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Trout on Strategy Capturing Mindshare, Conquering Markets by Jack Trout According to Webster's New World Dictionary, strategy is defined as "the science of planning and directing large-scale military operations; of maneuvering forces into the most advantageous position prior to actual engagement with the enemy." In the business world, asserts Jack Trout, strategy is "what makes you unique and what is the best way to put that difference into the minds of your customers and prospects." In Trout on Strategy: Capturing Mindshare, Conquering Markets, Jack Trout shares his insights on the essentials of good strategy. As the bestselling author of books such as Marketing Warfare and The 22 Immutable Laws of Marketing, Jack Trout is regarded as one of the world's foremost experts on marketing and strategic planning. He is also president of Trout & Partners, a marketing firm with offices in more than a dozen countries worldwide. Jack Trout believes that success isn't about having the right people, the right attitude, the right tools or the right role models. He says that they're all helpful, but they won't put you over the top. What makes a winner is the right strategy. This is because strategy sets the competitive direction, dictates product planning, tells you how to communicate internally and externally and tells you what to focus on. This is why strategy is so important and what follows are Trout's eight principles on creating a powerful marketing strategy. 1. Survival: In a tough world, using strategy is how you survive. Recent decades have witnessed an astounding proliferation of product choice across categories and industries; for example, in the early 1970s, there were 20 brands of soft drinks, by the late 1990s, they numbered more than 80. Moreover, it is estimated that over one million stock keeping units, or "SKUs" (unique codes by which all individual products are defined), exist for all products available in the United States. And while the average supermarket stocks 40,000 SKUs, the average family meets 80 to 85 percent of its needs from just 150 SKUs.
2. Don't get confused by facts. When people are uncertain. survival depends on excellence in strategy. which is why terms such as "fastest-growing" or "largest-selling" are widely used in advertising. The consumer is still king. with the variety of beers Budweiser offers — regular. people resist the confusing and cherish the simple. When Anheuser-Busch declared. Consumer boredom and inattention often results from excessive stimulation and information overload. they look to others to help them decide how to act. "This Bud's for you. 4. draft. Minds hate confusion – Put simply. dry-brewed. beverages and personal hygiene products. greater persuasion ability and attitude shifts — the so-called new product excitement — was evident in only one of the ten categories (pet products) when comparing new brands to established brands. In a research study by McCollum Spielman of more than 22. people buy what they think they should have. In 1979. and their most powerful strategy is calling their product "the real thing. Nina and Tim Zagat created the first New York restaurant survey. Consumers tend to be influenced by the bandwagon effect." the customer knew what was being served. More often than not. employees and shareholders. Look at Mennen's Vitamin E deodorant. . no discernable difference was apparent. With the explosion of choice that is prevalent in nearly every industry. and often consumers don't remember or know what their motive for a particular purchase was. you must be clear about what the strategy is and constantly communicate it to customers. the Zagat Survey guides are bestsellers with 100. here are some of Trout's best strategies. states Trout. In the remaining categories that included drugs. businesses must strive to find ways to stand apart from the competition. ice-brewed — that statement now causes the consumer to ask. not necessarily what they need. According to Trout. It's a simple. nor do confusing concepts. not sales. cold-brewed. They keep upping the ante to meet consumer needs. Complicated answers don't help anyone. for example. positioning is how you differentiate yourself in the mind of your prospective customer. focused value proposition — what is the reason to buy from you instead of one of your competitors? The "tyranny of choice" demands a focused strategy in today's world of killer competition. Perceptions: Perception is reality. Minds are insecure – People tend to be emotional. Being Different: If you don't have a point of difference. Trout outlines these important issues to consider when determining your position against the enemy. As the editorial director at polling firm Roper Starch Worldwide explains: "All brands have to work harder to get ahead today. spraying a vitamin under your arm got laughs from consumers. and Anheuser-Busch is losing its market share. Minds don't change – Belief: new product advertising should generate higher interest than advertising for established brands. Fact: consumers are more impressed by what they already know (or buy) than by what's new. 3. they tend to seek advice on decision-making and this has spawned a "choice industry.Consumers are overwhelmed and paralyzed by the sheer magnitude of the volume of choice. Understanding how positioning works is critical in creating a successful strategy to differentiate your product from the crowd of competitors." 3. Marketers also utilize company tradition and culture to get consumers on the bandwagon — Coke invented the cola. not rational. will often require a guide offering information and ratings. 1. Today.000 participants rating and reviewing restaurants in more than 40 international cities. 2. To achieve this excellence. "Which one?" The once clear perception of what the brand will deliver is now out of focus." The decision as simple as where to go out for dinner.000 TV commercials over 23 years. you'd better have a low price. and today. Positioning is job one when determining your strategy. for example." With that in mind. Because of this. light. Minds can lose focus – Most big brands are clearly understood by their customers — there is a clear picture of what a customers' favorite brands represents. clear.
