What a German Genius Can Teach You about Effective Marketing What comes to your mind when you think of Germany? Some people think of Hitler? Some recall the horrors of the Holocaust? I am reading Sophie’s choice for the third-time, the setting is Germany, but this time, I see human beings, not a particular country. The truth is the Germans have given the world wonderful inventions. But, what do you see when you hear about Germany? Do you think of Martin Luther, the great Gutenberg, Goethe, of first-class footballers, excellent engineers, compelling, classical music composers… This article is one of our introductory pieces; the aim is to provide a solid foundation. You will learn about Theodore Levitt, some of his contributions to Marketing, and the marketing concept. Let’s start with the marketing concept, and then look at Professor Levitt, who is regarded as the man, who popularized the term, ‘Globalization’, and is acclaimed by some of his students, as someone who changed their lives! He also asked the now iconic question: what business are you in? It is a simple question, with profound implications for us all. What business are you in? Sales’ Ambitious Sibling Before we go on, let me ask you a question, are you focused on satisfying your clients, or just selling your products? I am waiting. It’s not a rhetorical question, and be honest. I am watching you, and I’ll know if you’re fibbing. If we’re honest, we can start making tangible changes in the way we do business, which means, we will have different results. We have to be sincere with ourselves, then we extend that to those we serve. So, don’t forget the question. Then, let me add another one, how would you like a company to treat you, if you were their customer, are you treating your customers or clients like that? Sales was the first-born. Marketing, the more ambitious sibling came many, many years later. Sales was doing well, but at a point, entrepreneurs got hip to the fact that it won’t hurt to have some research about the markets they are serving. Overtime, marketing exploded and now has many strands. It even dominated sales. It subsumed it. I don’t see it as superior. Just complementary. But, it’s indispensable for any serious entrepreneur. We will be exploring its many facets. Have you heard the story of two salesmen who were sent to Africa 200 years ago? (Honestly, I have embellished the story). I’ll make it short. But it’s profound. The salesmen represent a company that sells shoes. The first salesman saw my ancestors walking barefoot in the heat and in the rain, on soft grass, and on thorns. His heart sank. His dreams of retiring to the Caribbean faded away. These Africans! He sent back a telegram to the U.K. Situation hopeless, they don’t wear shoes! What about the second salesman who covered another part of the town? He was ecstatic with joy, when he saw the barefooted tribe. He mingled with them. He went from village to village, attending the meetings and festivals, and was secretly recording how many people were in each village. He estimated their shoe sizes. He started learning the language and the culture. He started knowing these denizens of the Dark Continent. He discovered they do not live in trees. He discovered the enthralling pleasure of palm-wine… Rumor has it that he even had something with a princess. I could not confirm that. He sent his telegram. He wrote: glorious opportunity, they don’t have any shoes yet! Which salesman do you think is really a smart marketer? It’s interesting that where one person saw a problem, another saw an opportunity! Growth –Hacking Your Way to Millions Let’s assume that you’re a writer (who is crazy about technology) and you like women (is there a writer who does not?). I don’t mean it like that. Why are you smiling? You just like them, like you like your sisters. And truth, be told, you’re an only child, so you don’t really have any sister. You look macho and all. But, you’re really shy. You don’t know many women. They are an enchanting enigma, to you. You don’t really understand them. You actually prefer hiding behind your computer screen to interacting with them. But you’ve been reading about how start-ups are leveraging growth-hacking to make out like bandits! Everywhere you turn, some twenty-three year old is becoming a millionaire on the strength of an app! By the way, growth –hacking is one of the buzzwords in business now, and it will be the theme of my next article. I will offer you a comprehensive treat. One article, or a couple, on what it means, how you can leverage it, and the realities, so you can contribute intelligently when you meet a jargon –lover at your next meet-up. But, let’s continue with the story… So, one weekend, you dreamed up with this wicked app that’s going to revolutionize how women communicate, you’re sure, it going to be a hit. You felt so creative (but you also wonder if the beer was not a catalyst). You’ve been able to convince one of your serious bean -counter friends, to work with you on crafting a winning business plan. He agreed. But, he’s been asking you some questions. He works with a marketing consultancy, and he’s picked up some of the jargon. But, some of his questions are making you think, they’re helping you see dimensions you never thought of…so, now, you’re a tad reluctant to raise the $5m! You continued working on the business plan, and as you do, your understanding of what it takes to run a business expands. One weekend, while reading a top business magazine, you came across another entrepreneur, this time, a dude in his late thirties, who raised $20m for an app that is focused on students. The start-up is in its third year, and is currently valued at $90m. It was a long article, but, it’s so informative that you don’t mind. At a point, it