CASE STUDY Wage and Win Battles for Market Share · and Win Battles for Market Share This case study introduces the concept of ... This case study is written in first ... Wal-Mart

FROM $10 MILLION TO $50 MILLION A MONTH ...IN 60 DAYS

HOW SYQUEST ATTACKED AND DISLODGED IOMEGA

Utilizing Maneuver Theory to Wage and Win Battles for Market Share

This case study introduces the concept of maneuver

theory and it’s application to marketing campaigning.

The essence of maneuver theory is the ability to shape

the competitive landscape to your advantage and the disad-

vantage of your adversary. Maneuver theory is especially appropriate

for smaller, agile competitors intent on attacking and dislocating larger

competition.

T h e S y Q u e s t c a m p a i g n is an excellent example of maneuver theory applied to marketing campaigning. This case study is written in first person and

offers the insight and observations from those responsible for executing the cam-

paign. The SyQuest engagement provides a compelling before, during and after look into the impact maneuver theory can have on marketing campaigning. Before

the campaign, SyQuest employing traditional feed and speed technology marketing approaches the brink of bankruptcy. During the campaign, adopting maneuver-

based marketing increases SyQuest revenues five-fold, nearly triples market capitali-

zation and dislodged Iomega from it’s leadership position. Six months after return-ing to traditional technology marketing SyQuest was in bankruptcy.

Wage and Win Battles for Market Share

COPYRIGHT 1997 - 2005 - Michael K. Smock 1

“SyQuest’s sales into its distribution channels have increased five-fold dur-ing a two-month stretch...CNET Inter-view with Ed Harper, CEO

VSENTE | San Francisco

Experienced Campaigners

w w w . v s e n t e . c o m

415.457.8449

CASE STUDY

BEFORE: Traditional technology marketing drives SyQuest near bankruptcy

DURING: Maneuver-based market-ing generates 5-fold revenue in-crease in 60 days, tripling of market

capitalization, and dislodges market leader Iomega.

AFTER: Return to traditional marketing drives SyQuest into bankruptcy.

BEFORE DURING AND AFTER THE SYQUEST CAMPAIGN

05.97

12.97

CONTENT

02: What is maneuver theory?

03. Maneuver theory applied to marketing campaigning.

04. The SyQuest/Iomega market share wars.

06. Developing and executing the campaign.

13. Results and lessons learned.

WHAT IS MANEUVER THEORY?

The essence of maneuver theory is the ability to shape the competitive landscape to your advantage and the disadvantage of your adversaries. By applying maneuver theory, campaigners can approach Sun Tzu’s ideal of winning without fighting. Sun Tzu’s approach to fluidity in shape and intentions is the foundation of maneuver theory:

“So a military force has no constant formation, water has no constant shape: the ability to gain victory by changing and adapting according to the opponent is called genius”.

Maneuver tactics were first described by Sun Tzu in the “Art of War” more than 2000 years ago. The late Samuel B. Griffith a retired Brigadier General in the U.S. Marine Corps authored one of the best translations of the Art of War. In the intro-duction of his 1963 translation, Griffith introduces for the first time the key concept behind maneuver theory called “shaping”.

“The prudent commander bases his plans on his antagonist’s shape. Shape him, Sun Tzu says. Continuously concerned with observing and probing his opponent, the wise general at the same time takes every possible measure designed to prevent the enemy from shaping him”.

The ability to shape is based upon knowledge of yourself and of your opponent. Sun Tzu again:

“So it is said that if you know others and know yourself, you will not be imperiled in a hundred battles; if you do not know others but know yourself, you win one and lose one; if you do not know yourself and do not know others, you will imperiled in every single battle”.

ATTACKING WITHOUT FIGHTING

If the ultimate expression of maneuver theory is winning without fighting then isn’t the notion of attacking a competitor at odds with maneuver theory? If your defini-tion of attack is the traditional attrition based attack, then yes, this definition of attack is at odds with maneuver theory. But maneuver theory defines attack in dif-ferent terms. The art of attack is characterized by the ability to exploit mismatches in relative competitive competencies in a manner where it is not necessary to engage in head to head conflict.

Maneuver theory was advanced in the last half of the 20th century by John Boyd the maverick fighter pilot turned military scholar. Boyd focuses on the relation-ship of analysis and synthesis within relevant frames of reference in order to shape and maneuver opportunity. Boyd researched mathematical logic, physics, thermody-namics, biology, psychology, anthropology and conflict in order to explain how hu-mans might exploit this scheme. He found that conflicts can be described by two primary maneuver forces of interaction and isolation. The need to increase my inter-action with a customer while isolating my competition is at the heart of maneuver theory.



Can a business enterprise attack a

competitor? Of course. Should a

business attack a competitor? Of

course! Why? Because that’s where

the customers are! Customers who

have been trained to write the

checks and do the deals.

