(
Revised
Unit 11 from Business & English)
‘WARM-UP’ POINT
►Discuss the extent to which you agree or disagree with the following ‘marketing’ definitions:
Marketing is not only much broader than selling; it is not a specialized activity at all. It encompasses the entire business. It is the whole business seen from the point of view of the final result, that is, from the customer’s point of view. Concern and responsibility for marketing must therefore permeate all areas of the enterprise. /Drucker/
The marketing concept is a philosophy, not a system of marketing or an organizational structure. It is founded on the belief that profitable sales and satisfactory returns on investment can only be achieved by identifying, anticipating and satisfying customer needs and desires. /Barwell/
‘THEORY-1’ POINT
Marketing
(1) Marketing plays a key role in the company’s strategic planning process in several ways. First, marketing provides a guiding philosophy - the marketing concept - that suggests company strategy should revolve around building profitable customer relationships with important consumer groups. Second, marketing provides input to strategic planners by helping to identify attractive market opportunities and by assessing the firm’s potential of strategies for reaching the unit’s objectives. Once the unit’s objectives are set, marketing’s task is to carry them out to mutual advantage.
(2) Modern marketing suggests that consumers should be the focal point of all business activity. The goal is to build strong profitable relationships with customers. As a first step, through market segmentation, targeting, and positioning the company decides which customers it will serve and how. It identifies the total market, then divides it into smaller segments, selects the most promising segments and focuses on serving and satisfying these segments. Next, the company designs a marketing mix made up of the factors under its control - product, price, place, and promotion (the 4 P’s). To find the best marketing mix and put it into action, the company engages in marketing analysis, planning, and control. Through these activities, the company monitors and adapts to the factors and forces in the marketing environment.
(3) One component of a firm’s marketing strategy is the marketing mix which has been described as the set of controllable, tactical marketing tools that the firm blends to produce the response it wants in the market place with its intended target market. The marketing mix consists of everything the firm can do to influence the demand for its product. The various possibilities can be collected into four groups of variables - product, place, price and promotion.
The 4 P’s take the seller’s view of the market, not the buyer’s view. From this buyer’s viewpoint, in this age of customer relationship marketing, the 4 P’s might better be described as the 4 C’s, according to Robert Lauterborn. The relationship can be described by the following chart:
The 4 P’s |
The 4 C’s |
Product Price Place Promotion |
Customer solution Customer cost Convenience Communication |
Thus while marketers see themselves as selling products, customers see themselves as buying value or solutions to their problems. And customers are interested in more than just price; they are interested in the total costs of obtaining, using, and disposing of a product. Customers want the product and service to be as conveniently available as possible. Finally, they want two-way communication. Modern marketers would do well to think through the 4 C’s first and then build the 4 P’s on that platform.
(4) Customer relationship management is the overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction. Said another way, it is about developing long-term, mutually beneficial relationships. Modern marketers are going beyond designing strategies to attract new customers and create transactions with them. They are using customer relationship management to retain current customers and build long-term relationships with them. This new view is that marketing is the science and art of finding, growing and retaining profitable customers. The key to building lasting customer relationships is to create superior customer value and satisfaction. Customer perceived value is the difference between total customer value and total customer cost; whereas customer satisfaction is the extent to which a product’s perceived performance matches a buyer’s expectations.
(5) As marketers find themselves in the first decade of the twenty-first century, dramatic changes are occurring. These major developments can be summed up in a single theme: connecting. Now more than ever before, we are all connected to each other and to things near and far in the world around us. Moreover, we are connecting in new and different ways. The major force behind the new connectedness would be tremendous advances in computer, telecommunications, information, transportation and other connecting technologies. The Internet is perhaps the most dramatic new technology driving the connected age. These new connecting technologies are allowing marketers to connect more effectively with customers, with marketing partners and with the world. When connecting with customers, marketers are able to interact with potential and actual customers directly and with greater selectivity to build and maintain a mutually beneficial relationship - for life. In addition to customer relationship management, marketers must also be good at partner relationship management. Partner relationship marketing involves working closely with partners in other company departments and outside the company to jointly bring greater value to customers. When connecting with marketing partners, marketers are more able to develop strategic alliances with suppliers and distributors as well as within the organization itself. Finally, as marketers are redefining their relationship with customers and partners, marketers are also looking at new ways in which to connect with the broader world around them. This involves developing broadened connections with global partners with recognition of the importance of social values and responsibility.
►Question/Answer session:
What are the key roles that marketing should play in an organization's strategic planning process?
What are the principal activities of the marketing process?
Explain how the elements of the marketing mix (the 4 P’s) should be viewed from the buyer’s standpoint as the 4 C’s.
What is the concept of customer relationship management?
What are the major trends and forces that are changing the marketing landscape and challenging marketing strategy in this millennium?
‘SUMMARY’ POINT
►Translate the phrases below into Russian and make them stick in your mind:
the strategic planning process
to provide input to strategic planners
to identify attractive market opportunities
to assess the firm’s potential
to reach the unit’s objectives
to be the focal point of all business activity
to identify the total market
to divide into smaller segments
to select the most promising segments
to focus on serving and satisfying the segments
to put into action
marketing analysis, planning, and control
to monitor and adapt to the factors and forces in the marketing environment
the set of controllable, tactical marketing tools
the target market
the solution to a problem
to dispose of a product
to deliver superior customer value and satisfaction
to attract new customers
to retain current customers
to build/develop/maintain lasting and profitable customer relationships (long-term, mutually beneficial relationships)
market segmentation, targeting, and positioning
the extent to which a product’s perceived performance matches a buyer’s expectations
‘PUZZLE-1’ POINT
►Fill in the blanks with the expressions from ‘Summary’ Point:
The Marketing Department has recently __________ the new plan devised by the Marketing Director and aimed to not only __________ but also __________ thus maintaining the present customer base and even increasing it.
__________ involves a thorough analysis of a company’s performance over a certain period of time and __________.
GMM decided that it needed to change its __________ from the over 35s to the 25-35s.
The highly competitive environment requires that businesses be sure in customer satisfaction that is __________.
__________, a focal point of marketing mix, is a combination of marketing activities used to promote a particular product or service.
The best __________ is to __________ and launch another one which will cater more for the elderly.
‘TRANSLATION-1’ POINT
(1) Marketing communications have their own ‘promotions mix.’ Think of it like a cake mix: the basic ingredients are always the same. However, if you vary the amounts of one of the ingredients, the final outcome is different. It is the same with promotions. You can ‘integrate’ different aspects of the promotions mix to deliver a unique campaign. Some of the elements of the promotions mix are:
Personal Selling
Sales Promotion
Public Relations
Publicity
Direct Mail
Trade Fairs and Exhibitions
Sponsorship
Advertising
(2) Companies must do more than deliver good products and services - they have to inform customers about product benefits and carefully position these in customers’ minds. They do this by skillfully employing mass promotions to target specific buyers. The three mass-promotion tools are advertising, sales promotion and public relations.
(3) Advertising is the use of paid media by a seller to inform, persuade and remind target audiences about its products or organization. It is a powerful promotion tool. Advertisements take many forms and have many uses.
(4) Advertising decision making is a five-step process consisting of decisions about the objectives, the budget, the message, the media and, finally, the evaluation of results. Advertisers should set clear objectives as to whether the advertising is supposed to inform, persuade or remind buyers. The advertising budget can be based on what is affordable, on a percentage of sales, on competitors’ spending, or on the objectives and tasks to be accomplished. Message decisions involve planning the message strategy - designing messages, evaluating and selecting them - and executing them effectively. The media decision calls for a definition of reach, frequency and impact goals; choosing chief media types; selecting media vehicles; and deciding on media timing. Finally, evaluation calls for evaluating the communication and sales effects of advertising before, during and after the advertising is placed. Companies that advertise their products in different country markets can apply the basic principles relating to domestic advertising, but they must take into account the complexities involved in international advertising. They must address the similarities and differences in customer needs and buying behavior, as well as cultural, socioeconomic, political and regulatory environments across country markets, which will affect the decision to standardize or differentiate advertising strategies and executions.
(5) Sales promotion covers a wide variety of purchasing incentives - coupons, premiums, contests, buying allowances - designed to stimulate consumers, the trade and the company’s own sales force. In general, sales promotions should be about consumer relationship building. In many countries, sales promotion spending has been growing faster than advertising spending in recent years. Sales promotion calls for setting sales promotion objectives, selecting tools, developing, pre-testing and implementing the sales promotion program, and evaluating the results.
(6) Organizations use public relations to obtain favorable publicity, to build up a good ‘corporate image’ and to handle or head off unfavorable rumors, stories and events. Public relations involves setting PR objectives, choosing PR messages and vehicles, implementing the PR plan and evaluating PR results. To accomplish these goals, PR professionals use a variety of tools, such as news, speeches and special events. Or they communicate with various publics through written, audiovisual and corporate identity materials, and contribute money and time to public relations activities.
►Question/Answer session:
What is promotions mix?
Why do companies have to do more than simply deliver good products and services?
What is the essence of advertising decision making?
Are advertising principles the same for local and international markets? If not, explain the differences using real examples.
What is the essence of sales promotion?
What is the essence of public relations?
►Translate into Russian.
