Summary of Presentation on 22 Immutable Laws of Marketing
In the 70’s and the 80’s, the basic business philosophy was “If you could manufacture it, you could sell it”. As a direct result of this, even today, where the market conditions have changed dramatically, we still have tens of thousands of businesses both large and small who believe that in producing a good product they will automatically be able to sell it. This presentation is designed to help appreciate the fact that this is no longer true.
In the 90’s and onto the year 2000, the philosophy that previously existed will have to be seriously questioned and no doubt completely reversed. It is certainly true today to say “If you can sell it, you can manufacture it”.
“The 22 Immutable Laws of Marketing” is a book written by two highly successful marketers and business consultants, Al Reis and Jack Trout. These 22 Immutable Laws of Marketing are presented in a way to help you appreciate the application of these laws as they relate to your business within your given market segments. Not all of these laws will have immediate application to you, but you should be cautious that to violate any one of them, you will do so at your own risk.
1. The Law of Leadership
“It’s Better to be First than to be Better”
It is a little sad that this law happens to be totally accurate since it potentially questions the basis of many current management tactics and indeed it potentially questions the whole “quality industry”. To understand this law you have to ask yourself a simple question, who was the second person to climb Mt Everest, or walk on the moon, or fly solo across the Atlantic?
You are most likely to know that Charles Lindbergh was the first person to cross the Atlantic. The second person was called Bert Hinkler. The amazing fact is however that Hinkler did it faster and used less fuel, but history does not seem to care. The same goes for product. People speak of Xerox copiers, Kleenex tissues and Coke, but they may actually be holding a bottle of Pepsi or a Scott tissue.
2. The Law of Category
“If you can’t be First, Create your own Category and be First in that”
Now who was the third person to make that Atlantic solo flight? Give up? Not only was she the third person, she was also a woman. Her name was Amelia Erhardt. However, she is not famous for being the third person to cross the Atlantic; she is outstandingly famous, because she was the first woman to do so. The first in a new category.
IBM was the giant of computer companies with a dozen “followers” running behind, but only one of these followers grew to gigantic success. Digital Equipment Corporation did so not by being the best second string mainframe computer company. They did it by being first in mini computers.
3. The Law of Mind
“It’s Better to be First into the Mind than into the Marketplace”
The law of leadership must be supported by the law of the mind and so in a sense it does not really matter if you are first, people must also perceive you to be the first.
4. The Law of Perception
“Marketing is not a Battle of Products, it is a Battle of Perceptions”
There is only one thing that really matters in terms of marketing and that is the perception in the customers mind about the product. To have any chance of success, marketing must deal with altering or enhancing the perceptions people have about product.
The most fundamental mistake made by executives of companies, is that if they have the best product, people will decide on the merits of this product. The facts and the merits might be clear to you, but they may have little significance in the clients mind.
In the U.S. the best selling Japanese car is a Honda followed by Toyota and Nissan. In Japan however, if you tell your friends you bought a Honda, they will immediately think you own a motorcycle. So for this reason, Toyota outsells Honda in motorcars in Japan.
5. The Law of Focus
“Owning a Word in the Prospect’s Mind is the Most Powerful Marketing Tool in the World”
The best words are simple ones and so if you can focus on a very simple word that the client can easily remember, you will become the leader in your field. In America, Federal Express sacrificed its whole product line to concentrate on overnight parcel delivery. The payoff was outstanding ownership of the word “overnight”.
Mercedes owns the word “engineering”, BMW owns the word “driving” and Volvo owns the word “safety”. Be aware that you cannot take somebody else’s word.
6. The Law of Exclusivity
“Two Players Cannot Own the Same Word”
As Volvo owns the word “safety”, you would be stupid to run an advertising promotion campaign against Volvo using the word “safety”. This surely proves to you how many marketers out there don’t know the basic laws of marketing. It has been proven that you cannot change a persons mind through muscle. At very best, all you will achieve is to prove to the market that the word owned by your competitor is so important and special that you too would like to have it.
Eveready tried at great cost to use the words “long lasting” from the original owner Duracell. The name Duracell even suggests strength which is synonymous with the idea of long lasting. Eveready tried to run ads showing that toy rabbits using energizer batteries would run longer. These ads were doomed to failure because they contravened the law of exclusivity.
These types of advertising and marketing programs get great support from senior management of a company because they appeal to the emotion of the management group with little or no application in the real world of marketing.
