Using actual examples and sharp analysis, Al Ries and Jack Trout offer 22 “laws” that amount to a basic, concise distillation of their marketing experience and wisdom. Their examples are pithy enough to keep the most jaded marketing person engaged. And their lessons are embedded verities that would be hard to dispute. The only drawback is that this classic may be a bit dated, so it is interesting to see how surprisingly well some of their original observations have fared over the years.
In this summary, you will learn
- What the 22 constant laws of marketing are; and
- How these laws can help your marketing plans flourish.
- Twenty-two marketing rules have become laws because they don’t change and because you get in trouble if you don’t obey them.
- Marketing’s main goal is to be specific, so explain what your product represents.
- Consumers ignore messages that are inconsistent with their beliefs about products.
- Being first in a product category lets you make a great first impression.
- Being the first product to get attention is better than being the first to market.
- To create a powerful brand association, focus on one word that describes your product perfectly.
- Most consumers can remember no more than seven brand names in a category.
- As brand categories mature, the number of competing products dwindles to two: the original and the first challenger.
- In time, the leader will lose market share to the challenger.
- Sam Walton of Wal-Mart encouraged experimentation and did not punish failure.
The Basic Rules of Marketing
Even the best and brightest marketers at the largest corporations make huge marketing mistakes. Size does not assure error-free marketing. Big companies make as many mistakes as small firms, because the same factors cause costly mistakes at both: bad assumptions, lack of understanding and the need for more research. Companies make the wrong moves when they violate the following 22 laws of marketing. These rules are like laws because they don’t change and because you get in trouble if you don’t obey them. They were developed after 25 years of studying the reasons behind major marketing mistakes and successes. So, listen up; here’s the law:
“When a company makes a mistake today, footprints quickly show up on its back as competition runs off with the business.”
“More money is wasted in marketing than in any other human activity (outside of government…of course).”
- “The Law of Leadership: It’s better to be first than it is to be better” – Being first makes you the leader and gives you a chance to make a great initial impression. Followers have to expend more energy to convince customers that their product is better. This law applies to any product. Consumers know the names of the first products in popular categories: the first Japanese luxury car (Acura), the first four-wheel drive car (Jeep), the first mainframe (IBM) and the first minivan (Chrysler). Being first means market dominance and nearly generic identification with your product (Xerox, Kodak, Formica).
- “The Law of the Category: If you can’t be first in a category, set up a new category you can be first in” – Creating a new category offers many of the same benefits as being first and can reap large rewards. Think of Michelob (first domestic premium beer), Digital Equipment (first minicomputer builder), Dell (first PC builder to sell direct), and Miller-Lite (first domestic low-calorie beer). Creating a new category can take you in the direction of thinking about what’s new, rather than what’s better. If you create a new category, exploit it. Use your head start.
- “The Law of the Mind: It is better to be first in the mind than to be first in the marketplace” – You want to be the first in your category to capture the consumer’s attention. Mindshare counts. Once a person has a concept about your product, changing it is almost impossible. Such perceptions form rapidly and solidify quickly.
- “The Law of Perception: Marketing is not a battle of products, it’s a battle of perceptions” – Perception often is reality. Quality is based on perception, not objective truth. The real difference among Honda, Toyota and Nissan, all technologically similar cars, is how people think of them. Honda cars rank higher in the U.S. than in Japan, where Honda is associated with motorcycles. People often borrow each other’s perceptions. If “everyone knows” that Japanese cars have fewer problems than U.S. cars, Japanese car owners will report fewer problems, since that conforms to their perceptions.
- “The Law of Focus: The most powerful concept in marketing is owning a word in the prospect’s mind” – Focus your product by defining it with a powerful image. Find a single word or action that describes your product. Federal Express tied its name to overnight delivery; Hershey means chocolate; Xerox means copiers. The right signature word conveys a “halo effect,” that is, it generates other meanings. For instance, safety connotes better engineering. Be specific, so consumers know what your product means.