►Classify the expressions below under the common communication platforms given in boldface:
Advertising |
Sales promotion |
Public relations |
Personal selling |
Direct marketing |
Trade-in allowances Display signs Brochures & booklets Speeches TV shopping Demonstrations Audiovisual materials Sponsorships Coupons Symbols & logos Sales meetings Charitable donations Lobbying |
Press kits Community relations Fairs & trade shows (2) Mailings Web sites & banners Rebates Annual reports Sales presentations Point-of-purchase displays Sampling Video news releases Fax mail Special events |
Billboards & posters Premiums & gifts Voice mail Telemarketing Packaging Motion pictures Catalogs Contests, games, lotteries E-shopping Identity media Print, broadcast, online ads Tie-ins Continuity programs
|
‘SHOW-1’ POINT
B
enetton
is a global unmarked clothing brand, based in Travis, Italy. Benetton
is known in the United States for producing a long-running series of
controversial, sometimes offensive, advertisements that have caused a
number of media critics to accuse the company of deliberately
creating controversy in order to sell its products.
This publicity campaign originated when photographer Oliviero Toscani was given carte blanche by the Benetton management. The ads entitled ‘United Colors of Benetton’, have included images that are apparently unrelated to the clothes sold by the company, including scenes of people dying of AIDS, panicking crowds jumping off of a sinking ship, a bloody, unwashed newborn baby, and a death row inmate. The only caption included in these pictures is the Benetton logo.
►Make a PowerPoint presentation on Benetton Controversy. Visualize your presentation in minds of your listeners. The use of initiative is highly praised.
‘SHOW-2’ POINT
►Take center stage and with the help of different advertising techniques convince your audience to buy a particular service or product. Let your imagination run wild!
MAKE YOUR POINT
Flori Footwear is a small manufacturing company situated near the Lake District in Landria. It is launching a new quality walking boot to add to their product range.
►As their marketing manager, what two promotional activities might you use? Explain your reasons.
‘PROS & CONS’ POINT
The media planner has to know the reach, frequency and impact of each of the major media types. The major media types are newspapers, television, telephone, direct mail, radio, magazines, outdoor and the Internet.
►Each medium has advantages and limitations. What are they? What factors do media planners consider when making their media choices? Fill in the table:
|
Advantages |
Limitations |
Newspapers |
|
|
Television |
|
|
Telephone
|
|
|
Direct mail |
|
|
Radio
|
|
|
Magazines
|
|
|
Outdoor |
|
|
Internet
|
|
|
WWW POINT
Personalized marketing is getting more and more popular nowadays. Sometimes it is referred to as an extreme form of product differentiation, which tries to differentiate a product from competing ones. In contrast, personalization or customization makes a unique product offering for each customer. For instance, car customization is becoming increasingly popular. It first became big with the release of the movie “The Fast and the Furious,” which was about the underground street racing world. After that, it was no longer unusual to see a car driving down the street with a huge spoiler and an engine you could hear from 500 feet away. Car customization suddenly had become a new fad.
►Go to www.scion.com and prepare a short talk on Build your personalized car!
►Go to www.buildabear.com and prepare a short talk on Build your personalized bear!
In both cases be sure to analyze the reasons and advantages of personalized marketing or customization.
‘SHOW-3’ POINT
►
Team
up with your classmate, go to www.amazon.com
and prepare a PowerPoint presentation on How
Amazon broke new marketing ground!
Be sure to analyze how customization works at Amazon. The use of
initiative is highly
praised.
‘THEORY-2’ POINT
International marketing
(1) Companies cannot simply stay domestic and expect to maintain their markets. Despite the many challenges in the international arena (shifting borders, unstable governments, foreign-exchange problems, corruption, and technological pirating), companies selling in global industries need to internationalize their operations.
(2) In deciding to go abroad, a company needs to define its international marketing objectives and policies. The company must determine whether to market in a few countries or many countries. Then it must decide on which types of countries to consider. In general, the candidate countries should be rated on three criteria: market attractiveness, risk, and competitive advantage.
(3) Once a company decides on a particular country, it must determine the best mode of entry. Its broad choices are indirect exporting, direct exporting, licensing, joint ventures, and direct investment. Each succeeding strategy involves more commitment, risk, control, and profit potential. Companies generally begin with indirect exporting, then proceed through later stages as they gain more experience in the international arena.
(4) In deciding on the marketing program, a company must decide how much to adapt its marketing mix (product, promotion, price, and place) to local conditions. At the two ends of the spectrum are standardized and adapted marketing mixes, with many steps in between. At the product level, firms can pursue a strategy of straight extension, product adaptation, or product invention. At the promotion level, firms may choose communication adaptation or dual adaptation. At the price level, firms may encounter price escalation and gray markets, and it may be very difficult to set standard prices. At the distribution level, firms need to take a whole-channel view of the challenge of distributing its products to the final users. In creating all elements of the marketing mix, firms must be aware of the cultural, social, political, technological, environmental, and legal limitations they face in other countries.
(5) Depending on the level of international involvement, companies manage their international marketing activity in three ways: through export departments, international divisions, or a global organization. Most firms start with an export department and graduate to an international division. A few become global companies in which the top management plans and organizes on a global basis.
►Question/Answer session:
What prompts companies to internationalize?
What should a company ‘going global’ determine at first?
Explain each step mentioned in your answer to the previous question.
►Consider the following. An overseas casual clothing manufacturer is going to break into the Russian market. This is the aim. What might be objectives? In light of the steps mentioned in the article decide:
the best mode of entry
the marketing program (at product, promotion, price, and distribution levels)
Because of shrinking domestic markets due to competition, a moderate-size company in the salad-dressing industry is trying to decide ‘whether to go abroad.’
►What are some questions concerning political, religious, and cultural factors that the company should ask itself before it decides to engage in international business? Choose a country and answer the question, then decide whether or not to market salad dressing in that country.
‘PREPOSITION’ POINT
►Fill in the blanks with the correct prepositions:
Have you decided ___ our advertising budget at the meeting?
Last month ProZet merged with 7F ___ their mutual advantage.
We designed the best marketing mix and put it ___ action.
Marketing consists of some basic principles that can be applied ___ any marketing effort.
Through targeted marketing activities companies try to adapt ___ prospective consumer tastes the best possible way.
Successful marketers should be good ___ customer relationship management.
‘TRANSLATION-2’ POINT
►Translate into English using the expressions in brackets:
(1) Современный маркетинг направлен на привлечение новых клиентов за счет предоставления им наивысшей потребительской ценности (promise superior value), а также на удержание имеющихся клиентов посредством полного удовлетворения их потребностей. Умелый (sound) маркетинг необходим (be critical to) для достижения успеха в любой компании, большой или маленькой, коммерческой или некоммерческой, местной или траснациональной.
(2) Многие считают, что маркетинг – это только реклама и сбыт. На самом деле маркетинг состоит из многих видов деятельности, включая маркетинговые исследования, разработку товара, организацию его распространения, ценовую политику, рекламу, персональную продажу. Все они используются для осознания, обслуживания и удовлетворения (sense, serve and satisfy) потребительских нужд, а также для достижения целей организации. Маркетинг существует (operate within) в условиях динамических глобальных перемен. Из-за стремительных изменений в мире стратегия, которая еще вчера была самой лучшей, сегодня становится устаревшей. Для достижения успеха в 21-м столетии компании должны строго ориентироваться на рынок (be strongly market focused).
(3) Мы определяем маркетинг как социальный и управленческий процесс, с помощью которого отдельные лица и группы лиц удовлетворяют свои нужды посредством создания товаров и потребительских ценностей и обмена ими друг с другом (create and exchange product and value). Основные понятия маркетинга включают такие понятия, как нужды, потребности и запросы; товар и услуга; ценность, удовлетворение и качество; обмен, сделка и взаимоотношения; рынки. Потребность – это нужда, формируемая в соответствии с культурным уровнем и индивидуальностью человека (shaped by culture and individual personality). Подкрепленная (backed by) покупательской способностью, потребность превращается в запрос. Люди удовлетворяют свои нужды, потребности и запросы с помощью товаров и услуг. Товаром мы называем все, что может быть предложено на рынке для удовлетворения нужд, потребностей и запросов. В широком смысле слова к товарам также относятся услуги, места, организации, виды деятельности и даже люди.
(4) Принимая решение о покупке товара или услуги, потребители надеются на свое восприятие относительной ценности (perception of relative value). Потребительская ценность – это соотношение (различие) между преимуществами, которые потребитель получает в результате приобретения и использования товара, и затратами на его приобретение. Удовлетворение потребителя напрямую зависит от качества товара; данный факт побуждает многие компании работать по программам комплексного управления качеством (TQM). Маркетинг возникает тогда, когда некто решает удовлетворить свои нужды и запросы с помощью обмена. Кроме заключения кратковременных сделок продавец (закупщик) заинтересован в долговременных отношениях со своими клиентами, дистрибьюторами, агентами по продаже и поставщиками.
(5) Управление маркетингом – это анализ, планирование, реализация и контроль программ, разработанных для формирования и сохранения выгодных отношений с целевыми покупателями ради достижения целей организации. Управление маркетингом – это не просто поиск определенного количества потребителей, достаточного для данного уровня производства компании (the company’s current output). Управление маркетингом временами связано с корректировкой и даже уменьшением спроса. Управление спросом означает управление потребителями. Помимо использования стратегий, нацеленных на привлечение новых клиентов и совершение с ними сделок, компании сегодня делают все возможное, чтобы сохранять уже имеющихся клиентов и поддерживать с ними постоянные отношения, предлагая им наивысшую потребительскую ценность и удовлетворяя их потребности.
