Positioning: The Essence of Marketing Strategy

Marian Chapman Moore and Richard L. Helstein

Positioning Statement
indicates how you want customers to think about your product/service/brand relative to competitors
A cold-hearted, no-nonsense statement of how you are perceived in the minds of your prospects. (Harry Beckwith)
expresses how you wish to be perceived
the core message you want to deliver in every medium
guides the development of marketing communications to reach the target customers
a statement of strategy
Elements of a Positioning Statement
Among [target market], [x] is the brand of [frame of reference], that [point of difference] because [reason to believe].
E.g. Among snackers, Snickers is the brand of candy bar that satisfies your hunger because it is packed with peanuts.
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(1) Target Market

o The target market decision should be made prior to developing a positioning statement
o E.g. Possible target market for snickers: Snackers? Busy people? Hungry people? 5 to 103-years-olds?
(2) Frame of Reference
o Reflects how you define the market in which your product competes
o Often expressed as a product category/customer need
o Frame your product in terms of what it is not and invoke the frame of the larger category
o E.g. Diet Coke is presented as an alternative to coffee
(3) Point of difference
o Your product must be different from competitors on one or more dimensions that are meaningful to customers in
your target market
o Specify the single most compelling and persuasive reason your target customer would purchase your product
over any other product
o Should be unique to your product
o Your promise to customers
o The essence of your value proposition
o E.g. The point of difference from Snickers is its ability to satisfy ones hunger
(4) Reason to believe
o Customers have to believe that your brand can deliver the point of difference
o The products functional, economic, and/or emotional attribute must be credible to assure customers that the
brand will deliver on its promise
o Inherent in the product or your company that customers associate with your ability to deliver the promised point
of difference
o E.g. Why is Snicker bar able to satisfy you? Because it is packed with peanuts.

Complications
What if you have more than one target?
o (1) You might want a different positioning statement for each target market

The various statements must not clash with each other

o (2) You could have one positioning statement that would work for all targets

E.g. Snickers satisfies

What if it is a combination of attributes that makes up your point of difference?
o You may need a more complex positioning statement and marketing communications to match

E.g. Michelin positions its LTX 1/T2 tires to light truck owners with the tag line Off-Road Traction, On-Road
Comfort.
What if there are multiple decision-makers?
Vetting the Positioning Statement
Six Criteria that are useful for vetting your positioning choice:
o Relevance Do consumers care?
o Clarity Will consumers get it?
o Credibility Will consumers believe it?
o Uniqueness From our consumers viewpoint, does it set us apart from our competitors in a meaningful way?
o Attainability Can we deliver? Are our claims consistent with our performance?
o Sustainability Can the position be maintained over time?
Final Comments
Good positioning statements come from good analysis of the company, the competitors, and customers.

Perceptual Maps
provides a structured, systematic comparison of alternatives when there are multiple competitors and multiple relevant
dimensions of comparison
a two-dimensional graphic that shows the relative location products or brands occupy in the minds of consumers
Three ways to gather data to generate a perceptual map
(1) Attribute Ratings
o a statistical technique called multiple-discriminant analysis (or factor analysis) is used to find the optimal weighted
combination of attributes that best discriminates among the set of brands that are rated
o The success of this methods depends on the researchers articulating the most meaningful dimensions to have
consumers rate-and on consumers ability to think of brands in the terms the researcher has chosen
(2) Attribute Associations
o an attribute-based technique used to ask consumers which brands are associated with each attribute (or vice
versa)
o Correspondence analysis is used to analyze the data, which in this case is a brand-by-attribute matrix
o The result is called a correspondence map and shows both brands and attributes
o The farther the brand is from the origin of the map, the more different it is from the average brand
(3) Similarity Judgments
o consumers may be asked to judge the similarity of brands
o consumers are asked to make a holistic judgment of similarity, in contrast to an attribute-rankings approach that
considers one attribute at a time.
o The closer the brands, the more similar they are
o The ideal point is at the center of the circles

