The customer will own the 1990s. And for the marketer, that is fantastic news.
Technology is changing options, and options are changing the marketplace. We are currently seeing the rise of a new marketing paradigm that does not simply turn up the volume on the old sales pitches, but rather one that is knowledge- and experience-based and signifies the final demise of the salesperson.
The huge power and widespread adoption of technology are what are driving the revolution of marketing. Today, technology is so prevalent that distinguishing between technology-related businesses and industries is essentially pointless; there are only technology corporations. Technology has incredibly quickly and thoroughly migrated into goods, the workplace, and the market. Fractional horsepower motors are currently found in 15 to 20 household items in the typical American home, seventy years after their invention. The microprocessor has attained a comparable penetration in less than 20 years. Less than 50,000 computers were in use twenty years ago; currently, more than 50,000 computers are bought every day.
Programmability is the defining feature of this new technical development. Programmability in a computer chip refers to the ability to change a command so that one chip can carry out a number of predetermined tasks and generate a variety of predetermined results. Programmability transforms the production process on the factory floor and makes it possible for one machine to generate a wide range of models and goods. In a broader sense, programmability is the new corporate capability to provide customers with an increasing number of options and varieties—even to give each individual customer the chance to create and implement the “programme” that will produce the precise product, service, or variety that is best for him or her. Programmability as a promise of technology has expanded into a reality of almost infinite options.
Consider the world of pharmacies and markets. In these two consumer product markets, the number of new items increased by an astounding 60% between 1985 and 1989, reaching an all-time annual high of 12,055, according to Gorman’s New Product News, which tracks new product debuts. As storied a brand as Tide serves as an illustration of the multiplicity of brand choices. Procter & Gamble made history by releasing the first laundry detergent in 1946. One Tide product covered the whole market for 38 years. Procter & Gamble then started releasing a string of new Tides in the middle of the 1980s: Unscented Tide and Liquid Tide in 1984, Tide with Bleach in 1988, and concentrated Ultra Tide in 1990.
Some marketers view the emergence of virtually limitless customer choice as a threat, especially when choice is accompanied by fresh rivals. When you count any company that is in the “computer” business, IBM now has more than 5,000 rivals, compared to just 20 competitors 20 years ago. Less than 90 semiconductor businesses existed twenty years ago; today, there are about 300 in the United States alone. Additionally, the clients are new, joining the competitors’ new items and new business models: 90% of those who used computers in 1990 had never used one before. These new clients are unaware of the previous laws, agreements, and business practises, and they are unconcerned about them. They are interested in a business that will modify its goods or services to match their strategies. This illustrates how marketing has changed to fit the needs of the market-driven organisation.
There were businesses that prioritised sales a few decades ago. These businesses adhered to the marketing tenet that “any colour as long as it’s black” and concentrated their efforts on persuading consumers to buy their products.
Some businesses changed their strategy and became more customer-driven as technology advanced and competition rose. By employing the “tell us what colour you want” school of marketing, these businesses demonstrated a new willingness to alter their product to suit customers’ preferences.
Successful businesses in the 1990s are becoming more market-driven and modifying their products to match the plans of their clients. These businesses will employ the marketing strategy of “let’s determine whether and how colour matters to your broader aim together.” It is marketing that is focused on establishing a market rather than dominating one; it is built on ongoing processes, incremental improvements, and developmental education as opposed to straightforward market-share strategies, raw sales, and one-time events. Most importantly, it makes use of the organization’s existing knowledge and experience foundation.
The capabilities of a successful marketing organisation will increasingly be defined by these two fundamentals: knowledge-based and experience-based marketing. They will replace the current methods of product development and marketing. The traditional method of coming up with a concept, doing traditional market research, building a product, testing the market, and then launching it is slow, unresponsive, and rife with turf wars. In addition, there are fewer and fewer reasons to think that this conventional method can keep up with the needs of the competitors or the fast-changing market.
Consider the well-known 1988 case that Beecham, the global consumer products company, brought against the powerful advertising agency Saatchi & Saatchi. The lawsuit claimed that Yankelovich Clancy Shulman, at the time Saatchi’s U.S. market-research unit, had “vastly inflated” the expected market share of a new detergent that Beecham marketed. The lawsuit demanded more than $24 million in damages. Yankelovich predicted that if Beecham invested $18 million in advertising, its Delicare cold-water detergent would capture between 45.4% and 52.3% of the American market. However, Delicare’s maximum market share, according to Beecham, was 25%; the product typically attained a market share of between 15% and 20%. Without a definite winner or loser, the dispute was resolved outside of court. Regardless of the outcome, the problem it highlights is pervasive and fundamental: projections must by their very nature be incorrect, especially given how frequently, quickly, and drastically technology, rivals, customers, and markets change.
