During my last trip to Taiwan, at the 2001 Taipei International Cycle Show I had the opportunity to visit with two of my long-standing business associates for a morning at a wonderful teahouse in Taichung. The conversation soon turned to the bicycle business and one of my friends went to a nearby bookshelf and came back with the February 1, 2001 issue of Common Wealth Magazine. He turned to an article that featured a joint interview with King Liu, Chairman and Tony Lo, President of Giant Manufacturing Company, Ltd. (GMC).

The Two-Sword Style: only the two-sword style will survive in the future. Keeping in mind that this is my own spin on the interpretation my friends made as they were kind enough to read through this article in English for me - I was stunned by the clarity of business insights that King Liu and Tony Lo shared in there interviews. The Two-Sword, or Two-Knife style refers to the two-swords carried by samurai in feudal Japan. King Liu and Tony Lo use the two-swords as symbols for manufacturing and marketing, and their warning or admonition that only the two-sword style will survive in the future is clearly explained as meaning only Taiwanese bicycle industry companies with manufacturing in one hand and marketing in the other hand will survive going forward.

Using China as the manufacturing sword to help Taiwan become the marketing sword. In concluding the interview, King Liu and Tony Lo observed that Taiwan is in position to be the R&D, administrative and marketing center for the global bicycle industry and China is in position to be the manufacturing center. I have underlined "is in position to be" because this implies that Taiwan is not yet the R&D, administrative and marketing center, and my own observation is that Taiwan is much further along at being the R&D and administrative center, and still has much further to go to become the marketing center. Above all, the Taiwan bicycle industry has to focus on how to use China as the manufacturing sword to help Taiwan become the marketing sword.

Marketing is as important as manufacturing to success. The emphasis that Giant Manufacturing Company puts on the two-sword business strategy is certainly carried out in the very successful reality of their annual growth and results. Giant now stands alone as the only financially viable global player in the bicycle industry - and they are making it clear that marketing is as important as manufacturing to their success.

Taiwan bicycle industry score: two out of three. Taiwan has a long-standing reputation as the most efficient source in the world for high quality bicycle products and its expertise in material handling, materials management and productivity is second to none in the global bicycle industry. The Taiwan Bicycle Industry R&D Center is testament to the leadership in this area as well. However, when it comes to marketing there are examples like Giant Manufacturing Company, who truly has mastered the two-sword style of business, but not many more. This leaves marketing as both a weakness and a huge opportunity.

Marketing is both a weakness and a huge opportunity for the Taiwan bicycle industry! A weakness because not enough companies in the Taiwan bicycle business have taken action to learn about and employ sound marketing techniques and methods, and accordingly are still vulnerable to attack from companies that are quicker to pick up the second sword, and use it! An opportunity because the Taiwan bicycle industry has already gotten to China before the American, European and Japanese bicycle industries, and in so doing has put itself in the best position to capitalize on China's growing prominence as the world's bicycle factory.

The time to begin the process of learning about marketing is now! The opportunity will wait for no company, and the time to take action to begin the process of understanding marketing is - well right now! This will be the first in a series of articles about understanding marketing where I hope to share some helpful information to get companies started in their development of reliable marketing techniques and methods.

The marketing function is not fully developed in most companies today. In his excellent college textbook, Marketing Management: analysis, planning, and control, Philip Kotler observes that the "marketing function is not fully developed in most companies today" and he list the following four reasons for this deficiency:

1. Recent origins of marketing. Marketing is a relatively new business discipline that is too often confused with one of its sub-functions, such as sales or advertising.

2. Hostility toward marketing. Marketing is normally resisted by vested interests in the company and must fight an uphill battle to establish its role, scope and authority.

3. Law of slow learning. Marketing passes through several stages of misconception as it grows in the company. In the typical company, marketing enlightenment grows slowly when it is not fully supported, and it takes years to build a well-functioning marketing organization.

4. Law of fast forgetting. Even when marketing has been supported, marketing principals tend to be forgotten with success, and executives have to be reminded of them periodically.

Marketing was invented in seventeenth century Japan! Peter F. Drucker, in his book Management: Tasks, Responsibilities, Practices, puts forward his believe that "Marketing was invented in Japan around 1650 by the first member of the Mitsui family to settle in Tokyo as a merchant and to open what might be called the first department store." The Giant analogy of the Two-Sword style of samurai in feudal Japan may be very historically correct!

