Books : Marketing and Strategy : Marketing and Strategy Book Summaries
 Marketing Warfare - Al Ries and Jack Trout
This is the book that changed marketing forever is now updated for the new millennium
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by Al Ries and Jack Trout
Publisher: New York : McGraw-Hill
ISBN: 007052730X
This is a synopsis only. RESULTS.com recommends you buy the original book.
Marketing Warfare
War
is often used as a metaphor for business, but most authors are unaware
of military strategy and what really works. The study of warfare is a
study of how to win, and how not to lose.
The
principles of military strategy have been refined & perfected over
1000’s of years. Marketing as a discipline is less than 100 years old.
It’s not about aggressiveness and fighting. The best approach is seldom
a direct head on attack. (i.e. it is a mistake to market the benefits
of your product X vs the competitor’s Y)
Instead, ask yourself, what is most likely position to take that will undermine the competitor’s position?
Apple is good example – it stopped going head to head with Microsoft, and outflanked it by launching iPod.
Aim to be the first to offer a something in a new category
The Principle of Force
Superior numbers wins most of the time (biggest sales team, biggest marketing budget)
Quantity overcomes quality most of the time (Microsoft / Coke etc dominate over better quality products).
You don’t win with better people, product, service – you win with better strategy
You must accept customer perceptions as their reality, and focus your
marketing accordingly. The customer defines who is the leader in each
category.
You can’t change customers’ perceptions once they have been formed with
your “so-called truth” about who has the best quality product.
You don’t win with a better product, you win with better perception (positioning)
The Superiority of Defense
It is hard to take customers (territory) off a company that already occupies it
People fight harder to resist losing something they already think they have
You need to gain your own high ground (perception of leadership).
It’s easy to stay on top of the hill, hard to dislodge someone off it
Avoid entrenched competitors
Market research – don’t ask people what they want, ask how they perceive you and your competitors
Don’t try to control everything (line extensions). Spread yourself too
thin and you are liable to attack on a narrow front from a focused
competitor
The 4 key strategies
Out of 100 companies
1 = Market leader playing defense
2 = Offence – competitors being opposite of the leader
3 = Flanking
4 = Guerilla
1. Defense
Only the dominant market leader should play defense
The best strategy for dominant leaders is to attack yourself. Create
new products that make your old ones obsolete – (Gillette introduces
new razor blades every couple of years etc)
Strong competitive moves should be blocked (Shick releases Quatro =
Gillette counters with 5 blade razor). Bock them as they land on the
beaches – don’t let them get a toe hold on your territory
By retaliating quickly a large company can protect its territory from more innovative, nimble companies
Block them asap with covering products, and bring economies of scale
pricing to bear in terms of pricing. Aim to contain their growth with a
blocking product, and go back to focus on creating a new innovation to
make your old product obsolete
2. Offence
Go on the offence if you are a strong #2 or #3 brand
Be the opposite of the leader and focus your attack at that point
Find a weakness in the leader’s strength (a strength that they can’t change the market perception of easily).
Attack on as narrow a front as possible. (Don’t do line extensions)
Keep your forces concentrated. Bring the greatest number of your team into action at a focal point
Ask what word do you want to own in the customer’s mind? (one that is the opposite of the leader)
3. Flanking
Go around the competitors. Make a move into an uncontested area.
Create a new category – be the first to occupy this ground. The element of surprise is important
The pursuit is as critical as the attack – you need to pour it on once
you get a foothold – to gain the leadership perception before a large
competitor launches a “me too” defensive product
Reinforce success, abandon losers quickly. Don’t spend resources throwing good money after bad
Don’t try to be all things to all people. Keep your forces concentrated
High priced, exclusive products can outflank incumbent giants in a way
they can’t counter easily (e.g. Absolut Vodka launched at 50% higher
price than leading brand Smirnoff).
Use different packaging, distribution, price, design – compared to incumbent products
Don’t ask customers what they want – you need to be innovative and
creative, and then generate as much PR as possible (keep it secret –
use the element of surprise so incumbents are caught unable to respond
- then pour it on)
When creating a new category, don’t look at advertising Return On
Investment. In the crucial early times, you should be asking, “How much
do we need to spend to ensure victory (ownership of this new category)?”
4. Guerrilla Warfare
Most companies in the world should play guerilla warfare
Find a segment small enough to defend. Pick a segment small enough that you can become the category leader.
Become a big fish in a small pond (focus geographically / by industry / by price point – e.g. Rolls Royce)
Go narrow and deep rather than broad and shallow. You have limited forces. Focus.
Never act like the leader (never introduce line extensions etc)
Don’t be greedy – position yourself as far away from the leaders as you can
You are not trying to take customers from someone else (as per a
flanking strategy) – you are in a market all your own (Rolls Royce does
not try to line extend down market to compete with Mercedes etc)
Be contrary. Defy conventional wisdom. Do the opposite of what MBA’s recommend.
Have lean and mean operations. Limited support staff. Make quick decisions.
Jump in, jump out. Be prepared to run away to fight another day
Form alliances – band together for self preservation (Century 21 / Quality Inn)
Strategy follows tactics.
Tactics first – then strategy.
Most companies decide their strategy then look for tactics to make the strategy work
Better to find a tactic that works, then build it into a strategy
Strategy should evolve out of the mud of the market place – what works in the field, not out of some ivory tower
Be like the battlefield general - not the conference room CEO
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