Successful Organizations Are a Product of Successful Marketing

Successful Organizations are a Product of Successful Marketing

L. McTier Anderson's 1987 article, "Charting a Smooth Course for Marketing's Seven C's," provides a practical framework for marketing management. Anderson suggests that an appreciation of the significance of the 7Cs of the marketing discipline - customer orientation, change, competition, communication, credibility, creativity, and commitment - can help managers choose analytical tools and techniques and develop effective marketing strategies and plans. As business professionals, one way we can better understand marketing principles, is to study the distinguishing characteristics of successful organizations and how they apply these principles.

Customer Orientation

Anderson suggested that perhaps the best expression of customer orientation is the "marketing concept," which is beautifully explained in the quintessential Harvard Business Review article "Marketing Myopia" by Theodore Levitt (1960). Levitt illustrates the marketing concept with the story of Henry Ford, inventor of the manufacturing assembly line. Levitt postulates: "We habitually celebrate him for the wrong reason: for his production genius. His real genius was marketing." While it is true that he developed a method of assembly that enabled him to cut costs and make millions of $500 cars, the method was a result of his conclusion that at $500 he could sell millions of cars. Ford first discovered a need in the market place (affordable motorized transportation) that he could satisfy, for a profit. Levitt suggested that "a truly marketing-minded firm tries to create value-satisfying goods and services that consumers will want to buy...The seller takes cues from the buyer in such a way that the product becomes a consequence of the marketing effort, not vice versa." In order to achieve this deep understanding of the buyer (a businesses customer), management must strive to build deep -and lasting- relationships based on service and trust.

"In Business Week's first-ever ranking of the best providers of customer service, we set out to find the service champions, but also to dig into the techniques, strategies, and tools they use to make the customer king," writes McGregor, Jesperson, Tucker and Foust (2007). The results crowned 'service legend' USAA as the No. 1 Customer Service Champ, "where great customer service is a founding, fundamental principle." That was 2007 - and USAA has been on the list every year since.

"Although few large companies have such a specialized focus, managers everywhere could learn plenty from USAA about coddling customers," writes J. McGregor in the 2010 article detailing specifics of Bloomberg BusinessWeek's annual Customer Service Champs top-ranking companies. "In almost everything it does, the financial-services outfit puts itself in the spit-shined shoes of its often highly mobile customers, many of whom face unique financial challenges."(2010)

Karen Pauli, research director of consulting firm TowerGroup claims: "There is nobody on this earth who understands their customer better than USAA." So how do they do it? USAA knows how to serve its armed forces customers and the unique financial issues they face. The company was founded in 1922 by a group of 25 Army officers who got together to insure each other's vehicles. Today, the company continues to foster this level of identification with its customers beginning with employee training. New hires attend sessions where they dine on MREs (meals ready to eat), which troops consume in the field, try on gear such as Kevlar helmets and flak vests, and receive deployment letters to help illustrate the financial decisions customers face at such an emotional time. (para. McGregor p41).

Another market leader in the customer orientation category (and a regular on Business Week's Customer Service Champs list) is Nordstrom Inc., an apparel company known for its outstanding customer service and accomplishments in creating an outstanding 'customer experience.' From inviting atmospheres, huge inventories, and personal 'thank you' notes from sales staff, Nordstrom's has "created a culture where customer service is singled out, honored and rewarded." Perhaps that's why 28% of 19,000 customers surveyed by a recent IBM pole (higher than any other store in its group) pledged their loyalty and recommendations for the retailer.

It was Peter F. Drucker, commonly referred to as the father of modern management, who first asserted that: "There is only one valid definition of business purpose: To create a customer..." Drucker stressed that a firm understanding of customers' ever-changing needs, wants, and preferences was the driving force for business success. He would no doubt agree that Southwest Airlines is an honorable mention with regards to customer orientation. In a 2010 Marketing Management article, Locander and Luechauer state "Unless you have been living under a rock for the past 30 years, you are no doubt aware of the many accolades Southwest Airlines has garnered for "luving" and taking exceptional care of both its customers and employees."

Change

To effectively manage change, an organization must monitor market evolution and be willing and able to adjust in a changing environment. Levitt articulates a classic example of management's failure to anticipate and adapt to change, even if that meant changing everything about their business operation and industry in order to satisfy the needs of their customer. "The railroads are in trouble today not because that need was filled by others (cars, trucks, airplanes, and even telephones) but because it was not filled by the railroads themselves. They let others take customers away from them because they assumed themselves to be in the railroad business rather than in the transportation business...they were product oriented instead of customer oriented."

Levitt further proclaimed that "What the railroads lack is not opportunity but some of the managerial imaginativeness and audacity that made them great...[What is lacking is] the will of the companies to survive and to satisfy the public by inventiveness and skill."

Many would argue that no other company in the world satisfies its customers with 'inventiveness and skill' more than Apple, Inc. "It's called the Cult of Apple for a reason," states Stone and Burrows of BusinessWeek, referring to the company as the master of loyalty for all its innovative gadgets and gizmos.

In a 2004 BusinessWeek