Page 171 - (DK) The Business Book

WORKING WITH A VISION 169

As long as products remain the only fighting a product battle rooted in
one of their kind available, the reality. But consumers are not
company that is first to market has a concerned with reality; they make
monopoly position; this means it can purchases based on perception.
set the price, establish loyalty, and “Being first in the mind is everything
build a reputation before competitors in marketing. Being first into the The key to success for
catch up. When competition does marketplace is important only to the Sony, and to everything
arrive, the first-mover still has the extent that it allows you to get into in business … is never
advantage, because it has the mind first,” say Ries and Trout. to follow the others.
established itself. This is generally Ibuka Masaru
the case even when subsequent The car in front Japanese co-founder of Sony
products are better than the first. Japanese car manufacturer Toyota (1908–99)
tries to be first to market, and
It’s all in the mind imparts this message in the minds
Al Ries and Jack Trout, authors of of consumers with the slogan: “The
The 22 Immutable Laws of car in front is a Toyota.” Toyota was
Marketing, developed a theory of the first company to introduce a
why the first company to market hybrid car—with an engine drawing
can continue to dominate. They power from both gas and electricity an environmentally friendly driving
proposed that the customer’s —to market. Its Prius went on option. Second, creating a hybrid car
perception of where a product or sale in Japan in 1997. Several would increase access to new and
service sits in the market is of manufacturers were considering existing markets, such as the US,
utmost importance, claiming that the concept of a hybrid car in the where emissions legislation would
“it is better to be first than it is to 1980s, but combining an internal favor a hybrid car. Third, it would
be better.” It is easier to get into the combustion engine and an electric enhance Toyota’s image, because of
consumers’ minds first than to motor required significant its clear message of the company’s
dislodge a product or service from investment. Despite this, Toyota commitment to environmental
their minds and convince them that knew that if they could lead the protection, while at the same time
your company has a better product. way, there would be a number of generating excitement about
Ries and Trout argued that most advantages for the company. First, Toyota’s new products and the
marketing stems from the Toyota would gain early-adopter company‘s innovative capabilities.
assumption that companies are consumers who were looking for The Prius went on sale
worldwide in 2001, and more than
ten years later Toyota continued
to lead the hybrid market. The Prius
was the top-selling car in California
in 2012, giving Toyota a 21.1
percent market share, compared to
closest rival Honda’s 12.5 percent.
Although other companies, such
as Ford and Nissan, have now
developed their own hybrid models,
Toyota’s first move into the market
continues to yield benefits in an
ever-growing market. ■

The Prius gas-electric hybrid has won a
sizable share of the low-emissions market
for Toyota. The company was willing to
invest significant development funds in
return for a market-leading position.