Current Marketing Issues Seminar …its defining attributes, concepts & emergent ramifications …

Current Marketing Issues Seminar

…its defining attributes, concepts & emergent ramifications …

2nites Mission: What “it” is… Who-saw-what coming-

when… “Its” defining dimensions…

& their implications…. “Its” Ramifications:

New Rules for Organization Structure & Management

New Business ModelsNeed for New Marketing

Skills & Strategies..

What “it” is… Who-saw-what coming-

when… “Its” defining dimensions…

& their implications…. “Its” Ramifications:


New Business ModelsNeed for New Marketing

Skills & Strategies..

“There’s a new economy out there – and it looks nothing like the old one”

January 3, 2000, page S1

“The new economy is not just a dot.com thing.

It’s not just about high tech …computers or microchips.

What it is about is new ways of doing things in every industry, every government.

It’s about speed, quality, flexibility, knowledge and networks. It will affect everything.”

(Collaborative Economics)

New Forces in the New Economy….

Over-capacity & hyper-competition.

Ascendant power of customers. Ascendant power of distributors

over manufacturers. Growth of digitalization & the

Internet as major sources of efficiency & profitability.

Proliferation of channels & media.

Globalization & global interdependence.

Mergers, alliances, large company bankruptcies

Over-capacity & hyper-competition.

Ascendant power of customers. Ascendant power of distributors

over manufacturers. Growth of digitalization & the

Internet as major sources of efficiency & profitability.

Proliferation of channels & media.

Globalization & global interdependence.

Mergers, alliances, large company bankruptcies

At Least Ten Key Differences

At Least Ten Key Differences

1. Tangible assets

2. Rigid-Vertical Org.

3. Protected markets

4. Competition

5. Distribution hierarchy

6. Rigid barriers

7. Standardization

8. Domestic

9. Prdt-Life Cycle=Years

10. Seller power

1. Tangible assets

2. Rigid-Vertical Org.

3. Protected markets

4. Competition

5. Distribution hierarchy

6. Rigid barriers

7. Standardization

8. Domestic

9. Prdt-Life Cycle=Years

10. Seller power

1. Intangible assets

2. Fluid & Modular

3. Open markets

4. Hypercompetition

5. Direct to customer

6. Flexible entry

7. Personalization

8. Global

9. PLC=months

10. Buyer power

1. Intangible assets

2. Fluid & Modular

3. Open markets

4. Hypercompetition

5. Direct to customer

6. Flexible entry

7. Personalization

8. Global

9. PLC=months

10. Buyer power

Old EconomyOld EconomyOld EconomyOld Economy New EconomyNew EconomyNew EconomyNew Economy

Old EconomyOld Economy – Manufacturing driven

New EconomyNew Economy – Information driven

0

25

50

75

100

’72 ’78 ’84 ’90 ’96 ’02 ’08

%%

IndustrialIndustrialEconomyEconomy

Source: Marvin Zonis & AssociatesSource: Marvin Zonis & Associates

U.S. GDP

New New “E”conomy“E”conomy

Standardization & Duplication Economies of scale Hierarchical -bureaucractic

Differentiation, customization Networks & speed-Economies of Scope Diversified -Adhocracy

… arising largely from new developments in the internet,

telecommunications and computer sectors.

-

Commercialization of the Internet

Until 1993-The GENERAL PRINCIPLE of Internet Use:

“NSFNET Program Backbone services are provided to support research and education in and among US research and education institutions and for private or personal communication incidental to such activities… Use for other purposes, including extensive use for private or personal business, is not acceptable.

1993- National Information Infrastructure Act is passed-- Internet commercialized

COMPUTERSHOSTS IN INTERNET (MILLONS)

5.000.000

20.000.000

25.000.000

25

20

15

10

5

01969 JUL.

1989SEP.1991

JUL.1992

OCT.1993

ENER.1995

ABR1996

FEB.1997

NOV.1997

MAR.1994

JUL.1995

SEP.1996

JUL.1997

130.0004

local ISP

companynetwork

regional ISP

routerserver

Seamless-Instant 24/7 global Connectivity

~10,000 GEOs, MEOs & LEOs

Enables an ever-increasing

Interdependent Interconnected Mobile Society

living in the Info-Bubble

As Machines emptied countryside...