Circles represent segments of customers with similar ideal products

The bullets define each brands relative place in the space

Using Perceptual Maps
Perceptual maps are used many ways in marketing:
o to understand the competitive landscape (market structure)
o to identify segmentation or targeting opportunities
o to understand how segments of consumers differ
o to identify new product opportunities
o to reveal areas for improving existing products or the perceptions of those products
make sure to include the right set of competitorsthe ones your customers consider competitors, and not just the ones
you think you can compete with
be sure your consumers are representative of your target market and that their ratings are well informed
The Concept of the Marketing Mix
Neil H. Borden
Marketing is still an art
Marketing Manager head chef, mixer of ingredients
o Creatively marshal all his marketing activities to advance the short and long term interests of his firm
Marketing Mix
first coined by Professor James Culliton (1948) in a research bulletin on the management of marketing costs
o Business Executive: decider, artist, mixer of ingredients; follows others, follows his own, and experiments with
ingredients no one has ever tried
o Marketing Executive: mixer of ingredients one who is constantly engaged in fashioning creatively a mix of
marketing procedures and policies in his efforts to produce a profitable enterprise
o Mixing of ingredients: wide variations in the procedures and policies and the corresponding wide variation in the
costs of marketing functions
The marked differences in the patterns or formulae of marketing programs
(1) reflected clearly in the figures of a cost study of food manufacturers made by the Harvard Bureau of Business Research
in 1929
o Objective: to determine common figures of expenses for various marketing functions among food manufacturing
companies
o Unable to determine common expense figures that had significance as standards by which to guide
management
o Result: ratios of sales devoted to different functions of marketing (advertising, personal selling, packaging) were
widely divergent
(2) Cullitons study of marketing costs in 1947-1948
o Objective: to find out whether a bigger sample and a more careful classification of companies would produce
evidence of operating uniformities that would give helpful common expense figures
o Result: there was wide diversity in cost ratios among any classifications of firms and no common figures were
found that had much value

Understanding of advertising usage by manufacturers had to come from an analysis of advertisings place as one
element in the total marketing program of the firm
o Essential to ask the following:

Marketing strategy profitable operation

Combination of marketing procedures and policies; and cost that will permit profit desired behavior of
trade and consumers

Elements of marketing program profitable operation

o Every advertising management case called for a consideration of the strategy to be adopted for the total
marketing program

Advertising is recognized as only one elements

Advertisings form and extent depended on its careful adjustment to the other parts of the program
o The Economic Effects of Advertising by Borden in 1942

The innumerable combination of marketing methods and policies in designing a marketing plan

E.g. branding individualized brand? a family brand? Or under private label/unbranded?

Any decision in the area of brand policy in turn has immediate implications that bear on his selection of
channels of distribution, sales force methods, packaging, promotional procedure, and advertising
o Overall marketing strategy affects and determines the way a marketing function is designed, and the burden that
would be placed on function

Advertising: not an operating method to be considered as something apart; whose profit value is to be
judged alone
Marketing Man as an Empiricist Mixer of ingredients who designs a marketing mix
market forces cause managements to produce a variety of mixes

(1) Elements of the Marketing Mix of Manufacturers (6PABCDFS)

(a) Product Planning
o Product lines
o Markets to sell
o New product policy
(b) Pricing
o Price level
o Specific prices
o Price policy
o Margins to adopt
(c) Branding
o Selection of trade marks
o Brand policy
o Sale under private level or unbranded
(d) Channels of Distribution
o Channels
o Degree of selectivity among wholesalers and retailers
o Efforts for cooperation
(e) Personal Selling
o Manufacturers organization
o Wholesale segment
o Retails segment
(f) Advertising
o Amount to spend
o Copy platform to adopt
o Mix of advertising: Product image desired or Corporate image desired
(g) Promotions
o Burden to place on special selling plans or devices
o Form of these devices for consumer promotions, for trade promotions
(h) Packaging
o Formulation of package and label
(i) Display
o Burden to be put on display to help affect sale
o Methods to adopt to secure display
(j) Servicing
o Providing service needed
(k) Physical Handling
o Warehousing
o Transportation

o Inventories
(l) Fact Finding and Analysis
o Policies and procedures related to: securing, analysis, and use of facts in marketing operations

Behavior of individuals and groups in all spheres of life has a bearing on

What goods and services are produced and consumed
Procedures that may be employed in bringing about exchange of these goods and services
Skillful Marketer
Perceptive and practical psychologist and sociologist
Has keen insight into individual and group behavior
Can foresee changes in behavior
Has creative ability for building well-knit programs
Has the capacity to visualize response of the consumers, trade, and competitors to his moves
(2) Market Forces Bearing on the Marketing Mix (Cbb/Tb/Cpob/Gb)
(a) Consumers Buying Behavior
o Motivation in purchasing
o Buying habits
o Living habits
o Environment
o Buying power
o Number
(b) The Trades Behavior
o Their motivations
o Their structure, practices, and attitudes
o Trends in structure and procedures that portend change
(c) Competitors Position and Behavior
o Industry structure and the firms relation thereto

