marketing imagination

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MARKETING IMAGINATION Theodore Levitt

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Page 2: Marketing Imagination

Theodore Levitt Born: March 1, 1925 Where: Vollmerz, Main-Kinzig-Kreis, Germany Education:  bachelor's at Antioch College and

a Ph.D. in Economics at Ohio State University Known for:  

American economistprofessor at Harvard Business School - 1959Editor Harvard Business ReviewCoined the term “globalization”

Died June 2006 because of Cancer

Page 3: Marketing Imagination

Chapters/Articles in the book

1. Marketing and the Corporate Purpose

2. The Globalization of Markets3. The Industrialization of Service4. Differentiation — of Anything5. Marketing Intangible Products

and Product Intangibles6. Relationship Management7. The Marketing Imagination8. Marketing Myopia9. Exploit the Product Life Cycle10. Innovative Imitation11. Marketing and Its Discontents

Marketing and the Corporate Purpose2. The Globalization of Markets3. The Industrialization of Service4. Differentiation — of Anything5. Marketing Intangible Products and Product Intangibles6. Relationship Management7. The Marketing Imagination8. Marketing and Its Discontents9. Addendum:

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A GLOBAL IMAGINATION

Page 5: Marketing Imagination

Profit was not the objective; it was the reward for creating a satisfied customer.

The significance of marketing was first to develop a thorough understanding of the marketplace, understanding the broader social and economic function and issues associated with marketing, beyond the level of the firm.

Companies must be flexible to the changes of global marketplace emphasizing relationship management

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The range of marketing relationship Pure Transaction Repeated Transactions – repeated transaction between buyer

and seller. Long-term relationship – adversarial and depends heavily on

market control. Real partnership – each partner approaches total dependence

on the other in a particular area of activity and mutual trust replaces adversarial assumptions.

Strategic alliances – the formation of new entity such as product development team, a research project, or a manufacturing facility, to which both parties commit resources and which serves clear strategic purposes for both.

Network organization – corporate structures that result from multiple relationship, partnership and strategic alliances

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Globalization of markets Free trade results to globalization Globalization leads commonality of goods Standardization of products increase

quantity which reduce cost because of economic scale.

High quality and low costs are not opposing postures. They are compatible, twin identities of superior practices

Global diversity resist product standization

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Multinational vs. Global “Hedgehog and the Fox” The multinational corporation knows a lot about

great many countries and congenially adapts to supposed differences.

Global Corporation knows everything about one great thing all nation and people have in common – scarcity. The absolute need to be competitive on a worldwide

basis as well as nationally Seek constantly to drive down prices by

standardizing what it sell and how it operate.

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Other countries resist change from the globalization of products - the persistence of economic nationalism as a barrier to the globalization of market.

The global corporation does not abjure customization or differentiation for the requirements of markets that differ buying behaviour of customers shaped by environment factors.

Global corporation accepts and adjust to these differences only reluctantly, only after relentlessly testing their immutability.

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The purpose of business is to create and keep a customer – customer satisfaction Product innovation4 P’s of strategyQuality and Reliability of the product

Preferences are constantly shaped and re-shaped – by technology and globalization

A gradual convergence of markets that leads to the reduction of costs and prices.

Page 11: Marketing Imagination

The Industrialization of Service British Style of Service: one person’s

labour for the benefit of the other, each has a specialized performance in a separate and costly triviality.

Service is “one person directly and personally attends another, as servant attends the master.”

Lacking improvement to service.

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Opportunities for service improvement lie around - lesser tools, simpler methods and less elaborate organization

Service can be industrialized in three ways:Hard technologiesSoft technologiesHybrid technologies

Service was the product. Customer buy tools to solve the problems. specialist who know the customer’s problem are more likely to help fulfil the expectation of the solution.

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Chapter 4 – The Differentiation

“There is no such thing as a commodity. All goods and services can be differentiated and usually are. (branding, packaging, advertising, features, pricing)”

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PRODUCT- May be tangible and intangible- It must be differentiated from competitive offerings

because people respond to differentiation, and they respond differently to different kinds of differentiation

- To the potential buyer, a complex cluster of value satisfaction.

- Business is for the patronage of solvent customers

"Customers don’t buy things, they buy tools to solve problems."

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THE TOTAL PRODUCT CONCEPT

1. The Generic Product- Rudimentary substantive “thing” with no chance to play the game of

market participation.

2. The Expected Product- represents customer’s minimal expectations of a product.- varies by customers, conditions, industries, etc.

3. The Augmented Product-Offering the customers with what they think they need or has become accustomed to expect.

4. The Potential Product- everything potentially feasible to attract and hold customers.

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Chapter 5: Marketing Intangible Products and Product Intangibles

A. Tangible Products- can be directly experienced (seen, touched,

smelled, tasted and tested). Often this can be donebefore you buy.

- To make buyers more comfortable and confidentabout tangibles that can’t be pretested, companies gobeyond the literal promises of specifications,advertisements and labels to provide reassurance.

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B. Intangible Products

- can seldom be experienced or tested in advance. - the offered products will be judged in part by who

personally offers it, not just “who” the vendor corporation is but also “who” the corporation’s representative is.

- in keeping customers for intangibles it becomes important regularly to remind the customers what they’re regularly

getting.

“Goods are produced, services are performed” – John M. Rathwell

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Industrialization of ServiceA. “Hard” Technology – continuous

computerized monitoring rather than batch testing of industrial processes.

B. “Soft” Technology – division of labor for one-person craftsmanship in production

C. “Hybrid” Technology – combination of the soft and the hard technologies

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Chapter 6 – Relationship Management- “The sale merely consummates the courtship;

then the marriage begins. How good the marriage is depends on how well the relationship is managed by the seller. That determines whether there will be continued or expanded business or troubles and divorce, and whether costs and profits increase.”

- “For the seller, it is the end of the process; for the buyer the beginning.”

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- “Expectations are what people buy, not things. They buy the expectations of benefits promised by the vendor”

- “The fact of buying changes the buyer.

- “One of the surest signs of a bad or declining relationship is the absence of complaints from the customers.

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Art: 7 Marketing Imagination Marketing imagination is the starting point of

success in marketing. Nothing drives progress like the imagination The only exception are accidents Imagine:

Insights on how to understand your customer (needs and wants) reconceptualization○ Knowing the customers mind

Have the ability to direct the attention to you product not on your competition

Shift the behavior to he advocacy or the goal that the company is promoting or want

Page 22: Marketing Imagination

Marketing Imagination Imagine -> Idea -> to be converted to

results by asserting that people don’t buy

things, but buys solutions to problems

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Art: 8 Marketing and Its Discontents Marketing is maligned for its Pushy,

Noisy, Manipulative instructions into our lives

Hard to bury the Past – people take a special masochistic pleasure in parading our imperfections in public view

Focusing more on the bad, negative rather than the good.

Page 24: Marketing Imagination

Marketing and Its Discontents According to Edward Gibbon, “there

exists in human nature a strong propensity to depreciate the advantages and to magnify evils of present times. ..”

No presumption that if we solve all our known problems and remove all basis for discontent then we shall at last be happy

Page 25: Marketing Imagination

Article 9: Addedun on Management and the Postindustrial Society As economy advance, living standard fall Role Management (POSDICON) – decision-making

Planning Organizing Staffing Directing Controlling

Variations in productivity – value difference in production Utilizing technology Production vs Performance Limits of industrialization Practice of Management