Marketing Warfare -1
Written by
Al Ries and Jack Trout in 1986, Marketing Warfare has been an international
bestseller. This pair is attributed to many bestsellers including the marketing
classic, Positioning. The summary is from the 2003 Tata McGraw-Hill Edition.
The book is
spread across 16 chapters dealing with various marketing strategies drawing
parallel with the strategies used in warfare. The authors start the book by
acknowledging the role of Karl von Clausewitz, a retired Prussian general and
his book, On War written in 1832.
The summary
of the book has been divided into two parts –
·
Marketing
Warfare -1, is the summary of the theories and concepts that are explained by
the authors in the first 10 chapters
·
Marketing
Warfare -2, is the summary of chapters 11 to 16 where the authors have
explained the theory through real-life examples of marketing wars
* Example
not in the book but has been added to give Indian perspective to the concept.
Introduction & Chapter 1 – 2,500
years of war
The age-old
definition of Marketing to be customer oriented needs a revamp with the
changing times. Surging competition and higher commoditization of products and
services are leaving little differentiation for the firms to increase their
market share. Almost everyone is becoming customer-oriented.
The need of
the hour is to be competition-oriented. Find flaws in competitor’s offering and
attack there. For example, DEC identified weaker presence of IBM in smaller
computers and attacked that segment. Burger King’s attack on McDonalds with its
“broiling not frying” campaign.
The authors
point out a research claiming that out of last 3,438 recorded years, only 268
years didn’t see any war. The author goes on explain briefly various wars
starting from Marathon in 490 B.C. to War at Sedan in 1940.
Be obsessed with
competition
Chapter 2 – The Principle of Force
Fundamentally,
it’s far easier to stay at the top than getting to the top, unlike the myth
“It’s easier to
get on to the top but difficult to stay there”. The leader can
take the advantage of the “Principle of Force”. This is because the bigger
company naturally has a bigger advertising budget, a bigger research
department, more sales outlet and bigger sales force etc.
The author
points out two fallacies which people think, can overpower the principle of
force –
·
Fallacy
of better people: We have better people than competitor, so what if our numbers
are small?
·
Fallacy
of better product: Our product is better. This is more of perception and
amusements.
The more, the better.
Chapter 3 – The superiority of the
defense
The authors
suggest that defense is always a better strategy. US lost Vietnam on offense
and won South Korea in defense. Attack makes glamour, while defense make
history. For example, RCA and GE went up against IBM, which left them with
heavy losses.
Always have a strong
defense strategy. And do not get enchanted by the offense.
Chapter 4 – The new era of
competition
Marketing
promises should be as vague as political ones. This helps in maintaining the
credibility. For example, When Douglas Arthur claimed “I shall return” without
mentioning a date and he returned, this was enough to maintain his credibility.
On the other hand, when Hitler promised to take Stalingrad and could not take
it, he lost his credibility.
Be vague in promise to
take advantage of the ambiguity
Chapter 5 – The new era of
competition
Marketing
battles are not fought in supermarkets and stores. Rather, they are fought
inside the customer’s mind. Just like in military warfare, the marketer needs
to study the battleground (customer’s mind), the enemy’s position (Competitor’s
space in mind) and favorable areas of the terrain (favorable perception in the
mind).
Advantage
positions are like mountains in battlefield. Example, for instant noodle
mountain, Maggi is on top, for car, Maruti Suzuki is on top*.
But
Segmentation has changed the concept. Segmentation allows to slice the mountain
into small terrains and challenge the leader on those terrains where he is
weak. Example, Syska LED in lightening solutions. Not trying to claim the
lighting mountain, it sliced the mountain into LEDs and Non-LEDs and then
claimed the LED mountain with its offering*.
Understand what is in
the consumer’s mind and try to take a strong ground, if not on mountain then a
smaller terrain
Chapter 6 – The Strategic Square
In any given
market each company has a different goal, different resources at hand and
different strengths. Obviously, the each company should have a different
marketing strategy*.
The biggest
player – Maruti Suzuki – Protect Market Share – Defensive Warfare
The
challenger – Hyundai – Gain Market Share – Offensive warfare against the weak
points of the leader (Premium SUV segment, premium hatchback segment)
The follower
with bigger share – Tata Motors – Profitable Survival – Flanking attack against
all (Create new categories and offer products for them and stand ground in
those categories. For example, Compact Sedan category, Pick up Category)
The follower
with smaller share – Nissan Motors – Survival – Guerrilla warfare – Pick a smaller
segment big enough to be profitable but small enough for others to bother
(Nissan Micra with its bright colored cars)
·
Offensive
Marketing Warfare – Go through the mountain head on
·
Defensive
Marketing Warfare – Come down the mountain to stop competitor’s moves
·
Flanking
Marketing Warfare – Go around the mountain. Inexpensive and effective
·
Guerrilla
Marketing Warfare – Go under the mountain to secure a small territory for self
Know your strengths and
situation and adopt the best suited strategy for self
Chapter 7 – Principles of Defensive
Warfare
Three basic
principles of defensive marketing are –
·
Only
the market leader should think of
playing defensive
o
‘The’
market leader, not ‘a’ market leader (As per customers and market share)
·
The
best defensive strategy is to have the courage to attack yourself
o
Apple
brings out its own newer better product which hurt the sales of its existing
products. This may hurt sales in short term but adds huge profit for long-term
·
Strong
competitive moves must be blocked in
time
o
You
may not always be the first one to create something new, but you should be able
to adopt and adapt fast. Migraine Mountain – Tylenol (J&J) vs Datril
(Bristol-Myers. Datril tried eating up Tylenol share by reducing prices which
was effectively blocked by Tylenol by matching the price right at the momen
hence not allowing any advantage to Datril.
