1. CHAPTER 6 STRATEGIC INNOVATION AND THE MARKETER
OR, WHY THE MARKETING CONCEPT IS MISCONCEPTUALIZED
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Rethinking Marketing, 1st Edition

2. Rethinking Marketing, 1st Edition
Learning Objectives
List the four modes of focus
Describe what environmental conditions would lead to each of the four modes of focus
Identify ways in which a company can create and retain customer
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Rethinking Marketing, 1st Edition

3. Is customer orientation all that matters?
Most marketing textbooks argue
Firms should be
Customer focused
Customer driven
Customer-centric
Firms should not be
Production oriented
Sales oriented
Product focused
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Rethinking Marketing, 1st Edition

4. Rethinking Marketing, 1st Edition
Old textbook view on new-product development and product management
Research has indicated what customers feel they
Need
Will want
Will purchase
No sensible firm will launch without researching to
Determine customer needs and wants
Whether meets or exceeds these
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Rethinking Marketing, 1st Edition

5. This textbook takes a different perspective
Strong case for customer orientation under certain circumstances
Frequently compelling argument in favor of
Innovation, or product orientation
Not a simple case of “either-or”
Executives need to determine the course of their firms and decide if appropriate
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Rethinking Marketing, 1st Edition

6. The Customer-Product Debate
Innovation orientation
Customers prefer products and services that generate the greatest
Interest Quality
Performance Features
Value for money
Technological superiority
Firms devote energy
Inventing
Refining
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Rethinking Marketing, 1st Edition

7. Rethinking Marketing, 1st Edition
Customer/market orientation
Key attainment of organizational goals
Identifying the wants and needs of target market
Delivering products and services
Philosophy
Customer service
Customer satisfaction
Customer focus
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Rethinking Marketing, 1st Edition

8. Rethinking Marketing, 1st Edition
Innovation orientation and customer/market orientation
Two distinct constructs that can interact
Facilitate strategic success
Inhabit strategic success
No one right way for an organization to orient
No necessary conflict between the two orientations
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Rethinking Marketing, 1st Edition

9. To serve or create? A Reexamination of Customer Orientation
Peter Drucker stated sole purpose of a firm
Create and keep customer
Managers embraced customer orientation
Organizations must ascertain
Customer needs and wants
Produce products and needs to service those needs and wants
Customer driven
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Rethinking Marketing, 1st Edition

10. Rethinking Marketing, 1st Edition
Customer orientation subsumed under market orientation
Three core aspects
Customer orientation
Organizationwide integration of effort
Clear objectives (profitability)
Drucker’s concept of a business as a whole
More than customer orientation
When discusses function uses term broadly
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Rethinking Marketing, 1st Edition

11. Rethinking Marketing, 1st Edition
Marketing concept
Genesis on customer
Needs
Wants
Values
Delivering
Creating customers
Servicing customers insufficient for long-term success
“Organizational ambidexterity”
Meet needs and wants of today’s customers
Innovate to ensure creation of new customers
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Rethinking Marketing, 1st Edition

12. Beyond Customer Orientation: The Return to Innovation
Servicing and creating customers is an organizationwide responsibility
Business changes bring into question, Is customer orientation enough?
Turbulence of globalization
Deregulation
Rapid technological development
Unstable financial markets
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13. Rethinking Marketing, 1st Edition
Many contemporary authors believe customer orientation is not enough
Aggressive competition leads to oversupply of product
Customers have more choices, are more sophisticated
Spur marketers to innovate incrementally
Leads to imitation
Back to oversupply
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Rethinking Marketing, 1st Edition

14. Marketing and Innovation
Innovative marketing
Product proceeds need
Create their own demand
Change way customers behave
Two components
Openness to innovation
Capacity to innovate
Potential to create markets and customers
Defining human needs
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15. Rethinking Marketing, 1st Edition
Innovative marketing—cont.
Sources of innovative ideas
Technology
Engineering and production
Inventions and patents
Other firms
Management and employees
Customers
First to market and continual innovation is key to survival in a turbulent business environment
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Rethinking Marketing, 1st Edition

16. Competitive Advantage
Achievements in recent past came from anticipating and creating customer wants
Competitors who survive more proficient
Dwindling opportunities to sustain competitive advantage
Create and target future needs and wants
Managers perceive inherent risk
Accepting risk likely to become more central to competitive advantage
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Rethinking Marketing, 1st Edition

17. Changing Needs and Environments
ICON grid (innovation or customer orientation)
Framework to conceptualize and think about changes in market
Customer needs and wants change rapidly
Traditional firms will increasingly be aiming at moving targets
Flow of learning between customer and innovation goes in both directions
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Rethinking Marketing, 1st Edition

18. Rethinking Marketing, 1st Edition
Figure 6.1 The ICON Matrix
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Rethinking Marketing, 1st Edition

19. Rethinking Marketing, 1st Edition
Degree of Focus on Innovation and/or the Customer Can Vary, Leading to Four Strategic Orientation Modes for the Firm
Isolate
Low customer focus
Low innovation focus
Organization becomes focus of its own attention
Follow
High customer focus
Customer drives innovation
Organization relies heavily on formal and informal market research
Shape
Low customer focus
High innovation focus
Technology defines human needs
Two distinct forms
Defining
Influencing
Interact
High customer focus
True dialogue between customer and technology
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20. Choosing a Mode of Focus
Managers should review conditions before choosing one mode over another
Environmental factors
Specific business environment
Very stable environment—isolate
Complex rapidly evolving customer needs and wants—follow
Rapidly evolving technology—shaping
Customer needs and wants proliferate—interaction
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21. Rethinking Marketing, 1st Edition
Environmental factors—cont.
Economic power of existing customers
Bargaining power of customer higher than supplier —follow
Competitive factors
Globalization and deregulation cause intensified competition—shape or interact
Political factors
Sometimes firms have very established and embedded approaches in their cultures, making change hard
Very substantial change necessary to bring about mode change
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22. Understanding Strategic Dynamics
A given mode in neither good nor bad
Organizations change modes over time
Valuable lessons may be learned from each mode
Organizations are in a continual state of flux
Simple checklist “The Amended ICON Scale Used” (Exhibit 6-1, page 118)
Organizations use to find current mode
Determine if current mode is appropriate
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Rethinking Marketing, 1st Edition

23. Understanding the Implications of Changes of Mode
Three high-profile cases of mode transition
Boeing
Shaper to interact to follow, with appearance it is again shifting
AOL
Shaper to isolation to follow to isolate
Microsoft
Isolate to follower
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Rethinking Marketing, 1st Edition

24. Rethinking Marketing, 1st Edition
Rethink Tool #6
Develop a balance between science and art, logic and imagination using "whole-brain thinking" like Leonardo da Vinci.
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Rethinking Marketing, 1st Edition