7. The Law of the Ladder
“The Best Strategy Depends on Which Rung of the Ladder You Hold”
In every clients mind there is a hierarchy of brands. The customer has a first, second, third, fourth and so on, place on the ladder for your product. So attempting to call yourself number one, when you are actually number three contravenes this law.
If your claim arouses suspicion based on the perception the client already has about your product, then you will gain nothing and potentially lose your position on the ladder.
For years Hertz had established itself as number one in car rental. Avis tried to break this by running a campaign which said Avis is “finest in rent a car”. Avis did not make a profit for thirteen years. They did so when they switched back and acknowledged that they were number two. Their campaign then said “Since Avis is only number two, why drive with us? Because we try harder”. Immediately this issue supported the perception in the clients mind as being the truth. Big profits followed.
8. The Law of Duality
“Over the Distance, Every Marketing Race Comes Down to Two Horses”
In any line or category of products, there will be several rungs on a ladder. The tendency however is for most rungs to drop off until there are only two. Nike and Reebok, Eveready and Duracell, Kodak and Fuji. With this in mind, you should strive to gain the number one or number two position on the ladder. Remember that you can gain a new and different ladder by applying the law of category and therefore become number one on that ladder.
9. The Law of the Opposite
“When Aiming for Second, Your Strategy is Determined by the Leader”
When aiming to be second, you must derive your strategy by studying the leader. Most businesses fail in this strategy because their emotions lead them to believe that they know why the leader is successful. The smart organizations study the actual and central strengths of their competitor. Once you have established what this strength is you may be in a position to turn this strength against the leader. You will never be able to beat them by trying to be the same. The success will usually lie in doing the complete opposite.
Coca Cola marketed its “secret formula” which apparently has only been known to seven people in its hundred year history. So Pepsi decided to create “the Pepsi Generation”. Time Magazine made its name on picturesque writing and colourful commentary. Newsweek on the other hand went in the opposite direction, straight forward style separating facts from opinions.
10. The Law of Division
“Markets Divide into Categories Over Time”
One of the exciting things about marketing, is that it is limitless because markets themselves split and breed like single cell organisms. Computers are a typical example. We have gone from mainframes, mini computers, workstations, PC’s, Laptops, Palmtops, etc. You must never think that the category you are in is the end of the chain. There is no such chain.
11. The Law of Perspective
“The Effects of Marketing Unfold Over a Long Period”
Have you ever wondered whether alcohol should be classified as a stimulant or a depressant? In some cases it looks like a stimulant by 7.00pm on a Friday evening, yet if you go back to the same place at 3.00am it is hard to believe that the same people are under the same product influence. The analogy here as far as marketing is concerned is that the long term results of any marketing campaign are often the direct opposite of its initial effect. A clearance sale can be relied on to boost revenues in the short term, in the long term it may be interpreted by the market as a sign of inflated prices or low sales and/or low service in the first instance.
12. The Law of Line Extension
“The Pressure to Extend a Brand’s Equity is Virtually Irresistible”
This is the most common disregarded law of all the laws of marketing. Most people seem to do it all the time and never learn from it. This law is connected to the previous law because it can take some years for it to show itself. By then the original people who broke it have usually escaped relatively unpunished and even sometimes promoted.
The concept of line extension means that if you have a brand that is leading in a particular line of products, you automatically come to the conclusion that this same brand should be put on all your other ranges of products. This is completely wrong. This belief has lead to disaster. You should never try to give a new product a free ride on the back of a successful one. In 1978, 7-UP held 6% of the entire U.S. soft drink market. So what did they do? 7-UP Gold, 7-UP Cherry, Diet 7-UP’s, etc. The result is today they battle to hold 2.5% of the market. The evidence of line extension madness can be seen everywhere. 200 types of cereal, 250 soft drinks, 1,300 shampoos.
General Motors is another company to have embraced this level of stupidity. They are involved in Sedans, Trucks, Mini-Vans, sports cars, cheap cars, luxury cars, big cars, little cars and even electric cars. It would seem that their strategy is, “if it has wheels, we will market it”.
13. The Law of Sacrifice
“To Get Something, You Have to Give Something Away”
Success has a price, the best marketing efforts have required sacrifices to achieve success. Many companies believe that the more products you have, the more you will sell. Success on the other hand seems to come in culling products, not letting them breed like rabbits.