MANEUVER THEORY APPLIED TO MARKETING CAMPAIGNING

There are many ways one can isolate a competitor via well-timed and well-placed attacks. Generically speaking we can attack price, quality, service features and repu-tation. And as long as the attacks are credible I can begin isolating my competition while simultaneously increasing my interaction with the customer.

It is the interplay of interaction and isolation that allows me to shape the market to my advantage and the disadvantage of my competition. When executing a cam-paign we work off a campaign palette that incorporates actions designed to in-crease our interaction with our customers while decreasing our competitions. There are times when attacking the competition is necessary. There are other times went it is opportunistic.

CAN YOU ATTACK A COMPETITOR?

Maneuver theory has evolved over several thousand years of military conflict. One might reasonably question military thought in marketing campaigning. Especially when considering attacking a competitor.

There are many applications for the word attack. Attacking the Normandy beach had one meaning to Eisenhower. Attacking the Green Bay line had another mean-ing for Mike Ditka. Attacking a messy disorganized garage has a third meaning for a weekend warrior tired of losing his tools.

Can a business enterprise attack a competitor? Of course. Should a business attack a competitor? Of course! Why? Because that’s where the customers are! Customers who have been trained to write the checks and do the deals.

No market, brand, technology or innovation in the twenty-first century is ever im-pervious to attack. The bottom line is that any transaction, customer, market or industry is vulnerable to attack. There are times when attacking the competition is necessary. There are other times when it is opportunistic.

WHO ATTACKS?

Start-ups, turnarounds and expansions can launch an attack. Large well-provisioned market leaders are always vulnerable to attack by smaller agile challengers:

a. Start-ups: A start-up enterprise can attack an existing competitor’s position via a launch strategy offering a lower price, more features, better quality, etc. Microsoft is vulnerable to new entrants offering better security and usability.

b. Turnarounds: Smaller struggling enterprises can attack a larger competitor’s posi-tion via quality, service or features. Wal-Mart is vulnerable to niched regional chains or local retailers offering differentiated products and services.

c. Expansions: Growing enterprises with industry momentum can further their ex-pansion by attacking and dislodging the market share leader. Delta is vulnerable to attack by Jet Blue offering better quality and service.



The essence of maneuver theory is the

ability to shape the competitive land-

scape to your advantage and the dis-

advantage of your adversaries.

MANEUVER MARKETING VS. TRADITIONAL MARKETING

Most advertising agencies and marketers profoundly underestimate the concept of attack, both from the standpoint of how to attack and how to respond to an attack. In Competitive Advantage, Michael Porter dedicated a chapter to attacking an in-

dustry leader. In this chapter, he out-lines the conditions for attacking a leader along with avenues for at-tacking leaders. Channeling classic maneuver theory Porter states that the:

“cardinal rule in offensive strategy is not to attack head-on with an imita-tive strategy”.

The primary reason why so many agencies and marketers underestimate the con-cept of attack is their continued emphasis on creativity over strategy and intelli-gence. Both agencies and marketers continue to value and promote the wrong competencies as evidenced by their focus on awards rather than effectiveness. Philip Kotler the godfather of contemporary marketing was quoted in the UK publication Marketing Week:

“Many marketing professionals are clueless about how effective their strategies are.”

The primary difference between maneuver marketing and traditional marketing is the degree of responsiveness, intelligence and assertiveness between the ap-proaches. Maneuver marketing is agile, smart and pro-active. Traditional marketing is rigid, dumb and passive. The SyQuest campaign is a good example of maneuver marketing applied to the attack and dislodgement of a larger competitor.

THE SYQUEST/ IOMEGA MARKET SHARE WARS

One of the more contentious battles in the history of business would be the hard fought struggles between SyQuest Technology and Iomega. Both competitors started in the early eighties with essentially the same business concept but different solutions. The concept was removable storage for personal computers.

Over the years SyQuest and Iomega traded leadership positions and quite often found themselves engaged in life or death struggles for control of the removable storage category. By the end of 1993 the struggle had evolved to the point where SyQuest was the indisputable leader with Iomega a distant second. Iomega in fact was close to bankruptcy and desperate for products to compete against SyQuest.

Recognizing the need to do something truly revolutionary in order to succeed, Io-mega embarked on a crisis development effort which led to the launch of one of the most successful products in history of technology the Zip Drive. Within three short years of the launch of Zip, Iomega had marginalized SyQuest to point of ex-tinction. SyQuest had experienced erosion of their market share, a complete reor-ganization of its management team, the exit of its founder Syad Iftikar, losses



Iomega had become the leader in

the removable storage market with

the launch of the Zip drive. Iomega

grew from $140 million in reve-

nues, to $1.4 billion in revenues in

less than three years absorbing

87% of the low-end data-storage

market and 62% of the high-end

RESPONSIVENESSINTELLIGENCE

ASSERTIVENESS

AgileSmart

Proactive

RigidDumbPassive

MANEUVER MARKETING TRADITIONAL MARKETING

mounting in the millions and extensive employee layoffs. Analysts predicted that SyQuest would “cease to exist in 1997”, the stock fell from 15 to 1 11/16 in less than six months and they faced the threat of delisting by NASDAQ.

