Marketing Myopia

Marketing Myopia • What is Marketing Myopia? failure to see customer-need-oriented business (vs product/service-oriented business) • Every major business was once a boom business • There is no such thing as a growth business (perpetually) Sheu

Railroad Story • Railroad business: • WAS: • Early 90s: speed, flexibility, durability, economy, full of growth • Many royal customers. Investors rush to invest its stocks • A tradition, code of honor, source of poetry, most solemn machine. • Declining is unthinkable. • IS: • Overtaken by planes, bus (?)/taxi/own car. Rapidly shrinking industry. • Low-class riders; shabby machine/vehicle • Great operation loss. • WHY ??? • in rail business instead of in transportation business Sheu

Oil Industry Story • Thought ever-growing population guarantees growth. (石化工業已不若當年風光. 拜耳 / 六輕) • Narrowly defined as oils industry. • Providing: crude oil and gas. R&D on oil exploration and refinery efficiency. (Not on improv. Generic product & market) • Episodes: • Kerosene -> electric lamps <space heater (oil) to rescue> • Space heating -> central heating (coal) <intern. comb. Eng (ICE). To rescue> • ICE -> Car gas level off <aviation fuel> • Central heating -> Natural gas. • Oil co. own gas but resist the dev of gas usage. Lost business to a new industry. => narrowly perceived self as oil producer not energy provider. • ALL substitutes are from outside the industry. <lost oppr.> • Moral(寓意): (cf: morale) • Seemingly evergreen yet was of luck • Decline is unavoidable - & indeed. • Product-oriented vs market need - oriented (substitute energy needs) • Missed opportunities to others. (eg. Natural gas) Sheu

中鋼 case • Taisil company (中德):中鋼 & Hughes <= German company • What steel company has to do with semiconductor? • Commodity product vs Custom-made product • Aggregate MKT driven vs individual customer driven. • 0.9999 purity control vs 0.999999999999 purity contr. • Millions of tons vs millions of grams • Tech. turnover 20 ~30 yrs vs 2~3 yrs. • A steel producer => material component provider • Satisfying material needs for downstream industries. • Core competence: material science. Sheu

Product vs Market vs Sales Oriented • Product-oriented vs Market-oriented • Company tends to be product-oriented. • Demise of a major typewriter company. (~30 -> 5000 -> 0) • If you do not obsolesce yourself, others will do. (Continuous product improvement & change product CATEGORY to satisfy customer needs.) • Consider yourself as serving a more generic customer needs • using your core competency to serve a need provide a value • Not just providing a specific product - even continue to improve on that prod.may not be enough. <typewriter> • Sales vs Marketing • Sales: getting the product out of the door. (seller needs) • Marketing: satisfying customers’ needs. Sheu

Ford Production Philosophy • Traditional: • Mass production to get cost down. Sales to get the product out. • Price is determined by how much can the production/engr. lower the cost. Customer to choose from what are produced. • Manufacturing oriented • Ford $500 car. ($500 salary level will suffice to buy a car.) • Find what price level intended customer will buy the car. • Trace backward to force engr/mfg to reduce cost or rearrange features of product. • Market oriented. Sheu

Principles • Mgmt think of itself not as producing productsbut as providing customer satisfaction creating customer value. <Using core competence> • Internalize the idea to the whole organization. • Stimulate/excite employees. (口號, 精神指標) • Continuously reminding. • These principles are the same for pushing IT or any major ideas w/i the company. Sheu

Marketing Myopia