22 immutable laws of marketing 2.0

In 1993, Al Ries and Jack Trout have defined the laws of marketing in The 22 Immutable Laws of Marketing (which is by the way a must read for any marketer). And while most of 90’s marketing ideas are not very accurate today (press and outdoor campaigns seem not to be enough and 2 for 1 sales strategy might not be the best sales strategy), the laws seem to last.

The idea for this article is to review those laws and see how they work today. I have found a lot of argue over the Internet whether the laws from the book work or not (ex. here and here). I will be very happy to listen what you thin about them.

1. The Law of Leadership – It’s better to be first than it is to be better.

This law should not be understood very directly, as if you think about being first in the market, the law fails completely. Apple iPod was not the first MP3 player. Apple iPhone was not the first smartphone. Facebook was not a first social network.

What Al and Jack underline through all the book, everything is about the perception. The first-mover advantage comes from being first in the perception of customer (I have covered this topic here – Positioning: getting into customers’ mind). And whatever you say, if you have asked anybody about a music player a few years ago, their first hit would be iPod. And probably… there wouldn’t be any second guess.

Is it still true? I think so. It was a very tough battle for Facebook to compete with Snapchat – much smaller company (Google even tried to buy them for a ton of money), but first in the perception when it comes to vanishing communication. It took them a lot of time and resources to make a worthy rival – Instagram Stories.

Source: http://www.businessinsider.com/instagram-stories-vs-snapchat-user-growth-chart-2017-4?IR=T

Same story – it was a hard time for Samsung to compete with Apple on smartphone and tablet market. Samsung spent almost 4.5 times Apple – and $1B more than perennial consumer goods brand leader Coca-Cola on advertising (source: Forbes). And you won’t be surprised if I tell you that they are not having 4,5 higher sales now.

They sell more units as you can see below:

Source: http://www.businessinsider.com/apple-samsung-smartphone-market-share-chart-2016-11?IR=T

But when it comes to the high-end of the category, there is still one leader:

Source: http://www.businessinsider.com/samsung-galaxy-apple-iphone-premium-market-share-chart-2016-12?IR=T

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.

Competing in a category where there are many strong players is hard. You can spend a lot of money on ads and produce little to none results. It is better (and easier) to create a new category. A category, where you can be first (Law 1).

When I see this law, a Blue Ocean Strategy (created 12 years later) comes to my mind. Category where there is a lot of competition (red ocean), so you need to create your own category (blue ocean). If you are interested in how to try developing a new business model or product that creates new category, feel free to dive in here: Why is Blue Ocean Strategy an evergreen for shifting business models and new product development?

This law does not mean a shift in product and finding completely different category. It is all about small changes in perception. Hard to compete in banking category? Go for first full mobile banking. There are many examples of success using this law (Southwest Airlines, Cirque de Soleil etc.).

3. The Law of the Mind – It’s better to be first in the mind than first in the marketplace.

This law was already discussed earlier in the article. Being first on the market does not give you any advantage. Become first in the mind, so you can benefit.

Source: Consumers Mind 2008 by Christopher Dombres

4. The Law of Perception – Marketing is not a battle of products, but a battle of perceptions.

Sometimes we tend to think that we are rational and when shopping, we take into consideration all rational arguments. But it is not true at all. How we perceive products is not deeply connected with their specification.

Every time the new iPhone is revealed, there is a mass of haters discussing the features it lacks and how bad is it comparing to Samsung/HTC/etc. Is is true? Well, if you compare just the chosen specs and features – probably yes. Does it matter for buyers?Absolutely not. Have you seen the queues before Apple Stores?

Source: http://fortune.com/2012/01/12/thousands-of-chinese-queue-up-in-the-cold-for-the-iphone-4s/

5. The Law of Focus – The most powerful concept in marketing is owning a word in the prospect’s mind.

While I generally agree with this law, and you can find plenty of examples (Coca-Cola: happiness, Volvo: safety, Harley-Davidson: freedom etc.), there is a think that we need to remember.

Consistency. Coherence. Budget. This trio is essential if you want to own such a space in consumer mind. It is not about the best and most powerful concepts.

