Here's a summary from Al Ries & Jack Trout's book titled, 22 Immutable Laws of Marketing. Hope you find it interesting reading.
1. The Law of Leadership – It's better to be first than it is to be better.
- Example – Charles Lindbergh – first to fly the Atlantic Ocean solo. Bert Hinkler – second to fly the Atlantic Ocean solo, flew faster, consumed less fuel, was a better pilot, but is forgotten today.
- The leading brand in any category is almost always the first brand in the prospect's mind. eg. Hertz, Coca-Cola, IBM. It often becomes generic (eg. Xerox, Kleenex, Band-Aid, Gore-Tex, Velcro)
- Sales of follow-up brands often match the order of their introductions.
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.
- Example – Amelia Earhart – third to fly the Atlantic Ocean solo, but first woman. Cray Research – first supercomputers. Charles Schwab – first discount broker.
- When launching a new product – ask what category is this new product first in?
3. The Law of the Mind – It's better to be first in the mind than to be first in the marketplace.
- Example – Remington Rand was the first to marketplace with the mainframe computer but IBM was first in the prospect's mind.
- You can't change a mind once it is made up. eg. Xerox was first in copiers, and tried to get into the computer business unsuccessfully.
4. The Law of Perception – Marketing is not a battle of products, it's a battle of perceptions.
- Example – In America, the leading 3 Japanese cars are Honda, Toyota and Nissan. All are perceived as car makers. In Japan, it's Toyota, Nissan and Honda. In Japan, Honda means motorcycles, and people don't want to buy a car from a motorcycle company.
- A perception that exists in the mind is often interpreted as a universal truth. eg. People think that Japanese cars are higher quality than American cars. It's the “everybody knows” principle.
- Marketing is a battle of perceptions, not products. Taste tests show that Pepsi tastes better than Coke, but Coke is the leader.
5. The Law of Focus – The most powerful concept in marketing is owning a word in the prospect's mind.
- Example – FedEx owns “overnight”. Xerox owns “photocopier”. Coke owns “cola”. Burn your way into the mind by narrowing the focus to a single word or concept. The most effective words are simple and benefit oriented.
- You must protect your word in the marketplace. eg. BMW – ultimate “driving” machine. When BMW broadened its product line and chased Mercedes-Benz with the 700 series, sales went down. They've since refocused on “driving”.
6. The Law of Exclusivity – Two companies cannot own the same word in the prospect's mind.
- Example – Volvo owns “safety”, and other car manufacturers haven't succeeded in getting into the prospect's mind on safety.
7. The Law of the Ladder – The strategy to use depends on which rung you occupy on the ladder.
- Relationship between market share and position on ladder: you have twice the share of the brand below you and half the share of the brand above you.
- Your strategy depends on your position. eg. Avis is No. 2 in rent-a-cars. The campaign of “Finest in rent-acars” lost money. When they admitted they were only No. 2 “Avis is only No. 2 in rent-a-cars. So why go with us? We try harder.” they made lots of money!
- There's a maximum of about seven rungs on the ladder – the average human can't deal with more than seven things at a time.
8. The Law of Duality – In the long run, every market becomes a two-horse race.
- Marketing usually ends up being a battle between two major players – the old reliable and the young upstart. Example – in 1969, Coca-Cola had 60% share, Pepsi-Cola had 25% share and Royal Crown cola had 6% share. In 1991, Coca-cola has 45%, Pepsi-Cola has 40% and Royal Crown has 3%.
- Knowing that marketing is a two-horse race in the long term can help short term strategies, when there is no clear #2.
9. The Law of the Opposite – In shooting for second place, your strategy is determined by the leader.
- Discover the essence of the leader, and present the prospect with the opposite. Don't try to be better, try to be different. Example – Coca-Cola is an old established product. Pepsi-Cola is the choice of a new generation.
- There are two types of people – one who buy from the leader, and those who don't want to buy from the leader. A potential #2 appeals to the latter.
- By positioning yourself against the leader, you take business away from all the other alternatives to #1. Don't try to emulate the leader – be an alternative!
10. The Law of Division – Over time, a category will divide and become two or more categories.
- Example – “Computers” becomes mainframes, minicomputers, workstations, personal computers, laptops, etc. “Cars” becomes full size, intermediate, compact, sports cars, 4WD, SUVs. “Beer” becomes imported, domestic, premium, light, draft, dry.
- The way for the leader to maintain its dominance is to address each emerging category with a different brand name. eg. GM with Chevrolet, Pontiac, Oldsmobile, Buick, Cadillac.
