A TCI Book Review

New Marketing Practice - Rules for Success in a Changing World

David Mercer
Penguin Books, Harmondsworth, 1997

David Mercer is a Senior Lecturer in Business Studies at the Open University Business School in Europe. Prior to this position he was involved with brand and marketing management for a variety of organizations, including fifteen years with IBM. So he knows his marketing theory and practice pretty well.

In this book he has compiled a set of tried and true marketing principles and rules of thumb into an overall course on brand and marketing management. Unlike an academic textbook, though, he has steered clear of theory and abstract concepts that may be difficult to implement in practice, in favour of practical and workable principles that in his experience have actually proved useful on a day-to-day basis.

"This is an intensely practical rule-book designed to support and empower the individual manager — you — by offering a range of easy-to-implement rules which have already led to demonstrable success. These simple rules encapsulate the practical experience of some of the most expert marketers in the world. They are intended to help managers who have a less comprehensive knowledge of marketing than these experts, but the unique in-depth knowledge of the specific problems facing their own organization." (p. vii)

Throughout the book, he presents 190 of these ‘rules for success’, divided into four categories: ‘general rules’, which apply to most management situations, not just those pertaining to marketing; rules of strategy; rules of tactics; and operational rules. The book itself is divided into 15 chapters, each covering a distinct aspect of marketing and brand management. The rules are presented through discussion of each of these topic areas. The chapter headings are:

Theory and Reality
Competition
Product:Service Strategy
Branding
Segmentation and Positioning
The Customer
Marketing Research
Advertising
Conviction Marketing
Public Relations
Selling
New Products
Pricing
Marketing Planning
Strategies for Success

Throughout the book, Mercer adopts a very utilitarian, if not downright contrarian, approach to marketing theory and practice. If he does not believe that a given concept or approach has merit in the harsh light of practical utility, he will not hesitate to say so. For example, regarding the hallowed ‘4 P’s of marketing’ approach (product, price, promotion, place) he comments as follows:

"I do not recommend this framework, no matter how popular it is — and indeed suggest that you positively avoid it! As you can see, in its rather desperate attempt to find four categories that begin with the letter ‘P’ it ignores services; it places undue emphasis on Price and comes up with a catch-all category for leftovers, called Place, which tends to be meaningless, no matter how much time is devoted to trying to explain what it covers. Not the least of the problems posed though, is that the four Ps make no reference to the customer or client — who should be at the centre of the whole process!" (p. 6)

(Mercer is similarly skeptical about some of the work of Michael Porter, believing him to have developed some useful concepts, but being overly simplistic in other areas. He also dismisses the concept of the Product Life Cycle as being intuitively quite powerful and appealing, but ultimately of little practical use in predicting market performance.)

Some of the more interesting and useful concepts that Mercer presents are:

Rule G4 (meaning General Rule Number 4) - The Analytical Four-Step, which is a process for developing your own judgement about a given marketing (or any other) situation. It actually comprises five steps, which are Step 0 — START with a blank sheet of paper; Step 1 — SEARCH using your own judgement of the situation for relevant factors involved and write them on the piece of paper; Step 2 — SELECT the most important factors, until you end up with the six most relevant; Step 3 — PRIORITIZE these six factors; and Step 4 — SYNTHESIZE these factors into no more than two directives that will lead to action (pp. 9,10)
Rule T5 (meaning Tactical Rule #5) — The Experience Curve, which outlines the theory and justification for the notion that in many markets, the more that is produced, the more that is learned and the lower costs become (p. 16)
Rule T8 — Fast Response: A consistently fast response to competitor’s actions is usually the most (cost-) effective strategy. (p. 24)
Rule O2 (meaning Operational Rule #5) — Sensitivity: Determining which element (changed by 10%) has the greatest (%) impact on the overall organization is a powerful device for focusing attention on key issues, especially cost issues. (p.32)
Rule G5 — The 80:20 Rule: "The most general and powerful rule of all is this one. It simply states that, across a wide range of situations, 20% of the contributors (customers, say) will account for 80% of the performance (sales volume, for instance)." (pp. 39,40)
Rule S6 (meaning Strategy Rule #6) - Branding Practice: "The brand is simple in concept but normally represents the most powerful device offered by marketing practice to all organizations in all fields. With very few exceptions, it embodies the most important and valuable investment that any organization can hold. It must be developed over the longer term — not milked for short-term results — and above all it must be safeguarded. It encapsulates the whole product:service package and is the means by which the richness of this is conveyed to your customers in a personified form." (p.60)
Rule S8 — The Rule of 1-2-3: This is the notion that the most competitive markets are typically dominated by 2 or 3 brands, and between them they usually account for approximately 70% of sales. For maximum stability of the market, the brand leader should hold about twice the market share of the second, and three times the share of the third, market leaders. P.65)
Rule O10 — Market Segmentation: Practical and useful market segmentation should be based upon characteristics that are relevant to the consumer, rather than the supplier. (p. 68)
Rule O45 — Simplicity: Simplicity is the key to successful promotion. Less is more." (p.123)
Rule O49 - 5 OTS: The usual rule of thumb is that 5 OTS (opportunities to see, or exposures to the message) are required to achieve market impact. (p.133)
Rule T32 — Satisfaction Equals Perception Minus Expectations: "If you EXPECT a certain level of service and PERCEIVE the service received to be higher, you will be a satisfied customer. If you perceive the same level where you had expected a higher one, you will be disappointed and therefore a dissatisfied customer." (p.147)
Rule O62 — Public Relations: You get the PR coverage that the story is worth. (p.161)
Rule O69 — The Proximity Trap: You must not get fooled into thinking that your real customers are your distributors (because they are close by). (p.177)
Rule O85 — The Customer Bonus: The very best R&D of all is to let the customer tell you how the product or service should be developed. (p.213)

The above is merely a sampling of the material in Mercer’s book; there are many more ideas and concepts presented. For each, he gives an explanation of the historical development of the concept, related principles, an assessment of its strengths and weaknesses, and an idea as to the situations in which it can be practically used. It is a very thorough and rigorous treatment.

New Marketing Practice is a very entertaining and useful book, highly recommended as an interesting read in itself, as well as an on-the-shelf reference.

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