Marketing Insights From a to Z: 80 Concepts Every Manager Needs to Know

166
Marketing Insights from A to Z
A Hong Kong shoe manufacturer wondered whether a market
existed for his shoes on a remote South Pacific island. He sent
an
order taker
to the island who, upon a cursory examination,
wired back: “The people here do not wear shoes. There is no
market.” Not convinced, the Hong Kong manufacturer sent a
salesperson
to the island. This salesperson wired back: “The
people here don’t wear shoes. There is a tremendous market.”
Afraid that this salesrep was being carried away by the sight
of so many shoeless feet, the manufacturer sent a third per-
son, a 
marketer
. This marketing professional interviewed the
tribal chief and several natives and wired back:
“The people here don’t wear shoes. As a result their feet are
sore and bruised. I have shown the chief how shoes would
help his people avoid foot problems. He is enthusiastic. He es-
timates the 70 percent of his people will buy the shoes at $10 a
pair. We probably can sell 5,000 pairs of shoes in the first year.
Our cost of bringing the shoes to the island and setting up dis-
tribution would amount to $6 a pair. We will clear $20,000 in the
first year, which, given our investment, will give us a rate of re-
turn on our investment (ROI) of 20 percent, which exceeds our
normal ROI of 15 percent. This is not to mention the high value
of our future earnings by entering this market. I recommend
that we go ahead.”

---

nicate value.” But as products have become more similar, each
competitive salesperson delivers essentially the same message. So
the new need is for the salesperson who can “create value” by
helping the customer make or save more money. Salespeople must
move from persuading to consulting. This can take the form of
providing technical help, solving a difficult problem for the cus-
tomer, or even helping the customer change its whole way of do-
ing business.
ervice
In an age of increasing product commoditization, service quality is
one of the most promising sources of differentiation and distinc-
tion. Giving good service is the essence of practicing a customer
orientation.
Yet many companies view service as a pain, a cost, as something
to minimize. Companies rarely make it easy for customers to make
inquiries, submit suggestions, or lodge complaints. They see provid-
ing service as a duty and an overhead, not as an opportunity and a
marketing tool.
Every business is a service business. You are not a chemical
company. You are a chemical services business. Theodore Levitt
said: