If you came from Mars and landed at a marketing conference somewhere in the US for the first time, you might find that marketers seem to have nothing to talk about except 'TGIF.' 'TGIF' stands for Twitter, Google, the Internet, and Facebook. Undoubtedly, these four revolutionary developments have profoundly changed the marketing function. Word of mouth has now become 'word of finger.' A core difference: word of mouth leaves invisible traces among people, while 'word of finger' leaves electronic traces on the Internet. In the past, although some estimates suggested that word of mouth had a significant impact on a brand's image, few people paid much attention to it. Today, however, the visibility of 'word of finger' has fascinated the entire marketing world. But does skillful use of TGIF make you an excellent marketing manager? I don't think so. TGIF is not everything. DHL did not exit the US market because it didn't buy enough keyword ads on Google. DHL exited because it violated a basic marketing law—the Law of Duality. In a category dominated by UPS and FedEx, DHL was the third brand. Kmart did not go bankrupt because it failed to use the Internet to spread its brand. Kmart went bankrupt because it was squeezed into a category where Walmart dominated the low-end big-box stores and Target dominated the high-end big-box stores. Coca-Cola failed to build a leading energy drink brand in three attempts (KMX, Full Throttle, and Tab), not because it didn't use Facebook to ignite these brands, but because it waited too long after Red Bull launched, losing the first-mover advantage. Marketing can be divided into two parts: (1) marketing strategy and (2) marketing tactics. Which is more important? I believe, without a doubt, that strategy is the most important part of marketing planning. Marketing is war, a combination of strategy and tactics. The media used in marketing planning is equivalent to weapons in war. How many wars are won because the army had better soldiers, better guns, better tanks, and better fighter planes? Very few. Wars are won with better strategy. In World War II, the German army had better weapons, better-trained soldiers, and more combat experience. However, their leader, Adolf Hitler, was an amateur in military strategy. Operation Barbarossa (the code name for Germany's invasion of the Soviet Union) was launched on June 22, 1941. More than 4.5 million troops invaded the Soviet Union along a front of 1,800 miles, making it the largest and deadliest military operation in human history. By January 1942, the Soviet Union had turned the tide and almost repelled the invaders. Although the war continued for another three years, the German army could never achieve the expected victory. Germany's strategic mistake was trying to fight two wars simultaneously: against Britain and the US in the West, and against Russia in the East. Ironically, 129 years earlier, Napoleon made the same mistake. He invaded Russia with 690,000 troops, the largest force in European history at that time. The same old story. Trying to fight on two fronts (against Britain in the West and Russia in the East) ultimately drained Napoleon's crown and empire. Then there was Japan, which attacked the US while still embroiled in a war with China. You might think that business elites would not make the same mistake. In fact, they keep repeating it. Take Lenovo, the Chinese company that acquired IBM's PC business. Lenovo is trying to compete with HP and Dell in the high-end PC market while fighting Acer and Asus in the low-end market. That is not a good strategy. Take Citigroup, one of the largest financial institutions in the US. Citigroup had assets of $1,938.5 billion, yet in 2008 it lost $27.7 billion and needed a $45 billion government bailout to survive. What happened to Citigroup? The same old story. It started as Citibank, focusing on personal banking. Then it acquired Travelers (insurance), Smith Barney (brokerage), and Salomon Brothers (investment banking). In other words, Citigroup started as a bank, competing with other major US banks, and then tried to enter four battlefields: banking, insurance, brokerage, and investment banking. That is not a good strategy. Growth is not strategy. Yet it seems to be the only strategy for many companies today. Line extensions, mergers, acquisitions, multi-price-point layouts, and other tactics are all aimed at increasing sales. But how do these tactics affect the brand's position in the consumer's mind? In general, they dilute the brand's positioning. Citigroup got bigger and bigger, but also weaker and weaker, because the brand was stretched in too many directions. As a result, the brand lost its meaning. General Motors made the same mistake. Each of its brands covered a very broad range of car lines. As a result, the brands lost their meaning, and the company went bankrupt. I repeat. Pursuing growth is not strategy. In the past four years, GM sold more than 35 million cars globally, more than any other automaker. Yet in those four years, GM lost $82.1 billion. If your brand doesn't stand for anything, you have to rely on 'price' to sell products. But when your product is priced lower than competitors, it's hard to make a profit. In working with many companies, we have found similar thinking. Almost every company wants to expand to increase sales and profits. They grow step by step by entering many different businesses and markets. That is not strategy; it is the road to mediocrity. What really works in marketing? Dominating