Chapter 16: Marketing leadership management – Consumption and Management

16

Marketing leadership management

Section 1 Concept and development of marketing

Productivity is one of the links of consumption in the consumption society. Products are consumed by consumers through the sales process, thus realizing their use value. The long history of mankind is the process of three important consumptions in which living consumption and social consumption drive the development of scientific research and production consumption. During the process, new needs of consumption are created, and then the needs act upon consumption. The ever-increasing material, spiritual, and cultural needs of consumption of human beings drive the economy to move forward in a spiral way. Therefore, the marketing of the three kinds of consumers’ demands is referred to as ‘marketing of consumers’ target demands large market system service’. The marketing of the large market service system is the soul of enterprises.

With the competitive development of capital commodity production and exchange, the overall supply–demand relations of society turn from a seller’s market into a buyer’s market. While competing to meet various consumers’ demands, the manufacturers and dealers create various kinds of marketing modes and marketing means.

The common purpose of production and exchange is to win the preferences of various types of consumers and achieve the value of products. However, the conception of marketing is interpreted differently in different historical periods. In the developing history of marketing, some new concepts emerge every ten years, which encourage research, guide the practice of consumption, and arouse controversy. No matter how controversial, they must provide light and heat; they must be solid; they must not be a flash in the pan; they must improve our abilities to understand, predict, and control reality. People are often disturbed by the shortage of scientific concepts rather than the excess of scientific concepts.

As early as 1937, those sociologists who founded the American Marketing Association began to study marketing. So far, they have been constantly developing their theory, seeking to give a more scientific definition to guide marketing. Early studies show that marketing is a discipline and should have a core concept. For example, the core concept of economics is shortage; the core concept of political science is power; the core concept of anthropology is culture; the core concept of sociology is group. The core concept of marketing is exchange.

A set of common-sense concepts is derived from the concept of exchange. Then there emerge the concepts of demand, desire, product, value, satisfaction, and market, which fill in the blanks in marketing. These concepts contain insights on exchange.

During the historical development process, academic marketing began to transfer to schools of business from departments of economics in the 1950s. The development of marketing helps entrepreneurs build and protect the thinking system of the market.

Around 1950, in an address to the American Marketing Association, Neil Borden began to use the concept of ‘marketing mix’ and identified 12 elements within it. Borden said that he was enlightened by James Clinton’s words in 1948 that the enterprise manager functions as a decision maker, an artist as well as the combination of various elements. Borden pointed out that marketing experts were concerned with whether marketing and advertising personnel (who consider the creation of demands as the primary function of advertising) could go further.

In 1950 Joel Dean, in his discussion of an effective pricing policy, used the conception of ‘product life cycle’. Dean described the market development period, market expansion period, maturity period, and so on. Subsequently, Theodore Levitt (1965) spoke highly of the concept. Since then, the concept of the product life cycle has undergone numerous modifications. However, so far it is still a controversial issue that interests many people.

Wendell Smith (1956) introduced the concept of rich connotation in market segmentation. There are differences in the history of different markets. They have different needs and interests. Smith required companies to conduct detailed market segmentation studies instead of just product differentiation. He considered market segmentation as a strategy. Today we are more inclined to see it as the division of the market into a number of competitive parts. Then the company decides to choose the part and tactics to meet the needs of this part.

Jerome McCarthy (1960) put forward the well-known 4P combination, the marketing mix of product, price, place, and promotion.

Theodore Levitt (1960) published the famous concept of marketing myopia. It is characterized by an emphasis on product rather than customer demand.

In 1963, William Glazer (1969) put forward the lifestyle conception (achieving sales by observing behaviors of social consumers and studying products demanded by consumers).

In 1967 John Howard and Jeddish Sheth (1969) put forward the buyer behavior theory and pointed it out that a marketing organization should base production on sales, and observe the behavior of consumers, study the needs of consumption, and organize marketing.

Philip Kotler and Sidney Levy (1969) proposed the idea of expanded marketing, in which marketing can be applied to all behaviors (including those of organizations, people, places, and ideologies).

Gerald Zaltman and Philip Kotler (1971) proposed the conception of social marketing, which is marketing expanded to include social goals.

In 1985, the American Marketing Association provided a new definition of marketing, whereby marketing conduct extends to the systematic combination of social and public relations, political skills, social welfare activities. Thus marketing is not only reflected in the activities of enterprises, but can also be extended to non-profit organizations and public bodies.

To sum up, the conception of marketing is constantly changing. However, no matter how it changes, it must meet the three important consumptions needs, which are the core of marketing. I call it ‘marketing of consumers’ target demands large market system service’ and the details will be discussed later.

The key of this concept is that it will be meaningless if the consumer parts with consumption. The demands of consumers diversify society, so marketing should be carried out according to the detailed classification of consumers’ demands. The consuming process has various relations with society, which also has the scope of a ‘great market’. The consumer’s consuming process is a complex social marketing process. At the moment, it is a buyer’s market of capital commodities production and exchange. The competing aim of marketing is the direct consumer and the homogenization of marketing methods. The key point is that whoever can win the preference and satisfaction of the direct consumer is the winner. So, in the process of winning the consumer’s preference and satisfaction, the quality of marketing and service determines success or failure.

The marketing conception can reveal the essence of modern marketing and guide marketing practice. However, the conception of marketing keeps developing along developing consumers’ demands.

