Summary/High Level Thoughts
I should have read this sooner - the principles are timeless, and it’s a quick, easy book to finish.
The rules are concise, and anytime you undertake any marketing or sales activities, this book provides the set of rules by which you should evaluate those activities.
Definitely recommended reading for any CEO/salesperson/marketer.
"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."
"Everyone is interested in what’s new. Few people are interested in what’s better."
"The single most wasteful thing you can do in marketing is try to change a mind.”
"In the long run and in the presence of serious competition, line extensions almost never work.”
"Less is more. If you want to be successful today, you have to narrow the focus in order to build a position in the prospect’s mind.”
"15 The Law of Candor: When you admit a negative, the prospect will give you the positive."
"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.”
"20 The Law of Hype: The situation is often the opposite of the way it appears in the press."
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 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.
- Not every first is going to become successful, however. Timing is an issue — your first could be too late.
- Some firsts are just bad ideas that will never go anywhere.
- The law of leadership applies to any product, any brand, any category.
- If you’re introducing the first brand in a new category, you should always try to select a name that can work generically.
- 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.
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.
- When you launch a new product, the first question to ask yourself is not “How is this new product better than the competition? “but “First what? “In other words, what category is this new product first in?
- This is counter to classic marketing thinking, which is brand oriented: How do I get people to prefer my brand? Forget the brand. Think categories. Prospects are on the defensive when it comes to brands. Everyone talks about why their brand is better. But prospects have an open mind when it comes to categories. Everyone is interested in what’s new. Few people are interested in what’s better.
3 The Law of the Mind: It’s better to be first in the mind than it is to be first in the marketplace.
- The law of the mind follows from the law of perception. If marketing is a battle of perception, not product, then the mind takes precedence over the marketplace.
- 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.
- 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.
4 The Law of Perception Marketing: Marketing is not a battle of products, it’s a battle of perception.
- It’s an illusion. There is no objective reality. There are no facts. There are no best products. All that exists in the world of marketing are perceptions in the minds of the customer or prospect. The perception is the reality. Everything else is an illusion.
- What some marketing people see as the natural laws of marketing are based on a flawed premise that the product 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.
- 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.
- Changing a prospect’s 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.
- Marketing is a battle of perceptions, not products. Marketing is the process of dealing with those perceptions.
- What makes the battle even more difficult is that customers frequently make buying decisions based on second-hand perceptions. Instead of using their own perceptions, they base their buying decisions on someone else’s perception of reality. This is the “everybody knows“ principle.
- Marketing is not a battle of products. It’s a battle of perceptions.
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.
- This is the law of focus. You “burn" your way into the mind by narrowing the focus to a single word or concept. It’s the ultimate marketing sacrifice.
- 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.
- An astute leader will go one step further to solidify its position.
- If you’re not a leader, then your word has to have a narrow focus. Even more important, however, your word has to be “available “in your category. No one else can have a lock on it.
- The most effective words are simple and benefit oriented. No matter how complicated the product, no matter how complicated the needs of the market, it’s always better to focus on one word or benefit rather than two or three or four.
- Also, there’s the halo effect. If you strongly establish one benefit, the prospect is likely to give you a lot of other benefits, too. A “thicker“ spaghetti sauce implies quality, nourishing ingredients, value, and so on. A “safer“ car implies better design and engineering.
- 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.
- What won’t work in marketing is leaving your own word in search of a word owned by others.
- 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.
- You can’t narrow the focus with quality or any other idea that doesn’t have proponents for the opposite point of view.
- 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.)
- Once you have your word, you have to go out of your way to protect it in the marketplace.
6 The Law of Exclusivity: Two companies cannot own the same word in the prospect’s mind.
- When a competitor owns a word or position in the prospect’s mind, it is futile to attempt to own the same word.
- 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.
- What often leads marketers down this booby-trapped lane is that wonderful stuff called research.
7 The Law of the Ladder: The strategy to use depends on which rung you occupy on the ladder.
- While being first into the prospect’s mind ought to be your primary marketing objective, the battle isn’t lost if you fail in this endeavor. There are strategies to use for No. 2 and No. 3 brands.
- All products are not created equal. There’s a hierarchy in the mind that prospects use in making decisions. For each category, there is a product ladder in the mind. On each rung is a brand name.
- Your marketing strategy should depend on how soon you got into the mind and consequently which rung of the ladder you occupy. The higher the better, of course.
