One of the best books about marketing by two of the most influential marketers.
An absolute must-read (and re-read) for entrepreneurs, business people, photographers, musicians and bloggers alike.
If you're interested in process-driven business execution, I highly recommend Working Backwards, Amazon's methodology for building great businesses with strong moats.
We have been studying what works in marketing and what doesn't for more than 25 years…programs that work are almost always in tune with some fundamental force in the marketplace.
1: 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 their first.
- Neil Armstrong was the first person to walk on the moon. Who was second?
- Roger Bannister was the first person to run a four-minute mile. Who was second?
- George Washington was the first president of the United States. Who was second?
- The law of leadership applies to any product, any brand, any category.
- Not only does the first brand usually become the leader, but also the sales order of follow-up brands often matches the order of their introductions.
- The best example is ibuprofen. Advil was first, Nuprin was second, Medipren was third. That's exactly the sales order they now enjoy: Advil has 51 percent of the ibuprofen market, Nuprin has 10 percent, and Medipren has 1 percent.
2: The Law of 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?
- Dell got into the crowded personal computer field by being the first to sell computers by phone.
- Charles Schwab didn't open a better brokerage firm. He opened the first discount broker.
- Everyone is interested in what's new. Few people are interested in what's better.
- When you're the first in a new category, promote the category. In essence, you have no competition.
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.
- You can't change a mind once a mind is made up.
- The single most wasteful thing you can do in marketing is trying to change a mind.
- If you want to make a big impression on another person, you cannot worm your way into their mind and then slowly build up a favorable opinion over a period of time. The mind doesn’t work that way. You have to blast your way into The mind.
4: The Law of Perception
Marketing is not a Battle of products, it's a battle of perceptions.
- 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.
- There may well be oceans, rivers, 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.
- A perception that exists in the mind is often interpreted as a universal truth. People are seldom, if ever, wrong. At least not in their minds.
- 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.
- Everybody knows that the Japanese make higher-quality cars than Americans do. So people make buying decisions based on the fact that everybody knows the Japanese make higher-quality cars.
- If you have had a bad experience with a Japanese car, you've just been unlucky, because everybody knows the Japanese make high-quality cars.
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.
- The leader owns the word that stands for the category. This is another way of saying that the brand becomes a generic name for the category.
- The most effective words are simple and benefit oriented.
- Crest… cavities
Domino’s… home delivery
- 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).
- The essence of marketing is narrowing the focus. You can't stand for something if you chase after everything.
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 prospects mind, it is futile to attempt to own the same word.
- As we mentioned earlier, Volvo owns safety. Many other automobile companies, including Mercedes-Benz and General Motors, have tried to run marketing campaigns based on safety. Yet no one except Volvo has succeeded in getting into the prospect's mind with a safety message.
7: The Law of the Ladder
The strategy to use depends on which rung you occupy on the ladder.
- 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. 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.
- In general, a mind accepts only new data that is consistent with its product ladder in that category. Everything else is ignored.
- When Chrysler compared its cars with Honda, very few people traded in their preludes and accords for Plymouth and Dodges.
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.
- In batteries, it's Eveready and Duracell. In mouthwash, it's Listerine and scope. In toothpaste, it's Crest and Colgate.
- In a maturing industry, third place is a difficult position to be in.
- Look at the history of the automobile in United States. In 1904, 195 different cars were assembled by 60 companies. Within the following years, 531 companies were formed and 346 perished. By 1923, only 108 cars makers remained. This number dropped to 44 by 1927. Today, Ford and General Motors dominate the domestic industry with Chrysler's future in doubt.
9: The Law of Opposite
If you’re shooting for second place, your strategy is determined by the leader.
- 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.)
- When you look at customers in a given product category, there seem to be two kinds of people. There're those who want to buy from the leader and 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.
10: The Law of Division.
Over time, a category will divide and become two or more categories.
- Like an amoeba dividing 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, personal computers, laptops, notebooks, pen computers.
