Tom Asacker

• Home
• Tom's books
• About Tom
• Thought pieces
• Contact

Watch highlights from Tom's speeches

 

Eric Schmidt on strategy

"Our business strategy is not to compete."

Question: Who is the US's largest television advertiser?

Answer: General Motors.

Question: Do any of General Motors' products appear in US Consumer Report's list of the top 10 Best Cars of 2006?

Answer: No. For the first time ever, the list doesn't feature a single U.S. brand. All 10 top picks are Japanese, even the full-sized pickup truck.

Question: Is this a result of poor "little m" marketing (e.g. positioning, creative, media placement, etc.)?

Answer: Puh-lease!

For the record, I believe in advertising. I believe in the power of advertising to:

1. Introduce people to new products and services; and

2. Differentiate, and thus increase sales of, commodity products and services. Because whether we want to believe it or not, most of us certainly do wear, eat and drink the brand-meaning created by the advertising of certain products, or use the brand as a proxy to avoid analysis and decision-making for stuff that appears to be "good enough."

That's it! I do not believe that advertising (or publicity, for that matter) can get people to adopt inferior brands.  Try them? Yes.  Stay with them over time in the face of evidence - either experiential or word-of-mouth - of something demonstrably better. No. And neither should GM, United, and the more than 150 other major corporations teetering on the brink of bankruptcy.

People are awash in new products, information and ideas, and therefore are less likely to stay focused for any length of time on one message or one product. And in this supersaturated economy, sustained audience attention is the foundation of brand endurance. So what's a marketer to do? First, here's what NOT to do:

From iMedia Editor Peter Sealey's Ten Trends article:

"I was having dinner at General Motors and the chairman told me a story. He said, "I am sitting in my office, my manufacturing people come in and say, 'we can build an automatic transmission at GM for 700 dollars. It costs the Ford Motor Company 800 dollars to build that same transmission.' I say, 'Congratulations. Fantastic job. Keep up the good work.' Then, my marketing guy comes in and says, 'we are spending 700 dollars per car in advertising in GM, and Ford is spending eight hundred. We have to increase our spending to 800 dollars.' What is wrong with this equation?" He is right.

Instead of agency lapdogs, marketers must become innovators.  They must work like hell to get sustained attention by focusing on and delivering the value desired by their audience. Forget about competing. Forget about positioning. Yes, you read me right. These old school notions of business success are obsolete.

While in Hawaii last week (mahalo again my friends), I read a post at tompeters.com titled "Competition," which ended with this statement: "Know the competition and engage the team in beating them." Bad, bad advise.  That's exactly why the GM guy was looking for an increase in ad spending.

And I read this gem in Chief Marketer in an article titled, "The Value of Marketing":

"Tom Lueker, chief marketing officer/cofounder of WebSurveyor Corp., is a self-described fan of Ries and Trout's work on positioning. 'I think it's everything,' he says of positioning.

WebSurveyor, a provider of online survey software and services, was not the first in its market. The company followed Ries's advice and found something that it could be first in, by using an application service provider model. Today, says Lueker, 'we're number one in online surveys for a midmarket product for people who want to do it themselves and who want service.' Now that’s positioning.

Lueker says that the company positioned as the leader gets about 50% of the market, number two gets 25%, number three gets 12.5%, and the rest of the competitors split the remaining 12.5%. 'I would never sell [WebSurveyor’s number-one position] unless I was selling the company, because that is the company,' he says.

What's my point? Fortune 500 or Inc. 500, positioning adds value to a company. Marketers are responsible for positioning, and if companies value it, they should value the practice and process that creates and maintains it."

What a bunch of mumbo jumbo, circular reasoning. Here's what really happened, which has nothing to do with Ries' positioning principle. Lueker created a new business model (online ASP survey creation), which potential customers valued more than competitive offerings. That marketplace innovation drove WebSurveyor Corp. to a leadership position in its defined space. End of that chapter of Lueker's story.

Marketing isn't a complex process with complex solutions. It’s simple. Not easy mind you, but simple nonetheless. Develop something that people value enough to trade their time, attention and/or money for, and do it at a profit. Simple. The challenge is to continuously change and innovate, and achieve this simple concept over time.   And that challenge, my marketing friends, is your job.

Posted March 6, 2006
Email this post     

The comments to this entry are closed.