Iomega had become the leader in the removable storage market with the launch of the Zip drive. Iomega grew from $140 million in revenues, to $1.4 billion in reve-nues in less than three years absorbing 87% of the low-end data-storage market and 62% of the high-end (International Data, 1998). Iomega was able to hit a homerun with Zip because they figured out the key to marketing technology.

IOMEGA HITS A HOMERUN

Iomega hit its homerun by understanding the concept of emotional attachment. Iomega cultivated emotional attachment for Zip by positioning the product in a manner that generated a feeling that a Zip was the only place to store your stuff. Stuff that was important to you. Stuff that you needed and didn’t want to entrust to just anyone or anything. Which led to the now famous tagline of “It’s Your Stuff.

Before Zip, all drive manufacturers, not just the removable guys, sold storage on the basis of price, capacity and speed. Most consumers where numb to the messages depicting bits and bytes and search and seeks etc. Iomega came out with a very simple, and a very powerful message for a product that had been completely redes-igned from the ground up. And to the consternation of many Iomega engineers a product that was not state of the art and in fact contained many flaws and ineffi-ciencies that would never have been commercialized in the “old” Iomega.

Why was Iomega, who was so close to extinction, able to execute this complete about face?. The primary factor contributing to this stunning turnaround was Kim Edwards the CEO hired to complete the Iomega transformation. Complete is an important word. Because while the success of the Iomega turnaound is generally attributed to Kim and his management team the truth is that the previous regime has actually put into play the initial positioning and design of the Zip product.

What Kim Edwards did was to come in, recognize a great product idea and then execute like a demon. Kim is a ferocious competitor with a take no prisoners atti-tude. Kim commands great loyalty from his team and hatred from those who may have been displaced by his team. Rather than attempting to build coalitions or con-sensus Kim came in and assumed complete autocratic control. Kim was loved and hated, feared and respected. Many of the original Iomegans left or lost their jobs. Kim was brought in to a very tough situation with limited amount of time to suc-ceed. Kim probably broke every rule you’ll find in contemporary management litera-ture regarding employer/employee relations.

Before Iomega, Apple Computer shattered the traditional technology marketing paradigm. When you compare Iomega and Apple they share two elements that I believe are needed to be present in order for a startup or a turnaround to succeed. They are a zealot for a leader and revolutionary positioning.



SyQuest was on the verge of bank-

ruptcy. We had to compress a tradi-

tional five-month campaign develop-

ment cycle down to eight weeks. This

was the first time we took full advan-

tage of the power of the internet to

drive a campaign.

SYQUEST STRIKES OUT

After the launch of Zip, SyQuest immediately responded to the Zip drive with the release of the EZ135, which was not received well and they actually lost money with each drive sold in an attempt to defend against Iomega. SyQuest then released the EZFlyer 230, and despite great product reviews, were unable to successfully position and sell the product effectively enough to make an impact on revenues. SyQuest then released the SyJet in January 1997 and again faced the issue of being unable to sell the product despite outstanding product reviews.

Syad Iftakar, the founder of SyQuest, was removed from office and replaced with a new management team consisting of experienced executives from companies like Western Digital, Computer Memory Products and Conner Peripherals. The environ-ment at SyQuest continued to reflect the traditional, technology-driven background of its original management team. And though there was substantial expertise with operations and manufacturing, SyQuest needed aggressive measures to position and brand the company and its products in a way that would dramatically differen-tiate it from Iomega, and more importantly from the prevailing perception of its viability.

By May 1997, despite the complete reorganization of its management team, 12 months of advice and support from Bain Management Consulting, a recapitalization of the business and the launch of the award-winning SyJet drive in January 1997, SyQuest continued to flounder in the marketplace. Meanwhile, Iomega had essen-tially absorbed most of SyQuest’s marketshare.

DEVELOPING THE CAMPAIGN

It is our practice to pursue business in a manner that is different than most agencies and consultancies. We form a specific campaign team and organization for each engagement. Then disband it when the campaign is over. We will quite often recruit an industry expert to help win a specific engagement or to provide a level of exper-tise during the execution of a campaign.

Most of our engagements are executed incognito. The nature of the engagement combined with confidentiality agreements require us to operate off the radar screen. However there are times when we can derive a tactical advantage for our client by disclosing or promoting our involvement. This was the case with the SyQuest campaign.

