Assimilation of Marketing Term Paper

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Introduction

Schewe & Haim (1998) provide an overview of the field of marketing, tracing its roots and development until the end of the 20th century. This era set much of the foundation for how marketing works today, although the modern marketing organization leverages modern technology in ways that were unavailable to practitioners in the 20th century. Schewe and Haim make the case that marketing is a critical element of business success, but that marketing as a function need not be expressly the work of a marketing department. The argue instead that the core essence of marketing lies not just with attracting new customers, but also with ensuring the satisfaction of existing ones.

The inherent logic of this argument is fairly straightforward – marketing is about revenue generation. There are two components to revenue – new business and repeat business. To take a holistic view of marketing is to recognize this reality, and build your marketing strategy around that. Evidence shows that the cost of retaining an existing customer is much lower than the cost of attracting a new one. A customer relationship is inherently a value one – a company must continue to deliver value to the customer in order to continue to earn revenue (Buchanan & Gillies, 1990). Customer satisfaction often comes down to marketing principles – the same appeals that are made explicitly during the marketing and sales processes continue to be made on an implicit level once someone becomes a customer (Rust & Zahorik, 1993).

This is what Schewe and Haim mean when the say "customer first, last and always" – marketing is always about the customer. All efforts of the company are in one way or another about the customer, and thus all should be done with a marketing mindset.

Who Is the Market?

Schewe and Haim provide the framework for understanding the market. They explain how marketers typically break the market down into manageable, understandable segments. They explain the process of profiling customers – this allows marketers to either work with target markets or personas, as means of understanding who the customer is, and to get a better sense of buyer behavior. The outline what are essential six types of buyers based on their behavior style – the initiator, influencers, decider, buyer, consumer and evaluator. For many transactions, these might be the same person. But that is not always the case. In general, when a purchase is larger, or one that requires a greater level of thought and analysis, there will be many of these roles filled by different people. In a B2B transaction, there are almost always at least these six, if not more, people involved in the buying process, and the buying cycle can take months as a result.

Another element of the buyer that Schewe and Haim analyze is that of culture. In their view, variables like culture and social class can matter – and these are variables that are fairly easy to understand because they relate to data that arise from the census. But the key takeaway from the discussion about the different roles that marketers must be aware of is that these roles are unique to each product and transaction – it is of utmost importance that the marketer should understand which apply to their transaction, and set out a marketing strategy accordingly.

The Four Ps

The four Ps of marketing are product, position, price and promotion. These form one of the most fundamental concepts of marketing. Schewe and Haim (1998) discussion positioning in terms of understanding the target market. First, a marketer should know who the target market is, and get a sense of that target market's behaviors. Then, the marketer can start to think about what positioning it wants to take. In a sense, the product will dictate that. But there is also a role here for the Product Marketing Manager, a role that specifically takes information gained from marketing efforts and helps product teams translate that into either new products, or enhancements to existing products. An example of positioning for a target market as Schewe and Haim discuss would be an airline that starts a budget division. The airline might be happy with its core business, but feel that there is an opportunity for a budget division that offers slimmer margins but higher volumes – that it risks losing customers if it does not offer this. So the airline is now designing a product specifically for a new target market, one that presumably it does not currently have a product for.

Kawasaki (2006) argues that one of the best approaches to the product side of the marketing mix is to develop disruptive products.

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This is much more difficult than it sounds, of course, but has the value of being correct. A company that markets products that offer little distinctive is one that will have typically have trouble winning share away from existing customers. The product aspect of the marketing mix needs to be disruptive in some way, and that is really just the starting point for marketing excellence.

Ries & Trout (no date) argue this point on several fronts. First, they argue that leadership is the best approach to marketing. This means being the innovator in a category, or at the very least finding something that you do better than the competition, whether that is the product itself, the pricing, the promotion – but some element of the marketing mix should be excelled at. With product leadership, there is at least something around which the marketing team can build – and it will be difficult to succeed without some sort of leadership. They follow up this argument with a case that just because a company or product is the leader does not preclude a strong #2. Not by accident, but because there will likely be a weakness in that leading product, and a company can be successful by exploiting that weakness. But as Trout and Rivkin (2006) point out, there has to be some genuine differentiation in order to carve out this niche, and without that a company will have a much more difficult time succeeding in the market.

Promotion

Cialdini (2009) discusses the promotional aspect to some extent in his book Influence. He argues that there are several different sources of influence, including social proof, liking, authority, scarcity, commitment and reciprocation. On a high level, he is really saying that humans are influenced by other humans. If a company can cultivate this influence, that they are going to be more success in their marketing efforts. A lot of marketing promotion, particularly with respect to messaging, is about creating influence. Think about the timing of a new product launch. First you want to get the early adopters on board, and if you can do that successfully that will lay the foundation for everybody else. In the social media age, the company can release a new product, put up a little bit of social, and then seek the attention of known influencers in the field. If you have a microbrewery, for example, and you want to release a special beer, you can leverage this to a very high level.

You would start by bringing in whatever local beer bloggers or reviewers there are, and the people who run the best bars/stores in town that beer nerds like to patronize. These are your influencers – these people might actually buy very little of any one beer, but they are going to influence thousands. A couple dozen people get a free bottle, and they influence thousands because they have the credibility. If some write about the beer online, that creates social proof and authority. If this is combined with scarcity, that beer might never make the company money, but will increase its prestige, which can carry over to the brewery's other, high-volume products. And this is just with one element of the product launch, one that costs very little. There are definitely opportunities with many products to adopt this sort of approach, simply by understanding the roles that different consumers play in the promotional process, and then shaping the messaging and promotional strategy around the different types of buyers and influencers.

Cialdini rightly points out that marketing has a large psychological element to it, and would be well to note the sociological element as well. The psychology of the buyer is basically that they are convinced by arguments, but Cialdini does not note that these arguments are often sociological in nature – so many times it is people convincing other people, and usually indirectly. If a marketer can successfully influence the influencers, there is a lot of power in that.

Schewe and Haim (1998) contribute to the discussion about promotion. A lot of their discussion is focused on the enterprise domain, and on advertising. They note that there is a need to find a way to cut through the noise – that companies have to….....

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