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It's not that marketing itself has a problem; the market environment has changed, and we need to return to the essence of marketing to find new breakthroughs.

Back to the Essence of Marketing

"People don't need a 1/4-inch drill; they need a 1/4-inch hole." Marketing guru Theodore Levitt reminded us of this in his 1960 book Marketing Myopia.

Many domestic companies have focused their marketing strategies on "price, channel, promotion, rebates" for years or even decades. Their marketing organizations center on the "sales department" rather than the "marketing or brand department," with resources and power in the hands of those doing "selling" rather than "marketing." This approach was once effective because consumers primarily sought low-cost solutions: first, purchase cost (price), and second, usage cost (quality). This is why companies that first embraced the principle of "economies of scale" succeeded.

Now the market environment has changed. Consumer groups are diversifying, forming many segmented markets with different needs, some even calling it a "fragmented market." This requires companies to return to the essence of marketing—to the starting point of providing solutions for consumers—and rethink their strategies, or they will inevitably face elimination. Just as consumers need to remove facial hair, not a razor, Gillette was replaced by Philips; with digital cameras offering a more convenient solution for storing images, consumers naturally drifted away from Kodak film.

Put aside your products, technology, equipment, raw materials, and personnel. Whether you are a multinational giant or a fledgling domestic company, you must adapt to objective reality. Otherwise, you may end up like Kodak—guarding a group of world-class chemical engineers but being defeated by young electronic engineers.

Back to Consumer Needs

First, Return to the Source: Discover Consumer Problems

Many companies realize they need to re-understand consumers, but they still start on the wrong foot—using a product-oriented approach to consumer perception and market segmentation. Look at their target customer descriptions: age, income, gender... These demographic indicators or seemingly sophisticated psychographic analyses are essentially just reflections of their own product categories or price levels. Describing target customers by consumer characteristics can only reveal correlation between these characteristics and purchase decisions, not causation. Only when consumer descriptions provide causal relationships for purchase behavior can companies determine true consumer needs and offer solutions that precisely meet them.

Practical case: A pharmaceutical company produced medicated patches for arthritis and injuries. They had patented technology and good clinical results, but after several years, the market hadn't improved much.

Some analysts said the company's product was priced too high, occupying too small a market segment. They suggested redefining the market segment based on consumer characteristics, targeting middle-aged and elderly consumers with low income or relying on retirement pensions with a lower-priced product. They tried it, but it didn't work.

Others said the product was good, but the promotion wasn't strong enough to influence consumers. So they invested 30 million yuan in advertising on CCTV-1, resulting in a 20 million yuan increase in sales.

Still others said the pricing was unreasonable. This time the boss didn't listen, saying that although the unit price was high, the efficacy was good, and the overall usage cost for consumers was actually not high. But at a loss, they tried a "buy one get one free" promotion in Shandong market, which was effectively a price cut, but still no improvement.

Finally, they accepted my advice to study the consumer usage process. They found that consumers, especially office workers, usually apply the patch at night and remove it in the morning to avoid strong odors affecting others in public. But with this company's product, the patch had a medicine bag in the middle, reducing the adhesive area, making it easy to fall off when patients turned over in bed. Consumers who used the product during the day generally thought it was excellent, and price wasn't an issue; even lower-income elderly consumers felt the overall usage cost was lower than competitors'.

The problem was identified: the company didn't need to adjust price but to solve the easy-falling-off issue. They replaced zinc oxide rubber adhesive with new acrylic pressure-sensitive adhesive tape, which not only solved the falling-off problem but also greatly reduced allergy rates. From then on, the product opened up the market, and sales climbed steadily.

Second, Change the Process: Front-Load Service

Producing first and serving later is not only ineffective but also inefficient and costly. Many companies fall into trouble because they can't bear the huge service costs.

Returning to the essence, companies need to introduce service at the concept development stage, making significant efforts to understand the problems consumers need to solve and the details of the solution, treating the product as a complete solution before it goes into production. When Boeing developed the 777 series, they held regular meetings, inviting customers like United Airlines, All Nippon Airways, British Airways, Japan Airlines, and Cathay Pacific to participate in concept development, each sending 2-4 engineers as on-site representatives working alongside Boeing designers. The 777 series was well-received upon launch, with unparalleled cabin comfort and flexibility, and operational reliability and economy as major advantages.

A bus chassis manufacturer in East China, during the concept development stage, went to downstream customers like bus companies and terminal users to understand their usage environment, methods, future route planning, and needs for buses. Then they discussed the development and use of new-generation chassis technology with bus manufacturers, eventually moving into R&D, production, and sales. Now, this company has become an industry leader.

Some might say these two examples are B2B markets, and B2C markets are harder because customers are clear and concentrated in the former but highly dispersed in the latter. In fact, there's no difference between the two markets; the only difference is the way of thinking. Otherwise, there wouldn't be Haier's Little Prince washing machine or Oral-B's electric toothbrush.

How did Youngor's Xinuo brand suits in Weifang, Shandong, carve out a bright path among strong competitors? I found in the Shandong market that this brand's clothing is special: one suit jacket comes with two pairs of trousers. It turned out they studied their target market—consumers in third-tier markets—and found that their suits always wore out at the trousers first, while the jacket was still in good condition. They couldn't find matching trousers, and it was a pity to throw away. So the company made a "simple" innovation: one suit with two identical pairs of trousers, which was very popular.

More and more companies understand this principle. In mid-October 2006, Li Dongsheng led more than 20 senior executives from TCL to visit Gome's headquarters. They didn't discuss procurement contracts but signed a "Strategic Cooperation Memorandum" to achieve "deep vertical business docking and penetration," connecting their 10 million members to gain deeper understanding and develop more valuable solutions.

Third, Correct Mistakes: Remove Service Time Limits

When companies treat after-sales service as a responsibility, they also block business opportunities. Many products are foolishly given service time limits, like "two-year warranty." Once the warranty expires, consumers find that even paying higher prices to the manufacturer gets them worse service than from street-side stalls.

Many domestic companies don't pay much attention to how customers use their products, let alone consider customers' product lifecycle costs. I first saw this material from IBM: when determining whether to develop a product, they consider quality, performance, and other factors, but one major factor is not price but the total cost to the customer over the product's usage cycle.

Automobile companies observed this phenomenon early on, leading to the current 1:2:7 ratio—selling a car yields only 10% profit, maintenance yields 20%, and parts yield as much as 70%. Clearly, a company that focuses on customers' full lifecycle usage will gain more business opportunities.

A model of truly excellent service and reaping huge benefits is European car dealers. They build sales and service shops around communities, maintaining files for all families within the shop's radius, including car usage status and potential needs analysis. When a customer buys a car, they start recording the car's file, like a medical record, noting when problems occurred, what maintenance or repairs were done. When the car is ready for second-hand trade, they can determine a reasonable price based on the file, help both parties complete the transaction, earn agency fees, and recommend a suitable new car to the seller or facilitate a trade-in. At other times, they might notice a family's child got a driver's license, analyze the family's potential needs, and provide a second-hand car solution. As their connection with consumers deepens, their services expand beyond selling, repairing, maintaining, leasing, insurance, or financial services to guiding consumers in customizing new cars.