Environment

Chapter PREVIEW

In Part 1 (Chapters 1 and 2), you learned about the basic concepts of marketing and the steps in the marketing process for building profitable relationships with targeted consumers. In Part 2, we'll look deeper Into the first step of the marketing process—understanding the marketplace and customer needs and wants. In this chapter, you'll discover that marketing operates In a complex and changing environment. Other actors in this environment—suppliers, intermediaries, customers, competitors, publics, and others—may work with or against the company. Major environmental forces—demographic, economic, natural, technological, political, and cultural—shape marketing opportunities, pose threats, and affect the company's ability to build customer relationships. To develop effective marketing strategies, you must first understand the environment in which marketing operates.

Let's start with a look at an American icon, Xerox. A half-century ago, this venerable old company harnessed changing technology to create a whole new industry—photocopying—and dominated that industry for decades. But did you know that, barely a decade ago, Xerox was on the verge of bankruptcy? Don't worry, the company is once again growing and profitable. But Xerox's harrowing experience provides a cautionary tale of what can happen when a companyeven a dominant market leader—fails to adapt to its changing marketing environment.

Xerox introduced the first plain-paper office copier nearly 50 years ago. In the decades that followed, the company that invented photocopying flat-out dominated the industry it had created. The name Xerox became almost generic for copying (as in "I'll Xerox this for you")- Through the years, Xerox fought off round after round of rivals to stay atop the fiercely competitive copier industry. In 1998, Xerox's profits were growing at 20 percent a year and its stock price was soaring.

Then, things went terribly wrong for Xerox. The legendary company's stock and fortunes took a stomach-churning dive. In only 18 months, Xerox lost some $38 billion in market value. By mid-2001, its stock price had plunged from almost $70 in 1999 to under $5. The once-dominant market leader found itself on the brink of bankruptcy. What happened? Blame it on change, or—rather—on Xerox's failure to adapt to its rapidly changing marketing environment. The world was quickly going digital but Xerox hadn't kept up.

In the new digital environment, Xerox customers no longer relied on the company's flagship products—stand-alone copiers—to share information and documents. Rather than pumping out and distributing stacks of black-and-white copies, they created digital documents and shared them electronically. Or they popped out copies on their nearby networked printer. On a broader level, while Xerox was busy perfecting copy machines, customers were looking for more sophisticated "document management solutions." They wanted systems that would let them scan documents in Frankfurt, weave them into colorful, customized showpieces in San Francisco, and print them on demand in London—altering for American spelling.

As digital technology changed, so did Xerox's customers and competitors. Instead of selling copiers to equipment purchasing managers, Xerox found itself trying to develop and sell document management systems to high-level information technology managers. And instead of competing head-on with Japanese copy machine competitors such as Sharp, Canon, and Ricoh, Xerox was now squaring off against information technology companies such as HP and IBM.

Xerox's large and long-respected sales force—made up of those guys in the toner-stained shirts trained to sell and repair copy machines—simply wasn't equipped to deal effectively in the brave new world of digital document solutions. Xerox, the iconic "copier company," just wasn't cutting it in the new digital environment. Increasingly, Xerox found itself occupying the dusty and dying "copy machine" corner of the analog office.

Since those dark days on the brink, however, Xerox has rethought, redefined, and reinvented itself. The company has undergone a remarkable transformation. Xerox no longer defines itself as a "copier company." In fact, it doesn't even make stand-alone copiers anymore. Instead, Xerox bills itself as "the world's leading document-management technology and services enterprise." Xerox's newly minted mission is to help companies and people "be smarter about their documents." Says the company in a recent annual report company's image.

Xerox's new brand logo better fits the changing digital environment, helping to complete the transformation of the

Documenting any communication used to mean committing it to paper, getting it down in xerox S)

black and white. Now communication is generally scanned, sent, searched, archived, merged, and personalized—often in color. It can move back and forth, many times, from physical to digital. So when we say our mission is to help people be smarter about their documents, it really means giving them a range of tools and techniques to capture, organize, facilitate, and enhance how they communicate. In any form. To an audience of one or many millions.

The Xerox transformation started with a new focus on the customer. Before developing new products, Xerox researchers held seemingly endless customer focus groups. Xerox's Chief Technology Officer, Sophie Vandebroek, calls this "dreaming with the customer." The goal, she argues, is "involving experts who know the technology with customers who know the pain points. . . . Ultimately innovation is about delighting the customer." Xerox even employed anthropologists, ethnographers, sociologists, and psychologists—what it calls "work-practice specialists"—to spend time with customers, understand their problems, and help develop customer-focused solutions. The new Xerox believes that understanding customers is just as important as understanding technology.

