Not that a revelation like this was a shock to me. In today’s world with the proliferation of the Internet as a major channel in terms of getting customer attention, brand building, product sales and customer management, the marketing playbook has changed. Drastically.

Kotler writes about how a firm can engage in a certain set of activities to influence buyers to purchase their product or service. This set of activities is referred to as a marketing mix which is typically based on the four P’s:

· Product: Products manufactured and sold today must be better or different in some way to engage customers to purchase it.

· Price: Standard cost-based pricing, which simply adds a markup to the cost of a product, is no longer effective (maybe for a generic product but otherwise not). Instead, he promotes value-based pricing, where prices are not based on their cost, but based on their value to the customer

· Place: The rules of the game have changed with the Internet. Newer channels means newer ways of thinking on how to add value to the product selling process and newer places of selling it.

· Promotion: Use the right mix of delivery and communication tools to deliver a message that resonates with potential buyers.

Bottom line - companies can no longer rely on their former business practices to sustain prosperity. Busines assumptions and practices that were practiced ‘then’ with the ones being increasingly practiced ‘now’ are detailed by Kotler as follows:

Then

1. Make everything inside the company. (Fully owned)
2. Improve on one’s own.
3. Go it alone.
4. Operate with functional departments.
5. Focus domestically.
6. Be product-centered.
7. Make a standard product.
8. Focus on the product.
9. Practice mass marketing.
10. Find a sustainable competitive advantage.
11. Develop new products slowly and carefully.
12. Use many suppliers.
13. Manage from the top.
14. Operate in the marketplace.

Now

1. Buy more things outside (Outsource).
2. Improve by benchmarking others.
3. Network with other firms (Collaborate).
4. Manage business processes with multidiscipline teams.
5. Focus globally and locally.
6. Be market-and customer-centered.
7. Make adopted/or customized products.
8. Focus on the value chain.
9. Practice target marketing.
10. Keep inventing new advantages.
11. Speed up the new product development process cycle.
12. Use few suppliers.
13. Manage up and down and across.
14. Operate in the marketspace.

The checklists above are clear indicator of a firm’s approaches to managing profits. The elements of the ‘Now’ list are viewed as more effective modern approaches to managing profitability. A company can almost tell how much it has adopted contemporary business practices by placing a check in each list on either the ‘then’ or the ‘now’.

If most of the checks are on the ‘then’, then that company is trouble. How does one know that? Well, declining market share, loss of customer confidence, negative buzz in online and offline channels, lower production outputs and hemorraging costs should be a good indicator.

If there are low barriers to entry in an industry, the easier it is for other firms to enter this industry. In such a situation, new entrants could change major determinants of the market environment (e.g. market share, product pricing, customer loyalty) at any time. There is always a hidden pressure for reaction to any change in the market dynamics and adjustment for existing players in this industry.

The threat of new entries will depend on the extent to which there are barriers to entry – the greater the barriers to entry, the less prone is someone’s inclination to enter the market. The lower the barriers, the easier it is for someone to enter the market. The barriers to entry typically are:

• Economies of scale. This means the minimum size requirements for an operation to be economical.
• High initial investment and fixed costs. This is essentially a cost barrier.
• Cost advantages of existing players due to experience curve effects of operation with fully depreciated assets. With fixed costs depreciated, existing firms will enjoy significant costs advantages.
• Brand loyalty of customers. If the brand has major penetration in the market, then it’s hard to get customers to switch.
• Protected intellectual property like patents, licenses etc.
• Scarcity of important resources and raw materials. Here whatever’s available could be controlled by existing players who have long-term contracts in place.
• Distribution channels are controlled by existing players. This is a problem as a new entrant will then have to either forward integrate or enter into distribution contracts with existing players and take a hit on operating margins.
• Existing players have close customer relations. This is about long-term contracts with a strong customer base and is highly relevant in a B2B scenario.
• High switching costs for customers. Changing to another supplier will involve significant costs from a process and management standpoint for a customer and they may not be inclined to go with a new entrant.
• Legislation and government action prohibits new players in the market.

Threat of Substitutes

A threat from substitutes exists if there are alternative products with lower prices or better performance parameters for the same purpose. They could potentially attract a significant proportion of market volume and hence reduce the potential sales volume for existing players. This category also relates to complementary products.

