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15766973 Deadly Marketing Sins

15766973 Deadly Marketing Sins

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Published by: Maria on May 22, 2010
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06/30/2010

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s s
In t 
 
hi 
 
s is 
 
su 
 
e: 
s
 Identify...
and overcome the 10 mostglaring marketing deficien-cies that keep companiesfrom succeeding in themarketplace.
s
 Attain...
high marketing productivityand profitability by segment-ing your market, choosingthe best segments, anddeveloping a strong positionin each segment.
s
Understand...
your customers’needs, per-ceptions, preferences, andbehavior, and motivate yourstakeholders to obsess aboutserving and satisfying thecustomers.
s
 Develop...
systems for identifying andstimulating opportunities,ranking them, and choosingthe best ones.
s
 Manage...
a marketing planning sys-tem that leads to insightfullong-term and short-termplans, and exercise strongercontrol over your productand service mix.
s s
Ten Deadly Marketing Sins
Signs and Solutions
by 
Philip Kotler
 Asummary of the original text.
M
arketing is in bad shape.Not marketing theory,but marketing
 practice.
Every new product or serviceneeds to be supported by amarketing plan that bringsin a good return that coversthe investment of time andmoney. But then why do 75percent of new products,services, and businesses fail?
Volume 13, No. 5 (2 sections). Section 1, May 2004.©2004 Audio-Tech Business Book Summaries 13-9.No part of this publication may be used or reproducedin any manner whatsoever without written permission.
To orderadditional copies of this summary, referenceCatalog #5041.
 
marketing mix, a misdirectedSTP, or poor market research.But today, too many market-ing departments don’t handlethis whole process. It’s han-dled by a mix of marketers,strategists, finance types, andoperations people. Somehow,a new product or serviceemerges, and marketing isleft to its true mission asconceived by others in thecompany, namely selling andpromoting.Most of marketing is reducedto a one-P function —Promotion — not a four-P job.If the company ends up mak-ing a product that doesn’tsell well, most of market-ing’s task is to clear up themess through hard sellingand advertising.Every indication suggeststhat marketing will becomeeven more challenging in thefuture than it is today.Consider the following sevenchallenges:1.
National brands are find- ing it harder to get an adequate premium to cover their brand-build- ing cost.
Why? Wal-MartMarketing is supposed todrive business strategy. Themarketers’ job is to researchnew opportunities for thecompany and carefully apply
segmentation, targeting and positioning 
— or STP — topoint a new business in theright direction.Then marketers are sup-posed to flesh out the
4Ps 
Product, Price, Place and Promotion 
— making surethat they are consistent witheach other and with the STPstrategy.Then marketers are sup-posed to
implement 
the planand
monitor 
the results.When the results deviatefrom the plan, marketershave to decide if the culpritis weak information, a bad
 
Kotler set out to identify themost glaring marketing defi-ciencies that handicap com-panies from succeeding inthe marketplace. He foundwhat he calls the 10 DeadlySins of Marketing:1.Your company is not suf-ficiently market-focusedand customer-driven.2.Your company doesn’tfully understand itstarget customers.3.Your company needs tobetter define its competi-tors and monitor them.4.Your company has notproperly managed itsrelationships with stake-holders.5.Your company is notgood at finding newopportunities.6.Your company’s market-ing plans and planningprocess are deficient.7.Your company’s productand service policies needtightening.8.Your company’s brand-building and communica-tions skills are weak.9.Your company is notwell-organized to carryon effective and efficientmarketing.10.Your company has notmade maximum use otechnology.Let’s discuss each of thesesins in detail, including boththe
signs
that it is a problemin your company, and thebest
solutions
for fixing it.
s s
2A
U D I O
- T
E C H
and its imitators areinsisting on much lowerprices from suppliers ifthese suppliers wantWal-Mart’s business.And mega-retailers areincreasingly putting outtheir own store brandsthat are reaching a levelof quality equal to thenational brands. Storebrands don’t have to payfor research, advertising,and selling.2.
Companies have been embracing Customer Relationship Management as the latest cure for their ills.
This meanscollecting private infor-mation about individualsto make a better guessat what they can betempted to buy. Butthere is growing opposi-tion to the collection ofpersonal information.Furthermore, people areincreasingly upset with junk mail, spam e-mail,and telemarketing phonecalls. Companies bettermove to permission or"opt-in" marketing assoon as they can.3.
No matter how cheaply a company can produce its products domestically, it can’t be the cheapest as long as China has a say.
China can produce every-thing cheaper and isstarting to make it asgood. China will havethe power to repeat theJapanese game: betterquality at lower prices.4.
Mass marketing costs are rising even though mass marketing effectiveness is falling.
As fewer peoplepay attention to TV com-mercials — either ignor-ingor zapping them — TVnetworks are raising theirprices. This will forcemarketers to find a moreeffective media.5.
Differentiation isn’t work- ing.
Professor TheodoreLevitt said years ago thatyou could differentiateanything, including saltand cement. But theproblem is two-fold. Manydifferentiations don’tmatter to customersthey are spurious or notcompelling. Worse, com-petitors are quick to copyany effective differentia-tion, leading innovatorsto enjoy even shorter life-cycles, barely recoveringtheir investments.6.
Consumers are more informed and sophisticat- ed in their buying habits.
A customer who wants tobuy a digital camera goeson www.mysimon.comand finds over 25 on-linemerchants stating theirprices for this camera.People are being trainedinto price consciousness.Buying on-line is all aboutprice, not reliability orservice differences.7.
Companies continue to cut their marketing expenses during reces- sions, the one prop on which their sales depend.
But because companiesdon’t get hard data onwhat their marketingexpenditures are doing,can you blame them?The point is that marketerswill face increasing chal-lenges in trying to preservecompany margins and hitcompany profit targets. Tomake matters worse, manycompanies are inefficientlyorganized from a marketingstandpoint. Adding companymarketing inefficiency andineffectiveness to all thesechallenges is a recipe fordisaster.
s
 