(6) Управление маркетингом может осуществляться с помощью пяти стратегий. Концепция совершенствования производства (the production concept) основана на том, что потребитель предпочитает (favor) товары, которые широко доступны и стоимость которых устраивает потребителя (be affordable); управление (менеджмент), следовательно, должно быть направлено на совершенствование производства (production efficiency) и снижение цен. Концепция совершенствования товара основывается на том, что потребитель всегда отдаст предпочтение товару, который обладает наивысшим качеством и является инновационным; таким образом, требуются небольшие усилия по продвижению продукта. Установочная концепция (или концепция интенсификации коммерческих усилий) (the setting concept) гласит, что потребители не будут покупать товары определенной компании, если только она не предпримет (undertake) широкомасштабную кампанию по продвижению своей продукции. Концепция маркетинга предполагает, что достижение компанией своих целей зависит от определения нужд и потребностей целевых рынков, а также от более полного и эффективного по сравнению в конкурентами удовлетворения потребителей. Суть концепции социально- (или общественно) этичного маркетинга (societal marketing) заключается в том, что компания должна определить нужды, потребности и запросы целевых рынков. Обеспечение (1) удовлетворения запросов потребителей (customer satisfaction) и (2) долгосрочного общественного благополучия (societal well-being) является ключом к достижению целей и обязанностей компании.
(7) Сегодня компании борются за выживание в условиях изменяющихся ценностей и ориентиров потребителей (customer values and orientations), стремительно развивающейся мировой экономики, роста некоммерческого маркетинга, бума информационных технологий, включая Интернет, ускорения процессов глобализации (rapid globalization), включая усиление международной конкуренции, и наличия других экономических, политических и социальных изменений. Эти трудности усугубляются требованием уделять особое внимание вопросам этики и социальной ответственности. В таких условиях могут преуспеть только компании, которые (1) четко ориентированы на изменяющийся рынок и (2) взяли на себя обязательство использовать все инструменты маркетинга для предоставления клиентам высшей потребительской ценности.
‘THE ECONOMIST-1’ POINT
►Pre-reading question/answer session:
What may the title of the article Led by the nose convey?
How do you think retailers may try out smells, sounds and sights on hapless shoppers? Why do they do that?
What do you know about Harrods and Selfridges?
Led by the nose
Retailers will try out a baffling array of smells, sounds and sights on hapless shoppers
(1) A scent of chocolate wafted through the women’s shoe section. That of cut grass floated through the outdoor-furniture department, accompanied by the far-off sounds of children laughing, jumping into pools and of sausages sizzling on an open fire. Lime and basil infused the till receipts. Never a store to do things by half-measures, London’s Harrods, the world’s best-known purveyor of luxury, went for maximum impact when it played with scent for a few weeks in 2008. No fewer than 12 different fragrances permeated its sumptuous departments, in the boldest experiment yet in the use of aroma in retailing.
(2) In 2009 several other stores will follow the Harrods lead, in Britain and beyond. They will include at least one large supermarket, the owner of several shopping malls and a fast-food chain. All will try out an array of new smells, sights and sounds on their customers, hoping not just to entice people in but to make them stay longer, spend more and come back again.
(3)
If
history does indeed rhyme,
rather
than simply repeat itself,
it
does so with remarkable symmetry in retailing.
For the Darwinian world of shopkeeping has long thrown
up all manner of innovation.
Harrods, for instance, installed the world’s first escalator in
1898, drawing huge crowds of people. Those brave enough to ride it
were offered a
stiff brandy
at the top.
(4) For all its magic, however, the past century of retailing has been dominated by attempts to appeal to the eye. In Britain, for instance, two Americans threw out the rulebook for running shops and introduced a radical new form of retailing when, in 1909, they opened Woolworths, a cheap general dealer, and Selfridges, a department store offering luxury to the middle classes. Although aimed at very different parts of the market, they transformed shopping in a similar way. Both brought goods out from behind their Victorian counters and put them where customers could see and touch them. “Display was everything,” says Kathryn Morrison, an architectural historian.
A whiff of innovation
(5) Now smell is the new frontier. One reason for this is that mainstream shops have suffered a steady haemorrhaging of spending to cheaper internet sites and “big-box” warehouses on the outskirts of towns. In response, they are trying to make shopping more entertaining and to offer customers experiences that they cannot get online, says Ira Kalish, a retailing expert at Deloitte. With sight and sound easily delivered in bits of data to the home, retailers are now experimenting with the two senses that don’t transmit: touch and smell.
(6) This is not entirely new. Canny supermarkets already ensure shoppers are hit with the smell of freshly baked bread as they enter. But now retailers and marketers are playing with a whole bouquet of smells in new and radical ways that often seem unconnected with the products on sale, be they chocolate or women’s shoes.
Get the smell right and you can bypass rational thought
(7) Indeed, a second reason for a smellier future is the innovation that will flow from advances both in our understanding of how different smells affect the mind and in new techniques to deliver them. Brain scans, for instance, can show how different smells fire up the brain’s pleasure centres. Some aromas have shown a remarkable ability to get customers to browse longer, spend more and come back to the store more often, says Eric Spangenberg of Washington State University, who has published several papers on the subject.
(8) Simon Harrop, chief executive of BRAND sense agency, reckons the power of scents comes from their close association with emotion and memory. Get the smell right and you can bypass rational thought. Field trials in stores have shown that aroma can achieve the holy grail of marketing. It can prompt customers to try new brands, and to stay loyal to them, he says.
(9) But retailers and their marketers are treading a path full of pitfalls. What are the ethics, for instance, of enticing obese people to buy snacks by wafting the smell of popcorn at them? And how much damage will be done to a company’s brand if its customers realise that it has, quite literally, been leading them about by the nose?
►Question/Answer session:
Translate the third sentence in paragraph 5 and explain the use of ‘experience’ in plural. Compare it with the use of ‘experience’ in its uncountable meaning.
After translating the first sentence in paragraph 5, please consult a dictionary and explain the differences, if any, in the use and the translation of:
A frontier
A border
A margin
An edge
A line
A brink
Give a contextual translation of the words, phrases and sentences in boldface.
Hold a discussion on Smells, Sights and Sounds: The Holy Grail of Marketing.
‘PUZZLE-3’ POINT
►Choose the correct answer and explain your choice:
Consumers make choices based on ___ the value and satisfaction that various products and services deliver.
their perceptions of
promotional campaigns highlighting
availability of credit and
word-of-mouth promoting
The overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction is known as customer ___.
lifetime value
relationship management
perceived value
satisfaction
___ is the customer’s evaluation of the difference between all the benefits and all the costs of a marketing offer relative to those of competing offers.
Customer perceived value
An acceptable selling price
An effective promotional campaign
Supply chain economics
The aim of customer relationship management is to produce___.
maximum profitability
maximum product exposure
high customer equity
cross selling
The process of dividing a market into distinct groups of buyers with different needs, characteristics or behavior who might require separate products or marketing programs is called ___.
market targeting
market segmentation
market positioning
market aggregation
‘PUZZLE-4’
POINT
►Guess whether it is true or false and explain why:
Building customer relationships based on customer value and satisfaction is at the very heart of modern marketing.
The twofold goal of marketing is to attract new customers by promising superior value and to keep and grow current customers by delivering satisfaction.
The product concept suggests that an organization should devote considerable effort making continuous product improvements.
Mass marketing, which is selling in a standardized way to any and all customers, is an especially appropriate marketing strategy in today's fragmented market place.
Marketing activities may be performed not only by sellers, but also by potential customers.
Marketing offers are not limited to physical objects, but they may include persons, places, organizations, information, and ideas.
A market is made up of only the actual buyers of a product or service and does not include potential buyers.
Marketing management involves managing demand, but it does not involve managing customer relationships because that would be viewed as manipulative.
Marketing managers need to work closely with managers from other departments and functions to develop a system of functional plans under which the different departments can work together to accomplish the company's overall strategic objective.
‘CASE-1’ POINT
Simply Zara
(1) The first Zara store opened more than 25 years ago in La Coruña, Spain, which is still the company’s corporate headquarters. Over the years, Zara has grown to be the largest unit of Inditex. The parent company also includes five smaller fashion chains selling such lines as lingerie, teen styles, and upscale men’s clothing. Collectively, the Inditex units sell more than 90 million garments a year.
(2) Once Zara decided to make speed in implementation and responsiveness to fashion-conscious shoppers its hallmarks, its overall strategy fell into place. For example, most of its products are made in Spain whereas competitors typically use producers in developing countries in order to obtain lower labor costs. But as Inditex’s CEO explains, ‘The fashion world is in constant flux and is driven not by supply but by customer demand. We need to give consumers what they want, and if I go to South America or Asia to make clothes, I simply can’t move fast enough.’
(3) The same rationale guides operations at the company’s 5-million-square-foot warehouse (the size of about 90 football fields). This enormous space is connected to 14 Zara factories by tunnels that carry merchandise on rails and cables to separate staging areas for every Zara store. ‘The vast majority of the items are in here only a few hours,’ says Inditex’s logistics director. Managers and technical specialists monitor the physical distribution system constantly, considering details such as the sequence and size of deliveries, departure times, and shipping routes.
(4) Deliveries are scheduled by time zone; orders for the Americas and Asia are packed and shipped in the morning and orders for Europe in the afternoon. ‘We are always fine-tuning things, with the same objectives: flexibility and speed,’ says the logistics director. The aim is to deliver merchandise to stores before they open, when trucks can more easily cope with downtown traffic and store managers can readily accept and process the deliveries. A new warehouse, which will double Inditex’s capacity, is being built northeast of Madrid, Spain.
