More than Just Business

          “It is all about business Darling, it is all about business,” I still remember sitting at the back of the room during my first business class as a college student at a small school in my hometown. The professor gave his signal to start lecturing; he grabbed his student’s list and randomly picked a name. I heard my name, and politely I answered, yes professor? He continued by asking: Esther, what do you believe is the foundation of doing business, what drives people into business.? Shyly I answered: people needs, people are always searching for something and if you give them what they are searching for while getting a profit, then you are getting into business. Good answer he replied, in business you offer a product or service, get paid for it; but you never get involved with your customers, he said. It is all business out there he continued, full of greedy and egocentric people; unfortunately, This is how the business world works and that is why you do your job and leave the room. Professor, I am a little confused I implied, if offering what people need is part of the process of getting into business, how do you not get involved with your customers? There is no friendship in business he answered, there is no giving a hand, people pay for what you are offering, and therefore; there is not a friendly relationship between you and your customers. Consumers are just clients trying to get the best they can get from you; so, in business we have got to be careful with trusting each other, it is all about business darling, he said, it is all just business.

Something just did not sound right to me, I was working at a small company during that time; the company was growing thanks to the relationships we have been building throughout the years; so, I was a little confused, but I decided to let it go for that moment.

After a few years, I went to another school and the whole perspective changed, I will never forget the moment when one of the greatest professor I have had, who taught me based on his own experiences and not just books and theory said: “Gaining customers is about building relationships, satisfying customers needs and taking care of them; that is what builds customer’s loyalty.” I thought: well, when we get into business what we want is to gain customers. Also, we do not want customers to be just onetime buyers; we want them to always come back. Reaching that point, where customers are loyal to your brand, sounds like a strong relationship to me.

“It is all just business”, Many old school business books and teachers may still be teaching with that idea; but highly developed corporations have grown thanks to their loyal relationship with customers. I surely do not believe in theory, I believe in facts; I believe in the success of many companies around the world who have increased their consumer’s loyalty through their CRM programs. CRM, which means customer relationship management sounds like a relationship builder to me, many big companies are implementing it and I believe it can change the focus and direction of any business. In the business world, it is more than just business; it is about building  relationships; it is about caring about your customers and offering them the best you have got.

Core Concepts: Marketing Myopia

There is a core concept in the process of avoiding marketing myopia that needs to be address. Every company needs to capitalize in these concepts: Markets, Needs, Value (Satisfaction), Products/ Services, and customer relationship management (CRM). First, the company should target a market and if the marketing strategy includes diversification, the company would also need to make some R&D to be able to define the other target markets. Then, the company should carefully study and research on the current and future needs in every market. Later, it is important for a company to measure the value that is trying to offer to the customers through their products and/or services. Last, but not least, is the most important tool to create loyalty: Customer relationship management or CRM which is one of the most important competitive advantage in a marketing strategy.

In addition, is necessary to avoid marketing strategies based on inward looking approach and pursue a market strategy based on the needs of the customers first to find the company’s need and objectives later. An outward looking would help to be focus on what is most important for every company: customers and prospects customers.

Avoid Marketing Myopia: Diversification

I have heard many times people giving me advises such as “Do not bite off more than you can chew” or the well-known saying “Jack of all trades, master of none.” That might be a good advice for other aspects in life but business. Today’s biggest empires and leaders of all industries have proven that diversification is a must do. They are competing in various trades now, yet they are mastering at least one of all markets.

Pepsi-Cola and Nike are the best example in this matter. Pepsi Cola Inc. went from being the long-lasting runner-up (always falling behind Coca Cola) until Pepsi Cola decided to diversify. The company began to penetrate into different markets like chips and soft drinks. Currently, Pepsi Cola is second in the market in carbonated drinks, but they become the leaders in soft drinks and chips making almost double the amount of net income last year 2010. Nike Inc. has also chose to redefine their company beyond what it was the original or initial product. Nike Inc.  has successfully diversified their products becoming one of the leaders in the sports gear and apparel industry.  Thus, another effective way to avoid marketing myopia is with diversification.

Marketing Myopia: How broad is your business?

Defining accurately how broad your business is another way to avoid marketing myopia. Failing to understand the scope of your business can easily result in the implementation of incorrect marketing strategies. Upper level management should be able to continuously keep in mind what is the scope of the business and how far can the company really reach without compromising their sustainability. Upper level management should be able to carefully acknowledge their customers and prospects real needs. The combination of these two elements will not only avoid marketing myopia, but lead the company to a sustainable success as well. More than researching for new successful products/services in the market, the vital strategy is to define the right market focus.

If the business is too broad, the upper level management can lose track of the actual market focus and that can result in failure, higher costs, and marketing myopia. On the other hand, if an upper level management is too close minded about marketing strategy and they do not take marketing in a serious way, they would most likely fail too. The balance is in the middle: define how broad your business is and carefully define your customer’s need.

Marketing Myopia: Never stop evolving

Managers or upper level management with marketing myopia would normally share comments like “Customers loyalty would not change regardless of what happens in the market,” or “that won’t ever happen to us.” Those expressions are clearly signs of marketing myopia and often can lead to outdated and old-fashion marketing strategies.  Our modern society, with their new trends formed as a result of fast pace of life, is challenging these outdated concepts. Avoiding marketing myopia means to continuously evolve research, advertise, recognize consumer needs or go out of business.