As a result, the Xerox now offers a broad portfolio of customer-focused products, software, and services that help its customers manage documents and information. Xerox has introduced 100 innovative new products in the last three years. It now offers digital products and systems ranging from network printers and multifunction devices to color printing and publishing systems, digital presses, and "book factories." It also offers an impressive array of consulting and outsourcing services that help businesses develop online document archives, operate in-house print shops or mailrooms, analyze how employees can most efficiently share documents and knowledge, and build Web-based processes for personalizing direct mail, invoices, and brochures.

Now that Xerox has transformed its business, it's setting out to transform its image as well. Befitting its new identity, Xerox recently unveiled a new brand logo.

Xerox recently retired the staid red capital X and block-lettered XEROX that has dominated its logo for 40 years. In its place is "a brand identity that reflects the Xerox of today." The new brand logo consists of a bright red lowercase "xerox" that sits alongside a red sphere sketched with lines that link to form a stylized X. Xerox chose a ball to suggest forward movement and a holistic company, and to reflect the company's connection to customers, partners, industry, and innovation. The logo retains the good things that Xerox stands for (dependability and stability), jettisons the not-so-nice (formal, somewhat stodgy), and, most importantly, adds in such attributes as modern, innovative, and flexible.

Like the new Xerox, the new brand logo better fits the chang ing digital environment. For example, the ball is designed to be animated easily for use in multimedia formats, particularly in messages that can be beamed to handheld devices. Xerox settled on lowercase letters

Xerox invented photocopying and for decades flat-out dominated the industry it had created. But Xerox's harrowing experience provides a cautionary tale of what can happen when a company—even a dominant market leader—fails to adapt to its changing marketing environment.

Xerox CEO Anne Mulcahy sums things up this way: "We have transformed Xerox into a business that connects closely with customers in a content-rich digital marketplace. Our new brand reflects who we are, the markets we serve, and the innovation that differentiates us in our industry. We have expanded into new markets, created new businesses, acquired new capabilities, developed technologies that launched new industries—to ensure we make it easier, faster, and less costly for our customers to share information." A major Xerox customer agrees: "From the outside looking in, I've watched Xerox transition its business from a copier and printer company to a true partner in helping companies better manage information—whether it's digital, paper, or both. Changing the brand is the next logical step. Now the face of Xerox matches the tech savvy, innovative company Xerox is today."

Thus, Xerox isn't an old, fusty copier company anymore. And thanks to a truly remarkable turnaround, Xerox is once again growing and profitable. But the message remains clear. Even the most dominant companies can be vulnerable to the often turbulent and changing marketing environment. Companies that understand and adapt well to their environments can thrive. Those that don't risk their very survival.1

lake a smart printer; Transcontinental Inc. Add relevant data to a catalog fun using Xerox digital technology and their client, Reader's Digest Canada, has 7A% more sales. There's a new way to look at it.

digital growth:

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because they seemed friendlier, and on a deeper red and a thicker font to stand out better on the Web and on high-definition television. Xerox thinks that the new logo and supporting marketing campaign will help to complete the transformation of the company's image.

Xerox has rethought, redefined, and reinvented itself. The company now "connects closely with customers in a content-rich digital marketplace."

Tronscijntinentcs! inc. though!; ö digit«! stint söUitioo technology, personoîasd (S'ect moil »«ra «tested to test caufá ochievs o response breaktíwough for Reoáe<'-> Gigs?«, one oí' th«> worfrf's most stK.cessiui direct mas.«««. A calí to the digital experts from the Xerox Irl Lofe möf« thu« preved ífiem rigírt. Using o Stalef's Digest «otabas® and Xerox digital printing lake a smart printer; Transcontinental Inc. Add relevant data to a catalog fun using Xerox digital technology and their client, Reader's Digest Canada, has 7A% more sales. There's a new way to look at it.

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Responses

  • ashton reid
    How to adapt the change in market enviroment xerox?
    8 years ago
  • sarah
    How xerox campany undergone aremarkable transformation?
    5 years ago
  • abbondanzio
    WHY Xerox found itself in brink of bankruptcy ?
    5 years ago
  • Bruno Cunningham
    How xerox company undergone a remarkable transformation?
    5 years ago
  • Emmie
    How xerox campany undergonearemarkable transformation?
    5 years ago
  • Larry
    What makes xerox to undergone remarkable transformation after all those dark days?
    4 years ago
  • Sandra
    What make xerox to undergone remarkable transformation after all those dark days?
    4 years ago
  • obo
    Why xerox found itself in brinks?
    3 years ago

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