(5) Zara does almost no advertising or other promotion. What little it does, it announces new stores and reminds customers about a new fashion season a couple of times yearly. None of Inditex’s chains, including Zara, sells through the Internet or catalogs. ‘The center of it all is the store,’ explains the group’s managing director.
(6) A combination of good fashion sense, real-time information from consumers, tightly controlled production, and carefully designed logistics, along with rapid implementation, of course, has helped triple Inditex’s revenues in recent years.
Raising the roof in fast-fashion
(1) With its bright-red H&M logo on 1,200 stores, Swedish retailer Hennes & Mauritz has long been the world’s leading purveyor of cheap-chic apparel. No more. On Mar. 29, Spanish retail group Inditex, best known for its Zara stores in Europe, reported 21% sales growth in 2005, to $8.15 billion. That puts Inditex ahead of H&M, which posted $7.87 billion in sales last year.
(2) Zara’s secret? It moves fast. With an in-house design team based in La Coruña, Spain, and a tightly controlled factory and distribution network, the company says it can take a design from drawing board to store shelf in just two weeks. That lets Zara introduce new items every week, which keeps customers coming back again and again to check out the latest styles.
(3) Zara’s success is all the more surprising because at least half its factories are in Europe, where wages are many times higher than in Asia and Africa. But to maintain its quick inventory turnover, the company must reduce shipping time to a minimum. The fast-fashion approach also helps Zara reduce its exposure to fashion faux pas. The company produces batches of clothing in such small quantities that even if it brings out a design that no one will buy, which happened during an unseasonably warm autumn in 2003, it can cut its losses quickly and move on to another trend.
(4) Zara’s fast pace means that some popular items appear and disappear within a week, creating an image of scarcity that many shoppers find irresistible ‘They’ve built up an excitement around snapping up new clothes before they go,’ says Kris Miller, a New York-based retail analyst with Bain & Co. ‘As well as keeping sales high throughout the year, it also keeps margin-stripping markdowns to a minimum,’ Miller says. That helps explain why Inditex profits soared 26% last year, to $973 million.
(5) H&M uses a slightly different strategy. Around one quarter of its stock is made up of fast-fashion items that are designed in-house and farmed out to independent factories. As at Zara, these items move quickly through the stores and are replaced often by fresh designs. But H&M also keeps a large inventory of basic, everyday items sourced from cheap Asian factories.
(6) To add pizzazz to its lineup, the Swedish retailer has also struck deals with high-fashion designers Stella McCartney and Karl Lagerfeld to create limited, one-time collections, which generally sell out within days. H&M is a strong financial performer too. Sales during the first three months of this year were up 20%, after rising 14% in 2005.
(7) No wonder fast-fashion companies such as H&M, Zara, Spain’s Mango, and Britain’s Top Shop, are among the brightest stars in Europe’s retail landscape. A 2004 Bain & Co. study found that fast-fashion outlets in Spain and Britain posted average double-digit sales growth, compared with 4% growth in overall retail sales in those countries.
(8) These companies are expanding rapidly. Zara’s parent, Inditex, whose other retail chains include Massimo Dutti and Bershka, opened 448 new stores last year, while H&M inaugurated 145. This year Inditex expects to add as many as 490 stores, which includes its first Chinese outlet, opened recently in Shanghai. By 2010, its global total could grow from 2,700 to 5,000.
(9) So far, Inditex and its European counterparts have expanded cautiously in the U.S. Zara has only 19 stores stateside. H&M has 91, but that’s tiny compared to the company’s 1,200 worldwide total. NPD Group, a New York-based market research outfit, says that fast-fashion accounts for only 1% of the $181 billion U.S. apparel market. That compares with 18% in Spain, 12% in Britain, and 8% in France, according to Bain&Co. estimates. ■From Business week 2006
►Case task:
Map out Zara’s supply chain and marketing strategy. Make sure to include in this analysis the role of product design, production, distribution and retailing processes. Use other sources for additional info.
►Case questions:
What are the reasons behind Zara’s success? To what extent is this success explained by its supply chain and marketing strategy?
What does Zara do especially well in implementing its marketing strategies? What aspects of its implementation might be improved?
Compare Zara’s supply chain and marketing strategy with those of H&M. What are the major differences and/or similarities? Can these differences be explained by differences in strategy? What can H&M learn from Zara, if anything?
‘THE ECONOMIST-2’ POINT
The claim that ‘the customer is king’ has always rung hollow. But now the digital marketplace has made it come true.
(1) It is the biggest advertising event of the year. On February 6th, half the households in America sat down in front of their televisions to watch the 2005 Super Bowl. Never mind the game: the Super Bowl is a showcase for television commercials, and more than a quarter of the viewers tune in just to watch the ads. For days before and after the event, these are discussed in the newspapers, on radio and on TV. At an average cost of $2.4m for a 30-second slot, a Super Bowl commercial is the most expensive pitch an advertiser can make. For some, such as Anheuser-Busch, it has become an institution. The brewer's decision to drop one of its ads from the ten slots it had booked made headlines. The commercial was a cheeky take on Janet Jackson's “wardrobe malfunction” (a slipping top) during the half-time show at the 2004 game. The resulting publicity prompted large numbers of people to visit Anheuser-Busch's website to look at the ad, which meant that probably as many saw it as if it had been screened.
(2) The Super Bowl is a great excuse for a party, especially for the advertising industry. It shows that people still enjoy ads that are creative and entertaining. But it raises an awkward question: does it actually sell any more bottles of beer, cars or pills for erectile dysfunction? Although TV viewers tend to be able to recall a particularly good commercial, many cannot remember the product it featured. And for the most part they try to avoid the rising barrage of ads. Getting their attention is becoming increasingly difficult, because audiences are splintering as people use different kinds of media, such as cable television and the internet. The choice of products and services available is multiplying, but at the same time consumers have become more skeptical about claims made for products. In today's marketplace, consumers have the power to pick and choose as never before.
►Find words/phrases having the same or similar contextual meaning with those boldfaced. Insert them into sentences in the appropriate form. Now translate the sentences into Russian.
All-seeing, all-knowing
(3) This new consumer power is changing the way the world shops. The ability to get information about whatever you want, whenever you want, has given shoppers unprecedented strength. In markets with highly transparent prices, they are kings. The implications for business are enormous: threatening for some, welcome for others. For instance, the huge increase in choice makes certain brands more valuable, not less. And as old business divisions crumble, a strong brand in one sector can provide the credibility to enter another. Hence Apple has used its iPod to take away business for portable music players from Sony; Starbucks is aiming to become a big noise in the music business by installing CD-burners in its cafés; and Dell is moving from computers into consumer electronics.
(4) “I am constantly amazed at the confidence level and sophistication of the average consumer,” says Mike George, Dell's chief marketing officer and general manager of its consumer business in the United States. Dell soared to the top of the personal-computer business by cutting out retailers and selling directly to consumers. If Dell changes prices on its website, its customers’ buying patterns change literally within a minute. “That tells you people are well-researched and knowledgeable,” adds Mr. George.
(5) Even buying a car, long considered to be one of the worst retail experiences anyone can have, is being transformed. Over 80% of Ford’s customers in America have already researched their prospective purchase on the internet before they arrive at a showroom, and most of them come with a specification sheet showing the precise car they want from the dealer’s stock, together with the price they are prepared to pay. Similarly, more than three-quarters of mobile-phone buyers in America do their research on the web, even though only 5% buy online, says John Frelinghuysen of Booz Allen Hamilton, a firm of business consultants. They still want to go to a shop to hand over their money and get their phone, but first they want to see exactly what the service package covers, and to read what other users say about their proposed purchase.
(6) With consumers becoming increasingly empowered, how can the marketing, advertising and communications firms that companies use to promote their products hope to get their messages across? And what does it mean for media businesses relying on advertising revenue, the traditional channels for reaching this increasingly elusive audience? Disintermediation—the process of middlemen being cut out - seems to be in the air. The three big TV networks in America have all hedged their bets by acquiring cable channels. The advertising business is reorganizing itself, seeking safety in size. Many agencies are now clustered into four big global groups: America’s Omnicom and Interpublic, France’s Publicis and Britain’s WPP. In some ways they are recreating the big, vertically integrated advertising giants of the past, but with separately run companies to deliver the range of specialist marketing services they think their clients will need in the future.
(7) So what will that future hold? “For the first time the consumer is boss, which is fascinatingly frightening, scary and terrifying, because everything we used to do, everything we used to know, will no longer work,” says Kevin Roberts, chief executive of Saatchi & Saatchi, part of Publicis. Shelly Lazarus, head of Ogilvy & Mather, part of WPP, is more sanguine. “Advertising is as vibrant as it has ever been. It’s just that the way you define it is so much broader now, with new ways to reach people,” she explains. “In the past you would keep pounding the creative message out into the market place and look at reach frequency,” says Howard Draft, a veteran direct-marketing expert and chief executive of his eponymous New York agency, part of Interpublic. “Well, basically that is dead. What you have today is an informed consumer who is taking control of the way he learns and hears about products.”
(8) Companies with some of the world’s biggest advertising budgets are beginning to look for new ways of attracting consumers’ attention. Jim Stengel, global marketing officer for Procter & Gamble (P&G), is one of the advertising industry’s harshest critics, awarding it a “C minus” for its ability to embrace new media. And Larry Light, who has been giving McDonald’s a makeover as its chief marketing officer, says bluntly: “The days of mass marketing are over.”
