• Most managers believe the basic issue in marketing is convincing a prospective customer that you have a better product or service. Not true.
• The basic issue in marketing is creating a new category you can be first in.
Introduction
Who’s really best? Who has the best rent-a-car service? The best cola? The best ketchup? If you are thinking Hertz, Coca-Cola, and Heinz, you agree with most customers who make these three companies the leaders in their fields. In fact, there is a strong axiom, or belief, in the minds of consumers that ‘the best product or service wins in the marketplace’. After all, this is so logical and so obvious, who could disagree?
We could.
There’s a paradox in marketing. While everyone believes that the better product will win in the marketplace, the worst possible strategy for any company is to try to produce a ‘better product’. Why? Because the leader in your field already has the perception of producing the better product. If you try to claim that your product is better, the prospect thinks, ‘No, it can’t be better, otherwise they would be the leader’. Yet what do most companies try to do? They try to: (a) produce a better product, and (b) communicate that difference to customers and prospects. It’s easy to do (a) but it’s almost impossible to do (b). Is Royal Crown Cola better tasting than Coca-Cola? Royal Crown thinks so, and their research shows that prospects prefer the taste of Royal Crown to Coca-Cola Classic by 57% to 43%. That’s a pretty big difference. Yet Royal Crown Cola has only 2% of the market. What they need to do, you might be thinking, is to communicate that difference. Well, they’ve tried, and it doesn’t work; prospects too easily conclude: ‘If Royal Crown was the better tasting cola, they would be the leader, not Coke. There must be something wrong with the research’.
What’s Important: Who’s First?
It’s our experience that 90+% of all marketing exercises are based on communicating the essence of the better product or service. Unless you are already the leader, these exercises are bound to fail because the prospect assumes that the leader must have the better product or service. But how did the leader achieve its leadership? Not by introducing a better product or service; invariably the leader in the category got to be the leader by being the first brand in the category. Companies such as Coca-Cola, CNN, Dell, Hoover, Pizza Hut, Rolex, and Xerox are all globally recognised as leaders in their respective fields.
How to Start?
Before you launch (or relaunch) a new product or service, ask yourself the following questions:
• What is the name of the category? Not a name that you might like, but a name the industry gives the category.
• What is the brand name of the leader in the category? Not necessarily the sales leader, but the brand that customers perceive to be the leader.
• If there is no dominant brand, or at least not a dominant brand in the mind of most prospects, jump right in with your product or service and try to quickly establish your leadership. Cut prices, cut deals, hire sales people, launch massive publicity campaigns, do everything you can to seize the leadership position before someone else does.
• Promote your brand as the leading brand. ‘It’s so easy to use’, says AOL, ‘no wonder it’s number one’. Leave no piece of marketing material or website or TV advertisement or radio commercial without mentioning your leadership. Leadership is the most important aspect of any marketing campaign. Why? Prospects assume the better product or service will win in the marketplace. Therefore, if you are the leader, you must have the better product.
• If there is a dominant brand, then move on and set up a new category you can be first in. But make sure you have a new name to match the new category. You can get in serious trouble if you try to use an existing name.
• You can’t dictate the category name. Only the industry and the media can do that. Therefore you have to launch your new brand with publicity and get the media to establish the category name for you.
About Al Ries & Laura Ries
Al Ries and Laura Ries are a father and daughter team. Al is chairman and Laura is president of Ries & Ries, a marketing strategy firm located in Roswell, Georgia, which they founded in 1994. The company now has affiliates around the world
(www.ries.com).
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