Page 262 - The Drucker Lectures

The Future of the Corporation III [ 243

to define what a market is. And those of you who have worked
in that field know that it’s not an easy thing to do. But it’s a very
critical thing to answer, “What is our market?” It is a make-or-
break answer. Suddenly, with the Internet, it is no longer ad-
equate. With the Internet, everything has become a local market.
Basically, there is no distance on the Internet. And so everything
is a local market.
Now let us go back to what the purpose of marketing is. And
there are two answers to it. These were arrived at about 50 years
ago by two people, quite independent of each other. One was
Ted Levitt at the Harvard Business School, and I was the other
one. To me, marketing was looking at the institution from the
customer’s end. But marketing is also a bag of techniques. And
you need both.
The original definition of marketing was “we make things, and
the customer buys what we make.” But that’s selling. That’s not
marketing. And this is still the way most businesses look at them-
selves. Marketing starts with: “What does the customer want?”
And this want is what is satisfied. All businesses preach this. But
very few practice it.
And now we have new questions, which are marketing ques-
tions. The first, for this institution of ours, is: “Is the Internet
just a distribution channel? Or is it its own market?” GM, for
one, has come to the conclusion that the Internet is just a distri-
bution channel. Even if orders come in over the Internet, a dealer
in the neighborhood then delivers the car. Now, considering that
automobiles are not particularly easy to ship around, this is an
intelligent answer. On the other hand, you have things that are
very movable, like books. And so for Amazon, the answer is that
the Internet is a market. And increasingly, organizations will
have to ask that question: Is the Internet a distribution channel,
or is it a separate business? Will it force us to change our theory
of the business altogether?