The Hindu Business Line : The mystique of marketing

THE work that marketing personnel do has been variously described as an art, a science, a profession, an instrument of mass persuasion, and so on. The term marketing is sometimes used in a pejorative connotation — particularly by the media — and marketing people portrayed as persons whose credibility is in doubt. To understand the nature and status of marketing, it is necessary to examine its origin.

The US can justly claim to be the cradle of marketing. In the 19th Century, as transportation gradually improved, travelling salesmen went all over the country laden with every known cure, stimulant, medicine, and therapeutic material. It all started with the pharmaceutical business. Perhaps many of these early medical salesmen may have been quacks elling snake oil, but their contribution to the evolution of marketing is beyond question.

In the early years of the 20th Century, American business developed an array of techniques — discounts, free samples, catalogues, and advertising — all in support of the solitary salesman on the road. In 1931, Procter and Gamble introduced a new creature into the management arena — the brand manager. By 1967, at least 80 per cent of large manufacturers of consumer goods in the US employed brand managers.

In due course, this American model took root in European companies as well. These men were aggressive and self-confident about their ability to influence customers and make them eat out of their hands. Yet, this confidence was short-lived and misplaced. They had underestimated the growing power of consumerism. Marketing became an easy target and came in for for criticism.

In 1962, the then US President, John F. Kennedy, delivered a special message about safeguarding consumer rights. Ralph Nader, Rachel Carson, and a host of others followed in quick succession.

It was not until the 1990s, however, that governments and corporate boards took the consumer issue earnestly, and brought it into their agenda of action. Some companies even removed the word marketing from the job description, and replaced it with customer. "Customer Relations Manager" became a popular title in the organisation chart. Rechristening marketing as customer relations, it was thought, would take away the sting and stigma of the portfolio.

Many senior executives talk the marketing gospel, but almost never walk it. Seldom does practice follow precept, and rhetoric does not always reflect reality. Failure to satisfy customers, and anticipate customer needs before the competitors get at them, are events of everyday occurrence in the marketing department.

There are some issues which can help take the company forward on the road to commercial success. Quality is one such issue. Quality was initially defined and understood as conformity to specification. However, sometimes, specifications may not exactly match a particular customer need.

Hence, the operational definition of quality was modified as meeting the customer's expectations. In other words, quality is giving the customer what he wants, at a price he is pleased to pay, and at a cost which can be pegged and contained. The price customers are prepared to pay for a product depends on their perception of its value. Most customers have a clear value-map. A product is considered to be of better value than another if more people choose it from two similar products that carry the same price tag.

Customer satisfaction and customer loyalty have a seductive logic. The more satisfaction a customer obtains from a transaction involving a product, the longer will be his loyalty for that product and brand. Since the customer seeks and is steadfast to that product, it is also, keen to perpetuate that relationship, and walk that extra mile to please the customer. The company treats that customer even better than before. It is a virtuous circle. Theodore Levitt wrote: "Industry is a customer satisfying process, not a goods producing process."

Another business obsession is the need for innovation. When there is stagnation in the economy; when the customers do not pick up what is produced, marketing managers yearn for innovation. Apparently helpless and hapless, they look up to the magic and logic of change. Changes in the demand patterns of the consumer, often induced, translate into products of innovation.

Another aspect deserves consideration in this context. The phenomenon of psychological obsolescence occurs in the minds of some people. Though they already possess perfectly usable goods such as cookers, cars, clothes, TVs and so on, waiting for these goods to wear out does not appeal to them.

Fancy and fashion spur the lifestyle of such fickle and fastidious consumers. If quality retains a certain kind of consumer, innovation attracts a different kind. This is the mystique of marketing.

Innovation comes in two different forms. One method is to make the new product totally different, where the change is real and radical.

Another approach is to make incremental improvements and bring forth a marginally different product, which may be just a line extension hiding behind an existing brand, neither new nor old, but a hybrid variant.

The second option may not seem heroic; it may even be castigated as a cannibalistic change — selling old wine in a new bottle — nevertheless, it may still more than meet the purpose of innovation, which is to win over some customers, particularly the conservative group who are comfortable with convention.

Bennett and Cooper deliver this message in eloquent terms; "We spend billions more convincing the customer that the product is new and improved, rather than spending the money in the lab to develop a significantly superior product... We have become a society of tinkerers and cosmeticians."

Radical or peripheral, it is necessary to research the mindset of the consumer, trace and track down the factors that drive him to decide his product option and adoption. People who dislike garlic may still buy it as a health supplement. People who like potato may not buy it because of its calorie and carbohydrate content. In both the cases, the buying behaviour is based on the customer preference and predilection, created by contextual circumstances.

In a computer industry dominated by a colossus such as IBM, consumer habits were initially bent, but eventually broken, step by step, by Microsoft with innovations such as Windows and Word. Mr Bill Gates was, perhaps, aware that in the market place it is not merely technological superiority, but product popularity that determines customer priority.

Winning in the innovation game is a matter of understanding this theorem. This is another mantra of marketing.

Microsoft's Technical Manager, Jeff Lill, admits: "A competitor comes in and does something interesting: Then, we come in and basically clone it; do it marginally better and throw some marketing clout behind it; then, relentlessly make it better over the years. That is our strategy. And it has worked damn well."

Businesses have come to realise that their premium advantage is based on knowledge, intellectual capital, and soft assets such as customer relations.

The time has come to shake up the marketing function. Customer and competitive strategies have become too important to be addressed anymore by a single department. Marketing has become too complex an activity, and requires the focus of the whole corporate. This is the magic of marketing.