MARKETING

 

THE MARKETING CONCEPT

 

WHAT IS IT?

 HOW SHOULD IT BE DONE?

 

MARKETING today is at best organized, systematic selling in which the major jobs -- from sales forecasting to warehousing and advertising -- are brought together and co-ordinate. This is all to the good, but the starting point is wrong. The purpose of a business is to create a customer.

 

1. Only by asking the Customer, by watching them, by trying to understand their behavior, can we find out who the customer is, what they do, how they buy, how they use what they buy, what they expect, what they value, etc. This FORMULA has never Failed! Example: "And what do you look for? Maybe this product has it."

 

2. The customer rarely buys what the business thinks it sells them. Nobody pays for a product. What is paid for is satisfaction. But nobody can make or supply satisfactions as such -- at best, only the means to attaining them can be sold and delivered. What you make and sell is the vehicle for customer satisfaction, not customer satisfaction itself!

 

3. Because the customer buys satisfaction, all goods and services compete intensively with goods and services that look quite different; seem to serve entirely different functions, are made, distributed, sold differently; but are alternative means for the customer to obtain the same satisfaction. The Cadillac competes for the customer's money with mink coats, jewelry, vacations. This is an example that is one of the few we understand.

 

4. The customer's only Question is -- and should be: What does this do for me? The producer or supplier thinks the most important feature of a product to be what they mean when they speak of its -- quality may well be relativity unimportant to the customer. It may be what is hard, difficult, and expensive to make: but the customer is not moved in the least by the manufacturer's troubles.

 

5. The customers have to be assumed to be rational. But their rationality is not necessarily that of the manufacturer or supplier -- or should it be. It is the manufacturers or suppliers job to find out why the customer behaves in what seems to be an irrational manner. It is their job to adapt themselves to the customers rationality or to try to change it! But they must first UNDERSTAND and RESPECT it!

 

6. There is no social security in the market. The market is a harsh employer who will dismiss even the most faithful servant without a penny of severance pay. For the businesswoman/man this is hard to swallow. What one does and produces is inevitably important to oneself. The businesswoman must see her company and its product as the center; The customer does not see them at all.

 

7. All the statements imply that we know who the customer is. However, a marketing analysis has to be based on the assumption that a business normally does not know but needs to find out. Not "Who Pays" but "Who Determines the Buy Decision" is THE CUSTOMER. The minimum number of customers with decisive impact on the buying decision is always two: the ultimate buyer and the distributive channel. Each class of customer has different needs, wants, habits, etc. Yet, has to be sufficiently satisfied not to veto a purchase!

 

8. A great many businesses do not sell to any one person or industry. There are two large and important groups of industries in which it is difficult and sometimes impossible to identify the customer: the materials industries and end-use supply (or equipment makers). But to say that everyone is a customer is to say that no one is an identifiable customer. The answer is not that these businesses cannot be subjected to marketing analysis, but rather, markets or end-users, instead of customers, are the starting point for this analysis in these industries.

 

The view from outside has three dimensions rather than one. It asked not only "who buys" but Where is it  bought?" and "What is it being bought for?" THUS, every business can be DEFINED as Serving either Customers, Markets,, or End-Users. Which of the three, however, is the appropriate dimension for a given business cannot be answered without study. Every marketing analysis on a business THEREFORE should work through all three dimension to find one that fits best.

 

 How To See The Unexpected

Now the emphasis might be on different questions that are rarely asked.

 But they are the questions that force us to see the unexpected.

 

1. Who is the non-customer, the person who does not buy our products even though they are (or might be) in the market? And can we find out why they are a non-customer?

 

2. Equally important may be the question: What does the customer buy altogether? What do they do with their money and with their time?

This leads to two questions that are not asked in the ordinary market survey or customer study:

 

3. What do customers -- and non-customers -- buy from others? And what value do these purchases have for them? What satisfactions do they give? Do they actually or potentially compete with the satisfactions our products or services are offering? Or do they give satisfactions to our products or services -- or those we could render -- could provide too, perhaps even better?

What this question might unearth are the value preferences of the market. How important in their life is the satisfaction the customer obtains from us? Is the importance likely to grow or to diminish? And in what areas of satisfaction do they have new or inadequately satisfied wants.

 

4. This is , of course, very close to THE CRUCIAL QUESTION: What product or service would fulfill the satisfaction areas of real importance for both those we now serve and those we might serve?

 

Four Additional Areas Still Demand Investigation

Whenever a manufacture tries to impose what they consider rational, on an apparent irrationality, which turns out to be in the best interest of the customer, they are likely to lose the customer. At least, the customer will resent their attempt as a gross abuse of economic power - which it is. For behavior, that is contrary to the customer's own best interests, the manufacture in the end pays a heavy price.

 

1. What would enable the customer to do without our product or service? What would force then to do without? On what in the customer's world -- economy, business, market -- do we, in other words, depend? Is it economies? Is it such trends as the constant shifts from good into services, and from low price into high convenience in an affluent society? What is the outlook? And are we geared to take advantage of the factors favorable to us?

 

2. What are the meaningful aggregates in the customer's mind and in their economy? What makes them aggregates?

"Aggregates", to use the terms of the psychologist, are "configurations". Their reality is in the eye of the beholder. They depend not on definition but on PERCEPTION. The perceptions, and with them the aggregates of the manufacture and of the customer, must be different; for they have different experiences and look for different things. Yet it is the CUSTOMER'S perception of aggregates that matters, that DECIDES; WHAT they buy, When they buy, and Whether they buy.

 

3. WHO are our non-competitors -- and WHY? The question: WHO is our non-competitor logically leads to the next question.

 

4. WHOSE non-competitor are WE? Where are there opportunities we neither see nor exploit -- because we do not consider them part of our industry at all? Finally, one should ask the question? What in the customer's behavior appears to me totally irrational? And what, therefore, is it in their reality I fail to see?

 

Attempting to understand seemingly irrational customer behavior forces the manufacture to adopt the marketing view rather than talk about it. Moreover, it forces the manufacture to take action according to the logic of the market rather than according to the logic of the supplier. YOU must adapt yourself to the customer's behavior if you cannot turn it to your advantage. Or you have to embark on the more difficult job of changing the customer's habits and vision.

 

Whenever a manufacture tries to impose what they consider rational, on an apparent irrationally, which turns out to be in the best interest of the customer, they are likely to lose the customer. At least, the customer will resent their attempt as a gross abuse of economic power -- which it is. For behavior, that is customary to the customer's own best interests, the manufacture in the end pays a heavy price.

 

EXAMPLES

As the examples show, forcing oneself to respect what looks like irrationally on the customer's part, forcing oneself to find the realities of the customer's situation that make it rational behavior, may well be the most effective approach to seeing one's entire business from the point of view market and customer. It is usually the quickest way to get outside one's own business and into MARKET-FOCUSED ACTION.

Marketing analysis is a god deal more than ordinary market research or customer research. It first tries to look at the ENTIRE business. And secondly, it tries to look not at our customer, our market, our product, but at THE Market, THE Customer, THEIR Purchases, THEIR Satisfactions, THEIR Values, THEIR Buying and Spending patterns, THEIR Rationally.

 

MARKETING OBJECTIVES

Because of the importance of marketing in any commercial setting, a comprehensive marketing plan should bge developed for the company as a whole, as well as for individual products and services. The following overall approach has been proposed by management

Holistic/Synergy

A. To identify, qualify, and establish contact with the markets that offer optimal growth and profit potential;

B. To inform the potential markets that the company is a source for the products and services;

C. To establish a viable sales dialogue with decision makers in the primary market segment;

"Viable Sales Dialogue" is information gathering.

 Any and all methods to collect data must be in force at All times.

D. To locate potential customers and turn over to the sales department

 to convey the reputation of YOU, INC.

E. To establish the company as a highly regarded center for: ?

 

Promo, Hype and advertisement should be a primary function of the marketing department.

 But the sales force uses it as a tool not as a limp attempt to make unrealistic claims.