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1. Introduction to the
book
2. Main
Themes: what is this book about?
3. Some of the new and interesting ideas
in the book
4. Innovative
methods, tools and processes – in brief
5. Common biases of the "MBA
Clones"
6. Noteworthy
quotations from the book by topics:
-Consumer psychology
and trends in consumer behavior
-MBAs, management, competition and strategy
-Marketing and consumer research
-Brands and branding
__________________________________________
1. Introduction to the book
How can you be immensely successful for many years, and yet not
be imitated by competitors?
Impossible, you say. Not so. Virgin Atlantic, the Body Shop, Apple Computers,
and Birkenstock – they all achieved this status, and there are ample additional
examples. They cracked the secret of successful differentiation that is
not imitated and are adored by customers who think that they are incomparable.
Dr. Dan Herman calls it an Unfair Competitive Advantage. It's not at all
unethical. Everyone has a fair chance of attaining such an advantage. At
least, every reader of this book.
There is a secret to successful differentiation that is not imitated.
It is a psychological secret that has to do with the way your competitors
think. Most marketers today are MBA graduates who tend to think and operate
in typical and predictable ways - you might call them MBA Clones. You can
take advantage of their biases and outsmart them.
In this groundbreaking book, Dr. Dan Herman not only reveals the secret
of successful differentiation that is not imitated but also supplies you
with a comprehensive set of practical rules and tools that will enable
you to make an "unfair" advantage your reality.
Dr. Herman, a competitive strategy consultant with vast global experience,
a seasoned CMO in a large corporation, a branding professional and a businessman,
does not tell you to 'think out of the box' as so many do – he provides
you with a new and comprehensive toolkit for success.
You'll learn:
- The secret of successful differentiation that is not imitated
- How to scan methodically for both strategic and tactical opportunities
for success How to integrate a business model, a competitive strategy
and a brand concept to create a unified 'unique success formula' for
your company
- How to create marketing hits – short meteoric successes
- How to use electrifying marketing, just-on-desire branding and the
brand drama approach to build emotionally powerful brands and many other
useful additions to your profit-generating arsenal of concepts and methods.
Using a plethora of examples from top businesses around the world,
Dr. Herman offers a business oriented-point of view that is fresh, different,
and even humorous at times. Even though this book will turn your thinking
inside out, everything in it is practical and easily applied to any
kind of business.
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____________________________________________
2. Main Themes: what is this book about?
- Profound changes have occurred in consumer behavior and the dynamics
of competition, in recent years. They have caused a radical transformation
of theory and practice in competitive strategy, marketing and branding.
For example: strategy needs to be routinely updated, marketing should
be electrifying rather than satisfying and brands should in many cases
be short term.
- Management as a discipline is more like architecture than
engineering or medicine, since managerial actions affect consumer expectations
and behavior, as well as changing the rules of the market. However, MBA
programs normally overlook this crucial point. The results are MBA clones
with predictable ways of thinking and acting. This sameness is a competitive
vulnerability for their companies.
- There is a simple yet surprising secret to successful differentiation
that competitors do not tend to imitate, even after many years of evident
success. It is called off-core differentiation and it leads to an "unfair"
competitive advantage in which competition is truly irrelevant.
- The most neglected aspect in strategic business thinking is the fact
that customer behavior causes the strategy to succeed or to fail. Therefore,
a deep understanding of psychology is crucial to successful strategizing.
Unfortunately, understanding of consumer psychology has been severely
lacking among senior decision makers. This book demonstrates
the problem and takes very significant steps towards amending it.
- A brand is an expectation or anticipation consumers feel for a specific
benefit that will be derived from a company, product, or service. All
brands are instruments by which a consumer can achieve or accomplish
something desired. This is the instrumentality approach. Successful brands
surpass the tangible benefits supplied by the product itself. The real
wonder of sophisticated branding is the ability of brands to supply consumers
with intangible benefits that go far beyond the tangible benefits of
the product. Such brands can offer what I call intangible instrumentality.
This capability operates in ten different mechanisms described in the
book.
- Currently, managers are encouraged to think outside the box and
perpetually innovate in all areas of management. Most executives find
this task to be unrealistic. This book presents a new and comprehensive
toolkit for today's managers. It is specifically designed to enable them
to outsmart their MBA clone competitors.
- The commonly used process of strategy development taught in MBA programs
(based on gap analysis between goals and existing situations) is flawed
and inept for today’s hyper competitive markets. A new process named
"What's Next?" offers a solution. This process is based on the insight
that today’s business successes
are more often the result of early identification and fast maximizing
of opportunities than the result of developing and carrying out plans
to achieve objectives.
- The book presents numerous practical tools that are part of the comprehensive
methodology it describes.