Section 2 Large market system service marketing directed at consumer target needs

The sellers’ market

In a sellers’ market, overall commodities in society are in short supply – there is a shortage of commodities. As the Chinese saying goes, mud on the radish is not washed when it sells well. This means that consumers do not find fault with the quality of a commodity if it is difficult for them to buy the commodity they need. As long as they can purchase the commodity from the suppliers, they are easily satisfied. The marketing process is characterized by a trading exchange process. As a result, it is common that marketers do not show enough respect for the human rights of consumers in a sellers’ market.

The buyers’ market

In a buyers’ market, overall commodities in society are in oversupply: there is an excess of commodities but a shortage of consumers who want those commodities. When consumers buy the commodity, they are critical about product quality. Sellers should provide a fine service and show respect for the rights of consumers. Consumers’ interests are protected by society and the law. In a buyers’ market, manufacturers and dealers have to change their ways of thinking and acting in the marketing of products to meet consumers’ demands and preferences in order to achieve their marketing purposes. This whole process involves government intervention and the participation of all aspects of society. Marketing has become a broad, socialized issue for social and public relations.

Relationships between a buyers’ market, consumers, manufacturers, and dealers

Because of the relative shortage of consumers’ demands, manufacturers and marketers compete to meet these demands. In this competitive process manufacturers and marketers provide a variety of services and behaviors, so as to gain consumers’ preference for their products, enable consumers to buy their products, and upgrade consumers’ status and rights. It is difficult to satisfy consumers who are critical about products. The protection of consumers’ rights and interests improves. Manufacturers and marketers are forced to improve their product quality and service quality. The national government strengthens the monitoring and management of product quality and makes laws to protect consumers’ rights and interests.

Consumers are ‘supporters’ of manufacturers and marketers (also known as ‘God’)

Since consumers dominate the manufacturers and marketers, production is based on sales. If products produced by manufacturers are not recognized and purchased by consumers, factories will close down; workers will lose their jobs; investors will lose money. As long as products produced by manufacturers are recognized and purchased by consumers, the factory will be able to develop; investors and dealers will make a profit; all staff, production workers, and marketing personnel will earn wages, laborers’ protection tax, and welfare. With money, basic human needs can be met. The money, which comes from consumers, is the wealth created by consumers. Consumers support manufacturers and marketers. Manufacturers and distributors are also consumers (it is not an absolute opposition, but a different division of labor in a certain time). The production process of manufacturing enterprises is also the consumption process of products from other enterprises, showing the process of the productivity of the consumption society.

Respecting consumers’ rights and interests

All members of society are consumers, with their own independent thinking and behavior rights. As long as they do not break the law and other regulations, they should be respected by other members of society.

Consumers, including consumers in the production process, have the right to choose satisfying products, offer criticism and rational proposals for manufacturers and marketers, and have their rights and interests protected. Any forced purchases and sales are illegal acts that violate consumers’ rights and deserve the criticism of consumers and the community as well as legal sanctions.

Staff of the marketers should not only show respect for the rights and interests of consumers, but also act as consumers’ consultants, providing knowledge on health. treatment of diseases, how to recover from diseases, and changes of lifestyle that lead to poor health. They should recommend relevant health and disease rehabilitation products, learning materials, and products of daily use to consumers, and establish friendships of mutual trust so as to enhance consumers’ health and longevity.

Marketing personnel need to provide consumers who are capable of enjoying consumption power with spiritual commodities and services to build friendships and develop long-term commodity sales relationships. This will promote sales and harmonious relationships in the community and make consumers loyal to the enterprise and its products.

Section 3 Analysis of the concept of large market system service marketing directed at consumer target needs

The relationship between consumers and marketers

As previously stated, all members of a society are consumers. In a certain period of time, space and job position, you are a consumer and I am a marketer or a producer. Outside the workplace everyone is a consumer. Everyone is in the consumption process and is closely linked to society. Particularly after detailed division in the production of commodity, members of society all create consumption products and consume social commodities.

The products we consume are shipped from one place to another or from one country to another, so the products are gained through marketers’ transactions or the process of international import and export. In this process, the products are subject to management by the country, laws, decrees, and policy, as well as transportation and storage. The products should be traded at a specific trading place or site in order to meet customers’ needs. This comprises a large social marketing concept, not just limited to a simple relationship between marketers and consumers.

Relationships between consumers, target demands, and system service

Manufacturers and marketers have a common goal to meet consumers’ demands. When products in the same industry are of almost the same quality, all enterprises are in the direct pursuit of customer satisfaction with different degrees of expectation, which is constantly improved. For each manufacturer and marketer, the key to success lies in meeting consumers’ demands. Therefore, manufacturers and marketers must decide on commodity pricing, transportation, sales outlets, pre-sales service, marketing service, and after-sales service; seek advice; improve services; and establish long-term relationships with consumers and so on. All the above elements are part of the system service, with each element functioning as an independent small system. Each system is a complete whole, constituting the service structure of the whole system.

Analysis of relationship between consumers’ target demands and system service marketing

As we have stated, all members of society are consumers; production is consumption, and producers are consumers. However, a commodity cannot satisfy all members. For example, foods are consumer goods that everyone needs, but everyone has their own preferred food; again, everyone needs clothing, but everyone has their own preference for clothing. Consumers’ demands are affected by work, lifestyle, and purchasing power. Different age preferences and different purchasing power lead to different consumption target demands of consumers.

Marketers fix consumers’ target groups for their products according to different consumers’ target groups. If marketers cannot correctly target consumption groups of their products and blindly improve system service marketing, it is ‘pointless’ service marketing, which results in serious waste or the total failure of marketing, business losses, and even corporate failures. However, if an enterprise selects target consumer groups accurately and gains their preferences with service planning, the enterprise will be able to achieve its marketing purposes.

Classification of consumption of food consumers’ target demands

First, consider the classification of popular food consumption groups, and meet their different demands and preferences; second, consider the needs of groups with different purchasing power; third, consider the needs of groups of different ages.

Target needs of consumption for medical and health products

First, consider the demands for popular medical and health products; second, consider the needs of groups with different purchasing power; third, consider the needs of groups of different ages. Since health care consumers have an urgent need to enjoy this type of consumption, marketers must meet their needs and spread knowledge of health at the same time.

Clothing needs of target consumption groups

First, consider the consumption needs of most people; second, consider the consumption needs of groups with different purchasing power, of different ages, and with different preferences. Consumers who enjoy consumption are the target group of all marketers in different sectors.

Consumption needs resulting from ethnic and regional lifestyles

Over a long period of time, people in different regions have formed habitual ways of living consumption. It is necessary to respect people’s lifestyle and meet their consumption needs; meanwhile consider improving backward consumption ways, thereby improving their quality of living consumption.

Creating new needs for consumption

People’s living consumption and material and spiritual culture are growing continuously and will never stop. Therefore, scientific research should be undertaken and products should be manufactured to meet the growing consumption needs. When the new products are produced and not recognized by consumers, they are products without competitiveness in the market. After new products are made, manufacturers and marketers locate target consumers, popularize the products, and increase consumers’ awareness of the advanced products.

Meanwhile, it is necessary to train volunteers who choose a free shopping experience. Increase consumption desires and awareness of target consumers through the volunteers’ remarkable consumption experiences. Get the innovative products to meet consumers’ demands during the marketing process through the assurance of service and public relations. It should be known that the cost of research and the production of products needed by consumers is high, and marketing expenses are high as well. Therefore, the retail prices of products sold in the market should be much higher than the fixed cost of the factory, raw and auxiliary materials, and the variable cost. The retail price should cover research costs, production costs, costs of product knowledge and consumer awareness, the enterprise’s risk-taking charges, and the entrepreneurial profits. If the price is not set rationally, the marketing process is bound to fail, as incontrovertibly proven through harsh realities.

Summary

Therefore, during the marketing process enterprises should first decide what the target market group for their products is. Too, the planning of marketing programs and implementation of the system services ensure successful marketing; otherwise even a minor error is likely to lead to partial failure.

It is shown that if manufacturers and marketers cannot constitute a system of service and carry out systematic service management, the needs of consumers cannot be met. Enterprises should first decide on target consumers of their products and make plans for marketing the large market system service. Thus, with only the awareness of meeting consumers’ satisfaction and without thinking about large-scale marketing, the purposes of marketing cannot be achieved; only with awareness of service marketing and the conception of a large market can consumers’ needs be met. Without scientific positioning of target consumers, marketing of a large market system service does not exist. Thus, satisfaction of target consumers is the core of marketing.

Section 4 Consumption, marketing management and marketing mode

The marketing of consumers’ large target market system service is a socialized marketing process and also a process of pursuing the consumption satisfaction of target consumers. Systematic service marketing influences the organization of various aspects in society, the participation of the people, the great market systematic service structure and the increase of marketing cost. The purpose of management is to control and manage the consumption during the social marketing process, carry out comprehensive budget-control management, achieve good enterprise marketing benefits – enterprise benefits and social benefits – with relative low consumption costs.

The marketing model is based on consumers’ demand. In order to achieve the purpose of marketing, marketers must first use all their power to research products for target consumer groups, purchase convenience, and preferences. The means to satisfy their demands, the marketing model of alternative products and the marketing situation should be paid more attention. The marketing model is the prerequisite for successful marketing. If the marketing model cannot meet the objective satisfaction of consumers, other marketing measures cannot function. This is because sales management and marketing planning measures are developed according to the marketing model. Unless it adapts to the needs of the marketing model, the marketing measure cannot play its role.

Marketing model elements and categories

Supply and demand elements of marketing

Table 16.1 shows the supply and demand elements of marketing.

Table 16.1

The supply and demand elements of marketing

Producers’ marketing Products price consumers outlet sale service environment relationship
Consumers Demand value producers convenience consumption satisfaction environment relationship

Different combinations of various elements constitute different marketing models. Different marketing models keep on changing, especially when there is a buyers’ market. Business marketers continuously change marketing models in order to track the target population and to meet their preferences and satisfaction. Enterprise marketing management and planning varies with the marketing model.

Marketing models of a traditional social channel

In the marketing mode for products with full market competition, if the quality of products is the same, manufacturers, during the marketing process, win consumer preferences through product price, quality, channel, environment, and relationships, so that products are offered at low prices and purchased at convenient locations. These might be:

• large supermarkets

• small supermarkets in residential areas

• fixed fairs and scattering markets

• department stores and shops

• shopping malls, commercial buildings, supermarkets, and other retail models

• units for commercial purposes such as pharmacies, supermarkets, hospitals, specialist hospitals, clinics, nursing homes, kindergartens, and so on

• other places such as cinemas, gyms, bookstores of product marketing, schools, training courses, meetings, and commercial conferences.

Products with half market competition are manufactured by a few manufacturers to meet the needs of target consumers. Such companies’ competition for market consumers is conditional. Not every manufacturer is able to produce technical products or new functional and multi-functional products, and only a few manufacturers can control the production of products. Marketing composed of a few manufacturers competes for consumers’ preferences and satisfaction in order to achieve their marketing purposes. For example, China’s beverage market, mainly Coca-Cola, Sprite, Cola, and Nongfushangquan, compete for consumer preferences to achieve their marketing purposes. Another example is the donkey-hide gelatin product. In the market the products of Pingyin donkey-hide gelatin plant, Pingyin Dong E donkey-hide gelatin factory, and several other plants compete for consumers. Different combinations of elements are adopted to meet consumer preferences to accomplish sales.

Some products are marketed without market competition. The products are any proprietary technology products and products with the new technology at a certain stage of monopoly, and differentiation products. The products that no manufacturers produce on the market are non-competitive. The marketing model for manufacturers is to take combined elements, and determine target consumers. The target consumer should recognize the quality of products. To be successful consumers must know about the product and the product must sell for the right price. If the price is too high and consumers have low purchasing power, it is impossible to attain sales. If the price is too low, sales cannot cover marketing costs and cannot be efficiency and effective. This will inevitably lead to marketing failure.

The building of the right environment and relations including social relations and consumer relations in the marketing process is very important, and the living condition of enterprises and the condition for the marketing process.

The model of marketing of consumers’ large target market system service is that the services before, during, and after sales are provided for target consumers. Convenient channels of purchasing are provided to ensure efficiency and effectiveness. This kind of marketing model is employed by many corporations, such as Sanzhu oral liquid, Heart K, Melatonin, Wahaha, Wuliangye, and Maotai.

Service-oriented marketing

The conference-marketing model combines the system elements of the pre-sale, mid-sale, and after-sale services that meet the special needs of the consumer target groups by a single product or multiple products. The special needs combine the consumption demands for physical products and spiritual culture. Service marketing achieves sales purposes. It is system services marketing that centers on the elderly population with spending power.

Direct marketing is a model in which the producers sell directly to direct consumers. The direct marketing model around the world is not producers’ directly selling to direct consumers, but a hierarchical mode that is established according to the operator’s desire for rapid wealth obtained from consumers’ consumption and investment means.

These are some new marketing modes with television and network as the media:

• TV direct sales. Manufacturers or dealers set up shopping centers or stores on TV, which they promote through advertising and display. According to the characteristics of television sales, service elements are combined to form a new model of service marketing system, thus achieving marketing objectives.

• Internet online marketing. Manufacturers or distributors make domestic and foreign online marketing settlements with direct consumers through the network, online malls, shops, or business relationships. Online contracts and procurement have greatly promoted the development of marketing, and will play a tremendous role in promoting the development of the three kinds of consumption.

These are the four operating modes of marketing:

1. The internalized enterprise-marketing model. This is when the business organizes marketing companies on their own and establishes subsidiary marketing companies in the provinces, cities, and counties for their own products. The promotion organizations are built under the level of subsidiary companies. The company’s products run through their own marketing structure of system services. Each independent subsidiary is also an independent corporation. Under the leadership of the parent company, each subsidiary has the right of its own independent accounting management. Most products are entrusted to pharmacies and supermarkets for sales while the company has promotions through meetings.

2. Manufacturers entrusting products to marketing companies. Marketing companies adopt independent marketing modes. They negotiate with producers and decide the retail price of the agent’s products and the retail price in the market and a series of conditions to ensure the implementation of marketing. Then they regulate the marketing model, and manage the implementation of planning.

3. Conference marketing. This is designed to meet the special needs of specific consumers’ demands for spiritual and material services.

4. Direct marketing. This depends on consumers’ ways of investing and businessmen’s desire for wealth. It consists of direct and multi-level marketing. In China the multi-level marketing model is illegal. It should be recognized as legal that their own products are sold by themselves, and should be advocated.

Section 5 Marketing management mode

The marketing mode decides the marketing management mode. A marketing mode must have a suitable management mode, which serves the marketing mode. The purpose of this marketing mode is to decide what the lowest management costs to achieve the best sales are so as to make the most marketing profits. These are the most important decisions in marketing, and they should be made every season.

Section 6 Consumption and marketing culture

Marketing culture

Marketing culture is the soul of ‘marketing of consumers’ large target market system service’ and an important part of the corporate marketing culture. The orientation of the marketing culture varies with enterprises, such as ‘customer is God’, and so on. The marketing culture of Sanzhu Group is that consumers are the parents of enterprises, striving to be small advisers for consumers, and centering on consumer preferences and satisfaction as the highest standard.

Enterprise culture is the whole of enterprise

Culture is broad and narrow. In the broad sense, culture is made up of material culture and spiritual culture – the whole of the relations between human consumption and the progress of natural history. In ancient China, the connotation of narrow-sense culture is culture, education, and achievements in culture and education. The broad-sense culture is the sum of the material and spiritual productive capacity, the material wealth and spiritual wealth acquired in the process of human social practices. Each society has an appropriate material culture and spiritual culture, and with the progress of the social material production, the popularity of producers’ cultural and technical level, education, literature, art, and science is an important criterion of cultural development in a certain historical period. The narrow-sense culture is mental production capacity and intellectual products, including all forms of social ideologies, the natural sciences, technical sciences, and social ideology. Sometimes the term refers specifically to knowledge and the facilities related to education, science, literature, art, health, and sports, which are distinguished from world outlook, political thinking, and morality.

A culture formed by a social concept is a socio-political and economic reflection, and at the same time it affects the politics and economy to some extent. Its development is a historical succession. A new culture always evolves by relying on the results of the old culture. With the appearance and development of the nation, national culture is also affected to some extent by the physical environment. The nearer it is to primitive times, the greater the influence the physical environment has. Religious culture and various ideologies are also great influences. In a class society, culture reflects the ruling class’s thought and the concept of ethics that is dominant in the spiritual culture. In Capital, Marx said that the class dominating the material means of production also dominates the spiritual means of production. Therefore, the minds of those without the spiritual means of production are generally dominated by the ruling class (Marx, 1867).

Advanced socialist culture is created and developed on the basis of inheriting human outstanding cultural heritage in a critical way. It is the common spiritual wealth of all members of society and plays a role in the progress of social civilization. Sanzhu Group’s corporate culture is a culture grafted on three kinds of culture: the advanced culture of socialism with Chinese characteristics; fostering the strengths and circumventing the weaknesses of traditional Chinese culture – Confucianism, Legalism, and Taoism; and the study of Western culture, learning its advanced science and technology, management experience, and corporate marketing experience.

The conception of corporate planning

People’s wisdom and creative ideas on the objectives of the enterprise are called ‘creative intelligence’. It is the arsenal of marketing measures and creates the soul and culture of products. Besides the new desires of consumption demand, the loyalty of consumers, a corporate brand, and new values are created. For example the marketing planning of Sanzhu Group is ‘Sanzhu oral liquid, convincing oral liquid’; and that of Wahaha planning is ‘Wahaha, an appetizer for you’.

Selecting products

Market size and brand strategy

The overall marketing plan of enterprise products develops on the estimated market share of consumer spending and is implemented in stages. The marketing strategy scale of Sanzhu Group takes five years to occupy the national consumers’ market. And the short-term goal program in the first-year, the mid-term goal plan of two years and long-term goals program of three to five years are developed. In the actual market development, it just takes three years to accomplish the goal of the entire strategic plan.

Strategic objectives of new product development

New product development is an important means of market competition and an important business strategy for long-term sustainable development. Only by means of patented newly differentiated non-competitive and semi-competitive technology products can there be rapid development and enterprise efficiency and effectiveness, thereby achieving rapid and sustained growth of the enterprise. When focusing on new patented technology products or new products with technology differentiation, the marketing also reserves new technology and functional products of the next generation to be ready for the cyclical decline of the product; in the meantime, developing and updating a new generation of technology products is self-transcendence and leads to continuous development of new technology products.

Focus strategy

These are elements of the focus strategy:

1. Centralized management of funds. Highly centralized funds are managed by the financial center of the headquarters by means of a financial management company or revenue and expenditure management system. It is similar to bank management that transfers the funds to triple flow capital value.

2. Centralized and unified corporate culture. A unified group culture and philosophy, unified code of conduct, and unified corporate internal image make staff recognize the value of the enterprise and create strong solidarity and cohesion; externally the enterprise will be accepted by the public and a good social image will be established.

3. Low-cost. The reduction of the production consumption and enhancement of product quality yield are fundamental to corporate profits and competitiveness to meet the ‘marketing of consumers’ large target market system service’. The competitive process of products, especially the products in the overall market competition, is a process of competition in the high quality and low cost of consumer goods. Whoever has superior quality and lower costs than average is a winner.

4. Innovation strategy (unconventionalstrategy). Production, management, research, and marketing should embrace constant reforms and innovations to ensure long-term vigor and vitality of business. In particular, there should be sophisticated scientific research on consumer demand using high technology, which is the reserve force of the sustainable development of enterprises.

The strategy matrix of product service

The strategy matrix of product service is a marketing model of systems market services. It has the following strategic features:

1. Building specifications. To build a series of specifications on products before and after sale, and to refine the service structure and control management.

2. The reform of management organization. This is brought about when service causes all business activities of enterprises to be truly customer-centric. It is necessary for organizers of modern enterprises to make a big change. And independent organizations that are parallel with production and marketing and provide services for customers should be established within the enterprise. They will have a commitment to service throughout product sales. At the same time the content of services needs to be beyond the previous narrow service areas. The prevalence of a telephone service in the West and China is a typical example. The telephone hotline service is a major business of the service sector. Any customer who calls the dedicated hotline of the service department of an enterprise can obtain services related to the product. Such hotlines are free: costs are paid by the enterprises.

3. The concept of service. The concept of service perpetrates all the economic activities of enterprises. Since service has been regarded as a new factor of the marketing mix, the concept of customer service has run through the whole service process from product design to the after-sale service and has been employed in the strategy of the product life cycle. In all stages of the product life cycle, sales and service activities are combined. At different stages, the corresponding service is provided to extend the product life cycle, thus improving marketing effectiveness.

4. Relationship service marketing. Salesmen in the marketing process establish trust with consumers. Consumer information is recorded in the service card files of the salesmen, who maintain friendships with consumers by telephone. The consumption amount is recorded in the performance evaluation of the salesmen. When consumers’ consumption reaches a certain volume of sales, the salesperson calls the consumer to receive a prize, and meanwhile makes a new round of promotions for repeated purchase. When there is a new marketing campaign, the salesperson informs the consumer to participate in the activities and that this activity offers preferential goods and a bonus for them and their friends. In this way, a chain promotion is formed.

5. Hospitality service sales. During service marketing, the products should be sold with hospitality. The warm service to consumer B from salesperson A will motivate the consumer’s feelings. When consumer B purchases the same products, that person will specifically look for salesperson A to buy from, so the sales volume of salesperson A will expand. Especially in conference marketing, the sales staff provide enthusiastic services for lonely elderly people, calling them grandpa or grandma when they make a home delivery. They also help the seniors in cooking and washing dishes, call them regularly, and tell them to take medicine on time. The seniors are moved and do not know how to respond. So they buy the salesperson’s product as a reward to the salesperson. Because of the salesperson’s enthusiasm toward consumers with special needs, the consumption is not just material; more importantly, it is the satisfaction of spiritual and cultural consumption. It is well known that there are no worthless services. The passionate spirit can meet the service whose value is embedded in the products. It is similar to the idea that the value of a cup of coffee in cafés and at airports is totally different from its value at home. It is the value of the serving place and service that adds to the retail value of coffee.

