Share of Mind and Customer
Are you familiar with the Law of the Situation? It is a term coined in 1904 by Mary Parker Follett, the first management consultant in the United States.
Her client was a company that thought it was in the window shade business.
But she persuaded them that they were actually in the lightcontrol business. By expanding their concept of what kind of business they were in, she was able to help them expand their business. “What business are you really in?” is the fundamental question posed by the Law of the Situation. Every company selling to the public can and
must broaden its answer to the question even more than Mary Follett did for the window shade company, for even to define their mission as “light control” may have limited their thinking and opportunities. For example, draperies, like window shades, are a form of light control. Matching bedspreads have nothing to do with light control. Yet bedspreads might be a popular and profitable item to promote to the end-users of your draperies.
The New Revised Law of the Situation
Today the real answer to “What business are you really in?” is that you are in the customer development business. And the sooner your company comes to that realization-the sooner it casts off the shackles of a narrower definition-the sooner it will be free to expand in surprising new directions.
What is a mint doing selling leather-bound books? What is a giant bank doing selling refrigerators? What is a radio station doing selling tours to listeners? What is a distillery doing selling long underwear?
They are applying the New Revised Law of the Situation: namely, that the business you are in is making money any which way you can through developing a continuing, profitable relationship with the buyer of your product or service. And these companies are applying the Law by joining two powerful marketing assets, share of market and customer database.
How We Define Share of Mind
We want to call it “share of market” rather than “share of mind.” What is the difference? In our definition, share of market measures the breadth of your market penetration, but share of mind measures the depth.
For instance, you might have a 17 percent share of the facial-tissue market because your product is the cheapest. Your share could start melting away overnight if a competitor seriously undercut your price. But Kleenex tissues has a share of mind. It has been an old, familiar, comforting friend through laughter and tears, opening nights and last rites. It has a share of mind that can resist price competition. When Coca-Cola tried to abandon old Coke soft drink, they found that it too had an impressive share of mind not revealed by market share figures or their costly research studies. In the past, this share of mind might have seemed a vague, unmeasurable asset, but now a price tag can be-and has been-put on it. When Philip Morris moved to acquire General Foods for $5.8 billion. About $2.8 billion of that represented not physical assets but good will. As one stock analyst pointed out, “If you had to go out and create a brand like Jell-O, it would cost you a lot more than what Philip Morris is paying for it.”