They include:
> The Advantagizing approach for creating Unique Success Formulas
for companies
> The Opportunity Scan (O-Scan) Method
> The principles of Electrifying Marketing
> The Formula for Developing Market Hits
The Brand Drama method.
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3. Some of the new and interesting ideas in the book
- We live in the Post Customer Loyalty era. Consumers today are
addicted to having options and have become serial adopters of innovations.
They have ever-declining loyalty to products.
- Most managers today suffer
from Strategophobia: the fear of strategy. They are afraid to focus
on a single benefit or a certain target group of customers and "forsake
all others". They are concerned with preventing competitors
from gaining an advantage when they should be creating an advantage
for their company. A related phenomenon is Competitive Autism:
defining a "vision"
rather than a winning competitive strategy.
- Customer satisfaction
does not assure customer loyalty. Customers will move on when turned
on by some new and exciting option. We need to move from satisfying,
subservient marketing — that gives consumers what they want
and expect — to what
might be called Electrifying Marketing – giving them what they
don’t yet know
they want.
- An Unfair Advantage is a situation where customers adore your
company or product and think that it is incomparable, while competitors
do not imitate you. It is only in this situation that you have
a private monopoly.
- Most of the things that you do as a manager
are similar to the things that your competitors are doing. These
things are the things that constitute good management. On the other
hand, your strategy consists of the things you do differently.
They probably make up no more than 5% of your busy schedule
but they are your differentiation and they make all the difference.
- Good management provides you with the entrance ticket to the
competition. Strategy allows you to win the battle for the consumer.
It's an important distinction.
- Only differentiation is strategy because it is only your uniqueness
that can be a basis for customer preference. Consumers seldom notice
that you are better than your competitors; however, they will invariably
notice that you are different.
- On-Core Differentiation means trying to set yourself apart on
criteria which are considered to be important benefits sought by
customers in your category. It will inevitably be imitated precisely
because it is important to customers. Off-Core Differentiation
means creating your uniqueness by supplying consumers with a benefit
that is dear to them but not thought of as being relevant to your
category. Only-Off Core Differentiation stands a chance of not
being imitated and therefore can achieve an Unfair Advantage.
- Your
competitive strategy is your brand. It is the way you achieve an
advantage over your competitors, namely: giving your target customers
a strong motive to prefer you. You do this by offering them some
benefit. Your promise of benefit is none other than your brand
strategy.
- Short-term brands are a major new paradigm for
Post Customer Loyalty Marketing. Long-term brands are based on
trust. Short-term brands are based on excitement.
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4. Innovative methods, tools and processes – in brief
- The Advantagizing approach to creating "unfair" competitive advantages
(successful differentiation that customers adore and competitors do not
imitate), using the Shield of David model of strategy creation and the
principles of Off-Core Differentiation to accomplish a Unique Success
Formula (a concept that integrates a business model, a competitive strategy
and a brand strategy) for the company.
- The "What’s Next?" process for
developing competitive strategies. “What’s Next?” tools
include the Opportunity Scan (O-Scan) methodology for identifying and
mapping out business and marketing opportunities and the Consumer ForeSearch
research method for spotting potential/future consumer wants.
- The Contextual
Segmentation method for segmenting the market into buying and consumption
contexts (rather than by groups of consumers) in which most consumers
may find themselves from time to time.
- ForeSearch - a qualitative (psychological)
research method used to "X-ray" the
unconscious mental and emotional structures that motivate and guide consumer
behavior and to predict future and potential desires.
- The principles
of Electrifying Marketing (the alternative to the current Satisfying
Marketing approach) – a more apt approach for satisfying
the already satisfied needs of today's consumers. Electrifying marketing
is based on a different understanding of consumers, as well as their
needs and wants.
- A method for building a psychological,
interpersonal or social utility for a brand (beyond the benefit of the
product), based on the Enriched Reality phenomenon and using the 10 Extents
of Branding model and the principles for creating emotional significance.
- Various methods for bringing a brand to life and exhausting its potential,
which include: the Brand Drama method, which will turn your brand into
the most fascinating phenomenon on the market, the Brand Trance approach,
which applies hypnotic principles to branding, the 5D Brand Realization
system and the ABCDE measures of brand success.
- A methodology for the successful creation and launching of Market
Hits (blockbusters) and STB - Short Term Brands, based on FOMO- the Fear
of Missing Out, as well as on the Market Hits Formula.
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5. Common biases of the "MBA Clones"
Standardization in MBA programs results in a similarity in the professional
approach and managerial thinking of their graduates. Strategic conduct,
marketing practices, products and brands have come to resemble each other
because the marketers themselves have become virtually indistinguishable.