a category. In marketing, nothing is more effective than dominating a category. Take Coca-Cola. Since it was introduced in 1886, it has dominated the cola market. (The second brand, Pepsi-Cola, was launched in 1903.) For 106 years, Pepsi has tried to overtake Coca-Cola but has not succeeded. It is very difficult to replace a well-established leader. That is why the most important goal for any brand is to establish a clear leadership position in the consumer's mind. In China, according to Euromonitor International, Pepsi holds 23% of the carbonated soft drink market, while Coca-Cola holds 22%. In other words, the two brands are almost neck and neck. This is not a stable situation. Categories with multiple brands running side by side are rare. That is, categories eventually become dominated by two brands, with each holding roughly equal share, but this rarely lasts long. Sooner or later, one brand will overtake the other and take absolute dominance, and the war will end. This is very likely to happen in the Chinese market. Sooner or later, Pepsi or Coca-Cola will pull ahead, and the war will end. Consumers will perceive one cola brand as the 'leader' and the other as the 'follower.' This is devastating for the laggard. It will permanently relegate the defeated brand to the 'second' position. Look at the fast-food industry. McDonald's is perceived as the leading fast-food chain in the US, with 13,918 stores. Burger King is second, with only 7,207 stores. Furthermore, McDonald's has become a large, profitable global enterprise based on its leadership in the US fast-food industry. For example, last year, McDonald's sales were $23.5 billion, with net income of $4.3 billion and a net margin of 18.3%. On the other hand, Burger King's sales were only $2.5 billion, with net income of $200 million and a net margin of only 7.9%. Conventional wisdom says McDonald's is more successful than Burger King because it has better products and service. Nonsense. McDonald's is more successful than Burger King because it is perceived as the leader. Consumers always believe the leader has better products and better service. What should Burger King do? Too many marketing gurus give only four answers to this question: Twitter, Google, the Internet, and Facebook. Actually, Burger King has had many successes on TGIF platforms, including the 'Chicken Servant' video and the 'Whopper Sacrifice' campaign on Facebook. But why doesn't Burger King consider changing its strategy? Why doesn't Burger King use the most powerful marketing strategy for a second brand: be the opposite of the leader? Year after year, Burger King violates this powerful marketing principle. Instead of being the opposite of the leader, it imitates the leader.

  • McDonald's introduced Ronald McDonald; Burger King introduced 'The King.'
  • McDonald's launched Chicken McNuggets; Burger King launched Chicken Tenders.
  • McDonald's set up PlayPlaces in stores to attract kids; Burger King also set up play areas in its restaurants.
  • McDonald's added a Dollar Menu; Burger King also added a Dollar Menu. Despite constant imitation, Burger King still lags behind McDonald's. Ten years ago, the average sales per McDonald's store in the US were $1,514,400, while Burger King's average was $1,117,200. In other words, McDonald's led Burger King by 36%. In 2008, McDonald's led Burger King by 68%. ($2,158,900 vs. $1,288,600.) Why not be the opposite of McDonald's? Look at In-N-Out Burger, a burger chain on the US West Coast. McDonald's menu has 81 items; In-N-Out Burger's menu has only 4: hamburger, cheeseburger, double-double, and french fries. You might think McDonald's average sales per store would far exceed In-N-Out Burger's. Not so. In 2008, In-N-Out Burger's average sales per store were $2,252,300. In business, there is never just one way to do anything. Take Walmart, the world's most successful retail chain. The average Walmart store in the US stocks 150,000 items and has annual sales of $72 million. Costco's average store stocks about 4,000 items. Is it better to have a full product line or a limited one? Which is the better strategy? Both can work. What doesn't work is being stuck in the muddled middle. Trimming the product line doesn't mean lower sales. In 2008, Costco's average annual sales per store were $129 million, more than 80% higher than Walmart's average. Too many companies imitate the leader and try to do better, when they should avoid the leader and do differently. A storm can tell which ships are seaworthy and which are not. An economic downturn can determine which brands are strong and which are weak. Do the important things first. The first thing is to set the right strategy. Note: All data in this article is as of October 2009. Source: 'Ries Category Strategy' WeChat official account -END- Click the image to read directly FMCG industry's most professional practical knowledge base 【 Reply with yellow numbers in the background to view the following keywords 】 | 001 Excellent article selection | 002 Distributor market operations | 003 Terminal visit management | 004 Sales supervisor skills | 005 Sales improvement techniques | 006 Channel expansion | 007 Managing distributors | 008 Distributor development | 009 Distributor internal operations management | 010 Team management | 011 Efficient distribution techniques | 012 Sales manager's eighteen skills | 013 KA operation methods and strategies | 014 First lesson for new salespeople | 015 Internet, brand | 016 Distributor B2B transformation |