Similarly to the threat of new entrants, the threat of substitutes is determined by factors like

• Brand loyalty of customers. The biggest brands will have the highest market share. Changing loyalty means changing habits and that takes too much time.
• Close customer relationships. From a B2B perspective, that’s a hard one to break.
• Switching costs for customers. Customers want to cut costs not increase them. The value proposition of the new entrant’s products need to be extremely high to entice a switch.
• The relative price for performance of substitutes. If the substitute does not perform as well as the original, then there’s a problem.
• Current trends.

Competitive Rivalry between Existing Players

This force describes the intensity of competition between existing players in a market. High competitive pressure results in pressure on prices, margins, and profitability.

Competition between existing players is likely to be high when:

• There are many players of about the same size, Same size implies that the same amount of resources will be available to carry out the marketing tactics in an industry.
• Players have similar strategies. Enough said, with a similar strategy there’s a limited amount of market share that you can grab.
• There is not much differentiation between players and their products, hence, there is a lot of price competition
• Low market growth rates. Here the growth of a firm is possible only at the expense of a competitor, However, in such a scenario, with limited growth the potential of upside is virtually nothing until a disruption derails a competitor.
• Barriers for exit are high. With a lot invested in capital equipment which is expensive and highly specialized, it makes little sense for someone to exit the market – in such a market, it’s also possible to partner with competitors from a manufacturing standpoint and have tolling agreements to utilize capacity.

The competitive strategy should be based on a strong understanding of the industry structure and how it may possibly change. In the online world, this principle does apply though in slightly different ways.

Porter identified five competitive forces that shape every industry and every market. According to Porter, these forces determine the intensity of competition and hence the profitability and attractiveness of an industry. The objective of corporate strategy should be to play against these competitive forces in a way that the market share or position of the firm in question is improved.

Bargaining Power of Suppliers

The term ‘suppliers’ comprises all sources for inputs that are needed in order to provide goods or services.

Supplier bargaining power is likely to be high when:

· The market is dominated by a few large suppliers.
· There are no substitutes for the core raw materials required for manufacturing.
· The suppliers’ customers are fragmented so their bargaining power is low. This essentially means that the market is fragmented with many pieces carved out between many players. This also means that the product in question is very generic in nature.
· The switching costs from one supplier to another are high.

The relationship of the firm to powerful suppliers can potentially reduce strategic options for the organization because of their clout in the market.

Bargaining Power of Customers

Similarly, the bargaining power of customers determines how much customers can impose pressure on margins and volumes.

Customers bargaining power is likely to be high when:

• They buy large volumes and there is a concentration of buyers which makes the buyer pool limited.
• The supplying industry comprises a large number of small operators which means that it’s very competitive.
• The supplying industry operates with high fixed costs. This is true when suppliers deliver a high value-added raw product component.
• The product is undifferentiated and can be replaces by substitutes, In this scenario, a generic product competing in the marketplace implies the presence of multiple duplicate products.
• Switching to an alternative product is relatively simple and is a low cost-proposition. Here multiple substitutes are available.
• Customers have low margins and are price-sensitive.
• Customers could produce the product themselves. If a customer has the scaling capability within his existing production facilities to backward integrate some of the manufacturing for their raw material components, they do posses strong bargaining power.
• The product is not of strategic importance for the customer. In this situation, the product may represent a very small portion of annual revenue from a firm’s product portfolio and may not of strategic importance.
• The customer knows about the production costs of the product. If the customer has the capability to produce the material in question, it’s highly possible that he’s aware of the costs involved.

Continued in part II coming next…

What do they mean essentially? A simple definition would be that the two of them produce results. Period.

A business needs to do two things well to succeed: Marketing and Innovation. All the rest of the business support these two functions.

Jack Trout pointed out in an article that he wrote on Forbes a while back: “Today, when top management is surveyed, their priorities in order are: finance, sales, production, management, legal and people. Missing from the list: marketing and innovation.”

So, why are these two key functions at the lower end of the priority list? Perhaps, there is a lack of comprehension about the real meaning of marketing and innovation and the nature of management activities that are necessary to drive and manage these two functions.

Marketing and Innovation are the only things that can sustain a company’s continued growth. There are countless examples of companies who could not see opportunities beyond their noses. The Big 3 auto makers in the US ignored innovation and marketing, resulting in increased market share for Japanese car makers. Microsoft ignored innovation and efficient marketing allowing a competitor like Firefox to enter and grab browser share. Xerox’s Palo Alto Research Center were innovative but failed to market (or failed to exploit many of the technologies they developed)  many technologies now in use by Apple and others.

