Brand Shorthand

Immutable Forces, Immutable Laws ... and Bad Brand Behavior

• Mark Vandegrift and Lorraine Kessler • Season 1 • Episode 5

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After a discussion about frustrating and bad brand behavior, Mark and Lorraine dive into the next three laws from the 22 Immutable Laws of Marketing: The Law of the Ladder, the Law of Division, and the Law of Resources. Learn one of the most critical laws that must be understood before diving into the exercise of developing a position. Then discover how this Law of the Ladder – aka the category – dovetails into the Law of Division. Finally, if you only have $100 to market, don’t call us, we’ll call you!! Don't break the Law of Resources.

If you dig all things marketing, advertising, and positioning, spend 30-ish with Mark and Lorraine.

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Mark Vandegrift:
Welcome to the latest episode of the Brand Shorthand Podcast. I'm your host, Mark Vandegrift, and with me is one of the immutable forces of positioning, Lorraine Kessler. Lorraine, tell us what's on your mind this week.

Lorraine Kessler:
Well, there's just so much happening in the world of marketing that seems to be derailed. May I say that? So, you know, I think one of the things that really comes to mind is this idea of brand legitimacy. There is none. I'm being a little provocative there, but I'm building on someone I really respect, and I encourage our listeners and viewers to study and that's Mark Ritson. He's Australian. He's a professor of marketing, a PhD. He's taught master classes at the London School of Business and MIT and he is a provocateur, but on the right point. And what he's basically been saying — and this is way before we've had the Adidas having a man model women's bathing suits advertised in the women's section – what I call the cancellation of women. I mean, once men can insert a uterus and have children, there will be no need for women anymore. 

But way before those kinds of insanities, right? Or Target with its marketing of transgender bathing suits to kids, upsetting their wholesome mothers and families who love that brand and store. He talked about brand legitimacy and what he said is totally dead on. Because what's happening is that brands take on a purpose or some sort of value or morals cause which distances them and breaks the rapport with their customer ratings. And there's no reason to do this. I mean, it's just there's just no reason. I mean, take Starbucks … I think … about three years ago they said to have a racial discussion with your barista. I mean, race relations and doing well and talking about that is a noble cause, but people want their coffee and they want to go on the road and they don't want to talk to the barista about that. They want to make sure their order is right and they make their train as Ritson would say. 

So it's really not altruism either because like Schultz at Starbucks at the time said, “we feel like taking this kind of moral stance or value stance is good for our bottom line.” Well, the minute you're turning it into something to make you money, it's now un-purposed. It's not purpose. It's what I would call counterfeit capitalism, right? I'm going to jump on something that I think does well for us, morals wise, but it's a risky, as we've seen, right? Um, risky, risky game. 

 I mean, the losses are just unbelievable. I think Target lost $10 billion value in 10 days. That's a billion a day. I can't even … my head can't even get around that. So that's on my mind is this, you know, this brand legitimacy. There are brands, we can talk about them, that have from their get-go, and I think you will get into this a little bit more, take a stance. And so you either buy those brands for that stance or not. And so it's authentic to them. And I think of like, Bombas socks, you know, who donate a pair for every pair you buy. So they say when you purchase a pair of socks, it's an act of kindness for someone homeless. Toms Shoes, who has given shoes to children in need, to save a child for a long time, and even Ben and Jerry's, who started and has been consistent and “we're progressive and we fight for justice. We believe there's inequality in society.” So, you know, that's part of their knitting from the get-go, but to just kind of glom on at some point, particularly things that are so divisive, as some of these issues are. 

Mark Vandegrift:
Yeah, we used to say, I think it was, “any press is good press.” And if that were the case, I don't think that we'd see Bud Light losing, I think it's $15.1 billion now. And you just said that Target’s down, they were up to $9.8 billion, so $10 billion total. And what do you think it is with these large companies? They get to a point in size, they've been around for a while, they've established a brand. And now it seems like large company after large company is just falling down on this sword of wokeism. Why do you think that we're seeing that happen right now?

