The Law of Unpredictability – Unless You Write Your Competitor’s Plans, You Can’t Predict the Future

Most marketing plans make assumptions about the future.

Have you ever noticed that even with hundreds of computers and an army of meteorologists, no one can predict the weather more than three days in advance? So how do you expect anyone to predict what the market conditions will be like in one to three years?

Failure to forecast competitive reaction is a major reason for marketing failures. Yet there are those who would say that America’s big problem is the lack of a long view and that American management is too short term in thinking. Without including a forecast of the future, in marketing plans, wouldn’t things be even worse?

On the surface, those concerns are real. But it is important to understand what is meant by long terms versus short term. Most of corporate America’s problems are not related to short-term marketing thinking; they are related to short-term financial thinking.

Most companies live from quarterly report to quarterly report. That is a receipt for problems. Companies that live by the numbers, die by the numbers.

For example, General Motors was doing fine until the financial folks took over and put the focus on the numbers instead of the brands. That allowed Alfred P. Sloan’s plan of differentiated brands to fall apart. Every division head, in order to make their short-term numbers, started to chase the middle of the market. Over time, this approach contributed to the bankruptcy in 2009.

Good short-term planning is coming up with that angle or word that differentiates your product or company. You then setup a coherent long-term marketing direction that builds a program to maximize that idea or angle. It is not a long-term plan, it is a long-term direction.

For example, Tom Monaghan’s short-term angle at Domino’s Pizza was to come up with that home delivery idea and build a system that delivered pizzas quickly and efficiently. His long-term direction was to build the first nationwide home delivery chain as rapidly as possible.

Monaghan determined he could not own the words, home delivery, until he had enough franchises to afford national advertising. He accomplished both objectives and today Domino’s is a multi-billion dollar company with a significant share of the home delivery business. Monaghan did it all without a complex, 10-year plan.

So what can you do? How can you best cope with unpredictability? While you can not predict the future, you can get a handle on trends, which is a way to take advantage of change.

One example is American’s growing orientation toward good health and wellness. This is estimated to be The Next Trillion $ industry and it has barely gotten started.

However, the danger in working with trends is extrapolation. Many companies jump to conclusions about how far a trend will go. For example, if you believed the prognosticators of a few years ago, everyone today should be eating fish or chicken; however hamburger sales are still doing just fine.

Equally bad as extrapolating a trend is the common practice of assuming the future will be a replay of the present. When you assume that nothing will change, you are predicting the future just as surely as when you assume that something will change. Remember Murphy’s Law, the unexpected always happens.

While tracking trends can be useful tool in dealing with the unpredictable future, market research can be more of a problem than a help. New ideas and concepts are almost impossible to measure. People do not know what they will do until they face an actual decision.

For online marketers, this is where keyword research is very helpful. By using keyword research tools, the online marketer is able to learn what ideas, concepts, trends, and products are in demand based on what people are searching for online. In addition, market profitability, and the amount of competition, can be determined based on good keyword analysis with the right keyword research tools.

One final note that is worth mentioning is that there is a difference between predicting the future and taking a chance on the future. Orville Redenbacher’s Gourmet Popping Corn took a chance that people would pay twice as much for high-end popcorn. This was not a bad risk in today’s affluent society.

No one can predict the future with any degree of certainty nor should they have marketing plans that try to predict the future unless they are writing the marketing plans of their competitors.

Marketing is a battle of ideas. If you are to succeed, you must describe your value and deliver sustainable results. Without capability, you had better have a low price; a very low price.

It takes a while but many Internet Marketing entrepreneurs learn the Law of Unpredictability. They learn to identify their target market with keyword research and keyword research tools as they know they can not guess what the market desires nor can they predict the future.

To accomplish this, they use various methods, tools, and follow a traffic formula to build relationships with their leads and customers. They build websites that create trust. They collect name and email addresses using an Optin form on a Landing Page. They use email systems with both auto-responders and broadcast capabilities in order to send messages to their leads and customers. These email messages frequently send information, provide knowledge, and occasionally promote an offering. Many Internet Marketing entrepreneurs learn that leads and customers do not like to be sold to however they will browse and shop. Over an extended period of time, skilled Internet Marketers are able to use hypnotic writing skills, in their marketing campaigns, to get leads and customers to take the action they want. This is how they learn to identify a target market, stay focused, and add value to their target market. They learn to leverage the equity in their list and be successful in the world that includes the Law of Unpredictability.

