The Business Book

(Joyce) #1



o be successful in a market,
an enterprise needs to
understand both the
environment in which it wants
to do business, and the way
consumers in that environment
think and act. The marketing
environment is the world beyond
the confines of the organization—
the world that its customers live
in—and includes the state of the
economy, government regulations,
social attitudes, current issues,
competing companies, distribution
infrastructure and partnerships,
and technological changes. At the

A product that fits the
customer will sell itself.

Every successful business...

...gathers data about the
needs of its present and
potential customers.

...assesses the market
competitors, distributors,
the economy, technology,
and social trends.

It can then develop
the products that will
solve customer problems,
and so meet an
existing demand.


Focused marketing

1920s The concept of market
research emerges in the US.

1941 Robert K. Merton invents
the idea of the focus group.

1953 Peter Drucker says the
first step for any business is to
ask: “Who is the customer?”

1970 US economist Milton
Friedman puts forward the
business model of shareholder
1998 Marketing professor
Robert V. Kozinets coins the
term “netnography” to refer to
the theory of ethnography as
applied to Internet users.

1990 US professor Gerald
Zaltman develops the first
neuromarketing technology,
ZMET, to analyze consumers’
subconscious reactions to
advertising imagery.

core of this market is the prospective
customer, who will be influenced
by many of those environmental
factors, but will also be driven by
individual needs and preferences,
which will affect what products
and services he or she buys.
This means that to understand
the market, a company must
make sense of the “broad brush”
of the external environment and,
at the same time, fathom the
psychological profile and
personality of the consumer. The
end purpose of these investigations
is to identify the biggest problems

that consumers are struggling
with. Once these are identified,
a business needs to respond
innovatively, to deliver the products
and services that will be seen as
perfect solutions.

Gathering data
This analysis may sound simple,
but given that any particular
market might number thousands or
millions of individuals, how does a
marketer go about understanding
how those people think and
behave—let alone what problems or
unfulfilled wants they have, both
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