Page 43 - Marketing the Basics 2nd

Marketing as a corporate Function 35
On the edge of the experience economy is the transformational economy. Not only do some consumers want an experience but they wish to be transformed into slightly better people by the experience. Examples include taking Yoga not just to improve your muscle tone but to become more at peace, a somewhat spiritual benefit, so that you can handle life’s hassles more easily. Or education, where you become more knowledgeable, and in the case of a leadership course, hopefully a more effective leader,
CONCLUSION
Companies need to become more customer focused. The emergence of an experience-based economy only serves to underscore the need, otherwise the products sold will be classified as a low-involvement good by cost-conscious customers looking to save a buck to buy more luxuries. Products that compete solely on price face a race to the bottom. To avoid getting caught in a cost-trap, managers must make difficult decisions with regards to allocating resources to ensure customers continue to have a favourable impression of the product. Corporate planning plays a major role in this matter. The corporate plan outlines the objectives, and the SBUs implement them. Over the next three chapters we will show you exactly how that is done.
Up till now, we’ve talked exclusively about products. But a product is classified either as a good or service. A good is any tangible object that has been manufactured, mined or harvested. Services are everything else. It might come as a surprise, but most economic activity in developed economies arises from the service industry. In the UK, manufacturing, mining and agricultural activity amounts to 30 per cent of its gross domestic product, the highest level of the seven leading industrial nations. Collectively these seven produce in excess of $25 trillion of products. But most of the world’s wealth is created from products that do not exist.
Though wealth creation is an exploration in metaphysics, there is a much more pressing problem. The current practice of marketing is designed to promote consumerism. While consumerist-based societies offer a diverse set of choices, it also creates enormous amounts of waste, which contributes to the destruction of the