Al Ries’s Interview (The co-father of Positioning) by Kamil Ali

Al Ries,
the co-father of Positioning,
Interviewed 1st time in Pakistan by
Kamil Ali
 
About Al Ries:

Al is a legendary marketing strategist, co-father of Positioning concept and a chairman of Ries and Ries, a marketing consultancy firm. He named one of the top 10 business guru by Marketing Executives Networking Group. He works with many Fortune 500 companies. (Read More about him at the end of this interview) 

Short Introduction:
I had an interesting conversation with Al Ries. I tried asking comprehensive questions, that also include Pakistan’s marketing issues. I’m sure you’ll learn out of it.

You can comment or ask questions by clicking on the Comment link.

Welcome to the conversation….

HOW TO READ THIS INTERVIEW? : This interview is highly interactive. Don’t read it like a novel. It is suggested to read every paragraph fully (and carefully). If you don’t, you simply won’t get it!….Over to you!

Kamil Ali: What inspired you to write this book (War in the boardroom)?

Al Ries: I have spent many years arguing with highly intelligent chief executives and their staffs about marketing issues. Why didn’t highly-intelligent people approve of our concepts?

Years later, it occurred to my daughter Laura and myself that they think differently. Chief executives are verbal, logical and analytical. They have to be. Marketing people, on the other hand, tend to be visual, intuitive and holistic.

No wonder right-brain marketing people have a difficult time selling ideas to left-brain management people.

Kamil: How did you guys get along with management as after discussion they want everything on their own way?

Al : We are consultants. We do no execution work. After we have prepared a report for a client, it’s up to the client whether or not they want to take our advice. Some do. Some don’t.

So we don’t usually have any follow-up meetings. If they disagree with us, they go their own way.

“Show me a retailer that uses frequently uses coupons and
discounts and I’ll show you a retailer in trouble.”

Kamil: In the last two pages of the book, you’ve mentioned some guideline to marketing soldiers to deal with management.
 

 

You and Laura Ries must have experienced these guidelines, then why you people lost so many battles in the boardroom?

Al : You live and learn. We have lived through many battles in the boardroom. We have learned that the typical visual presentation doesn’t work with verbally-oriented management people so we don’t do these any more. What we do is what we recommend in the book.

He is the bestselling author (or co-author) of 12 books on marketing including his latest book in the year 2009 is War in the Boardroom. This book is an attempt to the peace in the boardroom.

Kamil: Left-brain management says, for launching new brand, why we should not use a brand that is well known? It saves our marketing cost (in this recession), gives us shelf space and gives consumer a reason to buy a well credible brand.
 

 

While, right-brain marketers recommend exactly the opposite strategy, to come up with new brand. Don’t you think it will increase the marketing cost, get no shelf space and consumer will take time to trust the unknown brand?

Al: That’s logical, but that’s not what usually happens. Almost every new category is dominated, not by a line-extended brand name, but by a new brand.

Kodak used their well-known name to try to sell digital cameras. Is Kodak the leader in the digital camera field. Of course, not.

Kamil: In your book, the emphasize in on avoiding line extensions because it destroys the brand. But in reality the opposite seems to be true. The logical management’s strategy is winning!
 

 

For example, in Pakistan there’s brand, Gourmet. (There prices are relatively low, targeting lower and middle class consumers)

 

First they were known as bakers (but was not that earning) ,then they lunched inexpensive sweets (that made them famous in lower-end market)

 

Now they are diversified to other categories with same brand name, Gourmet, soft drink,mineral water, milk, ice cream.

 

Whether you are in an upscale area or in some part of old city Lahore, you can be sure to find a Gourmet outlet near you. They‘re opening their outlets like wildfire and consumer’s satisfaction level is high.
 
Al: What you call line extension is not necessarily what we would call line extension. Gourmet sounds like Wal-Mart to us.

What position does Wal-Mart own in the mind? “Cheap.” That can be a powerful position in any country.