Fundamentally, marketing and innovation is a philosophy of doing business. It about developing a mindset or a way of thinking that searches for external opportunities and develops an outside-in orientation. All other business functions such as finance, production and distribution, customer services, R&D etc support these two disciplines. Marketing is not just advertising and promotion – it means bringing market focus into business decision making.

Innovation is not just exploiting technology for marketable products, it is also about changing the internal processes of an organization to serve customers better and to create sustainable competitive advantage. The need is not to grow bigger but to grow better.

Innovation is a constant in technology as well as business. But not all innovations are the same. Most innovations can be divided into two broad categories: an evolutionary change (e.g., from the phonograph record to the cassette tape) or a discontinuous innovation (e.g., from the cassette tape to the iPod). Discontinuous innovations are new products or services that require a combination of the end-user and the marketplace to effect a dramatic change in past behavior, with the promise of gaining equally dramatic new benefits.

Innovation bring out the ‘New’ or ‘Better’. Marketing commercializes it. Both of them work hand-in-hand. A caveat however, both these disciplines are philosophies that need to be intrinsic to the workings of an organization to succeed. Which means that they need to be fostered from the top.

But, sometimes, it does make sense to hold back and actually not increase your market share. Here are the reasons why…

1. If the firm is NOT ready:

If the firm is near its production capacity, an increase in market share might necessitate investment in additional capacity as it will have to meed the additional demand for its products. The big problem is that it poses many capital budgeting questions that the firm might not be in a position to answer. For e.g. how much capacity needs to be present? how much is enough, too much? These are questions that need to be answered after careful analysis. If a company suddenly realized that it’s running out of product in the marketplace, typically it scrambles to meet demand by tolling i.e. using another firm’s underutilized manufacturing capacity to meet demand and at the same time, it thinks about how it can ramp up its efforts at optimal cost.  In the end, if the expansion in capacity leads to a situation where the newer capacity is underutilized, higher costs will result.

2. If the firm grabs market share too aggressively:

There’s the right way to increase market share and that’s called customer pull-through. And, there’s the wrong way to increase share and that’s called product push-through. If a company increases their promotional budget too aggressively and decreases its prices too aggressively, needless to say, the bump in product revenue might not be enough to keep EBIT in line with growth levels since the increased marketing spend might more than take the advantage of increased sales away. So, with EBIT in decline, any increase in market share as a result of increasing promotional expenditures or by decreasing prices is a zero-sum game. Comcast spends so much money to aggressively grab market share from Verizon but despite the increased spend, the marginal increase in share hasn’t resulted in high profits.

3. If all firms in the marketplace engage in a price war:

The most amateur of all moves. In a price war, only the customer benefits. All the firms engaging in this tactic lose heavily. A market share grab using a tactic like this is just plain idiotic. Customers buy your product not just based on price but on the other tangible and intangible features that your product possesses. but, marketers to meet short-term goals forget this basic tenet of marketing and engage in an all-out unnecessary price war which erodes profits.

4. If an upstart firm captures market share:

If a firm’s a brand new upstart firm, any market share it captures is at the expense of the market leader which means that it highly possible to wake up a sleeping giant. If that happens, this market leader can reach into its war chest and cause promotional havoc on the upstart. If a  small niche player captures only a small share of the market, it’s usually tolerated. However, if that share increases, a larger, more capable competitor may decide to enter the niche and the David Vs. Goliath scenario unfolds. In today’s world, unlike biblical times, very few upstart firms possess the marketing equivalent of a sling-and-stone to stun the market leader and grab more share though one might argue that if an upstart uses digital marketing channels like a website, SEO, SMO, social media, videos etc, it could effectively get the jump on the market leader on the Internet.

5. If the firm dominates the market:

Microsoft knows this lesson. Antitrust issues are always plaguing the company in all the markets in which it operates. While the company is still the overwhelming market leader in the desktop operating system market, it still has to use valuable time and resources to address antitrust concerns.

6. If the firm’s customers are unprofitable:

The applies more to B2B firms that B2C. If a company has low margins from a segment of customers it sells to or services, it should cut its losses. In this case while it might lose market share, the upside is that its profit margins increase.

Estelle Metayer is one of these people. Her insights and advanced thinking into marketing and competitor intelligence are very potent. But, her ability to translate these concepts into day-to-day actionable changes is what makes her such a powerful communicator. Gosh, maybe I’m in love!

