The best marketing book I've read, or am ever likely to read. Useful for understanding marketing from a strategic point of view, and worthy of a re-read. Delightfully brief, it differs from modern business advice books because it makes 22 different arguments with sparing words, instead of making one point with endless fluff.
When you're the very first thing that comes to mind, you dominate everyone's perception of that entire category. If you don't, you're something of an also-ran. Fighting on the apparent superiority of your product will get you nowhere.
'People will stand in front of a Ricoh or a Sharp or 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.' (Page 6)
Category creation can be hard, but it's better to try and pull it off than be an also-ran like those competing against the "mind leader" in rule 1.
It's hard to change a mind once it's already made up. So you either make the right first impression, or you must barge into there with bold determination. There's no room for wallflowers.
'Someone has an idea or concept he or she believes will revolutionize an industry, as well it may. The problem is getting the idea or concept into the prospect's mind.' (Page 15)
So you've got a great product. So what? If it's not perceived in the right way you're dead in the water. Marketing is about manipulating those perceptions.
The truth? It's not on anybody's side and it has nothing to do with it anyway. With even only a modicum of experience, consumers/buyers assume they are right.
'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.' (Page 19)
Thicker, slower, overnight, safer... fundamental words all owned by different brands of pasta sauce, or delivery service, and all owned at the level of fundamental understanding. This means it is nigh on impossible to poach someone 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.' (Page 31)
If everyone in the market is about "quality," then nobody is. But once you have your word, the trick is to get others to use it. Leaders are nothing without followers.
Exclusivity is important. Others using your word will help you, but if you try to compete on somebody else's, you'll fail.
Ladder = where you are positioned in a category, in the mind of the customer.
You can be on many ladders at once. There are many ladders available: some are big, some are small. Better to be somewhere on a big ladder than #1 on a small one that nobody has ever heard of.
Know your place on that ladder, then market from there. Example: Hertz vs Avis. Hertz was number one when this book was written, and Avis made significant headway by positioning themselves very deliberately as #2 against them. Their difference? "We try harder."
It all went wrong when they decided to go with another tack, "we will be #1". Downhill from there.
People already ahve their minds made up about where a brand is on any given ladder. So don't try and BS them, they'll see right through it.
7-Up used to be #1 on the lemon-lime soda ladder. That's good, but it's a very small ladder. What's a bigger ladder that you could compete on? The cola ladder. Positioning themselves as "the un-cola" or an alternative to drinking coke all the time, they were able to make great gains.
'What's the maximum number of rungs on a ladder? There seems to be a rule of seven in the prospect's 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.' (Page 42)
It's a long-term game, often played in decades. But a busy, fragmeted market can't last forever.
'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.' (Page 45)
You can't beat the leader by using their tactics against them. That's a fight you can't win. You need to show you're the alternative, and why an alternative is worth considering.
So if you're not positioning yourself against the leader, what's the point?
Cars --> SUVs, hatchbacks, estates. Premium, mid-range, budget. Hybrid, electric.
Credit cards --> 0%, cashback, points.
Computers --> super, desktop, laptop, gaming, office, pro.
Putting something on sale is a short-term gain for a long-term pain. The actions we take today will have an effect later down the line, so be careful what it is you decide to do.
'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.' (Page 69)
A jack of all trades and a master of none. Diversification can lead to being bad at many things, and losing focus. But the pull to continuously expand is always tempting: people want to keep busy and keep things growing, so why not? But down that road leads significant problems.
'Invariably, the leader in any category is the brand that is not line extended.' (Page 72)
You can't win by offering everything. You must sacrifice something, somewhere. There are three possible things you can sacrifice:
FedEx went with "overnight" and nothing else. When they tried to extend their line, they lost ground. In a nutshell, generalists are weak.
'The target is not the market. That is, the apparent target of your marketing is not the same as the people who will actually buy your product. Even though Pepsi-Cola's target was the teenager, the market was everybody. The 50-year-old guy who wants to think he's 29 will drink the Pepsi.' (Page 82)
Just the same as owning a word, you must find your own attribute. If a brand of burgers in a shop across from you has the attribute of "healthiest," it would be better to position against them as "dirtiest" instead of competing on health.
"With a name like Smuckers, it has to taste good."
You're not fooling anybody, so it's better to lean into it and make light of the situation.
'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.' (Page 90)
Admitting to problems lets people open their minds; it's disarming. Who wants to hear somebody brag, anyway?
'History teaches that the only thing that works in marketing is the single, bold stroke. Furthermore, in any given situation there is only one move that will produce substantial results. Successful generals study the battleground and look for that one bold stroke that is least expected by the enemy. Finding one is difficult. Finding more than one is usually impossible.' (Page 93)
To know what this bold move might be, you must know the reality of what's happening in the market. What are people actually thinking? What is the real perception? Then act on that knowledge.
'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.' (Page 99)
You need a short term plan (maybe for the next quarter), but not in the long term. For that, you need a long term direction. Why plan for something you can't predict?
Change happens fast, so why plan like you know what you're going to need to do?
Pride comes before a fall. Ries and Trout seem to attribute this to leadership becoming out of touch over time. This happens because a successful streak might obscure shifting realities, but also because the size of the company may do the same.
'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?' (Page 108)
Sometimes it needs to happen, because this is what happens when you take risks. If you're not taking risks, you're likely not being bold enough. Better to take risks than always remain safe.
Better, too, to recognise when it's happened so you can accept, fix, and move on to the next thing.
'There is a built-in conflict between the personal and the corporate agenda. This leads to a failure to take risks. (It's hard to be first in a new category without sticking your neck out.) When the senior executive has a high salary and a short time to retirement, a bold move is highly unlikely. Even junior executives often make "safe" decisions so as to not disrupt their progress up the corporate ladder. Nobody has ever been fired for a bold move they didn't make.' (Page 112)
'When things are going well, a company doesn't need the hype. When you need the hype, it usually means you're in trouble.' (Page 115)
Real revolutions are seldom announced. They happen quietly, not on the same schedule as the press.
Fads are bad for business. It can be tempting to ride them for all they're worth but, once they're done, they're done. And so are you. Better to damped these urges, and not overstretch. Better to turn them into trends instead.
'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.' (Page 121)
You can't save your way to success. It's a question of resources to drive a message into the mind. Do you have enough money to make that happen?
'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.' (Page 125)
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