Authors: Al Ries & Jack Trout Group – 3

Moloy Sunder Ghosh – u112037Saisha Shukla – u112105

Surendra Singh – u112177Raj Kiran K M – u112160

Manvendra Singh Chauhan – u112034Ananyo Sen – u112065Sarthak Hota – u112167

Marketing Warfare

Marketing is War

• Satisfy Needs & Wants• Anticipate customer needs

Traditional Philosophy

2500 years of War Marathon(490 B.C.) Arbela(331 B.C.) Metaurus(207 B.C.) Hastings(1066) Crecy(1346) Qubeck(1759) Bunker Hill(1775) Trenton(1776) Austerlitz(1805) Waterloo(1815) Balaclava(1854) Gettysbarg(1863) The Somme(1916) Sedan(1940)

The Principle of Force “Get there firstest with the mostest” – General Nathan

Bedford Forest Better people or Better product fallacy “If you are so smart, how come you're not rich?”- The

black box called brain

The superiority of Defense The mathematics of a defensive war Don’t be a hero- Offence is not always the way to go Friction favors the defense and an attack takes time.

The new era of competition The most bloodthirsty languages are in business pages of

newspapers The headline wars Prediction or propaganda The reality of marketing conflict

Single minded focus towards winning may result in catastrophe

Mapping the mind

Mountains in the mind

Segmentation is tearing up the

terrain

The Nature of the Battleground

Market Leader

• Attack themselves with new ideas

• Block Competitive moves

No. 2-3 of Market

• Avoid strength of leader’s position

• Attack leader’s weaknesses

New Players

• Move into uncontested areas

• Contain an element of surprise

Small Players

• Find a market small enough to defend

• Be prepared to bug out at short notice

The Strategic Square

Defensive

Warfare

Offensive

Warfare

Flanking

Warfare

Guerrilla

Warfare

Defensive principle # 1: Only the market leader should consider playing defence

Defensive principle # 2: The best defensive strategy is the courage to attack yourself

Defensive principle # 3: Strong competitive moves should always be blocked

Defensive Warfare

Offensive principle # 1: The main consideration is the strength of the leader’s position.

Offensive principle # 2: Find a weakness in the leaders strength and attack at that

point. Offensive principle # 3:

Launch the attack on as narrow a front as possible.

Offensive Warfare:

1. Flanking move must be made into an uncontested area Does not require a ground-breaking product but must have an

element of newness or exclusivity Miller Lite, Mercedes on Cadillac

2. Tactical surprise is a must Greater the surprise, longer it takes for leader to react No elongated test marketing

3. Pursuit is as critical as the attack itself Back the successful surprise attack with strong follow up Close-up toothpaste, Miller Lite First PC ‘Altair’ failed since there was no follow up

Principles of Flanking Warfare

Flanking with low price : no-frills approach Budget flanked Hertz and Avis in low end car rental market

Flanking with high price: high price is a benefit Redenbacher’s Gourmet Popping corn : 2 ½ times more expensive

than leading brand Flanking with small size: small is good in some cases

Volkswagen Beetle Flanking with large size: large is better in others

Prince brought out oversized tennis racquets Flanking with distribution: new distribution channels

Hanes: inexpensive pantyhose in food and drugstore outlets Flanking with product form:

Close-up: clear mouthwash looking product as opposed to regular pastes at the time

Types of flanking

1. Find a segment small enough to defend Reduce size of battleground to achieve superiority Rolls-Royce: high-priced guerilla Guerrilla campaign looks like a flanking attack but it isn’t. Flanking

attack is deliberately launched close to leader’s position with an intention to bleed the leader’s share.

A guerrilla may be tempted to launch a flank attack as well but it may fall into the ‘line extension trap’

2. Never act like the leader Guerrilla strategy is opposite to strategy of large companies Have most workforce at the frontlines; improves nimbleness of firm

3. Be prepared to bug out at moment’s notice Abandon position or product if battle turns against you Can also jump into a market quickly

Principles of Guerrilla Warfare

Geographic guerrillas : Local guerrillas City business publications over national publications like

Forbes Demographic guerrillas : appeal to a segment of market

Inc. magazine for small businesses Industry guerrillas: concentrate on an industry

Software for banking industry Product guerrillas: unique one of a kind product

AMC’s Jeep High-end guerrillas: high-price products

Cuisinart food processors: At $250 , 4 times as expensive as GE

Types of Guerrillas

In 1915 Coca-Cola introduced its unique 6-1/2 ounce bottle that became closely associated with the brand. The size and shape was just right to fit the hand, and this bottle and its association with Coca-Cola was a major strength.

However, when Pepsi introduced a larger bottle for the same price as the smaller bottle of Coke. Coke did not have many options to respond because of the way the size and shape of the bottle fit the hand, it could not be enlarged easily.

Furthermore, the dispensing machines for Coke were designed for nickels only, so the price could not easily be changed. These weaknesses were a direct result of Coke's strength and illustrate the second principle of offensive warfare:

“the challenger should seek a weakness in the leader's strength.” Many of the successes and failures of the Coke vs. Pepsi cola wars can be explained

by principles of marketing warfare, including the success and failures of smaller challengers such as 7-Up (the Uncola) and Royal Crown Cola.

The Cola Wars

“The challenger should seek a weakness in the leader's strength”

“The main consideration is the strength of the leader’s position”

“Launch the attack on as narrow a front as possible”

Offensive Principle No. 1

Offensive Principle No. 2

Offensive Principle No. 3

Ries and Trout also use the "beer war" to illustrate marketing warfare principles. Schlitz was the top brand, but lost its lead to Budweiser in a close battle.