In any case, here’s a two part adaptation of her article on how to calculate market share. To say that, this helped me immensely is an understatement.

Have you ever been in a situation where your competitor claimed a market share that was not even close to the calculations you gave to your senior management? Or where different people in the organization were using different numbers? Where annual reports claimed market shares you could not retrace in your calculations? Understanding how you can calculate – and use – market shares can be extremely useful.

This article will discuss some of the techniques you could apply when dealing with market share calculations:

• Why is an appropriate calculation of market share so important?
• Defining your market share according to your objectives;
• Market share calculations and pitfalls to avoid;
• How to calculate a market share when there is no data available.

Why is an appropriate calculation of market share so important?

As a marketing manager at Starbucks described in an excellent article about market share in the retail world, the underlying themes typically include any, or all, of the following:

Market potential – “How many dollars are there in this market for my concept?”

Market share – “How much of the potential in the market do I capture?”

Market opportunity – “Which markets offer the greatest opportunity for growth?” But market-share calculations can also serve other purposes. They can be used to:

Challenge common wisdom : One of my clients at an electronic firm consistently claimed his company owned 80% of the world market in its segment. However, we soon noticed that the accounting team, which was responsible for maintaining the market share calculations up to date, used the following method to arrive at their calculations:

Number of contracts won / number of contracts pursued

Because the company was only pursuing half of the total contracts available, this measure did not portray an appropriate picture of reality – which was that the company really owned less than 50% of the total market.

Avoid blind spots and avoid overlooking substitutes: Imagine yourself as the marketing manager for Coca-Cola. What is your market share? Roughly 60% of the world market versus Pepsi? Not really. Management at Coca-Cola does not only include the direct competitors into their market share (Pepsi), they can also include soft drinks (Sprite, fruit juices, etc.) or even any Food & Beverage product destined to cool down a dry throat. For example, they can include ice cream. This method allows a company to include alternative products/lifestyles to avoid a blind spot – a new trend or product arriving in the market, such as the increase of consumption of smoothies, that would not be tracked otherwise.

Similarly, do manufacturers of corn flakes compete only against one another? Or do they also compete against makers of other ready-to-eat cereal? What about hot cereal? What about bacon and eggs?

To present a common sheet to work from: In many companies, there are a variety of market-share calculations. Accounting calculates the market share based on revenues; the marketing department uses the number of products sold; the strategic-planning department looks at the broad picture, etc. As you can easily imagine, working from the same set of numbers is useful. It will also avoid confusion and contradictory messages (annual reports, discussions with journalists, etc.)

Defining your market share according to your objectives
In fact, market-share calculations are often “twisted” to serve political or public relations purposes. Here are some examples:

Market-share calculations and pitfalls to avoid

The calculation seems easy:
Products or services sold (A) / Market size (B)
However, here are some of the questions you can ask yourself:

A: Products and services sold

• Do I calculate in dollars or units?
• Do you take into account booked orders or delivered orders?
• If I calculate in dollars (or any other currency – pardon my Canadian biases), do I compare real dollars year to year or do I adjust with inflation?
• How do I incorporate sales from subsidiaries?

B: Market size

• How do I define my market? As Ben Bidwell, who headed marketing at Ford Motor Co., once said, “Define your market, don’t let it define you.”
• Do I include all countries, or only the ones where I am active?
• Do I include taxes?
• Do I include the service component?

How to obtain market share when there is no data available Bottom-up:

• Track the number of units sold and the number of contracts awarded through press releases and articles;
• Create a database (Excel works well usually) to add them up;
• Assuming that one is never able to track all contracts awarded, extrapolate using what you know of the total market size

When does it work best? When your company is active in a market where large contracts are awarded (defense, energy systems, transportation projects, etc.)

Players revenues:

• Gather information from annual reports and company information about the total revenue in a particular market;
• Add revenues from main players;
• Extrapolate for smaller players based on number of employees, or estimate of revenues

When does it work best? When there are few players: the aerospace industry, for example (the size of the aircraft market can easily be obtained by looking at Boeing and Airbus and a handful of other companies).

Demographics
If your product is a consumer good:

• Go back to statistics and demographics;
• Assume a penetration percentage;
• Calculate volume in units;
• Apply price/cost per unit.