11: The Law of Perspective
Marketing effects take place over an extended period of time period.
- 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.
- Three years after the introduction of Michelob light, regular Michelob peaked in sales and then declined 11 years in a row. Today the four Michelob flavors combined (regular, light, dry, and classic dark) sell 25 percent fewer barrels than Michelob alone did in 1978, the year Michelob Light was introduced.
12: The Law of Line Extension
There’s an irresistible pressure to extend the equity of the brand.
- 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 spite of the evidence that line extensions don't work, companies continue to pump them out. Here are a few examples:
- Bic lighters. Big pantyhose?
Chanel. Chanel for men?
Coors beer. Coors water?
- 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.
- In the long run and in the presence of serious competition, line extensions almost never work.
13: The Law of Sacrifice
You have to give up something in order to get something.
- The power of the sacrifice for Federal Express was in being able to put the word overnight in the mind of the prospect. When it absolutely, positively had to be there overnight, you would call Federal Express.
- Marketing is a game of mental warfare. It's a battle of perceptions, not products or services. In the mind of the prospect, Federal Express is the overnight company. Federal express owns the overnight position.
- Coca-Cola got into the prospects mind and built a powerful position. In the late fifties, for example, Coke outsold Pepsi more than five to one. What could Pepsi-Cola do to go against Coke’s powerful position?
- In the early sixties Pepsi-Cola finally developed a strategy based on the concept of sacrifice. The company sacrificed everything except the teenage market.
- Within one generation, Pepsi closed the gap. Today it is only 10 percent behind Coca-Cola in total U.S. cola sales.
14: The Law of Attributes
For every attribute, there is an opposite, effective attribute.
- Too often a company attempts to emulate the leader. “They must know what works," goes the rationale, “so let's do something similar." Not good thinking.
- It's much better to search for an opposite attribute that will allow you to play off against the leader. The keyword here is opposite – similar won't do.
- 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 a positive.
- You have to prove a positive statement to the prospect’s satisfaction. No proof is needed for a negative statement.
- 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.
- “With a name like Smucker’s, it has to be good.”
- Listerine brilliantly invoked the law of candor: “The taste you hate twice a day.”
16: The Law of Singularity
In each situation, only one move will produce substantial results.
- Most often there is only one place where a competitor is vulnerable. And that place should be the focus of the entire invading force.
- Military strategist and author B.H. Liddell Hart calls this bold stroke "the line of least expectation.”
- In recent years there have been only two strong moves made against GM. Both were flanking moves around the GM Maginot Line. The Japanese came at the low end with small cars like Toyota, Datsun, and Honda. The Germans came at the high end with superpremium cars like Mercedes and BMW.
17: The Law of Unpredictability
Unless you write your competitors’ plans, you can't predict the future.
- 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.
- 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.
18: The Law of Success
Success often leads to arrogance, and arrogance to failure.
- When a brand is successful, the company assumes the name is the primary reason for the brand success. 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.
19: The Law of Failure
Failure is to be expected and accepted.
- 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.
- IBM should have dropped copiers and Xerox should have dropped computers years before they finally recognized their mistakes.
- Marketing decisions are often made first with the decision maker’s career in mind and second with the impact on the competition or the enemy in mind. There is a built-in conflict between the personal and the corporate agenda.
- This leads to failure to take risks. (It's hard to be first in a new category without sticking your neck out.)
20: The Law of Hype
The situation is often the opposite of the way it appears in the press.
- Forget the front page. If you're looking for clues to the future, look in the back of the paper for those innocuous stories.
- 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.
- 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.
- 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 satisfied that 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.
- 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.
- The more successful marketers front load their investment. In other words, they take no profit for two or three years as the plow all earnings back into marketing.
If you violate the immutable laws, you run the risk of failure. If you apply the immutable laws, you run the risk of being bad–mouthed, ignored, or even ostracized.
Have patience. The immutable laws of marketing will help you achieve success. And success is the best revenge of all.