Size and strength of competitors

Number of competitors and degree of industry concentration

Indirect competition
o Relation of supply to demand: oversupply or undersupply
o Product choices quality, service, price
o Degree to which competitors compete on price vs. nonprice bases
o Competitors motivations and attitudes their likely response
o Trends technological and social, portending change in supply and demand
(d) Governmental Behavior
o Regulations over products
o Regulations over pricing
o Regulations over competitive practices
o Regulations over advertising and promotion
Weigh the behavioral forces and then juggle marketing elements in the mix
Manager must devise a mix of procedures that fit his resources:
o Money
o Product line
o Organization
o Regulation
Managements must fashion their mixes to fit their resources
Small firms in the industrial goods field, seek to build sales on a limited highly specialized lines
Industry leaders seek patronage for full lines
o The company of limited resources often elects to limit its production and sales to products whose potential is too
small to attract the big fellows
o Push strategy vs. Pull strategy
Long vs. Short Term Aspects of Marketing Mix
Marketing mix: a product of the evolution that comes from day-to-day marketing
o Short range forces play a large part in the fashioning of the mix to be used at any time and in determining the
allocation of expenditures among the various functional accounts of the operating system
Overall strategy employed in a marketing mix: product of longer range plans and procedures dictated in part by past
empiricism
A good manager foresees what needs to be done in order to keep up with the changing world
Foresee and study trends: natural, economic, social, and technological

E.g. Sears Roebuck and Company: Foresight, Adaptability, Creative ability

Use of the Marketing Mix Concept

What is marketing?
o Marketing is the devising of programs that successfully meets the forces of the market
Mix chart: provides an ever ready checklist as to areas into which to guide thinking when considering marketing questions
or dealing with marketing problems
Marketing: Science or art?
As science: systematic formulation and arrangement of facts in a way to help understanding
o Adapted the scientific method in assembling facts and sharpened the tools of fact finding; in designing tests
whereby the results from mixes or parts of mixes can be measured
As art: designing marketing mixes
o Without any clearly defined marketing laws, marketing will largely lie in the realm of art
Marketing is Everything
Regis McKenna
1990S belong to the customer
Technology is transforming choice and choice is transforming the marketplace
The emergence of a new marketing paradigm: Knowledge and Experience-based marketing
Marketing transformation is lead by the enormous power and ubiquitous spread of technology
The defining characteristic of this new technological push is programmability
o Programmability: the new corporate capability to produce more and more varieties and choices for consumers
o Offers each individual customer the chance to design and implement the program that will yield the precise
product, service, or variety that is right for him or her = unlimited choice
o E.g. 1985-1989 the number of products grew by 60%. Tide as an example of multiplication of brand variety. P&G
introduced laundry detergent. Then the introduction of unscented, liquid, concentrated, and with bleach Tide.
Unlimited customer choice is a threat for some
...since choice is accompanied by new competitors
The brings about the evolution of marketing to the market-driven companies
Consumers only care about the companies that adapts to fit its products and services to them
Before: sales-driven companies organizations focused on changing the mind of the consumers to fit their product. Any
color as long as its black school of marketing
Before: due to technology, approach because customer-driven willingness to change products to fit consumer requests.
Tell us what color you want
Now: market driven companies adapt products to fit customers strategies. Lets figure out together whether how color
matters to your larger goal
How it works:
o Creating rather than controlling the market.
o Based on developmental education
o Incremental improvement
o Ongoing process (not just simple market share tactics, raw sales and one time events)
o Draws on the base of knowledge and experience of an organization
Two fundamentals that define the capabilities of a successful marketing organization
Old approach: getting an idea, trade marketing research, develop a product, test the market, go to the market = slow
unresponsive, and turf-ridden (cannot keep up with the competition and the customer wishes and demands)
E.g. Case: Beecham v. Saatchi & Saatchi
o Shulman, Saatchis market research subsidiary had vastly overstated the market share of the laundry detergent
that Beecham launched.
o Point: forecasts are unreliable because with technology, competitors, customers and markets shift so rapidly and
radically.
(1) Knowledge-based marketingrequires a company to master a scale of knowledge
o of the technology in which it competes,
o The competition
o Customers
o New sources of technology that may alter competitive environment
o Own organization (capabilities, plans, way of doing business)
(2) Experience-based marketingemphasizes the interactivity, connectivity, and creativity