Co-marketing strategy cooperative marketing type

Three types of cooperation are required in a co-marketing strategy:

1. Horizontal cooperation. This is the parallel cooperation in specific marketing activities of enterprises. For instance, the two companies work together on developing a new product, or they cooperate on product advertising and sales promotion, or to provide the network of distribution channel for each other’s products. Horizontal cooperation is most likely in the same industry, which is a foundation for the international division of labor.

2. Vertical cooperation. This is the cooperation in different marketing activities of enterprises. Enterprises undertake a marketing activity to form the advantage of cooperation. For example, Novo Company in Denmark is a small company producing insulin and enzymes with certain technology and production advantages, but its ability for sales is poor. So Novo cooperates with the US partner Bristol-Myers Squibb, which has marketing activities in North America, so Novo has overcome its own weaknesses by acquiring the strong points of Bristol-Myers Squibb Company, which has achieved very good results.

3. Cross-cooperation. This cooperation exists mainly between the enterprises in the same industry and companies in different industries. With the continual application of a corporate diversification strategy, this cross-enterprise cooperation has been increasingly accepted by enterprises. It is also known as all-round cooperation, whose great importance is increasingly attached to international marketing. Consumer target groups demand large market system services; marketing and the consumption of productive forces are developing rapidly; the internal environment and external environment of enterprises are changing; and marketing models and measures develop with the new needs.

Objective gathering strategy

At a certain time, space, and location, enterprises gather humans, finance, and materials to develop different products with established targets. According to the different demands of consumers, corresponding consumption strategies and ways are adopted so as to make a breakthrough at the key point and achieve marketing success. For example, in the early days, the integrated force of Sanzhu Company was not strong. However, the gathering of internal and external relations and power in the scientific research ensured the scientific research project proceeded quickly (integrated cooperative research) and the ultimate success of the scientific experiment. Then in the marketing process, the gathering of human, financial, and material resources was successful in a market trial.

Tactics and strategy

Tactics and strategy determine the satisfaction of strategic objectives. Once the strategic objective is decided, the most important factors in the satisfaction of consumers’ demand are the system services details, tactical skills and strategic approach, and marketing. An error in detail often leads to overall failure.

Organization guarantee and management

After making decisions about product selection and choosing marketing models, strategies, tactics, and policy, the top priority for marketing firms is the organization guarantee. The key for marketing success is the selection of the leaders and groups that fit with the purposes of the above-mentioned tasks. The marketing team is recruited and established to ensure the realization of objectives and tasks. Selecting, educating, and employing are the tasks of the personnel center (or personnel department) and the first task of the main leaders:

1. The criteria for recruitment should be promulgated.

2. Training should be organized. This includes simulation training and practical training. the Sanzhu Company’s cadre school (17 volumes of training materials with several million words), teaching, and other activities.

3. Talent is evaluated and selected through performance; anyone unsuitable is not appointed.

4. The policies on wages and incentives should be jointly studied and formulated with the financial department so as to motivate the enthusiasm of all the staff. The ‘three motives’ (material motive force, spiritual motive force, and informational motive force) is the theoretical basis for policy development.

5. The assessment criteria of personnel in the marketing system should be managed to build an excellent team.

Six best practices

The marketing process should adhere to the ‘six bests’: best quality, best technical content, best service, best network, best environment, and best management.

Best quality should be sought throughout the product competition. High-quality products and satisfying consumer needs to the greatest extent are the basis of competition and the key to market competition. Best technical content means only products with high technology content and great market potential can be competitive. Best service should be adhered to in the process of market development. Foreign and domestic business development proves that when manufacturers give priority to consumers’ needs and provide effective services, consumers will purchase their products. Good networks bring scale efficiency. Either in the market consolidation of existing products, or market development of new products, we must focus on network size and increase network efficiency and effectiveness.

Additionally, the marketing process has to pay attention to the best environment. There will be nothing without a good environment; that is the survival condition of enterprises. Therefore, we should focus internally on the education of corporate philosophy, strengthen cohesion and solidarity, and enhance collaboration and unity between internal staff; externally, we should foster a good corporate image, product image, and brand image to win support thereby creating good internal and external environments for the overall development of enterprises. In the course of the entire business operation, the best management needs to be achieved. A flexible and efficient management system and accurate management rules are the key to the effective operation of the enterprise.

These ‘bests’ are not parallel, but the considerations for the overall function of the enterprise from different points of view. Therefore, we must always adhere to the ‘six bests’ and deal with them with a strategic vision.

Section 7 Handle nine major relations in the marketing process

The relationship between marketing and enterprises

External relations and market sales are two factors that complement each other in marketing. First, pay special attention to external conditions and ensure a fine external environment so as to steadily move forward. Second, the relationship between marketing and the internal environment improves the internal environment by ensuring unity within the team, by ensuring good planning work, and by strengthening training and improving staff quality.

The relationship between Sanzhu Oral Liquid and other new products

Sanzhu Oral Liquid is Sanzhu Group’s leading product and the basis for further development of the group. However, more high-tech products must be brought into the market, so the group can develop steadily. Therefore we must show concern for the development of new products in the market.