Prior to our first meeting with SyQuest’s Board of Directors on May 7, 1997 we had spent three years prospecting clients within the storage industry. From 1994 through 1997 we made several presentations to participants within the industry, including Quantum, Iomega and SyQuest Technology. The ongoing competitive con-flict between SyQuest and Iomega was of particular interest. To win this engage-ment we recruited one of the original founders of Iomega, Paul Losee, to join our campaign organization which we called the Silakhan Route, a virtual organization established to win and prosecute the SyQuest campaign. Paul served as a resource partner to the Silakhan Route participating in the final presentations to SyQuest in May of 1997 and in the subsequent campaign.



We knew that our creative solu-

tion had to be better... more

compelling in order to break

through the clutter and imme-

diately reestablish the viability

of SyQuest.

To win this engagement we

recruited one of the original

founders of Iomega, Paul Losee,

to join our campaign organiza-

tion which we called the Sila-

khan Route, a virtual organiza-

tion established to win and

prosecute the SyQuest cam-

paign.

Based upon our knowledge of the industry we knew that in order for SyQuest to win they would have to vault the benchmarks already established by Iomega. Spe-cifically, product and positioning benchmarks that now defined the removable stor-age category and that we felt could be exploited by SyQuest. We also knew that if SyQuest did this successfully they could repeat the Iomega growth cycle. We pro-posed a two-year campaign to SyQuest’s board with the objective of achieving $2 billion in revenue and a $20 stock price. The board approved our plan and we be-gan the engagement on May 1, 1997.

BUILDING THE ATTACK ENGINE

SyQuest was on the verge of bankruptcy. We had to compress a traditional five-month campaign development cycle down to eight weeks. This was

the first time we took full advantage of the power of the internet to drive a campaign. Each phase of the campaign development required 24-hour—and in many cases immediate—review and approval cycles to remain on schedule. We also built a virtual attack engine consist-

ing of the Chairman, the CEO and the EVP’s Sales and Market-ing along with key creative vendors for immediate input and

responses during the course of the campaign.

The initial hypothesis we considered in developing the competitive strategy against Iomega was based upon a concept called the Emotional Continuum. This concept is

expressed as a graph with “X” and “Y” coordinates. The “Y” axis of this chart is a measure of the emotional attach-

ment a customer will have to the data (labeled Emotional At-tachment). The “X” axis is a measure of how separated (time) a customer feels from the data (labeled Emotional Separation). This axis can represent both time and dis-tance. The longer the storage has been separated from the customer, the lower it’s emotional attachment. Also, the further away the storage is from the customer, the lower the attachment. Stuff eventually goes to storage and ends up in the trash.

DETERMINING IOMEGA’S CENTER OF GRAVITY

There is a natural flow of storage as time passes and it moves from storage on the shelf to the closet to the garage to the dump. People experience this “storage to junk evolution all the time. The word “Stuff” is higher in its emotional attachment. It has more value than storage. Iomega found that if they can get the customer to say “my stuff,” that’s an even higher point on the curve. That’s why you see Iomega trademarking the phrase “Because it’s your stuff.” They’re trying to get the cus-tomer to say, “yea, it’s my stuff,” referring to the Zip drive.

An idea begins the creative process. Ideas create genius. We postulated at this point that SyQuest could exploit Iomega’s center of gravity by positioning SyQuest as cre-ating and owning the high emotional category called “Genius.” Your genius is housed inside the cartridge. It’s the home for your ideas. It’s where creativity is born, nurtured, and made manifest to the outside world. Everyone is a genius. SyQuest is in the business of helping to manifest the genius of our customers.



Execution CycleFUNCTION: SalesOWNER: Gary Jones EVP SalesCYCLE TIMING: Weekly

EXECUTION COMMUNICATION

ORIENTATION

Command CycleFUNCTION: Approval/OversightOWNER: Ed Marinaro, ChairmanCYCLE TIMING: Weekly

Orientation CycleFUNCTION: Strategy/IntelligenceOWNER: Mike SmockCYCLE TIMING: Hourly

Communication CycleFUNCTION:MarketingOWNER: Gary Marks, EVP MarketingCYCLE TIMING: Daily

SYQUEST ATTACK ENGINE

COMMAND

ATTACHMENT

SEPARATION

STUFF

IOMEGA’S CENTER OF GRAVITY

DETERMINING THE STRATEGY

In order to succeed SyQuest needed to execute a two-pronged strategy (interaction/isolation) designed to vault the competition while simultaneously pushing them down the emotional continuum. It is critical to understand that both efforts are essential to the success of the campaign. This strategy provided the opportunity for SyQuest to successfully build the category while Iomega was defending it’s tradi-tional terrain. The cornerstone of the positioning strategy was to create and own a new category for storage described as “Genius” while at the same time pushing Iomega down the emotional continuum to “Trash”

So with this thinking the outline of a campaign came together. A campaign that would simultaneously establish a new emotional category called genius while at-tacking and pushing Iomega “stuff” further down the Emotional Continuum to-wards junk. Additionally, initial thinking was to position Iomega as being in the drive business, the storage business, or the stuff business forever. And positioning SyQuest the creator of genius. The new SyQuest would be positioned as nurturing genius. The new SyQuest category is called “Genius.” The tag line would become: “Explore Your Genius.”