One can turn to readily available geo-demographic data from vendors like Claritas, CACI, and Applied Geographic Solutions. For a few industries, the questions are answered through systematically obtained consumer data. IRI, ACNielsen, and others provide scanner-based purchase data. Companies like NPD and MRI provide consumer survey data. Other companies, such as IXI, provide market share and account data for specific industries (in IXI’s case, the financial services industry). With few exceptions, however, the data are not generally available at low levels of geography.

When does it work best? For consumer products.

Similar market

• Select a similar market to yours (in size or in behavior);
• Extrapolate from a market you know well, or where more information is available;
• Adapt the number obtained for particularities of the market;
• Use as an estimate of market size, and not a precise number.

When does it work best? When the market is comparable. For example, to understand the size of a Canadian market, use US market and divide by 10 to get a “back-of-the-envelop” average.

Linked to another market
Use the numbers from the larger market to derive size of the current one. The market you pick will have to be directly proportional to the one you are analyzing.

When does it work best? When both markets are directly proportional to each other: for example, the size of the car seat market is closely linked to the size of the car market.

Conclusion
By now, you have understood how misleading a market-share calculation can be, and how companies can easily manipulate them. In order for you to use them effectively, you should also write down your assumptions and make sure you compare “apples with apples.” As a result, always beware of market-research reports which often lack explanations of how the market calculation was done. In fact, you should almost always pick up the phone and talk to the person who originated the calculation, to check his/her assumptions.

About the Author
Estelle Métayer is president of Competia. Competia is North America ‘s leading consultancy and training organization for senior executives and analysts in Strategic Planning and Competitive Intelligence. A former consultant at the international strategic consulting firm McKinsey & Company, Estelle has written and lectured widely on the process involved in turning the intelligence gained into actions.

Then, the CEO asks you. “How are you going to implement this?” Either you have a series of next-level tactics on hand or you fumble about how different members of your team will keep working hard to make this happen.

The meeting ends with no financing approved. What went wrong?

Here’s what happened : You did not have a series of tactics thought out on how you would implement your strategy. Even worse, you did not have an operational plan for execution. Let’s understand how tactics fit into the work-flow.

Tactics sit somewhere between strategy and day-to-day operations. You break down your overall strategy into digestible executable pieces – those are tactics. Next, you break down those tactics into operational goals to be achieved in a certain amount of time. After that, you have your day-to-day operational activities.

The steps are simple. Once again :

Strategy- > Tactics -> Operational goals -> Day-to-day steps to execute to achieve goals.

Let’s take an example. Suppose your business strategy requires that you launch 2 new products every year to increase penetration.

Tactical Question : What is the optimal mode or route to launch this?

- Do you wait for a competitor to work out a concept, go through the initial pain and leap-frog them? In this case, you would lose your first mover advantage.
- Or, you try testing 100 new ideas hoping one would work? This means that you have to innovate and test new products.
- Or, do you make small, minor improvements in an existing product and launch a variant ?
- Or, do you come out with something totally new?

What next? You’ll have to set tactical goals in place to leverage each function that will contribute to the success of any of the courses of action above.

Next, the operational part. Resource allocations will need to be done, you’ll have to create and maintain a process for the next several quarters (and tactically implementing them one by one). Your sales force will need to use messaging to keep your customers engaged and informed about what you’re planning to deliver to the market in terms of a new product or offering.

Then, finally the execution plan which has time-lines right to the last detail. If you plan to go to market in six months, transition to actual production, before that part testing the prototype, before that the prototype needs to be ready, before that the idea has to be translated into a physical design and so on. This breakdown of tactics into operational goals and a time-line will tell you if the business idea is practical or a waste of time.

Finally, the numbers. How does the revenue model work? Is the revenue model based on some assumption of “we’ll go after ABC market segments and assume that this many people will buy the product”? And, if that is all you have, you might as well hang up your boots. Optimism is a good thing, but in the end it does not pay the bills of a business or contribute to cash flow.

Do your analysis. Have the segments clearly mapped out and understood. If you don’t have this part, the tactics cannot be worked out. Have you done any test marketing? A specific example would be launching a software product aimed at an online retailer. If that category of retailers is a commoditized or generic part of the Internet, how will you acheive penetration? Will you offer a full-fledged service or will just sell the product for in-house use? How will the product be marketed? Will you do it on your own or co-market with another software provider? How will you target the specific segments of large/medium/small customers? For small buyers, how will you price the product? If it is expensive, will you just let them have the product and charge a monthly fee for using it or want a one time, large fee? For large buyers, how would you enter and target the final decision maker for making a purchase? And finally, have any of these been tested in a limited setting or are riding only on assumptions?