Problem of loyalty because of the unlimited choice

This may be solved thru adding sales and marketing people to retain customers. (Marketing)
Real Solution: Better Marketing integrates the customer in a company. To create and sustain relationship between a
company and the customer
Marketer must be the Integrator
o Internal synthesizing technological capability with market needs
o External bringing the customer in the company as a participant in the development and adaptation of goods
and services.
o Must command credibility. Its the companys sustaining value.
o Measurement of a companys credibility: (also attracts quality people, generate new ideas, and form quality rel)
Character of its management
Strength of financials
Quality of its innovations
Congeniality of its customer references
Capability of its alliances
Fundamental shift in marketing: manipulation of the consumer to genuine customer involvement
Relationships basis of customers choice and company adaptation
Shift from finance to engineering to marketing
Marketing is not a function but a way of doing business
It has to be all pervasive; part of everyones job description
E.g. Pumpco vs. Gluco
o Pumpco selling things and collecting money
o Gluco building relationships with customers
Marketing is like quality
It is integral to the organization
An intangible that the customer must experience to appreciate
Marketing has been evolutionary
Marketings ultimate assignment
Serve customers real need and;
to communicate the substance of the company
Marketing in the 1900s is an expression of the companys character. It is the responsibility that belongs to the whole
company.
o US companies typical mistakes:

(1) Get caught up in the excitement of new creations

Problem: leads to an internal focus. R&D agendas over customer, market and competition.
Will be unable to sustain performance and maintain independence.

(2) Getting absorbed in the competition of selling things and increasing market share in a product line.
Problem: leads to market share mentality = undershooting the market. Only thinking of customers as share
points.
Expensive fight over crumbs rather than a smart effort to own the whole pie
The real goal of marketing is to own the market (Define what whole pie is yours)
What you lead, you own. Leadership is ownership.
o Develop products to serve a specific market
o Define standards in that market
o Bring in third parties to develop their own compatible products or offer new features and add-ons to augment
your product
o You get your first look at new ideas that others are testing in the market
o You attract most talented people because of your leadership position
Owning the market is a self-reinforcing spiral. Youre the dominant force; you deepen your relationship with the market
and your customers.
(1) To own a market, you need to redefine it by creating a new product/category of products
o E.g. Convex computer and its mini-super computer
(2) To own a market, you may need to broaden/narrow it
o Case: Apple broadening the market thru category of small computers. They made personal computers which
expanded the market concept.
o Case: Apple narrowing the market thru creating and owning desktop publishing
2 important outcomes of owning a market:
o (1) Substantial earnings may replenish R&D coffers
o (2) Powerful market position allows a company to grow additional market share by expanding technological
capabilities and its definition of a market
Spiral of R&D innovation, market creation and market dominance
Mass manufacturing and mass marketing.

Flexible manufacturing and flexible marketing.

Technology comes first, ability to market comes after
Technology embodies: adaptability, programmability, and customizability
o E.g. telephone, bicycles, and newspapers
Mathematical formula of todays marketing: variety + service = customization
Customization capacity to deal with a customer in a unique way