It looks easy but marketing is not a game for amateurs. Marketing is not a battle of products. It is all about the strategy you use to benefit from the Law of Unpredictability as no one can predict the future with any degree of certainty.

You can find out more about Internet Marketing and home-based businesses by reading updates that will be posted at my blog over the next few weeks.

Finally, a great book to read is "The 22 Immutable Laws of Marketing" by Ries & Trout. It is the source of some of the material provided in this article.

In closing, be sure to meet me at my website, WhoIsMikeFarrell, learn some tips about being No 1 on Google at aspenIbiz My Go-To-Market Partners, and learn how to be savvy with your money like the insiders at aspenIbiz The Conspiracy For Your Money Blog.

The Law of Singularity – Only One Move Produces Sustainable Results

Many marketing people see success as the sum total of a lot of small efforts beautifully executed. They think they can pick and choose from a number of different strategies and still be successful as long as they put enough effort into the program. They seem to think that the best way to grow is the puppy approach - get into everything.

If they're not with the leader, they often end up trying to do the same as the leader but they try to be a little better or try a little harder. However, trying harder is not the secret of marketing success.

Whether you try hard or try easy, the differences are marginal. Furthermore the bigger the company, the more the law of averages wipes out any real advantage of a trying-harder approach.

History teaches that the only thing that works in marketing is the single, bold stroke. Furthermore, in any given situation there is only one move that will produce substantial results.

Successful generals study the battleground and look for that one bold stroke that is least expected by the enemy. Finding one is difficult. Finding more than one is usually impossible.

Military strategist and author B. H. Liddell Hart calls this bold stroke "the line of least expectation." The Allied invasion came at Normandy, a place whose tide and rocky shore the Germans felt would be an unlikely choice for a landing of any scale.

So it is in marketing. Most often there is only one place where a competitor is vulnerable. And that place should be the focus of the entire invading force.

What works in marketing is the same as what works in the military; the unexpected.

Hannibal came over the Alps, a route deemed impossible to scale. Hitler came around the Maginot Line and sent his panzer divisions through the Ardennes, terrain the French generals thought impossible to traverse with tanks. (As a matter of fact, he did it twice - once in the Battle of France and again in the Battle of the Bulge.)

The automobile industry is an interesting case in point. In recent years there have been only two strong moves made against GM. Both were flanking moves around the GM Maginot Line. The Japanese came at the low end with small cars like Toyota, Datsun, and Honda. The Germans came at the high end with super-premium cars like Mercedes and BMW.

With the success of Japanese and German flanking attacks, General Motors was under pressure to commit resources in an attempt to shore up the bottom and the top of its lines.

GM made the fateful decision to build many of its midrange cars using the same body style. Suddenly, no one could tell a Chevrolet from a Pontiac, Oldsmobile, or a Buick. They all locked alike. Its’ look-alike cars weakened General Motors in the middle as Ford broke through with the Sable. And then the Japanese jumped in with Acura, Lexus, and Infiniti. General Motors, weak across the board, spun into bankruptcy during 2008 after the start of the Global Financial Crisis.

To find that singular idea or concept, marketing managers have to know what's happening in the marketplace. They have to be down at the frontline in the mud of the battle. They have to know what's working and what isn't. They have to be involved.

Because of the high cost of mistakes, management can't afford to delegate important marketing decisions. That's what happened at General Motors.

When the financial people took over, the marketing programs collapsed. Their interest was in the numbers, not the brands. The irony is that the numbers went south, along with the brands.

It's hard to find that single move if you're hanging around headquarters and not involved in the process.

Marketing is a battle of ideas. If you are to succeed, you must have a single successful move to describe your value and deliver sustainable results. Without one, you had better have a low price; a very low price.

It takes a while but many Internet Marketing entrepreneurs learn the Law of Singularity. They learn to identify their target market and focus on a single successful move to promoting products that will appeal and add value to their target market.

To accomplish this, they use various methods, tools, and follow a traffic formula to build relationships with their leads and customers. They build websites that create trust. They collect name and email addresses using an Optin form on a Landing Page. They use email systems with both auto-responders and broadcast capabilities in order to send messages to their leads and customers. These email messages frequently send information, provide knowledge, and occasionally promote an offering. Many Internet Marketing entrepreneurs learn that leads and customers do not like to be sold to however they will browse and shop. Over an extended period of time, skilled Internet Marketers are able to use hypnotic writing skills, in their marketing campaigns, to get leads and customers to take the action they want. This is how they learn to identify a target market, stay focused, and add value to their target market. They learn to leverage the equity in their list and be successful in the world that includes the Law of Singularity.