Then Heineken entered the market as an import with a successful flanking attack, maintaining its import lead by following through with strong advertising budgets.

In the 1970's many brewers introduced light beers as line extensions. Ries and Trout believe that the line extensions are unwise because the extensions inadvertently flank a firm's own leading brand. This happened to Miller High Life after Miller Lite was introduced.

Miller Lite was successful, but Miller High Life suffered as it lost its position in the mind of the consumer as the working man's beer.

The Beer Wars“The pursuit is as critical as the attack

itself”Flanking

Principle No. 3

In the fast food industry, Ries and Trout use the "burger war" to illustrate a flanking attack

McDonald's was the leader, and Burger King tried offensive maneuvers.

The moves that were unsuccessful were those that extended the product line and that copied McDonald's.

On the marketing battlefield, it means overpowering the competitor in a specific position in the mind of the customer.

For example, Have it your way attacked a weakness in McDonald's consistent production line process that had the flip side of being inflexible.

Even more successful were the advertisements emphasizing the fact that Burger King's burgers were flame-broiled while McDonald's were fried.

Wendy's successfully flanked McDonald's by targeting adults rather than children, offering adult-size portions and launching the highly successful Where's the beef? campaign.

Finally, White Castle was the low-end guerrilla who limited their geographic scope, did not add a confusing array of other products, and maintained a high level of sales in each establishment.

White Castle observed the guerrilla principle of never acting like the leader, and as a result was able to coexist peacefully.

The Burger War

IBM became the market leader in the 1950's, and many other companies attempted to emulate IBM, but IBM continued to hold a majority market share.

In the 1960's Digital Equipment Corporation launched a successful flanking attack by introducing the PDP-8 minicomputer, winning the position of small computers.

According to Ries and Trout, IBM should have blocked this move by introducing their own minicomputer, but they failed to do so until 11 years later.

With DEC owning the minicomputer market, Ries and Trout argue that DEC should have been the company to introduce the PC in the business market.

DEC failed to do so, and IBM launched its PC in 1981 with virtually no competition in the business market.

IBM effectively flanked DEC with a product in the small computer market, just as DEC had done to IBM 15 years earlier.

Many companies introduced their own PC's but IBM pursued the defensive strategy that a leader should pursue by attacking itself, first with the improved PC-XT and then with the PC-AT.

While IBM owned the business PC market, Apple took the lead in home PC's. IBM unsuccessfully attempted to attack Apple in the home computer market with the PCjr, illustrating

that a company's position is more important than its size.

The Computer War

Ries and Trout argue that strategy should be developed using the “bottom-up approach” Exxon's entry into office systems and Mobil's acquisition of Montgomery Ward. Such diversions shift

resources away from the point of battle where they are needed. This is one of the dangers that can be avoided by a bottom-up strategy based on what can be accomplished on the tactical level.

More specifically, Ries and Trout argue that the sole purpose of strategy is to put the forces in motion to overpower the competitor at the point of contact using the principle of force.

On the marketing battlefield, it means overpowering the competitor in a specific position in the mind of the customer.

Ries and Trout explain that a good strategy does not depend on brilliant tactics. Mediocre tactics usually are sufficient for a good strategy. Even the best possible tactics are unlikely to compensate for a poor strategy.

In marketing, advertising can be considered tactics and many managers falsely assume that success depends almost entirely on the quality of the advertising campaign.

If a strategy requires top-notch tactics to win the battle, Ries and Trout maintain that such a strategy is unsound because tactical brilliance is rare.

Any strategy should take into account the probable response of the competitor. The best way to protect against a response is to attack the weakness in the leader's strength so that the leader cannot respond without giving up its strength.

Strategy and Tactics

Tactics Should Drive Strategy

Ries and Trout believe in having relatively few people involved in the strategic process. The organization needs a strong marketing "general" to formulate the strategy from the tactical realities. A marketing general has the following characteristics:

Flexibility - to adjust the strategy to the situation.

Courage - to make a decision and stand by it.

Boldness - to act without hesitation when the time is right.

Knowing the facts - in order to formulate strategy from the ground up.

Knowing the rules - but internalizing them so they can be forgotten.

Lucky - marketing warfare has an element of chance; a good strategy only makes the odds more favourable.

Key Take Away - Marketing General

“Marketing is a War” - To triumph over the competition, it’s not just enough to target customers. Marketers must take aim at their competitors- and be prepared to defend their own turf from would-be attackers at all times. Ex: Cola Wars

“Marketing is a strategy” - Companies must learn how to deal with their competitors. How to avoid strengths. How to exploit weakness. Some of the marketing warfare strategies that this book discusses are defensive warfare, offensive warfare, flanking warfare and guerrilla warfare. The companies may use different strategies depending on their market position.

“Marketing is like a football game” – To win the game, the team must focus its efforts on outwitting, outflanking, or overpowering the opponent. This is the case in football, war and marketing. It involves leadership and motivation, intelligence gathering, types of marketing weapons, logistics and communications.

Ries and Trout have identified interesting and useful commonalities between “military strategy and marketing strategy”. As in military warfare, the appropriate marketing warfare strategy depends on the firm's position relative to its opponents. In developing its strategy, the firm must objectively determine its position in the market and act accordingly.

Summary