Markets and customers operate like light and energy

More than one thing at the same time: part of a group, fitting to social and psychographical classifications, other times,
iconoclastic.
Make or break patterns: old people wanting to be youthful
Different markets have different levels of consumer energy
o E.g. Yuppie market and BMW. After high customer energy and close identification, the wave was gone. BMW
shifted to selling to yuppies to focusing on its technological innovations. Yuppies dissolved.
Technology will allow marketers to have the tools to understand and predict, and then design programs
o E.g. database marketing
Dont fight forces, use them. It creates and leads directly to new market forms and opportunities.
o E.g. Personics and their customized composite cassettes and CDs. They saw a market amidst the threat of
hackers.
The obsolescence of Advertising
Old: Sell mass-produced goods to a mass market thru mass media. One-way communication.
3 factors of the decline of advertising:
o (1) Advertising overkill has started to ricochet back on advertising itself
Problem: Proliferation of products has yielded to proliferation of messages
Proof: shift to 15s commercials to fit as many voices as possible
Equating to smaller impact to consumers, unable to remember and differentiate
Case: Eveready v. Duracell confusion.
o (2) Advertising has proliferated and become more obnoxiously insistent, consumers have gotten fed up
Problem: People are shutting advertising out as it continues to intrude them
Case: a law passed limiting the program length commercials in children television
Case 2: public outcry over cigarette marketing plans targeted at blacks and women, calling for more
environmentally sensitive packaging and products
o (3) Advertisings dirty little secret: it serves no useful purpose (the underlying reason behind both factors) It misses
the fundamental point of marketing which is adaptability, flexibility, and responsiveness.
Feedback loop missing from the monologue of advertising; connects company and consumers. It is central to the
operating definition of a truly market-driven company.
o E.g. Apple. It adapts in a timely way to the changing needs of the customer. Apple has a feedback loop. A user
group that was prepared to praise mac publicly during its launch, and to advice apple on how to improve it. They
became the reason why mac was able to improve on its weaknesses.
Shift from monologue to dialogue. Accomplished thru experience-based marketing.
The goal is Adaptive Marketing marketing that stresses sensitivity, flexibility, and resiliency
o Sensitivity having variety of modes thru w/c companies can read the environment.

E.g. user groups that offer live feedback or consumer scanners that provide consumer choice.
o Flexibility creating an organizational structure and operating style that permits the company to take advantage
of new opportunities presented by customer feedback.
o Resiliency learning from mistakes. Marketing that listens and responds.
Rigid polarity of products and services to hybrid
(1) The servicization of products
o Case: General motors lending money to buy cars, IBM supplying systems, drugstore and marketing of
convenience.
(2) The productization of services
o Tangible events, repetitive and predictable exercises, standard and customizable packages that are product
services. E.g. flier, regular audits, loan packages
Critical for marketers to know what marketing the hybrid is not. They should not only offer warranty or survey forms, but a
service integral to the product.
Service is not an event; it is the process of creating a customer environment of information, assurance and comfort.
Adopt a well make good on it, no questions asked attitude on return policies.
If not service-oriented, some focus on competitive differentiation and tools to penetrate markets.
But those who recognize the importance of product-service hybrid focus on building loyal customer relationships.
Marketers and Technology truce
Marketers recognize that real savings can be gained by using technology to do people-directed field operations.
Matching of databases and marketing plans will allow them to stimulate a new product launch in a few days.
From automation for cost savings stage fusing and giving feedbacks to each other.
Result: transformation of technology and product, and reshaping of customer and company.

Technology allows:
o Information to flow in both directions between the customer and company
o Creates feedback loop that integrates the customer into the company
o Allows the company to own a market
o Permits customization
o Creates dialogue
o Turns a product into a service and a service into a product.