It looks easy but marketing is not a game for amateurs. Marketing is not a battle of products. It is all about the strategy you use to benefit from the Law of Singularity where only one move produces sustainable results.

You can find out more about Internet Marketing and home-based businesses by reading updates that will be posted at my blog over the next few weeks.

Finally, a great book to read is "The 22 Immutable Laws of Marketing" by Ries & Trout. It is the source of some of the material provided in this article.

In closing, be sure to meet me at my website, WhoIsMikeFarrell, learn some tips about being No 1 on Google at aspenIbiz My Go-To-Market Partners, and learn how to be savvy with your money like the insiders at aspenIbiz The Conspiracy For Your Money Blog.

The Law of Candor – Admit a Negative and the Prospect Will Give You a Positive

It goes against corporate and human nature to admit a problem. For years, the power of positive thinking has been drummed into us and “think positive” has been the subject of endless books and articles.

So it may come as a surprise to you that one of the most effective ways to get into a prospect’s mind is to be candid and first admit a negative, then twist it into a positive.

Avis is only No 2 in rent cars.

With a name like Smucker’s it has to be good.

What’s going on here? Why does a dose of honesty work so well in the marketing process?

First and foremost, candor is very disarming. Every negative statement you make about yourself is instantly accepted as truth. Positive statements, on the other hand, are looked at as dubious at best especially in an advertisement.

You have to prove a positive statement to the prospect’s satisfaction. No proof is needed for a negative statement.

“With a name like Smucker’s it has to be good.” Most companies, especially family companies, would never make fun of their name. Yet the Smucker family did, which is one reason why Smucker’s is the No 1 brand of jams and jellies. If your name is bad, you have two choices: change the name or make fun of it.

Avis is only No 2 in rent cars so why go with them? They must try harder. Everybody knew that Avis was second in rent cars.

So why go with the obvious? Marketing is often a search for the obvious. Since you can’t change a mind once it is made up, your marketing efforts have to be devoted to using ideas and concepts already installed in the brain. You have to use your marketing programs to “rub it in.” No program did this as brilliantly as the Avis No 2 program.

The explosive growth of communications in our society has made people defensive and cautious about companies trying to sell them anything. Admitting a problem is something that very few companies do.

When a company starts a message by admitting a problem, people tend to, almost instinctively, open their minds. Think about the times that someone came to you with a problem and how quickly you got involved and wanted to help. Now think about people starting a conversation about some wonderful things they are doing. You probably were a lot less interested.

Now with that mind open, you are in a position to drive in the positive, which is our selling idea. Some years ago, Scope entered the mouthwash market with a good tasting mouthwash thus exploiting Listerine’s truly terrible taste.

What should Listerine do? It certainly could not tell people that Listerine’s taste was not all that bad. That would raise a red flag that would reinforce a negative perception. Things could get worse. Instead, Listerine brilliantly invoked the law of candor: “The taste you hate twice a day.”

Not only did the company admit the product tasted bad, it admitted that people actually hated it (now that’s honesty). This admission setup the selling idea that Listerine “kills a lot of germs.”

The prospect figured that anything that tastes like disinfectant must indeed be a germ killer. A crisis passed with help of a heavy dose of candor.

One final note: The law of candor must be used carefully and with great skill. First, your negative must be widely perceived as a negative. It has to trigger an instant agreement with your prospect’s mind. If the negative does not register quickly, your prospect will be confused and will wonder, “What is this all about?”

Next you have to shift quickly to the positive. The purpose of candor is not to apologize. The purpose of candor is to setup a benefit that will convince your prospect.

This law only proves the old maxim: Honesty is the best policy.

Marketing is a battle of ideas. If you are to succeed, you must have a unique attribute to focus and describe your value. Without one, you had better have a low price; a very low price.

It takes a while but many Internet Marketing entrepreneurs learn the Law of Candor. They learn to identify their target market, focus on promoting products that will appeal and add value to their target market.