Work out these aspects before approaching anyone for funding. Period.

Some key elements to test :

- Revenue model
- Cash flow (will they survive till things take off)
- Profitability (what are the key determinants/assumptions and associated risks and “plan B”)
- Execution time-lines
If you have the above, things will go much better than expected. The executive team or a Vc will be impressed by the level of preparation and your project will be greenlit.

The premise of this article was based on the fact that marketing folks always keep telling us to mollycoddle our customers and do things like customer care, customer delight, customer is king etc. etc. I agree with Mr. Brown to an extent; Some customers are uninformed and only focus on one attribute on a product, which is mostly price.

Sometimes, they may not really know what they want.

It is true. Marketers have been doing so many brand extensions, line extensions, brand revamps, over-segmentation for so many years that we as customers have been reduced to new depths of indecisiveness. Plus, we’re in a culture that give credence to opinions so we’re an opinionated race, we love to talk about something that we know absolutely nothing about and even worse, we want to be recognized for spouting such drivel.

In any case, I digress, Mr. Brown, in his article, demands that we get back to the age of retromarketing.

So, what is it? Well. Retromarketing shuns all modern marketing principles to the point that it stands everything contrary to today’s marketing philosophies. Why do people still go to used car lots and buy lemons from snake-oil salesmen? Why do we still allow ourselves to be enamored by a good sales pitch? Let’s try to understand this by understanding retroactive marketing more thoroughly.

Exclusivity:

Customers love this. It gives them the sense that they’re fortunate and lucky to be the select few to get a ‘special ” product. Harley Davidson does this, Mazda does it with its Miatas, Nintendo did it with their Wiis, Ty Inc. did it with Beanie Babies and Webkinz did it with their ridiculous stuffed animals where they enticed kids with the promise of entering an exclusive club online by using the access code printed on the labels

Secrecy:

A great example of this is Scholastic’s campaigns with Harry Potter. When ‘goblet of fire’ was ready to be released, Scholastic made sure that they held back information about every aspect of the book – there some some deliberate pieces fed to the slobbering press coupled with hints that there weren’t enough copies of the book to go around further increasing demand. Of course by the time the book was released and every Tom, Dick and lemonade stand had it, nobody complained since they had all read the book and had forgotten the mysterious marketing campaign. That being said, we are a race that moves on.

Additionally, we get the secrecy aspect of marketing daily from KFC with the Colonel’s secret recipe, from Coca Cola about their secret formula and Mrs. Fields Cookies about their arcane recipes.

Amplification:

This is the viral part of retromarketing. Use as many inexpensive means as possible to get the message across that the product or experience is something that one has to know about. ‘Snakes on a plane’ is a terrible movie but the buzz that preceded its release led to moviegoers flocking the theartres during its first week. Ditto with ‘The Blair Witch project’ which after weeks of speculation led to it being a blockbuster when it was finally released.

Entertainment:

This is principle number four of retromarketing. Engage, amuse and entertain your customer in the best possible way. I love the Verizon FIOS ads on TV where the Comcast guy is simply hilarious. With this ad, Verizon has reduced Comcast to a caricature of a installation guy who cant be taken seriously. And oh! while people laugh at the ads, they’ll pick up the phone to get FIOS installed. In comparison, Comcast’s rejoinder ‘Don’t buy FIOS’ ads are weak.

Hollywood has learned this part very well when they promote movies online. Right from creating micro sites that promote their movies, to partnering with like-minded partners to promote the movie (if it’s a kids movie, they partner with fast-food chains, entertainment chains etc).

Tricksterism:

I love how Mr. Brown writes about how marketing must deal in tricksterism using tactics like Loki (the Norse God) and Wily Coyote used. The Blair Witch project is another example of tricksterism. Mr. Brown clearly states that he does not advocate that marketers cheat theirs customers by way of this principle, but by using an extra helping of panache and exaggeration to promote something.

The article is quite a read. He also advocates that Marketing is all about fun. It should be fun. Customers know that a car is a mode of transportation, but marketers with promoting a brand engage them in a cycle of seduction and excitement where they make a car to be much more that what it is with claims of mileage, reliability, 0% APR, features, add-ons etc.

