My goal on these pages is to translate scientific findings into written advice. It’s advice; it’s not THE LAW. You are free to not follow the advice. You are free to bet on long shots. Just don’t complain when you lose more than you win.
EXTRA DOSES
If you are a true Marketing Revolutionary, SIGN UP for Eureka! Espresso at www.DougHall.com. Eureka! Espresso is my occasional e-newsletter and audio PodCast of intense ideas, musing, and rants on marketing and innovation.
The Espresso name is more than an alliteration. I’m such a coffee fanatic that at the Eureka! Ranch we have our own brand called Brain Brew. It’s an intense brew stoked with caffeine and the flavor of four of the world’s most prized coffee beans. A test found that after chugging three cups of Brain Brew, participants invented 40 percent more ideas than the decaffeinated control group.
I believe in following in the footsteps of such noted coffee lovers as Franklin, Twain, Voltaire, Bach, Beethoven, and Brahms. I believe that the power of one’s mind is directly proportional to the quantity and quality of coffee one drinks.
I understand that the impact of coffee on health is richly debated. Myself, I’m on the side of Voltaire, who reportedly drank some fifty cups of coffee a day. When told that drinking coffee was a “slow poison,” the philosopher replied that it must be very slow indeed, as he had been drinking that much coffee every day for more than eighty years!
THE WHITE SPACE IS YOUR SPACE
Throughout this book I’ve purposely left WHITE SPACE. This is your space for thinking. This is your space for “connecting the dots” between the scientific advice and your world. PLEASE BE BOLD—read and write with a PEN. Write, scribble, think, jot, create, and challenge yourself to find smarter and more creative ways to revolutionize your marketing success.
Doug Hall January 17, 2005 Cincinnati, Ohio
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MARKETING STRATEGY
In the spring of 2004, I debated Sergio Zyman, author of the foreword to this book. We conducted a debate in Boston entitled Marketing Mayhem on the importance of smart strategy vs. big ideas. It was billed as Sergio Zyman “the Armani-wearing Mexican” versus Doug Hall, “the Jimmy Buffet–wearing Canadian.”
I defended the power of big ideas and stated that when “gurus” like Sergio bring their strategic tablets down from their lofty mountains, nothing happens until they’re translated—if they can be translated at all—into a customer-relevant big idea.
Sergio defended the power of marketing strategy and argued that without strategic discipline, “touchy-feely” creativity is a waste of time.
Following numerous jabs and pokes, including a healthy discussion on Sergio’s strategic misfortune introducing “New Coke,” we came to the conclusion that no matter how hard we tried to defend our singular positions, STRATEGY and the IDEA are of EQUAL importance.
Great strategy not translated into a compelling marketing message is just as ineffective as a great message that lacks strategic discipline.
In effect, great marketing is about “whole-brain” thinking. It’s a blend of left-brained strategic discipline with a right-brained big idea.
The Scientific Advice and Practical Ideas on the following pages will cause you some anxiety. They will challenge your established beliefs. That’s GREAT! It means I’m making progress on my mission to incite a revolution in your marketing thinking.
With respect to my friend Sergio Zyman, this first chapter focuses on Marketing Strategy.
In this chapter you will find Scientific Advice and Practical Ideas on 1.) the fundamentals of smart strategic thinking, 2.) selecting target audiences, 3.) naming—the single most important decision you make as a marketer, and 4.) advice and ideas on marketing plans.
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SCIENTIFIC
ADVICE
WHEN IT COMES TO DRIVING NEW PRODUCT TRIAL RATES AND CORRESPONDING SUCCESS RATES, YOU HAVE THREE DISTINCT STRATEGIC OPTIONS
A monumental study involving 239 new products and 3,500 consumers tracked over 52 weeks identified three distinct strategies for achieving success in generating trial of new initiatives. As the leader of your organization, you need to make a commitment to one and focus your organization’s energy.
1. Be Bold and Brave!: New products offering a major point of difference generate above-average trial rates. Interestingly, the research finds a U-shaped distribution. You can succeed with a low price and little uniqueness or by being Dramatically Different. Moderate levels of uniqueness are the least successful. At this level of uniqueness, customers are asked to make a change in their behavior for no good reason. To be successful with a uniqueness strategy, the uniqueness must be big enough and bold enough to be worth the hassle of changing.
2. Spend! Spend! Spend!: Spending MORE MONEY does work. The research found direct relationships between new product trial rates and 1.) higher average advertising spending, 2.) higher levels of feature, display, and distribution, and 3.) lower average price. The challenge with this strategy is to balance the investment relative to the longer-term return.
3. The Original Wal-Mart Strategy: The third approach is to attack the market where there is little competition. New products generated greater trial when introduced into 1.) categories with fewer existing brands, 2.) less existing advertising spending, and 3.) less intense competitive reactions. This is the Wal-Mart strategy. Wal-Mart focused their initial expansion in small towns to avoid strong competition. And as Sam Walton said, “There was much, much more business out there in small-town America than anybody, including me, had ever dreamed of.” When they achieved skill and scale in distribution and merchandising they were then ready to compete in the major metro markets.
PRACTICAL IDEAS
Leverage Courage: Dramatic Differences in products and services can occur only when management has the courage to direct resources on the discovery and development of true new-to-the-world inventions. Courage is a necessity because with real R&D, there is a risk of failure. Fortunately the rewards are also spectacular. To the courageous go higher trial rates, sales, profit margins, and government-granted monopolies in the form of patents.
Combine Resources to Create a SURGE in Spending: American distance runner Frank Shorter used a SURGE strategy to win the 1972 Olympic Marathon. “At nine miles, the front pack slowed going around a hairpin turn,” he explained. “My momentum carried me to the front. I put down my head and ran to get away just as I had on the playgrounds of my youth. In track races, if you’re willing to take the risk, you can throw in surprise surges. If you train to do this, you can recover more quickly than the opposition. You keep doing it until no one covers the next surprise surge and you win. The surge lasted almost eight miles. At 17 miles I slowed down to let my body recover, but I didn’t look behind.” Shorter destroyed his opponents through the use of a SURGE of energy. Think: How can you create a SURGE in spending that will break the “will” of your competition? Can you “borrow” marketing money from other divisions within your company or partner with