Marketing eliminating the gap between production and consumption

Marketing workstations that will draw on graphic video, audio and numeric information from a network of databases. They
can:
o manipulate data,
o stimulate markets and products,
o bounce concepts of others in diff cities,
o write production orders from product designs and packaging concepts,
o obtain costs and time tables, and distribution schedules.
Marketers play the role of both designer and consumer. They can:
o Integrate data on historic sales and cost figures, competitive trends and consumer patterns
o Create and test advertisements and promotions, evaluate media options and analyze viewer and readership
data.
o Obtain instant feedback on concepts and plans and to move marketing plans rapidly into production
The marriage of technology and marketing gives the marketer the capability to explore new ideas and to test them to the
reactions of real consumers in real time, and to advance to experience-based leaps of faith
It will be the vehicle for bringing the customer inside the company and for putting marketing in the center of the company
The function of marketing includes all of the attributes that define how a company does business
That is why Marketing is everyones job. Why everything is marketing, and marketing is everything
Marketing Myopia
Theodore Levitt
Growth is threatened because of failure of management and not because the market is saturated
Fateful Purposes
Failure is mostly caused by the executives
o E.g. Railroads. They failed because consumers were robbed off of them by the competition. They remained
railroad oriented instead of transportation oriented. They were product-oriented instead of customer-oriented.
o E.g. Hollywood. Defined the business incorrectly, they thought they were the movie instead of the
entertainment business. Movies is only a specific limited product = contentment. They also failed to welcome
TV instead of seeing it as an opportunity to expand.
Shift from being product-oriented customer-oriented
Error of Analysis
The problem lies in defining an industry so narrowly as to guarantee its premature senescence (deterioration with age)
One is limiting the growth of a certain industry because of the failure to define it properly
Railroads not lacking opportunity but managerial imaginativeness and audacity
Shadow of Obsolescence (no longer wanted)
Problem: Industries claiming that they are a growth industry, and assuming that the superiority of their product will let
them remain like that
o E.g. Dry cleaning. Boomed because of wool garments. Competition: ultrasonics, synthetic fibers and chemical
additives that eliminated the need for dry cleaning.
o E.g. Electrical utilities. Supposedly a no substitute product, forever enthroned on a pedestal of invincible
growth Competition: non-utility companies presenting a powerful chemical fuel, eliminating the need for
electrical power & solar power.
Solution: They themselves should plot the obsolescence of their livelihood
o E.g. Grocery stores. Pride was their problem, they believed that when the consumers cooperate with their
suppliers, pay attention to their costs, and improve their service they can whether the competition.
o Problem: courage in their convictions but not willing to accept the threat of the competition.
Self-deceiving cycle
No such thing as a growth industry. Only companies organized and operated to create and capitalize on growth
opportunities
Industries, who believe that their growth will remain and escalate, die.
4 conditions that guarantee this cycle:
o The belief that growth is assured by an expanding and more affluent population.
o The belief that there is no competitive substitute for the industrys major product.
o Too much faith in a mass production and in the advantages of rapidly declining unit costs as output rises.

Preoccupation with a product that lends itself to carefully controlled scientific experimentation, improvement,
and manufacturing cost reduction.
Petroleum, automobiles, and electronics
o All of excellent reputations with the public, and also enjoy the confidence of sophisticated investors.
o Their managements are also known for progressive thinking in areas like financial control, product research and
management training.
o If obsolescence can happen to these 3 industries, it can happen anywhere.
o

Population Myth
The belief that profits are assured by an expanding and more affluent population
If the market is increasing more comfort in the future no need to think imaginatively or expand
Absence of problem = absence of thinking
o E.g. Petroleum industry. Tends to be optimistic with its enviable record, and age.
Customers will compare products through feature-by-feature basis
All improvements are confined to the technology of oil exploration, production and refining.
Asking for trouble
Problem: Companies only focus on the efficiency of getting and making products, not really on improving the generic
product, or marketing
Idea of indispensability
E.g. Petroleum industry is persuaded that there is no competitive substitute for their product. Or if there is, it will only be a
derivative of crude oil.
Problem: There are many refining companies with huge crude oil reserves
Point: There is no guarantee against product obsolescence.
It will be either your own R&Ds doing, or your competitions
Oil industry was just lucky. To create your own luck, you are required to know what makes a business successful. One of the
greatest enemies of this knowledge is mass production
Selling v. Marketing
Selling focuses on the needs of the seller. A.K.A. the need to convert product cash
Marketing is a more sophisticated and complex process. It focuses on the needs of the buyer. It consists of satisfying the
need of the customer by means of its products and the cluster of things associated with it Creating, delivering, and
finally, consuming it.
A truly marketing-minded firm tries to create value-satisfying goods and services that customers will want to buy
The buyer, not the seller, determines what it offers for sale. It is the seller that takes cues from the buyer. The product is a
consequence of marketing effort.
E.g. automobile industry where mass production is most famous.
o Fortune was made from annual model changes. Making customer orientation necessary.
o They spend millions of dollars in consumer research.
o Detroit was not persuaded that people wanted anything different from what they were offering.
o Question: why did the research not show it?
o A: Detroit never really researched about the consumers wants. They only asked about their preference on existing
offers/decided offerings. Detroit was product-oriented not customer-oriented
o Consumers have needs that the manufacturer has to satisfy. Only thru product changes. Sometimes in financing
in order to sell.
E.g. Ford as both brilliant and senseless marketer
o They refused to give customers anything but a black car, they fashioned a production system designed to fit
market needs, and they cut the selling price to $500 to reduce costs
o Mass production was the result, not the cause of his low prices
Product Provincialism
The marketing and the consumer is undermined by growth companies because of mass marketing
The product fails to adapt to:
o Constantly changing patterns of consumer needs and taste
o New and modified marketing institutions and practices
o Product developments in competing and complementary industries
E.g. Buggy Whip Industry. Failed to define themselves, limited to the buggy whip instead of transportation
Think of business as taking care of peoples transportation needs
Creative destruction
Consumers do not like buying gasoline. They cannot see it, feel it, or test it. Instead, they buy the right to continue driving
their cars
Gas station = tax collector (unpopular institution)
To reduce unpopularity, one must eliminate it.
Fuel substitutes = creative destruction for oil companies

