Under the Influence with Terry O'Reilly - S5E09 - Achilles Heel Advertising: Repositioning The Competition

Episode Date: March 4, 2016

This week, we explore when a smaller advertiser attacks the weak spot in a bigger advertiser’s marketing. It’s a strategy of brinksmanship, because it means a smaller company not only chooses to attack a larger company, but it attacks the weakness in a bigger company’s strength. It takes surgical precision, but when done well, the smaller advertiser gains market share, while diminishing the bigger company’s reputation at the same time. We’ll talk about how Avis aimed an arrow at Hertz, how Tylenol overtook the much larger Bayer Aspirin, how Scope used a slingshot to battle the Goliath in the mouthwash category, and the amusing story of how a potato chip company battled a competitor by finding the soft spot in its ingredient list. Hosted on Acast. See acast.com/privacy for more information.

Hi, it's Terry O'Reilly. As you may know, we've been producing a lot of bonus episodes while under the influences on hiatus. They're called the Beatleology Interviews, where I talk to people who knew the Beatles, work with them, love them, and the authors who write about them. Well, the Beatleology Interviews have become a hit, so we are spinning it out to be a standalone podcast series. You've already heard conversations with people like actors Mark Hamill, Malcolm McDowell, and Beatles confidant Astrid Kershaw. But coming up, I talk to May Pang, who dated John Lennon in the mid-70s. I talk to double fantasy guitarist Earl Slick, Apple Records creative director John Kosh. I'll be talking to Jan Hayworth,

who designed the Sgt. Pepper album cover. Very cool. And I'll talk to singer Dion, who is one of only five people still alive who were on the Sgt. Pepper cover. And two of those people were Beatles. The stories they tell are amazing. So thank you for making this series such a success. And please do me a favor, follow the Beatleology interviews on your podcast app. You don't even have to be a huge Beatles fan. You just have to love storytelling. Subscribe now and don't miss a single beat. In case nobody's told you, weight loss goes beyond the old just eat less and move more narrative. And that's where Felix comes in. Felix is redefining weight loss for Canadians with a smarter, more personalized approach to help you crush your health goals this year.

Losing weight is about more than diet and exercise. It can also be about our genetics, hormones, metabolism. Felix connects you with online licensed healthcare practitioners who understand that everybody is different and can pair your healthy lifestyle with the right support to reach your goals. Start your visit today at Felix.ca. That's F-E-L-I-X.ca. Whether you're in your running era, Pilates era, or yoga era,

dive into Peloton workouts that work with you. From meditating at your kid's game to mastering a strength program, they've got everything you need to keep knocking down your goals. No pressure to be who you're not. Just workouts and classes to strengthen who you are. So no matter your era, make it your best with Peloton. Find your push. Find your push. Find your power.

Peloton. Visit Peloton at onepeloton.ca. From the Under the Influence digital box set, this episode is from Season 5, 2016. You're so king in it. You're so king in it. You're so king in it. You're so king in it. You're so king in it.

You're so king in it. You're so king in it. You're so king in it. You're so king in it. You're so king in it. You're so king in it. You're so you when you're hungry. You're in good hands with Austin. You're under the influence with Terry O'Reilly. Every great athlete believes, deep in their heart, that they could excel in another sport.

Which would explain why Michael Jordan left basketball and played baseball for an entire season in 1994. It might also explain why basketball great Wilt Chamberlain almost fought Muhammad Ali back in 1971. At the time, Ali was coming off his three-year boxing exile for refusing to serve in Vietnam. In other words, he needed money. He was almost broke. Secretly, Wilt Chamberlain had always dreamed of fighting for the heavyweight championship.

He had boxed as an amateur briefly and believed he could hold his own against Ali. Even though boxing wasn't his sport, Chamberlain felt his size, speed, and hand-eye coordination would give him an advantage. It may seem like a bizarre idea, but remember this. Wilt Chamberlain had a reach of 92 inches compared to Ali's 78. That was a 14-inch difference unheard of in a boxing match. Chamberlain also weighed 275 pounds, 60 pounds heavier than Ali.

But more than anything, it was his height advantage. Wilt was 7'2", almost a foot taller than Ali. When sportscaster Howard Cosell interviewed them both on the wide world of sports, he had them stand side by side. Ali looked like Wilt Chamberlain's little brother. At 6'3.5, Muhammad Ali, the heavyweight champion of the world. At 7'1", Wilt the still Chamberlain. And what you have just seen was the decisive edge in reach that Wilt would have if these two men do in reality fight.

As Chamberlain said, he truly believed there was a chance to throw one punch and take Ali out. His height gave him the upper hand. While sportswriters were dubious about the matchup, there was one thing they all agreed on. The bout would generate a lot of money. In preparation, Wilt Chamberlain worked with Cus D'Amato,

who had trained heavyweight champion Floyd Patterson, and who would one day launch the career of Mike Tyson. D'Amato had an insight. He said, we know everything about Ali, but he knows nothing about you as a fighter.

He'll be coming into the bout blind. So a 10-round fight was set for July 26, 1971 at the Houston Astrodome, and both Ali and Chamberlain were promised outrageous sums of money. But at the press conference, Ali did what he did best. He got inside Wilt's head. As Chamberlain and his entourage sat down at the press table, Ali just kept quietly saying, Timber. A reporter would ask a question,

and Ali would say, Timber. Another reporter would ask another question, and Ali just said, Timber. When asked what his fight strategy would be against a 7'2 opponent, Ali just motioned with his forearm and said,

Timber. The tree will fall. Wilt started to look nervous. Then Wilt started to wilt. He and his lawyers got up and left the room for a few minutes. And when they came back, they announced the fight was off. Ali had completely intimidated Wilt Chamberlain, and he did it with the most interesting strategy. He attacked Chamberlain's greatest strength, his height. In the world of marketing,

attacking the weakness in a large competitor's strength is a gutsy strategy. Call it David versus Goliath. Call it Achilles' heel advertising. But when it's done carefully with surgical precision, attacking a larger rival's strength can completely turn the tables. Number two brands suddenly become number one, fortunes change, and history is rewritten.

All you need is a polished stone, a slingshot, and a plan. You're under the influence. There are many selling strategies in marketing. Some are seasonal, like selling Christmas ideas in December. Some are price-based, like weekend sales. Some are based in luxury, like Louis Vuitton luggage. But what all companies try to do is position themselves in your mind. See, the mind is like a camera. It takes a quick photo of a brand, then files it.

And each file only has so much room. So the file that holds tire brands in your mind may just have Goodyear and Michelin tucked into it, for example, and not Firestone, Bridgestone, Goodrich, Yokohama, Continental, Pirelli, Motomaster, or Uniroyal. The art of positioning a product in your mind is probably the most important act in marketing. It's all about standing out from the competition. Back in the 70s, a seminal book was written on the subject

called Positioning, The Battle for Your Mind. In that book, authors Al Reese and Jack Trout put forth that in order for a brand to get into someone's mind, it had to link itself to something that already existed there. And by doing that, it helps people remember the product. Here is a classic example. When 7up wanted to position itself in people's minds, it called itself the Un-Cola. Let's analyze that. First, 7-Up used the word cola to link itself to the cola leaders, Coca-Cola and Pepsi-Cola. That information already existed in people's minds.

But 7-Up was different than Coke or Pepsi. It was clear, not brown, and it had a lighter citrus taste. So 7-Up called itself the Un-Cola, saying it was like cola, only different, creating a new brain file it could own. That's the concept of positioning. Carve out a new space in people's minds by linking it to something they already know. When pork suppliers wanted to encourage people to buy it with the same frequency as chicken,

they positioned pork as the other white meat. It linked pork with chicken, which was a frequent purchase, and suggested it was a viable option. But there is another kind of strategy that is even more interesting than positioning. And that is repositioning the competition. Explained simply, that's when a brand positions itself in your mind by disabling the competition. It adjusts the perception you have about a rival brand and takes advantage of that change.

It's a very powerful strategy because it's a bit like Kung Fu. In Kung Fu, you use an attacker's momentum against himself. For example, if someone grabs your wrist and you want to break free by moving your arm up, the Kung Fu way is to first pull your arm down. Now, why would you do that? Because your opponent will want to go in the opposite direction in order to control you. So he'll pull your wrist up, which is the way you really want to go. So, as he pulls your wrist up, you suddenly change direction and ride his force,

combine it with yours, and break free. Follow me, grasshopper? Good. In marketing, the concept is the same. You find a weakness in the leader's strength and ride that momentum. Here's a classic example of repositioning. As we've mentioned before, Hertz was the number one car rental company in the 1960s.

But Avis wanted to steal market share from Hertz. So Avis said, We're number two, but we try harder. That was a radical statement in the 1960s. No one had ever boasted about being number two in a category. But more importantly, it repositioned Hertz as a company that wasn't trying that hard anymore. Another Avis ad said, Our lines are shorter. Classic repositioning.

It leveraged the weakness in Hertz's strength. Avis was saying you would get faster service at their counter because they weren't as busy. And because they were number two, they would try harder to keep your business. By repositioning Hertz's too big and too busy, Avis increased its market share by 35% in just a few years. It's always fascinating to watch a smaller marketing company try to reposition a larger rival. It's David eyeballing Goliath. For more than 70 years, the pain reliever category had been dominated by bare aspirin.

Then, along came Tylenol. The makers of Tylenol had an interesting strategy. First, they marketed to physicians and healthcare professionals. Once doctors started to suggest Tylenol to patients, Tylenol positioned itself as

the pain reliever professionals use and recommend. Then, in the 1980s, Tylenol wanted to increase its market share and decided to achieve that by repositioning aspirin. It did that by saying Tylenol was the pain reliever that was easy on stomachs. Aspirin irritated the stomach lining in some patients and created a small amount of bleeding in a few others.

By saying Tylenol didn't irritate stomachs, it repositioned aspirin as the pain reliever that did. Hospitals can trust Tylenol to give effective relief without the stomach irritation possible with aspirin or any other type of pain reliever. That did. Tylenol effectively adjusted people's perceptions of aspirin. It acknowledged aspirin's leading pain-relieving abilities, but questioned the strong ingredients it used to relieve that pain. So, if you had stomach issues, you would stay away from aspirin.

And if you didn't have stomach problems, why tempt them with aspirin? That repositioning was so powerful, it eventually made Tylenol the number one brand. We'll be right back to our show, but first, a quick word from a sponsor who supports our podcast. There is one irrefutable fact in marketing. If you want to grow your business, that business has to come from somewhere. Namely, from your competitors. Dalton China opened its doors back in 1815.

Founded by John Dalton, the company began making fine china in Stoke-on-Trent, England, where there happened to be an abundance of coal and clay. In 1901, King Edward VII conferred the double honor of a royal warrant and granted the company the right to use the title royal in their name. Soon, Royal Dalton became world-renowned for its fine bone china. It must be said I enjoy the finer things in life. For instance, fine bone china, like this. The English are famous for the quality of their china. And among English manufacturers, none surpass the firm of Royal Dalton.

Because over 50% of Royal Dalton's china is exported, foreign markets are very important. In the U.S., there was a rival company called Lenox Fine China. When Royal Dalton found itself competing with Lenox for sales, it decided to reposition its rival. So it ran a famous ad that said, Royal Dalton, the China of Stoke-on-Trent, England, versus Lenox, the China of Pomona, New Jersey. While Lenox made fine China, too,

it did manufacture it in New Jersey, and the instant picture New Jersey conjures up is not exactly an idyllic little village in the countryside. As a result of that one ad, Royal Dalton increased its revenues by 6%, a big uptick in the North American market. Again, Royal Dalton adhered to the strict rules of repositioning. It recognized Lennox as a leading China maker, but adjusted the public's perception of the company by aiming an

arrow at its Achilles heel. There is one irony, however. Any British person will tell you that Stoke-on-Trent is just as industrial as New Jersey. It just sounds nicer. Sorry, just wanted to freshen up a bit. Mouthwash has been around a long time. The Romans used to import bottled Portuguese urine as mouthwash. As a matter of fact, it got so popular that Nero put a tax on it.

Nice. But the first commercial mouthwash in North America was Listerine. As a matter of fact, it got so popular that Nero put a tax on it. Nice. But the first commercial mouthwash in North America was Listerine. Created in 1879, it was originally sold as floor polish. It's a mouthwash and a floor polish. Listerine dominated the mouthwash category for decades. Then along came Scope in 1966. It was a pleasant-tasting minty mouthwash. In order to take customers away from Listerine, Scope chose to reposition its huge rival.

It simply asked, why settle for medicine breath? Laboratory tests prove that Scope kills mouth germs. Minty, fresh Scope fights bad breath, doesn't give medicine breath. As all effective repositioning strategies do, it attacked the leader's strength. Everyone knew Listerine tasted terrible. Everyone knew that terrible taste killed germs. Scope didn't challenge that belief. But what Scope did was alter a perception, suggesting that clean medicine breath could be just as unpleasant as bad breath. As a result, Scope was able to steal a healthy mouthful of market share away from Listerine. When BMW first came to North America, it was ranked number 11 in the European car category. It had the weakest image of all imports, and many thought BMW stood for British motor works.

The leading brand, of course, was Mercedes. So BMW set its sights on younger professionals with big paychecks. This upwardly mobile group also rejected the luxury symbols of the post-war generation. BMW was an underdog, so it hired an underdog ad agency called Amirati Impuris, who coined the slogan, The ultimate driving machine. The strategy was to emphasize performance rather than force BMW into the luxury category dominated by Mercedes. To do that, BMW chose to reposition Mercedes.

So it created ads that said BMW, the ultimate driving machine versus Mercedes, the ultimate sitting machine. That immediately repositioned Mercedes as a living room on wheels and BMW as a sleek, high-performance automobile. In essence, BMW kung-fu'd Mercedes, attacking the weak spot in their strength. No one doubted Mercedes' luxury.

They just now doubted the power and handling. With that, BMW sales soared. The ultimate driving machine slogan has been in use now for over 40 years, making it one of the longest lasting and most effective of all time. And BMW has outsold Mercedes for the last 10 years straight. In each of the cases we've talked about today, one brand was repositioning another brand. But sometimes a brand can try to reposition an entire category. In the late 1800s, ivory soap began saying it was 99 and 44 one-hundredths

percent pure. That was its way of repositioning all other soaps as impure. When I was writing ads for fashion retailer Breton's, it wanted to attract shoppers away from department stores. Because Breton's specialized in fashion,

I saw an opportunity. So I wrote the line, I won't buy my fashion where I buy my appliances. Just putting the image of a stylish dress beside a washer was all I needed to do to adjust the perception of department stores as fashion destinations. Now that you understand repositioning, you realize you've seen it at work many times. Remember this campaign? Hello, I'm a Mac. And I'm a PC. You know, we use a lot of the same kinds of programs. Yeah, like Microsoft Office. But we retain a lot of what makes us, us. You should see what this guy can do with a spreadsheet. It's insane. Oh, shucks. It was a humorous but vicious repositioning campaign,

altering the perception of PCs as the computer of choice for nerds. Pepsi tried to reposition the mighty Coke by saying it was the choice of a new generation, recasting Coke as the soft drink for old folks. Prego Spaghetti Sauce repositioned Ru by saying it was the thick sauce, leaving market leader ragu to be perceived as thick. In case nobody's told you, weight loss goes beyond the old just eat less and move more narrative, and that's where Felix comes in. Felix is redefining weight loss for Canadians with a smarter,

more personalized approach to help you crush your health goals this year. Losing weight is about more than diet and exercise. It can also be about our genetics, hormones, metabolism. Felix connects you with online licensed healthcare practitioners who understand that everybody is different and can pair your healthy lifestyle with the right support to reach your goals. Start your visit today at felix.ca. That's F-E-L-I-X dot C-A. Whether you're in your running era, Pilates era, or yoga era, dive into Peloton workouts that work with you.

From meditating at your kid's game to mastering a strength program, they've got everything you need to keep knocking down your goals. No pressure to be who you're not. Just workouts and classes to strengthen who strength program. They've got everything you need to keep knocking down your goals. No pressure to be who you're not. Just workouts and classes to strengthen who you are. So no matter your era, make it your best with Peloton. Find your push. Find your power. Peloton. Visit Peloton at onepeloton.ca. N. In 12th century Germany, you risk beatings, exile, and even death if you brewed a bad beer.

That's a lot of pressure, which is probably why Germany is so renowned for its beer today. When Lohenbrau was the leading German import beer in North America, another German beer called Becks wanted to steal its market share. So it took a leaf from Royal Dalton's playbook and said, You've tasted the German beer that's the most popular in America.

Now taste the German beer that's the most popular in Germany. Ouch! A well-placed knee to Lohenbrau's market share. It acknowledged Lohenbrau as number one here, but zeroed in on its weakness. It wasn't number one in the home country. It didn't take long for Beck's to overtake Lohenbrau.

Back in 1921, a grocer named Earl Wise Sr. realized he had too many potatoes one day. So he cut them up into thin slices, fried them, and sold them in small bags. The chips became so popular, Wise opened a production plant four years later. That was the beginning of Wise potato chips. Skip ahead to 1968. A man named Alexander Leopold creates a potato chip that doesn't have to be peeled or cut, but instead is made from potato flakes and flour and is then reconstituted into the shape of a chip.

Leopold presents the shape of a chip. Leopold presents the idea to the U.S. Army as a snack that could be made at remote Army bases without the expense of having to ship American-grown potatoes. But the Army isn't interested. So Leopold sells his patent to Procter & Gamble instead, and P&G creates Pringles Newfangled Potato Chips. There's only one problem. Unlike regular chips, Pringles break apart easily in bags. So P&G requested its food storage specialist,

Frederick Bauer, to design a new container. Bauer comes back with a tall cylindrical metal can that looks like a tennis ball canister. The Pringles stack nicely in the tall can, and the metal tube protects them from breaking. And because necessity is the mother of invention, this red Pringles can was an utterly unique package in the chip aisle. With that, Pringles launched in 1976,

backed with a $15 million advertising campaign, and instantly captured 18% of the chip market. Meanwhile, Wise Potato Chips is the number one chip in the New York area, and they're scared to death that Pringles is going to roll into town and steal all its customers. So Wise turned to its advertising agency for help. They asked to see a can of these newfangled Pringles. Then, an idea hit them. The ad agency creates a television commercial

where they simply read the ingredients right off the Pringles can versus the ingredients on a Wise chip bag. These newfangled potato chips are made of dehydrated potatoes, vegetable shortening, mono- and diglycerides, salt, with ascorbic acid and BHA added to preserve freshness. Wise potato chips are made from potatoes, vegetable oil, salt. The new-fangled potato chip or wise old-fangled potato chips? You decide.

The fact that Pringles seemed to contain so many chemicals had an immediate impact on Pringles sales. People started saying Pringles tasted like cardboard, probably because they had seen the commercial. It was brilliant repositioning. The big new-fangled Pringles brand was stopped in its tracks by its own ingredients list. Wise lost no market share, and P&G pulled Pringles to reformulate the product. What made Pringles unique was also its weak spot,

and Wise wisely aimed its arrow at the Pringles can. One last footnote. The inventor of the can, Frederick Bauer, died in 2008, and his family honored his last request. His ashes were buried in a Pringles can. Someone once said that great brands impose a view on you. That really is the crux of all marketing, to stand out in a marketplace with a unique identity

and attach a sticky note in your brain. Every smart company positions its product or service, but only a few companies dare to reposition a competitor at the same time. It's a fascinating aspect of marketing because it means looking for a weakness in a competitor's strength. That is high-level kung fu. Hurts is number one, but maybe that means it's too busy. Aspirin is a powerful pain reliever, but maybe that power irritates stomachs.

Mercedes is definitely luxurious, but maybe that makes it slow and soft. It's powerful stuff in the selling game because it influences which brands you buy. And marketers reap the rewards. It just requires a shrewd marketing eye, a razor-sharp plan, and perfect aim. Then, all that's left to do is yell timber when you're under the influence. I'm Terry O'Reilly. This episode brought to you by New antiperspirant secret.

Today the pits, tomorrow the wrinkles. Under the Influence was recorded at Pirate Toronto. Series producer, Debbie O'Reilly. Sound engineer, Keith Oman. Theme music by Ari Posner and Ian Lefevre. Research, Tanya Moore-Yusuf. Hey, I like your style. I'd like your style even more if you were wearing an Under the Influence t-shirt.

Just saying. You'll find them on our shop page at terryoreilly.ca slash shop. See you next week.