These notes aren't yet written. I may be writing them right now, or I might have decided this book either isn't worth taking notes for or isn't right for it.
Notes and Summary
The idea of the book is that there are 22 "basic laws that govern success and failure in the marketplace". Here they are:
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 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."
- "People tend to stick with what they've got"
- "The leading brand in any category is almost always the first brand in the prospect's mind. Hertz in rent-a-cars. IBM in computers."
Thoughts: This might be true in the short-term (which is very important), but the authors overstate the power of this law. Neither Hertz nor IBM are top of mind to me in their respective categories.
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.
- "If you don't get into the prospect's mind first, don't give up hope. Find a new category you can be first in."
- Example: Miller light was the first domestic light beer. Amstel Light came into the market as the first imported light beer, and carved out a niche.
- "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...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."
- "When you're first in a new category, promote the category. In essence, you have no competition."
Thoughts: The advice to niche down into a specific, new category is excellent.
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 marketplace is important only to the extent that it lets you get in the mind first."
- "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."
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."
- Thoughts: It is always worth noting that "There is no objective reality" is a self-defeating, oxymoronic statement that claims that 1.)there is no objective reality and 2.) that there is one (indicated by it's use of "there is"). It's wrong.
- "Truth is nothing more or less than one expert's perception."
- "Most marketing people think the battle between the three brands is based on quality, styling, horsepower, and price. Not true. It's what people think about a Honda, a Toyota, or a Nissan that determines which brand will win. Marketing is a battle of perceptions."
- Example: "Everybody knows there's a problem with Audi cars. On November 23, 1986, CBS broadcast a '60 Minutes' segment called 'Out of Control.' It called attention to a number of complaints about Audi's 'unintended acceleration.'..Every single automobile expert who has tested the car has failed to duplicate the complaint. Yet the perception lingers on."
- I've never heard someone express this perception of Audis, because perception eventually gets shaped by reality.
Thoughts: The idea that marketing is a battle of perceptions needs some nuance. Yes, people buy things because of their perceptions of those things. But, the product itself will determine long-term perceptions. For example, Gatorade has pitched itself as a healthy sports drink for decades. As much as they've been able to drive that perception, it is changing because the reality is that the drink is just too sugary to be healthy. You're much more likely to have a good perception if you focus on actually having a good product.
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...This is the law of focus. You 'burn' your way into the mind by narrowing the focus to a single word or concept."
- "Heinz owns the word ketchup...Prego's word is thicker."
- "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 position yourself as an honest politician, because nobody is willing to take the opposite position."
6. The Law of Exclusivity: Two companies cannot own the same word in the prospect's mind.
- "You can't change people's minds once they are made up."
- "What researchers never tell you is that some other company already owns the idea."
Thoughts: I think it's wise to avoid fighting over a word that is already owned as there are cheaper methods of carving out a niche, but I don't think this law is iron-tight. Over time, you can change the perception of the market (especially if you actually have a product that wins in the quality you're trying to own).
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."
- "...Avis did the one thing you have to do to make progress inside the mind of the prospect. They acknowledged their position on the ladder...For 13 years in a row, Avis had lost money. Then, when it admitted to being No. 2, it started to make money, lots of money."
Thoughts: Another "law" that isn't a law, but is a fine reminder that honesty with your customers goes a long way in establishing trust.
8. The Law of Duality: In the long run, every market becomes a two horse race.
- "When you take the long view in marketing, you find the battle usually winds up as a titanic struggle between two major players--usually the old reliable brand and the upstart."
- "Successful marketers concentrate on the top two rungs."
Thoughts: The long term existence of Verizon, AT&T, T-Mobile and Sprint in the cell service space proves that not "every" market becomes a two horse race (at least not soon enough to matter). Of course, there are two top rungs to any ladder, and there's more money at the top. A more interesting lens of seeing this through is the Pareto Principle, which is probably applicable in some industries and not true in others.
9. The Law of the Opposite: If you're shooting for second place, your strategy is determined by the leader.
- "don't try to be better, try to be different."
- "Coca-Cola is the old, established product. However, using the law of the opposite Pepsi-Cola reversed the essence of Coca-Cola to become the choice of a new generation: the Pepsi Generation."
- "Yet, too many potential No. 2 brands try to emulate the leader. This usually is an error. You must present yourself as the alternative."
- "Burger King's most successful years came when it was on the attack. It opened with 'Have it your way', which twitted McDonald's mass-manufacturing approach to hamburgers."
Thoughts: This is excellent advice. Find a way to be unique and different from your competitor, and focus on that.
10. The Law of Division: Over time, a category will divide and become two or more categories.
- "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."
- "The cars VW sells in the United States are the same as the ones it sells in Europe. Only the minds of the people buying them are different."
- "Timing is also important. You can be too early to exploit a category...It's better to be early than late."
Thoughts: It makes sense that people will perceive things in increasingly narrow categories. Early on, there might have only been a market for "cars". Over time, it's expanded and now there's a market for luxury cars, small cars, trucks, eco-friendly cars, etc.
11. The Law of Perspective: Marketing effects take place over an extended period of time.
- "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 the in the long term by educating customers not to buy at 'regular' prices."
- "Take line extension. In the short term, line extension invariably increases sales...but in the long term, line extension was bound to undermine one or the other brand."
Thoughts: A great reminder to consider second-order effects that are largely invisible.
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."
