The order in which the four functional areas
are listed also betrays the alienation of the oil
industry from the consumer. The industry is
implicitly defined as beginning with the search
for oil and ending with its distribution from
the refinery. But the truth is, it seems to me,
that the industry begins with the needs of the
customer for its products. From that primal position
its definition moves steadily back stream
to areas of progressively lesser importance
until it finally comes to rest at the search for
oil.
The Beginning and End.
The view that an
industry is a customer-satisfying process, not
a goods-producing process, is vital for all
businesspeople to understand. An industry
begins with the customer and his or her
needs, not with a patent, a raw material, or a
selling skill. Given the customer’s needs, the
industry develops backwards, first concerning
itself with the physical
delivery
of customer
satisfactions. Then it moves back further
to
creating
the things by which these
satisfactions are in part achieved. How these
materials are created is a matter of indifference
to the customer, hence the particular
form of manufacturing, processing, or what
have you cannot be considered as a vital aspect
of the industry. Finally, the industry
moves back still further to
finding
the raw
materials necessary for making its products.
The irony of some industries oriented toward
technical research and development is
that the scientists who occupy the high executive
positions are totally unscientific when it
comes to defining their companies’ overall
needs and purposes. They violate the first two
rules of the scientific method: being aware of
and defining their companies’ problems and
then developing testable hypotheses about
solving them. They are scientific only about
the convenient things, such as laboratory and
product experiments.
The customer (and the satisfaction of his or
her deepest needs) is not considered to be “the
problem”—not because there is any certain belief
that no such problem exists but because an
organizational lifetime has conditioned management
to look in the opposite direction.
Marketing is a stepchild.
I do not mean that selling is ignored. Far
from it. But selling, again, is not marketing. As
already pointed out, selling concerns itself
with the tricks and techniques of getting people
to exchange their cash for your product. It
is not concerned with the values that the exchange
is all about. And it does not, as marketing
invariably does, view the entire business
process as consisting of a tightly integrated effort
to discover, create, arouse, and satisfy customer
needs. The customer is somebody “out
there” who, with proper cunning, can be separated
from his or her loose change.
Actually, not even selling gets much attention
in some technologically minded firms. Because
there is a virtually guaranteed market
for the abundant flow of their new products,
they do not actually know what a real market
is. It is as if they lived in a planned economy,
moving their products routinely from factory
to retail outlet. Their successful concentration
on products tends to convince them of the
soundness of what they have been doing, and
they fail to see the gathering clouds over the
market.