Download The 22 Immutable Laws of Marketing

The 22 Immutable Laws of Marketing
By Al Ries and Jack Trout
Summary:
1) The Law of Leadership: It is better to be first than be better
2) The Law of the Category: If you can’t be the first in a category, set up a
new category that you can be first in
3) The Law of the Mind: It’s better to be first in the mind than to be first in
the marketplace
4) The Law of Perception: 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
6) The Law of Exclusivity: Two companies cannot own the same word in
the prospect’s mind
7) The Law of the Ladder: The strategy to use depends on which rung you
occupy on the ladder
8) The Law of Duality: In the long run, every market becomes a two horse
race
9) The Law of the Opposite: If you’re shooting for second place, your
strategy is determined by the leader
10) The Law of Division: Over time, a category will divide and become two
or more categories
11) The Law of Perspective : Marketing effects take place over an extended
period of time
12) The Law of Line Extension: There’s an irresistible pressure to extend
the equity of the brand
13) The Law of Sacrifice : You have to give up something in order to get
something
14) The Law of Attributes :For every attribute ther is an opposite, effective
attribute
15) The Law of Candor : When you admit a negative, the prospect will give
you a positive
16) The Law of Singularity :In each situation, only one move will produce
substantial results
17) The Law of Unpredictability : Unless you write your competitor’s plans,
you can’t predict the future
18) The Law of Success : Success often leads to arrogance, and arrogance
to failure
19) The Law of Failure : Failure is to be expected and accepted
20) The Law of Hype : The situation is often the opposite of the way it
appears in the press
21) The Law of Acceleration : Successful programs are not built on fads,
they are built on trends
22) The Law of Resources : Without adequate funding an idea won’t get off
the ground
1) The Law of Leadership
 The law of leadership is convincing people that you are the first in a
particular market
 It is easier to convince someone that you are first rather than convince
them that you have a better product
 The leading brand in a category are usually the first in the mind of
consumers
 People tend to stick with what they’ve got
 One reason why the first brand in a category is the best known is because
it tends to become generic
 Marketing is a battle of perceptions, not products – if you are the first then
you must be the best (even if your product is inferior, it is seen as being
the best)
2) The Law of the Category
 If you are not the first product in the market, you should try to find a new
category and be the first in that category
 IBM was the first in computers, but DEC was the first in minicomputers
 Dell was not the first computer seller, but they were the first in selling
computers over the phone
 Everyone is interested in what is new, not necessarily what is better
3) The Law of the Mind
 If marketing is a battle of perception, not product, then the mind takes
precedence over the marketplace
 The problem is getting the idea or concept into the person’s mind
 You cannot change a person’s mind – once they perceive a company of
being one thing, they forever feel that it is that thing eg: Xerox will always
be a photocopier company and never a computer company, no matter
how hard they try
 You have to blast your way into consumers’ minds
 Sometimes a simple and easy way of getting into a prospect’s mind is to
have an easy to remember name, such as Apple computers as opposed
to the MITS Altair 8800
4) The Law of Perception
 All that exists in marketing is the perception in the mind of the consumers
 The only reality that you can be sure about is in your perceptions
 The product itself is not central to the marketing, it is the perception in the
mind of the consumers that is the important thing
 If you tell someone in Japan that you bought a Honda, they would
automatically assume that you are talking about a motorcycle – if you told
someone in New York that you bought a Honda they would assume that
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you are talking about a car. Honda is perceived differently in different
markets
Taste tests prove that Pepsi tastes better than Coke, but Coke is
perceived to be the better drink because a) it was the first and b) because
its marketing makes you assume that it is the best and puts a perception
into your mind about Coke and about those who consume it
The “everybody knows” principle is that “everybody knows” that Volvos are
the safest cars in the world – there is a perception that they are the safest,
but have you ever tried driving one (or crashing one!)
Marketing is not a battle of products, but a battle of perceptions
5) The Law of Focus
 A company has to be focused on its product, its brand and its category.
