Focus on Product: Anti-marketing advice from HBO’s The Wire
Every business must answer two questions: why should I buy the product or service, and why should I buy it from you, specifically.
The heroin business is one in which no one needs to explain why a customer should buy the product. The demand in Baltimore is extremely strong as the fiends are addicted.
However, as The Wire demonstrates, the dealers must convince potential customers why they should buy from them.
The two principal drug retailers, each headquartered on opposite sides of the city, use a variety of marketing tactics to attract customers.
In the early seasons of The Wire, we see a variety of names used by the street dealers to push heroin, e.g, “Yellow Tops”, “WDM”, etc. In season one, DeAngelo turns in his weekly earnings to Stringer and comments that although sales were strong, the current product is weak. He has heard rumors a new product will arrive soon that is of higher quality, and he looks forward to selling the improved product.
Stringer, played impeccably by Idris Elba, tells D that there isn’t any new product coming out. He explains that they repackage the same weak heroin, spike it with caffeine or another cheap substance, and simply change the name. The fiends, unable to get their much needed high, are forced to buy more, thereby increasing profits.
Now please bear in mind, this only works because of a geographic parity in shitty heroin. That is, all the Baltimore dealers are dealing heroin of similar poor quality. As such, the customers were loyal to their dealers. Profits were steady but boring.
Then the industry is disrupted by an increase in quality with no additional cost.
Using the chemicals stolen off the docks by the Sobotkas, the Greek is able to produce a far higher quality heroin in Baltimore. Prop Joe, the principal east-side dealer, has an exclusive relationship with the Greek. This completely fucks the Barksdale organization. They are stuck with their shitty heroin while the boys across town have great stuff.
As you can imagine, the west-side customers migrate to the east-side to enjoy the superior product. Stringer responds as he has always done. He changes the product name. No effect.
Next he changes the product container. The new capsule works for a short while but the fiends soon realize that the product has not improved. They continue to buy on the east-side.
Finally, Stringer gives in and negotiates a partnership with Proposition Joe (the head of the east-side organization). In return for allowing Prop Joe access to his distribution channels (e.g., allowing east-side dealers access to corners and high rises in west-side territory) he gains access to the superior product. While Stringer’s piece of the pie becomes smaller, the pie itself grows a fuck ton and they make more money than they ever had previously.
While Stringer’s illicit pharmaceutical partnership is a financial success, Stringer fails to practice effective change management. His innovation — trading exclusive customer access for a superior product — is an anathema to the traditional business culture practiced by the organization’s CEO, Avon Barksdale.
For Barksdale, maintaining exclusive geographic territory is the principal manifestation of his core value: respect. As Barksdale explains to Stringer, he would rather go out of business than give up the territory he worked so hard to obtain. Unlike many organizations, Barksdale actually lives his core values. His eventual arrest and lengthy incarceration are the result of insistence that respect precede financial concerns in every situation.
Lesson: in industries with strong customer demand, the product is key. Marketing may provide short term results if there is parity in product quality, but one should allocate maximum resources to making the product kick ass. This may mean that you outsource or partner and do not develop your product in-house. Just be mindful of your organization’s core values: the current practices may be important than money in your boss’s eyes (but then again, probably not).