Chapter 8 – The Law of Duality
The law: In the long run, every market becomes a two-horse race.
Ries and Trout explore the Law of Duality in the non-alcoholic beverage industry. In 1969, Coke had sixty percent of the market, Pepsi had twenty-five percent, and RC cola had six percent. According to the law, over time Coke should lose market share, Pepsi should gain market share, and RC cola should lose market share (it would essentially be just Coke and Pepsi in the non-alcoholic beverage market). As of the time of the writing, Coke had forty-five percent of the market, Pepsi had forty percent, and RC cola had three percent.
Quote from the chapter:
- Knowing that marketing is a two-horse race in the long run can help you plan strategy in the short run.
Chapter 9 – The Law of the Opposite
The law: If you’re shooting for second place, your strategy is determined by the leader.
When a company is aiming to be number two in a market (because there is already a leader), the authors advise taking the leader’s strength and turning it into a weakness. Coke was the well-established leader and, knowing this, Pepsi positioned itself as the opposite. Pepsi claimed it was the cola “of a new generation: the Pepsi Generation.” According to The Law of Duality, with Pepsi claiming second place in the market, there was no room for RC Cola.
Related quotes:
- You must discover the essence of the leader and then present the prospect with the opposite. (In other words, don’t try to be better, try to be different.) It’s often the upstart versus old reliable.
- Yet, too many potential No. 2 brands try to emulate the leader. This usually is an error. You must present yourself as the alternative.
Chapter 10 – The Law of Division
The law: Over time, a category will divide and become two or more categories.
Ries and Trout advise marketers to be aware that categories split. In the beginning of the automobile industry, the market consisted of Chevrolet, Ford, and Plymouth. Now, sub-categories include vehicles based on price (luxury to inexpensive), size (compact to full-sized), and function (four-wheel-drives, mini-vans, etc.).
A couple of related quotes:
- Each segment is a separate, distinct entity. Each segment has its own reason for existence. And each segment has its own leader, which is rarely the same as the leader of the original category.
- The way for the leader to maintain its dominance is to address each emerging category with a different brand name, as General Motors did in the early days with Chevrolet, Pontiac, Oldsmobile, Buick, and Cadillac.
Chapter 11 – The Law of Perspective
The law: Marketing effects take place over an extended period of time.
When a store runs a sale, the authors say that in the short-run income will increase but in the long run it might decrease. Customers may begin to think that they are overpaying when they purchase a product or service that is not on sale. “Line extensions” (products companies introduce using an alternated form of the brand name) perform similarly. When Michelob introduced Michelob Light, sales increased. However, three years later Michelob saw a decrease in sales for the next eleven years. Ries and Trout assert that the “line extension was bound to undermine one or the other brand.”
Quotes from the chapter:
- The long-term effects [of some marketing strategies] are often the exact opposite of the short-term effects.
- In other words, you keep those coupons rolling out not to increase sales but to keep sales from falling off if you stop.
Andrew T. Daniel 