Über die Autorin bzw. den Autor

Dr Tony Curtis had 25 years industrial experience in the chemical and aroma trade industries before moving into education. He is a Fellow of the Royal Society of Chemistry, a Fellow of the Chartered Institute of Marketing and Senior Examiner for the ‘Marketing Management in Practice’ paper for the Professional Diploma in Marketing of the Chartered Institute of Marketing.

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Dr Tony Curtis covers everything that engineers need to know about marketing and project management. The book has been written in an easy to read style with clear learning outcomes and objectives. In my opinion this should be mandatory reading for all engineers who are involved in the design and marketing of products and services.

Dr Naren Gupta, Senior Lecturer and Teaching Fellow, Director of Quality, School of Engineering and the Built Environment, Napier University

In working with a range of professionals across many industry sectors one often finds it is the technologists and scientists that gain the most out of acquiring skills and knowledge in marketing. Not only does their structured and analytical approach lend itself to strategic marketing but those skills, combined with a clear customer focus and an innovative approach to the market, can give them the portfolio of skills required for successful leadership.

Deirdre Makepeace, Senior Examiner, CIM

To succeed, products and services must satisfy customers’ needs and wants. Engineers, scientists and technologists need to understand these needs to develop and deliver better products. This book covers consumer products, services, international and business to business marketing, as well as current issues such as green and social marketing and the service extended marketing mix. Tony Curtis also discusses the core management skills needed to implement marketing plans, such as leadership, negotiation and consultancy. Finally, he brings all these elements together into three key areas; new product development, market driven quality and marketing plans.

Written by a technologist for technologists, this book is essential reading for engineers and scientists taking a module in business studies or marketing at all levels. It also provides a good foundation in marketing strategy for MBA students with a technical or scientific first degree.

Supporting material for lecturers is available at www.wileyeurope.com/college/curtis

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Marketing for Engineers, Scientists and Technologists

John Wiley & Sons

Chapter One

Learning objectives

After studying this chapter you will be able to:

* Define marketing and explain the importance of a marketing orientation

* Describe the marketing system and explain the individual elements

Introduction

In the 1960s, architects were implementing a vision of the future to replace the slums of an earlier century. The vision was of a new utopia with cities in the sky. Small squalid terrace houses were demolished to make way for high-rise flats: cities in the sky. In the event, an old nightmare was replaced with a new nightmare. The new cities in the sky were not fit for purpose. At the social level, their implementation destroyed the social fabric of existing communities. At the technical level, they did not provide safe, warm accommodation. A comparatively minor accident at 'Rowan Point' led to the partial collapse of a multi-storey building. After 50 years, authorities across the UK have had to demolish (in some cases simply blow them up) these monuments to failure to replace them with housing that is fit for purpose. How could this past disaster have happened? Could history repeat itself?

Some years later, the new town of Milton Keynes was conceived and built. Much open space was provided, with more trees than residents. Unemployment is low and people want to live and work there. However, even this success story has a downside. Milton Keynes is said, in some ways, to resemble a US city. This is true to the extent that Milton Keynes is, as are many US cities, built for the car. It could have been built with public transport as the arteries, but 40 years ago global warming and carbon footprints were not an issue.

Applied scientists, engineers and technologists are engaged in the development of products and services to satisfy the needs and wants of real people. To be successful the technologist must understand:

* What are the needs and wants of the target market?

* How will people use the product?

* How much are people prepared to pay?

* How do you provide an effective technical solution at an economic cost?

Often the question is asked: 'Should new products be technology driven or market driven?' The answer is simple. If you have a product and people do not want it, you do not have a product. If you have an idea for a product that people need and want but the product itself fails to perform you do not have a product. It is necessary to move on from a two letter word, 'or', to a three letter word, 'and'. Products must make the best economic use of technology and satisfy the real needs and wants of customers. On Valentine's Day when a young man proposes to his girlfriend he does not give her an uncut diamond. The boy presents a cut diamond in an engagement ring. Our technological skills are the uncut diamond. To be successful we must know how to cut the diamond and set it in a ring. The assertion, on which this book is founded, is that there is no such thing in the real world as a purely technical problem. There is, in fact, a 'business problem' that has technology as part of the total solution. The technologist who fails to take into account the broader context will not come up with the most elegant, cost-effective solution.

Consider the case of a construction engineer faced with a transport problem across a tidal river (Figure 1.1). The first stage of the project is not technical: What is the nature of the transport problem? Who and/or what (freight) has to be transported? What is the means of transport: road, rail, boat (canal)? What are the volumes of traffic going to be and how might they change during the lifetime of the bridge? This is, in effect, a purely business environmental analysis.

The next stage is to consider the physical environment:

* What is the nature of the river (e.g. depth, tidal range, flood levels, river traffic etc.)?

* What is the nature of the ground (clay, sand, slate, granite etc.)?

* What is the nature of the weather conditions (temperatures, snow, rain, wind speeds etc.)?

* What other conditions may affect the construction? For example, is it to be built in an earthquake zone?

After the investigation of the general physical environment and determination of the transport objects (nature and volume of traffic), the strategic options can be considered. These might include ferry, tunnel and bridge. For the purposes of discussion, we will consider that a bridge is the solution selected. Then the next stage is the selection of the specific bridge technology (strategy detail): should it be a box-girder bridge or a suspension bridge? This decision will be affected by technical issues (e.g. new techniques and materials of construction such as composites) and commercial issues (e.g. relative costs). Then the detailed design of the bridge can commence, followed by the construction.

Marketing and business projects follow much the same type of process. The first stage is to determine the broad aims of the organisations and the project. The strategies to be developed will depend on the environment. In business situations, the business external environment is divided into the macroenvironment and microenvironment. Figure 1.2, which is reproduced later, shows the organisation in its macro- and microenvironment. Strategic options can then be developed (e.g. what new products should be developed). Just as with the bridge's construction, business technologies change (e.g. nature and costs of business communications options). Then detailed plans can be formulated and effected.

The purpose of this book is to provide the technologist with the marketing insight to ask the key environmental questions and formulate commercially successful solutions. Projects that fail provide little satisfaction; marketing and business skills are a critical part of the survival kit for an engineer, scientist or technologist.

What is marketing?

In less-developed countries, millions of people do not have enough money for food, clean water and healthcare. Here, the need facing technologists is not for the manufacture of 'designer' styled bottles for French mineral water bottled at source. The need is solely for adequate supplies of clean, safe water. In a five star international hotel, there will be a range of mineral waters (sparkling, still, etc.) and these are supported by extensive marketing effort. In developed countries tap water is entirely safe and will satisfy the core benefit need (i.e. stop you dying of thirst). However, consumers in advanced economies have moved beyond the core benefit of survival to other non-core benefits such as flavour and lifestyle associations. In the post-industrial society, products have to do more than satisfy core benefits. (More development of benefits is given in Chapter 4.)

Organisations can be considered to have three orientations. The first is product orientation. This assumes that what customers want is the best quality product providing the core benefit - the 'build a better mouse trap and the world will be ours' attitude. This strategy can be successful when the product is in short supply. However, it can be very risky when this view is taken by technologists who love and understand their product but do not really know the needs and wants of their customers.

Second is sales orientation. This assumes that people are reluctant to buy the product and all that is needed is heavy advertising, sales promotions and an aggressive sales force - the typical evening call: 'Do you want some double glazing?' This orientation tends to be forced on product-orientated organisations when the market becomes saturated. Demand is in balance with supply and possibly supply is beginning to outstrip demand.

Third is marketing orientation. This has at its heart the belief that for an organisation to be successful in the long term, it needs to understand the needs and wants of its customers. Moreover, the organisation develops an offering, the so-called marketing mix (which is covered in detail in Part Two), to satisfy these needs and wants economically, providing value to the customer and profit to the organisation. To be marketing orientated, the organisation has to make the satisfaction of customers' needs and wants the focus of the organisation. Profits flow from satisfied customers.

The word 'marketing' is used in a number of ways:

* As an adjective, it describes a type of organisation (a marketing organisation) that undertakes the activity called marketing - developing and supplying the customer offering (marketing mix).

* As a verb, it describes something people and organisations do.

* As a noun, the word acts as a label for a department: 'Marketing'. However, if all the people in the organisation have a marketing orientation there may not be a need for a formal 'marketing department'. This is particularly true of small organisations in a technical market where the new product development team and the technical sales support may be all that is needed, so long as they understand marketing.

The UK Chartered Institute of Marketing has defined marketing as:

... the management process responsible for identifying, anticipating and satisfying customer requirements profitably.

The US marketer Philip Kotler has an alternative definition:

The marketing concept holds that the key to achieving organisational goals lies in determining the needs and wants of target markets and delivering the desired satisfaction more efficiently and effectively than the competition.

The activity of marketing provides the understanding of the needs and wants of the customer. The technologist will be heavily involved in the new product development and logistics to provide the offering (marketing mix) to the satisfaction of the market segment. The technologist must be able to understand and interpret the results of marketing (e.g. market research) and provide innovative, cost-effective solutions (application of technology).

