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Laws of Marketing

The Law Of Leadership

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465_main_lindbergh

It’s better to be first than it is to be better.

Many people believe that the basic issue in marketing is convincing prospects that you have a better product or service.

Not true. If you have a small market share and you have to do battle with larger, better-financed competitors, then your marketing strategy was probably faulty in the first place. You violated the first law of marketing.

The basic issue in marketing is creating a category you can be first in. It’s the law of leadership: It’s better to be first than it is to be better. It’s much easier to get into the mind first than to try to convince someone you have a better product than the one that did get there first.

You can demonstrate the law of leadership by asking yourself two questions:

1) What’s the name of the first person to fly the Atlantic Ocean solo? Charles Lindbergh, right?

2) What’s the name of the second person to fly the Atlantic Ocean solo? Not so easy to answer, is it?

The second person to fly the Atlantic Ocean solo was Bert Hinkler. Bert was a better pilot than Charlie-he flew faster, he consumed less fuel. Yet who has ever heard of Bert Hinkler? (He left home and Mrs. Hinkler hasn’t heard from him since.)

In spite of the evident superiority of the Lindbergh approach, most companies go the Bert Hinkler route. They wait until a market develops. Then they jump in with a better product, often with their corporate name attached. In today’s competitive environment, a me-too product with a line extension name has little hope of becoming a big, profitable brand.

The leading brand in any category is almost always the first brand into the prospect’s mind. Hertz in rent-a-cars. IBM in computers. Coca-Cola in cola.

After World War II, Heineken was the first imported beer to make a name for itself in America. So four decades later, what is the No. 1 imported beer? The one that tastes the best? Or Heineken? There are 425 brands of imported beer sold in America. Surely one of these brands must taste better than Heineken, but does it really matter? Today, Heineken is still the No. 1 imported beer, with 30 percent of the market.

The first domestic light beer was Miller Lite. So what is the largest-selling light beer in America today? The one that tastes the best? Or the one that got into the mind first?

Not every first is going to become successful, however. Timing is an issue-your first could be too late. For example, USA Today is the first national newspaper, but it is unlikely to succeed. It has already lost $800 million and has never had a profitable year. In a television era, it may be too late for a national newspaper.

Some firsts are just bad ideas that will never go anywhere. Frosty Paws, the first ice cream for dogs, is unlikely to make it. The dogs love it, but the owners are the ones who buy the groceries, and they think that dogs don’t need an ice cream of their own. They should be happy just to lick the plates.

The law of leadership applies to any product, any brand, any category. Let’s say you didn’t know the name of the first college founded in America. You can always make a good guess by substituting leading for first. So what’s the name of the leading college in America? Most people would probably say Harvard, which is also the name of the first college founded in America. (What’s the name of the second college founded in America? The College of William and Mary, which is only slightly more famous than Bert Hinkler.)

No two products are any similar than twins are. Yet twins often complain that the first of the two whom a person meets always remains their favorite, even though the person also gets to know the other one.

People tend to stick with what they’ve got. If you meet someone a little better than your wife or husband, it’s really not worth making the switch, what with attorneys’ fees and dividing up the house and kids.

The law of leadership also applies to magazines. Which is why Time leads Newsweek, People leads Us, and Playboy leads Penthouse. Take TV Guide, for example. Back in the early fifties the then-powerful Curtis Publishing Company tried to field a television- listings magazine to compete with the fledgling TV Guide. Even though TV Guide had only a minuscule head start, and despite the awesome strength of Curtis, the Curtis publication never really got off the ground. TV Guide had preempted the field.

The law of leadership applies equally as well to hard categories like automobiles and computers as it does to soft categories like colleges and beer. Jeep was first in four-wheel-drive off-the-road vehicles. Acura was first in luxury Japanese cars. IBM was first in mainframe computers. Sun Microsystems was first in workstations. Jeep, Acura, IBM, and Sun are all leading brands.

The first minivan was introduced by Chrysler. Today Chrysler has 10 percent of the car market and 50 percent of the minivan market. Is the essence of car marketing making better cars or getting into the market first?

The first desktop laser printer was introduced by a computer company, Hewlett-Packard. Today the company has 5 percent of the personal computer market and 45 percent of the laser printer market.

Gillette was the first safety razor. Tide was the first laundry detergent. Hayes was the first computer modem. Leaders all.