Kamil: Yes, Mr. Ries, but right now, Gourmet is not like a Wal-Mart. But, yes, its good for Gourmet to build its empire as a”cheap” , because they don’t have any other differentiating idea left! And then they might make themselves as big as Wal-Mart.

 

According to Al Ries’ new book, War In The Boardroom:
The reason for the war is that marketing and management don’t understand each other. The reason is that their brains are different. Management people are left-brainer and Marketing people are right-brainer (click here to take brain quiz)
 

Kamil: You raised an amazing point of Lifetime Value of customer that customer. Do you think that we should measure Lifetime Value in regards to, for example, age group that the customer of Saturn is young student from the age of 20 to 25 and they will move to another brand when they start earning more?

Al: We have never used the term Lifetime Value because we don’t believe in it. Don’t try to create customers for life because they grow up, make more money and want to buy more expensive brands.

That was Saturn’s mistake. When they sold one model in the year 1994, they sold more cars than they have ever sold since. Since 1994, they have expanded the line into larger, more expensive cars, but the total volume has declined. And as you probably know, General Motors is in the process of selling the brand for practically nothing.

Kamil: Ok, let’s put the question this way: “I’m at the age of 27, doing a marketing job and a huge fan of Rieses, how’s it possible that at the age of 40, I switch to another author (brand)? I’d rather love to apply your ever-green concepts forever! But you say “Let’s your customer go”

Al: That’s what makes marketing difficult. Every category is different. In some categories, people grow up and buy more expensive brands. In other categories, they stick with the same brands forever.

In automobiles, people grow up.

In cola and toothpaste and many other categories, they will use the same brands forever.

Kamil: You disagree with the “coupon” strategies. How do you see the other form of “discounts”:
• Use discounts to clear stock and generate extra business.

 

Or should we use following discounting strategies:
 

 

• Use discounts but put time limits on the deal.

 

• Should use discount to only survive in the mature market.

 

• Should not use discount because every one else does.

Al: Show me a retailer that uses frequently uses coupons and discounts and I’ll show you a retailer in trouble.

Starbucks never used coupons and discounts. Now they do. Have things at Starbucks improved? No, they have not. They have gotten worse.

What should Starbucks have done in a down economy? Lower their prices by a small amount in order to give consumers a reason to continue buying their coffee at Starbucks.

That’s a much better approach than coupons and discounts.

Kamil: Even the inexpensive brands should not offer discount to clear stock?

Al: Probably not. Dump the stock into other distribution channels. Try to keep your brand clear of the high/low pricing that is destroying many brands.

Al Ries’ and Jack Trout’s groundbreaking book, Positioning, has acquired the stature of the “bible”

Kamil: Management wants to make their brands generic to the category, what they do, after using their common sense, launch a generic brand name for example in Pakistan the little inexpensive milk brand is Goodmilk.


Furthermore, after coming up with Goodmilk, The logical management diversified this brand to other categories (with the name Goodmilk) what’s your massage to the management of Goodmilk.

Al: It depends on the competition. When there’s little competition almost any strategy will work. Not knowing the situation in Pakistan, it’s difficult to answer this question.

Kamil: Yes! Even the worst strategy can work in weak competetion. Specially, when your competitors are making the same mistake.

 
Kamil: There was a time when management and marketers used to see eye-to-eye. The ad agencies love to develop marketing strategies with CEOs for developing ads.
 


Why don’t they use their both parts of the brain? Why they more focus on cleverness, emotions and creativity in ads rather then marketing or positioning?

Al: Advertising agencies, at least in America, get rich because their advertising becomes famous. Not because their clients sell more products. That’s why advertising agencies tend to focus on creativity and cleverness because these are the attributes that win awards, that generate good publicity for the agency and that generates new accounts.

Kamil: Why do you think that even the leading brands of fashion category will eventually lose their leadership? We’ve Levis, The Gap and Calvin Klein, still doing wonderful job.