It is about repeating the same message millions of times and being extremely coherent. Not changing communication platform every year, not finding new idea every campaign. You can be creative in your ads, but they all need to be the same in the meaning that when customer sees your ad, he must be aware what brand it is, even when you scratch out the logo.

6. The Law of Exclusivity – Two companies cannot own the same word in the prospect’s mind.

Sometimes the brand comes very powerful, so strong that it becomes a word. Did you google anything lately? Did you notice people calling their phones iPhone? Do you call your training shoes adidas (relevant in Poland)?

But even if the brand is not that strong, they tend to focus on some features, benefits – words that describe them. The “safety” from Volvo (years ago as Volvo has changed their strategy and stopped advertising safety), or durability from Duracell. Their competitors tried to use the same association and failed miserably.

7. The Law of the Ladder – The strategy to use depends on which rung you occupy on the ladder

In general, a number two company should use different strategy than number oneor three. Ries and Trout give a perfect example of Avis, which being for long time No. 2 has created strong positioning with claim “We try harder” and underlining their position.

The number 2, 3, 4 etc. company should not concentrate on promoting the category, as the leader will benefit from the market increase. During last ten years we have seen many challenger strategies that worked really well.

8. The Law of Duality – In the long run, every market becomes a two-horse race

Source: http://z-magistrem-przez-publike.blog.onet.pl/files/2015/07/Divided_by_escapism.jpg

McDonald & Burger King. Coca-Cola & Pepsi. Apple & Samsung. Microsoft & Apple.

While it is very difficult to be the second, it is much worse to be the third. In marketing, being third seems like being 4th on the Olympic Games – close to the medal, but nobody will remember it soon.

There will be some categories, where the law does not apply. Either due to the regulations or natural monopoly. Some markets are characterized by the long tail and a massive number of small companies. But for most there is just the two. Snickers or Mars for you?

9. The Law of the Opposite – If you are shooting for second place, your strategy is determined by the leader

The law no. 9 is another way of saying that when you are not the leader in a category, you should never follow their strategy. They will do it better, with higher budget and you will end up driving their sales not yours.

Your strategy will be determined on the leader and should be different. Different in terms of positioning – to be able to reach customer perception other way than the leader does. Try to escape the category and create a new one in customer perception. Or position yourself against the leader. Think different.

10. The Law of Division – Over time, a category will divide and become two or more categories

Categories tend to split when time passes. A perfect example from the past will be computers. While it started with just computers, with time we could notice division into personal computers, servers, laptops, netbooks, workstations etc. Today we can differentiate a ton of categories such as for example gaming PC, gaming laptop, ultrabook, etc.

Different market, same story – cars. When first cars were sold, there was just one category. Today we see luxury cars, sport cars, luxury sport cars, vans, SUVs, pick-ups, hatchbacks, etc.

What is crucial for company is noticing the division of category and addressing properly needs of the customer. Sometimes, this requires establishing new brands (as Honda did with Acura to go up-market), sometimes just the new series of products(Dell Alienware for gaming, or Asus Republic of Gamers), but it is important to catch the momentum.

11. The Law of Perspective – Marketing effects take place over an extended period of time

Marketing effects require time. A very often mistake is sacrificing long-term planning with quick wins – actions that improve sales in short term. A perfect example would be sale – which in short term can bring more profits but in long – teaches consumers not to buy for regular price. This can be seen especially on women clothing market. Today, most clothing companies can’t sell a thing for a regular price.

Source: http://www.jcdecaux.com/blog/outdoor-advertising-effectiveness-long-short-term-strategies

Building a brand does not take one day. You can ruin it in a moment but not build. This process requires budget and time to work for sales. Increase in customer perception (and therefore in sales) does not happen instantly, and should not be evaluated in a short-term.

12. The Law of the Line Extension – There’s an irresistible pressure to extend the equity of the brand

Ries and Trout believe that extending the brand is a bad strategy. They have used the case of Microsoft in their book as an example of bad strategy and forecasted that the company will go weak due to it. Well, they did not succeed on this one.

While I can agree that in many situations, when entering new category, it is beneficial to build new brand and not to extend one you have (when brand is about everything it is about nothing), the choice is much more complex.

TBC

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