Al Ries and Jack Trout were upset. Since they came out with their classic book Positioning: The Battle for Your Mind 14 years ago, they have consistently relayed the same message. And throughout the seminar series which took them through Singapore, Kuala Lumpur, and Manila, they said it again and again.

    Their message: Marketing is not a battle of products. It's a battle of perceptions.

    Therefore, the primary marketing task is to position your product in the mind of the prospect. "Positioning is not what you do to a product. Positioning is what you do to the mind of the prospect."

    As they were winding down their Asian tour, they couldn't believe how often they had been asked about how to enhance a product's quality, how to satisfy the customer, how to extend a product line by taking the brand name of a successful product and using it on a new one. "Asia's managers are asking the wrong questions. Quality, customer satisfaction, line extension—all of these violate the laws of positioning." Ries and Trout were upset.

    But they're used to it. In fact, they have made a career about being upset with the conventional wisdom in marketing. As best-selling authors, advertising agency executives and, now, strategy consultants, their reputation has been built on challenging marketing "truths."

    Ries and Trout enthusiastically bashed some of these icons in a conversation with Chief Executive Asia Editor-in-Chief Jet Magsaysay.

    Focus on Product: "Asia's managers have it all wrong."

    Ries: We've been saying, it's perception that counts, not product. But in Asia people seem to believe the opposite. Deep down they believe that the company that makes the best quality product at the lowest price is going to win. So they're dedicated to the notion that they're going to reduce the cost in the factory. They hire engineers who will help them improve quality. As a result, nobody in many of these product lines is using the kinds of strategies we would use.

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    Direct Marketing: "It's just a tool."

    Ries: Direct marketing (DM) is big today. The computer's ability to take and hold all those names and information in a bank allows companies to treat customers as individuals. But DM is just a tool, a technique. It's just like a general saying, "Our strategy is the tank." But that's not a strategy, that's a vehicle, a weapon. In a sense, DM is a weapon of marketing that happens to be effective today because of the computer.

    One mistake people make today is they think they can use direct marketing to have a separate campaign for every individual. That won't work. It sounds good, but you can't have, say, a product for old people by talking to old people, for young people by talking to young people, for rich people by talking to rich people. You'll destroy yourself, because people talk to each other and they'll say, "Hey, wait a minute, this product doesn't make sense."

    The Infobahn: "It's just another medium."

    Trout: We've started to see ads on computer bulletin boards, and we'll see more of them. But then, people will run ads anywhere. They even put ads on the backs of toilet doors. If they can find a way to run an ad in a new place, they'll do it. So the computer bulletin board is just another medium.

    Ries: It may turn out to be a good PR medium. Let's say you're a software company. If your customer has a question, he types it into his keyboard, and he gets an answer from you. It may well be a good vehicle for publicity as well as advertising. I'm not saying the vehicle is not important, but what's the message? It's the message that's important.

    Advertising: "The 15% commission should be abolished."

    Trout: A lot of clients feel that advertising is a commodity business. They can shop around. The agency business was built many years ago on the idea of partnership. The agencies were the marketing partners. But as more companies adopted the product-manager system and took more of the product management in-house, they began to view the agency as a commodity: "They are just guys who do ads. We can get a lot of guys to do that." So they've been pushing down the fees, squeezing agencies on costs, firing them at the drop of a hat if something goes wrong.

    Clients periodically shop for ideas from other players. That's the biggest problem. The advertising agencies in a way don't do good strategy anymore. They tell the client, you do the strategy, we do the ads. And that's a big mistake.

    Ries: Then there's the issue of the 15% agency commission. The ad industry is the only one where the supplier pays the service company. Is the 15% commission ethical? Of course not. It's an anachronism. It only exists because it used to exist that way. It demeans the agency, the client, the media, and it should be abolished. I think it's going to die out, but it might take a while.

    Trout: I was in Mexico when Televisa, the dominant network in that country, abolished the 15% commission. Televisa said to the agency, "You're not getting 15%, and that's it." They went straight to the client, who said, "If that's the way you want it, fine." It upset the agencies no end.

    Agencies should get paid for their thinking ability, the time they spend on an account. Pretty much like how an accounting or law firm gets paid. David Ogilvy used a good analogy: It's like doctors getting paid through the hospital. The doctor wants to keep you out of the hospital, not force you to go the hospital because that's the only time he'll get paid.