Al: The essence of fashion is the “new and different.” But brands that have been around for awhile lose their perception of new and different.

Years ago, the leading fashion brand was Chanel. Where is Chanel today? It’s a brand worn by very old ladies. And there are very few very old ladies who are in the market for fashionable merchandise.

In 1989, Sales & Marketing Executives International gave him its Tops in Marketing awardHe was named one of the 100 most influential public relations people of the 20th century by PR Week magazine in 1999 and was also profiled in BusinessWeek magazine. 
And he has named one of the top 10 business guru.

 
Kamil: As PR has a slow growth, do you still think that “trivial products” should not use advertising to launch and position a brand? In spite of rolling out your brand, your brand still can get copied in this killer competition-era.

Al: Every truly successful brands takes off slowly. Companies that try to accelerate the process with advertising usually find that the money is wasted. It doesn’t do much for the brand.

Early on, when nobody knows your brand, the only medium that has credibility is PR. It’s that credibility that helps get a new brand off the ground.

If your brand is first in a new category then it doesn’t matter if competition jumps in. They won’t get any publicity because they are second.

When Red Bull arrived in the U.S. market, it got a lot of publicity. But the copy-cat brands that followed got almost no publicity. So Red Bull became the leading brand of energy drink with almost no advertising investment.

Kamil: There’s a typical Asian example have been discussed on page 103, chapter 10.
 

 

“Lenovo is currently successful because it can build computers in China very cheaply. But as Chinese economy improves, as wages go up, that advantage will disappear.”

According to my observation Asian countries focus on micro problems (developing roads, bus stops and growing trees) and ignore macro problems (marketing your country).

 

They think that they will keep on surviving on “low productions cost” or “oil / gas reserves” but they don’t think that as “economy improves, as wages go up, that advantage will disappear” (China) and “the more they will use reserve, the more it will diminish” (Middle East countries)

 

I think Lenovo, Sony, TATA and host of other Asian brands have same “micro level thinking” problem. What are your thoughts on that?

Al: Marketing a brand and marketing a country are two different problems. Obviously Lenovo, Sony, Tata and others have no connection with marketing their countries. They only problem is marketing their brands.

Lenovo lost money in the first quarter. Sony has been doing poorly for many years. And Tata is a disaster in the making. Their $2.3 billion acquisition of Jaguar and Land Rover, two money-losing brands is going to hurt them in the long run.

Take Tata. It doesn’t make sense to market the world’s cheapest car (the Nano) and two of the world’s most expensive vehicles (Jaguar and Land Rover.) That’s crazy.

Marketing is simple. What’s a Lenovo? I don’t know, do you? Until Lenovo can answer that question with a “customer benefit,” they will continue to do poorly.

What’s a Sony? Same problem.

The assumption you are making is that governments can do something about these problems. They cannot. The only organizations that actually do anything are companies. Governments need to stay out of the way and keep their regulations to a minimum.

The free-enterprise system will solve all economic problems over the long term if given the opportunity.

 

Al Ries’ and Jack Trout’s, Positioning, shook up
 

  

the world of marketing with all the force

  

of 20-megaton bomb. After 28 years, it’s

  

still as fresh, even more relevant!

Kamil: Despite the fact the left brain management is ruling the corporate world. How it was possible for Al Ries’ s and Jack Trout’s positioning concept to make its place in marketing plan of the companies?

Al: For the most part, top management has never heard of positioning. It’s advertising and marketing people who know all about positioning.

For example, in 2007 the leading management guru, Ram Charan, wrote a book entitled, “Know-How: The 8 skills that separate people who perform from those who don’t.”

The No.1 skill, according to Ram Charan is “positioning.” Now do you suppose any top management person who read the book would have said, Wait a minute. That was an idea introduced by Ries and Trout 26 years ago?

Of course, not. They just assumed that positioning was a new idea created by the current top management guru, Ram Charan.

It’s easy to steal if your audience has never heard of the concept.