Branching out into different markets can kill the company
 Every product or brand has to have its own word – Volvo owns the word
“Safety”, Xerox owns the word “photocopier/Photostat” etc
 The halo effect is when one attribute gives rise to others eg: if your
spaghetti sauce owns the word “thick” it also implies that it is tasty, has
nourishing ingredients etc
 Broadening the scope of your word means certain death for the product
eg: Atari didn’t want to be known as just a video game company, they also
wanted to own the word “computer” when they branched out into
computers – but the word “computer” was already IBM’s word (“I want to
buy an IBM” definitely means “I want to buy a computer”)
 You can’t narrow your focus with quality – everybody says that they are
the best because they produce quality goods – as a result nobody
believes a company when they push the “quality” line
6) The Law of Exclusivity
 You cannot own another company’s word. Federal Express will never own
the word “worldwide” – DHL does; Energizer will never own the word
“long-lasting” – Duracell does
 The law of exclusivity states that if a word is owned by another company,
the chances are that you will never be able to own that word, so find a
different word
7) The Law of the Ladder
 All products are not created equal. There is a hierarchy in the mind that
prospects use in making decisions
 Marketing should be based on where on the ladder you stand. If you are
the first in the category, then you occupy the minds of most consumers so
then you are on the top rung, if you get in second, you are a rung down
etc
 When Avis admitted to its public that they were number 2 in the car rental
market, they started to do better business ie: “We may be the number 2
company, but we try harder” was their slogan. Their honesty and the
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perception created by the fact that they were number 2 and they are really
trying harder to become number 1 won them many more customers
There is a maximum of seven rungs on a ladder because consumers often
find it difficult to remember more than seven brands of any particular
product – that is why 7 is a popular number.
8) The Law of Duality
 When you take the long view of marketing you usually find that the battle
ends up between two major players – usually the original brand and the
upstart brand
 It might take a season or two to eliminate or make redundant the minor
players (eg: video games) or it may take decades (eg: telephone
companies)
 Jack Welch: “Only companies that are number 1 or number 2 in their
markets could win in that increasingly competitive global arena”
 In a developing market, the number 3 or 4 brand might be popular,
because customers don’t always know which brands are the leaders, so
they pick interesting looking ones. Once they are educated as to which is
the leading company, the 3rd or 4th companies tend to be eliminated or
ignored
9) The Law of the Opposite
 You must find the strength in the opposition and turn it into a weakness by
promoting your product as the opposite eg: Coke is the original which
implies that older people drink it. So Pepsi came up with the “Pepsi
Generation” – the choice of the new generation
 By making yourself the opposite, you take business away from all other
alternatives to number one – if old people drink coke and young people
drink Pepsi, then who is left ?
 Don’t simply knock the opposition – promote your product as well eg: This
mouthwash won’t leave you smelling like a hospital – it is the good tasting
mouthwash that kills germs
10) The Law of Division
 Categories that were at one time general (eg: computers) tend to break up
into other categories (eg: desktops, laptops, minicomputers, mainframes
etc)
 Address each emerging category with a different brand name
(Volkswagen works well with small, cheap and affordable cars, but a
Volkswagen name on a luxury car will not work)
 Get into the new categories as soon as possible to be the first – but be
careful not to extend the brand name so that it hurts the original brand
11) The Law of Perspective
 What is alcohol? Is it a stimulant (eg: workers look alive and refreshed in
the pub after work) or is it a depressant (workers who drink too much fall
asleep or get groggy after a while)? This is a perception – it depends how
you look at it
 If a business runs continuous sales, they will not do well – if they
constantly have sales they tell their customers that they don’t have good
prices and that they should always wait for the next sale to make a
purchase.
 How do your prospects view your product?
12) The Law of Line Extension
 By extending your line, you run the risk of losing sales of your original
product and also total market share
 Extending your line causes confusion. People will not know what an
ICRFS is because it could be one of many things if the line is extended
 Riding the wave of the success of one line can destroy that line in the end
 When you be all things to all people you inevitably wind up in trouble
 Line extension can be a winner in the short term but a loser in the long
term – more is less
 Narrow the focus to build a position in the prospect’s mind
 The alternative to line extension is launching a new brand. This is costly
and time consuming but it is the best way to introduce a new product
because it doesn’t hurt the original brand
13) The Law of Sacrifice
 If you want to be successful, you have to reduce your product line, not
expand it.
