MARKETING STRATEGY

Marketing Strategy

Marketing Strategy

Introduction

More than 40 years ago, Theodore Levitt (1960) said that the purpose of business is to make and keep customers. It might seem that his admonition is just plain common sense, not some cutting-edge revelation. On the other hand, the growing competitiveness in all industries has led many firms to believe that the purpose of business is making money. The focus on profits, ROI (return on investment), growth in sales and number of units, mergers, buyouts, stock prices, and sophisticated business school jargon has drawn attention away from the real purpose of business: to make and keep customers. No one is suggesting that profit is not important. It is critical. Without profit—and cash flow—a business “ain't no more.” Think of the following analogy: If you claim that the purpose of business is making money, you might just as well say that the purpose of life is eating. Eating is a requisite for, not a purpose of life. The same is true of profits. In other words, profits follow people.

Giving Levitt's perspective a marketing definition, marketing is a process by which we make and keep guests at a profit. This view confirms the marketing philosophy begun by the General Electric Company that became known as “the Marketing Concept.” The Marketing Concept views the consumer as the focal point of all marketing activities. In his classic article “Marketing Myopia”, Levitt (1960) reinforced this belief. Before this re-orientation was introduced, marketing focused on what the company could produce, promote, and sell, and it was called “the Selling Concept.” Folklore of the day maintained that Henry Ford reflected this philosophy with his claim that you could have any color of Ford, as long as it was black. This basic switch in how marketing was viewed reshaped the field of marketing to focus on the “customer is king” philosophy. From this reorientation came such concepts as the practice of segmentation, target or niche marketing, competitive advantage, product differentiation, positioning or brand building, and consumer research.

Although many people may be influenced to try a brand for the first time through the media, loyal customers are made one at a time. This appears to be a mind-boggling task. Think about a hotel that checks in 800 guests a day, a brokerage firm that serves 2000 people daily, or the hundreds of thousands who walk through the gates at Disney World every day. The managers of these operations, and thousands more like them, must have knowledge, understanding, and managerial skills to establish a standard operating performance—notice this didn't say procedure—for customer satisfaction. The consumer who first walks through the door can be turned into a loyal customer only through well selected, well-trained, and highly motivated employees. Thus, in reality, it is impossible to separate marketing from operations/line management. They are two sides of the same coin. Every employee is both a salesperson and a goodwill ambassador for your business. In fact, to your customer, he or she is your ...