Marketing involves an exchange process. Customers pay money for goods and services in a free process. The customer gains benefits (e.g. travel) that they then perceive to have value (worth what they have paid). The supplier receives money, which for long-term stability of the business must exceed the costs of production. To make long-term profits the organisation must achieve two key objectives:

1. create and provide perceived value for the customer

2. reduce the costs of production and delivery of the product

The implications of these simple rules are profound. It is easy for the technologist to decide to design the best possible product. This approach can produce an over-engineered product with features not wanted (not valued) by the customer. The low-cost airlines perceived that there was a market for a low-cost service with no frills. This developed a new market for air travel. The clients do not get the best possible product but they get value for money and they are satisfied; and the airlines are profitable.

How this book is structured

The book is divided into four core sections:

1. Introduction to the context of marketing

2. The tools of marketing - the marketing mix

3. Skills and tools for implementation

4. Bringing it all together - the application of marketing

The marketing system

Organisations take inputs and through a series of internal activities create offerings (products and services), which customers buy. These processes take place in a context. If we consider the movement of a Mars Explorer, the trajectory is affected by the gravitational forces of the sun and other planets. Other factors such as the solar wind may have an effect. There is always the possibility of a catastrophic effect such as the impact of a meteorite. During the time the space craft is moving to Mars, checks will be made on its progress and, if necessary, adjustments made with the control motors. At the end of the trip motors will again be fired for a soft landing of the explorer vehicle. The business process, such as the launch of a new product, is very much the same. The plans are affected by the business environment, the so-called macro- and microenvironments. The organisation has to take account of these ever-changing forces and take corrective actions to keep the plan on track. Then the delivery of the product can be effected successfully. The succeeding chapters of this book cover the various elements in some detail. The general overview is given in Figure 1.2.

The path 'suppliers-organisation-channels-buyers-users' is often known as the supply chain. It operates in the context of the micro- and macroenvironment. Although, in a two-dimensional diagram, this process looks simple, it is not. A major organisation (e.g. a car manufacturer) will have thousands of suppliers and may have thousands of distributors around the world, supplying a variety of different customers (market segments). In their turn, the suppliers have their own suppliers (e.g. a manufacturer of GPS systems will be buying memory chips). The total supply chain is a complex network and supply chain management is a vital element of the overall management required for the success of an organisation.

Where the supply chain operates in the context of the macroenvironment, there are a number of aspects to consider and the STEEPLE model provides a framework for analysing them (other versions include PEST: see Chelsom, Payne & Reavill and Wilson & Gilligan):

* Social/cultural

* Technological

* Economic

* Educational

* Political

* Legal

* Environmental

Within the microenvironment, closer forces act on the supply chain. A major aspect here are the forces of competition and these are explored using the five components proposed by Porter:

* direct competition

* supplier power

* buyer power

* substitute products

* new entrants

The Porter competition model does not, though, provide full cover of all the potential forces having an impact on the organisation. Consideration must also be given to stakeholders. Stakeholders may be defined as:

People, groups of people and organisations who have a stake in the organisation and may affect its plans and operations. Stakeholders may have a positive or a negative effect.

Theowners,suppliers,customersandemployeesofanorganisationareobviousstakeholder groups. However, every business situation has its particular context of stakeholders. A civil engineer involved in the construction of a new supermarket will need to take account of the concerns of local residents. Local residents will influence their local politicians, who have considerable power through the mechanism of local planning regulations. Neither one of these stakeholder groups is in the organisation's supply chain yet failure to understand and manage their impact could seriously jeopardise the project.

It has been said that there are three types of companies:

* those who wonder what happened;

* those who watch what is happening; and

* those who make things happen.

To avoid the first situation, the organisation must have good information on the marketing environment. The marketing information system provides this flow of information.

In the conduct of our lives, we do not rely on one source of data, we have different sources of data, such as sight, touch, hearing, smell, taste and temperature. In cooking a meal for a dinner party we will use all of these sources of data. However, data do not help us make decisions. We need information.

We can define data as a collection of single elements of information (e.g. the temperature of a joint of meat when cooking a meal). The information we need is: 'Is the joint cooked?' This may involve the integration of a set of data elements, such as weight of the joint, colour, aroma, temperature, time cooked at that temperature, texture, etc. The expert chef instinctively processes these inputs and using past experience arrives at a single conclusion: 'Time to eat.' Just as we have a variety of mechanisms for collecting and processing data, so do organisations. The marketing information system (MkIS) has the following elements:

* market research

* market intelligence

* internal information

* storage/retrieval process and systems

* analytical systems (decision support systems)

(Continues...)

Excerpted from Marketing for Engineers, Scientists and Technologistsby Tony Curtis Copyright © 2008 by Tony Curtis. Excerpted by permission.
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