& gave us factory-work in cities

Computers emptied factories

& gave us paper-work in offices

And the office work grew...

If there’s no document... nothing happens

Where industry had its products, administration has its documents

History of the Office: Office Machines http://inventors.about.com/library/inventors/bloffice.htm

•"914", the First Automatic Xerographic Machine (1959)

•The First Laser Printer for Computer Output (1978)

•Desktop Laser Printing (1984)

•"914", the First Automatic Xerographic Machine (1959)

•The First Laser Printer for Computer Output (1978)

•Desktop Laser Printing (1984)

The New Economy

A Knowledge EconomyBy 1990 -1/2

American workers are knowledge workers

Today -80%+ of new jobs are in information intensive sectors

A Knowledge EconomyBy 1990 -1/2

American workers are knowledge workers

Today -80%+ of new jobs are in information intensive sectors-5

5

15

25

35

45

55

65

75

1860 1990

% “Information-

Workers”

2%

50%

0%

10%

20%

30%

40%

50%

60%

70%

80%

%of GNP

1850 1950 2050

AgricultureManufacturingServices

W/ New Tech comes New Realities

Time becomes more important Decision-making accelerated- as

business processes automated

Space/Distance- less important, even meaningless Connectivity & virtuality renders

distance obsolete

Intangibles more valuable new value is applied information

(CRM,SCM)


when… “Its” defining dimensions…&

their implications…. “Its” Ramifications:


New Business ModelsNew Marketing Strategies






to knowledge based economy

to knowledge based economy

to primary focus on information gathering, analysis & marketing

to primary focus on information gathering, analysis & marketing

As early as 1969 Peter Drucker foresaw an “age of Discontinuity” w/ upcoming shifts:

From manufacturing based economy

From manufacturing based economy

From primary focus on engineering & manufacturing

From primary focus on engineering & manufacturing

Drucker, Peter F. The Age of Discontinuity. Harper & Row Publishers, Inc: New York, 1969.

In 1988 Drucker wrote “The Coming of the New Organization”

“by 2008 successful organizations “will be knowledge-based

… composed largely of specialists who direct … their own performance through organized feedback… from colleagues, customers & headquarters.”

1. Shift from a goods-producing to service economy

2. Be dominated by professional & technical class

3. Be knowledge driven4. & Future oriented

1. Shift from a goods-producing to service economy

2. Be dominated by professional & technical class

3. Be knowledge driven4. & Future oriented

In early ’70’s Daniel Bell foresaw coming post-industrial society-- that would:

Pre-Ind. Industrial Post-Ind.

Key Resource Land Machine Knowledge

Socio-locus Farm Corporation Lab

"Coming of Post-Industrial Society: A Venture in Social Forecasting; 1973

1980- Toffler’s 3rd Wave

First Wave ~8000BC Hunter Gatherer To Agricultural Age

Second Wave ~1750’sAgricultural Age To Industrial Age

Third Wave ~1950’sIndustrial Age To Information Age

1982 Naisbitt’s MegaTrends:Ten New Directions Transforming Our Lives

1. Industrial to Information Society

2. National to World Economy

3. Short to Long Term

4. Centralization to Decentralization

5. Institutional to Self Help

6. Representative to Participatory Democracy

7. Hierarchies to Networking

8. North to South

9. Either/or to Multiple Options

May 30, 1983 Vol. 121 No. 22

May 30, 1983 COVER STORY Technology has set off a scramble for jobs, profits and global markets Near the corner of Main and Walnut streets in the small town of Maynard, Mass., stands a massive complex of aged red-brick buildings. Within those walls, workers toiled amid clanging, churning machinery to produce carpets in the 1850s and Army blankets during two World Wars. But today the sturdy, old facade houses an entirely different enterprise. The noisy machines and grease-stained factory floor have given way to offices where engineers huddle over glowing oscilloscopes and secretaries peck quietly at word processors....