- "Microsoft is setting itself up [for failure]...Microsoft is the leader in the computer operating systems, but it trails the leaders in each of the following major categories: spreadsheets (Lotus is the leader), word processing (WordPerfect is the leader)..."
- "Invariably, the leader in any category is the brand that is not line extended. Take baby food, for example. Gerber has 72% of the market, way ahead of Beech-Nut and Heinz, the two line extended brands."
Thoughts: This chapter is an argument against line extension, saying that it dilutes the brand and fails. They have some examples that are true, but the Microsoft example is laughably wrong. Extending into different categories can be a way to continue to become the disruptor that would otherwise unseat you. But, it is probably more difficult to succeed when you extend your focus.
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."
- "From a marketing perspective, what did Federal Express do? It concentrated on one service: small packages overnight."
Thoughts: It makes sense to carve out a particular position in the mind of your prospects. "Particular" necessarily means excluding, or giving something else up.
14. The Law of Attributes: For every attribute, there is an opposite, effective attribute.
- "Too often a company attempts to emulate the leader...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 the opposite--similar won't do."
Thoughts: Similar to #7 and #9. True.
15. The Law of Candor: When you admit a negative, the prospect will give you a positive.
- "...General Foods admitted that Grape-Nuts cereal was a 'learned pleasure' and advised consumers to 'try it for a week.' Sales went up 23%.
- "The 1970 VW will stay ugly longer"
Thoughts: A good way to establish trust with an audience. Be honest.
16. The Law of Singularity: In each situation, only one move will produce results.
- "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."
Thoughts: Essentially, this is the idea that a small number of inputs will be responsible for a bulk of the effects. Again, the Pareto Principle is a better mental model for this. The problem is, it's extremely hard to understand what those inputs will be, so being able to recognize them when they appear is the more important thing to focus on.
17. The Law of Unpredictability: Unless you write your competitor's plans, you can't predict the future.
- "Peter's Law: The unexpected always happens."
- "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."
- A quick aside to note that this directly contradicts their claim that marketing is solely a battle of perceptions, not product and that there is no objective reality.
Thoughts: Success can lead to 1.) brand line extension 2.) distance from customers 3.) ignorance of trends, which can all lead to failure.
19. The Law of Failure: Failure is to be expected and accepted.
Thoughts: Not much in this chapter. A good reminder to test, learn, and test something new. More of a commandment than a law.
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."
- "No soft drink has received more hype than New Coke. By one estimate, New Coke received more than $1 billion worth of free publicity...New Coke should have been the world's most successful product. It didn't happen."
- "History is filled with marketing failures that were successful in the press."
- "Take the picture phone, now called the videophone...It's easy to see why the videophone hasn't made much progress. Who wants to get dressed up to make a phone call? What isn't easy to see is why the videophone gets so much hype."
- "Real revolutions arrive unannounced in the middle of the night and kind of sneak up on you."
Thoughts: It's true that "the situation is often the opposite of the way it appears in the press" (but anything that only happens often isn't a law. Take gravity: Anything with mass always exerts a force that pulls other bodies towards itself.). But, sometimes hype is real. Like in the case of the iPhone. The truth is that hype just doesn't tell you if a product will be successful. The product itself and the execution of a business plan tells you that. Moreover, generating hype/press/buzz is a great way to get people to know that your product exists in the first place, which is necessary before they can buy it. Again, the videophone bit is funny.
21. The Law of Acceleration: Successful programs are not built on fads, they're built on trends.
- "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. Furthermore, a company often tends to gear up as if a fad were trend."
- Example: Many Amazon sellers rode the wave of fidget spinners, but at the end of the wave, some got stuck with inventory that will never sell.
- "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."
- "The most successful entertainers are the ones who control their appearances...They don't wear out their welcome."
- "Forget fads. And when they appear, try to dampen them. One way to maintain 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."
Thoughts: True, but unsure of how helpful this law is or how to recognize fads. One response would be to focus on essential needs/wants, things that don't change.
22. The Law of Resources: Without adequate funding an idea won't get off the ground.
- "You'll get further with a mediocre idea and a million dollars than with a great idea alone."
- "Ideas without money are worthless."
- "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."
Thoughts: This might have been more true when it was first published (1993), but today, you just don't need that much money. Word of mouth, SEO, and Social Media are all freely available. The best product + the best marketing ideas can beat out a mediocre product with gobs of money.
There are some great points made in this book, particularly those around defining a brand, being focused, being long-term oriented, and positioning.
But, many of the laws could be thrown out (#4,5,6,8,9,16,17,19,20,21,22) and the book would be just as good. Lots of confirmation bias in the examples of the book, and many of those examples (20 years later) have ended up falsifying the very "laws" they were supposed to support.
I have some semantic disagreements with the authors of this book, in particular their definition of "immutable" and "laws" (which are immutable by definition) and their stance that there is no such thing as objective reality (a very objective statement) and that, at the same time, marketers have to be objective and look at reality as it is.
I also disagree with one of their fundamental points, that marketing is a battle of perceptions and not products. This may well be true in the short-term, but long-term perceptions are determined by the quality of the product (including the customer service). Think Google Maps overtaking Map Quest, the decline of the soda industry, Facebook overtaking MySpace, etc. Better products win.
Also worth reading for some of the examples used that now prove the opposite point that the authors were trying to make. I particularly enjoyed the example about how video calls will never succeed because "Who wants to get dressed up to make a phone call"?
That said, there's still tons of valuable ideas in this book related to how to position a brand or product. Worth reading and internalizing many of the laws.