the "Mach 3 and M3Power (which vibrates)." Owning the word "slow" helps Heinz maintain a 50 percent market share. Time is still ahead of Newsweek and People wins over Us. Specialization: It's better to be exceptional at one thing than good at many things. for example. When Sony began its dominance in television. Every two or three years it replaces its existing blade with something new. It must look for weak points in the positions of its competitors and then launch marketing attacks against those weak points. Marilyn Monroe was known for her attractiveness. replaced single blades." As Trout states. Chrysler and the imports. Avoid their strength. How a product is made – Many products contain a proprietary piece of technology or design. Learn from the example of Gillette. and they claimed the most important ketchup attribute: "slowest ketchup in the west. the "Sensor. "Good News. For example." Further. However. in the mind of consumers. General Motor's problem is not the customer. Then. So you need to be creative like Pepsi. stylizes its catalogue. but carefully maintains its New England image. peculiarity or distinctive feature of a person or thing. When you can't differentiate based on what your product does. "a rolling company gathers few competitors. Gillette quickly countered with the twin-bladed disposable. product or benefit gives you an enormous advantage. consider focusing on your unique technology when defining a differentiating idea. • • • • • 4. They own more than 60 percent of the blade market. Every company is customer-oriented — knowing what the customer wants isn't too helpful if a dozen other companies are already serving the same customer. Now there are three-bladed razors. you must find a balance between consumer-comforting tradition and progressiveness to enjoy continued success. that to be successful a company must become competitor-oriented. Leadership – The most direct way to establish the credentials of a brand is leadership. one that makes people secure in making a choice. when Bic introduced the disposable razor. Harvard was the first college in America and it's still viewed as the leader. Trout asserts that you should start your strategic planning with your competition in mind. is online. Sales numbers. General Motor's problem is Ford. Heinz owns the word ketchup." Movie and book reviews are commonly used by Hollywood and publishing companies to bring exposure and differentiate their offerings. but it sounded impressive. When Proctor & Gamble introduced Crest toothpaste with "fluoristan" for cavity prevention. Hotness – Word of mouth is a powerful force in marketing. but you cannot own the same attribute or position that your competitor owns. . and all persons or things have a mixture of attributes. understand how to defend their position and learn how and when to wage guerrilla warfare. Exploit their weakness. Competition: Know your competition. 5.• Being first – Getting into the consumer's mind first with a new idea. which made them stand out. Coca-cola was the original so Pepsi (successfully) positioned itself as the new brand and the choice of the younger generation. Attribute ownership – An attribute is a characteristic. LL Bean. Companies must learn how to attack and flank their competition. nobody knew what it was. The two-bladed razors. industry ratings. a shock-absorbent razor. Powerful leaders can take ownership of the word that stands for the category. and introduced women's clothing. Heritage – A natural psychological importance is attached to having a long history. the "Atra". it brought the public eye to the "Trinitron" picture tube." was introduced. Attribute ownership is the single most successful way to differentiate a product or service." and it now dominates this category. Where are they strong? Where are they weak? Business today is about war. As Trout points out. Crest toothpaste for its cavity protection. industry experts and the press can all be used to establish "hotness. and credentials are the collateral you put up to guarantee the performance of your brand. It only makes sense then. not about better people and better products. Evian is currently spending $20 million on advertising to remind consumers it is l'original because this company understands the power of being first.