IT’S THE CARTRIDGE STUPID!

In the past SyQuest had been a drive company. The new strategy required that SyQuest become a cartridge driven company. That is, the focus must be on the car-tridge and not the drive. The positioning was designed to project value for what’s inside the cartridge and link that value to a compelling new identity for the cus-tomer. The cartridge will become the “tool” that will allow the customer to achieve this compelling identity.

To repeat the Iomega cycle we knew that we would have to increase the emotional attachment in the category. And with the convergence of bandwidth, technology, content and applications on the internet we also knew that over the next several years storage would become critical. And that there would be a ferocious fight for this market share. (Iomega had already declared their intentions to become a $10 billion company!)

We quantified the opportunity within the storage industry via a new law and named this new law of storage after Paul Losee. Losee’s Law of Storage says that a 10% increase in emotional attachment to the data generates a 100% increase in market size. By moving from the storage category to the stuff category, Iomega went from a $140 Million company to a $1.4 billion company in slightly over two years. By moving the storage category from stuff to something more important than stuff SyQuest would be able to create and then harvest the kind of explosive market growth that Iomega experienced two years ago.

VAULTING THE IOMEGA BENCHMARK

A main element for the success of our strategy involved the need to VAULT the Io-mega creative benchmark. Which after two years of dynamite creativity had solidly positioned ZIP as the only place for your Stuff. We knew that our creative solution had to be better... more compelling in order to break through the clutter and im-



Create a new category of storage called Genius (INTERACTION) while simultaneously pushing (ISOLAT-ING) Iomega down the emotional continuum to trash.

ATTACHMENT

SEPARATION

STUFF

Genius

Trash

THE SYQUEST STRATEGY

mediately reestablish the viability of SyQuest. Base upon the above creative exercise we selected the Seattle Group - Area 3 and the French producer - Florent Wendling to proceed with actual campaign elements.

While we where gearing up we also had to deal quickly with the creative already in place. SyQuest was burning through $250,000 a week with full page ads in the NY Times and other regional papers with an ad designed by a committee that was barely having any impact. So in addition to completely repositioning SyQuest we had to bridge the old to the new and everything had to be live and ready to roll by the end of July.

EXECUTING THE CAMPAIGN

The final plan was approved by the SyQuest executive team on July 3, 1997. We knew we were working with a group of managers who had never confronted a competitor as talented and as aggressive as a “Kim Edward’s” led Iomega and we wanted to make sure they were primed for the fight of their life. While we had a good measure of success in communicating this to the key executives we had a more difficult time when it came to the rank and file.

The majority of the SyQuest sales and marketing staff came from traditional hard drive companies like Western Digital and Conner and they were used to competing in a different ball game. The reason we won the engagement to begin with was our ability to play a different game and to inject both a competency and a level of ag-gression missing from the SyQuest team. Many of the key marketing managers were risk averse. They were afraid to fight. A recurring conversation topic was “well we don’t want to make Iomega mad” or “we don’t want Iomega to notice us”. We politely kept reminding these managers that Iomega had already ‘noticed” SyQuest.

We weren’t popular with the line troops who would have much preferred their pre-vious world of data sheets, VAR programs and feeds and speeds. Almost immedi-ately, upon launching the campaign, the rank file began trying to tame down, di-lute, change or otherwise sidetrack the strategies and elements already agreed to.

CONSENSUS MANAGEMENT DOESN’T WORK DURING A CRISES

A major problem that we needed to deal with was the SyQuest style of manage-ment which was based upon consensus building. A key ingredient to the success of a maneuver campaign is the ability to make rapid decisions. Every time a tactical decision was required the process was to fill the room up with everyone involved and then fight it out. Which isn’t necessarily bad when you are at least on the same team and pulling in the same direction. Or people who truly understand the creative process.

Our take on creativity and advertising is that creativity is driven by the strategy. Not by a committee, award ceremonies, somebody’s wife or neighbor. But by the strat-egy. Perhaps the single most difficult task we faced at SyQuest wasn’t what you’d think. It wasn’t about strategy, positioning, or pricing. Believe it or not, the most difficult task we faced was getting an ad approved. Or a press release released. Or a logo approved. When it comes to creativity everyone has an opinion. Or their own vision of what they have in mind.



Many of the key marketing man-

agers were risk averse. They were

afraid to fight. A recurring con-

versation topic was “well we

don’t want to make Iomega

mad” or “we don’t want Iomega

to notice us”. We politely kept

reminding these managers that

Iomega had already ‘noticed”

SyQuest and had taken just

about everything they owned

and was about to dance on their

collective graves. Unless they

started to fight.

