Remember the days when we used to talk about the type of processor we had in our computers? Nobody really cares or knows anymore what processor our iPads or iPhones or laptops or Samsung products have. Superb marketing almost always beats great products; this trend exists in the technology sector, the clothing market, academics and even in politics!
Windows 3.1 was released in 1992 and it certainly paled in comparison to Apple’s ‘Mac 84’. The same can be said for Windows 95. So why did Microsoft Windows have materially higher market share than Apple back then? One of the reasons was that Microsoft then had much better marketing strategies than Apple did. Microsoft’s Steve Ballmer was a marketing genius. Most people don’t realize that prior to joining Microsoft, Ballmer was a Product Manager on the Duncan Hines cake mix product at Procter and Gamble. He managed to get Duncan Hines to the #1 product in the sector by market share by simply making the box bigger! In fact, per the image below, Steve Ballmer made the size of the Microsoft Windows box exactly the same size as the Duncan Hines box which was larger than competing products! Marketing was a key reason why Microsoft was so incredibly successful then.
Microsoft’s marketing savvy has since deteriorated, in part, due to founder Bill Gates resigning. In fact, when all the founders leave a company, both the marketing and product quality deteriorates; remember how much more dominant Nike’s marketing efforts were prior to founder Phil Knight retiring? There are many examples of this in the technology sector, clothing sector and many other industry verticals.
The 'superb marketing trumping great products' trend is also very much apparent in politics where the person that often wins an election does so because he or she has a much better marketing campaign than the competition does. In fact, think of most political leaders since the Nixon Kennedy’s televised debate in the 1960s and we might conclude that many elections around the world were won by candidates that had better marketing campaigns and by candidates that were more affable; the quality of their product or policies doesn’t seem to be the primary driver for election success. Superb marketing beats great policies in politics too.
The same trend can be said for academics. In many cases, students with the top grades are not the most successful in life. Rather, students that have superb ‘Marc Benioff-esque’ personal marketing skills tend to prosper the most. Their grades (or their diploma product) is not nearly as relevant compared to their personal marketing skills.
It is extraordinarily rare for a company to have a combination of superb marketing and superb products. When this occurs, we get companies that tend to dominate their sectors at least until the founder is no longer running the company. Companies that have this killer approach of having superb marketing and superb products almost always knock out the competition and offer superior investor returns.