(9) Mass retailing, however, looks as healthy as ever. The supermarkets are taking an increasing proportion of consumer spending - and on a lot of things beside groceries. A growing part of Wal-Mart’s business comes from people searching online for information on products such as consumer electronics, and then visiting a store to make a purchase. “I think it works to our advantage, because we are the price leader,” says Lee Scott, chief executive of the world’s biggest retailer. “There’s power for them and us.”
(10) Consumers, of course, care not a jot about marketing machinations. They are delighted to have more choice, which makes it easier for them to turn their back on a company they do not like and buy elsewhere. For some this is sweet revenge. “Consumers have become jaded and cynical,” says Rob Markey, a partner at Bain & Company, a consultancy. “There is a pile of broken promises heaped on the floor.”
►Find words or phrases in the article that have the same or similar meaning as the following and translate them into Russian:
unusual/unheard of
become an owner of sth/to get sth by buying it
be hard or difficult to find or see
be fed up with/tired of/sick of
reduce your chances of failure or loss by having several choices available to you
reprisal/vengeance
►Find words/phrases having the same or similar contextual meaning with those boldfaced. Insert them into sentences in the appropriate form. Now translate the sentences into Russian.
►Summarize the content of the first ten paragraphs keeping to the following guidelines:
Benefiting from the biggest advertising event of the year.
The ability to get info about whatever you want, whenever you want, has given shoppers unprecedented strength.
The transformation of car retail experiences.
With consumers becoming increasingly empowered, that’s how the marketing, advertising and communications firms can hope to get their messages across.
Looking for new ways of attracting consumers’ attention.
The ads we love to hate
(11) In fact, consumers have been telling market-research companies for 50 years that they do not trust advertising. But they have become even more negative about it recently, says Eric Schmitt of Forrester, a research firm. Indeed, people are actively looking for ways to avoid ads, using tools such as pop-up blockers on web browsers and digital video recorders (DVRs) that allow them to skip the ads when they record TV programs. Forrester found that 60% of the programs watched by DVR users are recorded, and 92% of the ads on such programs are skipped. The firm reckons that by the end of 2008, 36m households in the United States will be using DVRs. So what will happen to the $60 billion spent on TV advertising in America every year? Mr Schmitt thinks that if the TV industry can no longer guarantee its audiences, a lot of that money will move elsewhere.
(12) For the moment, advertising expenditure gives no hint of trouble ahead. The business is bouncing back strongly from the slump that began in 2001, when the bursting of the technology bubble caused a sudden collapse in ad spending. Worldwide advertising expenditure on the mainstream media and the internet in 2004 grew by around 7% to $370 billion, estimates ZenithOptimedia. Universal McCann, a media-services firm, uses different measures but sees a similar recovery. It says that in America last year $264 billion was spent on national and local advertising and other marketing, such as direct mail (a $50 billion business), up 7.4% on the previous year. And it expects ad spending in the world’s biggest market to grow by more than 6% this year.
(13) But the way that money is spent is changing. In America, growth in ad spending is led by the internet, Spanish-language TV and cable networks, according to TNS Media Intelligence, a media-monitoring company. And as with P&G’s $4 billion advertising budget, a growing proportion is shifting from mainstream media, such as television, radio and print, to new media and other forms of sales promotion, such as direct mail, public relations, promotions, sponsorship and product placement. Collectively this sort of spending, sometimes called “below-the-line” advertising, or marketing services, is already worth more than twice what is spent on traditional display advertising. Together, the two sorts of spending added up to more than $1 trillion last year, says WPP.
(14) By comparison, the $10 billion or so spent on internet advertising in America last year looks tiny. But it was 32% up on 2003, according to a study by the Interactive Advertising Bureau and PricewaterhouseCoopers. And that growth is accelerating, leading some forecasters to suggest that the online ad market could double in value this year. The internet is also becoming a lot more sophisticated as an advertising medium, beyond banner ads and pop-ups. In search advertising, companies buy words that, if they appear in searches made on sites such as Google or Yahoo!, will bring up a link to the company’s website, displayed alongside the search results. The advertiser pays only if someone clicks on his links. This makes the results of search advertising reassuringly measurable, because tracking how many people go on to make a purchase is relatively easy. Google is beginning to work like an advertising agency, placing small text-based ads on other people’s websites on behalf of its clients and splitting the revenue with the website owners. Google’s software scans the sites to match the ads it serves up to the site’s content.
(15) Local search could be the next big money-spinner on the internet - for whoever comes up with a winning formula. Microsoft’s MSN site, for instance, will provide details about a local shop, and a map to get you there. A9, a new search engine from Amazon, has a feature called “Block View” with pictures of streets and their shop fronts, so if you have forgotten the name of the restaurant you are looking for, you may be able to recognize it in the picture. The next step will be a feature that allows users to “click to call”. Initially this service is likely to be free, but in time it could be developed into another big source of online revenue.
►Find words/phrases having the same or similar contextual meaning with those boldfaced. Insert them into sentences in the appropriate form. Now translate the sentences into Russian.
►Summarize the content of the paragraphs #11-15 keeping to the following guidelines:
Consumers have become even more negative about advertising recently.
The ad money will be spent… but in another way.
The online ad market forecast.
Media from dawn to dusk
(16) Some changes in consumer behavior that were already under way have been speeded up by the growing use of the internet. For example, consumers are spending more time with media of all kinds: currently about ten hours per person per day in America. According to Veronis Suhler Stevenson (VSS), a New York-based media merchant bank, this is likely to grow to 11 hours by 2008. James Rutherfurd, the bank’s managing director, thinks this is due to a relatively new phenomenon he calls “media multi-tasking”: using different media at the same time. “This has enormous implications for advertisers and programmers,” he says. “It used to be that they were competing to get you to turn on the television. Now the TV may be on, but they are competing to keep your attention on the TV as opposed to the computer screen, the magazine or the iPod.”
(17) Fujio Nishida, chief marketing officer of Sony’s electronics division, points out that this forces advertisers to think very carefully not only about which media to use for the market they want to reach, but what people are likely to be doing when their ad appears. In Japan, he says, in the past you could be fairly sure that 90% of your potential targets would be watching TV at some point between 8pm and 10pm; but now only 70% may be watching and 60% will be using the internet - many doing both at the same time. Advertisers can take advantage of this by putting on TV ads specially designed to encourage consumers to go straight to a website, as Sony has done.
(18) “Who actually controls distribution in this type of world?” asks Bill Gossman. “The individual does. That’s where the ultimate consumer power comes from.” His company, Revenue Science, is developing new ways of “behavioral targeting”. This involves analyzing online consumer behavior and then delivering ads that are likely to be relevant to groups with common interests. Mr Gossman thinks that as the world becomes more digital, his techniques will increasingly be used by all kinds of electronic media.
(19) Amazon, which has long evolved from an online bookseller into a mass retailer, uses a form of behavioral targeting by suggesting products its customers might like, based on their past purchases. Jeff Bezos, Amazon’s chief executive, was among the first to spot that the transparent pricing and product information the internet was able to provide would allow people to shop just about anywhere. The trick was to make it easier for them, so Amazon’s website now operates as a shop front for lots of other companies too. And it gives customers the chance to read not only the sales blurb but also other customers’ comments on the products.
(20) For some companies this is scary stuff - the same as throwing open your customer-relations files and hoping that people have said enough nice things about you. Companies can, of course, try to control everything that is said and written about them through advertising and public relations. But nowadays a web search can turn up all sorts of skeletons in the cupboard, especially from news groups where people post comments, from online journals (called “web logs” or “blogs”) and more recently from “podcasting”, in which individuals produce their own audio programs for others to download to their Apple iPods or other MP3 players. Video versions of this are sure to follow. Not all of this can be dismissed as amateurish twaddle. Microsoft, for instance, is taking blogs seriously enough to have hired its own celebrity blogger, Robert Scoble, even at the risk that he might be scathing about the company’s products.
(21) This is a clever move. The less control a company has over its marketing message, the greater its credibility, says Pamela Talbot, an expert in consumer-product marketing and chief executive of the American side of Edelman, a giant public-relations firm. Indeed, Saatchi & Saatchi’s Mr Roberts thinks marketing departments must accept that brands no longer belong to them, but to the people who use them. The most valuable users of a company’s brand are what he describes as “inspirational consumers” - people who are closely associated with a company and its products. It does not even have to be another company. Some of the most successful agents for generating a buzz - and plenty of free publicity - can be the people who run the business.
(22) For example, the celebrity status of Sir Richard Branson has rubbed off on the Virgin brand, so his businesses, from music to airlines to space travel, get instant consumer recognition. Stelios Haji-Ioannou, a familiar face in Britain, founded easyJet, one of Europe’s first cut-price airlines. Mr Haji-Ioannou, who describes himself on his business card as a ‘serial entrepreneur’, believes that a brand represents ‘a promise’. So whether he is attaching his name to a car-rental business, a new no-frills hotel chain or a new cruise line, the consumer knows what to expect from the person putting his reputation on the line. Donald Trump has also turned himself into a brand, but the New York businessman is especially well known for ‘The Apprentice’, a business reality show on TV. This is a huge hit in America (unlike Sir Richard’s own show), and companies pay to be involved.
(23) What is it worth to have the contestants on such a show design a new product for your business, as Burger King did? The fast-food chain then went on to mount a similar competition on its own website. Measuring the effectiveness of such marketing is not easy. The marketing profession has yet to catch up with new media, says Malcolm Hunter, chief strategy officer of Vizeum, a London agency set up to seek out opportunities from recent trends. ‘Consumers are real people, and companies that understand that can do well.’ That might seem blindingly obvious, but he is right to remind the industry of it. Advertisers are still inclined to depict their activities as a form of warfare. Consumers are ‘targets’ and ad ‘campaigns’ are meant to ‘wear down resistance’ and score ‘hits’.
