Marketing Warfare by Al Ries and Jack Trout – Book Summary

This book, Marketing Warfare, lays out Marketing strategies that work for you. No matter you are a market leader, a challenger, or a newbie. By focusing on your competitors more than your customers, you can succeed in winning that extra share of the business. Just like a war strategy, a marketing strategy also depends upon the position of a Company against its rivals.

Here we proceed with the summary:

 

The Big Idea: Marketing Is Competitors-Centric, not Customers-Centric

How did Pepsi manage to carve out a share in the beverage market and challenge Coke? Did they focus on the customer needs? Well, all Companies need to serve customer needs. But Al Ries and Jack trout tell us that they need to focus more on the Competition!

The failure of several American businesses suggests that one can avoid these losses by adopting the principles of warfare. In business to stay for the long term, it is not only important to win consistently. But perhaps also more important to know how not to lose!

Marketing jargon borrows heavily from Military terminology. Therefore, Al Ries and Trout call it Marketing Warfare. For example, launching a campaign, promoting people, Cola-wars, etc… It is high time that marketing efforts focus on the enemy (competitor) to win a war. The marketing warfare is under fight not only in the retail chains, the supermarkets, or on television. It is also under fight in the minds of the consumers (mindshare).

Successful warfare results in increased market share/profitability/revenue.

 

Paraphrased Definition Of Marketing as Marketing Warfare

Chances are you have never heard of Carl von Clausewitz. He was a Prussian General and a thinker of war. His book On War lays down the principles of battle. Forget Philip Kotler who says that Marketing is an activity in which marketers direct at satisfying needs and wants. Also, forget the definition of the American Marketing Association which says that Marketing is the performance of those activities which accomplish an organization’s objective by anticipating consumer needs. Forget all the focus on the consumer and satisfying their needs and wants.

Would all the focus on the customer’s needs and wants to help a new automobile Company to compete with Toyota? The problem with such an approach of marketing is that it operates under a flawed and outdated assumption. It is not marketing warfare, it is plain marketing only. And this assumption is that customer orientation and mass advertising can help sales. When every company is customer-oriented and doing adequate research in consumer insights, how on earth would any Company achieve a breakthrough in sales?

The truth is that to be successful in today’s world, companies need to be competitor-oriented. Analysis of the competitive landscape is of prime importance in any marketing plan. And it has any hope of succeeding. Without knowing the strengths, weaknesses, and strategies of your competitors, you cannot market your products/services successfully.

 

There Is Coincidence In War Strategy And Marketing Strategy

The bigger army defeats the smaller army, the bigger fish eats the smaller fish. This principle of force is at least true in general. A Bigger Company has bigger muscles in terms of resources. If a Challenger tries to take on the Leader without a strategy, it is more than likely to fail.

Consider the example of a Rugby team. If a team of 6 players, goes against a team of 9 players, do you think the straightforward strategy of running with the ball towards touchdown will succeed? Not at all. The team with a larger number of players will dodge the team with a lesser number of players.

To win such a game, the weaker team must employ military tactics such as flanking attacks to have even a remote chance of success. The notions of better products and better people are just notions. The truth is that even if you indeed have a better product, it is tough to convince the customer to change his or her mind. In large businesses, people are more likely to be average than “better”, hence it is not a good idea to make a marketing strategy on the quality of the personnel.

The defense is always more likely to succeed than offense. Although offensive attacks have more glamour, the truth is that it is easier to defend a position, than to acquire a victory using offensive tactics. RCA and GE attempted to be heroes in attacking IBM in the Computer business. The deep blue’s immense muscle helped it easily defend against these upstarts and demolish them subsequently.

 

Defensive Posture Suits Market Leaders

The type of war to be fought depends upon the position of the Company. A market leader should fight a defensive war. Its victory lies in being able to defend its position from a challenger’s onslaught and firing a few of its own guns! A leader can risk a loss by adopting an offensive strategy, by employing more resources than is necessary to fight someone to the death.

For example, General Motors does not have anything to gain by trying to wipe out its competitors like Ford and Chrysler. It risks being the target of a public outcry by way of job losses and also risks being broken up by the American Congress in favor of avoiding monopolies. Its best strategy is to defend its position. It should reinforce its weak points. These can be targeted for attacks by a competitor like Ford. This can be done by constantly revamping their product lines, to make their own products obsolete. After all, it is better for you than your competitor to take market share from yourself!

