The 22 immutable laws of marketing pdf free download

Yoffa adapts classic marketing strategies from automobiles and breakfast cereals to the unique challenges of the Indie Author in the Digital Publishing Industry. In this business essential for the self-publishing professional, Indie Authors will learn the hands-on marketing strategies they never teach you in a creative writing course.

Choose to read the signs or ignore them at your own risk. World-renowned marketing guru AI Ries and his daughter and business partner Laura Ries examine brand-blazing strategies from the world's best, including Coca-Cola, Xerox, BMW, Federal Express and Starbucks, to provide you with the expert insight you need to build a world-class brand. But times have changed. Competition is fiercer.

Consumers are savvier. Communications are faster. And once-successful companies are in crisis mode. If the universe exists, it exists inside your own mind and the minds of others.

Marketing is a manipulation of those per- ceptions. All the laws in this book are derived from the exact opposite point of view. Which is why the natural, logical way to market a product is invariably wrong. Only by studying how perceptions are formed in the mind and focusing your marketing programs on those perceptions can you overcome your basically incorrect marketing instincts. If there is objective truth out there, how would we know it? Who would measure it?

Who would tell us? It could only be another person looking at the same scene through a different pair of eye-windows. And who is the expert? If truth is so illusive, why is there so much discus- sion in marketing about the so-called facts? Why are so many marketing decisions based on factual compar- isons? Why do so many marketing people assume that truth is on their side, that their job is to use truth as a weapon to correct the misperceptions that exist in the mind of the prospect?

Marketing people focus on facts because they believe in objective reality. Minds of customers or prospects are very difficult to change. With a modicum of experience in a product category, a consumer assumes that he or she is right. A perception that exists in the mind is often interpreted as a universal truth. People are seldom, if ever, wrong. At least in their own minds. For example, the three largest-selling Japanese import- ed cars in America are Honda, Toyota, and Nissan.

Most marketing people think the battle between the three brands is based on quality, styling, horsepower, and price. Marketing is a battle of perceptions. Japanese automobile manufacturers sell the same cars in the United States as they do in Japan. If mar- keting were a battle of products, you would think the same sales order would hold true for both countries.

After all, the same quality, the same styling, the same horsepower, and roughly the same prices hold true for Japan as they do for the United States.

But in Japan, Honda is nowhere near the leader. There, Honda is in third place, behind Toyota and Nissan. Toyota sells more than four times as many automobiles in Japan as Honda does.

How about an opposite situation? Would Harley- Davidson be successful if it launched a Harley- Davidson automobile? You might think it would depend on the car. Quality, styling, horsepower, pric- ing. You might even believe the Harley-Davidson rep- utation for quality would be a plus. We think not. Its perception as a motorcycle company would undermine a Harley-Davidson car—no matter how good the prod- uct chapter The Law of Line Extension.

Why is Heinz soup No. Marketing is a battle of perceptions, not products. Marketing is the process of dealing with those perceptions. Some soft-drink executives believe that marketing is a battle of taste. Well, New Coke is No. But who is winning the marketing battle? The drink that research has proven to taste the best, New Coke, is in third place.

The one that research shows tastes the worst, Coca-Cola Classic, is in first place. You believe what you want to believe. You taste what you want to taste. Soft-drink marketing is a bat- tle of perceptions, not a battle of taste. Everybody knows that the Japanese make higher- quality cars than the Americans do. So people make buying decisions based on the fact that everybody knows the Japanese make higher-quality cars.

And, more often than not, their own experi- ence is often twisted to conform to their perceptions. It is unlikely. Every sin- gle automobile expert who has tested the car has failed to duplicate the complaint. Yet the perception lingers on. Do you believe that? Probably not. Is it true? Does it matter? Marketing is not a battle of products. Not a complicated word. Not an invented one.

The simple words are best, words taken right out of the dictionary. This is the law of focus. Federal Express was able to put the word overnight into the minds of its prospects because it sacrificed its product line and focused on overnight package deliv- ery only.

The leader owns the word that stands for the cat- egory. For example, IBM owns computer. This is another way of saying that the brand becomes a generic name for the category. You can also test the validity of a leadership claim by a word association test. Heinz owns the word ketchup. But Heinz went on to isolate the most important ketchup attrib- ute.

Owning the word slow helps Heinz maintain a 50 percent market share. No one else can have a lock on it. Prego went against leader Ragu in the spaghet- ti sauce market and captured a 27 percent share with an idea borrowed from Heinz. The most effective words are simple and benefit oriented. If you strongly estab- lish one benefit, the prospect is likely to give you a lot of other benefits, too. They can be ben- efit related cavity prevention , service related home delivery , audience related younger people , or sales related preferred brand.