To accomplish this, they use various methods, tools, and follow a traffic formula to build relationships with their leads and customers. They build websites that create trust. They collect name and email addresses using an Optin form on a Landing Page. They use email systems with both auto-responders and broadcast capabilities in order to send messages to their leads and customers. These email messages frequently send information, provide knowledge, and occasionally promote an offering. Many Internet Marketing entrepreneurs learn that leads and customers do not like to be sold to however they will browse and shop. Over an extended period of time, skilled Internet Marketers are able to use hypnotic writing skills, in their marketing campaigns, to get leads and customers to take the action they want. This is how they learn to identify a target market, stay focused, and add value to their target market. They learn to leverage the equity in their list and be successful in the world that includes the Law of Candor.

It looks easy but marketing is not a game for amateurs. Marketing is not a battle of products. It is all about the strategy you use to benefit from the Law of Candor when you admit a negative, the prospect will give you a positive.

You can find out more about Internet Marketing and home-based businesses by reading updates that will be posted at my blog over the next few weeks.

Also, a great book to read is "The 22 Immutable Laws of Marketing" by Ries & Trout. It is the source of some of the material provided in this article.

In closing, be sure to meet me at my website, WhoIsMikeFarrell, learn some tips about being No 1 on Google at aspenIbiz My Go-To-Market Partners, and learn how to be savvy with your money like the insiders at aspenIbiz The Conspiracy For Your Money Blog.

Finally, I would like to provide Best Wishes for a Prosperous New Year!

The Law of Attributes – Every Attribute Has an Opposite Effective Attribute

In a previous (Feb 4th 2010) blog post about The Law of Exclusivity, a point was made that you can’t own the same word or position that your competitor owns. You must find your own word to own. You must seek out another attribute.

Too often a company attempts to emulate the leader. “They must know what works,” goes the rationale, “so let’s do something similar.” This is not good thinking.

It is much better to search for an opposite attribute that will allow you to play off against the leader. The key word here is opposite so similar will not do.

The leading cola drink was the original and thus the choice of older people. Pepsi successfully positioned itself as the choice of the younger generation.

Since Crest owned the word cavities, other toothpastes avoided cavities and jumped on other attributed like taste, whitening, breath protection, and baking soda.

Marketing is a battle of ideas. So if you are to succeed, you must have an idea or attribute of your own around which to focus your efforts. Without one, you had better have a low price; a very low price.

Some say all attributes are not created equal. Some attributes are more important to customers than others. You must try and own the most important attribute to your target prospects and customers.

For example, cavity prevention is the most important attribute in toothpaste. It is the one to own. But The Law of Exclusivity points to the simple truth that once an attribute is successfully taken by your competition, it is gone. You most move on to a lesser attribute and live with a smaller share of the category. Your job is to seize a different attribute, dramatize the value of your attribute, and thus increase your share.

Here is another example. Burger King was unsuccessful when it tried to take the attribute “fast” from McDonald’s. What should Burger King have done? Use the opposite attribute? The exact opposite attribute, “slow” would not do for a fast food place however the there is an element of slowness in the broiling concept.

To drive the concept into a prospect’s mind, Burger King needed a term or attribute to describe it’s new concept … it came up with the “flame-broiled taste of Burger King.” This new concept for Burger King, at the time, created fear and terror in the boardroom at McDonald’s … this is always a good sign of an effective program.

Marketing is a battle of ideas. If you are to succeed, you must have a unique attribute to focus and describe your value. Without one, you had better have a low price; a very low price.

It takes a while but many Internet Marketing entrepreneurs learn the Law of Attributes. They learn to identify their target market, focus on promoting products that will appeal and add value to their target market.

To accomplish this, they use various methods, tools, and follow a traffic formula to build relationships with their leads and customers. They build websites that create trust. They collect name and email addresses using an Optin form on a Landing Page. They use email systems with both auto-responders and broadcast capabilities in order to send messages to their leads and customers. These email messages frequently send information, provide knowledge, and occasionally promote an offering. Many Internet Marketing entrepreneurs learn that leads and customers do not like to be sold to however they will browse and shop. Over an extended period of time, skilled Internet Marketers are able to use hypnotic writing skills, in their marketing campaigns, to get leads and customers to take the action they want. This is how they learn to identify a target market, stay focused, and add value to their target market. They learn to leverage the equity in their list and be successful in the world that includes the Law of Attributes.

It looks easy but marketing is not a game for amateurs. Marketing is not a battle of products. It is all about the strategy you use to benefit from the Law of Attributes as for every attribute, there is another attribute that is opposite and effective.