(24) The rise of consumer power can best be charted through three industries: packaged goods, consumer electronics and cars. In each of these three very different categories consumers carry increasing clout. As the cost of the product goes up, they spend more time and effort considering which make and model to buy. The battle for their attention and money begins at the supermarket. ■From The Economist 2005
►Find words or phrases in the article that have the same or similar meaning as the following and translate them into Russian:
describe
pass on to
give a boost or moral support/to be supportive
a short description
results/consequences/effects
be accelerated
develop by changing into sth else/turn into sth else
power/authority/influence/have a (final) say in sth
►Find words/phrases having the same or similar contextual meaning with those boldfaced. Insert them into sentences in the appropriate form. Now translate the sentences into Russian.
►Question/Answer session:
What changes in consumer behavior are under way and how do they shape advertisers’ behavior?
What is meant by ‘behavioral targeting’? How does Amazon exploit the strategy?
Why is the above strategy scary staff for some companies?
Why did Microsoft hire its own celebrity blogger? Was it a clever move? If so, why?
How can celebrity status rub off on a brand? Give your own examples apart from those mentioned in the article.
►Make a talk on Consumers are real people and companies that understand that can do well.
‘CASE-2’ POINT
Marketing in a downturn: time to push the panic button?
“In stable environments, if I make a pricing mistake it’s not very important. But in today’s environment, it’s a matter of life and death. You’d better get your pricing right.”
(1) In a crisis, consumers generally start to rein in their spending and save more – just in case. But how should companies then market their goods and services in a downturn?
(2) Marketing experts say companies shouldn’t just focus on industry metrics as that would give a ‘very incomplete picture of what’s going on.’ Market share is not a good indicator as the money that consumers once spent on your products and services isn’t necessarily going to your competitor. “So from a marketing perspective one of the things that firms have to do in a crisis situation is start getting a better handle of not their share of the market but their share of the wallet and start figuring out what is the consumer's wallet, what are they spending on, in the crisis how is the share of wallet now changing across brands, across categories,” says a marketing guru. “And that will give you a sense of how you might go about figuring out what you should be doing in a crisis.”
(3) Let us look at how the consumer’s dollars are spent in four categories: durable goods or big ticket items such as cars, TV sets and photography equipment; non-durable items – food, electricity, gas and so on; semi-durables; and services such as education, health and finance. Within those categories, spending patterns can shift – with expenditure on cars predictably falling, while spending on bicycles increases in terms of durable goods. In the case of non-durables, spending on food increases, whereas spending on electricity and gas falls.
(4) Consumption of durables or expenditure on durables contract significantly and they contract the most, whereas consumption of non-food (items) contracts, but contracts a lot less. And there aren’t just differences in consumption patterns between categories. These also vary across different types of economy, depending on whether it’s a developing economy or developed. “If you are in a developing economy, what you see is that the durable goods share, actually goes down and goes down remarkably,” says the marketing guru. “Non-durables share actually increases and that's what happens in a developing economy. And the idea would be things like food are a necessity. People still have to spend and they will do that. And so the share relative to your income actually goes up. What is interesting is when you look at developed economies, food is a necessity but what the data show is that services are a necessity in those markets as well. So what you do find is share of durable goods going down, share of non-durables going up, but share of services also goes up. So in that sense, food or non-durables would be a necessity in a developing economy, but non-durables and services are necessities in the developed economy.”
(5) It’s a complex picture, but one which companies need to get to grips with. Another marketing guru says “per capita consumption takes a smaller hit in developed countries, whereas in developing countries it's much larger. Plus the hit that it takes persists for much longer periods of time for developing countries as compared to developed countries. One of the reasons for this is that credit markets in developed countries are much better developed, whereas they are thin or missing in developing countries. So therefore when a crisis hits, consumers actually lose access to financing and borrowing. So what they do is they really cut back on their consumption expenditures because they're also not aware of how long the crisis is going to last.”
(6) The bottom line: companies need to figure out how badly they’re going to be hit, both in terms of the sectors they’re operating in, and the local context in terms of the country they’re in. “If you look at the share of the wallet pattern in Hungary, it's going to look very different to the share of the wallet pattern in, say, Vietnam or India,” says yet another guru. For global companies operating in both developing and developed economies, this will create an added level of complexity. If yours is a global firm, you cannot have a one-size-fits-all approach to managing the crisis, you have to understand the category you’re in, you have to understand the country you’re in and realise your strategies for coping with the crisis. You do need to reflect on this divergence.
(7) Price wars should be avoided and managers should take care when trying to figure out what is happening to sales as they combat the impact of a crisis on sales. If managers just pay attention to income or pricing metrics and try to make sense of what’s happening to their sales, they are going to make mistakes, because what we show is that the crisis has an independent impact.
(8) “And if you don’t correct for that accordingly, firms could make very, very bad decisions,” says the first guru. “You might create a price war where you don’t need to. If you are a firm, you’re trying to understand within the crisis situation, when my sales are plummeting, to what extent I should adjust my prices. So I have to make a pricing decision, and right now it’s extremely important because things are extremely volatile. In stable environments, if I make a pricing mistake it’s not very important. But in today’s environment, it’s a matter of life and death. You’d better get your pricing right.”
(9) You may also have to take consumption smoothing effects into account – this is when consumers try to balance spending and saving – even though the paper didn’t actually find much evidence for consumption smoothing. “In a crisis situation, prices are the easiest thing to change,” continues the marketing guru. “Companies typically respond by reacting with prices when you have a crisis situation. But what this shows is in fact you have to be very, very careful in using prices. You have to figure out what’s going on and how people are smoothing the consumption.” “Don’t just look at price elasticity. Don’t just look at income elasticity,” he says. “Understand that there’s also a crisis component to sales and you need to be able to put all these three things together. If you don’t, you can draw the wrong inferences.”
►Case task:
Give a contextual translation of the phrases in boldface.
Hold a panel discussion on How should companies market their goods and services in a downturn? Discuss the main points of the case making use of phrases in boldface.
‘CHECK’ POINT
What is marketing? Explain the difference between the traditional marketing mix and the customer relationship marketing approach.
What does the promotions mix include? Describe the main mass-promotion tools.
How should companies market their products if they go global?
What role do smells, sounds and sights play in a customer’s decision to buy a product?
Prove that the customer is the king in the digital marketplace.
(Revised Unit 9 from Business & English by Levon Gzokyan)
‘WARM-UP’ POINT
►Question/Answer session:
What is the true value of a successful brand?
What is your attitude towards well-established and luxurious brands? Use examples of real brands.
‘THEORY-1’ POINT
Brand
(1) Firms have recognized the power of brands for many years. One of the most fertile periods for the creation of great brands was the 1880s and 1890s, when the names of both Kodak and Kellogg first appeared in shop windows. Their inventors stumbled across a fact not fully recognized until much later: that two of the most powerful elements in a brand name are the guttural sound (and especially the ‘k’ sound) and alliteration (repetition of the same consonant). Think of Pepsi and Coke.
(2) Firms with international ambitions must be careful when inventing new brand names. For example, Brillo, a well-known British scouring pad, has a hard time in Italy. Brillo, in Italian, means sozzled (drunk). When Chrysler introduced its Nova car into Mexico it forgot that in Spanish no va means ‘it doesn’t go’. The company changed the name to ‘Caribe’ for Spanish-speaking markets and sales shot up. One of Ford’s new models turned up in the Mexican market as ‘Caliente’ – Spanish slang for ‘street-walker’! Such classic blunders show how important it is for multinationals to carry out extensive marketing research before they launch a new product!
(3) In general, Americans have been more successful at creating internal brands than anyone else. Of the ten most valuable brands in the world, as calculated by consultants of Interbrand in 2002, no fewer than eight were American. The exceptions were Nokia (in the sixth place) and Mercedes (10th). But even the most valuable brands can stumble if they do not remain sensitive to consumer tastes. When Coca-Cola, regularly at the top of Interbrand’s list, tried to launch a new formula for its main product in 1985 it flopped spectacularly, and consumers deserted the company in droves.
(4) When a firm introduces a new product or service into a market where there is little scope for further growth, that product or service will either eat into the share of the market’s existing products or swiftly disappear from sight. If some of the existing products are manufactured by the firm that is introducing the new product, then the newcomers will cannibalize the old timers; that is, they will eat into the market share of their own kind. For example, it has been estimated that two-thirds of the sales of Gillette’s Sensor razor came from consumers who would otherwise have been customers for the company’s other razors. Likewise for the company’s later blades - they provide cut-throat competition for each other.
(5) There are sound reasons for firms to want to do such a seemingly stupid thing. In the first place, they may need to keep ahead of the competition. In the chocolate-bar market in the UK, for instance, the decline in Kit Kat’s share was arrested by the launch of a new, chunkier bar, which undoubtedly cannibalized the market for the original. Its appeal was to all those people who buy chocolate bars, including those who bought the old Kit Kat.
(6) Firms may also choose to cannibalize their own products by producing marginally improved products. The idea is to persuade existing customers to purchase an upgraded version. This is true of the PC market, for example, where Intel’s newest, most powerful processor cannibalizes the last generation of Intel processors, but in the interests of arresting decline in the total market.
(7) In recent years, the idea of branding has stretched from goods and services to individuals. Sports stars, pop stars and film stars take careful note of what brands they wear and what these brands say about them. Many modern novels describe their characters more by their clothes and accessories than by their physical features or behavior. The brands have become shorthand for the character.
