Wednesday, 30 May 2018

Book Summary: Marketing Warfare-2 by Al Ries and Jack Trout


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.


Chapter 11 – The cola war
In order to check the validity of the principles of marketing warfare the author looks at the cola industry which reflected the warfare between Atlanta based Coca Cola and New York based Pepsi.
Case: Coca Cola Executives considered the shape of the 6.5 ounce bottle as strength and got it patented. Pepsi used the flanking principle by finding the weakness in the competitors strength by launching a 12 ounce bottle and advertising heavily that the consumers can but 12 ounces of Pepsi-cola at the same one nickle for which they were buying 6.5 ounce of Coca Cola.

Coca Cola should have followed the defensive principle – To be courageous enough to attack yourself.

Since Coca Cola was a long entrenched drink (strength of Coca Cola) with more people from the middle aged generation drinking Coca Cola, Pepsi flanked Coca Cola by making its strength as its weakness by promotion its drink with “Pepsi Generation” alluding to the youth to be different than the older generation drinking Coca Cola.

Coca Cola’s best comeback to Pepsi’s attacks was its “The real thing” campaign which essentially dubbed everything else, including Pepsi, as a copy of Coca Cola.

Royal Crown, another Cola player, flanked Pepsi and Coca Cola both by bringing in Diet Rite, a low calori cola drink. Neither of the bigger players were in a position to bring in diet cola immediately. Hence, Diet Rite became the largest selling diet cola. However, the company didn’t follow the flanking rule – Pursuit is as important as attack. Instead of focusing on its hero product Diet Rite, the company divided its resourced between Diet Rite and the less successful Royal Cola, hence giving away the advantage to its rivals.

The Pepsi challenge was one of the biggest strategic move in mid 70s. This made Coca Cola commit its biggest mistake. It changed its formula to make Coca Cola sweeter as was Pepsi. This undermined its “Real Thing” position, a self-goal. This move led to a backlash among the consumers and Coca Cola had to bring back its original formula with the name “Classic Coke”.

The learning is, never try to change the perception of the consumer. So even when the taste test showed that people preferred the sweeter new coke over the Classic Coke, when it came to buying, perception was strongly biased towards Classic Coke.


Chapter 12 – The beer war

While Budweiser and Schlitz were engaged in a sea saw battle, Heineken came to the US as the first imported beer after the war. It followed the “pursuit is important as attack” strategy and continued spending lot of money on the brand building exercise in the country.

Lowenbrau became the talk of the town with its attractive bottle and advertisement that compared it with champagne. However, it should have adopted the offensive principle by finding a weakness in leader’s strength, which in this case was Heineken beer being an imported one. However, it was imported from Holland, not Germany. Holland is not known for making beer, Germany is. 

Lowenbrau could have crafted its communication around this. Once this was established, the strategy to keep the attack as narrow as possible must be adopted by not having too many positioning and stick to the one strong area.

The launch of Miller Lite was a great example of Marketing warfare on three different aspects –
  •          Uncontested area – No one was talking about the light beers that time
  •          Tactical surprise – Miller managed to kept this close and caught the competition by surprise
  •          The pursuit – Once Miller got a hold of the light beer market, it never let go the advantage and spend huge money to maintain the position

However, Miller made a mistake. While they were promoting the Miller Lite, there was not much difference between the cans for Miller High Life and Miller Lite and with Lite’s publicity Miller High Life’s sales started falling. Two products with similar or same name should not be made available in the market at the same time.


Chapter 13 – The burger war

In 1984, McDonald’s spend a quarter of a billion dollars towards advertising. It was an undisputed leader and there was not much comeptitoin will Burger Kinf entered the scnee. Burger King came up as challenger and used the “find weakness in strength” rule. While McDonals was able to churn out more and inexpensive burgers fast, the strength has a weakness. There was no customization possible.
Burger King came up with “Have it your way” hence flanking the advantage that McDonald’s had.  Later again, Burger king flanked McDonald’s by its “Broiling not Frying” campaign which put the leader in a spot.

Another chain, Wendy’s came up with adult-size burgers targeting the adults and creating a differentiation by flanking the competition on the offering side.

Another chain that uses the rule meant for guerrilla which is “No matter how successful you are, never act like a leader”, is White Castle. It is successful in its own right by serving specific kind of burgers and not getting in to egg muffins or whoppers. They know they are successful in making burgers which are called ‘Slider’ by the loyal customers and they stick to that.


Chapter 14 – The computer war

IBM is the undisputed leader in the computer market. Digital Equipment Corporation or DEC flanked IBM by selling smaller computers while IBM sold big computers with software. IBM here committed a mistake of “Not blocking the competitive moves by a competitor”. This helped DEC thrive in the micro-computer market which IBM could not make a stronghold in.

But later, DEC made a mistake and didn’t attack itself to move from the small computers to the personal computers category and hence laid open the entry for other players in this segment which later became a huge one. This costed dearly to DEC. IBM flanked DEC this time by launching a personal computer.

However, in 1984 tried to flank IBM by launching three personal computers for different needs. This was a weak strategy because a challenger should attack on a very narrow front to gain advantage. DEC could not focus it strength on one aspect and hence lost out.

Once IBM got the market stronghold, they efficiently executed the leader’s defensive strategy of attacking itself. It continuously brought products that were better and superior to its own products hence staying ahead of the curve and not giving its competitors a chance to flank it.


Chapter 15 – Strategy and Tactics

Strategy should follow tactic. Achievement of Tactical result should be the only function of the strategy else, the strategy is faulty. Unlike work of art, strategies should not be judged on their creativity and intelligence but rather on its effectiveness at the point it meets the customer and the competition.

The tanks and artillery of marketing is advertising. One should know how and when to use it. Some of the important aspect of marketing warfare are –
  •          Strategy is important to win a war even with ordinary tactics
  •          Strategy directs tactics – A good strategy must lead to efficient tactics
  •          Single point attack – At any given point one objective should dominate strategic plans
  •          Attack and Counter-attack – A good marketing strategy anticipates the competitor’s moves and is ready to defend its own
  •          Use of reserves – Be judicious on what can be used or consumed to achieve what benefits


Chapter 16 – The marketing general

Karl von Clausewitz had said that intelligent people need not make a good general. Below are the qualities a marketing general should be –
  •          Flexible
  •          Have mental Courage
  •          Bold
  •          Knowing the facts
  •          Should know the rules


Strategy and timing are the Himalayas of strategy, rest everything is catskill.

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