Major Fallacy of Thinking/Marketing. "Want/Need" Baloney. This is Controversial.

... "Focus" by Al Ries.

Because focusing is so difficult for me much of the time, a few months ago I wrote a report on the subject, using info from the internet and especially from Ries' book.

The thoughts are geared to business, but they are easily applied to all of life. You might find it useful, so I've copied it here. (The formatting isn't perfect, so just imagine that it is):

ONE. Why Focus? Because the Average Mind Gets:

* 9 hours of TV, radio, newspapers, magazines, books, and videos a day.
* 40,000 words a day.
* 280,000 words a week.
* 14 million+ words a year.

The competition for your prospect's mind is fierce. So in an overcommunicated society, oversimplify your message.

TWO. Enjoy The Benefits - A Narrowly Focused Company:

* Is more likely to get a big market share
* Is perceived as higher quality in the customer's mind.
* Can dominate its category. Reward? Good profits, almost competition-proof.
* Knows large markets need more specialization, smaller markets need less, so products decrease as market size increases.
* Knows the enemy & what they are doing.
* Gets more specialized in a global economy.
* Realizes perception is reality. The driving force in business isn't quality, but perception of quality.
* Realizes ALL business is a niche business. (Leader's niche is bigger, but still a niche.)

THREE. Being Unfocused Undermines Your e-Business Because You:

* Try to appeal to everybody, so you choose a vague concept to cover all products & services. Result? No identity in the customer's mind = small market share.
o Core customers feel neglected
o You open the door for narrowly focused competitor to take those customers.
* Waste time & money searching for opportunities in other markets because more is better. But loss of focus = loss of power.
* Ruin your quality perception, because, to consumers, specializing = quality.
* Wind up weak everywhere instead of strong somewhere = no power.
* Struggle to manage unrelated products & services, divisions & departments in a potpourri of businesses you don't know well.
* Watch helplessly as one product line undermines another. E.g., why would Domino's or Little Caesars buy Pepsi when PepsiCo's Pizza Hut is their top competitor?
* Become a big target. Coke ad: "Has PepsiCo opened a restaurant near you yet? Wait four hours. Every four hours PepsiCo adds another unit to their restaurant empire. Another unit that competes with your business and feeds your customers." (Focus, p.
* Use money from your successful lines to subsidize unsuccessful ones.
* Lose sight of your old enemy
* Gain unknown enemies.
* Often turn aggression inward, because no definite enemy means no external focus.
* Lose efficiency
* Lose competitiveness
* Lose leadership over time. E.g., IBM was a $35 billion leader before anyone heard of Michael Dell. Now, a few years later, Dell beats IBM in personal computers. Why? Dell focused.

FOUR. Describing The Perfect Focus:

* Requires fewer ideas and better judgment.
* Can be almost trite, yet powerful in your market.
* Is memorable because in 1-2 words, it creates an idea in the minds of customers, employees & media.
* Plays to human nature and common sense, not corporate logic.
* Is simple (but recognizing it isn't so simple).
* Tells your customer what you stand for.
* Creates a belief in your customer's mind that you'll be a big success.
* Tells employees where they are going.
* Gives you power over those with no focus.
* Attracts exactly the right employees to reinforce your strength.
* Concentrates & enhances employee dedication to a goal.
* Doesn't have to be a single product. It can be several products with a shared attribute.
* Excites employees because they're part of something big. Excited employees mean a lot.
* Owns the category. E.g., think of brand names for:
o aspirin
o cola
o canned soup
o instant photography

(Bayer, Coke, Campbell's and Polaroid)

FIVE. Be Aware of Consumer Beliefs:

* "The specialist knows more." True or not doesn't matter. That's the perception.
* "The better-quality product will win." So the easiest way to a quality perception in the mind is:
* "You can't have high quality AND low price. It's one or the other."
* "High price means high quality." A high price is a benefit to the customer. E.g., there'd be no prestige in a $20,000 Cadillac.
* "Low price means low quality."

Consumers avoid a company with a bad-sounding name. If it doesn't sound good to your ear (test it with others, too), don't use it.

SIX. How Consumers Measure Quality:

* Consumers have many choices. How do they compare and evaluate? Most don't.
* They talk about quality. But usually, they can't tell which is better. Products that cost the same often look and feel similar.
* Many customers believe the best-selling product is better quality, because they think the best quality will win. That's why it pays to be the leader.
* So quality differences are hard to measure. Perception differences are real & measureable. Your objective: improve customer quality perception of your products/services.

SEVEN. Focus & Employees:

* Good people want to work with good people at a good company.
* Unfocused companies want well-rounded execs, so they shuffle people between divisions, hurting morale.
* Specializing = power. So a focused company develops focused managers.