This provides an opportunity for those with an alternative approach and
a set of tools to gain an advantage.
Here are some of the common characteristics of MBA Clones:
- MBA Clones apply similar concepts and approaches such as striving
for a sustainable competitive advantage, segmenting the market, assuming
a niche strategy, attempting to conquer market share, practicing positioning,
determining to foster customer loyalty, developing a corporate vision
and adopting brand values.
- They are often conservative (preferring courses of action that have
already worked for others), reluctant to be truly different and focus
on blocking competitors from gaining an advantage rather than attempting
to achieve one themselves (strategophobia).
- All MBA clone competitors within a certain
market generally adopt a similar segmentation of consumers, focus on
the same attractive groups of consumers, and divide the market into sectors
in the same way (for example, "Luxury," "Value
for Money," and "Economy"). They tend to agree about what is important
to the consumer and what the consumer wants.
- As a result, competitors try
to one-up each other in doing the things that are “known” to be important
in their market. On this basis, they define their relative advantages
and disadvantages. They tend to offer consumers the same benefits, tangible
and intangible. They offer the same product or service components and
think in either/or terms (for example, a trade-off between price and
quality).
- MBA Clones often confuse "good management" with "strategy". They use
the term "strategy" to denote every important issue deserving the attention
of the CEO or pertaining to planning on the corporate level. They think
of strategy as an analytic process of research, analysis, setting objectives
and planning. They rarely see strategy development as a creative process
of inventing a new future.
- In making major strategic decisions, MBA
clones tend to ignore or underestimate possible future moves of competitors
and potential new competitors (competitive autism). They focus on direct,
immediate competitive threats and tend to overlook substitutes and other
product categories in which competition could emerge.
- Despite great
lip service paid to innovation today, in practice most innovation
is confined to NPD (New Product Development).
- They tend to look
for potential differentiation in the same place their competitors do – "the benefits that are important to the customer".
- The psychology ("consumer behavior") that MBA Clones study is superficial,
inconsistent and often outdated. Crucial characteristics of today's consumers
such as the Fear of Missing Out, and living in an Enriched Reality rather
than in pure reality are often ignored.
- They often think that branding
and brands are topics related to naming, graphic design and advertising.
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6. Noteworthy quotations from the book by topics:
>> Consumer
psychology and trends in consumer behavior
- What is really happening here is an unprecedented readiness of consumers
to try new products and brands ... It is this one behavioral pattern
that has been hammering the final nail into the coffin of long-deceased
customer loyalty.
- Consumers pretty much refuse to be classified into any homogeneous
group by demographic, socioeconomic, or even lifestyle characteristics.
They often won't "act" their age, gender, or social status. They just
won't behave or consume according to our stereotypical expectations.
- Most
human benefits—which is lucky for us as marketers—are "multi–satisfied",
regenerating goals, meaning that we feel the need to attain more of the
same benefit, again and again, often in new ways.
- Human beings are not ready to give up on benefits just because of
the very minor fact that they are unattainable or unsatisfiable. Consumers
are ready and willing to furnish themselves with benefits, in fantasy
too.
- Our emotions are not as haphazard as it may sometimes seem. They
also do not constitute an independent system that is detached from our
cognitive system. Our emotions are inner signals that blink whenever
something or someone appears to bring us closer to, or take us farther
from, what we need or want.
- Temptation is crucial to consumers because many purchases are hard
to justify (since the benefits they deliver are not always legitimate
ones given specific circumstances or prices).
- This world consistently refuses to grant all our wishes, and arrange
itself according to them. So, what do we do? We enrich our reality on
a regular basis. We live in a mixture of reality and fantasy ... None
of us lives our reality “as
is.” This is completely human.
- Consumers create beliefs about brands
since these beliefs help them decide what to buy. We generously aid their
decision-making by way of supporting the creation of those beliefs in
order to help them choose our product.
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>> MBAs, management, competition and strategy
- Most products, and even most brands, appear the same to the consumer.
These managers are not playing me-too. Even without consciously imitating
each other, they achieve the same results, simply because they think
the same way. In other words, they are “MBA clones.” Not every MBA graduate
becomes an MBA clone. But MBA graduates are definitely an at-risk population.
- Everyone
starts at the same point. Everyone has the same information. Everyone
is talented. Everyone is full of initiative. Everyone is creative and
everyone knows Porter, Kotler, Aaker, and Ries. So everyone gets to exactly
the same place. How about winning over competitors by "unfair" advantage?
- One of the classic ways to shield yourself from different thinking
is to say, “That's very theoretical. In practice, it doesn't work that
way.” That
idiotic statement does contain a grain of truth. A new possibility, by
virtue of its newness, is not common practice. It becomes praxis for
those who understand the potential, go for it, and grab the winnings.