He does offer a final caveat. Retromarketing is not for everyone or every product, service or market segment. I personally feel that people do like to be teased and by instinct we tend to crave what is harder to obtain than what is easily available. We still like our macho heroes even though the culture says that today’s man needs to be more in touch with his inner feelings.

Life can be boring sometimes. It’s up to marketers to be entertainers and customers love that (why do you think folks watch the WWE or reality shows even though they’re the lowest form of entertainment?) I’d say that a balance is required from marketing folks: Don’t oversell. People are smarter than we think. Respect that and market your product sensibly. Rewards will follow through.

His dialog is direct, focused, thrilling, to-the-point, unambiguous and compact. Every single line is loaded. That, in itself, is an art.

Consider some of his most memorable lines :

1. “Never feel sorry for a man who owns a plane.” – The Edge.

2. “Brazilian princess marries a soldier. Five years later, the guy’s still pumping gas. Girl’s gotta make a living.” – RedBelt

3. “You see this watch? This watch cost more than your car.” – Glengarry Glen Ross

Interestingly, in today’s Hollywood, there are very few old-style testosterone-powered male icons. Sure, once in a while Bruce Willis acts in a good movie or  Clint Eastwood comes out with Gran Torino, but that’s the most machismo that we get these days. Will Smith does do his thing with his CGI enhanced action movies – I did like iRobot a lot and Hugh Jackman as the anti-hero Wolverine keeps the aggravated and yet good anti-hero alive.

Nothing wrong with the anti-hero. Their worlds are dark and and fiery. A man’s gotta do, what a man has to do else he’s just part of the furniture. but, I  digress.

Mr. Mamet’s brand has come to stay. I loved ‘The Spanish Prisoner’, Glengarry Glen Ross, House of Games, The Verdict, The Edge, Ronin, Heist, Spartan and finally RedBelt.

Mr. Mamet’s style of writing dialog is so distinctive and precise that it came to be called Mamet speak (Note the use of clever personal branding though not of his doing but simply because of his talent). He often uses italics and quotation marks to highlight particular words and to draw attention to his characters’ frequent manipulation and deceitful use of language. His characters frequently interrupt one another, their sentences trail off unfinished, and their dialog overlaps. Mamet himself has criticized his (and other writers’) tendency to write “pretty” at the expense of sound, logical plots^.

Concept Check : Mr. Mamet is a prime example of excellent positioning. He has positioned himself as a unique multi-talented individual in Hollywood, with a style that very few can replicate. Positioning is what a company does when they try to place a product, service or idea in the minds of their customers. they do this using a variety of techniques right from determining the brand name, crafting the brand identity, delivering the brand message through a variety of media channels and promoting the same through point-of-sale outlets, partnerships etc.

Of course, to get into someone’s mind, it’s essential to be first because no one remembers who came second. But, if you cant help it and have to face off with a #2, work on your positioning strategy. Good examples include Miller Lite – these guys weren’t the first light beer, but they positioned themselves in the mind of their consumers as a light offering. Ditto for Avis – Gotta love that tag live – We try harder.

I’m going to end this blog post with some more lines of my favorite screenwriter and director.

“Gold – Makes the world go around. Some people say love. It is love. Love of gold”

“Everybody needs money. That’s why they call it money”

“Nobody lives forever. Frank Sinatra gave it a shot.”

“I subscribe to the law of contrary public opinion… If everyone thinks one thing, then I say, bet the other way…”

“Worry is like interest paid in advance on a debt that never comes due.”

“Always do business as if the person you’re doing business with is trying to screw you, because he probably is. And if he’s not, you can be pleasantly surprised.”

“You now have a Swiss bank account if anybody asks. Crédit Nationale Du Génève code name ‘PADDY’. Lavish awkward gesture. All of fifteen Swiss Francs in it, but if you ever want to impress anybody, they can find out you have a Swiss account. But, Swiss law prohibits the bank from revealing the balance. Thus are all men made equal.”

Situation : You’re a runner-up firm in a certain industry and you want to enter/ expand. Start with the basics. Ask yourself what you would like to accomplish here.

The images below have the market share break-up of search engines as well as Internet browsers for reference. IE was perceived to have an impregnable position until Firefox came along – a lesson to remember.

