Category Archives: Marketing

Marketing Effectively As An Underdog

As a marketer, it is easy to feel overwhelmed when going up against much bigger rivals. The big dogs can have an impressive legacy, unique branding, and deep pockets. So, if you are an underdog, how do you market effectively with low or no marketing budget?

Philip Kotler, the father of modern marketing, said: “Marketing is not the art of finding clever ways to dispose of what you make.” Unfortunately, putting the cart before the horse has become far too easy in today’s social-media frenzy.

Marketing Underdog

The good news is that there are many examples of upstarts outflanking much bigger rivals. But it requires a fundamental rethinking of a company’s place in the customer marketplace.

Achilles’ Heel

History has shown that market leaders can be their own worst enemies. Their soft underbelly can present opportunities in three areas for those who dare to be creative and passionate:

Scope: Larger companies, with my-way-or-highway attitude, often ignore certain customer segments because they may be unprofitable or difficult to serve. Smart marketers need to develop product or service offerings to help these underserved or neglected non-consumers. For example, Southwest Airlines started with three planes and targeted those passengers who couldn’t afford to fly and were either driving or taking the bus instead.

Service: Big companies can install customer-relationship software, but instilling a customer-first culture is often difficult for them because of unwieldy operations, multiple locations, internal politics, inward focus, and misplaced incentives. For example, Chick-fil-A, which started as Dwarf Grill in Hapeville, Georgia, has managed to keep customer loyalty and employee engagement front and center in an industry where fast food is synonymous with unfriendly service and high attrition.

Scale: Larger rivals can make huge investments, but they can also have blinders on about bigger and better customers. For example, Paychex saw an opportunity to make payroll outsourcing easy and affordable for small businesses after realizing that heavyweight ADP’s product offerings, internal processes, information technology, resource allocation, and incentive structure were all geared toward serving larger employers with 50+ employees.

Ignorant Antagonists

If these examples of upstarts outwitting the incumbents appear one-off or outdated, think again. Clayton Christensen, one of the world’s top experts on innovation and growth, has done in-depth research on how industry leaders get blindsided—precisely because they focus too closely on their most profitable customers and businesses.

According to Christensen, successful companies relentlessly move up-market by pursuing “sustaining” innovations aimed at demanding, high-end customers and by making better products that can be sold for more money to them. When they do so, however, they unwittingly open the door to “disruptive” innovations at the bottom of the market.

Mark Twain knew this more than a century ago. He said: “The best swordsman in the world doesn’t need to fear the second best swordsman in the world; no, the person for him to be afraid of is some ignorant antagonist who has never had a sword in his hand before; he doesn’t do the thing he ought to, and so the expert isn’t prepared for him; he does the thing he ought not to do; and often it catches the expert out and ends him on the spot.”

The caveat for low-budget marketers is to avoid taking the Goliaths head-on by going into battle with a sword. Instead, the trick is to develop an unconventional, five-smooth-stones strategy that would make the established rivals laugh and say, “Yeah, right!”

So, put on your ignorant antagonist hat and think carefully about what you want to market, to whom, and why before worrying about how to market it.

Remember the time when established mainframe computer makers labeled the personal computer a toy, when digital cameras were mocked by professional photographers, or when online education was pooh-poohed by major universities?

PS: A version of this post was previously published at Marketing Profs and CommPRO.Biz, both leading websites for marketing and communications professionals worldwide.

 

Ad Battles: Apple’s Non-Response to Disparaging Ads

A recent article in Variety titled “Apple, Once A Maker Of Ads With Bite, Gets Bitten By Rivals” ponders why Apple hasn’t responded in kind to the ads poking fun at it by Samsung, Microsoft, and Google’s Motorola unit. The article rightfully points out that as the world’s most valuable brand, Apple doesn’t have to stoop to the level of its competition—no matter how annoying they may be.

But there is more to it than that.

As Mom always said, “If you have nothing good to say about others, don’t say anything.” That is a good rule of thumb to remember in advertising too. Just like in presidential elections where the challenger always wants more debates and the incumbent wants as few debates as possible, Apple is now the incumbent as far as mind share is concerned. Apple no longer sees any need to give free airtime to its competitors.

Also, Steve Jobs had the chutzpah and in-your-face attitude to mock Microsoft. Comparative advertising, in which competitors are named, is always a gamble: It has to be hard-hitting but done tastefully enough so as not to be seen as belligerent and off-putting. You must be able to walk that fine line or things can blow up in your face. Tim Cook’s personality appears to be quite different and he may have decided not to go there.

According to Wikipedia, in the UK, most of the use of competitor’s registered trademark in a comparative advertisement was an infringement of the registration up till the end of 1994 and the current rules on comparative advertising are still regulated by a series of EU Directives. It is not an open field in the U.S. either. An article titled The Law of Comparative Advertising in the United States by John E. Villafranco states that the FTC permits disparaging advertisements “so long as they are truthful and non-deceptive.”

Although FTC doesn’t care about it, from a marketing perspective what the ads mock must be something the consumers care about. Steve Jobs in a refreshingly honest, thoughtful, and profound answer in a 1997 video to a rather blunt, in-your-face question, says, “You have got to start with the customer experience and work backwards to the technology. You can’t start with the technology and try to figure out where you are going to try to sell it. And I have made this mistake probably more than anybody else in this room and I got the scar tissues to prove it and I know it’s the case. And as we have tried to come up with a strategy and vision for Apple, it started with what incredible benefits can we give to customers. Where can we take the customer?”

Now, a lot of CEOs chant the same “customer-first” mantra. But not very many in recent memory have believed in it so wholeheartedly and executed it with such a ferocity as Steve Jobs and Apple have. That alone explains why Apple is the world’s most valuable brand today, not to mention a nearly half a trillion dollars in market cap. What was Apple’s market cap when Steve Jobs uttered these famous words in 1997? $2.3 Billion! Apple’s market cap has gone up more than 200 times since then and is still at a very reasonable P/E ratio of 12.84. (Compare that to the P/E ratio of 111 for Facebook or 1,227 for Amazon!)

Most importantly, and I believe the Variety article misses this point, Apple’s comparative ads in the past were geared toward boosting its fledgling Mac brand against the then-dominant yet clumsy and buggy PC or against IBM in the earlier days while positioning itself as elegant, hip, and cool. To the best of my knowledge, Apple has not taken the same approach with mobile entertainment or in mobile computing—fields in which Apple virtually reinvented and reinvigorated the customer experience with iPods, iTunes, iPhones, and iPads.

Besides, right now there isn’t much for Apple to mock as the technology and interface gaps have narrowed quite significantly. When Apple introduces visionary products again that take on established market paradigms and shoddy customer experiences , it may revisit taking potshots at its pitiful rivals again.

Let’s just hope those ads are half as entertaining as the Mac vs. PC ads!