CHANGING THE RULES OF THE MARKETING GAME
Gregory S. Carpenter
Financial Times September 14, 1998
Hamilton Summary
"Simply giving customers what they want isn't enough anymore - to gain an edge companies must help customers learn what they want."
Driven by intense competition and increasingly sophisticated customers, business has rushed to "get close to the customer." Companies at all levels - from industrial giants to smaller, but rapidly growing organizations - invest significant resources scrutinizing market research, drawing on new ideas for product and distribution improvements, and building stronger customer relationships. Though the benefits to the customers have been enormous, one of the major drawbacks has been that in many cases competitors are speaking to the same customers, analyzing identical market research data and drawing new managers and new ideas from the same sources. The result: products that, while high in value, are competitively indistinguishable.
Hence, the traditional view of marketing - giving customers what they want - is evolving. The core assumption of this view - that buyers know what they want - is now in question. Increasingly, strategies are being built on the idea that, at least initially, buyers do not know what they want but instead learn what they want. Perhaps one of the best illustrations of this is today's cell phone market. High profile brands such as Nokia and Ericsson are shaping the buyers' perceptions of cellular phones, the features customers value and how buyers' choose a cell phone. Not surprisingly, strong brand strategies are playing a central role in the buyers' learning process.
What are some of the new rules that today's successful companies are following to nurture this learning process?
- Creating a unique link between brands and customer goals. Harley-Davidson has capitalized on its position as an American icon of freedom by linking its products' popularity with motorcycle clubs to the buyers' desire for a rough, rebellious image. In effect, the company is teaching consumers what emotional needs its products meet.
- Influencing the customer's perception in a way that the competition cannot effectively imitate. In clothing retail, Levi Strauss' long-term brand strategy work has translated into consumers having a richer set of associations for Levis than for Lee jeans. Levis, using extensive advertising to shape and intensify buyers' perceptions of their jeans, has claimed the "rugged individualism" position in the marketplace.
- Tailoring brand strategy to customer experience. Starbucks attracts and retains customers by creating a store experience and advertising that reinforces and accentuates inherent differences in its coffee products. It can therefore both gain the advantages of economy of scale and be perceived as a high-end player - a profitable combination that is rarely possible.
The concept of consumer learning vastly changes the nature of the marketing game. If buyers need to learn what they want, competition becomes less of a race to meet customers' needs and more of a battle over how perceptions, preferences, and decision-making will evolve in the market. In short, good companies are giving customers what they ask for, but great companies are gaining a deeper understanding of the customers' goals and then creating messages that clearly define the links between those goals and their brands.
Gregory S. Carpenter is a professor of marketing at the Kellogg Graduate School of Management, Northwestern University.
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Financial Times © 1998