 

Lorraine Kessler:
I think they want to be with it, or cool, or hip. They become tired of their audience. Maybe it's just the idea that every brand doesn't have infinite customer acquisition. It becomes a time when a brand … this is the market share you're going to get on that distinctive customer audience. So you know what? Don't lose a customer. Focus on not losing a customer or reinventing with a new brand. If, for example, Adidas or even Target wanted to really go after as part of their portfolio, let's say, the transgender community, then create a whole new brand. It's when you take a brand that stands for something in the mind of the distinctive audience that it was meant for and as I said, Target's audience were suburban moms with children who are trying to be stylish within a budget, right? It's mass with class.  But I think they want to play it fast and cheap and score big points in some way, and it’s ended up just reversing on them.

Mark Vandegrift:
Well, and if you note what Anheuser-Busch did … Anheuser-Busch's initial reaction was to separate from that group. Now they're renewing their support of that group. So the whole thing just keeps falling down in so many different places because you have this hypocritical action on their part where they're saying, no, no, no, no, no, that's not us. But yet here's an action that says, yeah, this is us. It's just, we're going to do it behind the scenes. And I think like you said, had they not touched the Bud Light brand at all, they could keep supporting whoever they want. They can have the values however they want. The problem is when it made its way into their advertising. And I know it was just a single post and it was just one social post by Dylan Mulvaney and that was it. But at that point in time, you've made your bed. Now you got to deal with it. And they've ostracized pretty much everyone on the planet.

Lorraine Kessler:
Yeah, and that one keeps on giving to the competition … Modelo, you know, Constellation brands is picking up. That and Corona, they own both, it's picking up like 14% increase in sales. And we're at a point where I think this was in Bloomberg, that Mexican beer may now become America's favorite beer. So none of this makes any kind of sense. 

I think, could it be so simple as these brands are trying to be all things to all people? And that is the absolute 180 degrees opposite of positioning. You cannot be all things to all people. You get a core audience, you cultivate that audience. It's a distinctive audience to your brand, to its image, to what your values are. And I'm not talking morals, I'm just talking basic values or basic cultural identity. And you own that, you have to own that audience with authenticity. 

And there's a point at which, you know, the star only gets so big. So if you want more stars in your galaxy or portfolio, create more brands and go after those little segments, if you will. And that's a good way to attack yourself. So that would be good positioning strategy. This isn't about … you know I have a close family member who's part of the LGBTQIA+ community. So this isn't about, you know, our views on that. If people want to identify a certain way as they become adults and that's, you know, that's all fine. The question is, it's just bad branding. It's bad marketing because it's pandering and people have good sniffers. I think we said that and they know it. 

So at the end of the day, we don't want corporations telling us what to think and how to think. And I think that the idea that this has been forced down us, or that's how people feel, right? And feelings are more important than facts. I mean, how I feel about a brand, I mean, what is a brand? It's all about how you feel about something and then you find the facts to support why you buy that car, right? So, feelings are the language of branding. And when my feelings are turned off because you're judging me as a corporation, boy, that is just really, as we've learned, you know, that's what makes life so hard, is it gives the test first and the lesson after. And these are some hard lessons, billions of dollars of lost value. They're hard lessons.

Mark Vandegrift:
Yep. We do need to get to our topic of the day. We started last week discussing the three laws from Trout and Reese's book, the 22 Immutable Laws of Marketing. As we mentioned last time in our AD process, we've honed these down to 12 rules, choosing those that we felt were most relevant to the clientele that we've worked with through the years. And here's the full list again for those who might have missed last week. For those on audio only too, they are the law of leadership, the law of category, the mind, perception, focus, exclusivity, the ladder, the law of duality, the law of the opposite, division, perspective, line extension, sacrifice, attributes, candor, singularity, unpredictability, success, failure, hype, acceleration, and the last one, the law of resources. And we want to tackle three more today. 

To read about all of them, you'll have to pick up the book or download it on your Kindle. Last week, we covered the law of perception, which, as we went over very much in detail, is that perception is reality. The law of exclusivity, which means positioning is differentiation. And then the law of focus, which means business owners, as I said, multiple times, quit being ADHD. So, the three we're going to cover today are the law of the ladder, which also relates to the law of division, which overlaps with the law of category. And then the final one, the law of resources. 

