Why Do Smart Managers Fail

8/2/2019 Why Do Smart Managers Fail

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....................TroutisPresident ofTrout"Partners, aworldwidemarketingfirmwith headquartersinConnecticut, USA,andofficesin 28 countries.Hehas coauthoredthe marketing classicPositioning.Hislatestbookis Repositioning:Marketinginan EraofCompetition, Change,andCrisis.

whydosmartmanagersfail?........... .................................................IJ jack trout

SMARTUMMARYusinessmanagementsover-educated.herearehundredsof businessmanagementooksandover2,000titlesaloneinmarketing.Sowhyarewestill in suchchoppywaters?

lEIever have I seen so much advice offered toN executives about how to do things right.Why then did Detroit almost drive off aclift? Why did the banks need bailing out?

Why are some corporate legends such as Kodak, Nokia,Yahoo, Johnson &Johnson, Sears, Budweiser and evenGeneral Electric having problems? Sure, you can pointto the dramatic increase in global competition whichmakes mistakes so costly. But there are books abouthow to deal with competition and I even wrote oneof them (Marketing warfare). One can only say, 'It'sa puzzlement.'

If you study this paradox, the best you can do iscategorize the most popular mistakes. So rather than getinto the psychology of denial or study why it happened,it makes more sense to lay bare the traps that keep


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the'me-too'mistakeMany people believe that the basic issue in marketing isconvincing the prospective client that they have a betterproduct or service. They say to themselves, 'We mightnot be first, but we're going to be better.'

That may be true, but if you're late into a marketspace and have to do battle with large, well-establishedcompetitors, then your marketing strategy is probablyfaulty. Me-too just won't cut it.

Another disadvantage of being a me-too is thatthe name of the first brand to market often becomesgeneric. Xerox, Kleenex, Coke, Scotch tape, Gore-Tex,Krazy Glue, Q-tips and Google all have an enormousadvantage over competitive me-too products.

If the secret of success is getting into the prospectivecustomer's mind first, which strategy are mostcompanies committed to? The 'better product' strategy.Benchmarking is a popular subject in the businessmanagement field. Touted as the 'ultimate competitivestrategy,' it involves comparing and evaluating your

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company's products against the best in the industry.It's an essential element in a process often called 'TotalQuality Management' (TQM).

Benchmarking doesn't work because regardless ofa product's objective quality, people perceive the firstbrand to enter their mind as superior. Marketing is abattle of perceptions, not products. When you're a me-too, you're a second-class citizen.

I the'whatareyouselling?'mistake~ This may surprise you, but I have spent a good bit of my

time over the years figuring out exactly what people aretrying to sell. Defining the product category in a simple,understandable way is essential.

Companies large and small often have a tough timedescribing their product, especially if it's a new categoryor a new technology. Or else, they describe the productin confusing terms that doom the effort right out ofthe gate.

The positioning of a product must start fromwhat the product is. We sort and store information bycategory, so your chances of getting into a customer'smind are slim to none if the categorization is vague.

When faced with the tough task of coming up with aname for what you're selling, start with a simple analysisof how the new product works, then try to use thosewords to describe it. When the automobile was born, itwas christened a 'horseless carriage' (a brief descriptionof how it works). 'Cable television' accurately describeshow that system works.

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The biggest marketing successes come with basic,powerful explanations of the product being offered.Prince revolutionized the tennis racquet business with'oversized racquets.' Orville Redenbacher shook upthe popcorn market with 'gourmet popping corn.' Allthese categories were quickly and easily understood.Customers knew what the companies were selling andhow the products were really different.

There are times when you can adjust the explanationof what you're selling to improve your chances of the' otherguy's idea' mistakesuccess. A valve company called Keystone was selling A me-too product is bad enough, and equallywhat they called a 'quarter-turn critical service valve.' problematic is a me-too idea: two companies cannotWhile this was an accurate description that reflected own the same concept in the customer's mind.how the valve worked, it sure wasn't easy to figure When a competitor owns a word or position inout what they were selling. When I took a closer look the prospect's mind, it is futile to attempt to own theinside the brochure that described this product, I same idea. For instance, Volvo has preempted thediscovered that this was simply a 'zero leakage valve.' concept of 'safety.' Many other automobile companies,That was a much more exciting way to describe what including Mercedes-Benz and General Motors, havethey were selling. tried to run marketing campaigns based on safety. Yet

no one except Volvo has succeeded in getting into thethe 'truthwillout'mistake prospect's mind with a safety message.The failure to understand the simple truth that Another massive marketing effort aimed atmarketing is a battle of perceptions trips up thousands of someone else's word can be found in bunnywould-be entrepreneurs every year. land-to be specific, the pink Energizer bunny

Marketing people are preoccupied with doing that is trying to take the long-lasting concept awayresearch and 'getting the facts.' They analyze the from Duracell. No matter how many bunniessituation to make sure the truth is on their side. Then Eveready throws into the fray, Duracell will still be ablethey sail confidently into the marketing arena, secure in to hang onto the word 'long-lasting', because Duracellthe knowledge that they have the best product and that got into the minds of customers first and preemptedultimately the best product will win. the concept. Even the 'Dura' part of the name

This is an illusion. There is no objective reality. communicates it.There are no facts. There are no best products. All thatexists in the world of marketing are perceptions in theminds of customers or prospects. The perception is thereality.Everything else is an illusion.

