Doyle, P. (2008). Existing, latent and incipient needs [fragmento del cap. 3].

En Value-based
marketing:marketing strategies for corporate growth and shareholder value (pp.78-81)(367p.)
(2a ed). Chichester : John Wiley & Sons. (C62140)
78 THE MARKETING VALUE DRIVER

bottom line. Marketing needs to understand the power relationships in these buying units and to communicate the
appropriate messages to each of the important inuences.

EXISTING, LATENT AND INCIPIENT NEEDS

The most obvious way to discover the needs of customers is to ask them. But sometimes simply asking customers
what they want is not enough.

Wants or needs can be classied into three groups. Existing wants are those for which consumers consider
satisfactory solutions already exist. Here opportunities for new products are limited since they will be competing
head-to-head with similar products. Latent wants are wants that people have, which are not yet satised. Customers
can easily articulate these needs in market research. People would like a cure for u or cancer. Laptop users would
like a battery with a longer life, and so on. Prot opportunities are much greater for companies that can meet latent
wants since solutions represent innovations for which, temporarily at least, no competition exists.

Incipient wants are wants that people have, but which they do not know about until they see the solution. Customers
were unlikely to articulate the desire for Post-It notes, iPods, Internet banking or automated teller machines. In
areas of rapid technological and social change, buyers are likely to lack the foresight to predict the new products
or services they would buy. Companies often have to follow up on novel technologies and the insights of their
researchers without the benet of direct consumer research. Rather than the classic marketing approach of rst
researching needs, in many situations the product breakthroughs occur rst, and then the pioneering company has
to nd customers afterwards.

But it is a mistake to think that companies like Apple, Sony or 3M, which often proceed like this, create wants.
Unless the invention meets an underlying customer need, and customers perceive it offering an advantage to current
products on the market, it will not succeed. Such products as mobile phones, iPods and GPS car navigation systems
were not suggested by consumers. But they succeeded because they offered them demonstrable benets and
advantages. Technology-led innovation is very risky.

THE MARKET-LED ORGANISATION

Many managers still do not understand todays necessity of being customer-orientated and confuse marketing
with selling. A market-orientated business starts with understanding customer wants and then goes on to develop
products and services to meet these wants. Production- and sales-orientated businesses work the opposite way.

PRODUCTION- AND SALES-ORIENTATED ORGANISATIONS

Many organisations not only in manufacturing, but also in services and government are production-orientated
(Figure 3.2). They believe that if you have the necessary technical capabilities to produce good quality products or
services at the right price, then, as in the case of the better mousetrap, the world will beat a path to your door. If
marketing is seen as having a role, it is about selling using advertising, salespeople and PR to tell the public about
your offer and to convince them to buy.
CREATING CUSTOMER VALUE 79
Production orientation

Production Manufacture
Customer
capabilities products

Selling orientation

Aim at
Production Manufacture Aggressive
customers
capabilities products sales effort
as target

Market orientation

Actual and Production

Potential capabilities Market
potential
market products
customer Customers
opportunity and
wants and Marketing services
needs programme

feedback

Figure 3.2 Production, Sales and Market Orientations

But in todays world these strategies cease to work. Because production- and sales-orientated companies design
products or services with little or no input from customers, they are unlikely to be exactly what customers want.
With overcapacity and intense competition in most industries, customers have plenty of choices and can usually do
better. These businesses then can only nd customers by slashing their prices. The results of ignoring customers are
declining market shares and eroding margins.

MARKET-ORIENTATED ORGANISATIONS

Todays top companies are customer-led. This business orientation is often called the marketing concept.

The marketing concept states that the key to creating shareholder value is building relationships with target customers
based on satisfying their needs more effectively than competitors.

A market-orientated company starts by looking for market opportunities created by unmet customer needs. These
needs are identied by listening carefully to customers and closely monitoring technological and environmental
changes that impinge on markets. From this set of opportunities it aims to select those which look to have the
most potential and which best t its competencies. The business then evaluates what production and marketing
80 THE MARKETING VALUE DRIVER

capabilities it will need, and how they should be resourced. Should it undertake these activities in-house or should
it seek partnerships with other businesses already possessing these capabilities? Services and products are then
tailored to the problems that customers have. Throughout the process management continually obtains feedback
by listening to customers. The aim is to create a good relationship between the company and its customers such
that both parties see value in doing business with one another over an extended period of time. Figure 3.2 contrasts
production-, sales and marketing-orientated business.

BUILDING THE DIFFERENTIAL ADVANTAGE

Value-based marketing not only requires a focus on satisfying customer needs: it also has a competitive dimension.
Management must be aware of both what customers want and what competitors are offering them (Figure 3.3). The
rm must seek a value proposition that satises the needs of target customers more effectively than competitors.
A differential, or competitive, advantage is necessary for two reasons, one marketing, the other nancial. First, a
differential advantage is necessary to maintain preference. Only by having a differential advantage can the business
protably attract new customers or prevent existing customers defecting to competition. Second, a differential
advantage is necessary if a business is to maintain earnings above the cost of capital, i.e. to generate shareholder
value. Without the barrier of a differential advantage, competitors can easily enter the market, copy the companys
offer, and compete away its premium prots margins.

A differential advantage is created by offering customers superior value. Value is the customers perception of the
products or services effectiveness in meeting his or her needs. It is a trade-off between performance and cost.

Differential Advantage

What do customers want? What are the competitors strategies?

Value analysis Competitor analysis

Who are our customers? Who are our competitors today?

What are their needs? Who will they be tomorrow?
How do they operate? What are their strategies?
How do they make decisions? What are our opportunities?

Business Operating Model

Figure 3.3 Developing the Differential Advantage

BUILDING THE DIFFERENTIAL ADVANTAGE 81
Value can be increased by offering customers more performance or benets for the same cost, or the same benets
for a lower cost.

A differential advantage is a perceived difference in value that leads target customers to prefer one companys offer to
those of others.

Since customers have different preferences and constraints, the optimum value will differ among them. Some
customers will put a greater emphasis on benets, such as innovative product features or services; others will place a
greater weight on price or convenience. Hence, in any market there will be different viable value propositions, depend-
ing on the customers targeted. The choice management makes is called the companys market positioning strategy.

Market positioning strategy is the choice of target customers, which denes where the rm competes and the choice of
value proposition, which determines how it competes

STRATEGIES THAT OFFER MORE

Some companies compete primarily on the basis of offering more benets; others compete on cost and convenience.
The former strategy reects that some customers are primarily interested in selecting suppliers that offer the best
solutions and are willing to incur more costs to get them. Four types of positioning strategy can be distinguished
that compete on this dimension.

1. Product leadership. Some companies target customers who want the latest technology and products with
the most innovative features. Examples include Apple, 3M, Sony, Microsoft and Intel. These companies invest
heavily in research and development, prioritise hiring the brightest talent and build organisational cultures
focused on creativity and innovation. The nancial advantages of successful product leadership are the
opportunities to achieve rapid growth and to obtain premium prices.

2. Service leadership. Some customers place a high value on outstanding service. Companies with a value
proposition based on service include Virgin Atlantic, Four Seasons Hotels, American Express and the US
department store Nordstrom. Businesses competing this way need rst to identify the types of customers
who will pay more to be pampered.

3. Customer intimacy. This strategy involves communicating with customers on an individual basis to learn
about their needs and develop tailored solutions which directly improve the customers performance or
experience. It is now often called one-to-one marketing and promises to be one of the most successful
strategies of the information age. Customer intimacy has been a common strategy for business-to-business
suppliers with a small number of customers. Companies such as KPMG and Boeing have long seen this as
their positioning. But today, led by such organisations as Amazon.com, Federal Express, Lexus and Hertz, we
see it spreading into areas where previously advertising and mass marketing played central roles.

Category Management Developing Customer Intimacy

The most signicant development in recent years in the consumer goods area is category management. Suppliers
of fast-moving consumer goods (fmcg), such as Unilever and Procter & Gamble sell to nal consumers via
supermarkets. To attract nal consumers these companies seek to develop appealing brands. But supermarkets