EIGHT. How to Focus Your e-Business

1. Do a simple search for a simple idea. (The more searchers, the less likely you'll get anything good.)
2. Possibility: Whatever position the leader holds in the mind, you do the opposite. If they're expensive, you're cheap, etc.
2. Narrow your business to dominate a segment. This step is counterintuitive. Grow faster with fewer product lines? How ? Why? Because you don't have to:
a. Satisfy everyone.
b. Compromise on design, packaging, pricing, distribution.
3. Stake out your ground. Put your best people & resources on the product or idea of the future. Write off the rest.

a. If you can't walk away from part of your business, you can't focus.

b. Sacrifice defines "who you are not."
4. You don't have to focus everything to be successful. But you do have to focus something. At a minimum, cut back. Restrict growth outside your focus area (like pruning a plant so it grows in one direction).
5. Stock in depth
a. How many donuts does your bakery sell? 3 or 4 varieties? A big Dunkin' Donuts has 50+.
b. Your local coffee shop has regular & decaf. Starbucks sells 30 kinds.
c. The coffee shop has vanilla, chocolate, and strawberry ice cream. Baskin-Robbins sells 5 varieties (regular, yogurt, etc.) in 31 flavors.
6. Concentrate your efforts & marketing dollars on the fewest activities that will bring the most revenue E.g., consider Rocket Chemical:

a. a 3-person company making aerospace lubricants.

b. developed airplane anti-rust product: WD-40.

c. phased out its other products.

d. changed its name to WD-40 Company:

1) owns "slippery" in consumer minds.

2) in 77% of American homes.

3) reported $144 million net on $864 million sales in decade ending 1996.

4) Net income = 17% of sales. (Fortune 500 averages 5 % of sales.)
7. Market to increase your share of chosen product/service/idea.
8. Be patient & brave. The market won't come overnight.
9. Use repetition to motivate employees & consumers.
10. Think long-term. It's not, "Will this decision improve our numbers?" It's, "Will this decision improve our focus?"
11. Develop specific plans to deal with the enemy.
12. To own the prestige position, you usually must be first AND charge high prices.
13. Merge ONLY with a similar company to increase focus. (Merging with a dissimilar company decreases focus.)

NINE. If Someone Beats You To The Category You Want:

1. Do what made the leader successful.
2. Narrow your focus.
3. Invent and own a sub-category.
4. Move fast. Create the perception you invented the sub-category.
5. Get ingrained in that narrow segment.
6. Own a piece of the customer's mind.
7. Tell everyone about your leadership, not just your quality.
8. Become an institution.

TEN. Benefits of Being the Leader in a Category:

* You get time to react to other new products. (Just copy the competition to keep your lead).
* You can hire better people.
* You get first crack at distribution. (Outlets want the leading brand.)
* Power = owning a word in the mind
* You attract customers who want the same as others are getting.

ELEVEN. Focusing Can Be Torture. Obstacles:

* Selecting one concept to focus on. (Logic says, bet on several.)
* You may need one step backward for 2 steps forward. You may lose sales short-term. Be patient.
* Logic gives you bad ideas::
o Consider each division equal to the others, no matter how unproductive.
o Combine 2 different entities so when one's down, the other's up.
* To focus, you must subtract. Logic says, add products to spread costs & increase sales. But it rarely works. Example:
o A1 Steak sauce dominates its market.
o People eat more chicken. What to do?
o New product: "A1 Poultry."
o But in the mind, A1 isn't a brand. It's the sauce itself.
o Result? Despite large ad budget, A1 Poultry flopped.
* Best way to improve short-term numbers? Launch new products & services. In other words, unfocus.
* It's not logical: "To increase sales, narrow the focus." But if it were logical, everyone would do it. You'd get no advantage.
* Over time, you naturally lose focus with no conscious effort. (Clean the garage. In 2 months, it's a mess again.)

Factories, facilities, products, & people don't spell success. You must own a piece of the prospect's mind.

TWELVE. Beware Traps!

* Distribution thinks, "What else can we sell?"
* Manufacturing thinks, "What else can our factories be making?"
* Marketing thinks, "What else can we market?"
* Management thinks:
* "What happens when our customers outgrow our products?"
* "We're doing great locally. Let's go national."
* "Some customers can't afford us. What do we do?" Answer: Offer noncustomers deals and incentives." (You get more business, but alienate old customers.)
* "Customers want more flavors, more variety, more choices."
* "We'll make more money if we offer products to that other market."
* "Our competition is REALLY tough. Let's go someplace else."
* "If we have more variety, we'll sell more products."
* "We succeeded here. Now, let's broaden our base."
* "How do we sell to our non-customers?"
* "WHAT? Let go of a piece of our business? Are you crazy?"
* "Let's just offer this new one along with the old one. Let the customer decide."

Motto: Put all your eggs in one basket and WATCH THAT BASKET!

Richard Dennis