Most marketing mistakes stem from the assumption: that the marketer is fighting a product battle rooted in: reality. What some marketing people see as the natural

laws of marketing are based on a flawed premise thati the product is the hero of the marketing program andi that companies win or lose based on the merits of the. product. Which is why the natural, logical way to marketa product is invariablywrong.

the'we'reverysuccessful'istake: Success often leads to arrogance, and arrogance to1 failure. When people become successful, they tend to


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become less objective. They often substitute their ownjudgment for what the market wants.

As their successes mounted, companies like GeneralMotors, Sears and IBM became arrogant. They feltthey could do anything they wanted in the marketplace.Success leads to trouble.The bigger the company, the more likely it is thatthe chief executive has lost touch with the front lines.This might be the single most important factor limitingthe growth of a corporation. All other factors favorsize. Marketing is war, and the first principle ofwarfare is force. The larger army, the larger company,has the advantage. But the large company gives upsome of that advantage if it cannot stayfocused on themarketing battle that takes place in the mind of thecustomer. Small companies are mentally closer to thefront than big companies. That may be one reason fortheir rapid growth in the past decades. They haven'tbeen tainted by success.the'everythingoreverybody'mistakeWhen you try to be all things to all people, youinevitably wind up in trouble. Better advice comes froma manager who says, 'I'd rather be strong somewherethan weak everywhere.'

This kind of 'all things' thinking leads to what iscalled 'line extension.' In a narrow sense, line extensioninvolves taking the brand name of a successful product(eg,At Poultry Sauce). It sounds so logical. 'We makeAt, a great sauce that gets the dominant share of the

steak business. But people are switching from beef tochicken, so let's introduce a poultry product. And whatbetter name to use than At. That way people will knowthe poultry sauce comes from the makers of that greatsteak sauce, At.'

But marketing is a battle of perception, not product.To the customer, At is not the brand name, but thesauce itself 'Would you pass me the At please?' asks thediner. Nobody replies with ~t what?'

Needless to say,the At poultry launch was adismal failure.the'livebythenumbers'mistakeBig companies are in a bind. On the one hand, WallStreet is staring at them asking, 'How much are yoursales and profits going to grow next month, next quarter,next year?' On the other hand, an endless number ofcompetitors are staring at them saying, 'We're not goingto let you grow if we can help it.'So what happens? The CEO lies to Wall Street andthen turns around to tell the marketing people what isexpected in terms of profit and growth. They in turnscramble back to their offices and try to figure out howto make those unreasonable numbers.

Brash predictions about earnings and growth oftenlead to missed targets, battered stock, and evencreative accounting. But worse than that, they lead tobad decisions.

As panic sets in, upper management falls into the lineextension, or the everything-for-everybody trap to drive

-- -~~:~' '.'. .Marketingswar,andthe firstprincipleofwarfareisforce.


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Thoughdiffi(ult, leadersmust findawaytomovetothatbetterideaorte(hnology,evenif it threatenstheir basebusiness.

the numbers up. Rather than staying focused on beingstrongsomewhere, they opt for being weak everywhere.Their only hope is that they will be promoted before itall hits the fan.

the'notattackingourself'mistakeMuch hasbeenwritten about the likes ofDEC, Xerox,AT&Tand Kodak and their efforts to move fromslow-growth to high-growth businesses.When this isexacerbated,companies are facedwith what havebeencalleddisruptive technologies: DEC faced the desktopcomputer revolution; Xerox, the surge in laser printing;andKodak, the digital camera.Transforming a company when the underlying

technology changes is no easytask. First of all, WallStreetis upset becauselots of shareholder money startsto disappearin efforts that earn very little in return.Traditional customers are often alienated asthe sales

force's attention becomes diffused by new ventures. Theinternal folks become very uncomfortable with all thischangein the air.Though difficult, leaders have no choice in this

matter. They must find away to move to that better ideaor technology, even if it threatens their basebusiness. Ifthey don't, their future will be in question, especially asthat technology is improved and picks up momentum.the'notbeingincharge'mistakeWhen the CEO or high-level management doesn'ttakechargeof strategy,things rarely go well. In today'srough-and-tumble world, marketing strategy is toocritical to be left to middle-level management. Mter Imakethat 'you're in charge' speech to general managersor CEOs, they often tell me that they don't want toundermine their employees. They want to give them

the responsibility they were promised. That's all welland good for morale, but I encourage them to think theNavy way.When a naval vesselhas aproblem, the ultimate

responsibility is not that of the young officer who hadthe conn when the accident occurred. It's the captain ofthe ship who must answer to that board of inquiry. Andchances are,his career is in trouble.In the business world, it's the CEO who hasto

answer to the board when things go bad. It's your job onthe line if you're at the top, so you'd better take chargeto make sure those bad things don't happen to you.theBajajstoryNothing makes the 'Being in charge' argument betterthan Bajaj Auto. They were just selected asthe '2011Company of the Year' by Economic Times. The reasonis that Rajiv Bajaj is in charge of the marketing aswell asbeing the Managing Director. He feels that marketing ismuch too important to be left to the marketing people.In many ways he operates like the late SteveJobs at

Apple, ashe is involved with all aspectsof motorcyclebrand building: product planning, design, strategy,advertising and PR.It's this involvement that is an importantcomponent in their success.Rajiv Bajaj works very

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Why Do Smart Managers Fail