This is a summary of ideas from the book The 22 Immutable Laws of Marketing by Al Ries and Jack Trout. Text in normal is my paraphrasing of what the book says. Text in italic represents my personal comments. And remember: this is just a short summary and is not meant to replace the book, nothing beats reading the real thing. The book is short, buy and read it.
Being first in the market is better than having a better product than a competition. Examples: we all remember who first flew over Atlantic or who was the first man on the moon but almost no-one knows who was the second. Heineken was the first imported beer in USA and still is No. 1 imported beer. Same for Miller Lite, first domestic light beer. Being first doesn't matter if the idea/product is not good.
I think it's better to say that being first gives one extremely big advantage over competition but doesn't guarantee the success. It's rather obvious that it doesn't matter that you're first to market if no-one needs your product or if your product is very bad. There are many examples from computer industry that disapprove this rule (i.e. first spreadsheet isn't the dominant spreadsheet, first word processor isn't the dominant word processor) so there are (many) cases showing that n-th product can overtake early leaders. But it's very hard and usually requires the leader to make huge mistakes.
Given that it's very hard to gain leadership in a category where competition already exists, it's better to create a product in new category than trying to attack existing categories. Category doesn't have to be radically different, e.g. if there's dominant player in imported beer, one can become the first to import light beer. If one can't be the first to fly over Atlantic, one can still be the first woman to fly over Atlantic.
It's not important to be the first in the market but the first in the mind of consumers.
Marketing is not about products (their features or quality) but about perceptions (how people perceive products). Reality doesn't exists, what we call "reality" is just a perception of reality that we create in our minds. Honda is a leading Japanese car manufacturer in US but only third in Japan (after Toyota and Nissan). If the quality of the car was the most important thing it should have the same position in all markets. In Japan, however, people perceive Honda as a manufacturer of motorcycles.
Therefore what's important is that marketing should be focused on changing the perception.
I have mixed feelings about this law. I fully accept the premise (that perceptions is our reality). However our perception is mostly grounded in objective reality. After all if it's raining not many people will maintain the perception that it's wonderfully sunny day. Therefore one way of changing the perception is to change the reality (e.g. improve the quality of your cars). Maybe having the desired reality is not enough to achieve desired perception but it's hard to argue that you can create any perception you want regardless of reality. If your car breaks down every 10 miles no amount of marketing will convince people that it has high quality.
"The most powerful concept in marketing is owning a word in the prospect's mind". Owning in this context means that if people hear or see this word they usually connect it with a company that "owns" this word. IBM owns "computer". FedEx owns "overnight". You can't take somebody else's word
I can't help but to think that this book has overly simplified thinking. Being simple is good but not when the reality is more complex. First this law seems to be derived from mega-corporation. The problem is that there aren't that many companies that are big enough to own a word in people's consciousness. Therefore the advice is only possibly relevant to a few people who design marketing campaigns for those behemoths but useless for all small business. There aren't even enough words to own to satisfy 10% of business in US.
It's fruitless to try to take over a word that is already owned by a competitor. Burger King tried to own word "fast" which was already owned by McDonald; and failed miserably. FedEx tried to take over "worldwide" from DHL.
This talk about "owning" words is a bit silly. The book doesn't say anything about how to actually own the word. I guess you're supposed to use it in your marketing/advertisement material but such statement is not very helpful for a marketer (I think; I'm not one).
Marketing strategy depends on your position in the market. If you're No. 2 you use different strategy than when you're No. 1 or 3. Avis was No. 2 in car rental and when they advertised as "finest in rent-a-cars" the had losses because their marketing wasn't credible (you can't be "finest" being No. 2). That had profit when they switched to "Avis is only No. 2 in rent-a-cars. So why go with us? We try harder". Then they had another disastrous campaign when they started claiming "Avis is going to be No. 1".
I agree with the premise (kind of marketing depends on your position in the market). However the book says very little about what kind of strategy one should use in a given position (except for a few examples). Additionally their examples feel like they oversimplify complex reality. Even assuming that the data about e.g. Avis is fully correct (i.e. that there is strong correlation between Avis profits and the kind of marketing campaign) I find it hardly unlikely that there's a causality relationship. I don't think that good or bad marketing campaign can make or break a company. I can see how this point of view can be attractive for marketing people but I would think that success depends on more factors. Marketing might be an important factor but certainly not dominant.
In the long run, every market becomes a two-horse race. McDonald & Burger King. Coca-Cola & Pepsi. Nike & Reebok. Crest & Colgate.
Even if that was universally true, how does it help a marketing person? There's little a marketing person can do about the position of his company in the market. The only conclusion I can make is that if I were a marketing person and worked for No. 3 company, I should just quit and apply for a job in No. 2 or 1.
