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.
‘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.
‘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.
‘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.
‘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 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.
‘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.
‘The strategy you use depends on which rung you occupy on the ladder’ – If you are second in a category, work with the consumers’ ingrained opinion.
‘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.
‘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.
‘Over time, a category will divide and become two or more categories’ – As time passes, bigger 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.
Drive the Market before It Drives You
Some companies have developed radical innovations to move ahead. The Body Shop,
CNN, Starbucks and Swatch are “market-driving” rather than “market-driven” companies.
Market-driving companies create new value propositions by offering unique value networks and new benefits at lower prices. For example, Ikea offers sleek Scandinavian furniture, variety and good value in a pleasant atmosphere. Its value network incorporates interchangeable parts, in-house design, high-volume manufacturing, computerized logistics and appealing displays. Customers pick up and assemble their own merchandise, keeping costs low.
Market-driving companies have these common characteristics, which set them apart from traditional companies:
• They rely on vision rather than market research.
• They attract customers from a variety of market segments. For example, Swatch sells low-cost, high-fashion watches.
• They create new, lower price points for quality and service, and educate their customers about the value of their offerings.
• They develop new channels and logistics. FedEx uses its own planes in a “hub and spoke” configuration, while Benetton knits its products before dyeing them so it can respond more quickly to customer color demands.
• They grow through positive customer word-of-mouth.