►Question/Answer session:
What did the inventors of Kodak and Kellogg brands stumble across? Think of other brands having the most powerful features in their names.
Why should companies going global be extra careful when inventing new brand names?
Why is it sometimes dangerous for a company to introduce a new product?
Think of some other examples of cannibalization.
►Summarize the content of the text by using as many expressions from ‘Summary-1’ Point as possible. Be sure to check off or cross out the expressions you used while holding your show.
‘SUMMARY-1’ POINT
►Translate the phrases below into Russian and make them stick in your mind:
to stumble across
sales shot up
classic blunders
to carry out extensive marketing research before launching a new product
to remain sensitive to consumer tastes
to flop spectacularly
to introduce a new product or service into a market
to eat into the share of the market's existing products or swiftly disappear from sight
to provide cut-throat competition
to keep ahead of the competition
to arrest the decline in Kit Kat’s share
to cannibalize the market for the original
marginally improved products
to purchase an upgraded version
‘PUZZLE-1’ POINT
►Replace the underlined with similar expressions from ‘Summary-1’ Point:
The company’s aim is to halt decline and improve their market share.
While reorganizing the company’s structure, the top management has finally found the only right way out of the present unsatisfactory state of affairs.
Inflation has soared, while productivity has dwindled.
Such an unfair market activity caused a lot of bankruptcies and mergers.
The introduction of a new marketing campaign helped the company leave all its competitors far behind.
The new slightly upgraded version of an existing product did not help the company survive; it bombed in a month after launching.
‘PUZZLE-2’ POINT
►Consult a business dictionary and fill in the blanks:
brand recognition trademark brand’ value
brand equity (2) brand franchise (3) brand name
Well-known products acquire (1) _______________. When a brand has accumulated a mass of positive sentiment among consumers, marketers say that its owner has acquired (2) ________________ or (3)_______________, which measures the (4) _______________ to the marketer. It is an assessment of the investment a company has made in a brand. (5) _______________ measures the effect of this investment on the target market. When enough (6) _______________ is created that the brand has the ability to draw buyers (even without further advertising), it is said to have (7) _______________. A (8) _______________ comprises that part of a brand consisting of words or letters that humans can verbalize. A brand name that has acquired legal protection becomes a (9) ________________.
►Explain the essence of ‘brand equity’ on your own.
‘THEORY-2’ POINT
Branding
(1) Originally, branding was the placing on animals (usually by burning) of an identifying mark. In a business context, branding refers to imposing on goods and services a distinctive identity. Philip Kotler, author of Marketing Management, a standard textbook on marketing, defines a brand as: ‘A name, term, symbol or design (or a combination of them) which is intended to signify the goods or services of one seller or group of sellers and to differentiate them from those of the competitors.’
(2) A brand represents the holistic sum of all information about a product or group of products. This symbolic construct typically consists of a name, identifying mark, logo, visual images or symbols, or mental concepts which distinguish the product or service. A brand often carries connotations of a product’s ‘promise’, the product or service’s point of difference among its competitors which makes it special and unique. Marketers attempt through a brand to give a product a ‘personality’ or an ‘image’. Thus, they hope to ‘brand’, or burn, the image into the consumer’s mind; that is, associate the image with the product’s quality. Because of this, a brand can form an important element of an advertising theme: it serves as a quick way to show and tell consumers what a supplier has offered to the market.
(3) A brand’s image is conveyed in a variety of ways, including advertising, packaging and the attitudes of employees. Branding bestows a number of benefits on goods and services.
It reassures consumers about the quality of the product. This allows the producer to charge a premium over and above the value of the basic benefits provided by the underlying product. Consumers buy Coca-Cola not just because they like the taste, but because when it comes to colas, the Coca-Cola brand name is a well-known ‘guarantee’ of quality.
The ability of powerful brands to grab a bigger share of consumers’ wallets than lesser-known competing products can give them great value. When Philip Morris bought the Kraft food company in 1988 it paid four times the value of Kraft’s tangible assets. Most of the 75% spent on intangible assets represented the value of Kraft’s powerful brands. When Nestle bought Rowntree it paid more than five times the book value of Rowntree’s assets. Most of that extra (almost £2 billion) was the cost of Rowntree’s well-known names, such as Polo, Kit Kat and After Eight.
The confidence that consumers gain from a well-known brand is particularly useful when they do not have enough information to make wise choices about goods and services. Thus western travelers seek out global brand names when buying drinks and cigarettes, for example, in far-flung corners of the earth where they have no knowledge of the local produce.
Another area where this applies is on the Internet, where online shoppers are uncomfortable with the multitude of choices presented to them. In order to feel they are getting reliable quality and value, they often revert to familiar brands.
It provides an enduring platform on which to develop other businesses. Brands have considerable staying power. Of the top 50 packaged goods brands in the UK, for instance, fewer than ten have been created in the past 20 years. New products can be launched under the same brand while old ones are gradually withdrawn from the market.
Changing the elements of a successful brand can be dangerous. When British Airways changed its tail-fin design in 1997, it was part of a gentle shift in the company’s branding. But the switch from variations of the Union Jack, with its nationalist overtones, to splashes of ethnic and abstract colors that were meant to convey a feeling of warmth, speed and (above all) of being part of a global community, backfired. Customers saw the new tail-fins as symbolic of a simultaneous deterioration in the airline’s service. By the end of the decade, the airline admitted the change was a mistake and pledged to revert to variations of the UK’s national flag.
(4) When a branded product becomes number one in its market category, it is called a brand leader. There are considerable advantages to being a brand leader. An American study found that brand leaders on average achieve dramatically higher returns on investment than secondary brands.
(5) When companies have a valuable brand they often attempt to stretch it by attaching it to other products and services. A classic example is the Mars chocolate confectionery brand, which has been successfully transferred to an ice-cream product with a similar shape and flavor.
(6) There is a theory, however, that brands can be stretched too far. The expectations that are built up in consumers by one branded product have to be delivered by all products bearing the same brand.
►Question/Answer session:
What does a brand represent? What is behind a brand?
What is the first benefit that branding bestows on goods and services? How does the confidence that consumers gain from a well-known brand help companies increase sales?
What is the second benefit that branding bestows on goods and services?
What benefits do companies gain from creating brand leaders and enjoying brand recognition?
What is brand stretching? Why is this strategy risky?
►Summarize the content of the text by using as many expressions from ‘Summary-2’ Point as possible. Be sure to check off or cross out the expressions you use while holding your show.
‘SUMMARY-2’ POINT
►Translate the phrases below into Russian and make them stick in your mind:
to impose a distinctive identity on goods and services
to differentiate products from those of the competitors
to ‘brand’, or burn, the image into the consumer’s mind
to associate the image with the product’s quality
a brand’s image is conveyed in a variety of ways
to bestow a number of benefits on goods and services
to charge a premium over and above the value
to revert to familiar brands
to launch under the same brand
to gradually withdraw from the market
to achieve dramatically higher returns on investment
to stretch a valuable brand by attaching it to other products and services
‘PUZZLE-3’ POINT
►Replace the underlined with the similar words and expressions from ‘Summary-2’ Point:
The latest marginally improved product is so similar to the previous one that consumers can hardly tell them apart.
It is often quite difficult to make the brand stick to the consumer’s mind especially if it is not connected with an attractive image.
I hope that after the last crisis our company is not going back to the same ways of doing business.
Marks & Spencer recently hired model Kate Moss to introduce its new range.
Higher profits and higher risks usually go hand in hand.
The sales of Duo have dramatically declined, so Star Way has had to remove it.
‘TRANSLATION-1’ POINT
►Translate into English using the expressions from ‘Summary-1’ and ‘Summary-2’ Points:
Любая компания прежде, чем представить новый товар или услугу на рынке проводит широкое маркетинговое исследование. Это очень важно, поскольку существует опасность того, что новый товар может «поглотить» рыночную долю уже существующего товара. Кроме того, любая компания всегда нацелена на то, чтобы опережать своих соперников. Иногда компания представляет на рынке слегка улучшенную версию товара под брендом, который ассоциируется с высоким качеством. Однако часто компаниям приходится инвестировать ресурсы в более прибыльные и новаторские товары. Это стратегия позволяет привлечь как можно больше покупателей, завоевать свою рыночную долю и добиться намного большей отдачи от инвестиций.
‘THEORY-3’ POINT
Brand management
(1) Brand management is the application of marketing techniques to a specific product, product line or brand. It seeks to increase the product’s perceived value to the customer and thereby increase brand franchise and brand equity. Marketers see a brand as an implied promise that the level of quality people have come to expect from a brand will continue with present and future purchases of the same product. This may increase sales by making a comparison with competing products more favorable. It may also enable the manufacturer to charge more for the product. The value of the brand is determined by the amount of profit it generates for the manufacturer. This results from a combination of increased sales and increased price.
(2) A good brand name should:
be legally protectable
be easy to pronounce
be easy to remember
be easy to recognize
attract attention
suggest product benefits (eg.: Easy off) or suggest usage
suggest the company or product image
distinguish the product’s positioning relative to the competition
(3) Brand rationalization refers to reducing the number of brands marketed by a company. Companies tend to create more brands and product variations within a brand than economies of scale suggest they should. Frequently they will create a specific product or brand for each market that they target. They also do this to gain precious retail shelf space (and also reduce the amount of shelf space allocated to competing brands). But this can be a very inefficient strategy so a company may decide to rationalize their portfolio of brands from time to time. They may also decide to rationalize their brand portfolio as part of an overall corporate downsizing.