Communicating this vision is impossible for most mangers. The difference between artists and civilians is the fact that the artist is able to translate the visual images in their head to physical images that you and I can see and appreciate. Which is why we continually end up in relationship threatening conflicts where we’re character-ized as arrogant, belligerent and uncooperative because we refused to change the color of a logo to match a Revlon lipstick color chip. Which actually happened at SyQuest.

ORCHESTRATING THE MARKETING MIX

We developed an attack array consisting of print ads, radio spots, TV spots, PR, merchandising tools and trade shows organized into four”thrusts”. Two of the thrusts were dedicated to building (interaction) the “Genius” category and two thrusts were dedicated to pushing (isolation) “Stuff “down to Trash. The first thrust was designed to define and introduce the Genius category. This thrust was long term, strategic and meant to communicate the brand. The second thrust was de-signed to establish and build the Genius category. This thrust was short term, tacti-cal and designed to generate revenue. The third thrust was designed to attack and push Iomega down the emotional continuum to trash. This thrust was long term, strategic and meant to “de” brand “Stuff”. The last thrust was designed to convert potential Jaz and Zip buyers to SyQuest products. This thrust was short term, tactical and designed to generate revenue.

Collectively the four thrusts where meant to be integrated into a single voice. Some-times aggressive, sometimes nurturing and always relentless in communicating the SyQuest story. When integrated together we achieved the strategic positioning of building the category while pushing Iomega down the emotional continuum .

The first volley of creative, an attack ad, ran under the headline of “Dump Your Stuff”. This full page ad which ran in mid-August in the New York Times showed a stark black and white ad with a large stainless steel trash can and an Iomega Jazz drive falling into the can. Copy went on to explain all the benefits of SyQuest SyJet over Iomega’s Jaz.

SYQUEST - THE ZIP KILLER

The response to the ad was swift and decisive. Iomega sent a cease and desist letter to SyQuest demanding they withdraw the ad. The industry responded powerfully both to the ad and Iomega’s threat with proclamations that SyQuest is back and fighting. Pundits pounced on Iomega wondering why “big ole” powerful Iomega was afraid of SyQuest. And every pundit compared the ill-fated Jaz to the award winning SyJet which generated millions of dollars of powerful positioning. Also, the “Dump Your Stuff” ad kicked off a sharp run-up in the stock running from a little less than $2.00/share to a little more than $6.00/share over the next 90 days.

The next thrust consisted of a series of black and white newspaper ads designed to increase interaction with SyQuest’s core consumers. The creative execution was startling and combined powerful design



The first volley was launched less

than 6 weeks after beginning the

engagement and consisting of full

page ads in the NY times and Wall

Street Journal with the headline of

“Dump Your Stuff” attacking Iome-

ga’s center of gravity. By attacking

their critical vulnerability we began

shaping the marketplace to our ad-

vantage. We were pushing them

down the “Momentum Curve”

INTERACTION ISOLATION

STRATEGIC

Print ads

Comdex Trade Show

Packaging

TV Spots

Analyst meetings

Press tour

Walt Mossberg

Howard Rosencrans

Herb Greenberg

TACTICAL

Print ads

Radio spots

TV Spots

Merchandising tools

POP displays

Sales collateral

Print ads

TV Spots

Radio Spots

Playbook

Sales collateral

THE ATTACK ARRAY

with clever copy. The ads where intended to stop the reader in their tracks as they turned the pages. The ads where created by Florent Wend-ling and Doug Kor. Doug is a writer with a fascinating background that ranged from writing for Shari Lewis and Lambchop to Seinfeld. He also is an award-winning designer/writer of children’s games and had perfect pitch for the voice we needed.

Between Florent’s dramatic design and Doug’s compelling and hilarious writing, the ads were potent and completely out - of - the - box. They included imagery of pregnancy, baby triplets, and screaming women, all messages focused on different ways of expressing genius. Iomega had spent two years and $100 million dollars educating potential consumers about the removable category. The ads therefor could be targeted at an educated audience and wouldn’t require all of the feeds and speeds and dealers and award information.

So the print ads were designed with a powerful image, a compelling statement, a brief positioning statement and the logo. The logo had been designed from the beginning as a powerful propaganda element with an an equally powerful positioning statement. These ads where meant to introduce the new SyQuest brand to prospective consumers and would then be “matched” to product packaging and merchandising once the prospect was in store. So the nuance was simple... hit them over the head with a provocative message in home and then convert them in store.

RAPID CYCLE MESSAGING

All creative was developed with speed and flexibility in mind. We were able to create and produce print ads in 24 hours, radio spots in 36 hours, and TV spots in two weeks. Production techniques were limited to simple wickedly-fast executions.