Apple Inc., is a perfect example of never stop evolving as a way to avoid marketing Myopia. In the 90’s apple was just a mere and pure computer company. The problem was that they were lacking behind the Microsoft Empire. Apple evolved and when from being a computer company to cancelling their operating systems licensing agreement and develop what would become the new generation of computers: the iPod. From the tremendous success of the new era in technology, music, and electronics: the iPod, Apple never stop evolving. Until today, Apple Inc. continues to innovate beyond consumer expectation and investing a substantial amount of money in marketing and R&D.

Innovation as a Marketing strategy

One of the normal symptoms when marketing myopia occurs is thinking that the company is its own competitor. In other words, the company does not have any important competitor. That thought is wrong, in fact, there are many competitors out there in the market that can and will be influential. The market place is becoming more and more competitive through the years; globalization is one important cause for this expanding competitive world.

Despite the marketing myopia of those companies that believe they do not have competitors, in reality, companies are battling for shrinking market shares; while struggling with differentiation. The more competitors in the market, the less profit there is for the leaders. Thus, when differentiation is a problem among competitors of a specific industry, innovative marketing strategies will be the bridge to a sustainable growth. Innovation and marketing can be the way to take over that uncontested market space.

Cirque du Soleil, for instance, succeeded not by competing with other circus and festival, but by making its competitors irrelevant. Cirque du solei developed a new and innovative market strategy: they did not target kids only anymore, they target all ages offering new and innovative shows for all ages.

Marketing: Company’s long lasting competitive advantage

Some companies can get to the top after years and years of being in the market, some others can get to the top faster than that by deliberated marketing efforts. What most competitors do not understand about this competitive world is that the most important thing is not get to the top; but to stay as the leader. Remaining as the leader for many years in a fast changing world is in fact one of the biggest challenges. Marketing is the key. The right marketing mix and cutting-edge marketing strategies would not only take a company to the top, but would maintain the company as a leader for a long time.

Marketing strategies can never stop and when a company reaches to the top and become the leader is when they have to rely even more in marketing efforts to stay as the leader. Motorola, for instance, failed to see this fact.  They were very successful with car radios first. They become the leader in the telecommunication industry when they introduced the first mobile phone. Motorola remained as the leader until a few years ago when companies like Nokia started to invest in a massive marketing campaign in Latin America and Europe and they dominated those markets. Later, Motorola failed to adjust and their marketing strategy did not help them prevent the introduction of smart phones.

Losing the edge

In the past few decades, we have seen companies that used to be top competitors and industry leaders turned into obsolete companies. Long lasting companies like Ford and General Motors, two of the most stronger leaders in the car industry during the 80’s; the same way companies like Sega, leader for more than a decade in the video game industry; or even smaller competitors like Blockbuster, movies rental industry, and Borders, book store industry have failed to adapt, have grown obsolete or simply they were acquired by competitors that knew how to adapt and modify.   The fast pace in technological advances have change not only the products, but also the consumers and the markets. Technology and globalization has definitely become a very tough test to all industries.

Companies like General Motors, Ford, Sega, Blockbuster, and Borders lost the edge and were not able to adapt. They were not able to keep up with the fast pace of technology losing loyalty, new costumers, money, and market share. General Motors and Ford did not pay attention to competitor investment activity. They were not expecting how handy technology would be. Sega on the other hand fail to invest in marketing efforts and they lose track of market trends. Borders and Blockbuster were able to adjust a little bit, Blockbuster for instance survive to the VHD to CD transition but fail to adjust to the free movies through the internet.

Selling vs. marketing

No matter the industry, so many companies in different fields have failed to understand the difference between being successful at selling and being successful in marketing. Sales are important in every company, but emphasize and capitalize a company efforts in sales only are a common mistake that can lead to a company’s failure. Therefore, mismanagement and marketing myopia happens when a company fails to stress the relevance of marketing strategy over a simple selling strategy. It is important to understand that selling strategies focuses on a seller need; while marketing strategies focuses on buyer’s needs.

The right way to invest in a company and expect a successful future is to concentrate in marketing strategies as a tool to improve sales. With the right marketing mix, realistic and correct marketing strategy, and the proper capital to invest in a marketing plan, the company can expect higher sales over time. Improving sales in tough times like today can be a very lucky and rare coincidence; or can be a result of a deliberated plan to success during tough times no matter the industry or company. Good managers would not be choosing either selling or marketing; good managers know that marketing should come first and sales will come as a consequence.

Marketing Psychology

Marketing psychology can also be called consumer behavior analysis. Is the analysis of a process developed by the buyers that can be influenced by several external factors.  As a Marketers, it is important to understand customers according to all those factors because it can affect the whole marketing decision.

The factors that affect consumer behavior are the following:

friends and family: The opinion of family and friends when purchasing things like food, cloths, cars and everything that can actually affect the lifestyle of a family or a group of friend has a great impact on what customers decide to buy.

opinion leaders: It is very important to identify who are the opinion leaders that influence your customers it is important who they are following because they are big influencers in their life.

Culture: People have that sense of wanting to belong to a group, therefore we usually adopt the cultures of our countries or of a group because we feel like we belong to that group.

These are only 4 factors that can influence consumer behaviour, but there are a lot of others factors that can influence the behaviour of each customers, it is very important as a marketer to run a marketing campaign that satisfies every types of needs that these influencers generate in our target market.