(4) There are several problems associated with setting objectives for a brand or product category.
Many brand managers limit themselves to setting financial objectives. They ignore strategic objectives because they feel this is the responsibility of a senior management.
Most product level or brand managers limit themselves to setting short-term objectives because their compensation packages are designed to reward short term behavior. Short-term objectives should be seen as milestones towards long-term objectives.
Often product level managers are not given enough information to construct strategic objectives.
In a diversified company, the objectives of some brands may conflict with those of other brands. Or worse, corporate objectives may conflict with the specific needs of your brand. This is particularly true with regard to the trade-off between stability and riskiness (see Theory-4 Point below). The brand manager also needs to know senior management’s harvesting strategy. If corporate management intends to invest in brand equity and take a long-term position in the market (for the penetration and growth strategy: see the next unit), it would be a mistake for the product manager to use short-term cash flow objectives (for the price skimming strategy: see the next unit). Only when these conflicts and tradeoffs are made explicit, is it possible for all levels of objectives to fit together in a coherent and mutually supportive manner.
►Question/Answer session:
What is brand management? What is the core of brand management?
What are the main features of a good brand?
How can companies benefit from brand rationalization?
What are the problems associated with setting objectives for a brand or a product category?
►Summarize the content of the text.
‘THEORY-4’ POINT
Growth matrix structure
B.C.G. (this analysis was originally developed by the Boston Consulting Group in the 1960s) analysis or Growth Matrix Structure is a technique used in brand marketing, product management, and strategic management to help a company decide what products to add to its product portfolio. It involves rating products according to their market share and market growth rate. The products are then plotted on a two dimensional map. Products with high market share but low growth are referred to as ‘cash cows’. Products with high market share and high growth are referred to as ‘stars’. Products with low market share and low growth are referred to as ‘dogs’ and should usually be discontinued. Products with low market share but high growth are referred to as ‘question marks’ or ‘problem children’ or ‘wild cats’. The technique can also help companies think about the priority and resources that they should give to the different businesses in their portfolio. A ‘question mark’ has the potential to become a ‘star’ in the future if it is developed. A company should have a balanced portfolio. This implies having at least one ‘cash cow’ which can generate revenue that can be used to develop one or more ‘question marks’. This process is referred to as ‘milking your cash cow’.
►Explain B.C.G. analysis in the form of a scheme or chart.
►Team up with your classmate. Think of a well-known and familiar company with a wide product line (a group of related products intended to be used for similar purposes or be sold in similar types of shops) under a household brand. Rate these products according to their market share and market growth rate by placing each in the B.C.G. scheme or chart that you devised for ‘B.C.G.’ Point. Now with the help of the other teammates decide what products would you add to the company’s product portfolio and what ‘maneuvers’ would you follow to have a more balanced portfolio.
‘SHOW-1’ POINT
Nike does not sell sports shoes. IBM does not sell computers. Nokia does not sell mobile phones. Harley-Davidson does not sell motorcycles. Starbucks does not sell coffee. Club Med does not sell vacations. And Guinness does not sell beer. Then what do they sell and what do we buy?
►Comment enthusiastically (!) on the given companies, using specific reasons and examples from your own experience, observations, or reading. Give a small talk. Use your initiative! And don’t hesitate to root for your performance by using visual aids.
‘THEORY-5’ POINT
Branding is simple. Branding is impossible.
An extract from Re-imagine by Tom Peters
(1) Branding is not about marketing tricks. It is about answering a few simple (and yet impossible) questions:
WHO ARE YOU?
WHY ARE YOU HERE?
HOW ARE YOU UNIQUE?
HOW CAN YOU MAKE A DRAMATIC DIFFERENCE?
And the most important WHO CARES? (DO YOU CARE?) (Starting point.)
WHO ARE YOU? (I really wanna know)
The top management of a Giant American Company invited me to speak with them. They had experienced a couple of decades of exceptional growth, and it seemed to be slowing. Employee morale, surveys showed, was slipping a bit, resulting in higher than usual turnover. Their formerly awesome customer service ratings were a bit wobbly. No, the world hadn’t come to an end, but it was suddenly (to them) ‘uncertain’. And talented, brass-knuckled competition with an investment cache to die for made the issue even more worrisome and urgent.
I studied like hell. Talked to customers. Talked to vendors. Talked to front-line employees. I had but three hours to spend with the Top 50, and my pride and professionalism insisted that I make each moment count. The first half was to be a presentation; I’d parade my ‘insightful’ PowerPoint slides for 90 minutes. Then we’d talk for the second half of the ‘show’.
As usual, I was suffering from pre-presentation insomnia. It was 4 a.m. The speech would begin at 7 a.m. And, yes, I had those slides ready … 127 of them. I thought. I fretted. And then I did something strange: I deleted 126 of the 127 slides. Just one remained. It read:
‘WHO ARE YOU [THESE DAYS]?
The company had made several acquisitions in the last half-dozen years. Though I’m a publicly avowed enemy of most big acquisitions, I had no complaint with what this firm had done; each purchase had filled a gaping hole in its portfolio, relative to its most powerful competitors. But somewhere … somehow … the firm’s True Identity seemed to have slithered away, deep into the bushes. So I said: ‘You can have your fee back if you want, but we’re going to spend the entire three hours talking about ‘WHO ARE YOU?’
MISSION CONTROL: WHY ARE YOU HERE?
‘You can’t just go on forever floating on the tide these days,’ writes Danish marketing expert Jesper Kunde, ‘monitoring the competition and conducting surveys to find out what your customers want right now. What do you want? What do you want to tell the world in the future? What does your company have that will enrich the world? You must believe in that. Believe so strongly enough to be unique at what you do.’
There’s more.
‘Some companies’, Mr. Kunde adds, ‘equate branding with marketing. Design a sparkling new logo, run an exciting new marketing campaign, and voila – you are back on course. They are wrong. The task is bigger, much bigger. It is about the company fulfilling its potential, not about a new logo.
‘WHAT IS MY MISSION IN LIFE? WHAT DO I WANT TO CONVEY TO PEOPLE? AND HOW DO I MAKE SURE THAT WHAT I HAVE TO OFFER THE WORLD IS ACTUALLY UNIQUE? THE BRAND HAS TO GIVE OF ITSELF, THE COMPANY HAS TO GIVE OF ITSELF, AND MANAGEMENT HAS TO GIVE OF ITSELF. … TO PUT IT BLUNTLY, IT IS A MATTER OF WHETHER (OR NOT) YOU WANT TO BE UNIQUE NOW.’
I think that’s brilliant.
Branding: It’s about meaning, not marketing … about deep company logic, not fancy new logos.
THE BEST – OR BUST: HOW ARE YOU UNIQUE?
UNIQUE. There is no bigger word. None.
Unique means … SINGULAR. RIGHT? (And … PERIOD.)
‘Success,’ says Tom Chappell, founder of the personal care products company Tom’s of Maine, ‘means never letting the competition define you. Instead, you have to define yourself based on a point of view you care deeply about.’
Brilliant.
But even Tom can be upstaged. By … the man … the late Jerry Garcia of the Grateful Dead: ‘You do not merely want to be considered the best of the best. You want to be considered the only ones who do what you do.’
And the Grateful Dead were precisely that. They changed the world. (I am a fan, by the way. Not a Deadhead, but a sympathizer … to be sure.)
If not unique … WHY BOTHER?
IT’S THE LAW: HOW CAN YOU MAKE A DRAMATIC DIFFERENCE?
Dough Hall is an ‘idea guru.’ The idea guru (according to a 2001 Inc. magazine cover story.) A former P&G marketer, and now overseer of Eureka Ranch, he has guided big corporation team after big corporation team to stunning new product breakthroughs. Now focused on translating those ideas to the world of small business, Dough has written a wonderful and meticulously researched book, Jump Start Your Business Brain.
At the book’s heart are three ‘laws’ of ‘marketing physics.’
Law#1: Overt Benefit. What is the product or service’s ‘One Great Thing’? (One or two ‘great things’ is far better that three or more ‘great things.’ When you get to three or more … you just confuse the consumer. A ton of hard data support the point.)
Law#2: Real Reason to Believe. Does the organization Really and Consistently Deliver that ‘One Great Thing’?
Law#3: Dramatic Difference. The Hard Data Scream: Dramatic Difference in a product or service offering makes a very Dramatic Difference in Top- and Bottom-line Success. Alas, Hall reports, damn few (Very Damn Few!) execs get it.
Consider: A few hundred consumers are asked to evaluate a potential new product or service. They confront two questions: ‘How likely are you to purchase this new product or service?’ and ‘How unique is this new product or service?’
The consumers’ responses to those questions are intriguing – but not nearly as intriguing as the way the company’s top executives then responded to the survey. Execs - no exceptions in 20 years, per Mr.Hall! – give 25% to 100% weighing to results from the ‘intent to purchase’ questions, and a 0% to 5% weighing to the ‘uniqueness’ consideration.
WHO CARES? (YOU’D BETTER CARE!)
When Bob Waterman and I penned In Search of Excellence, the received dogma of the time had reduced ‘management’ to a dry, by-the-numbers exercise. Bob and I roamed the nation, looking at companies that worked, and we saw something else. What we saw was ‘soft’, by the Harvard Business School standard. It had to do with people & engagement in work & love of quality& entrepreneurial instinct & values worth going to the mat for. The ‘surprising’ Waterman-Peters mantra: