Franklin Management Advisory Group LLC

Do You ''New Market''?

After Henry Ford introduced his Model T in the early 1900s, he often said it was available in any color. as long as it was black. Mr. Ford was clearly focused on his product, not the marketplace.

So it was with most products. They were touted mostly for their features.
Advertisements focused on how a product worked, what size it came in or where it could be purchased. Little, if any, of the ad copy took into account "the needs of the marketplace." Marketing then was no more than advertising.

Marketing as we know it today began taking shape in the middle of the twentieth century. It evolved into what business schools referred to as "New Marketing." Later this nomenclature became commonplace.

Then in the early 1960's, Dr. Theodore Leavitt, a Harvard professor published Marketing Myopia, in the Harvard Business Review. This highly acclaimed essay gave this new concept credence.

He argued that companies should place less emphasis on a product's features and more on the demands of the marketplace. A novel thought: sell people what they wanted rather than emphasize the features of a given product.

In his article, Professor Leavitt shared a classic example of the "old" style of marketing. At the turn of the twentieth century, every owner of a horse-drawn carriage had at least one buggy whip.

At about that same time, the horseless carriage appeared on the scene. Because of the noise and smoke it emitted, it was discounted as serious competition by the buggy whip manufacturers. They remained focused on new and improved buggy whips, and their advertisements extolled product features, such as fine leather and exotic skins.

More importantly, they overlooked the changes occurring in the personal transportation marketplace.

Ovaltine, the chocolate-flavored drink, is a prime example of Professor Leavitt's "new marketing" concept. At about the same time buggy whip manufacturers had their heads in the sand, George Wander, a Swiss chemist, developed Ovaltine as an intended cure for malnutrition. Back then, and for many years afterwards, health consciousness was not a high priority. So sales of the drink floundered.

It took the twenty-first century and a new focus on nutrition to resurrect the old brand.

Ovaltine re-positioned its beverage as a health product. A health-conscious audience responded, and the drink enjoyed a remarkable resurgence. By early 2004, its market share had tripled, becoming second only to Nestlé's Nesquik in the chocolate-flavored drink category. All of this thanks to "new marketing".

In today's "new" style of marketing, marketplaces reflect consumers' needs and wants and thus determine the products and services offered by providers. IBM, for example, embraces "new marketing" as part of its overall corporate philosophy. It proclaims: "the marketplace is the driving force behind everything we do".

Unfortunately, many companies still suffer from "Marketing Myopia" and remain product focused. While it is too late for the buggy whip makers, it is by no means too late for you. Review your marketing philosophy and take appropriate action.

Do you "new market"?

Written by Franklin Management Advisory Group LLC ©2004