SHIFTS IN MARKETING MANAGEMENT
A number of important trends and forces are evolving a new set of beliefs and practices on the part of business firms. Marketers are fundamentally rethinking their philosophies, concepts, and tools. There are about 14 major shifts in marketing management that smart companies have been making in the 21st Century. Successful companies will be those who can keep their marketing changing with changes in their marketplaceâ€”and market space.
From Marketing does the Marketing to Everyone does the marketing:
Companies generally establish a marketing department to be responsible for creating and delivering customer value. But as the late David Packard of Hewlett-Packard observed, â€œMarketing is far too important too leave to the marketing department.â€? Companies now know that marketing is not done only by marketing, sales, and consumer support personnel; every employee has an impact on the customer and must see the customer as the source of the companyâ€™s prosperity. Consequently, companies are beginning to emphasize interdepartmental teamwork to manage key processes. More emphasis is also being placed on the smooth management of core business processes, such as new-product realization, customer acquisition and retention, and order fulfillment.
From Organizing By Product Units To Organizing By Customer Segments:
Some companies are now switching from being solely product-centered with product managers and product divisions to manage them to being more customer-segment-centered. In late 1999, Royal Bank of Canada reorganized itself around customer segments, not products or territories. By studying these segments carefully, Royal Bank developed a number of new profit-generating products and services such as first mortgages and estate settlements. As a result, revenues increased by $1 billion over the next three years and the stock price rose 100% in the midst of a stagnant bear market.
From Making Everything To Buying More Goods And Services from Outside:
More companies are choosing to own brands rather than physical assets. Companies are also increasingly subcontracting activities to outsourcing firms. Their maxim: Outsource those activities that others can do more cheaply and retain core activities.
From Using Many Suppliers To Working With Fewer Suppliers in a â€œPartnershipâ€? :
Companies are deepening partnering arrangements with key suppliers and distributors. Such companies have shifted from thinking of intermediaries as customers to treating them as partners in delivering value to final customers.
From Relying On Old Market Positions To Uncovering New Ones:
In highly competitive marketplaces, companies must always be moving forward with marketing programs, innovating products and services, and staying in touch with customer needs. Companies must always be seeking new advantage rather than just relying on their past strengths.
From Emphasizing Tangible Assets to Emphasizing Intangible Assets:
Companies are recognizing that much of their market value comes from intangible assets, particularly their brands, customer base, employees, distributor & supplier relations, and intellectual capital.
From Building Brands Through Advertising to Building Brands through Performance and Integrated Communications:
Marketers are moving from an over reliance on one communication tool such as advertising or sales force to blending several tools to deliver a consistent brand image to customers at every brand contact.
From Attracting Customers Through Stores and Salespeople To Making Products Available Online.
Consumers can access pictures of products, read the specs, shop among online vendors for the best prices and terms, and click to order and pay. Business-to-Business purchasing is growing fast on the Internet. Personal selling can increasingly be conducted electronically, with buyer and seller seeing each other on their computer screens in real time.
From Selling To Everyone To Trying To Be The Best Firm Serving Well-Defined Target Markets:
Target marketing is being facilitated by the proliferation of special-interest magazines, TV channels, and Internet new groups. Companies are also making substantial investments in information systems as the key to lowering costs and gaining a competitive edge. They are assembling information about individual customersâ€™ purchases, preferences, demographics, and profitability.
From Focusing On Profitable Transactions To Focusing On Customer Lifetime Value:
Companies normally would aim to make a profit on each transaction. Now companies are focusing on their most profitable customers, products, and channels. They estimate individual customer lifetime value and design market offerings and prices to make a profit over the customerâ€™s lifetime. Companies now are placing much more emphasis on customer retention. Attracting a new customer may cost five times as much as doing a good job to retain existing customer.
From A Focus On Gaining Market Share To A Focus On Building Customer Share:
A bank aims to increase its share of the customerâ€™s wallet; the supermarket aims to capture a larger share of the customerâ€™s â€œstomach.â€? Companies build customer share by offering a larger variety of goods to existing customers. They train their employees in cross-selling and up-selling.
From Being Local To Being â€œGlocalâ€?â€”Both Global and Local:
Firms are adopting a combination of centralization and decentralization to better balance local adaptation and global standardization. The goal is to encourage more initiative and â€œentrepreneurshipâ€? at the local level, while preserving the necessary global guidelines and standards.
From Focusing on the Financial Scorecard To Focusing On the Marketing Scorecard:
Top management is going beyond sales revenue alone to examine the marketing scorecard to interpret what is happening to market share, customer loss rate, customer satisfaction, product quality, and other measures. They know that changes in marketing indicators predict changes in financial results.
From Focusing On Shareholders To Focusing On Stakeholders:
Top management respects the importance of creating co-prosperity among all business partners and customers. These managers develop policies and strategies to balance the returns to all the key stakeholders.
Marketing shifts are a never ending process and the firms must be alert enough to implement the shifts before their competitors can do the same.