Drucker goes on to suggest that marketing did not appear in the West until the middle of the nineteenth century at the International Harvester Company in the U.S. "The first man in the West to see marketing clearly as the unique and central function of the business enterprise, and the creation of a customer as the specific job of management, was Cyrus H. McCormick (1809-1884)," he notes.

The term marketing first appeared in U.S. college course titles in the early 1900s and marketing departments within business firms had their roots in the development of marketing research in the early twentieth century. In 1911 the Curtis Publishing Company installed the first marketing research department. Over the rest of the 20th century marketing has been adopted in whole or part by different industries, in different countries at different times.

What leads companies to suddenly want to embrace marketing? In his book Marketing Management: analysis, planning, and control, Philip Kotler says a sudden interest in marketing can be triggered by any of the following five circumstances:

1. Sales decline. This is the most common cause. Companies need marketing research to redesign products, to drive their product development and initiate innovative marketing programs.

2. Slow growth. Companies often reach the limits of their growth in their given industries and start to cast about for new markets. They recognize that they need marketing know-how if they are to successfully identify, evaluate, and select new market opportunities.

3. Changing buying patterns. Many companies are experiencing increasingly turbulent markets marked by rapidly changing customer wants. These companies must adopt a marketing orientation in order to keep producing value for the buyers.

4. Increasing competition. A complacent company may suddenly be attacked by a master marketer and forced to learn marketing to meet the challenge.

5. Increasing sales expenditures. A company's expenditures for advertising, sales promotion, marketing research, and customer service, may increase for no apparent reason. When this happens, management often decides to improve its organization and control of these marketing functions.

Marketing is identifying your customer prospects and determining how best to reach them. The biggest misunderstanding I hear and see continually is that marketing is sales or advertising. The truth is sales and advertising in all of their forms are just two of a number of important components or sub-functions of marketing. Marketing is the all-encompassing process of researching products, markets and competition, understanding and identifying target customers and tracking and understanding everything we possibly can about them, as well as identifying and utilizing the most effective methods for reaching, communicating and motivating them to purchase our products, including all forms and techniques of advertising, promotions, merchandising and sales. In simple terms, marketing is identifying your customer prospects and determining how best to reach them.

Marketing is about execution and tying together all the loose ends into one package. In the book Swoosh: The Unauthorized Story of Nike And the Men Who Played There, authors J. B. Strasser and Laurie Becklund tell the story of Nike signing the then unknown Michael Jordan in 1984 and for the first time the company having the opportunity "to tie together the athlete, the demand, and the concept to make a big splash in America". But Nike didn't have a Jordan specific product in development and worse yet, it was an organization made up of separate divisions that "had never worked simultaneously on the same coordinated project". Rob Strasser, Nike's senior marketing manager, was sitting in his office early one morning waiting for a meeting to start to discuss the Jordan opportunity, and the lack of coordination within the company, when "he could feel the bits and pieces of everything he'd learned over the years falling into place. Marketing was not just about ideas, Strasser realized, not even mainly about ideas. Marketing was about execution; about tying together all the loose ends into one package." That "package" became Air Jordan, and to make the concept a reality, Strasser effectively used marketing to coordinate product, sales, advertising, promotion, distribution and finance.

Marketing is not easy, but is essential to success and profitability in the future. Marketing is not easy and it is not a quick fix or silver bullet that will cure a company's problems and automatically set it on the road to prosperity. However, marketing has evolved from its early origins in Japan and the U.S. into a comprehensive philosophy for relating any organization, no matter where in the world it is located or what its size, dynamically to its markets. Marketing is a cornerstone of policy and practice in such global business organizations as General Electric, IBM and Giant Manufacturing Company. Large and small businesses everywhere in the world are beginning to appreciate the differences between selling and marketing and are organizing to do the latter. In my view, it is essential to future success and profitability that the Taiwan bicycle industry adopt the Two-Sword Business Strategy that makes marketing as important as manufacturing and fully integrates marketing into business organizations and operations.

In future columns I will cover Marketing Research, including determining research objectives and new research reports and products available on the U.S. market from the National Bicycle Dealers Association (NBDA), Marketing Planning, including developing a Marketing Plan, Product Planning and Development and Distribution Channels. For those of you who want to read ahead, I highly recommend Marketing Problem Solver by Cochrane Chase and Kenneth L. Barasch.

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