Marketing that is knowledge- and experience-based serves as an alternative to this antiquated strategy. A company must master a range of knowledge in order to use knowledge-based marketing, including knowledge of the technology in which it competes, its rivals, its customers, new technology sources that could change its competitive environment, as well as knowledge of its own structure, capabilities, plans, and methods of conducting business. With this mastery, businesses can use knowledge-based marketing in three key ways: incorporating the customer into the design process to ensure a product that is tailored to the needs and desires of the customer as well as the customer’s strategies; developing niche thinking to use the company’s knowledge of channels and markets to identify segments of the market the company can own; and building the infrastructure of suppliers, vendors, and partners.
Experience-based marketing, which emphasises engagement, connectedness, and creativity, makes up the other half of this new marketing paradigm. With this strategy, businesses spend time with their consumers, closely watch their rivals, and create a feedback-analysis system that transforms market and competitor data into crucial new product insight. These businesses work together to develop systems and solutions that benefit both parties while also evaluating their own technology to determine its viability. These up-close interactions with clients, rivals, and both internal and external technology give businesses the firsthand knowledge they require to make market expansion investments and take measured risks.
Marketing, namely the “new marketing,” is the solution in an era of overwhelming choice and unpredictable change. Companies risk losing clients because they have too many options. They can hire more sales and marketing staff to counter that danger, investing expensive resources in the market to keep clients. However, smarter marketing—not more marketing—is the true answer. And that entails marketing that finds a way to include the client into the business, to establish and maintain a client-business relationship.
The marketer must be the integrator, bringing the client into the business as a participant in the development and adaptation of goods and services while also working inside to synthesise technology capabilities with market needs. The job and goal of marketing have fundamentally changed: from controlling the consumer to real customer engagement; from telling and selling to communicating and sharing knowledge; and from last in line to champion of company credibility.
The marketer needs to hold credibility in order to play the integrator. Credibility transforms into the business’ enduring value in a market marked by fast change and possibly paralysing options. A company’s credibility can be determined by looking at its managerial style, financial stability, level of innovation, friendliness of customer references, and alliance-building skills. They are actions that, in turn, have a direct impact on its ability to draw in top talent, spark fresh thought, and build solid connections.
The key, the foundation for customer choice and business flexibility, is the relationship. After all, a successful brand is nothing without a special connection. Who better to build, maintain, and interpret the relationship between a firm, its suppliers, and its customers than the marketing team? Because of this, the company’s focus has evolved from finance to engineering—and now to marketing—as objectives have changed from cost management to product competition to customer service. Marketing will perform more than just sell in the 1990s. It will specify how a business operates.
The customary call from the CEO to the corporate headhunter with the request, “Find me a good marketing person to handle my marketing department,” embodied the outdated idea of marketing. Of course, the CEO was looking for someone who could do a specific set of textbook duties that were often included with everyday marketing. That person would travel to Madison Avenue right away to engage an advertising agency, update the advertising campaign, redesign the corporate logo, revamp the brochures, train the sales staff, hire a top-tier PR firm, and otherwise reposition the company’s image.
A number of presumptions and attitudes about marketing lay behind the CEO’s request for “a good marketing person,” including the notions that marketing is a distinct function within the organisation, distinct from and typically subordinate to the core functions, that its role is to identify groups of potential customers and find ways to persuade them to purchase the company’s product or service, and that image making—the process of fabricating and projecting a false perception of the organisation and its offerings in order to lure customers—is at its But even if those presumptions had ever been valid in the past, they are all now completely invalid and out of date.
Today, marketing is a method of conducting business rather than a function. Marketing is not this month’s promotion or a fresh ad campaign. Everyone’s job description, from the receptionists to the board of directors, must include marketing as an integral component. Its role does not involve deceiving customers or fabricating the company’s reputation. It is to incorporate the customer into the product’s design and to provide a methodical approach for interaction that will give the connection solidity.
Compare how two high-tech medical instrument companies recently handled comparable client phone calls demanding the repair and replacement of their equipment to better grasp the differences between the old and the new marketing. The replacement instrument was sent to the customer by the first business—call let’s it Gluco—within 24 hours of the request, no questions asked. It came in a box with instructions for returning the defective item, a mailing label, and even tape to close the box. The phone conversation and the exchange of the instruments were handled efficiently, expertly, and with the utmost respect for the customer and the least amount of inconvenience possible.
