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THE FUTURE OF THE FUTURE OF MARKETINGMARKETING

Sunarto Prayitno

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ContentsContents1.1. The Future of MarketingThe Future of Marketing

2.2. Marketing Strategic TransitionMarketing Strategic Transition

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1. The Future of 1. The Future of MarketingMarketing

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The Future of MarketingThe Future of MarketingCor Molenaar, 2002Cor Molenaar, 2002

CustomersCustomers now want you to remember who now want you to remember who they are, understand their needs and they are, understand their needs and provide them with a specific product to provide them with a specific product to meet these needs.meet these needs.

The internetThe internet has changed the way has changed the way customers think forever.customers think forever.

‘‘This lecture’This lecture’ will help you to build your will help you to build your marketing strategy to attract, retain and marketing strategy to attract, retain and grow profitable customers into the future.grow profitable customers into the future.

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Leo Burnett Company, Leo Burnett Company, Inc.Inc.

Richard Fizdale, Chairman and CEORichard Fizdale, Chairman and CEO ‘‘The New Marketing Paradigm: IMC’The New Marketing Paradigm: IMC’ could be could be the most important book on marketing you the most important book on marketing you will ever read. The authors recognize (Don E. will ever read. The authors recognize (Don E. Schultz, et al., 1993) that Schultz, et al., 1993) that the mass market is the mass market is deaddead..The old assumptions, strategies, and tactics The old assumptions, strategies, and tactics for reaching abroad base of people with a for reaching abroad base of people with a single selling message delivered by single selling message delivered by mass mass media media areare no longer valid no longer valid. . TelevisionTelevision, once of the greatest mass , once of the greatest mass communications vehicle, is communications vehicle, is impotentimpotent. . The The databasedatabase will prove to be a will prove to be a more powerful more powerful marketing toolmarketing tool than television than television everever was. was.

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Global Building BlocksGlobal Building BlocksCommunicating Globally, Don E. Schultz et al., Communicating Globally, Don E. Schultz et al.,

20002000 The four major interrelated elements or building The four major interrelated elements or building

blocks are driving changes in the market place blocks are driving changes in the market place and thus marketing and marketing and thus marketing and marketing communications:communications:

DigitalizationDigitalizationInformation TechnologyInformation Technology

Intellectual PropertyIntellectual PropertyCommunication SystemsCommunication Systems

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DigitalizationDigitalizationThe ability to convert almost all types of The ability to convert almost all types of knowledge, information, and materials into knowledge, information, and materials into 1s and 0s manipulate those digits through 1s and 0s manipulate those digits through computers and electronic systems has computers and electronic systems has literally changed the world.literally changed the world.

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Information TechnologyInformation TechnologyBy By information technologyinformation technology we mean all we mean all those devices, techniques, and capabilities those devices, techniques, and capabilities that allow human knowledge, data, or that allow human knowledge, data, or experience to be transferred quickly and experience to be transferred quickly and easily between organizations or individuals easily between organizations or individuals around the world.around the world.

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Intellectual PropertyIntellectual PropertyHistorically, nations, business Historically, nations, business organizations, and individuals have been organizations, and individuals have been valued on the basis of their tangible assets valued on the basis of their tangible assets – raw materials, land, factories and – raw materials, land, factories and buildings, and even cash and precious buildings, and even cash and precious metals.metals.

Today the new wealth is knowledge, Today the new wealth is knowledge, experience, understanding, and experience, understanding, and capabilities.capabilities.

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Communication SystemsCommunication SystemsHistorically, communication systems have been Historically, communication systems have been linear, developed, organized, and delivered from linear, developed, organized, and delivered from a single source, whether that was a newspaper, a a single source, whether that was a newspaper, a radio or television station, or a magazine, to radio or television station, or a magazine, to masses of listeners or readers or viewers.masses of listeners or readers or viewers.

