying harder is not the secret to marketing success. Whether you try hard or try easy, the differences are marginal. 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.
Military strategist and author B.H Liddell Hart calls this bold stroke “the line of least expectation.”
17. The Law of Unpredictability – Unless you write your competitors’ plans, you can’t predict the future.
Marketing plans based on what will happen in the future are usually wrong.
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 that live by the numbers, die by the numbers.
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 maximise that idea or angle. It’s not a long-term plan, it’s a long-term direction.
Tom Monaghan’s short-term angle at Domino’s Pizza was to come up with that “home delivery” idea and build a system that delivered pizzas quickly and efficiently. His long-term direction was to build the first nationwide home delivery chain as rapidly as possible.
While you can’t predict the future, you can get a handle on trends, which is a way to take advantage of change.
The danger of working with trends is extrapolation. Many companies jump to conclusions about how far a trend will go.
Equally bad as extrapolating a trend is the common practice of assuming the future will be a replay of the present. When you assume that nothing will change, you are predicting the future just as surely as when you assume that something will change. Remember Peter’s Law: The unexpected always happens.
Research does best at measuring the past. New ideas and concepts area 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.
One way to cope with and unpredictable world is to build an enormous amount of flexibility into your organisation. As change comes sweeping through your category, you have to be willing to change and change quickly if you want to survive in the long-term.
One final note that’s worth mentioning: there’s a difference between “predicting” the future and “taking a chance” on the future.
18. The Law of Success – Success often leads to arrogance, and arrogance to failure.
Ego is the enemy of successful marketing. Objectivity is what’s needed.
Donald Trump and Robert Maxwell are two examples of people blinded by early success and untainted by humility. Mr Trump’s strategy was to put his name on everything, committing the cardinal sin of line extension.
(Fun Story) When we first me 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 three-foot-high brass “T” sitting on the floor next to his desk. So much for the sermon.
When a brand is successful, the company assumes the name is the primary reason for the brand’s success.
Actually it’s the opposite. The name didn’t make the brand famous. The brand got famous because you made the right marketing moves. In other words, the steps you took were in tune with the fundamental laws of marketing.
The more you identify with your brand or corporate name, the more likely you are to fall into the line extension trap.
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 don’t impose their own view of the world on the situation.
Like kings, CEOs rarely get honest opinions from their ministers. There’s too much intrigue going on at the court.
Marketing is too important to be turned over to an underling.
19. The Law of Failure – Failure is to be expected and accepted
Too many companies try to fix things rather than drop things. “Let’s reorganise to save the situation” is their way of life.
The Japanese seems 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” than the devastating “I was wrong.”
There is a built-in conflict between the personal and the corporate agency. This leaders to a failure to take risks.
Nobody has ever been fired for a bold move they DIDN’T make.
20. The Law of Hype – The situation is often the opposite of the way it appears in the press.
When IBM was successful, the company said very little. Now it throws a lot of press conferences. When things are going well, a company doesn’t need the hype. When you need the hype, it usually means you’re in trouble.
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 newspaper has received more hype than USA Today. At its launch in 1982 were the president of the US, 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.
History is filled with marketing failures that were successful in the press. The essence of the hype was not just that new product was going to be successful. The essence of the hype was that existing products would now be obsolete.
Polyester was going to make wool obsolete. Video-text was going to make newspapers obsolete. The personal helicopter was going to make the roads and highways obsolete.
These predictions violate the law of unpredictability. The only revolutions you can predict are the ones that have already started.
Did anyone predict the overthrow of communism and the Soviet Union? It was only after the process had started that the press jumped on the “crumbling communist empire” story.
Forget the front page. If you’re looking for clues to the future, look in the back of the paper for those innocuous little stories.
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 book until a year and a half later, when Lotus 1-2-3 hit the market.
Capturing the imagination of the public is not the same as revolutionising a market.
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.
For the most part, hype is hype. Real revolutions arrive unannounced in the middle of the night and kind of sneak up on you.
21. The Law of Acceleration – Successful programs are not built on fads, they’re built on trends.
A fad is a wave in the ocean, and a trend is the tide. A fad gets a lot of hype, and a trend gets very little.
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 distributions networks.
If you were faced with a rapidly rising business, with all the characteristics of a fad, the best things you could do would be to dampen the fad. By dampening the fad, you stretch the fad out and it becomes more like a trend.
The Ninja turtle is a good example of a fad that collapses in a hurry because the owner of the concept got greedy. The owner fans the fad rather than dampening it. On the other hand, the Barbie doll is a trend. When Barbie was invented years ago, it was never heavily merchandised into other ares. As a result, the Barbie doll has become a long-term trend in the toy business.
The most successful entertainers are the ones 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.
When fads appear, try to dampen them. One way to maintain a long-term demand for your product is to never totally satisfy the demand.
But the best, most profitable thing to ride in marketing is a long-term trend.
22. The Law of Resources – Without adequate funding an idea won’t get off the ground.
Marketing is a game fought in the mind of the prospect. You need money to get into a mind. And you need money to stay in the mind once you get there.
You’ll get further with a mediocre idea and a million dollars than with a great idea alone.
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 and too many programs.
First get the idea, then go get the money to exploit it. The more successful marketers front load their investment. In other words, they take no profit for two or three years as they plow all earnings back into marketing.