Wednesday, October 27, 2010

Old Marketing Rules Still Apply

Marketing's roots go back to one of Peter Drucker's most famous quotes:

“There is only one valid definition of business purpose: to create a customer.”
Peter F. Drucker, Management: Tasks, Responsibilities, Practices

Even with all the business innovations, technological advances, and economic upheavals of the many decades since this was written, Prof. Drucker's observation is still a succinct description of what marketing should be doing.

In other words, no matter how the tools change, matter how the times change, no matter who the audience is and how it's changing, the old marketing rules still apply.

Video rental giant Blockbuster--now in bankruptcy--is a prime example of not moving quickly enough to keep up with snowballing shifts in customer behavior. In resisting the competitive onslaught of Netflix's online convenience and the instant-gratification benefit of Redbox's vending machines, Blockbuster took its eyes off the purpose of creating and retaining a loyal customer base, and thus lost its long-standing advantage.

Netflix wasn't substituting technology for a focus on the customer--it was using its insights into customer behavior to build a business based on creating and satisfying customers. The same holds true for Redbox, which didn't invent the vending machine but saw it as a cost-effective way to give movie-lovers access to recent releases at a low price and in convenient locations. Redbox created so many customers for its business model that vending machines are now seen as a prime way to distribute movie rentals.

The old marketing rules have not gone fact, they're more important than ever.

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