- What about your product’s ladder in the prospect’s mind? How many rungs are there on your ladder? It depends on whether your product is a high-interest or a low-interest product.
- Products you use every day (cigarettes, cola, beer, toothpaste, cereal) tend to be high-interest products with many rungs on their ladders.
- Products that are purchased infrequently (furniture, lawn mowers, luggage) usually have few rungs on their ladders.
- Products that involve a great deal of personal pride (automobiles, watches, cameras) are also high-interest products with many rungs on their ladders even though they are purchased infrequently.
- There’s a relationship between market share and your position on the ladder 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.
- 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.
- The ladder 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 prospect’s 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.
8 The Law of Duality: In the long run, every market becomes a two-horse race.
- Early on, a new category is a ladder of many rungs. Gradually, the ladder becomes a two-rung affair.
- When you take the long view of marketing, you find the battle usually winds up as a titanic struggle between two major players — usually the old reliable brand and the upstart.
- 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. “
9 The Law of the Opposite: If you’re shooting for second place, your strategy is determined by the leader.
- 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.
- In other words, by positioning yourself against the leader, you take business away from all the other alternatives to No. 1.
- 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-edge sword. It requires honing in on a weakness that your prospect will quickly acknowledge.
- Then quickly twist the sword.
- There has to be a ring of truth about the negative if it is to be effective.
- Marketing is often a battle for legitimacy. The first brand that captures the concept is often able to portray its competitors as illegitimate pretenders.
10 The Law of Division: Over time, a category will divide and become two or more categories.
- A category starts off as a single entity. Computers, for example. But over time, the category breaks up into other segments. Mainframes, minicomputers, workstations, personal computers, laptops, notebooks, pen computers.
- Categories are dividing, not combining.
- 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.
- What keeps leaders from launching a different brand to cover a new category is the fear of what will happen to their existing brands.
- Timing is also important. You can be too early to exploit a new category.
- It’s better to be early than late. You can’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.
- Many marketing moves exhibit the same phenomenon. The long-term effects are often the exact opposite of the short-term effects.
- Does a sale increase a company’s business or decrease it? Obviously, in the short term, a sale increases business. But there’s more and more evidence to show that sales decrease business in the long term by educating customers not to buy at “regular “prices.
- 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.
- 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.
12 The Law of Line Extension: There’s an irresistible pressure to extend the equity of a brand.
- 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.
- 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.
- In a narrow sense, line extension involves taking the brand name of a successful product (e.g., A-1 steak sauce) and putting it on a new product you plan to introduce (e.g., A-1 poultry sauce).
- But marketing is a battle of perception, not product. In the mind, A-1 is not the brand name, but the steak sauce itself.
- In the long run and in the presence of serious competition, line extensions almost never work.
- Invariably, the leader in any category is the brand that is not line extended.
- 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.
- More is less. The more products, the more markets, the more alliances a company makes, the less money it makes.
- Less is more. If you want to be successful today, you have to narrow the focus in order to build a position in the prospect’s mind.
- 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.
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. 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.
- 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.
- Let’s discuss the second sacrifice, target market. Where is it written that you have to appeal to everybody?
- The target is not the market. That is, the apparent target of your marketing is not the same as the people who will actually buy your product.
- Finally, the third sacrifice: constant change. Where is it written that you have to change your strategy every year at budget review time?
- If you try to follow the twists and turns of the market, you are bound to wind up off the road. The best way to maintain a consistent position is not to change it in the first place.
14 The Law of Attributes: For every attribute, there is an opposite, effective attribute.
- In chapter 6 (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.
- It’s much better to search for an opposite attribute that will allow you to play off against the leader. The key word here is opposite—similar won’t do.
- Marketing is a battle of ideas. So if you are to succeed, you must have an idea or attribute of your own to focus your efforts around. Without one, you had better have a low price. A very low price.
- Some say all attributes are not created equal. Some attributes are more important to customers than others. You must try and own the most important attribute.
- But the law of exclusivity points to the simple truth that once an attribute is successfully taken by your competition, it’s gone. You must move on to a lesser attribute and live with a smaller share of the category. Your job is to seize a different attribute, dramatize the value of your attribute, and thus increase your share.
15 The Law of Candor: When you admit a negative, the prospect will give you the positive.
- It goes against corporate and human nature to admit a problem.
- So it may come as a surprise to you that 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.
- 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 prospect’s satisfaction. No proof is needed for a negative statement.