- Don't use your well-known brand name from one category in another! eg. Volkswagen is known for its Beetle (small car, and had 67%), and started to sell bigger sportier cars. Now its share is down to 4% in small cars, and it's nowhere in larger cars.
- You can be too early to exploit a new category, but it's better to be early than late.
11. The Law of Perspective – Marketing effects take place over an extended period of time.
- Long term effects are often the opposite of short term effects. Example – discount sales increase business in the short term, but it tells the prospect that your regular prices are too high so it kills long term sales. Prospects only buy when things are on sales.
- Line extension can increase short term sales, but have a bad long term effect.
12. The Law of Line Extension – There's an irresistible pressure to extend the equity of the brand.
- Line Extension is the most frequently violated law – taking a single highly profitable product and diluting focus and spreading thin over many products. eg. Taking a brand name of a successful product and putting it on a new product you plan to introduce.
- The leader in any category is a brand that is not line extended. You have to have a narrow focus to build a position in the prospect's mind.
13. The Law of Sacrifice – You have to give up something in order to get something.
- There are 3 things to sacrifice – product line, target market and consistent change. eg. Emery Air Freight – did small, large, overnight, delayed services. FedEx – small packages overnight. Via sacrifice, FedEx managed to put the word “overnight” into the mind of the prospect.
- Product Line examples – Toys R Us, Blockbuster Video – in retail, generally the big successes are specialists with a narrow focus and in-depth stock.
- Target – a wider net does not catch more customers. eg. Pepsi increased share by focusing on youth. Marlboro focused on men only and is the largest selling cigarette amongst both men and women.
- Constant change – you don't have to change your strategy every year! The best way to maintain a constant position is not to change the strategy.
14. The Law of Attributes – For every attribute, there is an opposite, effective attribute.
- Search for an opposite attribute that will allow you to play off against the leader. You must have an attribute or idea of your own to focus on. Some attributes are more important than others – find the most important! eg. Crest toothpaste, owns “Cavities” so competitors can focus on “taste”, “whitening”, “breath”, etc.
15. The Law of Candor – When you admit a negative, the prospect will give you a positive.
- One of the most effective ways to get into the prospect's mind is to first admit a negative and then twist it into a positive. Since you can't change a mind once it's made up, focus on using ideas and concepts already installed in the brain. eg. The 1970 VW will stay ugly longer. Avis is only No. 2 in rent-a-cars. Listerine – the taste you hate twice a day.
- This requires skill. Your negative must be widely perceived as a negative and trigger instant agreement, and you must quickly shift to the positive.
16. The Law of Singularity – In each situation, only one move will produce substantial results.
- Most often there is only one place where a competitor is vulnerable – focus on this!
17. The Law of Unpredictability – Unless you write your competitors' plans, you can't predict the future.
- Failure to forecast competitive reaction is a major reason for marketing failures.
- Good short term planning is coming up with that angle or word that differentiates your product or company. Then you set up a coherent long-term marketing direction that builds a program to maximize that idea or angle.
- You can cope with unpredictability by looking for trends – eg. the trend towards good health has seen the success of Healthy Choice frozen meals. The danger with trends is extrapolation and jumping to conclusions about how far a trend will go.
- Market research can be more of a problem than a help – new ideas and concepts are almost impossible to measure. Xerox's research said that no one would pay for a plain paper copy when a thermofax copy was 3 times cheaper.
18. The Law of Success – Success often leads to arrogance, and arrogance to failure.
- When people become successful, they tend to become less objective, substituting their own judgment for what the market wants.
- Brilliant marketers have the ability to think like a prospect thinks, putting themselves in the shoes of their customers. They don't impose their own view of the world on the situation.
19. The Law of Failure – Failure is to be expected and accepted.
- Recognise a failure early and cut your losses.
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 hype. When you need hype, it usually means you're in trouble. e.g. New Coke received more than $1 billion in free publicity. Personal helicopter, USA Today, NeXt, etc.
- Real revolutions arrive in the middle of the night and sneak up on you.
21. The Law of Acceleration – Successful programs are not built on fads, they're built on trends.
- When a fad disappears the company often goes into financial shock.
- Example – Cabbage Patch Kids and the Ninja Turtle are built on a fads, Barbie is built on a trend.
- If you were faced with a rapidly rising business with all the characteristics of a fad, the best thing you could do is to dampen the fad.
22. The Law of Resources – Without adequate funding an idea won't get off the ground.
- The best idea in the world won't go very far without the money to get it off the ground. First get the idea, then get the money to exploit it.