Some Perspectives on Marketing

Marketing is becoming a hot topic, particularly in Canada as we wrestle with the so-called “Commercialization Agenda”. One of the most insightful articles of all time was by Ted Levitt entitled “Marketing Myopia” – June/July 1960 issue of Harvard Business Review. It made reference to the inabilities of industry managers to capitalize on changes in their markets. The railroads assumed they were in the railroad business and not in the transportation business.

Some industries fared better than others. The motion picture industry leaders recognized that they were in the entertainment business and embraced new technologies like television. It was a newer industry than the railroad industry and its managers were more entrepreneurial. In the 1930s, the large food chains barely escaped being wiped out because of their reluctance to accept shopping malls as a place of business. The first major shopping mall in the U.S. was in Jamaica, Long Island in 1930. The smaller food chains and stores adopted the concept throughout the thirties, while the larger chains blamed their problems on the depression. There always seems to be plenty of scapegoats for poor marketing decisions. The real culprit is usually the lack of recognition that marketing is a strategic function while selling is a tactical function. Some companies are better at scrapping product lines than others.

The Levitt paper is fascinating to read from a perspective of forty years. It addresses a lot of the same issues as Geoffrey Moore addresses but the jargon is different. He doesn’t refer to early adopters or pragmatists or chasms or tornadoes, but he does refer to customer orientation quite frequently. He scolded companies for being more concerned about cost reduction of obsolete products than with solving customer problems. He did not refer to “whole products” but to the arrogance of suppliers who thought they knew best and tried to force old solutions on them.

Marketing seems to present unique challenges to Canadian technology companies. We have a small domestic market and what does exist is often skeptical about Canadian solutions. We have a high level of foreign ownership, which means that marketing decisions are made elsewhere. Marketing expenditures are ongoing and must be ramped-up as business declines, whereas selling expenses are more related to sales revenue. Companies that are not funded properly in the first place are never likely to be very marketing oriented. That is why we have so many good Canadian technologies being exploited elsewhere.

A market is a group of people or institutions with a common need and the ability and willingness to fulfill that need. The people component is very important, especially when it comes to quantifying markets, especially new markets. In the final analysis, it is people who consume products. Markets are different than application areas. Markets can be quantified and can be addressed in terms potential, penetration, and share. They can change very quickly, making quantification very difficult. The North American market potential for TV sets used to be the number of family units, now it is the number of rooms with four walls.

Markets can behave erratically when addressed with new technologies. There were more telephones in rural North America in 1921 than there were in 1941. The market required a critical mass in order to be viable. In the final analysis, your market strategy will be reflected in your product migration strategy. It must not only give your customers clear buying choices with today’s products, but it must show how each of those products will migrate in terms of cost and benefits as new waves of technology come along. Technology produces products and products address markets – changes in both must be based on market intelligence. It is important that the technology/product/market pyramid be right side up. Many companies start out as consulting companies or system integrators and their pyramid is upside down – too many technologies and not enough products or addressable markets.