Part 8 of Kotler and Keller’s Marketing Management is titled “creating successful long term growth. As we learned in ecological economics, perpetual growth is a debatable desire. Yet, growth remains the principal goal of most businesses.
Kotler and Keller set forth 3 methods for business to achieve long term growth. They are “Introducing New Market Offerings”, which I’ve called “New Stuff”, “Tapping into Global Markets”, which I’ve called “Go Global” and “Managing a Holistic Marketing Organization” or Get Holy
One way to create growth is by selling more stuff. Once you have sold as much of the old stuff as possible, you need develop new stuff to sell. So how do you do this?
Now available from Presidio Books! Dariush Rafinejad’s Innovation, Product Development and Commercialization! Much of Chapter is about the product development, since most of us are also in Products and Services I won’t spend much time on this.
Among other challenges, a lack of ideas is one of the biggest barriers to developing new stuff. Many basic products, such as steel, have little room for improvement. Some companies use creativity techniques such as attribute listing, forced relationships, morphological analysis, reverse assumption analysis, new contexts and mind mapping.
Once ideas have been generated, development can take two forms. The company can create an organizational infrastructure of it’s own. Or, it can contract with independent researchers and product development firms.
Kotler and Keller point out that the BEST way to set up the new product development process is to have a unique and superior product…like the snuggie. However, the need for long term growth is such that even Snuggie will eventually need to develop new products.
It is yet to be seen whether or not the Snuggie for Dogs provides long term growth However, this product adaptation accesses new markets And therefore, it has the potential to increase revenues.
The 2nd method to long term growth described by Kotler and Keller is Going Global. There are many factors involved in the decision to go abroad and companies must carefully weigh the opportunities and risks.
The primary opportunity of going global is an increased customer base. More customers means more sales volume, economies of scale and higher profits
One major risk to going global is understanding customer preferences. For example this image depicts the differences between Japanese and German consumer preferences.
Another major risk is understanding of foreign business culture. As we know even small gestures can carry drastically different implications depending on the culture.
Companies have to decide which markets to enter. Considerations include How Many Developed v. Developing Regional Free Trade Zones physical proximity – closeness on a map And, psychic proximity – similarity in culture or product tastes
The third method proposed by Kotler and Keller to create long-term growth is managing a holistic marketing organization. Holistic Marketers embrace the complexity of marketing by engaging in a wide variety of carefully planned, interconnected marketing activities.
One key to managing a holistic marketing organization is staying aware of current trends Flattening is a current trend that has reduced the organizational levels between customers and businesses.
Creating Sustainable Long Term Growth
Long Term Growth
Methods <ul><li>New Stuff </li></ul><ul><li>Go Global </li></ul><ul><li>Holistic Marketing </li></ul>