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Marketing makes the cash register ring

By TOM W. GLASER

© St. Petersburg Times, published April 19, 2001


photo
[Times art: Teresanne Cossetta]
In 1886, Richard Warren Sears worked for the Minneapolis and St. Louis Railroad and bought a shipment of watches that a jeweler had refused. Sears, 23, bought them for $12 each but, instead of selling them at the customary retail price of $25, he sold them for $14. In six months he had made $5,000, enough to start the R.W. Sears Watch Co. in Chicago. He hired a watch repairman, Alvah Curtis Roebuck, who eventually became his partner.

Obviously, Sears, Roebuck & Co. did not start out in the catalog merchandise business, but that was where it ended up. But the catalog was more than just advertising. It never used stereotypes of the farmers who were important customers. No model was ever shown smoking a cigarette. And while there were glamorous women and handsome men as models, there were also a good number of average looking folk, models who looked like Sears' customers.

The mailing list of its catalog customers was Sears' greatest asset before it built its national retail store chain. Management often worried about what would happen if the list were to be lost in a natural catastrophe such as a fire. To find out what might happen if a disaster occurred, Sears ran announcements saying that the list had been lost and asking customers to contact the company. Comparing the responses to the still-existent mailing list, they found that not only did all of their old customers respond, but there were always quite a few new ones as well.

Although advertising is an important part of marketing, it is just that -- only a part of it. Marketing is everything that is necessary to sell the product or service, and it is an important rule of business to remember that nothing happens until the cash register rings. In other words, if your company does everything well except sell, your company won't be around long at all.

This is why what you've already done is called market research. You have found out if people will buy your good or service, who would buy it, what features they would want and how much they would pay for it. The marketing plan must include this demographic search if it is to be successful, just as advertising has a role. (Demographics is the science of studying people and their actions.) Indeed, it is the demographics that will tell you how and where to spend your advertising dollars.

From demographic data, a target market is pinpointed. This market is made up of the people most likely to want your product and, more importantly, can afford to buy it. This is called effective demand. While everyone might want a Rolls-Royce, not everyone can afford one. That's the difference between demand and effective demand.

This target market helps focus your efforts. If your good or service appeals mostly to retirees, you might not want to advertise it on television shows or in magazines aimed at teenagers. If your good or service is oriented toward a specific gender, then your marketing efforts would be wasted in magazines and shows primarily watched by the other gender. How would you know which are which? By market research, particularly research done by the publishers and the broadcasters, who also need to know how well they are reaching THEIR target market.

Marketing takes many forms besides advertising. Businesses will often sponsor events or sporting teams to show community involvement. Similarly, public opinion is a marketing concern, and a company will spend whatever it takes to maintain positive perception by the public. Packaging is a marketing function as well, because in addition to protecting the product, it must be attractive. The packaging is what the customer will see on the shelf, take home and look at until the product is used.

Shelf and store placement are also important for sales. In grocery stores, for example, the "end caps," the ends of the aisles past which everybody walks, are some of the most desirable and profitable square footage in the store. Similarly, the merchandise on the top shelf will sell the best because people don't like to bend down, and competition is stiff of the top shelf advantage. This aspect of marketing, often called merchandising, affects every business.

Manufacturers and wholesalers arrange their display rooms to maximum advantage. Automobile dealers make sure the demo cars are all clean, running well and have that "new car" smell. Book stores have special displays for current best sellers and discounted books. In clothing, cardboard tags catch the eye. And parents and teachers all know of the trend that started with sneaker names and logos on their old high-tops (as well as the famous Levi's pocket tag), progressed to the little polo player and the alligator, and now has people of all ages walking around as living billboards for the clothing manufacturer.

All of these things go into the comprehensive marketing plan, but most importantly, like every business document, it is a living document. Markets change, tastes change, fashions change, and businesses must be flexible enough to adapt to those changes or fail. For example, the Fisher Carriage Company made good carriages, but the development of the automobile was the end of the business. So what did Fisher do? The next time you get in or out of a Cadillac, look at the step plate. It says "Body by Fisher" and has a picture of the carriage they USED to make before they began to make car bodies.

Classroom activity

Ask the marketing people of a major firm -- movie theater, bowling alley or restaurant -- in your area to share their marketing plan with your class. Have these speakers address the occupations available in marketing. If your class is continuing to produce its own good or service, have the students begin to focus on a target market and develop ways to reach customers.

Useful web sites

http://www.ama.org -- American Marketing Association

http://www.demographics.com -- American Demographics

http://www.the-dma.org -- The Direct Marketing Association

http://www.marketing.org -- Business Marketing Association

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-- Tom W. Glaser is a high school teacher at the School for Advanced Studies at the Wolfson campus in Miami. He has won numerous national economic teaching awards and was named Florida Council on Economic Education Economic Educator of the Year in 1997.

About the Florida Council on Economic Education

Money Stuff: Get it! Spend it! Keep It!

Introduction and previous chapters

Money Stuff was developed by the Florida Council on Economic Education and project director Fonda Anderson. The council is a statewide non-profit organization founded in 1975 to educate K-12 teachers and students about the free enterprise system and to instill in them an appreciation for a market economy. For more information on the council's programs for teachers and students, please call (813) 289-8489.

About Newspaper in Education

The St. Petersburg Times devotes news space to NIE features throughout the year, including this classroom series. The Times' NIE department works with local businesses and individuals to enrich the classroom experience by providing newspapers, supplemental guides and educational services to schools in the Tampa Bay area. To find out how you can become involved in NIE, please call (727) 893-8969 or (800) 333-7505, ext. 8969. For past chapters, check out http://www.sptimes.com/nie and click on Money Stuff.

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