Theodore Levitt: The Marketing Imagination
The world belongs to those who see possibilities before they become obvious and who effectively marshal resources and energies for their attainment or avoidance.
Nor is anything great accomplished without high spirits.
Using a simulation model to determine the optimal warehouse network may be excellent management science, but you’ll realize it’s ridiculous if you just stop to think.
Common sense will suggest that you’ll need a warehouse in the New York metropolitan area, probably one between Washington and Philadelphia, one around Atlanta, around Chicago, around Houston-Dallas, in Los Angeles-San-Fransisco, in the Pacific northwest, and somewhere on a line between Denver and Minneapolis.
Your imagination can tell you in a moment a great deal more than scientific excellence would have told you at great expense and pretension in a year.
- The purpose of a business is to create and keep a customer.
- To do that you have to product and deliver goods and services that people want and value at prices and under conditions that are reasonably attractive relative to those offered by others to a proportion of customers large enough to make those prices and conditions possible.
- To continue to do that, the enterprise must produce revenue in excess of costs in sufficient quantity and with sufficient regularity to attract and hold investors in the enterprise.
- No enterprise can do any of this by accident or instinct. It has to clarify its purposes strategies, and plans, and the larger the enterprise the greater the necessity that these be clearly written down, clearly communicated, and frequently reviewed by senior members of the enterprise.
- In all cases there must be an appropriate system of rewards, audits, and controls to assure that what’s intended gets done properly done and, when not, that it gets quickly rectified.
Saying the purpose of a business is to make money is like saying the purpose of life is to eat.
Eating is a requisite, not a purpose of life.
To say profit is the purpose of a business is morally shallow.
Customers buy hopeful expectations, not actual things. The ability to satisfy those expectations is more effectively communicated by the packaging than be a simple generic description of what’s in the package.
Feelings are more important than feeling.
How we feel about a car is more important than how the car feels.
All energies should be directed toward satisfying the consumer, no matter what.
The problem with business concepts is a persistent tendency toward rigidity. They get dogmatized, interpreted in increasingly narrower and inflexible prescriptions.
In fabricated consumer and industrial goods, competitive distinction is visibly sought via distinctive product features, some visually identifiable, some cosmetically implied, and some rhetorically claimed by reference to real or suggested hidden attributed that promise results or values different from those of competitors.
Commodities exchanges dealers (ex. Metals, grains...) “sell” the distinguished distinction of their execution—how well they make transactions on behalf of their clients, how responsive they are to inquiries, the clarity and quickness of their confirmations, and so in.
The usual assumption about so-called undifferentiated commodities is that they are exceedingly price sensitive. A fractionally lower price gets the business. That’s seldom true except in the imaginary world of economics textbooks.
When the substantive content (the product) of competing vendors is scarcely differentiable, sales power migrates to all other differentiating ways in which buyers can likely be influenced.
Technically sophisticated personnel seem to be influenced by the seller’s reputation to a point that is unexpectedly higher than the influence of that reputation on such technically less sophisticated personnel as purchasing agents.
People buy products to solve problems.
A product is, to the potential buyer, a complex cluster of value satisfactions. Only the buyer can assign value, because value can only reside in the benefits he wants or perceives.
The way a company manages its marketing can become the most powerful form of differentiation.
P90-93 powerful analysis on price differentiation and different pricing for different markets.
Goods = tangibles
Services = intangibles
Tangibles can usually be directly experienced.
Intangibles can seldom be experienced or tested in advance.
Even more than consumers use the can to preassess the value of canned goods, intangible products force buyers to depend on surrogates to assess what they’re likely to get.
When prospective customers can’t taste, test or feel the product in operation in advance, what they are asked to buy are, simply promises of satisfaction.
When prospective customers can’t taste , test, feel, smell, watch, or properly try the promised product in advance, the necessity of metaphorical reassurances to the marketing effort becomes amplified.
Promises, being intangible, have to be tangibilized in their presentation.
Ex. A rendering shows cheerfully productive employees lounging with casual elegance in the verdant courtyard of the proposed new corporate headquarters.
Not even tangible products are exempt from the necessity of using symbol and metaphor.
A computer terminal has to look “right.” It has to be packaged to convey modernity—based on the assumption that prospects will translate the appearance into confidence about performance.
A product is more than a tangible thing, even a huge thing like a $100-million boiler. From the buyer’s viewpoint, the product is a promise, a cluster of value expectations of which its non-tangible parts are as integral as the tangible parts.
The most important thing to know about intangible products is that the customer usually doesn’t know what he’s getting until he doesn’t.
That’s dangerous, because the customer will be aware only of failure, of dissatisfaction, not of success or satisfaction. That makes him susceptible to the blandishments of competitive sellers.
Thus, while you get customers for your intangible product it becomes necessary to create surrogates or metaphors for tangibility:
- how we dress
- How we speak, write, design
- How we work with prospects and respond to inquiries
- How we initiate ideas and show how well we understand the prospect’s business
- Regularly remind the customers of what they’re getting (the promises that were made in order to land the customer must be regularly reinstated when the promises are fulfilled)
Once a relationship is cemented, equity is created for the seller. He had a customer. To help him, the equity in that relationship must be enhanced lest it decline and become jeopardized by competitors.
Ex. Periodic letters or phone calls. Regular visits or newsletters suggesting new or better or augmented product features are useful. Quarterly performance reviews with clients to talk about their results, experiences, and expectations.
Interesting:
Hotels productize their service regularly. In their bathrooms the drinking glasses are wrapped in fresh bags or film, the end piece toilet tissue is neatly shaped into a fresh-looking arrowhead. All these say with silent affirmative clarity that “the room has been specially cleaned for your use and comfort”
The marketing imagination begins with the assertion that people don’t buy things but solutions to problems.
Ex. Charles Revson said “In the factory we make cosmetics. In the store we sell hope.”
Ex2. Leo McGinneva said that people buy quarter-inch drill bits because “they don’t want quarter inch drill bits. They want quarter-inch holes.”
If marketing is seminally about anything, it’s about achieving customer-getting distinction by differentiating what you do and how you operate.
Since everybody sees segments as obviously consisting of certain demographics, industries, user groups, buying practices, certain influencing groups, and the like, then the thinking that gives real power is thinking that transcends the ordinary.
Business success is a matter of the disproportionate and enduring attraction of certain proportions of customers at certain enduring levels or relative price.