You can find out more about Internet Marketing and home-based businesses by reading updates that will be posted at my blog over the next few weeks.

Finally, a great book to read is "The 22 Immutable Laws of Marketing" by Ries & Trout. It is the source of some of the material provided in this article.

In closing, be sure to meet me at my website, WhoIsMikeFarrell, learn some tips about being No 1 on Google at aspenIbiz My Go-To-Market Partners, and learn how to be savvy with your money like the insiders at aspenIbiz The Conspiracy For Your Money Blog.

Finally, I would like to provide Best Wishes for a Happy Holiday Season and a Prosperous New Year!

The Law of Sacrifice – You Have to Give Up Something in Order to Get Something

The Law of Sacrifice is the opposite of the Law of Line Extension. If you want to be successful today, you should give something up.

In the world of business and marketing, there are three areas to sacrifice: product line, target market, and constant change.

The first area to review is the product line.

Where is it written that the more you have to sell, the more you sell?

Marketing is a game of mental warfare. It's a battle of perceptions, not products or services. In the mind of the prospect, Eveready was the long-time leader in batteries and then new technology arrived-as it does in most industries. The first technology to change the battery business was the heavy-duty battery. What would you call your heavy-duty battery if you had the No.1 name in batteries? You'd probably call it the Eveready heavy-duty battery, which is what Eveready did. Soon after, the alkaline battery arrived. Again, Eveready called it the alkaline battery. It seemed to make sense.

Another company, P.R. Mallory then introduced an alkaline batteries only product line and the company gave the line a better name; it called them Duracell.

The power of the sacrifice (meaning it gave up a broad product line) for Duracell was in being able to put the "long-lasting battery" idea in the mind of the customer. Duracell lasts twice as long as Eveready said the advertising.

As a result of this success, Eveready was forced to change the name of its alkaline battery to "the Energizer" but it was too late. Duracell had already become the leader in the battery market.

One more example of the law of sacrifice is from the retail industry. Many retail chains that are successful have a pattern or formula of a narrow focus with in-depth stock. Here are some examples.

In the retail field, generally the big successes are the specialists:

- The Limited - Upscale clothing for working women.
- The Gap - Casual clothing for the young at heart.
- Benetton - Wool and cotton clothing for young swingers.
- Victoria's Secret - Sexy undergarments.
- Foot Locker - Athletic shoes.
- Banana Republic - Safari wear.

(When a clothing chain with a name like Banana Republic can be successful, you know we live in the age of the specialist.)

Let's review the second area of sacrifice which is the target market.

Where is it written that you have to appeal to everybody?

Take the cola field. Coca-Cola got into the prospect's mind first and built a powerful position. In
the late fifties, for example, Coke outsold Pepsi more than five to one. What could Pepsi-Cola do to go against Coke's powerful position?

In the early sixties, Pepsi-Cola finally developed a strategy based on the concept of sacrifice. The company sacrified everything except the teenage market and then it brilliantly exploited this market by hiring its icons: Michael Jackson, Lionel Richie, and Don Johnson.

Within one generation, Pepsi closed the gap and to be within 10 percent of Coca-Cola in total U.S. cola sales. (In the supermarket, Pepsi-Cola actually outsells Coca Cola.)

In spite of Pepsi-Cola’s success the pressure for enlarging the tent is always present. In the mid 80s, it succumbed to the temptation and according to a report in Advertising Age, "Pepsi-Cola Co. had outgrown the Pepsi generation. In a major marketing shift, flagship Pepsi will be pitched as the soft drink for the masses."

"Gotta have lt" became Pepsi's new theme and the advertising promotions showed older people like Yogi Berra and Regis Philbin drinking Pepsi.

According to Fortune magazine, “Coca-Cola is still the world's most powerful trademark. When an also-ran like Pepsi-Cola develops a narrowly focused strategy that puts it within an eyelash of the leader, why would it change its powerful strategy?”

Finally, the third sacrifice area is constant change.

Where is it written that you have to change your strategy every year at budget review time?

If you try to follow the twists and turns of the market, you are bound to wind up off the road. The best way to maintain a consistent position is not to change it in the first place.

A little over 20 years ago, People Express was a startup airline carrier and it had created a brilliant "niche" position. It was the no-frills airline that flew to no-frills cities at no-frills prices. People used to get on a People Express plane and say, "Where are we going?" They didn't care as long as it was cheap enough.

