A Summary of The Law of Category

Corporate career blog

A Summary of The Law of Category

…And how to apply it to your Career

The 22 immutable Laws of Marketing by Al Ries and Jack Trout is arguably one of the most cited books in Marketing and Business. Particularly the second chapter – The Law of Category – attracted a great deal of attention. People like Tim Ferriss recommend anyone involved in Business to read it.

Those that follow me know that I consistently emphasize two things:

  1. Treat your corporate career as your entrepreneurial venture.
  2. Find your unique talents and your unique market within the corporate world. Find out here why this is so important and how well a fit your current job is.

In the following I am going to tell you how to apply The Law of Category to your personal career. But first things first. What is The Law of Category about?

 

Summary of The Law of Category

The 22 Immutable Laws of Marketing

The 22 Immutable Laws of Marketing

The Law of Category is all about being first in what you do.

If you can’t be first in a category, set up a new category you can be first in.

The Law of Category thereby relates to different theories that we know as differentiation, blue ocean strategy or first mover advantage (while some of them only came out after The Law of Category).

Entrepreneurs and new Businesses tend to focus on being better than their competitors. However, the Law of Category shows that it is more important to be different than to be better. Therefore, the book suggests to create your own categories.

 

What is a category?

Every piece that differentiates you from your competitors is a category. Usually, each category has a leader. A certain market as a whole is made up of lots of small markets. The book predicts that by tackling the big market you probably lose. If you create your own small one, you might win.

Nevertheless, the book also states that size matters. If your market or category is too small, you probably will not succeed in generating enough revenue. (Note from Phil: However, People often underestimate how small can already be big enough. I recommend you to read 1,000 true Fans, which is a great essay published on this topic.)

 

Real World Examples

The book supports its theory by giving lots of real world examples. Heineken, the first imported beer into the United States, became and still is a huge success. Anheuser-Busch then said “if there’s a market for a high-priced imported beer, maybe there’s a market for a high-priced domestic beer.” Michelob, which was promoted as the first high-priced domestic beer, became largely successful. By the way: After the success of Heineken, Anheuser-Busch also tried to promote Carlsberg. Carlsberg has a great reputation in Europe. In the United States however it never really kicked off.

Another example from the beer market is Miller Light, which was tremendously successful as the first domestic light. It afterwards took an importer five years to say “if there’s a market for a domestic light beer, maybe there’s a market for an imported light beer”. They imported Amstel Light, and guess what? It became the best selling imported light beer.

This doesn’t only work with beer. Apple started in a time when Microsoft dominated the market for personal computers. Therefore, they created their own category by being the number one in the graphic design category. We all know where Apple went from there.

The list of examples goes on and on…

 

How to apply The Law of Category to your Career

Now, how to apply this to your career? The Law of Category is mainly written for Marketing Experts, Business Owners and Entrepreneurs. Therefore, if you’re non of those three, you will not be able to adopt everything exactly as formulated in the book. Additionally, the terms ‘first’ and ‘unique’ might have to be regarded a bit broader when speaking about a corporate career. Nevertheless, I will stick to the formulations of the book although this might make my reasoning seem a bit extreme sometimes.

I keep emphasizing that you should treat your career as your own entrepreneurial venture. Therefore, everything that is targeting Entrepreneurs also should have some significance for you, even if you are in a corporate career. In The Law of Category I found lots of things that you actually should apply to your Career:

  1. Marketing matters

    Job seeking, getting promoted or getting a raise have a lot to do with Marketing. All of them include you persuading someone to choose and trust in you. Often instead of choosing or trusting in others. Therefore, almost every good Marketing Strategy can be applied to your career growth.

    Now, how do you persuade someone to give you a Job or to give you a promotion? Well, how did Heineken persuade its customers? Correct, they found an attribute that mattered to people and only they could cover. Lots of it has to do with standing out from the crowd. Imagine finding your unique personal strength where you are the undisputed number one. How difficult do you think your job hunting would still be? And who do you think would be in a stronger position when negotiating your next salary, you or your boss?