14. The Law of Attributes
“To Every Attribute, there is an Effective and Opposite Attribute”
You must have a central idea or product attribute to centre on. If not, you must have a low price – extremely low. Trying to copy the success of the leading product rarely works. It is much better for you to have your own attribute that in many cases will be opposite to the rivals chief quality. Gillette, who had control of the total razor market did not sit back when a competitor introduced the word “disposable”. Gillette moved fast and their “good news” disposable product hit the shelf in no time flat.
15. The Law of Candour
“Admit a Negative, Gain a Positive”
Admitting a negative perception can get you further into the mind of the customer than the biggest and most exclusive advertising program. This works on understanding and appreciating a very basic human characteristic – whatever you say in your favour is usually doubtful at best, anything you say against yourself is accepted as truth.
“Joy, the most expensive perfume in the world”
These statements would make most executives shake with fear, yet they were both highly effective campaigns, because they worked by disarming peoples natural defences to advertising messages.
16. The Law of Singularity
“In any Given Situation, Only One Move will Get the Best Results”
You must at all costs avoid “the puppy approach” – get into everything. The only thing that really works in marketing is the one big bold action that sets you apart from your competitors. If this is true, then Coca Cola should admit defeat and dump their “new coke” and go back to “the real thing” attack.
17. The Law of Unpredictability
“No One can Predict the Future”
The basic confusion that most businesses have is the difference between short term marketing thinking and short term financial planning. The short term marketing plan provides the crucial words or marketing angle to set you and your product apart in the minds of the customer. This may not give you short-term market success, it will however, establish the foundation on which sustained market success will be based. Short term financial planning however, usually expects quick returns that impede severely the future opportunities of the initial marketing program.
18. The Law of Success
“Success Frequently Leads to Arrogance, Which Leads to Failure”
The most dangerous opponent of marketing success is ego. Getting the proper focus requires objective judgement. A swollen head can rarely achieve this. This “early success syndrome” often lies behind the outbreak of line extensions. It is assumed that the brand name is the reason for its success, when in fact the opposite is true. Ego can be the driving force behind building a business, but at all costs it mus t be kept out of marketing. The best marketers in the world succeed by thinking the way their customers do.
19. The Law of Failure
Failure Must be Expected and Accepted”
The worst failures grow from the inability to admit a mistake. Mistakes are inevitable. The skill of cutting losses by acknowledging them early is as invaluable as it is rare in most companies. That is because most companies act on the personal agendas of those in upper management, sometimes this means that they may reject great ideas simply because nobody at head office will personally gain from it. The Japanese can attribute some of their success to their built in capacity to admitting and fixing mistakes. This is made easier because the decisions the Japanese make are based on group consensus, rather than individual executives whim. This egoless management system means there is far less disgrace in any failure.
20. The Law of Hype
“The True Situation is Often the Opposite of What Appears in the Press”
When a company is sweeping all before it, you rarely hear them talking about it. When companies pursue the media, it often signals trouble. IBM used to be a very quiet company. The number of press conferences they hold these days can measure their recent troubles.
21. The Law of Acceleration
“Successful Programs are Built on Trends, not Fads”
Fads are a short term excitement. Trends stay the test of time. Trends are more like the tide, slower and barely visible, but ultimately extremely powerful and quite unstoppable. A company, which finds itself with a fad, should act to slow it. If it can be restrained, it may draw out to become something like a
trend. Compare the extremely durable Barbie Doll phenomena with the overnight sensation of the Cabbage Patch Kids and Ninja Turtles.
22. The Law of Resource
“Without Adequate Funding, an Idea Won’t Get Off the Ground”
The basic fact is however, that your great product or idea may meet all of the criteria outlined in the Immutable Laws of Marketing, but it may not be enough to make it a winner. Successful marketing requires an investment. A great idea plus nothing equals zero. A mediocre idea and a million dollar marketing budget adds up to a lot more.
Fighting World War 2 apparently cost $9,000 per minute. Vietnam cost $22,000 per minute. A one minute ad during the American Super Bowl costs $1.5 million. Ideas are the weapons. The battlefield is the mind of the customers. Getting in there takes money and staying there takes even more. The Law of Resource says that without enough financial support, your great idea is destined to remain just that, an idea.
Credit: from the book “The 22 Immutable Laws of Marketing” by Al Ries & Jack Trout