Tapscott’s Defining Dimensions of the New Economy

Knowledge Digitization Virtualization Molecularization Integration Disintermediation

Convergence Innovation Prosumption Immediacy Globalization Discordance

Strategy in the new economy Don Tapscott. Strategy & Leadership. Chicago: Nov/Dec 1997

Knowledge

“The new economy is:

a knowledge economy

based on human capital & networks”

Old EconomyOld Economy – Manufacturing driven

New EconomyNew Economy – Information driven

Buildings, tools & equipment are assets people are expenses

Buildings, tools & equipment are expenses people are assets & knowledgeable people greatest asset of all…

How many mfgg plants & office buildings does Microsoft own?

What is the value of all the equipment in its offices?

How much inventory does it have?

Microsoft’s real assets walk out the door every night…

Another Dimension to Consider:

Digitalization!Digitalization!Digitalization!Digitalization!11010010110100100100100100110001011010010110100100001001001100010110100101101001001001001001100010110100101101001001001001001100010110100101101001001001001001100010110100101101001001001001001100010110

The “Media Fusion” Bomb

Akin to energy generated by nuclear

fusion, communication power generated by

media fusion is formidable…

W/ digitalization all media become

translatable into each other –and

gives one ability to digitally mix all

media on a common palette…

The New Economy: Digitalization

A Digital EconomyOld information flow: atoms - paper

• Cash, checks, invoices, maps, photographs…

New information flow: bits• All things - done digitally

“Being Digital” (’95) is understanding the significance of...

The movement of compressed weightless bits of data/ informationTransmitted at speed of lightCombined seamlesslyRetrieved instantly, anywhere24/7 around globe

The movement of compressed weightless bits of data/ informationTransmitted at speed of lightCombined seamlesslyRetrieved instantly, anywhere24/7 around globe

Virtualization

The Virtual:Partner/

CommunityOffice/ CorporationStore/ Mall

The Virtual:Partner/

CommunityOffice/ CorporationStore/ Mall

““ As

info

rmat

ion

sh

ifts

fro

m a

nal

og

to

dig

ital

, A

s in

form

atio

n s

hif

ts f

rom

an

alo

g t

o d

igit

al,

ph

ysic

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hin

gs

can

bec

om

e vi

rtu

al…

ph

ysic

al t

hin

gs

can

bec

om

e vi

rtu

al…

Ch

an

gin

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he

Ch

an

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g t

he m

eta

bolism

meta

bolism

of

the

of

the

econ

om

y,

the t

yp

es o

f econ

om

y,

the t

yp

es o

f in

sti

tuti

on

s

insti

tuti

on

s

& r

ela

tion

sh

ips

& r

ela

tion

sh

ips

possib

le,

&

possib

le,

& n

atu

re

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re

of

econ

om

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vit

y its

elf

”of

econ

om

ic a

cti

vit

y its

elf

”

Entering the infosphere Journal of International Affairs ; New York; Spring 1998; Michael Vlahos

Molecularization

“The old corporation is being disaggregated

replaced by dynamic molecules & clusters of individuals which form the basis of economic

activity”

“The old corporation is being disaggregated

replaced by dynamic molecules & clusters of individuals which form the basis of economic

activity”

The knowledge worker (atom) forms working clusters/ molecules

The knowledge worker (atom) forms working clusters/ molecules

Integration & Internetworking

“The new economy is a networked economy, integrating molecules into clusters which network w/ others for the creation of wealth”

Enables small companies to

• Overcome advantages of large companies economies of scale & access to resources

• Avoid burdens Bureaucracy, hierarchy & inflexibility

“The new economy is a networked economy, integrating molecules into clusters which network w/ others for the creation of wealth”

Enables small companies to

• Overcome advantages of large companies economies of scale & access to resources

• Avoid burdens Bureaucracy, hierarchy & inflexibility

Disintermediation

Middleman functions …being eliminated thru digital networks

Musicians don't need recording companies

Airlines, Hotels don't need travel agents

Food Companies don’t need wholesalers

Middleman functions …being eliminated thru digital networks

Musicians don't need recording companies

Airlines, Hotels don't need travel agents

Food Companies don’t need wholesalers

30%

0%

20%

40%

50%

60%

70%

80%

90%

100%

Japan Britain United States

Mfgrs

Retailers

Wholesalers

Number of companies involved in each level of the food industry, % of total, 1993

Number of companies involved in each level of the food industry, % of total, 1993

Convergence

“ the dominant economic sector is

being created by three converging

industrieswhich, in turn, provide

the infrastructure for wealth creation by all sectors” - Tapscott.