Practical people will always be left behind. An "unfair" advantage belongs
to the quick and open-minded.
- Contrary to what most people think, new categories are formed all
the time, and in most cases they do not represent big technological breakthroughs
but rather are manifestations of new business concepts or new business
models.
- Long-term strategies have been replaced by strategies that are constantly
adapting and changing as new market opportunities are identified and
maximized.
- The vast availability of manufacturing and marketing resources,
coupled with consumers' unprecedented openness to try new products
and brands, have turned every advantage into a temporary one.
- The unexpectedly
simple and wonderful secret of successful differentiation is: Do not
look for it among the core benefits of your product category; rather,
think Off-Core Differentiation.
- The companies that have succeeded in maintaining their differentiation
over the years and weren't imitated, even though they were making tremendous
profits, are those whose innovations lie somewhere beyond the core benefits
of their market.
- Successful differentiation has two defining characteristics:
(1) it is not imitated by your competitors, even though (2) it brings
you unmistakable success with consumers.
- Theoretical concepts are
tools for thinking about reality. They are not reality itself. No one
has ever smelled brand values or tasted positioning.
- Every strategy should have consumer psychology at its heart.
- Strategy is not analytical thinking. It is a creative, even artistic,
activity. A strategist designs a potential reality in his imagination,
his vision, and then turns it into something real.
- The mission now is to obtain a Renewable Competitive Advantage.
- The approach I'm suggesting is based on strategy-in-motion -a constantly
evolving strategy propelled by the constant tension between continuity
and adaptation to changing conditions.
- When designing your strategy, you have to integrate three points
of view: a strategy for competitive advantage, a business model, and
a brand concept. The first will guarantee your edge, the second your
profitability, and the third your attraction for the consumer.
- The strategy of your brand is none other than your competitive strategy,
formulated as a promise to the consumer.
- In creating an effective strategy, it is crucial to cross back and
forth between the business point-of-view, the competitive point-of-view,
and the psychological point-of-view. You must do this until your strategy
culminates in a unified concept.
- We should move from satisfying, subservient marketing —giving consumers
what they want and expect—to what might be called Electrifying Marketing,
marketing that surprises clients, in the positive sense, and consistently
offers them something they didn't expect to get.
- The greatest danger in using successful methods is the fact that
they have already succeeded. That is, your competitors are just as aware
of these methods as you are, and using them won't give you a competitive
advantage.
- An "unfair" advantage means that you essentially have a private monopoly—one
you can't get from the government, only from the consumers.
- An "unfair" advantage means that you have a clear and significant
differentiation that none of your competitors wants to imitate.
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>> Marketing and consumer research
- There's an old chauvinist saying which goes like this: “A man chases
a woman until she catches him.” At least when it comes to brands, this
is a pretty good way to put it. Marketers do what they do, and invest
what they invest, all so that consumers will discover their brand. This
is the only way it works.
- Marketers often deceive themselves into using terms that are irrelevant
to consumers and brands, such as loyalty, commitment, love, and relationships.
I personally think that anyone who cannot see the difference between
his or her lover and his or her brand of soft drink has a serious problem...
- The marketers who pin their hopes on consumer satisfaction repeatedly
discover that consumers are never totally satisfied. Any improvement
is soon taken for granted, raises the threshold of expectations, and
will never create a true advantage for you.
- I prefer to replace the question
about niches with a different one: “How
many consumers can our product or brand turn on?” Business people who
thought that way about “niche products” turned them into mass-market
products and turned themselves into billionaires.
- The marketing approach is dead – long live the competitive approach.
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>> Brands and branding
- As marketers we design our products, services and brands to be effective
instruments for consumers to use in attaining their goals and benefits.
This is our raison d'être. We must never forget this.
- Your competitive strategy, is what you are promising the consumer in
order to get the consumer to buy from you —and therefore it is also your
brand strategy!
- If the traditional long-term brand strives to “marry” its
consumers “until
death do us part,” then the short-term Brand invites consumers for an
exciting, thrilling “one night stand,” knowing that it will be short
and sweet.
- Our brands have come to resemble one another for the same reasons
our products began to resemble one another: because marketers themselves
have become virtually indistinguishable.
- There is a massive over-exaggeration of the impact and significance
related to logo, symbol, colors, shapes, and so forth.
- Surprisingly, Short-Term Brands help maintain consumer loyalty to
Long-Term Brands because they evoke renewed interest in the brand
every time.
- Successful brands don't need to be liked by everyone. If everyone
likes you immediately, then no one is really enthusiastic about you.
- Consumers develop strong feelings (desire) only toward brands that
provide them with some benefit that is both significant and rare….
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