Solutions :

Step 1:

Define your strategic objectives (e.g. To increase market share in XYZ market by X% in Y months.) It pays to be objectively sensible. If you’re going head-to-head with the market leader, the aim should be to increase market share not take over #1 because there are many reasons why the market leader is in first place. If you think to0 big, you’ll think (and outspend) yourself out of business.

For e.g. Bic understands well that Gillette is the undisputed leader in the razor market so all it want to do is increase market share.

Step 2:

Understand the market leader well. Conduct a SWOT analysis, product positioning maps, brand loyalty matrices, a BCG matrix – I guess I’m saying, do your analysis!

Step 3:

Choose a plan of attack. Here comes the fun part :

1.  Frontal attack : All bets are off with this one. You clearly indicate that you’re taking the leader head-on in a high-risk but potentially high-payoff strategy. Here’s you match your opponent in all respects : product, advertising (spend & reach), pricing and distribution.

• Success factors : Basic warfare 101 says that the side with the greater resources will win. For a frontal attack to succeed against a well-entrenched opponent or someone controlling a high ground, the attacker must have a 3-to-1 advantage in firepower. Example : A local cola brand in India “Thums Up” took on Coke and Pepsi head on when they first entered India. But, it lacked the resources and marketing acumen to carry on the fight and was bought out by Coke in the 90s.

How to succeed : Modify your frontal attack. fight on one or two fronts at the most pecking away at your opponent. If he retaliates, be prepared for an all out response.

2. Flank Attack:

Here you concentrate your strengths against the weak spots of your opponent. You can do this either geographically or by segmentation.

• Success Factors: Identify a shift in market segments that cause gaps to form, act swiftly to fill those gaps and develop them into strong segments that are loyal to you. This is basic marketing : Identify needs and satisfy them. Period. Note that this form of attack makes sense if you don’t have as many resources as the leader and has a higher probability of success. Example : Japanese car firms back in the 80s when they introduced fuel-efficient cars or Honeywell when it competed with IBM in the mainframe market, set up strong sales infrastructure in medium and smaller-sized markets that were neglected by IBM.

3. Encirclement attack:

This is simple. If you’re a big firm with lots of resources, you attack the leader on multiple fronts.

• Success factors: The objective is clear. Grab as much share as possible through a simultaneous attack on a couple of fronts. Add more value to your product, advertise on strategic fronts, partner with like-minded products. Example : Facebook opened up its API to developers at a time when a move like this was considered a no-no. This resulted in the creation of Apps which at the time were intriguing to users.  It also rolled-out multiple features and new add-one consistently to the point that mySpace was left to watch helplessly while it struggled to catch on.

4. Bypass Attack:

Here marketing takes some Machiavellian turns where you pretend to neglect the direct competitor and instead work on expanding your resource base. There are three ways to do this : Diversify into unrelated products, diversify into new markets geographically or supplant existing products with new technologies.

• Success factors: Here you’re consolidating your base and building up to a frontal or flank attack. Patience is key. An indirect strategy like this will leave your opponents guessing and snickering but, if executed well with a clear vision of what is to be accomplished at the end, it possible to win.

Example 1 : Summer of 98′ – Pepsi buys Tropicana for $3.3billion. buying the market leader in the OJ space helps it compete directly against Coke’s Minute Maid.

2000 – Pepsi buys Quaker Oats, the owner of Gatorade another dominant player in the sports drink market (80% market share as opposed to Coke’s Powerade) for $14 billion.

Earlier in the program, Pepsi develops its bottled water brand Aquafina which now commands a 14% market share as opposed to Coke at 11% and Poland springs at 10%.

Moral of this story : You may lose the brand war with your flagship product but could win the overall EBIT war with your family of brands.

Example 2 : Nintendo bides its time patiently in the video game console wars to a point where it’s perceived as insignificant with GameCube being a distant third. Microsoft and Sony battle it out with Sony claiming the dominant position. Behind the scenes, Nintendo invests heavily into R&D and then releases its Wii console in ’06 with new technological characteristics and an entirely new style of playing games and with expanded appeal to a broader audience. It employs a retroactive hold-back strategy where limited amounts  of Wiis are available for purchase and keeps building anticipation years after it is launched. In Jan ’09, 2.1 million units of Wii are sold in the US market. X-box sales – 1.4 million units. PS3 – 726,000 units.

In conclusion, being the #2 or  lower in a market is not necessarily a bad situation for you as it’s quite possible to seize a portion of market share from leader and increase your share over a period of time using some of the tactics above or innovating with new products and technologies.