The relationship between regional headquarters and subsidiaries, subsidiaries, branch offices and business divisions

When several business divisions or subsidiaries (branch offices) are established simultaneously in a city they should have a brotherly relationship and internal relationship. An integrated work unit should be established in the region, which will be responsible for coordinating their relationship. Regional managers and subsidiary managers should share resources and support new products.

The relationship between executive managers and operation directors

Executive officers, operation managers, and propagandists are closely related, none of them should be a bureaucrat. If the executive officer does not perform well, the person can be removed from the position; if the operation manager performs well, then the person should be promoted.

The relationship between marketing personnel and non-marketing personnel

Marketing personnel are involved in direct marketing and non-marketing personnel are involved in indirect marketing. They are both marketing personnel and are indispensable. Job responsibility should be detailed from subsidiaries to working offices, workstations, and propagandists. Bonuses should be linked with sales. Adhere to the principles of preciseness, prudence, carefulness, confidentiality, and firmness.

The bonus distribution relationship between operation directors and propagandists in subsidies and working offices

Incentive policies should be linked with operation directors and propagandists. Bonuses should be divided into several parts, of which a part is distributed to operation directors and a part is reserved for overall balance and annual bonuses. Fill gaps with the remaining funds, adjust independently and stabilize the entire sales force.

The relationship betwen subsidiary management, working offices, and township workstations management

Subsidiary management, working offices, and township workstation management are closely related to each other.

The relationship between urban marketing and rural marketing

On the one hand, the rural market remains the main battlefield of overall marketing in the future; on the other hand, urban work is still a priority. Be two-pronged: continue to develop and consolidate the rural market, and also capture the urban market.

The relationship between overall publicity and separate publicity

In cities the main publicity is handing out leaflets or newspapers. In rural areas the main publicity is also leaflets and newspapers, and publicity by word of mouth is used as well.

Pharmacies, wholesale departments, and hospitals remain the main marketing channels. Other channels can be set up, but they should be under strict control.

Section 8 Three basic points of marketing and dynamic leadership management

Planning, standardization, detailing, systematic control, and management

This has the following elements:

1. Planning. Planning can be divided into two aspects: macro regulation and control of the country, and corporate planning. The macro control of the country is not supplemented by administrative orders but by economic and legal means. Corporate planning is more rigorous. It is based on the needs of consumers, and centers on users.

2. Standardization. Standardization provides clear criteria and operational procedures for work quality and product quality. There should be standardized systems, supervision and monitoring procedures, standards, and refinement. For example, the standard parts of a machine can be applied to all the machines of the same type, which makes those standardized parts viable. If a part can only be used in one machine, it is of limited usage. Therefore, standard parts should be adopted.

3. Detailing. This is the working standard of rigor and precision. Our work should be detailed. If there are no detailed standards, there will be no good products, results, or achievements. Only if we adhere to the principle of providing detail can we identify and solve problems promptly, accurately, and efficiently.

4. Systematic control and management. Planning, standardization, and detailing are parts of a whole and we should study how to put them together. Systematic control and management involves combination in management. Only through systematic control and management can we bring various components together and ensure that each component plays its role.

Dynamic competitive marketing management

Competition exists all the time and crises occur repeatedly. This is the inexorable law governing competition in the market economy. This law functions around consumers’ needs, just as price fluctuates around the value of a product. We have to study the law of consumption all the time, anywhere, and constantly develop new products and increase our competitiveness. We must continue to study consumers’ psychology and the consumption market so as to meet the different needs of various levels of consumers. Stick to the idea of ‘prominence–balance, balance–prominence’. The higher level should set a good example for the lower level so that the lower level can learn from the higher level.

Diagnostic marketing

In diagnostic marketing, marketing strategies and tactics should be studied first. If you set the wrong direction, one false step will make a great difference. Each company must diagnose its own situation and then make the right judgments. If the situation is clearly interpreted and the main and secondary contradictions are understood accurately, correct decisions can be made.

Diagnosing decisions is a process in which the subject is consistent with the object. To do this well we must pay attention to tactics in the marketing process. After correct decisions are made, tactics must be studied in the implementation process. It is important to combine overall planning and individual implementation. If leaders do not know how to diagnose decisions and combine and coordinate strategic decisions and tactics rationally, they will become blind.

We should first be not afraid of security issues. Be ambitious, and use tactics and wisdom to gain the greatest victory. Have fine relations with all departments in the region where the company is located. Secrecy ensures security. Some of our actions, especially some of the actions of managers and senior managers in headquarters, must be kept strictly confidential. To improve security, internal unity also matters. Treat employees as our relatives. In this way, we can unite as one, and small problems will not turn into greater ones.

Section 9 Apply operation research to improve marketing management

These are some ways to improve marketing management through research:

1. Strengthen study to understand systematic operational research. It is necessary to apply a holistic way of thinking and systematic and operational research. We can learn from practice and application; then we can we control the overall situation.

2. Learn from the experienced by means of grafting. When learning from experienced people, we should combine specific conditions to uphold the unity of the subject and object by grafting.

3. Be good at accepting new things and methods. Tabularization is a part of layout, which everyone should learn to use. Using this method, management will rise to a new level.

4. Combine ‘ruthless management’ with ‘enthusiastic management’. This is a necessary requirement for modern enterprise management and a demand of human instinct, and also an integral part of Sanzhu’s corporate culture. A leader should plan first and arrange the work with an iron hand. All the things above belong to the range of a plan. ‘An iron hand’ should be used in the implementation. Implementation and orderliness must be intensified and strengthened.