 You may have to give up part of the market to build a perception about the
product. This can be a winning strategy in the long term
 An example of the law of sacrifice is when FedEx sacrificed the potential
market for delivering packages worldwide. It concentrated on delivering
parcels overnight to the domestic market. They built up a strong customer
perception. Once they started going worldwide (and broke the Law of
Sacrifice) they lost $1.1 billion
 Focus your product on a specific market, a specific theme and sacrifice
the rest of the market for the sake of building a strong and healthy
perception of your product
14) The Law of Attributes
 Do not copy the leader. Just because they are successful, it doesn’t mean
that you have to emulate them.
 The best strategy is when you choose to tackle the opposition from the
opposite view point eg: if they target young customers, you target the
older customers; if they sell large cars, you sell small cars; if they focus on
the worldwide market, you focus on the domestic market.
 Own the opposite word – if they own the word BIG, you own the word
SMALL (eg: IBM is big and builds mainframe computers, you are small
and build minicomputers)
15) The Law of Candor
 Sometimes admitting a negative can be a positive move.
 If you are number 2 to the leader, then by admitting it, you may gain
the confidence of the consumers (eg: Avis is only No. 2 in rent-a-card.
But at Avis, we try harder)
 Sometimes admitting a negative attribute of the product can be a
selling point (eg: The 1970 VW will stay ugly longer)
 Customers tend to open their minds when they hear you start with a
negative
 Don’t dwell on the negative, but follow it closely by a positive eg: With
a name like Smuckers it has to be good
16) The Law of Singularity
 Often the opposition only has one weakness, but you have to find that
weakness and focus your marketing on it
 Only one tactic is going to destroy your competition – not a whole lot of
weak tactics, but one strong one
 If your competition is marketing a particular way, market the opposite way
and concentrate your marketing. This will give you focus and help you to
gain market share (eg: If they are marketing to Men, market to Women)
17) The Law of Unpredictability
 Weather forecasters cannot tell what the weather is going to be like in the
next 3 days. How can you predict the market over the next 3 years
 Companies that pin their marketing strategy on one point that is based on
the market developing over a period of years, may end up big losers. You
must be focused but with the ability to be flexible in your approach.
 Long term plans must be well thought out MARKETING plans, not
financial plans. Base all long term plans on your brand, not on figures
 You can take advantage of long term trends – but you have to be sure that
the trend will really be long term and not a fad. Treat fads differently.
 Trends are difficult to work with because they are unpredictable
 The unexpected always happens
 Build an enormous amount of flexibility in your organisation
18) The Law of Success
 Ego is the enemy of successful marketing
 Don’t substitute your own judgement for what the market wants
 When a brand is successful, companies become cocky and extend the
line – a major problem
 Ego can be an effective driving force – but it can also be destructive
 CEOs should get in touch with the customers’ needs and get to the grass
roots of the business. It is a CEO’s job, not an underling’s job to make
sure that the customers are being serviced correctly
19) The Law of Failure
 Too many companies try to fix things rather than drop things – reorganise
instead of get out of the situation
 Be able to recognise failure early to cut losses – not hang onto something
that is going to cause major problems in the future
 Wal Mart doesn’t punish failure, but tries to learn from failure – But woe to
the person who makes the same mistake twice
 Being safe does not do the company any favours
 Eliminate “personal agendas” within corporations
20) The Law of Hype
 When things are going well, a company doesn’t need hype. When a
company uses hype, it is usually because they are in trouble and need to
get publicity for their product
 History is full of marketing failures that were successful in the press
 The greatest hype comes from those developments that promise to singlehandedly revolutionise the world
21) The Law of Acceleration
 A fad is a short term phenomenon that might be profitable but doesn’t last
long enough to do a company much good
 A trend takes effect more slowly but can be profitable over a longer period
of time
 If you are faced with a fad, the best thing to do is to dampen it, because it
draws it out over a longer period of time
 Ninja Turtles were a fad, Barbie Dolls is a trend
 Elvis appeared on stage on a limited number of occasions – thus, each
show caused a bigger impact
 Never totally satisfy demand.
 Long term trends are the most profitable types of waves to ride
22) The Law of Resources
 Money. Even the best marketing ideas will not get off the ground without
money
 You need money to get into the mind of the prospect
 The rich often get richer because they have the resources to drive their
idea into the minds of the prospects
 You can’t save your way to success
 Money makes the marketing world go around. It would be better to plow all
the profits back into marketing for the first few years of a business
because marketing is the most important investment a business can
make.