The first one, the law of the ladder is, I think, a good setup, Lorraine, to understand that minds work a certain way and this law has to be applied before you can even start to think about a position. So, Lorraine, take it from here and tell us why this is so fundamental to the principles of positioning.

Lorraine Kessler:
Sure. Well, the law of the ladder just tries to deconstruct in a very simple way how people think about brands, right? And I use this a lot in our Appreciative Discovery®. What people do in their mind is they create a ladder for a category, whether it's a cell phone, beer, imported beer, sports car, whatever it is. They bring that ladder in. And then they hang on the rungs, the brand that comes top of mind. 

So you bring in the ladder. Oh, I say to you, Mark, think about toothpaste. Immediately your brain has created that ladder. We didn't create it, you do in your mind. And then you're hanging like Crest and Aim and Colgate and Sensodyne, whatever comes to mind. And whatever position on that ladder you hold becomes really important in terms of how we maneuver around the playing field when we go to market. So if you're number one, and we know that, we can find that out by research, let's say you're number one in sales, you’re Crest, let's say for example, and you own more than toothpaste, you own kind of this whole category of oral health now, then you should attack yourself. 

And that's exactly what Crest did. They were just toothpaste. When I was a kid, Crest was just toothpaste, and it was the one you bought because it fought cavities. When cavities were a big, problem for kids born ’55-‘60, right? And then all of a sudden fluoride of the world in the US, cavities kind of, and people started to see dentists, which they didn't do before World War II, and they started doing afterwards. 

All of a sudden cavities became less of a problem. So what Crest was able to do is expand or reposition and kind of create a mega brand for whitening, oral health, a whole line. And it all works because we're willing to accept that from the leader, right? So they're number one, they need to attack. They need to attack any kind of strong move. So a strong move could have been whitening, a strong move against them could have been oral health and etc. 

So that's the, that's the job of number one is to play defense aggressively. Often it's good to do it with different brands. You can do it that way. You can do it with a mega brand if it relates in the customer's mind. So now if you're number one, that's what I have to do. Only number one can do that. 

If I'm number two on that ladder, I have to go opposite. You have to really, like we've always said, Coke is the old thing, traditional. I'll be the new thing, Diet Pepsi, or rather Pepsi and then the extension of that. And then if you're three, it's one, two, or something new. So, if you're three or something else, that's when you have to either flank or be a guerrilla, either narrow the focus to a specialty or a geographic focus or somewhere where you can win. 

Mark Vandegrift:
I think on the ladder, one of the ones we always use as a classic example is Hertz and Avis. So Hertz. Hertz is an example of being the leader. They did a great job of advertising back in the 80s and really dominated the market. So here comes Avis, and what does Avis say? We try harder, right? 

So what's an innate problem with a leader is they have so much business that they start treating their customers like a number. or they do something where there's a lack of intimacy between the brand and their customer. So Avis comes out with, “we try harder.” So I think that's a good example of, Hertz cannot now be service-oriented when they have so many customers and they're the leader, even if they could be by using technology or something else. It's just not in our mindset to give that allowance to someone that's big, right? If you're big, it's hard to be intimate. So that's what Avis came out with and did a fabulous job doing.  

And then we see that market continue to evolve. Enterprise, great example, what did they do? They come out with, “we deliver the car, we pick you up.” Right? So as you were saying, they were flanking, they came out with something new. They weren't the biggest, they weren't number two, so now I have to figure out a way to deliver a service that everybody already knows about and do it differently. So they come out with, “we’ll pick you up.” And that was a great campaign for a long time. Now, all of them have seen that have their troubles because it goes back to we want it all. So we start doing stupid things with our marketing. We start making bad decisions as a company. And then there's the Wall Street pressure, of course, that says become all things to all people, so I can just make a gazillion dollars and heck with what good marketing principles are all about. So I just wanted to give an example that I thought really shows how that law of the ladder works.  

And most people say, how many do we put on the ladder? What's the common number? How many rungs do we have on the ladder? Typically seven, right? 

