The Hindu Business Line : Marketing in the new millennium

Until recent times, the marketing function in most companies had been confined to the efforts geared towards selling and distribution. The difference between “selling” and “marketing” is not subtle, but substantial. According to Ted Levitt, selling is concerned with the needs of the producer, while marketing is concerned with the needs of the customer.

Few Indian companies have applied marketing strategies assiduously prior to the last decade of the last century. The main reason for this was the earlier national policy, namely, a protected commercial environment, consequent tariff barriers, and an insatiable urge for nationalisation masquerading as economic patriotism. Since the nineties of the last century, however, there has been a transition. The new trend is likely to intensify as the millennium marches ahead, and there are already clear portents that a marketing metamorphosis is just around the corner.

The economy is witnessing a radical change in the purchasing posture and demands of the customer. Companies are re-examining their assumptions about how to define and deliver value to their clientele. The Internet and other forms of electronic commerce are here to stay; and their impact on the relationship between the buyer and the seller is likely to further accentuate and accelerate the process of transformation.

Companies are migrating from the tangible to the intangible. The focus is shifting from physical resources such as capital, technology, and manpower to intellectual resources such as ideas, concepts, and paradigms. Creating awareness of, and sensitivity to, the needs of the customer has become sine qua non for success in business. Customer delight, as the Japanese say, has become the core and critical issue in marketing.

Marketing imperatives

Customer loyalty is the current marketing imperative. Success in business stems from a real commitment to providing customers with value for their money. This is possible only by delivering excellent goods and services through a quality-governed organisation. Quality has to become an obsession with every employee. More customer defections take place due to an attitude of indifference on the part of the front-line employees, than on account of product deficiency or competitor action.

Value addition is another important input – new and necessary – for winning in this game. Peter Drucker writes: “Profit can only be created by providing something that a customer accepts as value, and is willing to pay for as such. What the customer sees, thinks, believes, and wants at any given time determines whether value is being created.” In other words, no company will be able to stay in business beyond the moment it ceases to create value for its customers.

Like value addition, the measurement of efficiency is another core component in marketing management. It can be broken down into two indices: Customer Satisfaction Index, and Customer Behaviour Index. The first index is normally assessed by a survey of existing customers through the medium of questionnaire, personal interview, and so on.

The second index should not be confused with the first index which deals with the thoughts of the customer. The second index deals with the actions and reactions of the customer. Behaviour should be measured independent of cognitive issues. Repeat purchasing is a behaviour pattern that needs further analysis in order to reinforce and strengthen the motives driving that phenomenon. So also, all cancelled contracts will require investigation to ascertain the reasons for cancellation, so that the causes may be adequately addressed and redressed.

Measuring effectiveness

Unfortunately, some marketing managers are apathetic to the concept of measurement as a tool for improving their effectiveness. In their view, marketing deals with the abstract and psychogenic instincts of people, and hence, will not render itself to any means of measurement.

In this context, the statement made by Robert McNamara sets the seal on the subject once and for all. “The first step is to measure whatever can be easily measured. That is okay as far as it goes. The second step is to disregard that which cannot easily be measured, or to give it an arbitrary quantitative value. This is artificial and misleading. The third step is to presume that what cannot be measured easily is not important. This is blindness. The fourth step is to say that what cannot easily be measured really does not exist. This is suicide.”

When everything is said and done, what cannot be measured cannot be managed; and what cannot be managed, cannot be improved. The measurement of marketing efficiency with reference to customer satisfaction and customer loyalty will form the bedrock on which the marketing metamorphosis will be built step by step.

(The writer is a Chennai-based management consultant.)