Communication systems, however, have changed Communication systems, however, have changed dramatically in the last few years. In addition, dramatically in the last few years. In addition, many form of media have become interactive; many form of media have become interactive; that is audience can be both receivers and that is audience can be both receivers and senders of messages and information.senders of messages and information.

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Evolving Mobile Business Model- Depends on Customer Needs

VoiceVoice

• Voice centric• Revenue from

access• Time based

charging• Value add from

voice mail andSMS

• New revenuestream from mobiledata

• Tapping into mobileI nternet access viaWAP and GPRS

• Packet data -always connected &different chargingscheme

• Channel for m-commerce

• De-aggregation of valuechain

• Re-distribution ofrevenue

• Multimedia/ high datarate services andcontents delivery - massmarket

• Value from thepersonalised channelwith location info

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2020

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Knicks 101Knicks 101Knicks 101

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Traditional Value SystemTraditional Value SystemStrong leadership.Strong leadership.

Tendency to be thrifty and moderate.Tendency to be thrifty and moderate.Zeal for education.Zeal for education.

Interpersonal relation emulation family Interpersonal relation emulation family relationship.relationship.Cooperation.Cooperation.

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New Value SystemNew Value SystemRule by the law.Rule by the law.

Social diversification.Social diversification.Democracy.Democracy.

Individualism.Individualism.Materialism.Materialism.

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Consumer Behaviour Consumer Behaviour TransitionTransition

Traditional Traditional New Value New ValueValue SystemValue System System System Change ofChange of

Life-StyleLife-Style

Economic StatusEconomic Status

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The MTV Generation

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The MTV Generation

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The MTV Generation

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The Life-style TrendThe Life-style TrendConvenient TrendConvenient Trend

Quality TrendQuality Trend

Personality TrendPersonality Trend

Health/natural TrendHealth/natural Trend

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2. Marketing Strategic 2. Marketing Strategic TransitionTransition

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Market StructureMarket Structure

The Manufacturer-driven marketplace.The Manufacturer-driven marketplace.

The Distribution-driven marketplace.The Distribution-driven marketplace.

The interactive marketplace.The interactive marketplace.

The global marketplace.The global marketplace.

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The Manufacturer-driven The Manufacturer-driven MarketplaceMarketplace

Sellers brought their goods and services to the Sellers brought their goods and services to the marketplace, where buyers come in search of the marketplace, where buyers come in search of the thinks they needed.thinks they needed.Pricing, distribution, and marketing Pricing, distribution, and marketing communication occurred on the spot and communication occurred on the spot and instantaneously.instantaneously.Because the manufacturer or seller controlled the Because the manufacturer or seller controlled the supply of product and services, it also exerted supply of product and services, it also exerted control over the marketplace.control over the marketplace.Indeed, in these simple buyer-seller relationships, Indeed, in these simple buyer-seller relationships, sellers always control the four major power sellers always control the four major power elements in the marketplace.elements in the marketplace.

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The Distribution-driven The Distribution-driven MarketplaceMarketplace

This has come primarily as the result of retailers, This has come primarily as the result of retailers, distributors, wholesalers, or others form of distributors, wholesalers, or others form of channel organizations gaining control of the four channel organizations gaining control of the four marketplace building blocks.marketplace building blocks.

It is now in the center of the system. From that It is now in the center of the system. From that central location channels control marketplace central location channels control marketplace power.power.

That is, channels now dominate sellers and That is, channels now dominate sellers and buyers.buyers.

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The Interactive MarketplaceThe Interactive MarketplaceThe basic structure of this marketplace began to The basic structure of this marketplace began to develop in the early 1990s with the growth and develop in the early 1990s with the growth and expansion of various forms of electronic expansion of various forms of electronic communication such as the Internet, the communication such as the Internet, the commercialization of the World Wide Web, and commercialization of the World Wide Web, and the develop of E-commerce.the develop of E-commerce.This new marketplace will be radically different This new marketplace will be radically different from those that have gone before.from those that have gone before.Most important, it will, for the first time, put Most important, it will, for the first time, put marketplace power in the hands of consumers marketplace power in the hands of consumers rather than with the traditional producers or rather than with the traditional producers or channels.channels.