Lorraine Kessler:
Well, that's in a high interest category. 

Mark Vandegrift:
Yeah, high interest category.

Lorraine Kessler:
In many, many categories, it's three. But I think the key thing here is that anyone who's not number one has to attack an inherent weakness in the leader's position. Now what's an inherent weakness? It's a weakness you have to assume. Right? It's not something you can fix. There's weaknesses you can fix, but it's inherent weakness that comes from your strength.

So in Hertz's case, because they were so large, customer service lines at their desks were long because they were a leader. They had customer service people, they had good training, but you just have more people and demand, they're going to have to wait longer. Avis didn't have that problem. So that's why “we try harder” kind of arrived as a customer service attack. So in order to counter that, Hertz would have to have changed structurally something at a great cost. So that's where we try to find with our clients an inherent weakness in the leader's position that we can attack at that point. 

Mark Vandegrift:
Yep, very good, very good. So yeah, now we'll move on to the law of division, and it does overlap with the law of category. So why the overlap? Well, much like the law of the ladder. You have to understand the category, and more specifically to this law, you have to understand the competitive moves within the category, right? So sometimes a move by you can cause your product or service to hit up against a whole different category. So Lorraine, teach us.

Lorraine Kessler:
Well, I mean, over time, right, categories divide. And if you're not one, two, or something new in a very competed category, then it's probably a good time to create a new category you can be first in, because nothing beats being first in a category. And I don't mean first to do it. You've said this, but it's worth repeating, first to mind, right, in that new category.  

Companies combine, categories divide. So if you can find a new category to be first in, like that's what Starbucks did. They were the first Red Bull. They were a great example. There were no energy drinks. For Gatorade, there were no sports kind of electrolyte drinks. So that's a pretty brilliant thing to do.  

Often this gives some advantage to a guerrilla, somebody who's small, because they can divide within a small category and everything's plus growth for them, right? They're going from zero to whatever. And you'll see that a lot of times these companies get to a certain size and then they get consumed by a larger conglomerate or corporation because they hit a really timely category divide. The thing that also comes to mind when you think about this these categories and how people think about ladders and then brands is, you know, we overestimate how much customers and consumers think about brands. They don't think about as deeply as marketers.  

In fact, there's a great book called, Thinking Fast and Slow, and it's by Daniel, gosh, I wish I remember his name, maybe you know him. I think it's Kahnerman, Daniel Kahnerman. I think he won a Nobel Prize for this book, and I've read it like three times because it's not easy to read. But basically what he says is, and this part's easy to understand: we have a competing mode of operation in our brain every day. System One versus system Two. We're all familiar with system one thinking. System one thinking is automatic. It's absolutely the quick thinking. It takes the least amount of effort, and we use it every day to decide, you know, things like threats, how to take the best route home, what to buy, how to recognize friends, you know. We use it all the time. The problem with system one thinking is because it's so easy, it demands so little energy. Right? And it's so automatic that it overrides system two thinking, which is complex thinking.  

And what it does is it tends to take shortcuts and it tends to convince system two thinking, which is where you really have to study a problem and become analytical and break it down, right? It takes more energy, right? Which we need for preservation. So it's like the body saying, I need energy for other things. So I'm going to shortcut, like we call this brand shortcuts, right, for a reason. 

Because we're appealing in branding, the system one thinking. We're not appealing to system two. I'm sorry to say. And because it takes energy to engage system two thinking, what happens is system one tends to dominate, take over, and convince system two that it has the right conclusion, when in fact it doesn't. So anyway, that's a long way of saying it. We have to understand this kind of pseudo-psychologist as marketers, that the mind is limited, it likes simple things, it does not like complexity, and in all branding, the simpler you make it, the better. 

Mark Vandegrift:
Yeah, and just to, I guess I want to hammer this home because it's a law that I think is underutilized just from general thinking, but when we, I guess, expose it to our clients, they're like, aaahhh, that makes all the sense in the world.  

