BUSI 330 Week 1 Discussion Board Forum 1 Thread and Replies Example

Discussion Board Forum 1: Defining the Business by Customer Needs

BUSI 330 Principles of Marketing, Discussion Board Forum 1 Thread and Replies

Thread by [Student Name]

The prompt and the classmates are composites; the textbook and research cited are real.

Thread

The concept

Kerin and Hartley (2020) describe the marketing concept as the idea that an organization should try to satisfy the needs of consumers while also trying to achieve its own goals. Decades earlier, Levitt (1960) warned that many industries decline not because demand disappears but because companies define themselves too narrowly, by the product they make rather than the need they serve. Levitt's best-known illustration was the American railroad companies, which thought of their trade as running trains and so watched passengers and freight drift to highways and air travel. He called this narrowness marketing myopia.

The case

American newspapers offer a more recent example. For much of the twentieth century, local papers earned a large share of their revenue from classified advertising: listings for apartments, jobs, used cars and items for sale. Newspapers thought of themselves as being in the newspaper business. Their classified customers, however, did not need a newspaper; they needed a way to reach local buyers and renters quickly and cheaply.

When Craigslist offered free or low-cost online listings, it met that need directly. Seamans and Zhu (2014) studied newspapers across U.S. markets as Craigslist entered them and found that classified ad rates fell by about 20 percent, while newspapers also raised subscription prices and lost circulation. The newspapers did not lose to a better newspaper; they lost to a better way of meeting the need their ads served. Some papers had the resources to build online listings years earlier, but they treated the internet as a distribution channel for their existing product instead of a new way to solve their customers' problem.

The lesson

The case shows why the marketing concept begins with the customer's need. A business that asks what job its customers are hiring it to do is more likely to notice competitors outside its own industry. A modern example is the grocery store, which might see itself as a place to buy food but actually meets a need for convenient meals. Meal kits, delivery apps and prepared foods from convenience stores all compete for that need. A grocer who defines its business that way will invest in prepared foods and delivery before customers drift away, rather than after.

Applying the lesson requires regular environmental scanning, which Kerin and Hartley (2020) describe as acquiring information on events outside the organization to identify trends. Newspapers that scanned for new ways people found housing and jobs, rather than only for other newspapers, might have responded in time. The lesson for any manager is to ask regularly which companies outside the industry are solving the same customer problem, because those are the competitors a myopic firm will not see coming.

Reply to Brianna

Brianna, your report on how a local coffee shop builds customer relationships through its loyalty app was a strong application of the chapter's idea of customer value. You showed how the shop learns what each customer orders and offers rewards that match those habits, which fits Kerin and Hartley's emphasis on relationship marketing.

I would add evidence on why that effort pays off financially. Reichheld and Sasser (1990) studied service businesses and found that reducing customer defections had an outsized effect on profits; across the industries they examined, keeping just 5 percent more customers increased profits by roughly 25 to 85 percent. Long-term customers tended to buy more over time, cost less to serve because they knew how the business worked, and referred others. That suggests the coffee shop's app is not only a marketing tool but a profit strategy.

The research also points to a measurement question. If the shop tracked how many customers stopped visiting each month, and asked a few of them why, it could find out which problems drive people away. Reichheld and Sasser argued that defecting customers are one of the best sources of information a business has, because they reveal the weaknesses loyal customers tolerate.

Do you know whether the coffee shop tracks customers who stop using the app, and what might it learn by asking them why they left?

Reply to Marcus

Marcus, your SWOT analysis of the regional grocery chain was well organized, and Kerin and Hartley present SWOT as a useful way to summarize an organization's situation before choosing a strategy. Your point that the chain's strong local reputation could help it compete with national discount stores was persuasive.

I would add a caution about how SWOT is often used. When Hill and Westbrook (1997) looked at how firms actually used SWOT, they found sprawling lists of loosely worded factors, almost nothing ranked or checked against evidence, and output that seldom made it into later strategy decisions. They argued that SWOT had become a ritual rather than an analytical tool. Your list avoids some of that problem, but it could be stronger if each factor were tied to evidence and ranked by importance.

For example, local reputation is listed as a strength, but how would the chain know it is stronger than competitors' reputations? A short customer survey or online review comparison could confirm it. Similarly, the threat from discount stores could be quantified with their market share in the region.

If you had to pick the single most important item in your SWOT and build the chain's next strategy around it, which would you choose?

References

Hill, T., & Westbrook, R. (1997). SWOT analysis: It's time for a product recall. Long Range Planning, 30(1), 46-52. https://doi.org/10.1016/S0024-6301(96)00095-7

Kerin, R. A., & Hartley, S. W. (2020). Marketing: The core (8th ed.). McGraw-Hill Education.

Levitt, T. (1960). Marketing myopia. Harvard Business Review, 38(4), 45-56.

Reichheld, F. F., & Sasser, W. E., Jr. (1990). Zero defections: Quality comes to services. Harvard Business Review, 68(5), 105-111.

Seamans, R., & Zhu, F. (2014). Responses to entry in multi-sided markets: The impact of Craigslist on local newspapers. Management Science, 60(2), 476-493. https://doi.org/10.1287/mnsc.2013.1785