SMITH BRAIN TRUST – The introduction of cable television and, later, the Internet dramatically changed the way marketers operated. But now, there are new forces at play, and the times are changing once again. Three major forces – technological, socioeconomic and geopolitical – are altering everything we know about marketing, says Maryland Smith’s Roland Rust. Each force has its own implications that ultimately work toward deepening consumer relationships and the expansion of the service economy, says Rust, in new research published in the International Journal of Research in Marketing. Technological The continued pursuit of artificial intelligence and advancements in data analysis, for example, will affect how society will be structured, says Rust, Distinguished University Professor and David Bruce Smith Chair in Marketing at the University of Maryland’s Robert H. Smith School of Business. Improvements in AI increasingly mean that technological capital is fulfilling roles once filled by laborers. “Those who own the capital will come out very well while the laborers come out worse,” says Rust. “Much like around the turn of the 20th Century, when the farming, mining and steel mill jobs began disappearing, to a now much-reduced state, AI will cause a similar dislocation.” Many workers already see their jobs changing, and even consumers are increasingly using AI, as personal assistants like Alexa and Siri assume greater responsibility, Rust says. Related technological advancements, Rust says, are also bringing change. Digital marketing is enabling brands to personalize their messages and their products on an individualized basis. It’s something that is most highly effective for services, as opposed to goods, he says. “If we’re making a Chevrolet, for example, it’s really hard to make that car completely different for each person given the complexities of the manufacturing process,” says Rust. “But things happening online are transferred in bits, which are easy to change – and the result of this is that a lot of e-service becomes more personalized.” That kind of personalization requires a data-privacy tradeoff on the part of the consumer, however. “If you’re a customer and you don’t tell the service rep anything about yourself, they are unable to personalize the experience. But if you tell them everything about yourself, well then, you’ve just lost all of your privacy,” Rust says. Socioeconomic Diversity, discrimination and climate change are also driving change. The Black Lives Matter movement is changing the way people treat customers and other audiences, Rust says. Even well-established brands like Aunt Jemima, Uncle Ben’s and the Washington Football Team are finding that they need to be more conscious of the historical significance of their brand names and icons, he says. What was done 10 years ago may be unacceptable today. Geopolitical With respect to all of the big global issues, Rust says, marketing will be called on to alter the behavior of consumers and decision-makers to help drive needed change. Even rising concern about climate change is forcing many companies, especially energy companies, to balance their current profits against global sustainability, Rust says. “These are things that must be different moving forward, and marketing will play an important role in persuading people and changing their minds,” says Rust. “For example, with the pandemic, we already have a difficult problem on our hands and without successful persuasion, undesirable behaviors may persist.” The world is going to continue to change rapidly, Rust says, and those who want to get ahead must be attentive and willing to adapt. “The most important thing is realizing the big picture. People have to take a step back and consider the big trends that are impacting all of us,” says Rust. “The successful people will be the ones who look at these trends and think about how their business will be affected, and consequently how it must change.” Read more: "The Future of Marketing" is published in the International Journal of Research in Marketing.
GET SMITH BRAIN TRUST DELIVERED SUBSCRIBE NOW 2.What brands and products do you feel successfully speak to you and effectively target your age group? Why? Which ones do not? What could they do better?
In today’s business environment, marketplace is continuously changing. Hence, the marketers should join and respond to several important developments, which are occurring in the market. Small and large businesses are impacted by the internal and external environment factors. These environmental factors that the businesses have no control over are taken into consideration while making marketing decisions for creating a correct representation of where the organization stands in marketplace. Present marketplace is in more constant situation of changes than in past decades. With this transformation, there will be some new challenges, opportunities and development of new models and frameworks. The term new market realities state the changes during last 10 years and it is given by Kotler and Keller. The New Marketing Realities is the computerized improvements, creative and innovative and categorized small scale media and markets, which the service the local influent targeted, market nets[1]. There are various forces, which are driving the new marketing realities. These forces have created new marketing opportunities, behaviors and challenges for the market and its people. Due to these forces, the market place today is very different, because it has resulted several new company and consumer capabilities. It has transformed the marketing management significantly. To deal with the effect of this, the organizations look for the right balance of effective methods with discovering new and innovative approaches to attain the marketing excellence[2].  Figure 1: New Market Realities Three of these forces, which are driving new marketing realities, are stated below; GlobalizationGlobalization is a primary process of integration and interaction among companies, people and governments of different countries. It is a force or process that is driven by global trade and investment and supported by advanced information technology. In today’s marketplace, several organizations have become dissatisfied with the sales and revenues on domestic level. So, they are making efforts to expand their business in international markets. There are various factors, like; technology advances in the shipping, transportation and communication, which have made it easier for these organizations to expand business and market in, and customers to purchase from, almost any nation all over the world[3]. Traveling to international countries and markets has grown continuously, because most of the people work and operate their business in other countries. Figure 2: Forces driving New Marketing Realities It is creating different market realities and company capabilities. Globalization is the major force that is providing various new opportunities to the companies, like; business expansion, partnership with international organizations etc. It will improve the market geographical reach for promoting the products and services worldwide. Apart from these opportunities, the companies may face some challenges and risks, like; legal risks, political risks, entry barriers etc. TechnologyDevelopment of technology is one of the major forces that are driving new realities in today’s market. There is a significant revolution in the digital technology. This revolution in technology has developed an Information Era, which commits to direct to more precise levels of manufacturing and production, more targeted interactions and more appropriate and competitive pricing. In the terms of marketing, technology is defined as a medium that assists the marketers circulate his/her deliverables to the end users. The best result of bringing in technology has been innovation[4]. This technology has been vibrant throughout right from the television advertisement to internet marketing. Technology is the major factor that assists the organization and marketers in generating new company capabilities like; they can utilize the internet as a most strong channel for information and sales. They can gather the information about the customers, prospects, markets and competitors. Furthermore, these marketers can tap into social media to intensify their brand message. In today’s business environment, social responsibility is another force that is driving new marketing realities, because people are becoming very concerned about the welfare of environment and themselves. So, the organization needs to include social responsibility in their practices. In marketing, it is very important as it includes emphasizing on enticing the customers, who wish to make a positive experience with their purchases. There are so many companies, which have implemented social responsibility strategies in marketing process because it assists the community and manufacture the products, which benefit the targeted society[5]. Engaging in corporate social responsibility also offers new company capabilities, like; it will promote the brand image and reputation of the company that can primarily affect profitability and productivity positively. The above given factors may change in the future with new developments. In the future, technology can be improved with the up-gradation and advancements. It may affect the business operations as all of the employees will not be familiar with advanced technology. Under globalization, there may be some challenges, which may force the organization to make changes in global trade[6]. Apart from these factors, there are some other factors, which may impact the marketing, such as; privatization, increased competition, retail transformation, de-regulation, consumer purchasing power etc. There are many brands and products, which successfully speak to the people and effectively target the age group. Targeting an appropriate market is very important, when an organization wants to communicate its products to maximum customer base. For this, marketers divide the overall population into different age groups to dividing by targeting the levels of age, needs of different age groups etc. So, these marketers try to manufacture the products, which will be preferred to purchase. They will make efforts to attract the target customers by the products, which can satisfy their desires and needs[7]. In modern business environment, each and every brand targets the different customers’ market as they provide different benefits accordingly. Here is the discussion about two brands and their products, which are successfully targeted appropriate age groups. First brand is Apple that has offered different premium brands under its different segments, like; iPhones, Mac and iPad, which have successfully covered the people in appropriate age group. The company has introduced its iPhones with IOS operating system and targeted the people with the age group between 18 and 35 years. This age group includes the young people, which cover students and working professionals. The company has also targeted the children as their parents can download and install learning game apps on their devices[8]. The company has successfully introduced its specifications, which were actually aligned with the needs and expectations of targeted market, i.e. youth population.
