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By Peter F. Drucker

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Example text

Sears, further, has always looked upon its market as homogeneous. Sears has not been bothered by the fact that minority segments of the market were not its customers. Neither the very poor nor the very rich shop at Sears. But it has taken for granted that the bulk of the population buys the same . merchandise, considers the same things of value, and altogether shares a common economic profile and a common economic psychology. This may no longer be true. There are signs that the American market is fragmenting into a number of big segments with significant differences in buying behavior and economic values between them.

Facilities and equipment are in place. Capital has been invested and has to be serviced. People are employed and are in specific jobs, and so on. The administrative job of the manager is to optimize the yield from these resources. This, we are usually told, especially by economists, means efficiency, that is, doing better what is already being done. It means focus on costs. But the optimizing approach should focus on effectiveness. It focuses on opportunities to produce revenue, to create markets, and to change the economic characteristics of existing products and markets.

The emphasis has steadily shifted toward a long-range strategy which anticipates what tomorrow’s American family will be and what it will require, and then designs and develops the appropriate products or services. S:, practicing what most manufacturing businesses so far only preach, that is, the total marketing approach. To this marketing strategy, focused on creating the sources of supply rather than on selling products to the public, Sears owes both its tremendous growth in sales and its profitability.

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