What did People Express do after it became successful? It tried to be all things to all people. It invested in new equipment like 747s. It started to fly the heavily traveled routes to places like Chicago and Denver as well as Europe. It also bought Frontier Airlines. It added frills like first-class sections.

People Express then promptly lost altitude and only escaped bankruptcy court by selling itself to Texas Air which did it for them.

Good things come to those who sacrifice.

It takes a while but many Internet Marketing entrepreneurs learn the Law of Sacrifice. They learn to identify their target market, focus on promoting products that will appeal to the target market, and to stay the course with persistent effort and not have constant change.

To accomplish this, they use various methods, tools, and follow a traffic formula to build relationships with their leads and customers. They build websites that create trust. They collect name and email addresses using an Optin form on a Landing Page. They use email systems with both auto-responders and broadcast capabilities in order to send messages to their leads and customers. These email messages frequently send information, provide knowledge, and occasionally promote an offering. Many Internet Marketing entrepreneurs learn that leads and customers do not like to be sold to however they will browse and shop. Over an extended period of time, skilled Internet Marketers are able to use hypnotic writing skills, in their marketing campaigns, to get leads and customers to take the action they want. This is how they learn to identify a target market, stay focused, and add value to their target market. They learn to leverage the equity in their list and be successful in the world that includes the Law of Sacrifice.

It looks easy but marketing is not a game for amateurs. Marketing is not a battle of products. It is all about the strategy you use to benefit from the Law of Sacrifice as you have to give up something in order to get something.

You can find out more about Internet Marketing and home-based businesses by reading updates that will be posted at my blog over the next few weeks.

Finally, a great book to read is "The 22 Immutable Laws of Marketing" by Ries & Trout. It is the source of some of the material provided in this article.

In closing, be sure to meet me at my website, WhoIsMikeFarrell, learn some tips about being No 1 on Google at aspenIbiz My Go-To-Market Partners, my affiliate website, and learn how to be savvy with your money like the insiders at aspenIbiz The Conspiracy For Your Money Blog.

The Law of Line Extension – There Is an Irresistible Pressure to Extend the Equity of the Brand

If violating any of the laws of marketing was a punishable offense, a large portion of corporate America would be in jail.

By far the most violated law of marketing is the law of line extension. What’s even more diabolical is that line extension is a process that takes place continuously with almost no conscious effort on the part of the corporation. It’s like a closet or desk drawer that fills up with almost no effort on your part.

One day a company is tightly focused on a single product that is highly profitable. The next day the same company is spread thin over many products and is losing money.

Take IBM. Over the years, IBM has been a mainframe computer company that made a ton of money. Then they evolved into a company that had everything, midrange computers, personal computers, pen computers, workstations, software, networks, telephones, and of course professional services. They even tried to get in the home computer market with the PCjr.

Along the way, IBM spent millions on copiers (later sold to Kodak), Rolm (sold to Siemens), Satellite Business Systems (shut down), the Prodigy network (which evolved into an ESPN website and a Yahoo content portal), as well as software products including SAA, TopView, OfficeVision, and OS2.

In the early 2000s, IBM was close to collapsing under its own weight. It diversified, sold off, or closed down most of these product lines and focused on world wide professional services.

When a company becomes incredibly successful, it invariably plants the seeds for its future problems.

Take Microsoft, without a doubt the most successful company in the software field. Microsoft has been heard to say it intended to aggressively seek the dominant share in every major software applications category in the personal computer field with a goal to have as much as a 70 percent share in every major software category.

Microsoft Corp has continued on its quest in line extension with online products (MSN), games (Xbox), and smart phones and mobile devices (Windows Mobile). Even with challengers in all these categories, as of 2008, MSFT had a global annual revenue over $60B with nearly 90,000 employees in 105 countries. It develops, manufactures, licenses, and supports a wide range of software products for computing devices.

However, there continues to be ominous signs of softness in Microsoft’s overall strategy.

Whom does that sound like – IBM? Microsoft is setting itself up for a collapse along the lines of IBM ten years earlier.

When you try to be all things to all people, you inevitably end up in trouble. “I’d rather be strong somewhere,” said one manager, “than weak everywhere.”

In a narrow sense, line extension involves taking the brand name of a successful product and putting it on a new product you plan to introduce.

It sounds so logical. But marketing is a battle of perception, not product.

