What is marketing

Case: Buy Now, Pay Later. Does It Work the Same Way for

Computers and Cars?

In October 2002, IBM introduced a new financing plan called Total

Usage Financing, designed to stimulate spending for its on-demand com

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puting services from cash-strapped businesses. The plan spread the cost

of technology purchases over several months and included a revolving

line of credit. Like a pitch from a car manufacturer, IBM announced a

“triple zero” financing package, that offered large and mid-sized busi

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nesses zero down, zero payments, and zero interest until 2003.

Other technology companies followed suit. The same month, Micro

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soft unveiled a new program that allowed small businesses to take out

loans to finance software purchases. It also launched a special 24-month

zero-percent financing promotion targeting customers of Microsoft’s

Business Solutions division, which sells enterprise resource planning

and customer relationship management software.

In November 2003, Hewlett-Packard introduced a program offering a

3-month deferral on any large purchase, including hardware, software,

and services.

Question 1: What are the opportunities and threats of such policies?

Question 2: In which case can supply trigger demand

The danger of these three approaches is clear. They focus on the com-

pany and forget that the sales exchange involves two parties. Without cus-

tomers to purchase products, there is no justification for production. On the

contrary, the marketing philosophy centers on the customer; it emphasizes

that the key worth of a product lies in the value that it provides to the user.

A company that concentrates too much on the physical attributes of a prod

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uct, its logistics, or financial profit risks forgetting that the customer pur

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chases a product only as a means to resolve or address a problem.

This customer orientation involves all the departments of a company,

because customer satisfaction on all levels, from the product design to its

(after-sale) maintenance, is the final measure of success for the company, as

well as its long-term promise of success.

Being tuned in to customers in order to satisfy them better is more than

a philosophy. It is a discipline that requires an organized and responsive

company, not to mention everyone’s involvement. All members of the

organization, from researchers to CEOs, including switchboard operators

and production workers, are involved and responsible for the quality of cus

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tomer relations.

When the company’s organization is turned upside down, the customer

becomes the sturdy base of a long-lasting exchange relation between the

company and its customers (see Figure 1.2). This management philosophy

was made popular by Jan Carlzon, as CEO of Scandinavian Airlines (SAS) in

the beginning of the 1980s. As SAS was losing money while facing a bigger

competitor, Carlzon asserted that the company had lost its focus on