A common misconception about evolution is that “the fittest survive.” In reality, the most adaptable do. Life forms unable to adapt to changing environmental requirements for survival don’t pass their genes onto successive generations. Instead of branching into new life forms, they get pruned.
Just as living organisms need to adapt to change in order to produce future generations, organizations must deal effectively with change to survive and produce future profits.
We in the boating industry are no exception. In the short run, we need to wrestle with overcapacity —too many manufacturers and dealers chasing too few customers. Good business practices across all business functions will be required for our profitable survival. Marketing, however, is the sole business function serving as the direct link to the customer and can help ensure our survival.
The “marketing concept” is a philosophy popularized by Dr. Philip Kotler at Northwestern University. He holds that “the key to achieving organizational goals consists in determining the needs and wants of target markets and delivering the desired satisfactions more effectively and efficiently than competitors.”
The tool by which smart companies apply the marketing concept is the principle of market segmentation — a three-step process:
1) Segment consumers into groups based on
the features and benefits they seek in a product — both tangible and intangible;
2) Prioritize these segments from most to least valuable to the firm, and identify those the organization will make a concerted effort to attract — the target markets;
3) Develop a marketing mix to attract these
An organization’s marketing mix comprises its product, channels of distribution, price, marketing communications and positioning.
Companies that most effectively manage change believe in the marketing concept and the principle of market segmentation. General Mills, Hilton, Frito-Lay and Purina have all used market segmentation studies to build their brands.
Over the long run, on average, the more a company subscribes to the marketing concept and the principle of market segmentation, the more successful it is. There is a wealth of research in the marketing literature that supports this fact.
How can your business use the marketing concept and market segmentation to navigate the treacherous waters of our industry over the next decade? Books have been written on these subjects, and it is beyond the scope of this column to summarize them. But I offer the following recommendations to increase your organization’s knowledge in these areas.
In good times and bad, invest in your marketing people. Increasing your marketing professionals’ marketing knowledge and acumen will help you more effectively compete in the bad times and take advantage of marketing opportunities in the good times.
Consider how other professions — physicians, accountants, even landscape architects — certify their practitioners. To maintain their certifications, they must continually take courses and attend seminars to earn a certain number of continuing-education credits every several years. Experts don’t bone up only when the economy is good. It is a continuous process. To do otherwise makes as much sense as a company only investing in product development and quality improvement efforts when sales are up.
There are many ways to invest in your marketing and marketing research “human” assets.
If you don’t already have one, hire a full-time director or manager of consumer insights with a master’s degree in the marketing research field, or one whom the Marketing Research Association has certified as “Expert.”
You wouldn’t have an operation performed by a pre-med student, would you? Neither should you have your consumer insights department guided by a person with little education or experience.
If you can’t afford a seasoned research professional, and you have a marketing research staff that needs more education, encourage them to join the Marketing Research Association and work toward their Professional Marketing Researcher Certification, which the MRA manages. To this end, they could enroll in the only online marketing research course endorsed by all the major marketing research associations around the world — Principles of Marketing Research offered through the University of Georgia’s Center for Continuing Education and the Marketing Research Institute International.
Your marketing managers should also join the American Marketing Association, attend selected conferences and subscribe to selected AMA publications, such as Marketing Management.
Just as with any other living organism, we too will survive if we adapt by targeting and grasping the ripe segments in our industry.