The second business, Pumpco, addressed the situation very differently. The employee who answered the customer’s call had never been questioned about fixing a piece of machinery, therefore she carelessly put the caller on hold. The customer would be responsible for paying for the equipment repair, and a temporary replacement would cost an additional $15, she finally returned to the phone.
A few days later, the replacement was delivered to the customer without any information, directions, or instructions. The damaged equipment reappeared a few weeks after the customer had returned it, repaired but lacking instructions regarding the temporary replacement. Finally, the customer received a demand letter from Pumpco informing them that they had sent the incorrect equipment via C.O.D.
Marketing to Pumpco means making sales and being paid; marketing to Gluco involves cultivating relationships with its clients. The two firms’ responses to two straightforward client inquiries mirror the queries that customers are increasingly asking when interacting with a variety of enterprises, from software developers to airlines: Which business is capable, accommodating, and organised? Which business can I rely on to do it right? Which business would I choose to work with?
Successful businesses understand that marketing is like quality—essential to the business. Marketing is an intangible that customers must feel in order to appreciate, much like quality. Marketing has evolved over time, much like quality, which in the United States has progressed from primitive notions like planned obsolescence and assessing quality to more ambitious ideas like the systemization of quality throughout the entire business.
Marketing has evolved from deceiving the consumer to blaming the consumer to gratifying the consumer—and now to systematically integrating the consumer. The next step for marketing is to create an award for marketing that is similar to the Malcolm Baldrige National Quality Award in order to permanently shed its reputation for image-building and hucksterism. In fact, businesses who continue to view marketing as a set of techniques will quickly fall behind rivals who place an emphasis on substance and actual results.
The ultimate goal of marketing is not to introduce the kinds of cosmetics that used to characterise the auto industry’s yearly model modifications, but rather to service customers’ actual demands and express the substance of the organisation. Additionally, as marketing in the 1990s is a reflection of a company’s personality, it naturally falls under the purview of the entire organisation.
Two types of errors are frequently made by American businesses. Some people become enthralled and motivated by the thrill of creating things, especially original ones. Others become caught up in the competition of buying and selling items, especially to grow their market share in a particular product line.
Both strategies run the risk of ruining a company. The first has the drawback of encouraging an inward focus. Companies may lose sight of the customer, the market, and the competition in their pursuit of their R&D goals. They succeed in becoming recognised as R&D leaders, but they lack the more crucial ability—maintaining their performance and, occasionally, their independence. For instance, Genentech unmistakably emerged as the R&D pioneer in biotechnology before being purchased by Roche.
The issue with the second strategy is that it promotes a culture focused on market share, which invariably results in undershooting the market. A corporation with a market-share mentality will view its consumers as “share points” and will employ gimmicks, spiffs, and promotions in an effort to gain a meagre percentage point. It forces a corporation to either pay lavishly to introduce a new product in a market where competitors hold a hefty, dominant position, or to hunt for incremental, perhaps even microscopic growth out of existing items. Instead of a clever attempt to own the entire pie, it transforms marketing into an expensive battle for crumbs.
Instead of only producing or selling goods, the true objective of marketing is to control the market. Smart marketing entails determining what portion of the pie is yours. It requires a new way of thinking about your business, your technology, and your product, one that starts with identifying what you can lead. Because you own what you lead in marketing, Leadership is taking charge.
When you control the market, not only do you act differently but so do your suppliers and clients. Owning the market allows you to develop your products specifically for that market, set the industry standards, invite other companies into your fold who want to create complementary products or offer you new features or add-ons to enhance your existing products, get first access to novel concepts that competitors are testing in that market, and draw in the best talent thanks to your well-recognized leadership position.
Having a market might turn into a vicious cycle. As a result of owning the market, you advance your ownership of the market and become the dominating force in the industry. In the end, you also strengthen your relationship with your clients since they start to view businesses that function in such an integrated manner as having more and more leadership traits.
A corporation must first come up with a new definition of the market before it can claim it as its own. Consider the instance of Convex Computer. Convex was looking to launch a new computer in 1984. Convex would have believed that its only option was to compete for market share in the specified markets—supercomputers, where Cray was the leader, or minicomputers, where Digital was the leader—because of the market segmentation that already existed. Convex formed the “mini-supercomputer” industry by delivering a product with a price/performance ratio between Cray’s $5 million to $15 million supercomputers and Digital’s $300,000 to $750,000 minicomputers in an effort to define a market it could control. The technology performance of Convex’s offering, which cost between $500,000 and $800,000, was between that of a minicomputer and a full supercomputer. Convex became the market leader in this emerging sector.