Kamil: They just assumed that positioning was a new idea created by the current top management guru, Ram Charan.

You and Trout are writing books for 28 years, and you’ve always talking about positioning. How come media (Newspaper, magazine like Adverting Age) could have spare Ram Charan of not giving credit to you people?

Al: Keep in mind that there are two groups of media: Trade publications like Advertising Age, Marketing News, PR Week, etc. and business publications like The Wall Street Journal, Business Week, Forbes, etc.

Ram Charan has never been mentioned in Advertising Age or the other trade publications. On the other hand, Jack Trout and myself have almost never been mentioned in the business publications.

It’s like there is a divide between the two groups. Marketing is not considered important by management publications. Therefore, positioning never became a big deal in management publications. Therefore Ram Charan could write a book and ignore our contributions to the positioning concept.

Kamil: At least media would have talked about Ram Charan’s book that the “The No.1 skill positioning” belongs to Ries and Trout!

Al: They should have, but they didn’t.

Kamil: If media had talked about you people, management people would have taken notice of it!

Al: No. They ignored us.

Kamil: How’s that possible that management put the Positioning at the top of its marketing plan yet does not practice?

Al: Management doesn’t know about positioning.

Al Ries stressed:
“If Pakistan created a handful of successful global brands…. they would have a very positive effect on the country’s perception.”

 
 
 

 
  Kamil: Even though Positioning concept is discussed in every marketing book of business school (specially Philip Kotler’s book) and are taught in every business schools across the world.
 

 

How is that possible that we still find mess in the marketing (e.g. in the shape of line extension)

Al: Positioning is a process, not a principle. The positioning process involves “looking” into the minds of consumers and trying to insert an idea.

Marketing people buy this concept. Almost every marketing plans includes such terms as “We are trying to position our product as ____________”

What missing are the principles needed to insert a position in the minds of consumers. Such principles as “be the first in a new category.” And “be the opposite of the leader.” Etc.

Marketing people believe in positioning, they just don’t believe in the principles of marketing, principles that we have been writing about for decades.

  

 

Al Ries’s message to MBAs and marketers:  
 
“Nothing works better than building a powerful brand”


Kamil: After 9/11, currently, in perception, Muslims stands for terrorist. As a right brain marketer, what strategies would you suggest to Muslim’s world to improve their perception across the world? (In reality, religion Islam gives the massage of peace)

Al: Time heals all wounds. I don’t think the Muslim world can do much about its perception. (Nor do I think that America can do much about its negative perception either.)

I think that over time, the problem will disappear.

Look at the negative reaction to Germany and German people after World War II. Germany did nothing to improve its perception, yet time has solved its problem for it.

Kamil: After 9/11, Pakistan has been also looked down upon, by non-Muslim states, as it’s a Muslim state.

 
If we want to avoid the research oriented left-brain management to convince the world that Pakistan is not a terrorist state, what positioning or strategy would you suggest to Pakistan’s government, to sell (brand) Pakistan and its product or services to the world with the positive image?

Al: I would do nothing to try to overcome negative perceptions. You can’t change minds once minds are made up.

On the other hand, anything a country can do in a positive way will help improve its perception. If Pakistan created a handful of successful global brands, for example, they would have a very positive effect on the country’s perception.

What is helping Germany is Mercedes-Benz, BMW, Volkswagen, Siemens and a number of other very successful global brands.

Kamil: In Pakistan, it seems to be we’ve some right brainer entrepreneurs. How do you see following as an internet brands and as a strategy?
 

 

HitBox, Pakistan’s only online DVD rental company.

 

Rozee , Pakistan’s first job site. (In Urdu language, “Rozee” means job, but the word rozee is not used for a job, generally)

 

*Urdu is Pakistan’s mother language

Al: Both brands seem right to me. Being first and using a unique name is usually a very effective strategy.