  2. Be different – not better:

    When going into a negotiation you can still set yourself apart by what you believe to be better at than your competitors. However, how much of a difference do you believe it makes to an employer if you graduated with an A- or an A? Or do you think someone will give you a raise because you are trying to stand out with this one year additional experience that you have compared to your peers? Trying to set yourself apart will not work that way.

    Being different can also mean possessing a unique combination of skills. Therefore, let’s imagine you are applying for a Sales Position in a Firm that wants to expand to Germany within the next 6 Months. Now you can choose between being the only candidate that got an A in college (all others having an A-) or the only one speaking German. What do you think would truly set you apart? As you’re smart you of course guessed correctly. Someone speaking German has a much greater value to the company. Also if you were not the best student in college. Therefore, be different, not better. This example shows that in order to set yourself apart it often requires research. Find out what plans the company you want to apply to has. Or what direction does your boss want to move the company to? Then sell yourself correctly by showing how your unique skills make you stand out.

    You believe there is no room for differentiation in your job? Let the following sink in (and I already look forward to all the blame I will receive for choosing this example): Bruna Surfistinha became the most famous (and probably best paid) prostitute in Brazil. Why? I cannot say if she was the best in what she was doing. But she was the first one to grade and rank her customers in her online Blog. Bruna meanwhile moved on and became a best selling author.

  3. How to get a higher salary

    Another topic I keep stressing is the importance of negotiating your salary. Read here why this is particularly important at the beginning of your career.
    Especially when it comes to negotiating your salary companies often have a clear idea how much they want to pay for a certain position. We all have been in interviews and heard the sentence: “there is no flexibility on the salary.” There are different strategies how you can react. Find all of them here. However, one of the best ones is to explain that you want to be paid according to value and not according to a scale or framework. Additionally, show how your skill set is different from the skill set they applied on their framework. If you manage to do that, the firm cannot apply their salary scheme for you anymore. And suddenly you created flexibility.

    Additionally, recruiters start having issues finding people for the best paying jobs. According to HR Managers, the best candidates often choose to become Entrepreneurs. Wait a minute. Did you realize that? Recruiters call potential Entrepreneurs their best candidates who they want to have for their highest paying jobs! And what kind of skills do these candidates possess? Correct – unique talents that allow them to become Entrepreneurs and create their own category. If you’re asking yourself now why someone having unique talents should consider the corporate career path at all – scroll further down.

  4. How to get a promotion or a better work-life balance

    Professionals that do not stand out sooner or later notice that they’re hitting a glass roof in their career. Their skill set, which is the same than the ones of their peers, just doesn’t set them up for a promotion. Their only chance to move up is spending much more time at the office than their colleagues. While we all like to work if the job and company are good, we also have a life outside the office. If your only chance of differentiation is putting in more work than your peers, the additional hours spent at the office will accumulate into the innumerable. It is a fact that the air is getting thinner once you climb up the corporate ladder. But the good news is that unique talents that cannot be found elsewhere will be your oxygen to climb higher.

  5. Technological progress supports unique skills

    We all know that digitization and AI will have a huge impact on the job market. While we cannot know yet how new technologies will change the labor market exactly, certain jobs will definitely get lost. However, particularly human and creative skills will not grow out of demand. On the contrary, it is predicted that the demand of these skills and talents will highly grow and become more diverse.

 

Why not become an Entrepreneur?

Many of you might ask: If I manage to differentiate myself, why should I not become an Entrepreneur? The answer is simple: If this is what you want, you definitely should. However, there is way more to being an Entrepreneur than just differentiation. And entrepreneurship clearly isn’t for everyone. Those of you that follow me know that I ‎did entrepreneurship in the past as well. While being moderately successful, it just wasn’t my thing. My blog clearly indicates this. It wont take you long to figure out that I am doing next to nothing in order to monetize it. And even if that should change one day, it will remain a side hustle and complementary to my regular job and income.
When speaking about joining a firm I don’t talk about a traditional 9 to 5 Job though. In my opinion this is over. And most employers realized that if they want the best talents they have to offer a modern workplace and culture.

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