One reason the first brand tends to maintain its leadership is that the name often becomes generic. Xerox, the first plain-paper copier, became the name for all plain-paper copiers. People will stand in front of a Ricoh or a Sharp or a Kodak machine and say, “How do I make a Xerox copy?” They will ask for the Kleenex when the box clearly says Scott. They will offer you a Coke when all they have is Pepsi-Cola.

How many people ask for cellophane tape instead of Scotch tape? Not many. Most people use brand names when they become generic: Band-Aid, Fiberglas, Formica, Gore-Tex, Jello, Krazy Glue, Q-tips, Saran Wrap, Velcro-to name a few. Some people will go to great lengths to turn a brand name into a generic. “FedEx this package to the Coast.” If you’re introducing the first brand in a new category, you should always try to select a name that can work generically. (Lawyers advise the opposite, but what do they know about the laws of marketing?)

Not only does the first brand usually become the leader, but also the sales order of follow-up brands often matches the order of their introductions. The best example is ibuprofen. Advil was first, Nuprin was second, Medipren was third. That’s exactly the sales order they now enjoy: Advil has 51 percent of the ibuprofen market, Nuprin has 10 percent, and Medipren has 1 percent.

The fourth brand that entered the market was Motrin IB. Even though it has the powerful prescription name for ibuprofen, Motrin’s market share is only 15 percent. (Keep in mind that Advil was introduced with a “Same as the prescription drug Motrin” theme.) And note the generic substitution. Consumers use Advil as a generic term. Rarely do they use the word ibuprofen. Even an M.D. will tell a patient, “Take two Advil and call me in the morning.”

Also consider Tylenol, the first brand of acetaminophen. Tylenol is so far ahead of the No. 2 brand that it’s hard to determine who is No. 2.

If the secret of success is getting into the prospect’s mind first, what strategy are most companies committed to? The better-product strategy. The latest and hottest subject in the business management field is benchmarking. Touted as the “ultimate competitive strategy,” benchmarking is the process of comparing and evaluating your company’s products against the best in the industry. It’s an essential element in a process often called “total quality management.”

Unfortunately, benchmarking doesn’t work. Regardless of reality, people perceive the first product into the mind as superior. Marketing is a battle of perceptions, not products.

So what’s the name of the first brand of aspirin? The first brand of acetaminophen? The first brand of ibuprofen? (Hint: Substitute leading for first and you’ll have the answers to these three questions.)

Charles Schwab bills itself as “America’s largest discount broker.” Are you surprised that the Charles Lindbergh of the discount brokerage business is Charles Schwab?

Neil Armstrong was the first person to walk on the moon. Who was second?

Roger Bannister was the first person to run a four-minute mile. Who was second?

George Washington was the first president of the United States. Who was second?

Thomas’ was the first brand of English muffin. What was second?

Gatorade was the first sports drink. What was second?

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6 Comments

courtney lambert | twitter @cjlambert on April 12th, 2009 said

Big fan of the Trout genius and have been struggling with this versus a current launch for a supermarket product? What if the incumbent is weak and has a poor performing/quality product? Won’t their first-mover advantage erode if customers are frustrated with a product that doesn’t work. Aren’t we better to launch an assault on their weakly held position?

Meheer Thakare on April 13th, 2009 said

That being said… It’d be great to highlight the issues, First-timers face in Managing their brands before and after they’ve acquired the GENERIC recognition.

Bruce on April 13th, 2009 said

Great post – especially the examples. Except one – Heineken.

http://www.chicagotribune.com/business/chi-tc-biz-fri-corona-beer-0410-apr10,0,4885405.story

“According to Beer Marketer’s Insights, another trade publication, Corona Extra had a 28.4 percent share of the imported beer market in 2008, with Heineken in second at 17.8 percent.”

Petra on April 14th, 2009 said

The largest-selling light beer in America today? Bud Light, for more than a decade now…

Derrick Daye on April 14th, 2009 said

All good points. Times have changed since Jack wrote this. Has the Law of Leadership stood the test of time?

Dennis Moons on April 17th, 2009 said

Very interesting readings. But I’m a bit confused to what you actually mean by first. What is more important: time to market or being first on the customers consideration set?
Because the example with the (personal)computers; IBM was clearly waiting on the first move, which was made by Apple, only then to move in with a me-too product but bigger and bolder marketing budget.

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