Business Marketing 101

by breeve 21. March 2010 08:57

For years I made the same dull walk from my college apartment to campus and the only part of the walk that perked my interest was the daily charade that occurred outside the business building. Business students with their laptops, mochas, and Wall Street Journals hurried around as though they were late for an important board meeting obviously too busy to look up from their paper to make eye contact or smile. So pervasive was the attitude that even humble freshman couldn’t prevent their egos from tripling after spending an hour inside the business building with its huge foyer complete with fancy water fountains, nice leather lounge chairs, and offices engrained with titles on the doors.

I couldn’t help but feel slighted. The computer science building was a homely looking square building no doubt designed by an engineer trying to maximize space. The computer labs were located in the basement down a lonely stair case and no matter how hard I looked I was never able to find the leather chairs.

I spent many hours down in that basement banging on the keyboard coding quicksorts, binary trees, huffman codes, and traveling salesman. Sometimes when it got quiet and the hum of the many CPUs seemed to be playing the prelude from Bach’s Cello Suite No.1, I would think: What do those business students study all day anyways?

It was a few years into my career before I became curious enough to investigate. During the process, I became enamored with Joel Spolsky and found his recommended business books page which I quickly devoured. Of all those books none explained marketing concepts more concretely than 22 Immutable Laws of Marketing. Reading this book gave me more perspective than all those years walking by the business building. I will not go through all the laws just the ones I feel are most important.

The Law of Perception

Software engineers think the best code will win. This law says the real battle is not between code but how people perceive your product. Once someone develops an opinion of your product it’s impossible to change it. Take Honda for instance. In Japan, Honda is viewed as a motorcycle company and their cars do not sell well; however, in the US they do fine. Forget the product, the battle begins in the minds of customers.

The Law of Focus

The most important thing a product can do is own a single word in the mind of the customer. When they think of your product what word comes to mind? Prego spaghetti sauce got the upper hand on Ragu when Prego became synonymous with the word thicker which implies quality ingredients. Once thicker was owned by Prego, no other brand could use it because everyone knew thicker meant Prego. You cannot change the mind of the customer.

The Law of the Ladder

There is a natural ranking of products that all customers know. Knowing where your brand stands on the ladder should dictate the marketing strategy. Don’t claim to be #1 when everyone knows your not. This can only backfire. Interestingly, admitting your rank on the ladder can help as was the case with Avis. Their slogan—Avis is #2 and we try harder—greatly increases sales.

The Law of the Opposite

In the long run, the race becomes a battle between two brands. Think Coke/Pepsi, Scope/Listerine, and McDonalds/Burger King. The second place brand must not mimic the first but be opposite in some way. Some people don’t want to buy from the market leader so having a value proposition that is different attracts those types.

The Law of the Division

Every category over time splits into different vertical segments. Computers, for example, have developed many divisions like: mainframes, personal computers, laptops, tablets, netbooks, and now smart phones. Each separate computer division has its own market leader. This is a very powerful concept to understand because if a brand cannot compete with the market leader simply invent a new division of that category and plow ahead.

No industry understands this concept better than the beer industry. There is light beer, best imported beer, best domestic beer, and more recently low calorie beer. They even combine divisions to make best light imported beer or best light domestic beer. If there is one thing the beer industry has proven it's there is no limit to how a category can be sliced and diced.

The Law of Line Extension

Line extension is taking a successful product and introducing a new product around that same brand. Take A-1 steak sauce. The chicken market was growing and so A-1 poultry sauce was introduced with the thought that A-1 is so well known in the steak market people will want to use it for chicken. It was a complete disaster. Everyone knows A-1 is for steaks. 7-up also tried this same approach with Cherry 7-up. Same disastrous result. Line extensions don’t work. Instead, a new identity and brand must be created from scratch.

The Law of the Sacrifice

This law is similar to the previous one except it doesn’t apply to creating a new product but rather extending a brand beyond its identity. Federal Express was once known for overnight delivery but expanded their focus when they tried to capture more of the international market. The result was a company that lost its once strong identity of overnight delivery to become a company without one and lost a lot of money in the process.

Interestingly, Philip Morris did the opposite with Marlboro. It narrowed the focus from a general campaign to target both men and women to one that targets men only with a cowboy as the center piece no less. The result was a strong identity that helped Marlboro became the best selling cigarette for both men and women. A brand that stands for everything doesn’t work. In this law, less really is more.

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I am a Principal Engineer with 11 years experience developing and releasing software products. I started developing in C/C++ then moved into .NET and C# for the last 9 years and have tech lead multiple projects. I have developed products in Windows Forms, ASP.NET/MVC, Silverlight, and WPF. I currently reside in Austin, Texas.

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