“ the dominant economic sector is

being created by three converging

industrieswhich, in turn, provide

the infrastructure for wealth creation by all sectors” - Tapscott.

1

32

Over 100 years ago a technology convergence fueled a new economy

Steam Power

Mechanical Engineering

Material Sciences

The resulting Industrial Economy defined the business landscape for the 20th century

The resulting Industrial Economy defined the business landscape for the 20th century

Today, another technology convergence is fueling a new

economy

Computing Computing TechnologiesTechnologies

Communication Communication TechnologiesTechnologies

Content Content TechnologiesTechnologies

The resulting Techno/Info-sphere is re-defining the business landscape for the 21st

century

COMPUNICATIONS

COMPUNICATIONS

Innovation

“The new economy is an innovation-based economy.

…Obsolete your own products

The collapse of product life cycles• ‘96 Sony introduced 5000 new products• “No matter how good you are, you are

only 18 months away from failure”

“The new economy is an innovation-based economy.

…Obsolete your own products

The collapse of product life cycles• ‘96 Sony introduced 5000 new products• “No matter how good you are, you are

only 18 months away from failure”

ATTACK of the Cyber-Blob!

Every 18 months- double CPU power- for ½ the price (Moore’s Law)

Every 12 months double fiber network capacity for ½ the price

Every 9 months double wireless capacity for ½ the price

Every 18 months- double CPU power- for ½ the price (Moore’s Law)

Every 12 months double fiber network capacity for ½ the price

Every 9 months double wireless capacity for ½ the price

2nd Wave created situation where vast majority of food, goods n’ services destined for exchange (Sector B)

Virtually wiped out goods produced for self-consumption (Sector A)

Created civilization where almost no one– not even farmer was self-sufficient

2nd Wave created situation where vast majority of food, goods n’ services destined for exchange (Sector B)

Virtually wiped out goods produced for self-consumption (Sector A)

Created civilization where almost no one– not even farmer was self-sufficient

Dominant Economic Sector

1st Wave= Sector A

2nd Wave= Sector B

3rd Wave

Mixed

ProductionProduction Crafted/ for

Self Use

Mass/ for Exchange

Prosumption

Prosumption

3rd Wave Rise of PROSUMPTION:

1970’s few self service retail outlets nor tools, building materials, medical instruments sold to consumers

1980’s DIY explosion in full force

3rd wave characterized by massive growth of sector A

1970’s few self service retail outlets nor tools, building materials, medical instruments sold to consumers

1980’s DIY explosion in full force

3rd wave characterized by massive growth of sector A

1970 1980

Self-Serve Gas

8% 70%

Tools <30% >70%

PG ID 0 ~20 million

Prosumption

3RD Wave finds gap between consumers &

producers blurringCUSTOMERS INVOLVED IN PRODUCTION

PROCESS•Levi’s – Original Spin

•Levi’s – Original Spin

Customerization

CRAYON- http://www.crayon.net/

Chrysler - special order vehicles in 16 days

United Airlines – involved in design of Boeing 777

Delfield - involved in strategizing/ design of KFC Express outlets

CRAYON- http://www.crayon.net/

Chrysler - special order vehicles in 16 days

United Airlines – involved in design of Boeing 777

Delfield - involved in strategizing/ design of KFC Express outlets

Tapscott,

Immediacy Economy

The new economy is a real-time economy operating w/ speed of light rather than speed of the post office

OrganizationThe new enterprise is real-time enterprise, continuously & immediately adjusting to changing business conditions

TechnologyTechnology is applied to capture information online & to update information in real time.

In an economy based on bits Immediacy becomes a key driver

Product life cycles compressed:

From concept to production. In 1990, autos took 7 years; In

1997 < 2

From Introduction to Mass DiffusionNew products taken up

much more quickly

Product life cycles compressed:

From concept to production. In 1990, autos took 7 years; In

1997 < 2

From Introduction to Mass DiffusionNew products taken up

much more quickly

“In the old economy, an invention like Polaroid camera ensured revenue stream for decades.