5. Study with an open-minded attitude. We should have a correct attitude to study advanced experiences and be open-minded. The secret of success is to persist in intentional learning.

Section 10 Strategies, tactics, guidelines and principles of marketing

These are marketing strategies:

1. Market size brand strategy. The enterprise makes an overall plan for consumers’ share in the market, and then plans for regional market development, which will be completed in phases.

2. New product development strategy. This is an important strategy for the enterprise’s long-term sustainability. Only proprietary technology products and new variant products can develop rapidly and create enterprise efficiency.

3. Focus strategy:

• centralized financial management

• centralized corporate culture

• low-cost; this is fundamental in creating corporate profits and improving competitiveness

• innovation (create something new and original); this is the reserve force for the sustainable development of enterprises.

4. Product and service strategy:

• establish orderly specifications for pre-sales, sales, and after-sales processes, and refine service structure, control and management

• establish independent organizations for customer service parallel to production and marketing and maintain the service function during the whole marketing process

• adopt the concept of service is adopted in all the economic activities of the enterprises

• relations and service marketing by salepeople to build relations of mutual trust with consumers, which can promote chain marketing

• make sales with warm-hearted service

• co-market through horizontal cooperation – the parallel cooperation of enterprises in a particular marketing activity; vertical cooperation of enterprises in different marketing activities; and cross cooperation among enterprises of the same and different industries.

5. Objective concentration strategy. In a certain period of time, space, and location, enterprises make use of human, financial, and material power to achieve their objectives. They develop different products, adopt suitable strategies and methods on the basis of consumers’ needs, and spare no effort to ensure breakthroughs.

These are marketing tactics:

1. Turn from cities to rural areas to establish bases in rural areas. Get into rural areas by using the tactics of ‘mopping up’. We can either seize rural areas in mobile warfare before establishing a base, or establish a base before moving forward. These are cross promoted because different situations in different areas need different methods.

2. Concentrate superior forces to fight a war of annihilation. Only by concentrating manpower, material, and financial resources and continuing to emphasize them to the end can we achieve the expected effect. The leader’s power cannot be used equally. The leader must concentrate on the object of fighting in a certain period of time and should work independently while others coordinate.

3. Select a point to break through. In marketing work, we should select a successful point to break through for each task and to find a model. If we go about several tasks at a time, we can do nothing. We should select a point to break through and find a model so that the staffs are hopeful and encouraged.

4. Manage by division and division in movement. In major cities, you will have poor results if you don’t divide to manage. That is something we have not fully digested in marketing, so the work of major cities is still backward. Therefore, we must manage staff by letting them go down to specific functional areas through more detailed divisions of labor, and by ensuring the implementation of the strategies and tactics at each managerial level.

5. Establish bases in neighboring counties. We must establish a solid base for ‘the war of annihilation’. Only the establishment of bases can ensure we can fight a war of position, and only the war of position can improve basic management. Mobile warfare should be combined with guerrilla warfare.

6. Grade separation for comprehensive operation. Integral propaganda on TV widens the range but we may also make some people focus on the hospital to make an assault on the fortified position. In this way, many kinds of tactics integrate and coordinate with each other, and the mutual infiltration function is very good.

7. Integrate various tactics. The assault on a fortified position, guerrilla warfare, mopping up, and a war of position should form a complete and comprehensive system and coordinate with each other in mobile warfare. Unlike single tactics, these integrated tactics require certain command capabilities from the leader.

8. Use news and entertainment for propaganda. News has strong reliability and authority. Therefore, we should make full use of news to enhance soft propaganda. People love to see and hear entertainment, which allows us to use this method to publicize the enterprise and products.

9. Intersect the inside and the outside. This is the tactics of intersecting the actions of blocking and attacking. Our outward attack of marketing is continuing with overwhelming momentum. Meanwhile, the supervision and examination department and the ministry of law should ensure internal honesty. In public relations, we should strengthen external relations of each level and each aspect.

10. Intensify the effect and advance gradually. These tactics should be combined through TV, newspapers, free consultations, terminals, and other forms.

There is one guideline of marketing: depending on high technology, create new needs of consumption, promote the theory, technology, function, and consumption ideas of a product, create a new consumption environment, and meet consumers’ demands with excellent service.

These are some principles of launching a market:

1. Depend mainly on general propaganda and take specific propaganda as subsidiaries. General propaganda aims at the whole targeted market, emphasizing coverage and accuracy. Specific propaganda focuses on targeted consumers.

2. Depend mainly on the concept, mechanism, and efficacy propaganda and take image propaganda as a subsidiary. Image propaganda is based on functional propaganda. Only in this way can propaganda of healthcare products have the desired results.

3. Depend mainly on science and life columns in newspapers or on television and take advertising columns as subsidiaries.

4. Depend mainly on case surveys and take the cultivation of practitioners as subsidiaries. At the beginning of the market launch, register as many consumers as possible and then visit them to learn their consumption situation and help them solve problems in consumption.

5. Combine broadcasting propaganda and expert lectures. Let experts speak to enhance credibility.

6. Combine the publicity of popular science and volunteer medical consultation, disease prevention, and treatment.

7. Train and improve. Sanzhu Group not only improves the pharmacies, but also trains a team of high-quality promoters.

8. Publicize by making use of all opportunities. Participate in the government’s public welfare activities and sponsored events to carry out publicity.

9. Publicity should be credible, interesting, and accurate. Fine quality and genuine efficacy of products are prerequisites.

10. Depend mainly on treatment propaganda and take prevention and healthcare propaganda as subsidiaries.