- “The Law of Exclusivity: Two companies cannot own the same word in the prospect’s mind” – Marketers who stake out a word and use it come to own it once it is burned into consumers’ consciousness. DHL uses “worldwide” in all its ads. When FedEx began to tout global deliveries, it found that DHL already owned “worldwide.” FedEx was out of luck. Consumers could not forget that association. Ad agency researchers often want clients to spend their budgets in the false hope that they can get people to change the way they think. That is an expensive, uphill and fruitless battle.
- “The Law of the Ladder: The strategy you use depends on which rung you occupy on the ladder” – If you are second in a category, work with the consumer’s imbedded opinion. Avis boasted of its service even though it was always second to Hertz. When consumers asked how Avis could be the best if it ranked second, it launched the famous “We try harder” ad campaign. Before that, Avis had lost money for 13 years. Once that campaign was launched, it made money. Consumers form new beliefs (Avis tries harder) that are congruent with their old beliefs (Avis is second, but good). If they get an inconsistent message, they ignore it. Buyers have a limited capacity to recall the names of brands in a product area. A Harvard psychologist found that most people couldn’t remember more than seven names in a category.
- “The Law of Duality: In the long run, every market becomes a two-horse race” – As brand categories mature, the number of competing products decreases until only two remain, the originator and the first challenger. Think of Crest and Colgate. Eventually, the leader will lose market share to the challenger, as happened in the cola wars (Coca-Cola versus Pepsi versus Royal Crown) and among long-distance phone companies (AT&T versus MCI versus Sprint). Crowded fields dwindle. __
- “The Law of the Opposite: If you’re shooting for second place, your strategy is determined by the leader”__ – Second-place companies must present themselves as the clear alternative to the leader, as Newsweek did to differentiate itself fromTime. Newsweek said it would put its opinions on the editorial page, not in its stories, while Time had a more mixed approach. To revive an old product, be aggressive. Attack the number one slot. Don’t be timid.
- “The Law of Division: Over time, a category will divide and become two or more categories” – As time passes, monolithic brand categories break into small groups as product differentiation progresses. Computers started as a single category, but soon divided into mainframes, personal computers, laptops and workstations. They broke into categories, as did beer, broadcast networks and autos. For years, the music business had two categories, popular and classical. Today, Billboardmagazine lists 11 separate categories. To introduce a new brand into an established category, use a new name, as Honda did when it introduced its Acura, or Toyota when it debuted Lexus.
- “The Law of Perspective: Marketing effects take place over an extended period of time” – Changing events can affect the outcome of your marketing, especially with line extensions. Coors Beer launched Coor’s Light, which eventually cost Coors regular 75% of its sales. Similar outcomes happened to Miller and Anheuser-Busch. Coca-Cola suffered when it launched a clothing line in 1985. Within two years, Coke was selling $250 million in clothes, but during the third year, sales evaporated.
- “The Law of Line Extension: There’s an irresistible pressure to extend the equity of your brand” – This law gets broken more often than the others. Product success often outweighs internal discipline, encouraging companies to put their names on many more products, often with disastrous results. While line extensions sound like a rational way to extend products, remember that marketing isn’t about products, but about how people think of your products. The better route is to do more with less. Do not try to provide solutions for every need. Focus on your core brand or product.
- “The Law of Sacrifice: You have to give up something in order to get something” – Don’t offer too many products. Companies have to make sacrificial decisions about products, line extensions and the need for continuous change. Concentrate. Smuckers is synonymous with jelly and jam since that is all it makes. Department stores try to sell everything to everybody, so they are in trouble. Lasting firms specialize: the Gap, Victoria’s Secret and Foot Locker. Consistency has benefits. White Castle has been selling burgers for 60 years; its average store is more profitable than a Burger King outlet.
- “The Law of Attributes: For every attribute, there is an opposite, effective attribute” – Work against the category leader. Crest promotes its cavity-fighting ability, so other toothpastes tout whiteness or fresh breath. To take the top spot, come up with something new and very different, like new product benefits or a lower price. When you offer a new twist, seize the marketing opportunity. When disposable razors came out, Gillette reacted quickly and started a new line. Soon, its razors led a very large new market.