Today(’97*), consumer electronic products have a typical lifespan of 2 months”

“In the old economy, an invention like Polaroid camera ensured revenue stream for decades.

Today(’97*), consumer electronic products have a typical lifespan of 2 months”

From Adoption to Obsolescence- a matter

of months

*Strategy in the new economy Don Tapscott. Strategy & Leadership. Chicago: Nov/Dec 1997

Acceleration Quiz

Q: Disney and Sony (respectively) produce and launch one new product every _________?

Three minutes for Disney.Twenty minutes for Sony.

Elizabeth Debold, What is Enlightenment?, March-May 2005

0 10 20 30 40 50 60 70 80 90

Electricity (1873)

Telephone (1876)

Car (1886)

Radio (1905)

Television (1926)

PC (1980)

Mobile Phone (1985)

Internet (1990)

Years

0 10 20 30 40 50 60 70 80 90

Electricity (1873)

Telephone (1876)

Car (1886)

Radio (1905)

Television (1926)

PC (1980)

Mobile Phone (1985)

Internet (1990)

Years

TIME to Reach 50% Diffusion

TIME to Reach 50% Diffusion

Market Adoption Sequence: Traditional and Internet Life Cycles

Source: Patel, McCarthy; 2000; Digital Transformation; Mc Graw Hill

Call me- anytime – anywhere…

0

100

200

300

400

500

600

700

800

900

1000

1997 1998 1999 2000 2001 2002 2003

Mobile Phones in Million

Twice as many cell vs. net users--

1,173,109,925-net users

2,168,433,600- cell users

most developed countries have today between 50% and 90% coverage of population w/ mobile phones

Twice as many cell vs. net users--

1,173,109,925-net users

2,168,433,600- cell users

most developed countries have today between 50% and 90% coverage of population w/ mobile phones

... Work has become Communication!... Work has become Communication!

From work dominated by machines & production-- to work dominated by people & conversation.

Going to work is to going meet....

Work, education & entertainment are mixed. Work goes on anywhere, anytime... we become nomads as technology becomes mobile

Bo Dahlbom: President of the Swedish Research Institute for Information Technology http://www.informatics.gu.se/

Globalization

“Borders are Becoming Meaningless”Work performed globally….

continuously….“The entire globe is now tied

together in a single electronic market moving at the speed of light. "There is no place to hide”

• Walter Wriston, Citicorp Chairman

Discord

As we stand on frontier of new economy, we see beginnings of a new political economy

Raises questions about:

power, privacy, access,

equity, quality of work life, quality of life in general,

and the future of the democratic process itself.

As we stand on frontier of new economy, we see beginnings of a new political economy

Raises questions about:

power, privacy, access,

equity, quality of work life, quality of life in general,

and the future of the democratic process itself.

The Old Company

A society of its own, a well organized center for production & distribution...

A well defined, autonomous organization, with its own goals, values, and quality control

“Organizations will still be critically important in the

world, but as ‘organizers,’ not

‘employers’!” — Charles Handy

““The organizations we created The organizations we created have become tyrants. They have have become tyrants. They have taken control… creating barriers taken control… creating barriers that hinder rather than help our that hinder rather than help our businesses. businesses. The lines that weThe lines that we drew on our neat drew on our neat organizational diagrams have organizational diagrams have turned into walls that no one turned into walls that no one can scale or penetrate or can scale or penetrate or even peer over.”even peer over.” —Frank Lekanne Deprez & —Frank Lekanne Deprez & RenRenéé Tissen, Tissen, Zero Space: Moving Beyond Organizational Zero Space: Moving Beyond Organizational Limits.Limits.

“Ninety percent of what we call

‘management’ consists of making

it difficult for people to get things done.”