was as if your scales fell. You saw something the guy said, and it was an epiphany for you. When asked the secret of his success, the dude, said: research. He said, he’s been conducting research into student behavior for two years, before he had the app developed. He said, his focus was not really selling an app, but helping students with some of the financial challenges they were going through. He recalls how tough things were, dealing with finances when he was a student. He said: The technology is secondary. The technology is secondary. The business model is secondary. The customer is the cornerstone. The customer is the cornerstone. He repeated a couple of times. He said some businesses fail because they are product-centric. He leverages the marketing concept, and that’s his open secret. So, what is the marketing concept? How did it evolve? The story you’ve just read, may seem simplistic, but it’s an illustration of the marketing concept. You start with the customer. It’s a customer – centric approach to doing business. You’re thinking of the customer, even before you design the product or service. The customer is not an after-thought. Her needs and satisfaction are what your marketing and approach to business is all about. You don’t imagine a product in your head, and then try and force it on hapless customers. You have a deep understanding of them – their hopes, fears, needs…You know them like the back of your hands. The mediocre entrepreneur or marketer is PRODUCT –centered, the smart marketer, is CUSTOMER-centric. It’s not a subtle difference. Think about it. It’s not about technology, it’s not about the latest buzzwords, and it’s not about mindlessly copying what others are doing. It’s about strategy, and it’s about mindset. It’s about offering astonishing excellence in all that you do. Let me share something with you. It’s by one of the fathers of modern management. “It [Marketing] is not a specialized activity at all. It encompasses the entire business. It is the whole business seen from the point of view of the final result that is from the customers point of view. Concern and responsibility for marketing must therefore permeate all areas of the enterprise.” Peter F. Drucker I thought I’d take a historical perspective in looking at the evolution of the marketing concept; maybe I would in another article. I decided to skip some facets and just give it to you, direct. This is already getting long, and I have not told you about Theodore Levitt. You thought I forgot? No. No way. A German Genius Theodore’s’ family fled Nazi Germany for America. He was born in Vollmerz, Germany in 1925. His family settled in Ohio. He bagged a PhD in Economics in 1951. His contributions to marketing are immense, and his story is inspirational. A cobbler’s son, who rose to the height of becoming one of those who steered myriads back to a more sensible, simple, and profitable path… He is seen by many, as one of the founders of modern marketing. One of his dominant desires was to use his knowledge and insights, in serving the needs of the business community. Are you already seeing the marketer, in the revered professor? His early works were relatively conventional academic work. (You know how boring that can be). Some of these ideas may seem obvious to us now. But we must recall that he wrote his most celebrated work, MARKETING MYOPIA in 1960. The work left the realm of being an article, it morphed into a manifesto. It was not just for marketers or marketing departments…it was for companies as a whole. It was an epiphany. It was a paradigm shift. Trust me, if you were to read it. It’s fresh. It’s not dated at all. It’s still powerful. He urged companies not to define themselves by what they produce, but to attune themselves and align themselves to CUSTOMER NEEDS. ‘Ted Levitt exhorted executives to put their customers at the center of all they do – and to put marketing at the heart of strategy’ Harvard Business Review For about 5 years, he was editor of Harvard Business Review. He introduced tangible changes, which brought more readers and more profit. So, he was not some dreamer. Sadly, I cannot cover all the key facets of Professor Levitt’s contributions. Maybe, I’d try some other time. This is getting too long. Even my muse has this tired look on her enchanting face. So, let’s wrap up with another one of his contributions. What business are you in? Its related to all that weve been exploring. Try and answer that question. Please do. It is enlightening. Then, check your answer. Is it product-centered? Is it customer-centered? Is it centered on your company’s needs? If your answer is not customer-centric, then, you need to revisit your strategy and your business, as a whole. Professor Levitt illustrated the importance of this question, by talking about the downfall of the railroads in America. At a time, the owners of the railroads were richer than King Solomon. They had more money than Midas. So, what happened to them? They thought they were in the railroad business, so when other forms of transportation came on… cars, trucks, airplanes… They gradually lost their dominance and their shirts. Let me share what Theodore Levitt said: ’They let others take away customers away from them because they assumed themselves to be in the railroad business rather than in the transportation business. The reason they defined their industry incorrectly was that they were railroad oriented, instead of transportation oriented; they were product oriented instead of customer oriented.’ So, what business are you in? Please look out for my article on growth-hacking. And let me know your views about this article. I wish you success. Michael Newman
Posted on: Tue, 12 Aug 2014 20:06:22 +0000
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