The same was true with Intel’s processor. Early products and markets were identified by the corporation more as computers than semiconductors. Intel effectively created a new product category that it could own and dominate by providing a computer on a chip.
Owning a market can include expanding it at times or contracting it at others. In its efforts to establish and control a market, Apple has succeeded in both. To take the lead in the market for compact computers, Apple first widened the definition of the category. The market definition initially consisted of several small players and hobby PCs. The home computer was the next step, but this market was similarly competitive and constrained. Apple recognised the personal computer as a way to own a market, which broadened the idea of a market and made Apple the indisputable market leader.
In a later move, Apple did the opposite, reducing the scope of a market in order to redefine it. Undoubtedly, IBM was the leader in the business sector; for Apple, adopting a market-share approach in that sector would have been useless. Instead, Apple created—and owned—a completely new market: desktop publishing, using the right marketing strategies and technological alliances. With desktop publishing, Apple was able to enter the corporate world and grow and expand its connections with commercial clients.
Ironically, owning a market results in two crucial benefits: sizeable profits that can restock the company’s R&D funds and a strong market position that serves as a base from which a company can gain additional market share by enhancing both its technological capabilities and its understanding of the market. Japanese businesses in sectors like automotive, consumer electronics, semiconductors, computers, and communications are the best practitioners of this marketing strategy. Their main objective is to control particular target markets. They are able to utilise all of the market’s infrastructure thanks to the keiretsu industrial structure; relationships in technology, information, politics, and distribution support the corporation in asserting its leadership.
The Japanese approach is steadfast. These businesses start by utilising American basic research to propel the development of new products. For instance, Japanese businesses negotiated nearly 32,000 licencing agreements to buy foreign technology between 1950 and 1978, spending an estimated $9 billion. However, the first R&D was done in the United States, where costs were at least 50 times higher. After engaging the market and learning from it, these Japanese corporations launch a variety of products. They then concentrate on dominating the market to drive away international rivals, allowing them to reap significant profits. These enormous earnings are reinvested in a fresh cycle of R&D, invention, market development, and market supremacy.
The strategy that all competitors will use to thrive in the 1990s is one that integrates R&D, technology, innovation, manufacturing, and finance—integrating them through marketing’s desire to own a market.
Mass marketing was the antithesis of mass manufacturing. Flexible marketing is the antithesis of flexible production. The ability to commercialise comes after the technology. The marketing will now deliver on the versatility, programability, and customizability that the technology embodies.
The promise of today’s technology is “anything, any way, any time.” Customers have the option to create their own versions of almost any product, including those that focus more on mass identification than uniqueness. Consider a product or a sector of the economy where customization is not common. using the phone? The original intention of Bell Telephone was to install a straightforward, all-black phone in every home. With options ranging from various colours and portability to answering machines and programmability—as well as services—there are currently more than 1,000 permutations and combinations available. Optical fibre holds out additional potential, as computers and communications are merging to form a single business with more technological options.
How about a time-tested item like the bicycle, which Leonardo da Vinci first drew in his notebooks? A recent Washington Post article claimed that the National Bicycle Industrial Company in Kokubu, Japan manufactures custom bicycles on an assembly line. Within two weeks of placing the order, the bicycles, which are customised to each customer’s measurements, are delivered. The company provides 11,231,862 variations on its models, with prices just 10% higher than those of ready-made versions.
Even publications that report on this technologically driven trend toward customisation are becoming more personalised. In order to appeal to local suburban readers, metropolitan daily newspapers have started to alter their news, advertising, and even editorial and sports pages. For instance, The Los Angeles Times publishes seven zoned editions that cater to the neighbourhoods around the city.
The key mathematical equation of modern marketing is at play here: variety plus service equals customisation. The ability to interact with a customer in a particular way is what customization refers to, despite being bandied about as a marketing buzzword. Even when technology makes it easier to do that, oddly, marketing’s interpretation of the laws of physics makes it harder.
At the microscopic level, things behave differently, according to quantum theory. Light is a prime illustration. Light behaves like a wave and flows similarly to an ocean wave when put though specific types of tests. However, in other experiments, light moves as a single ball and acts more like a particle. So, the question for physicists is: Is it a wave or a particle? And which one is it when?
