Sunday, May 20, 2007

An elementary rule of business that is violated wholesale

Mass production... generate[s] great pressure to "move" the product. But what usually gets emphasized is selling, not marketing. Marketing, being a more sophisticated and complex process, gets ignored.

The difference between marketing and selling is more than semantic. Selling focuses on the needs of the seller, marketing on the needs of the buyer. Selling is preoccupation with the seller's need to convert his product into cash, marketing with the idea of satisfying the needs of the customer by means of the product and the whole cluster of things associated with creating, delivering, and finally consuming it.

This may sound like an elementary rule of business, but that does not keep it from being violated wholesale.
Theodore Levitt, Marketing Myopia Harvard Business Review, 38 (July-August 1960),
The goal of... [marketing] is to create a space inside the customer's head called "best buy for this type of situation" and to attain sole, undisputed occupancy of that space.

First, let us understand that... [the reason business people don't do this] is a failure of will, not of understanding. That is, it is not that these leaders need to learn about niche marketing. MBA marketing curricula of the past 25 years have been adamant about the need to segment markets and the advantages gained thereby. No one, therefore, can or does plead ignorance. Instead, the claim is made that, although niche strategy is generally best, we do not have time—or we cannot afford—to implement it now. This is a ruse, of course, the true answer being much simpler: We do not have, nor are we willing to adopt, any discipline that would ever require us to stop pursuing any sale at any time for any reason. We are, in other words, not a market-driven company; we are a sales-driven company.
Geoffrey A. Moore, Crossing the Chasm: Marketing and Selling High-Tech Products to Mainstream Customers, (New York: HarperBusiness, 1991)

1 comment:

Anonymous said...

Ford's policy notwithstanding, for most of the 20th century the primary driver for the large, capital-intense manufacturing industries like paper, chemicals, steel, even textiles, was finance--discounted cash flows, ROI, absorption of fixed costs, minimize variable, etc. They were barely selling, much less marketing, but they sure as heck knew that all those assets needed to be producing, and all that product needed to be "moved". I met Ted Levitt on several occasions, and admired his thinking and his work, but he was much more attuned to Madison Avenue than the noisy, messy, capital-gobbling mills out in the hinterlands. Today, of course, what largely remains is an urgent requirement for marketing stuff being "moved" from everywhere.

Bob Thompson
Rock Hill