    Communications: "Today, public relations is more important."

    Ries: I think there's definitely been a shift from advertising to public relations. If you have to achieve your marketing objectives with communications, I'd say 10, 15 years ago advertising was more important. Today, public relations is more important vis-a-vis advertising for many types of products or services.

    Trout: But it has to be strategic public relations. A lot of PR work is focused on just getting your name in the papers. Strategic PR means getting the key generic word out there. For example, Lotus Development might say, "Don't just get the Lotus name in the press. We'd like to see the word groupware." New generics tend to be born in the press, so Lotus could make that the focus of its PR activity. That's strategic use of PR, to get that key word out there.

    Ries: It's "The Law of the Category": If you can't be first in a category, set up a new category to be first in. The press will talk about a new category, they won't talk about a brand. They talk about "facsimile," but not about a certain brand. When you're first in a new category, you have great potential for getting stories about that new category.

    Line Extension: "Don't do it."

    Ries: Marketers are under irresistible pressure to extend the equity of a brand. But in the long run, line extensions almost never work. We beat line extension to death in our seminars. But afterwards, everyone in the audience wants to ask us questions about line extension. Why is there so much interest in that in Asia? I suppose it's because many manufacturers in Asia are moving from OEM manufacturing to selling their own branded products. Well, that's a good idea. But it's just a question of, if you want to do bicycles, then do bicycles. Create a bicycle brand. Don't take that brand across bicycles, watches, sporting goods.

    Corporate Identity: "People buy brands, not companies."

    Trout: Corporate identity is a very tricky game. It can confuse the people you're trying to communicate to.

    Ries: People buy brands. They don't buy companies (except in the stock market, of course). However, the best brands create the feeling of a corporate name. The best strategy for a brand is to make it sound like a company. But people into corporate identity sometimes push their brands into sounding like models. That's terrible. You have to be careful not to be obsessed with corporate identity.

    Quality: "Don't bet on it."

    Trout: All the top players have quality. It's what gets you in the game. If you have a product with poor quality, you're gone. There are too many alternatives. Quality is important, but it's almost a given now. It's got to be there or else you're going to get killed. But don't bet on that being the big differentiator, because you have a lot of competitors doing the same stuff.

    Ries: How would you know what is better quality? Who's to say? There's no way to know the actual quality. On the other hand, if you have a perception of quality, you have a great opportunity to win the marketing battle. But it's the perception that wins, not the actual quality.

    Customer Obsessiveness: "It's the wrong issue."

    Trout: Companies who are obsessed with "customer obsessiveness"are raising the wrong issue. Al and I get a kick out of this issue in the high-tech world, because it's one of their favorite slogans. "We have customer solutions." "We're customer-oriented." Everybody's obsessed with the customer. We ask them, "You want to give the customer what he wants?" And they say, "Yes." So we say, "But the customer doesn't have the foggiest idea of what he wants." Customers buy what they think they should buy. They're sheep. If something is hot, they'll buy it, b企业logo入口ecause everyone else is buying it. Don't think you can run around trying to find out what your customers want. They don't know what they want. That's a real trap—and they're all in it.

    Marketing: "What else should a CEO do?"

    Trout: There are some companies where top management pushes marketing down. "We have a marketing department, they do all that stuff. I'm up here above it all." But we have always said the opposite: "You've got to push marketing up. In fact, we feel CEOs should be actively involved in key marketing decisions. You can't delegate those to middle management. Look at what happened at some of the big companies that found themselves in trouble. At General Motors, for example, the top people were not involved. They let the marketing people create all these brands-big, small, expensive, cheap. The top executives totally lost control. When Alfred Sloan ran GM, that never happened, because he was actively involved in marketing.

    Ries: The question is: Where is marketing and where should it be inside the corporation? Peter Drucker says there are only two things a company should do-innovation and marketing. So what does top management do? They say they're not going to do innovation, because that's more of research and development. That only leaves marketing for top management. That's how we look at it. The function of marketing should only reside at the top level. There shouldn't even be a marketing department per se. Marketing should be what the company does.

    Al Ries is chairman of Ries & Ries.Jack Trout is chairman of Trout & Partners Ltd. Among the books the two marketing strategists have co-authored are Positioning: The Battle for Your Mind,Bottom-Up Marketing (both from McGraw-Hill),Marketing Warfare (Penguin), and The 22 Immutable Laws of Marketing (HarperBusiness).