Moreover. both wound up in bankruptcy court while specialty stores such as The Limited (upscale clothing for working women).Big or small. and sets and maintains the standards. Volvo equals safety. Big box stores are also succeeding because they offer their own specialization — Wal-Mart offers the lowest prices and Target has filled the void for price conscious consumers who aren't willing to sacrifice style. Simplicity: Big strategic ideas almost always come in small words. 7. remember they can be benefit related. • • Go down to the front – To become a great strategist. Large traditional department stores are floundering." Trout believes that his statement. Trout offers several concrete actions that leaders can take to ensure that customers. but above all they must be simple. service related or sales related. Macy's and Gimbel's. simplicity and common sense are one and the same. you need to stay in touch with the marketplace. For Trout. The leader sets the goals. Common sense is wisdom that is shared by all. When choosing your words. the "real" truth will finally come out. Most successful companies are those that own one or two simple words in the mind of the prospect. enthusiasm and humour — into the airline. and that is why an obvious answer works so well in the marketplace. The way to survive and prosper is to be better than your competitors at one thing. • . Simplicity and common sense allow you to see things as they really are — following the dictates of cold logic. common sense is good judgment that is free from emotional bias and is not dependent on special technical knowledge. The two legendary rivals. Once word gets around that a CEO prizes honesty and reality. 6. sets the priorities. your strategy should revolve around your core competency. Pepsi connotes youth and Nordstrom represents service. something that registers as an obvious truth to a community. eliminating both sentiment and self-interest from your decision. employees and stakeholders alike will embrace their leadership and strategy. The Gap (casual clothes for the young at heart). and Banana Republic (upmarket casual wear) are flourishing. Be visible – The best leaders are also storytellers. Value Honest opinions – Create an open environment where candid assessments of the current reality are praised rather than concealed. By definition. Strategy is all about simplicity. Trout asserts that simple ideas tend to be obvious ideas because they have a ring of truth to them. "The foundation of effective leadership is thinking through the organization's mission. is recognized for instilling his personality — spirit. ex-CEO of Southwest Airlines. making it one of the most admired and profitable companies in the US. what is obvious to you is usually obvious to many. Leadership: No one will follow if you don't know where you're going. defining it and establishing it. Why? People are impressed with those who concentrate on a specific activity or product and perceive them as experts. clearly and visibly. For proof of this concept we need only look at the failures of the generalists and the successes of the specialist companies in the retail sector. Your strategy must highlight your core competency so you can be viewed as the "go to" place in your field. found in Peter Drucker's The Effective Executive. Herb Kelleher. succinctly summarizes the significance of leadership in creating and executing a successful strategy. cheerleaders and facilitators. Sam Walton spent time at the front lines of numerous Wal-Mart stores throughout his life.
conversely. they have typically fallen far short of these goals while at the same time accruing the unfortunate side-effect of a profusion of accounting nightmares. Five companies — Viacom. All six broadcast networks in the United States are tied to film and television production studios. Yet. what he returns to again and again is that success is all about having the right strategy. Walt Disney. Further. Wake up and face reality. "The better you understand strategy. it appears that more and more of these deals are problematic: rather than garnering success in the form of solid increases in market share and profits. The past decade witnessed troubles and failures of America's corporate icons. dictates product planning. Time Warner. News Corporation and General Electric — have jumped into mergermania with both feet. In a world where most companies grow at an annual rate of just over 8 percent. . Trout's concluding thoughts concern facing the new reality. Reality: Goals are like dreams. from Polaroid to AT&T. from Xerox to Enron. tells you how to communicate internally and externally. and to a great degree. Strategy sets the competitive direction. 8. knowledgeable. it's no wonder companies make strategic mistakes. the better you'll be able to avoid big problems you'll no doubt encounter in our era of killer competition. According to Trout. leaders are also characterized as good generals — flexible." And. as time goes by." He objects to them because. completing the rabid soup-to-nuts integration of the broadcast business. and tells you what to focus on. lucky. the strategic lesson learned is that they simply lost touch with the reality of the marketplace. goals focus on pursuing existing markets — increasing market share and return-on-equity — rather than seeking fresh opportunities. Trout asserts that: "goals are responsible for mucking up marketing plans. bold. But. courageous. He has written extensively about these observations in ten books and spoken about them in countless lectures. With the average company striving to achieve an annual growth of 15 percent in earnings per share. it's not surprising that companies err in order to keep their growth rates up. Trout lays responsibility firmly at the door of Wall Street and the desire for growth.Ultimately. Trout on Strategy Jack Trout's remarkable career has allowed him the opportunity to observe and understand what makes for success or failure in business. the better you'll be able to select the right strategy for success. more often than not. Trout refers to the media world to illustrate this point.
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