Apart from this, Apple can also be included in the category that is failed in satisfy the target market. It was in the case of its iPod, where company was not able to include the specification required by students and their age group. There are various reasons behind it, like; Apple iPod just represented just as a fashion accessory that has the customizing ability in terms of music and color. It is highly portable and suitable for the high paced lifestyles. The students face the issues as it was not easy to operate. Apple could make their iPod a bit user friendly. For example; Microsoft has an option of folders on window, but iPod has so many sub-levels. Sometimes, students feel it very difficult to search the songs[10]. The company can enhance its marketing by targeting the Generation X in addition to millennia people. It could make the iPod look more professional, so that young professional could use them. Under this category, one more example is of Nokia, which was not able to understand the needs and preferences of people and stayed with its older operating system. It just focused on the battery life of its phone more than proving some innovative and entertaining features[11]. The company could do better by conducting market research and understanding the expectations of customers. Thus, the companies were failed to target appropriate market in above specific cases. Armstrong, G., Kotler, P., Harker, M. and Brennan, R., Marketing: an introduction. Pearson Education, 2015. Buckley, P.J., The contribution of internalisation theory to international business: New realities and unanswered questions. Journal of World Business, 51(1), 2016, pp.74-82 Chang, A. 5 Reasons Why Nokia Lost Its Handset Sales Lead And Got Downgraded To 'Junk, 2012, Retrieved From Https://Www.Wired.Com/2012/04/5-Reasons-Why-Nokia-Lost-Its-Handset-Sales-Lead-And-Got-Downgraded-To-Junk/. Gallaugher, J. and Ransbotham, S., Social media and customer dialog management at Starbucks. MIS Quarterly Executive, 9(4), 2010. Kotler, P. & Keller, K.L., Marketing Management, Pearson Education, Inc. 2012. Leipnik, M.R., Mehta, S.S. and Rajendran, V., Strategic and tactical issues with Apple’s mobile maps. Mobile Electronic Commerce: Foundations, Development, and Applications, 2014, p.449. Mathieu, B., 3 New marketing Realities to Live By, 2009, Retrieved from https://www.targetmarketingmag.com/article/3-new-marketing-realities-live/. Park, S.A., Consumer health crisis management: Apple's crisis responsibility for iPod-related hearing loss. Public Relations Review, 34(4), 2008, pp.396-398. Scott, K., Martin, D.M. and Schouten, J.W,. Marketing and the new materialism. Journal of Macromarketing, 34(3), 2014, pp.282-290. Sheth, J.N. and Sisodia, R.S., Does marketing need reform?: Fresh perspectives on the future. Routledge, 2015. Venkatraman, V., Dimoka, A., Pavlou, P.A., Vo, K., Hampton, W., Bollinger, B., Hershfield, H.E., Ishihara, M. and Winer, R.S., Predicting advertising success beyond traditional measures: New insights from neurophysiological methods and market response modeling. Journal of Marketing Research, 52(4), 2015, pp.436-452. Wind, Y.J., Toward a new marketing paradigm. The Routledge Companion to the Future of Marketing, 2014, pp.3-24 P. Kotler and K.L. Keller, Marketing Management, Pearson Education, Inc. 2012. G. Armstrong, P. Kotler, M. Harker and R. Brennan, Marketing: an introduction. Pearson Education, 2015. B. Mathieu, 3 New marketing Realities to Live By, 2009, Retrieved from https://www.targetmarketingmag.com/article/3-new-marketing-realities-live/. K. Scott, D.M. Martin, and J.W. Schouten, Marketing and the new materialism. Journal of Macromarketing, 34(3), 2014, pp.282-290. Y.J. Wind, Toward a new marketing paradigm. The Routledge Companion to the Future of Marketing, 2014, pp.3-24. J.N. Sheth and R.S. Sisodia, Does marketing need reform?: Fresh perspectives on the future. Routledge, 2015. J. Gallaugher, and S. Ransbotham, Social media and customer dialog management at Starbucks. MIS Quarterly Executive, 9(4), 2010. M.R. Leipnik, S.S. Mehta, and V. Rajendran, Strategic and tactical issues with Apple’s mobile maps. Mobile Electronic Commerce: Foundations, Development, and Applications, 2014, p.449. J. Gallaugher, and S. Ransbotham, Social media and customer dialog management at Starbucks. MIS Quarterly Executive, 9(4), 2010. S.A. Park, Consumer health crisis management: Apple's crisis responsibility for iPod-related hearing loss. Public Relations Review, 34(4), 2008, pp.396-398. V. Venkatraman et al, Predicting advertising success beyond traditional measures: New insights from neurophysiological methods and market response modeling. Journal of Marketing Research, 52(4), 2015, pp.436-452. A. Chang, 5 Reasons Why Nokia Lost Its Handset Sales Lead And Got Downgraded To 'Junk, 2012, Retrieved From Https://Www.Wired.Com/2012/04/5-Reasons-Why-Nokia-Lost-Its-Handset-Sales-Lead-And-Got-Downgraded-To-Junk/. |
What are the three key factors driving the new marketing realities?
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