Gurus On Marketing

The customer as the decision-maker
‘Specifically, there are no results within the organisation. All the
results are on the outside. The only business results, for instance,
are produced by a customer who converts the costs and efforts of
the business into revenues and profits through his willingness to
exchange his purchasing power for the products or services of the
business. The customer may make his decisions as a consumer on
the basis of market considerations of supply and demand, or as a
socialist government which regulates supply and demand on the
basis of essentially non-economic value preferences. In either case
the decision-maker is outside rather than inside the business.’
Source: Drucker, Peter. (1966). ‘The Effective Executive’. Heinemann.
Writing on the subject of innovation and entrepreneurship 14 , he
suggested knowledge-based innovation adopt a market focus.
‘Knowledge-based innovation can aim at creating the market for
its products. This is what DuPont did with Nylon. It did not ‘sell’
Nylon; it created a consumer market for women’s hosiery and
women’s underwear using Nylon, a market for automobile tyres
using Nylon, and so on. It then delivered Nylon to the fabricators
to make the articles for which DuPont had already created a demand
for which in effect it had already sold.’
For a new venture to succeed there is a need for market focus. It must
anticipate new market needs and potential competitors. He gives the
examples of products such as Xerox copiers, DDT, 3M Scotch Tape,
computers; the products which were designed for specific segment
users, mainly industrial. No one could foresee the use of these products
by household consumers.
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