Marketing Idea No. 232 – Marketing lessons from law firms of the world

There is probably one lawyer joke that was born every minute in comedy clubs and internet before the recession hit us. But interestingly post 2008, the number of lawyer jokes circling the system has gone down quite a but.

This small anecdote shows two things. On one side is the huge size and revenue of legal business, particularly in USA, which is by far the biggest legal market in the world. At one point from 1978 to 2004, the legal business in USA grew more than 4 times the size of economy and it used to represent 1.8% of total consumer spending. But the other side of the story shows that just like every other business, recession was not particularly kind of legal business. The revenue of the top 100 law firms went down 4.3% in 2008 and only went up by .3% in 2009.

That of course is not the lesson. The lesson to learn here is which law firms are particularly doing well even during and post recession and why.

Lesson 1: Go global before everyone else

Baker & McKenzie, the biggest law firm in the world in terms of revenue, has opened its office in Latin America in the 195os and in mainland China in 1993

Lesson 2: Specialize

Wachtell, Lipton, Rosen & Katz is the most profitable law firm in the world by focusing on only one kind of business – merger and acquisition

Lesson 3: Keep your cost down

DLA Piper is another law firm that serves clients in 19 countries but despite being a prestigious american firm they operate from cheaper cities to keep the overhead cost down.

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Marketing Idea No. 231 – Dont be a one trick pony like Microsoft and Google

Sometimes the biggest enemy of sustained success is overnight success. Just ask former superstars like Microsoft, IBM and Google.

Microsoft was once the standard for anything to do in technology sector. But since the glory days of PC, Microsoft has gone through an endless cycle of failed products (Zune) and services (IP TV). After the all conquering innovation of Windows operating system, Microsoft has failed to come up with the next big thing that can sustain the fantastic growth that they are known for. Microsoft stock has not increased at all in the last 10 years, at a time when S&P has outperformed Microsoft stock many a times. Even with their tie-up with Nokia for mobile platform and their 8.5 billion dollar buy out of Skype, the future is looking anything but fantastic for Micorsoft.

Think Google. Yes they are still the darling of silicon valley and the blue eyed boy of Wall Street. But a current research shows that since the search engine, Google has not really come up with any new ground breaking innovation. The cash generating Adsense is something they acquired. They even acquired the popular services like Google maps, Youtube etc. None of these are home innovations, which goes to show the same problem that is crippling Microsoft – they are failing to come up with the next big thing. Google could have gone big in social network. Back when Mark Zuckerberg was still toiling with his novel concept of Facebook, a google engineer called Orkut came up with a social network platform called Orkut. For some odd reason, Google failed to see the potential of a social network. Thats why they didnt believe in the product and Orkut failed to receive the attention and the money that it required.

The lesson is simple. Dont fall in love with your innovation so much that you fail to see the expiry date. The best time to come up with the next big thing is when you are on the high. And dont be a one trick pony.

Marketing Idea No. 230 – How to attack an established brand with a price fighter brand

One of the finest strategy ever created was done by Al Ries and Jack Trout some 30 years ago when they advised brands to create a new category/sub category and be the first in it. 30 Years down the line we are still practising it. And some guerilla vodka companies are showing the world how to get it done. Smirnoffs and Absoluts of the world are suddenly very very scared.

You may not have gone ga-ga over Vodka brand names like Sobieski, Wodka etc. but these brands are starting up a storm in liquor category. Now, Vodka being a colorless, odorless, tasteless and highly mixable drink; you need a strong image like the one Smirnoff and Absolut have done over the years. There is just not enough value in the product, so the value should come from image or packaging (i.e. Absolut).

But noticing the opportunity and a customer insight that there is just not enough difference between a super-premium Vodka and a regular Vodka, brands like Wodka and Sobieski has created a value/low price line of Vodka category. The strategy is simple. Charge it below $20, put “Super-premium or Ultra-premium” in the label to boost image and target restaurant owners. And by targetting the restaurant owners (who loved the idea of higher margins as his purchasing price for vodka going down but the selling price to consumers staying high) rather quickly they are eating into the market share of Absolut and Smirnoff. 

This is a lesson that through diligent trend and insight hunting, it is possible to understand that some of the products and brands may be over priced as per the differentiating value they deliver. Simply speaking, they thrive on hype rather than customer value. By attacking them head on and creating enough value at a significantly lower price without hurting image; you can hurt some of these so called giant brands.