Kamil: In your brilliant book, you wrote that fashionable brands cannot work as an online brand. Why Zappos.com is successful and why do you like it? As Laura Ries wrote in her blog:

“Zappos is a tremendous brand. With its unique and memorable name and its focus on footwear, Zappos has become the #1 seller of shoes on the Internet with sales of $840″.

Al: To every rule there is an exception. Zappos is incredibly successful because of its free shipping and free return strategy.

Yet shoe sales on the Internet are a very small percentage of overall sales. Two or three percent at the most.

Book sales are another matter. Amazon alone does 15 percent of all book sales in America.

Our point was not that you couldn’t build a successful fashion brand on the Internet. Our point was that fashion was not going to be a big category on the Internet.

“As the consultant who popularized the idea of positioning’ brand for different consumer segments, Al Ries has probably wielded even more influence over marketers’ thinking. When movers of such stature start exhorting companies to put fewer eggs in the basket, it suggests that a fundamental rethinking is under way.” BusinessWeek

Kamil: As you mentioned in your book that Google is making a line extension mistake, what would you comment about the Jeff Jarvis’ new book What Would Google Do? (It’s gaining a lot of popularity)

Al: Except for search, Google has not been successful in any other category the company has entered. Google should probably read Jeff Jarvis’ book and figure out what it has been doing wrong.

Kamil: What impresses or depresses you the most about the current state of marketing across the world?

Al: The conventional wisdom that good marketing is nothing but “common sense.” That depresses me because I believe the opposite. Good marketing is almost always counterintuitive. It doesn’t necessary makes sense, but it works.

Kamil: If you had to do it all over again, would you change anything in this book?

Al: Not in our latest book, War in the Boardroom. But we would make changes in our earlier books. As time goes on, hopefully we learn more.

Kamil: Are there any new business/ marketing authors that have grasped your interest?

Al: Most of our reading is devoted to understanding things outside the field of marketing. We do this so we can adapt the ideas to marketing and business.

For example, we have read dozens of books about evolution, including Origin of Species, in order to write the book, The Origin of Brands.

Currently we have read dozens of books about the brain in order to write the book, War in the Boardroom.

Oddly enough, I believe that many left-brain managers will read War In The Boardroom and think to themselves. “That’s foolish.” They should read some of the books on the brain. If so, they might be shocked to find how much the neuroscientific community accepts the basic left-brain/right-brain concept that we use in the book.

Kamil: Who are your favorite authors, anyways?

Al: The truth is, we read books that contain ideas that might be interesting or helpful to us.

My personal library has several thousands (maybe more) books. I pay much more attention to the ideas that I do to the authors.

Al’s Verbatim:
“The conventional wisdom that good marketing is nothing but “common sense.” That depresses me because I believe the opposite

Kamil: What’s your advice for Pakistani MBAs, marketers and management?

Al: Nothing works better than building a powerful brand. And how do you build a powerful brand? By following the principles of marketing.

Do most managers follow the principles of marketing? Of course, not. All most managers want to do are line extensions.

Kamil: Do you have anything specific that you want to say to your readers?

Al: What happens when a reader reads one of our books? The minute we proclaim a principle of marketing, many readers try to think of examples that prove that the principle is wrong. The minute they find even one example, they tend to disagree with our point.

Line extension is one of those principles that most readers disagree with.

But the point is not whether or not you can find an example that disproves the principle. There are always exception to every rule.

No principle works all the time. The issue is does the principle generally work or doesn’t it.

Kamil: Thank You so much Mr. Ries, I very much agree with you about the left/right brain issues in the boardroom and getting into the consumers mind and play with it, is what management guys should understand. I’ve been doing this for a long time. The Muslim’s country’s perception and Pakistan’s global brands strategy also sound very interesting and I’ll definitely be taking a closer look. If I got a good team  and support I’ll definitely work on a global brand, not only for Pakistan, but for the whole Muslim world.