There are as many ways to line extend as there are galaxies in the universe. And new ways get invented every day. In the long run and in the presence of serious competition, line extension almost never works.

In spite of evidence that line extensions don’t work, companies continue to pump them out. Here are some examples

Ivory soap. Ivory shampoo?
Life Savers candy. Life Savers gum?
Bic pens. Bic lighters?
Tanqueray gin. Tanqueray vodka?
USA Today. USA Today on TV?

Why does top management believe that line extension works, in spite of the overwhelming evidence to the contrary? One reason is that while line extension is a loser in the long term, it can be a winner in the short term (previous blog post titled The Law of Perspective). Management is also blinded by an intense loyalty to the company or brand.

More is less. The more products, the more markets, the more alliances a company develops, the less money it makes. “Full-speed ahead in all directioins” seems to be the call from the corporate office. When will companies learn that line extension ultimately leads to oblivion?

Less is more. If you want to be successful today, you have to narrow the focus in order to build a position in the prospect’s mind.

In the conventional view, a business strategy usually consists of developing an all-encompassing vision. In other words, what concept or idea is big enough to hold all of a company’s products and services on the market today as well as those that are planned for the future?

In the conventional view, strategy is a tent. You stake out a tent big enough so it can hold everything you might possible want to get into.

For many companies, line extension is the easy way out. Launching a new brand requires not only money, but also an idea or concept. For a new brand to succeed, it needs to be first in a new category (previous post titled The Law of Leadership). Or the new brand needs to be positioned as an alternative to the leader (previous post titled The Law of the Opposite). Companies that wait until a new market has developed often find these two leadership positions already preempted. So they fall back on the old reliable line extension approach.

The antidote for line extension is courage, a commodity in short supply.

It takes a while but many Internet Marketing entrepreneurs resist the pressure to extend the equity of their brand. As a result, they participate in Affiliate Marketing programs. They use various methods, tools, and follow a traffic formula to build relationships with their leads and customers. They build websites that create trust. They collect name and email addresses using an Optin form on a Landing Page. They use email systems with both auto-responders and broadcast capabilities in order to send messages to their leads and customers. These email messages frequently send information, provide knowledge, and occasionally promote an offering. Many Internet Marketing entrepreneurs learn that leads and customers do not like to be sold to however they will browse and shop. Over an extended period of time, skilled Internet Marketers are able to use hypnotic writing skills, in their marketing campaigns, to get leads and customers to take the action they want. This is how they learn to add value and leverage the equity in their list and be successful in the world that includes the Law of Line Extension.

It looks easy but marketing is not a game for amateurs. Marketing is not a battle of products. It is all about the strategy you use to benefit from the Law of Line Extension as there is an irresistible pressure to extend the equity of their brand.

You can find out more about Internet Marketing and home-based businesses by reading updates that will be posted at my blog over the next few weeks.

Finally, a great book to read is "The 22 Immutable Laws of Marketing" by Ries & Trout. It is the source of some of the material provided in this article.

In closing, be sure to meet me at my website, WhoIsMikeFarrell, learn some tips about being No 1 on Google at aspenIbiz My Go-To-Market Partners, my affiliate website, and learn how to be savvy with your money like the insiders at aspenIbiz The Conspiracy For Your Money Blog.

The Law of Perspective – Marketing Effects Take Place Over an Extended Period of Time

Is alcohol a stimulant or is it a depressant?

If you visit almost any bar and grill on a Friday night after work, you would swear that alcohol was a stimulant. The noise and laughter are strong evidence of alcohol’s stimulating effects. Yet at 4:00 in the morning, when you see a few happy-hour customers sleeping it off in the streets, you would swear that alcohol is a depressant.

Chemically, alcohol is a strong depressant. But in the short term, by depressing a person’s inhibitions, alcohol acts like a stimulant.

Many marketing moves exhibit the same phenomenon. The long-term effects are often the exact opposite of the short term-effects.

Does a sale increase a company’s business or decrease it? Obviously, in the short term, a sale increases business. But there is more and more evidence to show that sales decrease business in the long term by educating customers not to buy at “regular” prices.

Aside from the fact that you can buy something for less, what does a sale say to a prospect? It says that your regular prices are too high. After the sale is over, customer’s tend to avoid a store with a “sale” reputation.

To maintain volume, retail outlets find they have to run almost continuous sales. It is not unusual to walk down a retail block and find a dozen stores in a row with “Sale” signs in their windows.