- “The Law of Candor: When you admit a negative, the prospect will give you a positive” – Honesty pays. Even if something is widely recognized as ugly (the VW Beetle), costly (Joy perfume) or second-best (Avis), the public will reward honesty. Admitting something obvious reinforces public perceptions, an affirmation that makes the consumer feel empowered and receptive. When Listerine admitted that its mouthwash tasted bad, it explained that it is also a disinfectant. Since people expect disinfectants to taste bad, this confirmed their thinking. It tastes bad, so it kills germs and fulfills its claims.
- “The Law of Singularity: In each situation, only one move will produce substantial results” – Make a dramatic move to gain ground. Incremental, small, unfocused moves are ineffective. Japanese and German cars hit GM in the low-priced and high-priced markets, so GM focused on its mid-range models, but it didn’t change the body styles, so the cars began to look alike. Ford filled the gap with new models. Get involved in the product hands-on so you can find a bold, unexpected competitive move.
- “The Law of Unpredictability: Unless you write your competitors’ plans, you can’t predict the future” – Accurately forecasting the future from a marketing perspective is impossible because most marketers take a short-term view of sales and budgets. Quarterly corporate budgeting puts too much emphasis on the short-term, which is antithetical to marketing’s long-term vision. To get an idea about the future, pay attention – but not too much attention – to trends. Don’t overestimate their longevity or reach. Don’t put excess trust in research, either, because people often act unexpectedly.
- “The Law of Success: Success often leads to arrogance, and arrogance to failure”– Great success often motivates companies to offer too many brand extensions, which frequently fail. A good brand name does not necessarily translate into universal success. To contain the urge to expand, marketers and CEOs should check their egos and think like their customers. Marketers should shop in their own stores and eat in their own restaurants. The average CEO spends 17 hours per week in corporate meetings, and another six hours preparing for those meetings. That is all time spent away from the front lines, which is why smaller firms may have a better handle on their businesses than larger companies.
- “The Law of Failure: Failure is to be expected and accepted” – When a mistake happens, correct it quickly. The tendency is to prognosticate, procrastinate and delay repairs, especially if they seem insurmountable. A company’s approach to solving problems indicates how it addresses experimentation and failure. Sam Walton of Wal-Mart encouraged people to experiment and did not punish them if they failed. He considered experimentation part of the learning process. 3M has a system that shows how an innovation will help a wide group of people. The company publicizes the person who develops a new idea, so that people at all levels get credit when they innovate.
- “The Law of Hype: The situation is often the opposite of the way it appears in the press” – A successful brand does not need hype. Some products failed after receiving extraordinary amounts of publicity. Just think of the NeXt computer and New Coke. These products held out huge promises to consumers and debuted amid proclamations that they would radically interrupt the existing marketplace. Instead, nothing happened. It’s the law: Innovations are unpredictable and sustained success takes time.
- “The Law of Acceleration: Successful programs are not built on fads; they’re built on trends” – While fads can be profitable, they only last a short time, so you must be nimble to capitalize on one. The makers of the Cabbage Patch doll knew a fad when they saw one, so they designed their marketing strategy to exploit it to the hilt. Coleco raked in sales of $776 million and profits of $83 million within two years of the doll’s appearance. But five years after the fad began, Coleco was bankrupt. Hasbro bought Cabbage Patch, and has nurtured the dolls “conservatively.” Now, they’re doing fine. Given the choice, try to extend fads into trends. Barbie, which never committed the error of overextension, is a trend with a longer sales history than Cabbage Patch. Elvis Presley’s manager limited the singer’s appearances. When Elvis performed, it was a major event.
- “The Law of Resources: Without adequate funding, an idea won’t get off the ground” – Money helps marketers get their ideas to the consumer. It is essential. A great idea with no money behind it is not as good as a mediocre idea buttressed by a large budget. An entrepreneur with a great idea and no money should be prepared to give away a big percentage of the idea to get financial backing. Resources are behind the success of many mid-quality products. Large corporations spend billions on ads to maintain market share. That fact is intrinsic to successful marketing.