22 Unchange Laws of Marketing.
Rule 7. The Law of Ladder
The strategy to apply depends on the ladder you stand on.
While your primary marketing goal is to stay first in the customer’s mind,
you still won’t lose the battle
if your efforts aren’t successful.
There are strategies to apply
when your brand is in second and third place.
All products are not created equal.
There is a hierarchy in the customer’s mind that
they use when making decisions.
marketingIn each field there is a product ladder,
on each ladder is a brand name.
Let’s talk about car rental services.
The Hertz Company has entered the minds of consumers
and is at the top of the ladder.
Avis took second place and Natinal took third place.
Your marketing strategy should depend on
when you entered the customer’s memory and,
as a result,
where you are at.
Of course, the higher the ladder, the better.
For example, for many years Avis advertised the high quality
of car rental services.
“Finest in rent-a-cars” is one of the company’s advertising lines.
Customers look at it and wonder,
how can they get the best service
without being at the top of their ranking?
Then Avis did what it needed to do
if it wanted to get ahead in the minds of customers.
Avis acknowledges their position on the product ladder.
“Avis is only the second company in car rental services.
So why have you come to us?
Because we try harder.”
For 13 years in a row,
Avis has lost money.
And then when they claimed their second place,
they started to have money,
lots of money.
Shortly after,
Avis was sold back to ITT,
who immediately ordered the advertisement:
“Avis is going to be No.1”
(Avis is going to be No.1).
Customers think,
“No, they’re not number one.
They are not at the top of the ladder in my mind.”
And as a result,
customers pick up the phone
and call Hertz company every time
they need to rent a car.
The campaign strategy turned into a disaster.
Many marketers didn’t heed Avis’ story.
They assume that the company succeeds
because it tries harder
(for example, has a better service).
But in the end that’s not the case.
Avis was successful
because it linked itself to Hertz’s number one position in the minds of customers.
Many marketers make the same mistake that Avis did.
Recently the university
Adelphi of Garden City,
Long Island compared himself to Harvard University.
High school graduates say,
“Wait a minute,
Adelphi University is not in my head.”
And Adelphi University has not been successful
in attracting outstanding students.
The choice in mind is very important.
Customers use their own value bar to decide
which information is acceptable
and which should be rejected.
In other words,
customers only accept new information
if it matches the value scale already in their mind.
Everything else is denied.
When Chrysler compares their cars to Honda cars,
very few people trade their Preludes
or Accords for Plymouths or Dodges.
Chrysler’s ad:
“Comparing an old Dodge
with a new Honda Accords seems a bit ridiculous until you see the results.”
According to the advertisement,
over 100 customers were interviewed
when comparing an old Dodge car
with more than 100,000 km of mileage
with a new Honda.
The majority (58%) chose Dodge cars.
Ridiculous (But not necessarily not true).
What about the product ladder in the customer’s mind?
How many steps are there on the ladder?
It also depends on the product is more or less interested.
Products for daily use
(tobacco, beer, soft drinks, toothpaste, breakfast, etc.)
are products of great interest
and have many rungs on the value of customers.
Products that are not frequently purchased
(tables and chairs, furniture, lawn mowers, suitcases…)
often have few rungs on the value ladder.
Products related to personal pride
(cars, watches, cameras, etc.) are also products of great interest
in the multi-step value scale,
although they are not often purchased.
Products that are not frequently purchased
and involve an unsatisfactory experience often have little ladder in customer ratings.
Car batteries,
tires and life insurance are three examples.
Products associated with not being enjoyed at all
and being purchased only once in a lifetime have no ladder in the rating.
Have you ever heard of the Batesville casket camp
(its product is a coffin)?
Probably not,
even though this company accounts for over 50% of the market.
There is a correlation
between the segmentation of the market
and the position of your product on the customer rating scale.
You usually get twice the market share of the brand below you
and only half the market share of the brand above you.
For example,
Acura ranks first in Japan’s luxury passenger car category,
Lexus ranks second,
and Infiniti ranks third.
Last year,
Acura sold 143,708 units in the US,
Lexus sold 71,206 units,
and Infiniti sold 34,980 units.
The relationship between the three car brands is correct
according to the calculation 4-2-1.
The battle (between Acura-Lexus-Infiniti) is only in its early stages,
the cars are still new and are much loved
by the public and the press.
In the long run,
when the product is no longer stimulating,
the customer phenomenon will occur.
(See the next chapter: The Law of Doubles).
Marketers often talk about the “top three” in the category
as a fair battle.
Almost never.
The leading brand cannot avoid dominating the second;
and the second mark inevitably suffocates the third.
In terms of baby food are the brands Gerber,
Beech-Nut and heinz.
In terms of beer are Budweiser,
Miller and Coors.
Regarding long distance phone service are AT&T,
MCI and Sprint.
What is the maximum number of ladders?
It seems to be rule number 7 in the mind of the customer.
Ask a few people to name all the brands of a category
they can remember.
Very few people remember more than 7 brands,
even those that get the most attention.
According to a Harvard psychologist,
Dr. George A. Miller,
the average brain cannot work with more than 7 units at a time.
That’s why 7 is a popular number to memorize.
The phone has 7 numbers,
7 wonders of the world,
plays poker with 7 cards,
Snow White and 7 Dwarfs,
and has 7 kinds of dangerous symptoms of cancer.
Sometimes your ladder or your product category is too small.
It’s better to be a small fish in a big pond
than a big fish in a small pond. In other words,
sometimes it’s better to be 3rd on the big ladder
than to be 1st on the small ladder.
The top rung of the soda change ladder is occupied by 7-Up,
with Sprite in second place.
However, in non-alcoholic beverages,
the Cola ladder is much larger than the lemon soda ladder,
with almost two out of every three non-alcoholic beverage consumers
in the United States drinking Cola.
So 7-Up climbed the ladder for Cola
with a marketing campaign called “The uncola”.
Like tea to coffee. 7-Up becomes the replacement for Cola drinks.
And 7-Up sales climbed to third place for non-alcoholic beverages sold in the US.
Unfortunately, in recent years,
7-Up has dropped out of third place because of a number of laws that
It will be discussed later (Chapter 12: Expansion Law).
The rating scale is a simple yet powerful comparison that
It will help you solve marketing crises.
Before starting any marketing program,
ask yourself the following questions:
“Where are we on the rating scale in the customer’s mind?
Top notch or second hiccup?” (Or maybe not at all).
Then make sure your program is realistically executed
according to your position on the ladder.