Kamil Ali is the only Pakistani who Interviewed
Al Ries, the co-father of “Positioning.”
Dear Readers, Please don’t afraid;
PASS THIS ALONG to as many people you want!
More About Al Ries

 

Al is a legendary marketing strategist, co-father of Positioning concept and a chairman of Ries and Ries, a marketing consultancy firm. He named one of the top 10 business guru by Marketing Executives Networking Group. He works with many Fortune 500 companies.


Al Ries’ s books, ranked 1st and 3rd in Advertising Age. His books made both the Business Week and The Wall Street Journal bestseller lists. In addition to being reviewed by these publications, and also reviewed by USA Today, Harvard Business Review, Boston Globe, Chicago Sun-Times and many other publications.


He is bestselling author (or co-author) of 12 books on marketing including his latest book in the year 2009 is War in the Boardroom. This book is an attempt to the peace in the boardroom.

Updates:
His latest book “War In The Boardroom” is selected as one of the 10 best business books of 2009 in China!

Al Ries’s lecture (part 1)
Al Ries’s lecture (part 2)
Al Ries’s lectures on building brand through focus!


Comments

comments

  • Shakir

    Interview is nice.Did he say said that there is no need to read marketng books? And trade publications or other things are the only way to be a good marketer?

  • Muhammad Faheem

    Wondrful…where can i find all of Al Ries books?

  • Sarah

    Excellent Kamil…I am really impressed by ur efforts….Cheers for u….

  • Azeem

    Interviewing world's top marketing guru,Al Ries, is not a piece of cake.I really appreciate Kamil's knowledge.
    Kamil i think you would have worked hard on it, bringing your self to a marketing guru's level

  • Farux

    Good Stuff Kam!
    I'll now be lukin fwd to sum more of such sort!

    try to upload Al Ries VIDEO LECTURES, if you may, they must be available on the websites.

    I personally think that Visuals help learning quick!

    N without a shadow of doubt, A JOB WELL DONE!

    Thumb up,

    Cheerz

  • Haseeb

    JOB OFCOURSE WELL DONE!!!Sir I've been reading your article. I've asked many questions and you always made them clear. I'm sure this interview will also help in my upcoming projects

  • uzma

    Uzma Syed Said,
    Interview was good; successfully able to hold the attention of reader. Explaining views by supporting examples was great and make this interview and effective one. Great job Kamil 🙂

  • Kamil Ali

    @ Farux

    Here you go

    Nice suggestion you gave me last time

    Watch Al Ries 2 video lectures here…

    Also do watch the War in the Boardroom: Preface video by scrolling up and down in between interview

    Cheers

  • Irfan

    In Marketing we always study about positioning.But the truth is nost of the people don't know how to apply it.According to thi interview it seems that the same problem is across the world!Love this interview

  • Anonymous

    Well done Kamil. I am glad you gave justice to Jack Trout as well in your interview with Al Ries. All the best. Hasan Fadlallah

  • Anonymous

    Good Work Kamil…..i am an IT guy doesn't know much about marketing….but have a little intrest…his suggestions about building a good perception of Pakistan is really an important message for all of us…We should stop complaining about our country and give some good Brands to Pakistan….!
    Regards,
    Rameez

  • Irfan

    In Marketing we always study about positioning.But the truth is nost of the people don't know how to apply it.According to thi interview it seems that the same problem is across the world!Love this interview

  • Agnes

    Very interesting iterview. Al and Laura Ries will visit Poland (Warsaw) on 30th September 2010 and they will conduct all-day seminar on branding. I am sure it is going to be great event. For more information vistit http://www.alries.pl

    Regards,
    Agnes

  • Kamil Ali

    Agnes,

    I'm not that lucky to attend that event in Poland:)
    Enjoy and share your learning with me.

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    Woof,John

  • Kaloyan Roussev

    Amazing. Both the questions and the answers were very informative. Good Job!

    • http://www.kamilali.com/ Kamil Ali

      Al Ries’ interview was no doubt a great experience for me! Thanks for the kind words @f6017fd8258cc16652c2717132981f9a:disqus