- 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.
- 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.
- When a company starts a message by admitting a problem, people tend to, almost instinctively, open their minds.
- One final note: The law of candor must be used carefully and with great skill. First, your “negative “must be widely perceived as a negative. It has to trigger an instant agreement with your prospect’s mind. If the negative doesn’t register quickly, your prospect will be confused and will wonder, “What’s this all about?"
- Next, you have to shift quickly to the positive. The purpose of candor isn’t to apologize. The purpose of candor is to set up a benefit that will convince your prospect.
- This law only proves the old maxim: Honesty is the best policy.
16 The Law of Singularity: In each situation, only one move will produce substantial results.
- Many marketing people see success as the sum total of a lot of small efforts beautifully executed.
- 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.
- 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.
- 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.
- It’s hard to find that single move if you’re hanging around headquarters and not involved in the process.
17 The Law of Unpredictability: Unless you write your competitors ’ plans, you can’t predict the future.
- Implicit in most marketing plans is an assumption about the future. Yet marketing plans based on what will happen in the future are usually wrong.
- Failure to forecast competitive reaction is a major reason for marketing failures.
- 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 maximize that idea or angle. It’s not a long-term plan, it’s a long-term direction.
- 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.
- The danger in working with trends is extrapolation. Many companies jump to conclusions about how far a trend will go.
- Equally as bad as extrapolating a trend is the common practice of assuming the future will be a replay of the present. When you assume that nothing will change, you are predicting the future just as surely as when you assume that something will change. Remember Peter’s Law: The unexpected always happens.
- While tracking trends can be a useful tool in dealing with the unpredictable future, market research can be more of a problem than a help. Research does best at measuring the past. New ideas and concepts are almost impossible to measure. No one has a frame of reference.
- 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.
- One final note that’s worth mentioning: There’s a difference between “predicting “the future and “taking a chance “on the future.
- No one can predict the future with any degree of certainty. Nor should marketing plans try to.
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.
- When people become successful, they tend to become less objective. They often substitute their own judgment for what the market wants.
- Actually it’s the opposite. The name didn’t make the brand famous ( although a bad name might keep the brand from becoming famous ). The brand got famous because you made the right marketing moves. In other words, the steps you took were in tune with the fundamental laws of marketing. You got into the mind first. You narrowed the focus. You preempted a powerful attribute.
- 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.
- 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.
- 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.
- Marketing is too important to be turned over to an underling. If you delegate anything, you should delegate the chairmanship of the next fund-raising drive.
- The next thing to cut back on are the meetings.
- Small companies are mentally closer to the front than big companies. That might be one reason they grew more rapidly in the last decade. They haven’t been tainted by the law of success.
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 reorganize to save the situation “is their way 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.
- One way to defuse the personal agenda factor is to bring it out in the open.
- 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.
20 The Law of Hype: The situation is often the opposite of the way it appears in the press.
- When things are going well, a company doesn’t need the hype. When you need the hype, it usually means you’re in trouble.
- The only revolutions you can predict are the ones that have already started.
- 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.
- 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.
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.
- 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.
- When the fad disappears, a company often goes into a deep financial shock.
- Here’s the paradox. If you were faced with a rapidly rising business, with all the characteristics of a fad, the best thing you could do would be to dampen the fad. By dampening the fad, you stretch the fad out and it becomes more like a trend.
- Forget fads. And when they appear, try to dampen them. One way to maintain a long-term demand for your product is to never totally satisfy the demand.
- But the best, most profitable thing to ride in marketing is a long-term trend.
22 The Law of Resources: Without adequate funding an idea won’t get off the ground.
- 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 ground. Inventors, entrepreneurs, and assorted idea generators seem to think that all their good ideas need is professional marketing help.
- Nothing could be further from the truth. Marketing is a game fought in the mind of the prospect. You need money to get into a mind. And you need money to stay in the mind once you get there.
- You’ll get further with a mediocre idea and a million dollars than with a great idea alone.
- Ideas without money are worthless. Well … not quite. But you have to use your idea to find the money, not the marketing help. The marketing can come later.
- Remember: An idea without money is worthless. Be prepared to give away a lot for the funding.
- 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 (chapter 5: The Law of Focus).
- 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.
- So far we’ve been talking about smaller companies and their fund-raising strategies. What about a rich company? How should it approach the law of resources? The answer is simple: Spend enough.
- 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.