The TV spots we shot were some of the first to be done using a hand-held digital video camera. The spots were meant to be rough, with a cinema verite look and feel. The concept involved Florent taking the camera on the road and shooting real people doing interesting things with SyQuest. The first ad showed people in New York, Paris and San Francisco .

The response to the campaign was immediate and overwhelming. People went to the stores and began buying. In droves. A five-fold increase in revenue within 60 days. By late September the stock is heading up, reve-nues are increasing at an increasing rate and the press had picked up the story and was casting Iomega as the villain and SyQuest as the turn-around story of the year.

The press was now describing SyQuest as the next Iomega and the launch of a new product, SparQ, scheduled for the November 3, 1997 was rumored to be a Zip-killer. SparQ took off like a rocket. Through Comdex in November and the month of December SparQ was introduced



SYQ

UEST:

PRIN

T A

DS A

ND

BIL

LBO

ARD

S P

RO

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G I

NTERACTIO

N A

ND

ISO

LATIO

N S

HAPI

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MESSAG

ES

to rave reviews and industry acceptance. Both analyst and writers alike described SparQ as the next Zip and the replacement to Zip. SparQ was 10X the size of Zip and 1/3 the cost. With compelling metrics like that it was describe by the industry as the Zip-Killer. We also began receiving an-ecdotal examples of Iomega inventories building and revenues slowing in response to retailers placing ordered for SparQ and consumers delaying the purchase of a Zip or Jaz until they could get SparQ.

Despite the spectacular turnaround, the rank and file marketing folks were not happy. A major disagreement erupted over the creative direction with the primary complaint being the rough feel of Florent’s creative. The SyQuest marketing folks preferred a safer more traditional approach to their creative. While they grudgingly supported the campaign and basked in the results, a decision was made by the marketing team to invite large agencies in to compete for the business and further the momentum cre-ated by our campaign.

Our original engagement ended with Comdex in November of 1997. At this point in mid-November right before Comdex we met with the execu-tive team to present our strategy for the next phase of SyQuest’s turn-around. Our strategy was focused on rapidly accelerating the momentum established. We knew we had a very short term window of opportunity to exploit the disruption we had created in the marketplace and with Iomega. Here are a few excerpts from the strategy:

- Aggressively position SparQ as the Zip killer. SparQ can be positioned to push Iomega down, take over Zip customers requiring a more robust solu-tion, and create a buzz among users that Zip has outlived its usefulness.

- SparQ has the ability to become the defacto industry standard replacing Zip. We have only a six month window to create the correct perception or we lose the opportunity.

- SparQ can deliver $4 billion in top line revenue over the next 18 months. The model consists of simultaneously adjusting three knobs: drive price, cartridge price, content price.....maintaining adequate gross margin to fund the business.... with a constant pressure on manufacturing to ramp at maximum level in order to satisfy demand.

On the other side of this argument was Bain Consulting who had been advising SyQuest for almost two years. Their argument was that SyQuest should not engage Iomega directly and in fact that SyQuest should slow down. Decrease advertising. Ratchet expectations down so that manufac-turing would have time to tool up in order to meet demand. There was also some interesting discussion about the word leadership and when one can claim the leadership position.

We were the voice of growth. Bain was the voice of reason.

SyQuest went with the Bain recommendations and we respectfully re-treated to the sidelines. Our engagement was complete and we didn’t feel



SYQ

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as if we could add the sort of value we like under the Bain plan so we notified SyQuest of our intentions not to continue. We stayed on in a transition role until the end of January while SyQuest reviewed and hired a new advertising agency to con-tinue executing the positioning.

RESULTS AND LESSONS LEARNED

In late January 1998 SyQuest hired Bozell Silicon Valley as advertising agency of record. Bozell is a large traditional advertising agency and we were skeptical of their ability to do anything of significance to further the positioning. Agencies like Bozell are very good at making the rank and file happy. When you’re in the middle of a revolution the last thing you want is someone supporting the status quo.

RESULTS

Shortly after retaining Bozell, full page ads began to appear consisting of a large headline saying “Size Matters” a large shot of the product, a deal on price and none of the positioning. SyQuest was back to the status quo and Bozell was doing what they do best - catering to the lowest common denominator.

In February of 1998 Iomega announced that it would report a loss for it’s quarter ending December 1998. Analysts attributed the loss to SyQuest and the acceptance of SparQ. Three weeks later Kim Edward’s was fired.

SyQuest reported record backlogs and sell-through for the first three months of 1998.



SyQuest went with the Bain rec-

ommendations and we respectfully

retreated to the sidelines. Our en-

gagement was complete and we

didn’t feel as if we could add the

sort of value we like under the Bain

plan so we notified SyQuest of our

intentions not to continue.

vSente developed a two-pronged strategy (interaction/isolation) designed to create a new category for SyQuest while simultaneously iso-lating Iomega. SyQuest created a new category for storage described as “Genius” while at the same time pushing Iomega down the emo-tional continuum to “Trash”.

Trash

GeniusSyQuest

- Shapes and occupies “genius” category

- Stock price increased from $2.00 to $6.00/share

- Sales increased form $18 million to $56 million per quarter.

- Anointed new industry leader

ISOLATION | TIME

INTE

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ON

| E

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ATTA

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T

StuffBoth SyQuest and Iomega started atthe “stuff” location on continuum. Syquest was “pulled” up to the new genius category... Iomega was “pushed down to trash.

Iomega

- Pushed down to “trash” - lost signifi cant share,

- saw a sharp decline margins,

- defections of Iomega staff to SyQuest,

- termination of Iomega’s CEO

SUMMARY OF SYQUEST CAMPAIGN

For the second quarter of calendar year 1998 sales of SparQ stalled.

For the third quarter of calendar year 1998 sales actually dropped for SparQ and SyQuest announced a massive layoff.

In the last quarter of 1998 SyQuest ceased operations and filed for bankruptcy pro-tection.

And in the first quarter of 1999 SyQuest announced a deal to sell certain assets to Iomega.

WHY MANEUVER MARKETING GENERATED A FIVE-FOLD INCREASE IN REVENUE IN 60 DAYS.

There are three primary reasons why maneuver marketing was able to generate these results. They are:

1. By understanding and utilizing both interaction and isolation forces we were able to disrupt Iomega’s momentum and transfer this energy to SyQuest.

2. By utilizing rapid-cycle messaging we were able to quickly and cost-effectively create print ads, radio and TV spots that exploited Iomega’s vulnerabilities.

3. The attack engine formation allowed us to quickly and effectively make cam-paigning decisions in real time based upon actionable intelligence.

LESSONS LEARNED

In retrospect could SyQuest of won this battle? Yes. Why didn’t they? Traditional doctrine won out. Both the executive team and the marketing group developed a false sense of security after the initial success of the campaign. Rather than pulling back and slowing down efforts in November of 1997 they should of increased their operating tempo. Had they, both revenue and market capitalization would of con-tinued to increase.

Bottom line is you need a zealot to lead a revolution. And a group of rabid followers following.



ABOUT VSENTE

VSENTE is a marketing campaigning consultancy with offices in San Francisco and London. They execute campaigns for a global clientele via FIRSTmaneuver - a pro-prietary campaiging methodology. The name VSENTE is inspired by the ancient Asian game of Go. The objective of Go is to control more territory than your adver-sary. You continually trade profit for influence and engage in strategic and tactical struggles to control territory. The player with sente is the player with momentum. Having sente means you've seized the offensive.

Who is VSENTE? VSENTE was founded by Mike Smock an internationally recognized marketing expert. Immediately prior to vSente, he was the Executive Vice President Sales and Marketing for CRM vendor Moss Software (recently sold to E.piphany) and Chief Revenue Officer for outdoor apparel maker Gramicci. In his early career Smock held senior sales and marketing positions with AFG Industries later sold to Asahi Glass and Allied Tube and Conduit now part of Tyco. He was the Cofounder of Dynaquest Corporation an artificial intelligence pioneer, and led the successful leveraged buyout of AP&E from Johnson Controls.

British marketing expert David Burdon spearheads vSente's European operations. Burdon, 46, with 25 years experience working with European multinationals has established a London bridgehead to support growing demand from vSente's Euro-pean clients. His experience includes: Cosmosair Plc - Sales and Marketing Director, Opus Trust Venture Capital Fund - Divisional Manager, Lansdowne Venture Group - Managing Director Designate, Planit On Line - Managing Director, Thames Gateway Kent Partnership - Chief Executive, Stena Line UK - Chairman UK Marketing Group, Hi-Tec Sports Scandinavia - Managing Director, Carlsberg Brewery Ltd. - Marketing Director

What kind of experience do you have? More than 500 campaigns in 38 different industries as diverse as pipe fabrication, enterprise software and retail merchandis-ing. For clients ranging from the Fortune 500 to VC backed startups and small pri-vately held businesses. And for campaigns ranging in size from a one-week, $1,000 key account initiative to a nine-month $17 million product launch. Clients have in-cluded GTE, Marshall Industries, IBM, Phillips, Texas Instruments, Jacobs Engineer-ing, Weider Nutrition, Luxul Broadband, SyQuest Corporation, Christensen Boyles Corporation, Lockwood Greene and many small, privately held enterprises.

What differentiates you? Campaigning. We’re campaigners. We battle for market share. We launch products, defend share, attack competition and reposition weak offerings.We campaign via a proprietary, battle proven methodology

CONTACT INFORMATION. Our general e-mail address is [email protected]. Phone is 415.457.8449. David can be reached at +44 (0) 123 366 3199 in the UK.

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Copyright 1987/2005 Michael K. Smock. All Rights Reserved.

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