So let's say we have the ladder of cars and we're in the late 70s and we have something come out called the minivan. That creates a new ladder now. So who owned the minivan category? Chrysler Town & Country 

So the Chrysler Town and Country is out now as a minivan. Then fast forward a few years and we have something come out called the sport utility vehicle, which we call the SUV. Now we have another ladder. So under the car category, we have a ladder. Now we have a new ladder called Minivans and another one called SUVs. And now we have what? Crossovers, right? 

They're something like, I don't know, I call it a fancy station wagon because that's what it reminds me of. And so you can see how a new ladder is created each time. And I bet Chrysler Town and Country did not own the car category or the ladder, but they do, were the number one in the new category of Minivans. And then the SUV, 

Lorraine Kessler:
For a long time,

Mark Vandegrift:
Yeah, for a long time. And then, and then I think like the Ford Explorer probably owned the SUV category for a long time and then the crossover, et cetera, and they all have the ability, as you said, when you divide, you have that capability or the opportunity to be number one on that rung. And that's very important when the mind moves to that category to start shopping for it so that you are in consideration on that list. 

Lorraine Kessler:
Yeah, we're getting to the close of time, but I would say this. One of the things we try and focus on clients, one of the first places I start as a positionist with a client is by asking the question, can we create a new category?

Because very often the clients we have are in established categories. Where there's a great deal of competition. They have to narrow somewhere. It's either going to be geographic or a very specialized, distinctive audience that's maybe smaller or and so that's limiting, right? It can be limiting and the battle's hard because they don't just have one, two competitors. They may have a handful and they may be different nationally or geographically, globally. So, boy, the first thing I ask is, gosh, is there an opportunity to own a new category?  

We did that for one client. We created the category of insulated siding and the idea, for those who are marketers, the way to think about this is, you know when you see trend reports and they show the sales from year to year or how many people bought wood windows versus vinyl versus aluminum, whatever, composite. You want to see composite or insulated siding as a category. You want to see that in that report. When that's there, you really created a category. You want to see SUV. How many Americans buy SUVs. When you see it in that kind of report, you've won the day. And if your brand is attached to that, nothing's better. 

Mark Vandegrift:
Yep, perfect. Well, we are at our time, but tell you what, this last law, the law of resources in my mind is very easy to explain. I think we talked about it on the last episode, which is if you have $100, don't try to go do a Super Bowl spot. And so it does go deeper than that, Lorraine. 

So give us a real short background on that. 

Lorraine Kessler:
Well, absolutely. I mean, positioning, as we said, right, law of perception, it's a battle for the mind. It happens in the mind of the customer. It takes money and a lot of it. And it takes a lot of time to get your idea into the mind. Once you have it, once you have the idea, you've made it simple. You've made it digestible. It takes money. It just is not going to happen on its own. So you've got to have money.  

And I guess I go back to the Chinese military strategist who wrote the art of war, Sun Tzu… you know, strategy without tactics is the slowest route to victory. But tactics without strategy is the noise before defeat. And Dick always says this and I love it. And tactics, that's tactics are dictated. Resources dictate tactics. So tactics is without strategies is the noise before defeat, resources dictate the tactics. So you have to have the money. And there is no way around it. We're not magicians. We can't pull rabbits out of hats. We can't zap a million people with brain vibes to make it happen. Unfortunately, even with all the media we have and all the choices and all the ways to reach people, it's still the most difficult part of the game. 

Mark Vandegrift:
Maybe we can call up Elon Musk and ask him part of the Neuralink brain chip can just automatically take our messages and say, buy me, buy me, buy me. Then we won't need any resources at all, right? 

Lorraine Kessler:
Yeah, yeah. Right, right, maybe that's part of the new AI that you just wrote about today. It's actually a brain fix. 

Mark Vandegrift:
That's right. Well, we're out of time for this fifth episode of Brand Shorthand. And as our subscriber base grows, just some basic information for our new listeners. Remember to like, share, tell others about us. And for those who want to just send us a question or two on a future podcast, email me at mark@innismaggiore.com. 

And speaking of which, our next episode, we're going to answer a few of some listener questions that have already come in. And that'll allow us to expand on some of the topics that we've touched on already. And until then, have an amazing day. 

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