1. Y
OUR
C
OMPANY
I
S
N
OT
S
UFFICIENTLY
M
ARKET
-F
OCUSEDAND
C
USTOMER
-D
RIVEN
Let’s look at the first sin —your company is not suffi-ciently market-focused andcustomer-driven. Here wesingle out the two sides othe most handicapping defi-ciency in most companies.Either your firm has notgained insight into yourmarket opportunities, or it isnot well-organized to serveand deliver what your targetcustomers want or expect.The signs that your mar-keters have not sufficientlyanalyzed your marketinclude:Poor identification of market segments.Weak or no prioritizationof market segments.Alack of market segmentmanagers.When you ask, "Who are youtrying to sell to?" the answer"everyone" is unacceptable.The owner of a retail storemight say, "We sell clothingto women between ages 20and 50," but that doesn’t meanthe store’s target market isclearly focused. Thats apretty large group whose needsare quite varied. Youngerwomen are more likely todress for the social scene,while the 35 and older groupis probably more interestedin clothes for work and home.Many companies do identifydifferent segments of themarket and make offers toeach segment. An aluminummanufacturer may sell alu-minum on different terms tomanufacturers of airplanes,cars, and kitchen appliances.But has the company reallyanalyzed the attractivenessof each segment? Has it esti-mated the rates of return onits investment in the differentsegments? Has it prioritizedthe segments and reallocatedits resources to the moreprofitable segments?The more important segmentsshould have managers who areempowered to ask for budgetsthat they believe willproducethe company’s target rate oreturn — and they should berewarded accordingly.Now let’s talk about solutions.Most companies can
 do a better job of segmenting the market.
Too many arestopping at the demographicor descriptive level. Agivendemographic group — say30- to 50-year-old men usually contains quite differ-ent individuals, with varyingneeds and preferences.Ford found this out when itlaunched the new Mustangto appeal to young sports-minded drivers, only to findthat many young people werenot interested and manyolder people rushed to buythe car.In general, try to segmentthe members of a market bydifferent needs, or by thebenefits they seek. Then tryto find demographic descrip-tors that might correlatewith these needs and bene-fits to make the search forthese prospects easier.Then,
 prioritize the seg- ments.
Suppose your com-pany has identified more thanone segment. For example,IBM sells mainframe com-puters to companies in manyindustries. IBM recognizedthat some segments weremore important than others.It identified 12 industrieswhere it could focus its effortindustries such as bank-ing, insurance, hotels,telecommunications, andtransportation. By focusingon these industries, IBM wasable to design more compellingofferings than unfocusedcompetitors could present.Also, if customer segmentsare different, then youshould
 develop specialized  sales forces.
IBM learnedlong ago that sending thesame IBM salesperson to sella computer to a bank and tosell a computer to a hotelchain didn’t result in muchbusiness. The salespersonknew too little about theneeds of either banks orhotels. IBM found that it ismuch better to hire ex-bankersand ex-hoteliers to sell tothese industries. They havedeep experience and a net-work of relationships in theseindustries, all of which putsthem in a better position tosell effectively.Another problem is insuffi-cient customer orientation.This occurs when mostemployees think that it’s the job of marketing and sales toserve the customers; whenthere is no training programto create a customer culture;and when there are no incen-tives to treat the customerespecially well.The solution to this is to
 develop a clear hierarchy of company values,
withthe customer at the top. And
 make it easy for customers to reach the company
byphone, fax or e-mail — andrespond to them quickly.
s s
2. Y
OUR
C
OMPANY
D
OESN
T
F
ULLY
U
NDERSTAND
I
TS
T
ARGET
C
USTOMERS
The second deadly sin is that
B
U S I N E S S
B
O O K
S
U M M A R I E S
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