Customer defines the demand process

-Drucker emphasizes the fact that customers control the market and the product. As discussed in the class this past week, customers also control the demand process for products produced by companies. This did however make me think of the unique case of the Apple Ipad when it hit markets about three years ago. Customers did not really create the demand for the product, Apple created the demand for the Ipad and created new customers. This new innovation sparked a completely new line of products which is now demanded by the customer. However, in the beginning, Apple definitely created the demand for the product as customers did not really know what the product would be used for. I recall huge disappointments when first seeing the product, as many people thought that it was a product that would not be used by the customer (expected no customer demand. However, Apple was able to successfully create this demand even though initially people were very sceptical of the Ipad.

I found this very interesting article discussing the criticism received by Apple upon launching the Ipad. Customers were uncertain of the product initially, but demand was created.

http://appleinsider.com/articles/13/04/03/on-its-third-birthday-apples-ipad-looks-back-at-years-of-comical-criticism

This Week in PharmaSim World

This week I looked at the Advertising reports generated in PharmaSim and compared how my company matched up with competition. This report is very helpful in showing how companies are spending their advertising and how they try to lure the customer to buy the product. Performing a little bit of competitive analysis, I noticed that my company was much different in its approach to advertising. I noticed that many competitors spent a much higher percentage of advertising on “reminder” and “primary. I tended to focus my advertising on the benefits and comparisons and my percentage of reminder advertising was much lower. Upon looking at the competition, I instinctively thought to increase my reminder advertising as to align with industry norms. I thought that it was important for my advertising to be in line with the competition.  I was also able to analyze the total advertising budget by comparing to sales. This gave me a good idea of how much my competition is spending advertising.

Population of PharmaSim world is approximately 263.9 million

Fellow Blogger

Kristen's blog from the previous week was a good read in how it described the idea of companies "painting themselves in the corner". I agree with her analysis that many companies out there fail to keep up with the ever changing customer and fail to please there needs. When a customer's needs change, so must the company's products and services. Constant innovation becomes a centerpoint to a changing customer. Kristen's example of Blockbuster focused on that idea of failing to change with the customer and failing to innovate. As many of us know, the company failed to successfully innovate and when it finnally did, it was likely too late. I also like her camparison of the railroad industry example discussed in the article to Blockbuster. Similarly, they both failed to focus on the broader industry instead of the product.

Leaders and Marketers

Do company leaders have marketing philosophy?

 

Looking at the connections between leadership and marketing, I believe that all leaders of an organization are in some way “marketing thinkers”. Those in charge of leading an organization will be customer focused in growing and developing the company. Drucker emphasizes the idea that many marketing concepts and philosophies are applicable to leadership techniques. This includes strategic thinking with an emphasis on the customer. I feel that many leaders must be customer focused in their daily operations. Including both top and middle management, having a marketing background will help the leader keep the customer’s needs in mind. Leaders must “know their stuff”, and those with marketing backgrounds have a great handle on the products. After all, they work closely with the customer in ensuring they have all their specified features. Knowing the customer is a key point in leading a small group of individuals or an entire organization.

Leaders must know the product, as well as staying educated as to the changes in the industry. Staying educated with a marketing philosophy will also help in ensuring innovation. As Drucker indicates, innovation is essential to business success and will help the company continue to grow. Forward thinking is necessary for any leader, as indicated one of Cohen’s 8 Leadership Principles (Get out in front).  Leaders must also know the customer’s needs/wants as well as potential future implications. Looking at the leaders that I have previously worked with, I would definitely say that they were very customer driven. In the accounting industry, creating valuable relationships while giving great customer service becomes vital. A part of that is to “know your stuff” and knowing your customers. Leaders of my previous firms knew the customer’s needs and wants and were able to communicate those ideas to others members of the organization. Their information was essential in strengthening the team, and in the end improving everyone’s customer relationships.This helped in making improving customer satisfaction.

Brand Loyalty and Innovation

Brand loyalty is a definite outcome of successful marketing and customer satisfaction. Brand loyalty comes after a company is able to successfully market their products while satisfying the customer. In my eyes, customer satisfaction is the key in establishing a strong brand with loyal customers. Looking at the brands in which I feel loyal to, I first think of Honda. Growing up, my parents owned a Honda Accord and I always saw it as a dependable car that never had issues. I saw that my parents were very satisfied and always thought highly of the Honda brand. Then in high school, my parents gave me the car and I began to have even greater brand satisfaction/loyalty. I saw many of my friends having issues with their cars and saw that my car had never had any problems. As a customer, I saw Honda’s product as being very reliable. I would see their marketing produced by Honda which definitely stressed the ideas of reliability. The company would promote things like “Car of the Year” and “Voted most dependable car”. This built my own personal brand loyalty to Honda as I continued to see it as a strong car maker.  Ultimately when it came time to buy a new car, Honda was the first place I stopped as I knew exactly what I would be getting (dependable, reliable car). Although I actually did not get a Honda because I found another car that I loved, I still continue to have a strong feeling toward the brand after so many years of customer satisfaction.

 

Drucker’s idea of innovation also applies to customers with brand loyalty. I strongly feel that for companies to maintain brand loyalty, there must be constant emphasis on innovation. In my previous example of Honda, the company year after year has created products to satisfy customers. They would change models every year to stay innovative but at the same time having that dependability and reliability. Another example that makes me think of innovation and brand loyalty is Calvin Klein. Like many apparel companies, Calvin Klein has a brand is known for a certain style or fashion. Customers will continue coming back to the company knowing that they will get a fashionable shirt or accessory. Drucker’s beliefs of marketing and innovation are seen in this company as it is able to constantly innovate to please customers. Calvin Klein will “innovate” every season in order to please its customers and maintain that brand loyalty. Customers will continue coming back to that company as long as it innovates. I feel that added innovation will sustain brand loyalty.

MK 640

Peter Drucker On Marketing