Customers and markets function similarly to light and energy. The client is actually multiple things at once, much like light. Customers occasionally exhibit group behaviours that nicely fall into sociological and psychographic categories. Sometimes the consumer loses control and becomes iconoclastic. Customers buck trends: the senior market is flooded with elderly people who desperately want to appear young, while the upmarket market has to compete with wealthy people who conceal their status by making the most basic purchases.
Markets are governed by principles akin to quantum physics. When a product surges, is absorbed, evaporates, or dies in a market, the level of consumer energy is different for each market. After all, a fad is nothing more than a wave that breaks up and then transforms into a particle. Consider the well mentioned Yuppie movement and its connection to specific branded consumer goods, like BMWs. The wave has broken after a phase of tremendous customer enthusiasm and close identification. The Yuppie association has vanished as a result of being saturated and absorbed by the market, exactly like energy does in the physical world. BMW, seeing the shift, has shifted its marketing strategy away from the Yuppie lifestyle and toward the technological prowess of its products. And as they search for more independent and personal ways to exhibit their consumer energy, Yuppies are no longer the wave they once were. Instead, as a market, they are more like particles.
Of course, given that particles might act like waves once more, clever marketers will probably use a different energy source, like values, to reconstitute the young, affluent market as a wave. And thanks to technology, marketers now have the tools they need, like database marketing, to distinguish between waves and particles and even create programmes that group together enough particles to create a strong wave.
Don’t fight forces; use them is the marketing equivalent of Buckminster Fuller’s advice to scientists: Instead of fighting it, marketers that embrace and exploit technology will find that it directly generates new market opportunities and forms. Consider CDs, tapes, and audiocassettes. Companies that make records and tapes have fiercely protected their assets for years. The music industry resisted technology’s pressures while knowing that home hackers copied tapes and made their own composite cassettes, but the Personics System eventually realised that technology was creating a legal market for licenced, premium customised composite cassettes and CDs.
Personics recognised a market rather than treating the client like a criminal. A modernised jukebox with a collection of more than 5,000 songs, the Personics System, allows customers to create customised music recordings. Customers instruct the machine what to record for $1.10 each song. The technology creates a bespoke tape and prints a laser-quality label with the choices in about ten minutes. The label includes the customer’s name and a unique title for the tape. The technique, which was introduced in 1988, has now extended to more than 250 establishments. Once again, clever marketers have utilised technology to establish a relationship with the customer that is tailored to their needs.
Advertising is rapidly becoming outdated. It made sense as a component of the overall formula under the previous paradigm of marketing: you sell mass-produced items to a mass market through mass media. It was the responsibility of marketing to utilise advertising to convey a one-way message to the consumer: “Buy this!” Advertising now reflects the fact that this message is no longer effective. Compared to 6% in 1988 and 9% in 1987, newspaper advertising only increased by 4% in 1989. John Philip Jones of Syracuse University conducted a study that found that since 1984, advertising spending in the major media has been constant at 1.5% of GNP. Research, revenue, and employment at advertising agencies have all suffered.
The reduction of advertising is caused by three interrelated phenomena. First, excessive advertising is beginning to have a knock-on effect on other forms of advertising. Customers in the US are exposed to up to 3,000 marketing messages every day as a result of the proliferation of products. Marketers are cramming as many voices as they can into the available space in an effort to inundate the customer with yet another advertisement. For instance, only 15% of daytime and 38% of prime time television commercials in 1988 were longer than 15 seconds; in 1984, similar percentages were 6% and 11%, respectively. The amount of television ads has soared as a result of the switch to 15-second spots; from 1984 and 1988, prime-time commercials climbed by 25%.
However, as is to be expected, more voices have less of an impact. Customers just can’t recall which advertisements promote which products, let alone what characteristics or features would set one product apart from another. Simply put, the world is a tangle.
Consider the incredibly smart and well-regarded series of Eveready battery commercials that feature a tireless marching bunny. The advertisement for Duracell, Eveready’s main rival, was so effective that Video Storyboard Tests Inc. ranked it one of the greatest advertisements of 1990. In fact, 40% of people who chose the advertisement as an excellent commercial credited Duracell. According to studies, Duracell’s market share has increased while Eveready’s may have somewhat decreased, in part as a result of this misconception.
Not only in the market for batteries does increased advertising succeed in creating more uncertainty. Similar things have happened in industries like athletic gear and soda pop, where rival businesses have enlisted so many famous sponsors that customers can no longer tell who is pushing what for whom. For instance, almost thirty movie stars, athletes, musicians, and television personalities were used by Coke, Diet Coke, