top of page
Image by NASA

Marketing Academy.

The ABC of Strategic Marketing: the 8 Universal Laws of Success

In our country there is a lot of hoaxes about strategic marketing. “Immutable laws” based on pseudoscience. Incompetent gurus who create irrecoverable damage to small businesses. Methods based on stereotypes. Frankly, we've had enough. It's time to resolve this situation.

In the hope of pleasing you, we have simplified the 8 scientific laws (i.e. evidence-based) of strategic marketing applied by all professionals but often unknown in small and medium-sized enterprises. In fact, the exact opposite is often done. With incredible risks for your business.

Happy reading.

Law of Natural Monopoly

The "Natural Monopoly Law", or Law of Natural Monopoly, is one of the essential foundations of marketing that all businesses, even the smallest, must understand to develop effective marketing strategies. This evidence focuses on the power and influence that big brandsexert on the market and above all on a particular category of buyers called 'Light Buyers'.

A Light Buyer is a consumer who makes purchases with a relatively low frequency within a specific category of products or services. Despite their low purchase frequency, Light Buyers represent the largest segment of the market, which therefore cannot be ignored. In fact, this is a group of consumers who can significantly contribute to the growth of a brand's market share.

The Law of Natural Monopoly claims thatbig brands have the ability to attract the majority of these Light Buyers. This happens because, given their infrequency of purchases, Light Buyers, when they buy something, tend to opt for recognized and consolidated brands on which they believe they can rely.

I don't know about you, but I rarely buy tires. When it happens, it's natural for me to think first and therefore prefer well-known brands like Michelin.

The recognized brand, therefore, acts as a magnet for these occasional customers. Which are "almost all" customers.

This phenomenon occurs almost automatically: not because the Light Buyers have made a conscious and thoughtful choice, but rather because the big brands are the first that come to mind when you think of a certain type of product or service. This happens because of their Brand Awareness, i.e. the customer's familiarity with a particular brand.

For small businesses, becoming aware of this universal law of marketing is essential for planning effective strategies. SMEs can work on their visibility and familiarity with consumers, and try to offer a quality product or service that can compete with market leaders.

Furthermore, understanding the Law of Natural Monopoly can guide small businesses to focus on specific market segments in which they can compete effectively, increasing their penetration and attracting more Light Buyers.

Pencils
Big brands act as a center of attraction for the minds of casual customers

Double Jeopardy

Within the universal laws of marketing, Double Jeopardy is an extremely important principle that many marketers forget, particularly in the context of small businesses.

This rule, validated over decades of sociological studies, demonstrates that larger brands not only enjoy greater market penetration, but also have a more loyal customer who repeatedly chooses them for their purchases.

According to this law, moreover, large brands are more easily and more frequently remembered than their smaller competitors.

This is not only due to their larger presence on the market, but is also a reflection of the perception ofquality associatedwith these entities. Given the same product quality, price and other factors, customers tend to prefer the larger brand because they perceive it as synonymous with superior quality.

These first two laws (natural monopoly and double jeopardy) underline the importance of brand awareness strategies as an essential part of the strategic development of marketing. Particularly relevant for small businesses, which often struggle to compete with more stable brands on the market, the Double Jeopardy principle suggests that investing in brand-boosting actions (i.e. branding strategies) can have significant effects on customer loyalty and purchase frequency.

However, applying Double Jeopardy is not easy. It requires a deep understanding of market dynamics and audience characteristics. For this reason, the good practice of relying on professionals is always recommended.

Retention Double Jeopardy

The law of the "double penalty" of loyalty (Retention Double Jeopardy Law) represents another fundamental piece of strategic marketing.

The rule of thumb establishes a seemingly counterintuitive anomaly: large brands lose more customers in numerical terms than small brands. However, if we examine the situation in percentage terms, we find that the percentage of lost customers is lower for large brands than for small ones.

This phenomenon is intimately linked to the Double Jeopardy seen above. So brands with lower market share have not only fewer customers, but also less loyal customers.

And there's not much we can do about it, because loyalty only seems to depend on market share, not on our actions.

Duplication of Purchase

The "law of purchase duplication" represents a fundamental principle of marketing, and is essential to understand the dynamics of a market. This rule, in fact, underlines a surprisingly uniform phenomenonin the behavior of buyers in various markets.

According to the Duplication of Purchase Law, a brandshares its customers with other brandsin proportion to their market shares. This means that a small brand will tend to share the majority of its customers with a leading brand. On the other hand, a leading brand will only share a small fraction of its customers with a small brand.

Within the scope of universal marketing laws, the Duplication of Purchase Law offers important implications for development. In fact, this rule confirms that the first strategic activity for many small companies should be to correctly identify the leading brands in their market sector. A task that in Deep Marketing we make our clients carry out rather early, when a collaboration begins.

It could obviously be useful to analyze not only which are the leading brands in your market sector, but also to understand their strengths. Subsequently, you can develop a strategy to attract part of their customers by offering a product or service of higher quality or at a lower cost.

Elephant
Size matters. The great ones have indescribable benefits

Regression to the mean in sales

We often tend to think that a customer who has spent a considerable amount to purchase a product or service is willing to repeat the same behavior in the future. This perspective, however, does not take into account a phenomenon known as the "law of regression to the mean".

According to this universal rule, a customer who has spent significantly on one occasion is unlikely to maintain a high level of spending over time. More precisely, customer spending behavior tends to regress towards an average level. This is due to various factors, including natural variability in consumer purchasing behavior and the presence of particular conditions during high-cost purchasing that may not be repeated in future.

For example, a customer might spend a large sum on a Christmas gift but not maintain the same level of spending for subsequent purchases throughout the year. Another example would be a company that places a large order for supplies upon launching a new product, but its average order over time will be much lower.

This law has important implications for marketing strategy. First, entrepreneurs must be careful not to make overly optimistic assumptions based on individual cases of high-cost or high ticket sales. It's important to look at the big picture and consider customers' average spending behaviors.

Rather than trying to encourage sporadic high-cost purchases, it may be more fruitful to focus instead on strategies that increase the frequency of purchases and that aim to maintain a higher average level of spending per customer over the time, extending the Customer Lifetime Value (we'll talk about it again).

The importance of this key principle is easily understood.

Heterogeneity of the target

This rule of thumb highlights three key aspects:

  1. A brand's customers are incredibly different from one another

  2. Competitors have a similar customer profile

  3. A given person is heterogeneous when analyzed over a sufficiently long period of time.

The first point highlights the complexity of targeting customers. There is no "typical customer for a brand, given the vastness and variability of individual behaviors, tastes and preferences. This requires companies to adopt marketing strategies and a wide range of versatile offerings to meet the needs of a diverse customer base.

The second point highlights an apparent paradox: despite the diversity of a single brand's customers, customer profiles between competing brands are surprisingly similar. This is an effect of “Duplication of Purchase” – brands tend to share their customers with competitors in proportion to their respective market shares.

Finally, the last part of this law highlights the evolution of consumer behavior over time. A person who was a loyal customer of a brand may change his or her purchasing habits over time for a variety of reasons, such as changes in personal needs, living situations, social influences, etc. This means that a marketing strategy must be flexible and adaptable to changing trends.

The law of target heterogeneity requires companies to recognize the complexity and dynamics of consumer behavior and not to apply simplified theories on "buyer personas". That is, thinking that human beings are easy to classify and predict. It is not so. We don't really know our customers and there are no profiles that are too prototypical.
Crowd
A true marketer does not delude himself into easily classifying people. Every human is a complex and unique being

I love my mum and you love your mum

In the ABC of strategic marketing, the law "I love my mum and you love your mum" states that action precedes attitude in the process of consumer interaction with a brand. This fundamental concept concerns the idea that those who use a brand tend to have a greater preference for it and demonstrate greater ease in remembering its commercial communications.

Let's start by clarifying why an effective marketing strategy is based on this law.

Very often, consumers – just like all human beings – develop an affection for something after experiencing it, rather than vice versa. This is why seeing effective advertising can lead the consumer to try a product, but the experience of the product itself will determine whether the consumer will become a loyal customer.

Moreover, the fact that action precedes attitude highlights the importance of offering high quality products/services and a positive customer experience as the foundation of a business marketing strategy of any size. You can create a lasting impression on customers, grow brand reputation and customer loyalty simply by ensuring the experience lives up to the expectations created by your marketing efforts.

In summary. Once a customer chooses to interact with our brand, the experience will positively shape their attitude and perception of the brand itself. Not the opposite.

Prototypicality

The "law of prototypicality" is one of the fundamental pillars of marketing, a crucial principle for developing effective strategies, both for small businesses and multinationals. And it closes our list.

Basically, this law warns that, in an attempt to get noticed, a brand should aim to be perceived as the perfect representative" of the market category to which it belongs.

The essence of the law of prototypicality is thatbrand communication must be aligned with the prototypical image that consumers haveof that market category. For example, if we are talking about banks, communication should instil reliability and security; if we talk about sportswear brands, it should evoke characteristics such as performance, strength and determination.

Although attempting to distinguish oneself from other brands through exaggeration, polarization, or controversy may seem tempting to gain attention, the law of prototypicality suggests that such an approach is, ultimately, counterproductive.

A brand that distances itself too far from the prototype of its category risks confusing, alienating or turning away consumers.

Taffo knows this well, as for years it has spent a lot of money on advertising and visibility, however obtaining a laughable growth in margins and turnover, in line with competitors who have spent zero (in fact it has then decided to change its “core business”, capitalizing on cobranding and franchising). His "black humor", however creative and popular, in fact completely contradicts the law of prototypicality because few want to give the remains of a deceased relative to a clown who mocks death. And Victoria's Secret knows this well, as in 2023 it stopped communicating in a feminist and diversity-filled way and returned to advertising with "standard" and sensual models to recover from the collapse in sales due to a strategy that clearly ignored the law of prototypicality.

For a small business, understanding and applying the law of prototypicality can be particularly useful. This can drive the creation of marketing content and brand communications that are aligned with consumer expectations, increasing brand relevance over time and thus building a strong customer base.

Beat your competitors. Now

If this list has convinced you and you are ready to outrun the competition with your strategic marketing, you can rely on an expert partner like the agency Deep Marketing, already chosen by extraordinary clients such as Genertel, MIDATicket and Duomo di Milano. But first, we recommend that you read all 210 evidence-based laws of marketing. Start here:

Opmerkingen


bottom of page