Do not simply produce goods and services, but produce customer satisfaction

Dangers of R&D (Research and Development)

Fixation on the profit possibilities of technical research and development
Marketing Shortchanged
o Expansion is devoid from marketing efforts
o The realities of the market get shortchanged and engineer managers think of consumers as unpredictable,
varied, fickle, stupid, stubborn, shortsighted and bothersome.
o Problem: Concentrating only on what they know and what they control. Namely:

Product research

Engineering

Production
Stepchild Treatment (marketing)
o E.g. Oil Industry
o Problem: science + technology + mass production = diversion from main task
o They are not interested in probing deeply into basic human needs
o Stepchild status recognized as existing, as having to be taken care of. Not worth very much real thought or
dedication attention
o Neglect of marketing as seen in the industry press
o Marketing is a stepchild
Beginning and end
o Industry should be viewed as a customer-satisfying process not a goods-producing process
o The irony in industries oriented towards technical research and development is that they (scientists who occupy
the high executive positions) violate the first two rules of the scientific method:

Being aware of and defining their companies problem

Developing testable hypotheses about solving them

o They are only scientific about convenient things such as laboratory and product experiments
o Selling tricks and techniques of getting people to exchange cash
o Marketing - concerned with the values that the exchange is all about, view the entire business process as an
integrated effort to discover, create, arouse and satisfy customer needs.
Conclusion
Building an effective customer-oriented company involves far more than good intentions or promotional tricks; it
involves profound matters of human organization and leadership
Commentary (AFTER)
E.g. Glass industry: the company was forced to a more systematic and customer sensitive look at possible markets and
users.
R&D now externally oriented towards uses, users, and markets. Balancing internal focus on materials and methods
A mirror, not a window
Impact: more on industrial-products companies because of the lag in customer-orientation.
Two reason for this lag:
Industrial products companies tend to be more capital intensive
They rely heavily in communicating face to face the technical character of what they made and sold
A manifesto, not a prescription (Management wrongdoings)
Marketing mania obsessively responsive of the whims of the customer
Mass production operations converted to approximations in job shops, with cost and price consequences exceeding
the willingness of customer to buy the product (expensive)
Expanded product lines, and added lines of business without first establishing adequate control systems to run more
complex operations
Where Marketing Causes Trouble
Verena E. Stoeckl and Marius K. Luedicke
Marketing
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Is what people do when they want to provide something to, or get something from, someone else (Levy, 1978)
Considered successful if the parties involved consider the exchange of this something of positive value
Plays an increasing role in supporting consumers identity construction and expression
The question of where marketing causes trouble is an empirical one
Goal: to develop the idea of humanistic marketing and the first step is knowing where is it accused of dehumanizing
effects

Dehumanizing marketing practices

4 levels of socio-cultural criticism:
o Consumers private and psychic spaces

o Community relationships
o Societal values
o Human and natural resources
Disciplines most despised practices:
o Deception
o Intrusion
o Exploitation
o Hegemonic expansion