The other problem is that it isn't universally true and the book again makes a big simplification of reality and it tries to support this simplified picture with selectively chosen examples. There are market where 2 brands can't fulfill all the demand (there are more than 2 well-known car manufacturers). There are markets that tend to fall into monopoly (e.g. Microsoft has 95% of operating system and office software markets). I'm sure there are many markets that are two-horse race, but then again there are also three-horse race markets as well as highly fragmented markets. This "law" is nothing but a sometimes true observation and it's not true frequently enough to be worth anything.
If you're shooting for second place, your strategy is determined by the leader. Leverage the leader's strength into a weakness. Don't try to be better than the leader, try to be different. E.g. Pepsi marketed itself as a "choice for the new generation" when faced with Coca-cola's "old and established" brand.
Sounds correct although doesn't apply to those who do have ambitions to overtake the leader in exactly the same category (which happens e.g. Excel took over Lotus 1-2-3 by being a better spreadsheet, not a different spreadsheet).
Over time a category will divide and become two or more categories. E.g. computers started as a single category but broke up into mainframes, workstations, personal computers, laptops etc. Cars started as a single category but divided into luxury cars, sport cars, RVs, minivans etc. Companies often don't understand that and instead think that categories are combining, believe in synergy. Leader can maintain dominance by addressing emerging categories with new brand names instead of using brand name successful in one category in a new category. E.g. when Honda wanted to go up-market it created a new brand, Acura.
Marketing effects take place over an extended period of time. It's a mistake to sacrifice long-term planning with actions to improve short-term balance sheet. E.g. sales increase short-term profits but in long-term educates people not to buy for regular price, therefore decreasing long-term profits.
There's an irresistible pressure to extend the equity of the brand and it's a mistake. Instead one should create new brands to address new markets/products.
Here authors predict (in 1993) that Microsoft will fail because the they use this unhealthy strategy of extending their brand to new products. 9 years later and Microsoft is still going strong. Looks like the law doesn't hold universally.
You have to give up something in order to get something. There are three things to sacrifice:
For every attribute, there is an opposite, effective attribute. You can own the same word as the competition. You have to find another word to own, another attribute.
When you admit a negative, the prospect will give you a positive. Candor is disarming. It's ok to admit, as Avis did, that "Avis is only No. 2 in rent-a-cars".
In each situation, only one move will produce substantial results. People tend to think that success is the result of a lot of small efforts well executed, that working harder is a way to success. In marketing only thing that works is a single, bold stroke.
Unless you write your competitors' plans, you can't predict the future. You don't know the future, you don't know what your competition will do so you have to build your company and marketing strategies to be flexible, to be able to quickly respond to changing situation.
Success often leads to arrogance, and arrogance to failure. Don't be arrogant, drop the ego, be objective.
Failure is to be expected and accepted. Drop things that don't work instead of trying to fix them. Don't punish for failures (if you do people will stop taking risks).
The situation is often the opposite of the way it appears in the press. The amount of hype isn't proportional to success, often failed products are heavily hyped.
Successful programs are not built on fads but on trends.
Without adequate funding an idea won't get off the ground. You need a lot of money to market your ideas.
One one hand you can read it as a "don't fool yourself" advice. On the other hand authors promote indiscriminate spending of money of advertising without any mention of the fact that sometimes advertisement doesn't pay. It seems obvious that you should never spend more on marketing that you can hope to get out of it in later revenues, yet the books never says that. It just asserts that you need to spend a lot on marketing which is a suspicious advice coming from people who do marketing.
How one should judge a book on marketing? If the book gives information that allows you to do better marketing, then it's a good marketing book.
In my opinion "The 22 Immutable Laws Of Marketing" fails in that respect. Their examples that illustrate the laws are taken from the relatively small pool of the biggest companies in the world. It's not evident that the same rules apply to small (or medium) businesses.
The advice is frequently not helpful, e.g. "make sure your program deals realistically with your position on the ladder". Well, thanks guys, but how exactly?
A very frequent flaw of this book is its use of selected examples to illustrate their laws. If I can choose my examples I can make any laws I want - there will always be an example that support my "law" (the problem is that there might be 100 counter-examples that I won't mention). I can understand that providing counter-examples isn't something that authors were interested in, that a rule that is only correct in 80% of the cases is still a very useful rule, that not talking about every possibility can improve the clarity of exposition ("A little inaccuracy can save tons of explanation") but I got the impression that author's way of choosing examples was based on "whatever seems to confirm what we say" principle.
And never forget:
Marketing is the science of convincing us that What You Get Is What You Want. -- John Carter