Marketing myopia article summary

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Copyright 2013 Harvard Business School Publishing Corporation All rights reserved No part of this publication may be reproduced, stored in or introduced into a retrieval system, or transmitted, in any form, or by any means (electronic, mechanical, photocopying, recording, or otherwise), without the prior permission of the publisher. Requests for permission should be directed to permissions@hbsp.harvard.edu, or mailed to Permissions, Harvard Business School Publishing, 60 Harvard Way, Boston, Massachusetts 02163. The web addresses referenced in this book were live and correct at the time of the book’s publication but may be subject to change. Library of Congress Cataloging-in-Publication Data HBR’s 10 must reads on strategic marketing. p. cm. — (HBR’s 10 must read series) Includes index. ISBN 978-1-4221-8988-7 1. Marketing—Management. 2. Strategic planning. I. Harvard business review. II. Title: HBR’s ten must reads on strategic marketing. III. Title: Harvard business review’s 10 must reads on strategic marketing. HF5415.13.H368 2013 658.8'02—dc23 2012037855 eISBN: 978-1-4221-9152-1 Contents Rethinking Marketing Roland T. Rust, Christine Moorman, and Gaurav Bhalla Branding in the Digital Age David C. Edelman Marketing Myopia Theodore Levitt Marketing Malpractice Clayton M. Christensen, Scott Cook, and Taddy Hall The Brand Report Card Kevin Lane Keller The Female Economy Michael J. Silverstein and Kate Sayre Customer Value Propositions in Business Markets James C. Anderson, James A. Narus, and Wouter van Rossum Getting Brand Communities Right Susan Fournier and Lara Lee The One Number You Need to Grow Frederick F. Reichheld Ending the War Between Sales and Marketing Philip Kotler, Neil Rackham, and Suj Krishnaswamy About the Contributors Index Rethinking Marketing by Roland T. Rust, Christine Moorman, and Gaurav Bhalla IMAGINE A BRAND MANAGER sitting in his office developing a marketing strategy for his company’s new sports drink. He identifies which broad market segments to target, sets prices and promotions, and plans mass media communications. The brand’s performance will be measured by aggregate sales and profitability, and his pay and future prospects will hinge on those numbers. What’s wrong with this picture? This firm—like too many—is still managed as if it were stuck in the 1960s, an era of mass markets, mass media, and impersonal transactions. Yet never before have companies had such powerful technologies for interacting directly with customers, collecting and mining information about them, and tailoring their offerings accordingly. And never before have customers expected to interact so deeply with companies, and each other, to shape the products and services they use. To be sure, most companies use customer relationship management and other technologies to get a handle on customers, but no amount of technology can really improve the situation as long as companies are set up to market products rather than cultivate customers. To compete in this aggressively interactive environment, companies must shift their focus from driving transactions to maximizing customer lifetime value. That means making products and brands subservient to long-term customer relationships. And that means changing strategy and structure across the organization—and reinventing the marketing department altogether. Cultivating Customers Not long ago, companies looking to get a message out to a large population had only one real option: blanket a huge swath of customers simultaneously, mostly using oneway mass communication. Information about customers consisted primarily of aggregate sales statistics augmented by marketing research data. There was little, if any, direct communication between individual customers and the firm. Today, companies have a host of options at their disposal, making such mass marketing far too crude. The exhibit “Building relationships” shows where many companies are headed, and all must inevitably go if they hope to remain competitive. The key distinction between a traditional and a customer-cultivating company is that one is organized to push products and brands whereas the other is designed to serve customers and customer segments. In the latter, communication is two-way and individualized, or at least tightly targeted at thinly sliced segments.