Change is occurring at an accelerating rate; today is not like yesterday, and tomorrow will be different from today. Continuing today’s strategy is risky; so is turning to a new strategy. Therefore, tomorrow’s successful companies will have to heed three certainties:
- Global forces will continue to affect everyone’s business and personal life.
- Technology will continue to advance and amaze us.
- There will be a continuing push toward deregulation of the economic sector.
These three developments—globalization, technological advances, and deregulation—spell endless opportunities. But what is marketing and what does it have to do with these issues?
Marketing deals with identifying and meeting human and social needs. One of the shortest definitions of marketing is “meeting needs profitably.” Whether the marketer is Procter & Gamble, which notices that people feel overweight and want tasty but less fatty food and invents Olestra; or CarMax, which notes that people want more certainty when they buy a used automobile and invents a new system for selling used cars; or IKEA, which notices that people want good furniture at a substantially lower price and creates knock-down furniture—all illustrate a drive to turn a private or social need into a profitable business opportunity through marketing.
A recent book, Radical Marketing, praises companies such as Harley-Davidson for succeeding by breaking all of the rules of marketing. Instead of commissioning expensive marketing research, spending huge sums on advertising, and operating large marketing departments, these companies stretch their limited resources, live close to their customers, and create more satisfying solutions to customers’ needs. They form buyers clubs, use creative public relations, and focus on delivering quality products to win long-term customer loyalty. It seems that not all marketing must follow the P&G model.
Ten Rules of Radical Marketing
- The CEO must own the marketing function Radical marketing requires that the top individual in the organization be intimately involved in the marketing function, and in fact, drive the marketing approach of the organization. This ensures that everyone in the organization has a strong focus on the interaction with the market, because the CEO demands and expects it.
- Make sure the marketing department starts small and flat and stays small and flat The key point here is that the marketing function must not get so large that it starts to become bloated with bureaucracy and protocol, but rather is small and flexible enough to respond to new trends to stay in touch with the market, and to try out ‘outrageous’ new approaches.
- Get out of the office and face-to-face with the people that matter most the customers Hardly a radical idea, but surely a sensible one.
- Use market research cautiously Related, this point relates to the propensity for CEOs to ‘go with their gut’ on key marketing decisions, rather then rely upon focus groups or in-depth market surveys. Because of their close connection to their customers, such marketing decisions often turn out to be right.
- Hire only passionate missionaries Radical companies hire what the authors call ‘passionate missionaries’ for senior positions. These are individuals who believe in the product and the customer base as strongly as does the CEO.
- Love and respect your customers Unlike ‘mainstream’ companies, senior people in radical marketing companies do not see their customers only as target market segments, defined by demographic or psychographic characteristics. Rather, they think of their customers as being like themselves, passionate and proud to be associated with the product. In this sense, the authors describe the senior managements of ‘radical’ companies as ‘loving and respecting’ their customers.
- Create a community of customers One very striking aspect of certain of the radical marketing companies discussed in the book is their ability to create an extremely dedicated and loyal community of customers, who will even go to the extent of having their bodies tattooed with the brand they identify with (e.g. Harley-Davidson, the Grateful Dead).
- Rethink the marketing mix “Radical marketers market continuously and devote huge amounts of money, effort and time to communicating with their customers. However, they seldom have huge advertising budgets. In fact, some, like Providian, don’t even have marketing budgets, reasoning that such budgets act as “entitlements” and encourage spending when none is needed or, conversely, as ceilings, discouraging marketers from spending more when they see an opportunity… When radical marketers use advertising, they tend to do so in short, sharp bursts, what we have called “surgical strike advertising”…. Radical marketers tend to use more one-to-one or targeted communications tools, ranging from direct mail to Web pages to local advertising to sponsoring neighborhood basketball tournaments.
- Celebrate uncommon sense Radical marketers break the rules. For example, rather than try to maximize distribution of product to place as much as possible in the market, they may tend to limit availability to create pent-up demand, and thus foster loyalty and commitment among their distributors.
- Be true to the brand “Radical marketers are obsessive about brand integrity, and they are fixated on quality.”
In fact, we can distinguish three stages through which marketing practice might pass:
1. Entrepreneurial marketing:
Most companies are started by individuals who visualize an opportunity and knock on every door to gain attention. Jim Koch, founder of Boston Beer Company, whose Samuel Adams beer has become a top-selling “craft” beer, started out in 1984 carrying bottles of Samuel Adams from bar to bar to persuade bartenders to carry it. For 10 years, he sold his beer through direct selling and grassroots public relations. Today his business pulls in nearly $200 million, making it the leader in the U.S. craft beer market.2
2. Formulated marketing:
As small companies achieve success, they inevitably move toward more formulated marketing. Boston Beer recently began a $15 million television advertising campaign. The company now employs more that 175 salespeople and has a marketing department that carries on market research, adopting some of the tools used in professionally run marketing companies.
3. Intrepreneurial marketing:
Many large companies get stuck in formulated marketing, poring over the latest ratings, scanning research reports, trying to fine-tune dealer relations and advertising messages. These companies lack the creativity and passion of the guerrilla marketers in the entrepreneurial stage.3 Their brand and product managers need to start living with their customers and visualizing new ways to add value to their customers’ lives.
The bottom line is that effective marketing can take many forms. Although it is easier to learn the formulated side (which will occupy most of our attention in this book), we will also see how creativity and passion can be used by today’s and tomorrow’s marketing managers.
- Marketing Management, Millenium Edition by Philip Kotler. Custom Edition for University of Phoenix