Topic: Marketing


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A System of Marketing: The Story of John H. Patterson and National Cash Register

Cash Register

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Mental Models Used: , ,

In 1884, a small, wiry, middle-aged man named John Henry Patterson acquired the majority stock of a blandly named company called National Manufacturing Company.  That same year, Patterson renamed the company National Cash Register Company (let’s call it NCR, for short).  Although it was his first entrance into the cash register business, he realized the potential of the cash register immediately.  And Patterson, being forty years old at the time, had a fairly clear idea of what he wanted in a company.  He set right to work on creating a uniform management system, which included a uniform system of marketing.  Read More »

The Most Important Organizational Behavior: Empathy

Empathy

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Mental Models Used: ,

Peter Drucker once noted that the basic personality profile of an individual has been formed by about age five.  If even close to true, this has noticeable effects on organizational behavior within a group.  It implies that trying to alter someone’s personality to “better fit” an organization is a fruitless exercise.  But although attempting to change people is likely wasted effort, understanding them is most certainly not.

Understanding people, or the ability to share feelings with them, is what we call empathy.  And a group using empathy in its communications with each other will create stronger connections between themselves.  Stronger connections = better performance.  And as a side benefit, using empathy within a group often creates an environment where empathy is naturally used for communications or interactions with people outside the group as well.  And this is just like a little waterfall of goodness.  Read More »

An Accelerated Master’s Degree: Marketing in One Book

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Topics: Marketing
Marketing

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There have been plenty of books recently published on the concept of Deliberate Practice, which essentially says that it takes 10,000 hours of a certain kind of practice (called ‘deliberate’) to gain expertise in something.   It makes sense that the majority of what you want to learn in any discipline is going to be experiential (or gained through practice).  But in order to better understand your experiences, you want to have some kind of framework of what to expect.  You want to develop a theory structure.

Books are what give you this theory structure, and certainly the quality of the theory structure you begin with impacts the amount of deliberate practice you need to become an ‘expert.’  So it’s important to choose the right books, as they will provide the base infrastructure upon which you will layer your experiences.  You’re looking for books that concisely capture the overriding concepts of a particular discipline.

And in any discipline, at least one fairly well defined, there doesn’t need to be that many books to accomplish this.  I would generally say that 3 books or fewer, for each discipline, will give you a proper theory structure.

With that in mind, let’s look at Marketing…  Read More »

There’s No Best Age to Start a Business: The Story of Sam Walton and Wal-Mart

Walton

Photo by tsweden

After graduating from the University of Missouri in 1940, Sam Walton took a job with J.C. Penney.  He was 22 years old.  He spent five years with J.C. Penney learning the retail industry.  In 1945, Walton became an entrepreneur and bought a Ben Franklin variety store in Arkansas for $25,000.  He was 27 years old.  Walton spent five years growing his Ben Franklin store.  But in 1950, after Walton’s landlord refused to renew the five year lease he had on the Ben Franklin store location, Walton had no choice but to sell the franchise.  He sold it for a fair price, and then had to start all over again.  Walton was now 32, and it was at this age when he opened his first Walton’s Five and Dime (again in Arkansas).  But it wasn’t until he was 44 years old that he opened the first Wal-Mart.  It was a very gradual progression.  So, does age really matter when starting a business?  I doubt it.  There is no best age to start a business, no perfect time – none of that.  And Sam Walton is the perfect example of this.  Read More »

How to Build an Empire: The Story of Harvey Firestone and His Tires

Firestone Tire

Photo by Desert Bug

In 1926, Harvey Firestone sat down to write Men and Rubber: The Story of Business.  It outlines his philosophy on how to succeed in business, and to this day it’s still the best and most comprehensive story on how to build a business from nothing.

Firestone’s philosophy is quite simple.  It says that honesty is the fundamental principle of any business.  It says that a business must exist for a reason, and the single reason for the existence of any business must be that it supplies a human need or want.  “To make money” is not a good enough reason to be in business.  If fact, if all you want is money, Firestone advises you to get out of business as quickly as you can, and go work for someone else.  You are destined to fail otherwise.

Firestone was clear that a business must exist to supply a human need or want, and this philosophy can be further explained through Maslow’s Hierarchy of Needs.  The primary need for all humans is physiological, followed by safety, love/belonging, esteem, and self-actualization.  Humans seek to satisfy needs in this order.  Firestone was supplying tires, or facilitating transportation.  Transportation, depending on its intended use, could fall under physiological needs (driving to the grocery store for food), safety needs (driving to the office for work), or love/belonging needs (driving to family).  Either way, Firestone was clearly satisfying human needs with his tires.

This logic applies today as well.  For example, Mark Zuckerberg’s reason for starting Facebook (“to meet girls”), while it hurts my heart, does provide for the love/belonging needs that all humans naturally have.

That’s the end of my Zuckerberg digression – now back to Firestone…   Read More »

What People Want: Introducing the Hierarchy of Human Emotions

BP5_Door

Photo by Stuck in Customs

Back in 1943, a guy named Abraham Maslow proposed an idea: there was a hierarchy of human needs, and he had a pretty good idea of what it was.  Maslow’s Hierarchy of Needs was designed to explain motivation and behavior, and numerous people have since claimed this hierarchy is very accurate.  Andy Grove, former head of Intel, says exactly that in his book High Output Management.   Grove experienced this hierarchy first hand at Intel, and as a result it shaped many of the Human Resources decisions that were made.

Maslow ranked human needs as follows:

  1. Physiological: breathing, food, water, sex, sleep, homeostasis, excretion
  2. Safety: security of body, employment, resources, morality, the family, health, property
  3. Love/Belonging: friendship, family, sexual intimacy
  4. Esteem: self-esteem, confidence, achievement, respect of others, respect by others
  5. Self-actualization: morality, creativity, spontaneity, problem solving, lack of prejudice, acceptance of facts

It’s very likely that human needs (per Maslow) are heavily involved in the decisions we all make. In a logical world, decisions would be made purely according to needs.  But we don’t live in a logical world, and wants often take precedence over needs.  And since wants reflect emotions, there must be some hierarchy of emotions that can better explain how emotions affect human behavior.

So just as Abraham Maslow created a Hierarchy of Needs, there is also a Hierarchy of Human Emotions.  Certain emotions drive our behaviors, decisions, and actions more than others.  Understanding the hierarchy of these emotions, and how people express them, has an interesting side effect: it often explains how to figure out what people want.  Read More »