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The Global MarketplaceThe Global MarketplaceMany organizations may have created cross-Many organizations may have created cross-border production, distribution, and marketing border production, distribution, and marketing systems that they are currently using to serve systems that they are currently using to serve some clients.some clients.In marketing communication, typically, they have In marketing communication, typically, they have centralized communication development with one centralized communication development with one headquarters group and pared the agency list to headquarters group and pared the agency list to one or two global suppliers.one or two global suppliers.Through those efforts they have created what Through those efforts they have created what they call “global advertising campaigns”, they call “global advertising campaigns”, generally based on some type of “one sight, one generally based on some type of “one sight, one sound” marketing communication approach.sound” marketing communication approach.

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The Global MarketplaceThe Global MarketplaceIn the true sense of global marketing In the true sense of global marketing communication, these companies have not yet communication, these companies have not yet moved into many of the realms of marketing and moved into many of the realms of marketing and communication that we believe will be critical.communication that we believe will be critical.

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The Global MarketplaceThe Global MarketplaceThose include:Those include:

1.1. Using an Using an outside-in approachoutside-in approach, that is, , that is, identifying and valuing customers and identifying and valuing customers and prospects that the organization is able to prospects that the organization is able to serve.serve.

2.2. Allocating Allocating finite corporate resourcesfinite corporate resources against the most important customers and against the most important customers and determining how much and where to invest determining how much and where to invest those resources.those resources.

3.3. Finding Finding new ways to balancenew ways to balance the the improvement of shareholder returns with improvement of shareholder returns with services to customers on an ongoing basis.services to customers on an ongoing basis.

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The Global MarketplaceThe Global Marketplace4. Building ongoing 4. Building ongoing relationshipsrelationships with with

current and prospective customers that current and prospective customers that provide benefits to both parties.provide benefits to both parties.

5. Totally 5. Totally integrating the marketing and integrating the marketing and marketing communication activitiesmarketing communication activities of of the organization, both internally and the organization, both internally and externally, to create ongoing, useful, externally, to create ongoing, useful, interactive communication systems that interactive communication systems that bring the organization and its customers bring the organization and its customers closer together.closer together.

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HistoricalMarketplace

Marketer

Information

Channel

Media

Customer

Marketing Diagonal

Mktr Mktr Mktr

Channel Information

Media

Customer

Current Marketplace

Mktr Mktr Mktr

Channel Channel

Media Media Media

Information

Customer

Twenty-First-Century Marketplace

Source: Don E. Schultz & Beth E. Barnes, Strategic Brand Communication Campaigns, NTC Business Book, 1999.

Marketing Diagonal

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Marketing StrategicMarketing StrategicBasic DesignBasic Design

SegmentationSegmentation

TargetingTargeting

PositioningPositioning

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Moving from the 4Ps to Moving from the 4Ps to the 4Csthe 4Cs

Inside-Out Focus:Inside-Out Focus: Outside-In Focus:Outside-In Focus:

ProductProduct CustomerCustomerPricePrice CostCostPlacePlace ConvenienceConveniencePromotionPromotionCommunicationCommunication

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Marketing Strategic Marketing Strategic TransitionTransition

From:From: To:To:One-way tellingOne-way telling Two-way selling Two-way selling

Advertiser’s choice Consumer’s choiceAdvertiser’s choice Consumer’s choice

Consumer as target Consumer as guestConsumer as target Consumer as guest

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What is Internet What is Internet Marketing? Marketing?

Internet marketing is the process of building and Internet marketing is the process of building and maintaining customer relationships through maintaining customer relationships through online activities to facilitate the exchange of online activities to facilitate the exchange of ideas, products, and services that satisfy the ideas, products, and services that satisfy the goals of both parties.goals of both parties.

(Dictionary of Marketing Terms, 2000)(Dictionary of Marketing Terms, 2000)