Volume 17, Number 2 Article by V Kishore Kumar June, 2005
Knowledge-based Marketing: The Twenty- First Century Competitive Edge : By Ian Chaston, Response Books, New Delhi, 2004, pp. 274, Price: Rs. 280. :
What are the most important factors that determine the success of an organisation in t h e global marketplace of the 21st Century? Many experts agree that a marketing focus is, as a managerial philosophy, the most important part of successful organisations today. And, within this philosophy lie two most important success factors: (1) Understanding customer needs, creating and retaining satisfied customers, and (2) Understanding and adapting to a continuously changing market environment.
The word understanding by its definition implies knowledge, and in business terms, such understanding in a fast changing world requires large volumes of real-time data and information. According to Kotler, three major changes in the world – globalisation, changing buyer behaviour, and increasing competition, have made the need for real time information absolutely vital for surviving and prospering in the 21st century. As market opportunities and threats start coming in from all parts of the globe, managers need more and more information, quickly. As economies become stronger, buyers have become more and more selective and fickle. Sellers must rely on market research to give them more reliable and accurate information regarding buyers’ attitudes and wants, and in the face of severe competition, a seller must go beyond price cutting to garner sales volumes, using techniques such as branding, differentiation, advertising, and sales promotion. And these require information during various stages of implementation.
Ian Chaston’s Knowledge-based Marketing: The Twenty- First Century Competitive Edge addresses precisely this issue – gathering, recording, updating and retrieving data and information and converting it into useful knowledge. Although it is designed to be a ‘text book for students of marketing’, and is authored by a Professor of Marketing and Entrepreneurship at the Plymouth Business School, University of Plymouth, UK, the subject matter is of such vital importance that it is a must read for practising managers looking for options to make their organisations more responsive to today’s marketplace.
With ‘knowledge management’ as the theme, the author has touched upon almost every aspect of marketing and management that has emerged or changed or evolved over recent times – organisation structure, organisational and individual learning, computing and information technology, human values, e-commerce, core competence, product knowledge, innovation, strategic marketing, supply chain management, pricing and distribution, customer relationship management and so on. The importance of knowledge as a resource is established right in the opening chapter of the book, entitled ‘Knowledge and the Organisation’, wherein the author has explained alternative options of structuring knowledge platforms and clusters in regard to modern business requirements. However, like in all chapters of the book, the author does not attempt to offer ‘fit all’ solutions, leaving it instead to the practitioner to decide the type of knowledge management system he needs to adopt for his needs.
The essence of the entire book comes out in the chapter ‘Marketing and the Application of Knowledge’. Covering various issues in today’s marketing, including segmentation, competition, TQM, advertising and globalisation, the author has extensively quoted research in the field and cited examples to bring out how organisations can fulfil their goals through understanding customer needs and delivering satisfaction using knowledge .
The book extensively covers the interfaces between IT, real life managerial issues like marketing and distribution, and macro-environmental issues like marketing economics and legislation. This will be very useful for information managers and those responsible for implementing ERP solutions. Although the chapter on internal competence is fairly elementary in its treatment, the one on knowledge-based positioning is interesting. The author has interpreted Porter’s concept of positioning in terms of customer knowledge and product knowledge. The use of knowledge audits to assess the firm’s ability to develop an optimal market position is a novel concept. How far it is practical and useful in today’s corporations is debatable.
Product knowledge and innovation are directly connected with knowledge-based marketing and are treated in detail. A modified version of the BCG matrix is used to determine knowledge based marketing strategies for a product portfolio. Relating the experiences of 3M, Hitachi, Intel, and others, the author explains the possible strategies firms can adopt for innovation, and how knowledge management fits into the big picture. A different perspective is adopted on the topic of promotion, which is most relevant for high tech products or IIMB Management Review, June 2005 129 products in the earlier stages of their life cycle. The author sees promotion as a major avenue for imparting product knowledge that will differentiate the offering from those of the competitors.
The author has devoted an entire chapter to the management of services and customer relationships . Admittedly, the concept of CRM and the importance of having accurate and up-to-date knowledge of customers are well known. But an interesting input in this chapter is the author’s practical tips on utilising customer knowledge to augment the product offering with unconventional value added services.
The chapter on process implementation contains some very interesting links between the organisational culture and knowledge management. This chapter is a must read for business managers in traditional cultures like India who are contemplating mergers and strategic alliances with companies in other countries
While the author’s extensive reading and referencing are impressive, his effort to achieve academic rigour has resulted in a work that is somewhat cluttered, disjointed and difficult to read. It takes a lot of concentration and effort to extract the essence of each chapter. This may not be a problem for serious students and research workers, but for the others here is a warning: speed-reading of this book is impossible!
One wishes that the author had followed the advice of some of the experts quoted by him, and redesigned the book keeping in mind the needs of a larger segment of potential buyers – practising managers with very little time for reading. This could have been done by concentrating more on the author’s own views and using chapter summaries and ‘how to’ boxes.
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