There comes a time when a company must change words. The recent history of Lotus Development Corporation demonstrates the nature of the problem. For a number of years, Lotus has owned the word spreadsheet. Lotus was synonymous with and spreadsheet. But the world of spreadsheets is getting competitive, and the potential for growth is limited.

Like other companies, Lotus wants to grow. How is the company to get beyond its single-product business? The conventional answer is to expand in all direc- tions, as IBM and Microsoft did. As a matter of fact, Lotus did some conventional line extension with the purchase of Ami Pro word processing software and the introduction of a number of new software products.

If things work out, the company will eventually own a second word in the minds of its prospects. Unlike Microsoft, Lotus now has a corporate focus. What overnight did for Federal Express and safety did for Volvo, groupware could do for Lotus Development Corporation. What makes the Lotus strategy plausible is that the groupware word is not owned by any other company. Furthermore, there is an enormous industry trend toward networked computers.

More than half of all business computers are connected to a network. This was the case with Atari, which owned the words video game. But the business turned out to be faddish, so in it sailed off in a new direction. It wanted Atari to mean computers. It is synonymous with video games. Atari must redefine its image and broaden its business definition to electronic consumer products.

But the real irony was in that another company arrived in and took over the concept Atari walked away from. The company was Nintendo, which today has 75 percent of a multibillion-dollar market. Who knows where Atari is these days? The essence of marketing is narrowing the focus. You become stronger when you reduce the scope of your operations. Some companies accept the need to narrow the focus and try to accomplish this strategy in ways that are self- defeating.

General Motors tries to sell quality at all price lev- els. The same thing. This is great stuff inside the corporation. Total qual- ity, the path to greatness. But outside the corporation, the message falls apart. No, everybody stands for quality. As a result, nobody does. You can, however, position yourself as the pro-business candidate or the pro-labor candidate and be instantly accepted as such because there is support for the other side.

When you develop your word to focus on, be pre- pared to fend off the lawyers. They want to trademark everything you publish. The trick is to get others to use your word. To be a leader you have to have followers.

It would be helpful for Lotus to have other companies get into the groupware business. Once you have your word, you have to go out of your way to protect it in the marketplace. The case of BMW illustrates this very well.

Then the company decided to broaden its product line and chase Mercedes-Benz with large, series sedans. The problem is, how can a liv- ing room on wheels be the ultimate driving machine?

The compa- ny has regained its focus. Like drugs, for example. The antidrug crusade on television and in magazines suffers from a lack of focus. There is no one word driven into the minds of drug users that could begin to unsell the drug concept.

Antidrug advertising is all over the map. Both sides of the abortion issue have focused on single, powerful words—pro-life and pro-choice. The antidrug forces should do the same—focus on a single powerful word. What the campaign ought to do is make drugs what cigarettes are today, socially unacceptable. One word that could do this is the ulti- mate down word, loser.

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.

The Atari story shows the futility of attempting to move in on the home computer position against well- entrenched competitors. A variation called game com- puter might have been possible because it would have taken advantage of the perception of Atari as a creator of computer games.

The home com- puter position belonged to Apple, Commodore, and others. Despite the disaster stories, many companies con- tinue to violate the law of exclusivity. Federal Express has walked away from overnight and is in the middle of trying to take worldwide away from DHL.

Its concept: Faster to more of the world. No matter how many bunnies Eveready throws into the fray, Duracell will still be able to hang onto the long- lasting word. Duracell got into the mind first and pre- empted the concept.

Even the Dura part of the name communicates it. What often leads marketers down this booby- trapped lane is that wonderful stuff called research. Armies of researchers are employed, focus groups conducted, questionnaires tabulated—and what comes back in a three-pound report is a wish list of attributes that users want from a product or service.

They go dead at the most inconvenient times. Long-lasting, of course. What researchers never tell you is that some other company already owns the idea. The theory is that if you spend enough money, you can own the idea. Some years ago Burger King started down this slip- pery slope from which it has never quite recovered.

So Burger King did what most red-blooded marketers do. Many people have paid the price for violating the law of exclusivity. There are strategies to use for No. All products are not created equal. 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.

Your marketing strategy should depend on how soon you got into the mind and consequently which rung of the ladder you occupy. The higher the better, of course. Take Avis, for example. For years the company advertised the high quality of its rent-a-car service.

Then 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. So why go with us? We try harder. Then, when it admitted to being No. And to make the point, many picked up the phone and called Hertz. The cam- paign was a disaster. Many marketing people have misread the Avis story. They assume the company was successful because it tried harder i. Avis was successful because it related itself to the position of Hertz in the mind.

If trying harder were the secret of success, Harold Stassen would have been president many times over. Many marketers make the same mistake as Avis did. Wait a minute, says the high school senior, Adelphi is not on my college ladder. As you might expect, Adelphi is not very successful in attracting the top students. The mind is selective. Prospects use their ladders in deciding which information to accept and which infor- mation to reject.