Know who you are, be
ready to challenge yourself and be vigilant to block competitive moves in time
Chapter 8 – Principles of Offensive
Warfare
Three basic
principles of offensive marketing are –
·
The
main consideration is the strength of the leader’s
position
o
No
matter how strong is the No.2 company in an attribute but it cannot win if the
leader is also strong in that attribute. Leader owns a position in the
customer’s mind. Before you make your position in the customer’s mind, you must
take away the leader’s position. It’s not enough for you to succeed, others
must fail too.
·
Find
a weakness in the leader’s strength
and attach at that point
o
Weakness
that grows out of strength. “Rent from Avis, our lines are shorter” finds a
weakness (longer lines) in the strength (more cars given for rentals) of the
leader, Hertz. Radio Advertising Bureau highlighted TV’s high expense for
advertising to put across strength of Radio.
·
Launch
the attack on as narrow a front as
possible
o
When
you attack on a narrow front (Just one product or one category), you put The Principle of Force from Chapter 2 to
work. You negate the resource weakness of yours against the leader as you are
only focusing on a small area with full force through local superiority.
It must
however be kept in mind that Defender has always the better chance of coming
victorious and hence the offensive warfare should be as meticulously planned as
possible.
Know your competitor
(leader) well, find a weakness in its strength, launch the attack on a narrow
front with the aim to increase your marketing share while hurting leader’s
Chapter 9 – Principles of Flanking
Warfare
Flanking is
the most innovative way to fight a marketing ware. Three basic principles of flanking
marketing are –
·
A
good flanking move must be made in an uncontested area
o
The
flanking move must out you in a new category in some way or other, while need
not always be a new product. In case of launching a new product, segmentation
helps in identifying new categories. DEC flanked IBM by launching mini
computers. Ujala flanked Robin Blu by launching a liquid based indigo, hence by
creating a new category*.
·
Tactical
surprise ought to be an important element of the plan
o
By
its nature flanking attack is a surprise attack which essentially puts the
competitor in a fix with limited room to do something immediately. In case of
Tylenol and Datril, the flank by Datril was not successful because Tylenol got
to know about the flank attached Datril was planning, well in time.
·
The
pursuit is just as critical as the attack itself
o
Once
the attack has been made, it is important to quickly identify the advantage
points and reinforce them, while abandon the failures. The success through
flanking must be built stronger and must lead to more such attacks in future,
instead of becoming an isolated one time blitzkrieg
Flanking can
be achieved through various ways apart from a new product in a new category –
·
Flanking
with low price – Easiest one, as the market is already there and aware of the
product. Offer lower prices by cutting costs in areas where customers won’t
notice
·
Flanking
with high price – For specific products where higher price reflects quality or
establish the self-esteem. For example, jewelry and lifestyle products*
·
Flanking
with smaller size – Chip based products reaching to compact sizes everyday
·
Flanking
with bigger size – Cheater’s racquet (oversized) by Prince Manufacturing
·
Flanking
with distribution – Avon cosmetics was the first company to use door-to-door
channel. Xiaomi used online flash-sales in India to create hype around its
products*.
·
Flanking
with product form – Launch of toothpaste to counter tooth powder segment
·
Flanking
with lower calories – Much debated these days, products are flanking set
leaders by launching products with lower calorie content while chiding the
leader products
Before
making a flank attack, select the category carefully taking in cognizance the
leader’s thoughts and future plans. Production time helps you understand the
time you may have at your hand before others in the industry copy your
products.
Find an uncontested
area in the market, maintain surprise element in the attack and continue the
pursuit once successful with the flank attack to build on the advantage
Chapter 10 – Principles of Guerrilla
Warfare
Guerrilla
warfare is conducted through tactical attacks creating advantage for the
smaller player to survive in the land of Giants. Three basic principles of
flanking marketing are –
·
Find
a segment in the market small enough to
defend
o
The
area could be small geographically or volume or any other aspect, which is
difficult or unattractive for the larger company to attack. Considering the
importance of size, the Guerrilla Company tries to fight in a small area hence
having its limited resources concentrated in a small area, by being a big fish
in a small pond. Beardo in Men’s beard grooming market*. Rolls Royce is a true
guerrilla in the luxury automobile segment, which is a small segment and other
companies including the market leader, GM, will not want to attack it in that
segment due to smaller size and possible resistance.
·
No
matter how successful you become, never
act like a leader
o
Guerrillas
should work in form of lean organizations with flat structures to give
themselves the agility they need in market to react to any attack from the
other competitors and more so for the guerrilla techniques of war they thrive
on.
·
Be
prepared to bug out at a moment’s
notice
o
A
guerrilla doesn’t have resources to waste on a lost cause. Be ready to abandon
a post if it gets hot. Being small also helps in decision making in these
scenarios as there is not much of internal disturbance when areas and actions
are abandoned, unlike in case of bigger companies.
Guerrillas
can be based upon –
·
Geographic
Guerrillas – Attack on a limited geographic are with full concentration
·
Demographic
Guerrillas – Attack on a limited demographic profile. For example, Snapchat for
a particular age group
·
Industry
Guerrillas – Attack on specific industries. For example, targeting a particular
industry only, to sell its products or services out of expertise or synergy
·
High-end
Guerrillas – Specific to big ticket items in one or more areas
Most
companies fall in the Guerrilla companies and hence should undertake Guerrilla warfare
for their marketing. In a simple break up, out of the 100 companies in an
industry, 1 should play defense, 2 should play offense, 3 should flank and 94
should be guerrillas.
Find a small segment to
defend, don’t act like a leader and be agile enough to bug out when needed
No comments:
Post a Comment