Have the automobile rebate programs increased sales? The rise of auto rebates has coincided with a decline in auto sales. U.S. vehicle sales have declined for five straight years in a row.

There is no evidence that couponing increases sales in the long run. Many companies find they need a quarterly does of couponing to keep sales on an even keel. Once they stop couponing, sales drop off.

In other words, you keep those coupons rolling out not increase sales but to keep sales from falling off if you stop. Couponing is a drug. You continue to do it because the withdrawal symptoms are just to painful.

Any sort of couponing, discounts, or sales tends to educate consumers to buy only when they can get a deal. What if a company never started couponing in the first place? In the retail field the big winners are the companies that practice “everyday low prices”; companies like Wal-mart and K Mart and the rapidly growing warehouse outlets.

Yet almost everywhere you look you see yo-yo pricing. The airlines and supermarkets are two examples. Recently, however Proctor & Gamble made a bold move to establish uniform pricing which could become the start of a trend.

In everyday life there are many examples of short-term gains and long-term losses, crime being an example. If you a rob a bank for $100,000 and wind up spending 10 years in jail; you either made $100,000 for a day’s work or $10,000 a year for 10 years of labor. It all depends on your point of view.

Inflation, or the recent government stimulus (cash for clunkers comes to mind), can give an economy a short-term jolt but in the long run, inflation leads to recession or a Great Deflation as is being experienced in the U.S. at this time (circa 2010).

In the short term, overeating satisfies the psyche but in the long run it causes obesity and depression.

In many other areas of life (spending money, taking drugs, having sex) the long-term effects of your actions are often the opposite of the short-term effects. Why then is it so hard to comprehend that marketing effects take place over an extended period of time?

Take line extension. In the short term, line extension invariably increases sales. The beer industry clearly illustrates this effect.

Look what happened to Coors. The introduction of Coors Light caused the collapse of Coors regular; which today sells one fourth of the volume it used to sell.

In the short term, both brands can co-exist and do well. But in the long term, line extension was bound to undermine one or the other of the two brands. Once the decline starts, it is almost impossible to stop.

Unless you know what to look for, it is hard to see the effects of line extension, especially for managers focused on their next quarterly report. (If a bullet took five years to reach a target, very few criminals would be convicted of homicide.

In other areas of marketing, the short-term / long-term line extension effects occur much more rapidly. Let’s look at what happened to Donald Trump. At first, The Donald was successful. He then branched out and put his name on anything for which the banks would lend him money; hotels, casinos, condominiums, an airline, and a shopping center. Many asked, what is a Trump? What does Trump mean?

Fortune magazine called Trump an investor with a keen eye for cash flow and asset values, a smart marketer, a cunning wheeler-dealer. The Donald has been on the cover of many magazines.

At various points in time, Trump has declared bankruptcy. What made The Donald successful in the short term is exactly what cause him to fail in the long term – line extension.

It looks easy, but marketing is not a game for amateurs.

It takes a while but many Internet Marketing entrepreneurs recognize marketing effects take place over an extended period of time and as a result, they use various methods and tools to build relationships with their leads and customers. They build websites that create trust. They collect name and email addresses using an Optin form on a Landing Page. They use email systems with both auto-responders and broadcast capabilities in order to send messages to their leads and customers. These email messages frequently send information, provide knowledge, and occasionally promote an offering. Many Internet Marketing entrepreneurs learn that leads and customers do not like to be sold to however they will browse and shop. Over an extended period of time, skilled Internet Marketers are able to use hypnotic writing skills, in their marketing campaigns, to get leads and customers to take the action they want. This is how they learn to add value and be successful in the world that includes the Law of Perspective.

Marketing is not a battle of products. It is all about the strategy you use to benefit from the Law of Perspective as marketing effects take place over an extended period of time and requires not only perspective but also persistence.

You can find out more about Internet Marketing and home-based businesses by reading updates that will be posted at my blog over the next few weeks.

Finally, a great book to read is "The 22 Immutable Laws of Marketing" by Ries & Trout. It is the source of some of the material provided in this article.

In closing, be sure to meet me at my website, WhoIsMikeFarrell, learn some tips about being No 1 on Google at aspenIbiz My Go-To-Market Partners, my affiliate website, and learn how to be savvy with your money like the insiders at aspenIbiz The Conspiracy For Your Money Blog.