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 Plymouths and Dodges. Until we saw the results. The majority 58 out of chose the used Dodge. But not necessarily untrue. How many rungs are there on your ladder? It depends on whether your product is a high-interest or a low-interest product. Products you use every day cigarettes, cola, beer, toothpaste, cereal tend to be high-interest products with many rungs on their lad- ders.

Products that are purchased infrequently furni- ture, lawn mowers, luggage usually have few rungs on their ladders. Products that involve a great deal of personal pride automobiles, watches, cameras are also high-interest products with many rungs on their ladders even though they are purchased infrequently. Products that are purchased infrequently and involve an unpleasant experience usually have very few rungs on their ladders.

Automobile batteries, tires, and life insurance are three examples. The, ultimate product that involves the least amount of pleasure and is purchased once in a lifetime has no rungs on its ladder. Ever hear of Batesville caskets? Probably not, although the brand has almost 50 per- cent of the market. You tend to have twice the market share of the brand below you and half the market share of the brand above you. Infiniti was third. In a recent year, Acura sold , cars in the United States, Lexus sold 71, cars, and Infiniti sold 34, The relationship among the three brands is almost a math- ematically correct In the long run, when the products are no longer excit- ing, another phenomenon occurs.

See the next chapter: The Law of Duality. It almost never is. The leader inevitably domi- nates the No. Ask someone to name all the brands he or she remem- bers in a given category. Rarely will anyone name more than seven. According to Harvard psychologist Dr. George A. Miller, the average human mind cannot deal with more than seven units at a time.

Which is why seven is a popular number for lists that have to be remem- bered. Sometimes your own ladder, or category, is too small. It might be better to be a small fish in a big pond than to be a big fish in a small pond. The top rung of the lemon-lime soda ladder was occupied by 7-Up. Sprite was on the second rung. In the soft-drink field, however, the cola ladder is much bigger than the lemon-lime ladder. Almost two out of three soft drinks consumed in America are cola drinks. And 7-Up sales climbed to where the brand was the third largest-selling soft drink in America.

Unfortunately, in recent years 7-Up lost its grip on third place by violating one of the laws yet to be dis- cussed chapter The Law of Line Extension. The ladder is a simple, but powerful, analogy that can help you deal with the critical issues in marketing. On the top rung? On the second rung?

Then make sure your program deals realistically with your position on the ladder. More on how to do this later. Gradually, the ladder becomes a two-rung affair. When you take the long view of marketing, you find the battle usually winds up as a titanic struggle between two major players—usually the old reliable brand and the upstart.

Back in , there were three major brands of a certain product. The leader had about 60 percent of the market, the No. The rest of the market included either private label or minor brands. The law of duality suggests that these mar- ket shares are unstable. Furthermore, the law pre- dicts that the leader will lose market share and No. Twenty-two years later, the leader dropped down to 45 percent of the market.

The No. The products are Coca- Cola, Pepsi-Cola, and Royal Crown cola, respectively, but the principles apply to brands everywhere. Look at the three long-distance telephone compa- nies. Who will win and who will lose in the telephone wars?

Sprint is probably feeling very comfortable on the third rung of the ladder. And the market has been growing rapidly. For the long term, however, Sprint is in serious trou- ble. Look what happened to Royal Crown cola. Back in , the Royal Crown company revitalized its fran- chise system, bottlers strong, and hired the former president of Rival Pet Foods and a veteran of both Coke and Pepsi.

In a maturing industry, third place is a difficult position to be in. Take the domestic automobile industry. In spite of heroic measures undertaken by Lee Iacocca, Chrysler is in trouble. In the long run, marketing is a two-car race.

Take video games. In the late eighties, the market was dominated by Nintendo with a 75 percent share. The two also-rans were Sega and NEC.

In the long run, marketing is a two-game race. Time frames, however, can vary. The fast-moving video game market played itself out in two or three seasons. The long-distance telephone market might take two or three decades. Take the airline industry. American Airlines, with 20 percent of the market, got its nose out in front and will probably wind up as the Coca-Cola of the skies. The interesting battle is between Delta and United, tied at 18 percent apiece.

One of these two will take off like Pepsi—the other is headed down with Royal Crown. In the long run, marketing is a two-airline race. Are these results preordained? From the Law of Leadership, to The Law of the Category, to The Law of the Mind, these valuable insights stand the test of time and present a clear path to successful products. Violate them at your own risk. And branding greatly facilitates this process. From the Law of Leadership, to The Law of the Category, to The Law of the Mind, these valuable insights stand the test of time and present a clear path to successful products.

Violate them at your own risk. What Is Marketing and Sales?