Gillette is one company that adopted this principle successfully to ward off competition by Wilkinson Sword. When Wilkinson Sword successfully captured market share from Gillette in the ’60s and ’70s by launching two new types of blades, Gillette counterattacked by introducing a double-bladed razor, then an adjustable razor, and then further innovations including a disposable razor. The successive product innovations served to keep the “better” image of Gillette in the consumers’ minds.

 

Offensive Play Is A Need For Primary Contenders

While the defense is a good strategy for the leader, it serves no good for the challengers. The primary contenders must play an offensive game to have a chance at winning market share. However, the odds of waging a successful offensive are always low. Hence, the rivals must analyze the strengths and position of the leader and then respond appropriately.

Challengers must identify the weaknesses in the leader’s offerings and attack them with full force. To be able to successfully execute an offensive attack on the weaknesses of a leader, you must also choose a narrow area of focus rather than going for a widespread attack. By focusing your full force on a narrow area, you can enjoy local superiority (in specific areas) despite overall inferiority.

American Motors could enjoy success in one specific area against General Motors. It was their buyer protection plan. And it became a hit with the customers due to the poor service standards of General Motors dealers.
Avis, the second-largest car rental company, attacked the market leader Hertz by attacking its long queues! Their ads used to say, “Rent from Avis, the Line at our counter is shorter”.

 

The Followers Need To Employ Flanking Tactics To Survive In Marketing Warfare

For companies that are not serious contenders for the leadership position, marketing strategy has to adopt flanking moves. It has to act like and create marketing warfare. Since they cannot afford offensive play. A successful flanking move is typically in uncharted territory. Since the leaders and contenders occupy the primary markets, a laggard, or a new player must create a new category. Or segment the existing market to create a new territory. It is important to keep pursuing this strategy for some time rather than junking it after initial success.

Air Asia successfully adopted a no-frills low-cost strategy while not compromising on quality to successfully create a category it dominates. Haagen-Dazs flanked the other premium brands of ice cream by successfully introducing a higher-priced product. They created a new category of super premium ice-creams.

Coca-Cola has long been the leader in the cola/soft drinks business. It had no real competition until the 1920s. This sold specially made 6.5-ounce bottles of coke for a nickel, and there were billions of these bottles. The company manufactured these bottles over the years. Pepsi which was a new competitor of Coke, behind Royal Crown and Dr. Pepper, launched a classic flanking attack on Coke in the 1930s. It came up with a 12-ounce bottle for the same price as that of a 6.5-ounce Coke bottle. This stunned Coke and it couldn’t do much. Since they already had billions of bottles in circulation. And they couldn’t cut the price, because there were hundreds of thousands of nickel soft drink machines in operational existence. This strategy helped Pepsi overtake Royal crown and Dr. Pepper, and become number two after Coke itself.

 

Guerilla Warfare Between Giants Makes New Competitors Survive

For companies that are focusing on survival, flanking techniques may be too costly. They must employ the techniques of guerrilla warfare to make a dent in market share. The way to do it is, to find a small enough niche that can be profitable, and then dominate it. Small niches are not tempting for the bigger fish, and hence the smaller company can eke out a comfortable existence by being a big fish in a tiny pond. Companies employing this strategy must also never act like a leader. They should be prepared to leave their position quickly to find a new one.

While everyone is aware of McDonald’s and Burger King, a small player which happens to be the pioneer of fast-food chains, has survived and flourished for decades. White castle preserves a cult following and offers no-nonsense slider burgers while focusing on local flavors that remain a hit with its loyalists. The Company never kept its menu complicated by offering a wide array of products to compete with McDonald’s and Burger King. It skipped the franchising opportunity and never acted like a leader. Thus, it has been able to peacefully coexist with its big and powerful competitors.

 

Conclusion of Marketing Warfare

We hope you enjoyed this quid on Marketing Warfare. Al Ries and Jack Trout rightly assert that marketing is not to be seen as a consumer-centric act, but a competitor-focused strategy. Which aims to deliver higher sales by adopting tactics that are similar to those employed in the Military. Therefore they called it marketing warfare.

The strategy to adopt depends upon where the Company sits in the competitive landscape. A Market Leader should adopt a defensive posture, while a challenger must aspire to grab share from the leader and attempt offense at the weak points of the leader. The also-rans cannot afford to be offensive, they must adopt flanking tactics to outmaneuver the leader and the challenger. And sometimes resort to guerrilla warfare by identifying and dominating a niche that is too small for the big fish. And thus it becomes marketing warfare.