– Peter Drucker

A Time of Transformation

Not simply…Networked technology

Not simply…Networked technology

But...Networked humans

using technology

But...Networked humans

using technology

“Ebusiness is about rebuilding the organization from the ground up. Most companies today are not built to exploit the Internet. Their business processes, their approvals, their hierarchies, the number of people they employ … all of that is wrong for running an ebusiness.” Ray Lane, Kleiner Perkins

The New CompanyOrganizational Transformation

From product to customer orientation

From hierarchies, processes and channels to ad-hoc networking

From info- control to cooperative communication

From in-house to out-source

From product to customer orientation

From hierarchies, processes and channels to ad-hoc networking

From info- control to cooperative communication

From in-house to out-source

• Not just automate production• Deploy expert systems

Must Make fundamental paradigm shift

TIME

Tech- Diffusion

Need- structural & philosophical organizational transformation

More than Adm. Process Improvement

…to fully integrate into new “Economy”… need

The ability to Network-

Find strategic business partners- global, flexible, competitive, alliances

ID & cultivate employee capabilities, information & knowledge mgt skills

“The key ingredients of success…

organizational learning knowledge sharing the continuous improvement of processes working in teams & high levels of customer service…

The glue that holds it together is empathy, trust, learning and loyalty”

Source: Competing in the Third Wave by Jeremy and Tony Hope

“Firms will not ‘manage the careers’ of their

employees. They will provide opportunities to enable the employee to

develop identity & adaptability &

thus be in charge of his or her own career.”

Old Economy Quantity & Quality of Product

Dictated by limitations:

Shelf –space

Spectrum –space

Inventory carrying costs

Mass-Media advertising costs

Dictated by limitations:

Shelf –space

Spectrum –space

Inventory carrying costs

Mass-Media advertising costs

Logic of Limitations:dictated that should appeal

to Lowest Common Denominator to maximize

economies of scale

Logic of Limitations: Lowest Common Denominator = Mass Appeal = Top Selling “Hit”

Changes in Promo Channels & Costs

<Changes in Supply Chain>

Traditional Supply Chain• Well-defined lock-step supply chain

Traditional Supply Chain• Well-defined lock-step supply chain

Today’s Supply Chain• New direct relationships are being established

Today’s Supply Chain• New direct relationships are being established

ConsumerAuthor Publisher Printer Wholesaler Retailer

ConsumerAuthor Publisher Printer Wholesaler Retailer

1

2

3

Changes Exposed the Myths of Mediocrity

Myths:

•Store inventories reflect what people want to buy

•Only established brands, media hits … sell

Myths:

•Store inventories reflect what people want to buy

•Only established brands, media hits … sell

“We sold more books today that we didn't sell at all

yesterday, than we sold today of all the books that did sell

yesterday.”Amazon employee quoted in Wikipedia

“We sold more books today that we didn't sell at all

yesterday, than we sold today of all the books that did sell

yesterday.”Amazon employee quoted in Wikipedia

Amazon= Prototype of the New Business Model

Amazon= Prototype of the New Business Model

TheThePhysicalPhysicalEnterprisEnterpris

ee

TheThePhysicalPhysicalEnterprisEnterpris

ee

Emerging Business ModelsEmerging Business Models

Business Is Driving ...Business Is Driving ...DeregulationDeregulationGlobalizationGlobalization

Core Competence CentricityCore Competence CentricityInnovationInnovation

SupplySupply

DemandDemandCustomers Are Demanding ...Customers Are Demanding ...

More ConvenienceMore ConvenienceNew ChannelsNew Channels

Hybrid ProductsHybrid ProductsLower Cost Lower Cost

Networking Is Accelerating...Networking Is Accelerating...CommunicationCommunication

CollaborationCollaborationCommerceCommerce

From Most Common From Most Common Denominator to Most Denominator to Most

Specialized AggregatorSpecialized Aggregator

New Business New Business Models are EmergingModels are Emerging

TheTheVirtualVirtual

EnterpriseEnterprise

TheTheVirtualVirtual

EnterpriseEnterprise

New Business Models BasicsNew Business Models Basics

Open & proprietary collaboration vs. ownership & exclusivity Open-source code; Licensing & Leveraging

Peer Production“Harnessing collective intelligence of users”

Proffering Long Tail InventoriesOffer everything to everyone rather than just

the best-selling to the mainstream

Open & proprietary collaboration vs. ownership & exclusivity Open-source code; Licensing & Leveraging

Peer Production“Harnessing collective intelligence of users”

Proffering Long Tail InventoriesOffer everything to everyone rather than just

the best-selling to the mainstream

Every single iTunes song has been bought at

least once..w/ a million+ song catalog. The iTunes Music Store features music

from all five major record labels + over 600 leading independent labels from around the world.

w/ more than 100 million songs downloaded and 70% market share of legal downloads

Thinking Small

to Get Big

Thinking Small

to Get Big

Any Industry where there is demand for/ availability of specialized products…. can &

will be influenced by …

The Long Tail

Top 10 1000’s

Sex

Mp3

Britney Spears

3%

97%

Excite QueryDistribution

10,000,000

Excite didn’t figure out how

to make a business out of

97% of our traffic volume

Google Did…

$150 bn anyone?

…Created an efficient marketplace for advertisers to reach SMALL audiences.

“Marketing Secrets for the New Economy:

Everything you thought you knew about marketing is

wrong!” The January 2000 cover of PC

Computing magazine

Career Competencies Needed by New E-Marketers…

Traditional Skills Sales mgt Advertising mgt Sales promotion

mgt Marketing

research Pricing

Traditional Skills Sales mgt Advertising mgt Sales promotion

mgt Marketing

research Pricing

PLUS: Customer relationship

management (CRM) Partner relationship

management (PRM) Marketing Resource Mgt.:

Database Mgt & Data-mining Lifetime Profitability

analysis by segment, customer, channel

Integrated marketing communications; Public relations -(including event & cause sponsorship, buzz marketing)

PLUS: Customer relationship

management (CRM) Partner relationship

management (PRM) Marketing Resource Mgt.:

Database Mgt & Data-mining Lifetime Profitability

analysis by segment, customer, channel

Integrated marketing communications; Public relations -(including event & cause sponsorship, buzz marketing)

Marketing in the New Economy

New Engage Sense Process Respond

New Engage Sense Process Respond

TraditionalTraditional Make Price Distribute Promote

TraditionalTraditional Make Price Distribute Promote

Exploit e-commerce & e-business- gain market by building superior information & communication systems.

Treat customers differently and appropriately. Build & use customer database to manage customer portfolio. Focus on customer lifetime value,

customer value mgt, customer share & customer profitability.

Build brands in new ways-- Shift promotion funds away from broad advertising toward more direct promotion.

Partner with your employees, customers, suppliers, and distributors for co-prosperity…

Marketing in the New Economy

TechnologyTechnology

StrategyStrategy

PeoplePeople

ProcessProcess

BusinessBusiness

BusinessBusiness

BusinessBusiness

BusinessBusiness

CustomerCustomer

CustomerCustomer

CustomerCustomer

CustomerCustomer

focus is on relationships with customers & business partners

Old Economy New EconomyObjective

Increasing Profitability

Not easy , costly –Knowing-Understanding customer time consuming

Easier, Less costlyCross selling, upselling strategies. CRM, 1 to 1

Keeping the profitable customer

Difficult to identify the profitable customer. Both the tools and the information for measuring profitability not developed

EasierProfitable customers are ID’d followed very closely.

Customer acquisition & maintenance

Customer churn expected and accepted

Focal point of marketing efforts; churn minimized & maintenance imperative

Attracting-competitors’ buyers

Not easyCustomers more loyal

Easier; Less costlyCustomers are less loyal

Value creation in New Economy begins w/ aligning key elements of the enterprise…

TechnologyTechnology

Internet-enabledInternet-enabledtechnologytechnology

ProcessProcess

MIS, MDSS & MIS, MDSS & “ “e” processese” processes

PeoplePeople

Information- Information- empoweredempoweredAd-hocracyAd-hocracy

StrategyStrategy

Customer-enlightenedCustomer-enlightened strategic intentstrategic intent

The New Economy Needs New Workers w/ New Mind Sets

A guide to surviving

thriving, and finding

meaning in a world rocked

by outsourcing &

computerization

Design/Core: 0Design/Elective: 1

Creativity/Core: 0Creativity/Elective: 4

Innovation/Core: 0Innovation/Elective: 6

15 “Leading

” Biz Schools

The New Economy Needs People w/ New Business Degrees

- Tom Peters (02.02.2005)

“The past few decades have belonged to a certain kind of person with a certain kind of mind —computer programmers who could crank code, lawyers who could craft contracts, MBAs who could crunch numbers.But the keys to the kingdom are changing hands. The future belongs to a very different kind of person with a very different kind of mind —creators, empathizers, pattern recognizers and meaning makers. These people—artists, inventors, designers, storytellers, .. big picture thinkers—will reap society’s richest rewards and share its greatest joys.” —Dan Pink, A Whole New Mind

Agriculture Age (farmers)Industrial Age (factory workers)Information Age (knowledge workers)Conceptual Age (creators & empathizers)

Sept. 5, 2005 Business Week

NEWNEWCULTURECULTURE

Thinking-Creatively…

NEWCirque du Soleil is a dramatic

rethinking of what a circus can be, with amazing

costumes, moving music, and beautiful gymnastics

NEWCirque du Soleil is a dramatic

rethinking of what a circus can be, with amazing

costumes, moving music, and beautiful gymnastics

OLDCircus Traditional animal acts, painted clowns, and

high-wire stunts make for a very tired form of

entertainment.

OLDCircus Traditional animal acts, painted clowns, and

high-wire stunts make for a very tired form of

entertainment.

OLDCotton Mop P&G studied the art of

cleaning in search of something better than a wet mop, which spreads as much dirt as it picks up NEW

Swiffer - a whole new way to clean--using electrostatic

attraction. A revolutionary dry mop is born

OLDRadio Same old,

same old ad-choked, pre-programmed music and talk, from big national chains.

NEWSirius-Subscriber

model brings a rich variety of content

via satellite to your car and your

handheld.

OLDThe '60s icon of the

ergonomic and eco-friendly

lifestyle, Birkenstock

needed a modern update.

NEWWith Birkis,

designers kept the core values and added new

models, including colorfulslip-ons

“At Sony we assume that all products of our competitors have basically the same technology, price, performance & features. Design is the only thing that differentiates one product from another in the marketplace.” Norio Ohga

OLD

Best Buy has crowded shelves, overwhelmingchoice, and standard sales pitches.

NEWThe Apple Store is spare, elegant, and appealingly

interactive—a hip place to be on a Sat. night.

OLDGrocery stores are

big, messy places where you go to

buy plastic-wrapped and hot-house grown fruits

and vegetables.

NEWWhole Foods is where you shop

for organic items and other healthy

stuff w/ Old market look &

feel

OLDGranola: More nutritious than the sugary

cereals of childhood, but you still needed a bowl, spoon, and milk

NEWPower bars: Can be eaten anywhere, any time,

and they're tailored to meet a variety of health concerns: low-fat, low-carb, for women.

OLDGolden Nugget

Casino: Las Vegas' early emphasis on gambling overshadowed amenities, entertainment, and atmosphere.

NEWLuxor Hotel and

Casino: Exotically themed hotels with elaborate décor and high-end restaurants have given Vegas added allure.

“The sun is setting on the Information Society …. As information and intelligence become the domain of computers, society will place more value on… what cannot be automated: emotion. Imagination, myth, ritual - the language of emotion - will affect everything from our purchasing decisions to how we work with others. Rolf Jensen, Copenhagen Institute for Future Studies -= The Dream Society: How the Coming Shift from Information to Imagination Will Transform Your Business

“If things seem under control, you’re just not

going fast enough.”

Mario Andretti

“If it works, it’s obsolete.”

—Marshall McLuhan

Industry Sectors

Sports/Event Marketing -4

Real Estate -5

Retail -2 ??

Oil & Gas -6

Accounting -4

Hospitality -4

Communications -4

Mgt/HR -4 Education/ Health Care -4

Logistics -4

Sports/Event Marketing -4

Real Estate -5

Retail -2 ??

Oil & Gas -6

Accounting -4

Hospitality -4

Communications -4

Mgt/HR -4 Education/ Health Care -4

Logistics -4

Trend Monitoring Other Useful Sites

www.iconoculture.com/

www.psfk.com/

www.trendhunter.com/

www.ubercool.com/

www.google.com/trends

HOW TO USE: Google~Trends

Best Resources -Socio-cultural Factors

www.trendwatching.com/

#1. Best resource for monitoring business applications of technological

developments …

www.springwise.com/

Current Marketing Issues Seminar …its defining attributes, concepts & emergent ramifications …

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