(1) The Consumer level

The broadest range of criticism concerns the basic relationship of marketers and consumers that constitute the core of
the discipline mutually beneficial exchanges
To identify consumers potential desires, marketers routinely hunt for the most extensive and accurate consumer
insight using computerized online and offline consumption data-mining tools
o This allows them to target specific customer segments and modify their products with minor extensions
1st problem: Insufficient information provided by marketers
o Turning insights products and advertising
o Feeds the image of marketers as untrustworthy partners
o Issue: Relying to excessively on persuasive, deceptive, and manipulative techniques
o Planned obsolescencethe idea or practice of deliberately designing products to fail too early or to quickly
become unfashionable and outdated E.g. computer software
2nd problem: Intrusion of consumers psychic space through overabundance of commercial messages
o Consumers feel oppressed by these practices because they lack means to defend themselves against such
intrusions
o Marketers as highly skilled by repressive cultural engineers
o Leaving the consumer in a disadvantaged and dehumanized position
(2) The Community Level
Consumers slowly becoming reflexive, ironic and aware of the marketing game
Marketers are losing credibility across traditional media. Thus, they started to search for less commercially infiltrated
spaces.
Consumers reengage in alternative subcultures, share ideologies and experiences in voluntary simplified consumption
communities
o E.g. special interest online forums
Marketers take advantage of this situation and position their brands as authentic members of these emerging
communities
3rd problem: Consumers blame marketers for intruding into their communal spaces with commercial offerings
Marketers use aggressive viral campaigns or micro targeting strategies
Uninvited crashers of the web 2.0 party
Corporate co-optationmarketers searching out the creative ideas and symbolic resources that emerge with the
non-commercial corners of their cultures (due to the need for market differentiation)
Corporate conquest of coola mechanism for advancing culture commodification that gradually turns every
unconventional, experimental idea, and style that emerges in consumers subcultural epicenters into superficial
commercial offerings
Dehumanizing because they strip consumers of their power to protect their creativity and identity
(3) The Societal Level
Western societal trend: evaluating all aspects of human life and achievements in monetary terms
o Result: western citizen societies have gradually turned into consumer societies
o Characterized by: Superficial demands, wasteful materialistic lifestyles, and overspent consumers
4th problem: Marketers are accused of popularizing unsustained social systems
o Making people rely on the perceptual cycle of desire and instant gratification. More consumption leads to
more happiness.
o Consumers are forced to participate in a system of homogenized meanings, structures, and tastes
embedded in global brands
o Community co-optation but on a global scale
o Marketers seen as hegemonic advocates of commodification. Exerting their homogenizing influence on
worlds diverse markets, cultures and consumer tastes.
o Dehumanizing because it creates then fulfills demands that overtime bolster feelings of isolation,
inauthenticity and depersonalization.
(4) The Resource Level
Increase of globalized, specialized, and resource intensive modes of production
Posing new demands to ethical and political engagement through consumption choices and moral accountability of
marketers
5th problem: Critics charge marketers for pursuing self-interested and short-term profit maximization goals
o Without accounting for human and ecological externalities

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Carelessly depleting natural resources and exploiting cheap labor out of economic egoism
Aggressive and short-sighted marketing practices = harmful side-effects of overconsumption
Profit maximization agendaleaving the society with long-term ecological costs of a mass consumption
society

Diagnosis: Over-marketing
The discipline has failed to consistently foster mutually beneficial exchanges
o Interpersonal level

Mass seducing and deceiving consumers by abusing information asymmetries

o Communal level

Party crashers by invading consumer subcultures and co-opt cultural innovations

o Societal level

Held responsible for commodifying and homogenizing global cultures and depriving consumers of a
sustainable source of happiness
o Resource level

Free riders on environmental resources and human labor that they exploit for the search of the next
big rush of profit
Overmarketingresults when marketers over-differentiate, -advertise, -sell, or discount in order to keep up with tough
competition or to drive consumption to fulfill over ambitious growth goals
Marketing ideologies:
1st ideology: Economic egoist marketing ideology
o Considering business growth as moral contribution since it creates wealth and enhances value for companies,
customers, and society at large
o Material progress, efficiency and effectiveness in satisfying need, exercise of economic and political freedom
operate as Safety belt
o Ideal: highly competitive system: satisfies consumers needs that will lead to lower prices and diffuse
innovations and resources
o Real: highly competitive condition: marketing concepts are copied and profits shrunk. Conventional
marketers turn into over-marketers that use aggressive and deceptive practices to prevail in their niche
2nd ideology: Belief that consumers enter the store with their own values and convictions and only purchase that
which they consider as morally good
o Reality: western markets readily buy into dominant marketer-imposed representations of lifestyle
o Digital social media as a platform to disseminate critical views = market resonance
o Reality: only few consumers vigilantly monitor practices of corporations and industries
Summary
Dehumanizing marketing practices result from
o (1) Marketers adjusting to highly competitive market conditions
o (2) Marketers pursuing an ideology (a companys economic growth is its socio-cultural contribution)
Struggle to balance humanistic and economic goals
Advantage:
o (1) Communities, social movements, family enterprises, and owner-managed companies are able to directly
relate their human desire for superiority long term and partially more independent decisions.
o (2) Less vulnerable to outside and financial pressures which demand short term profits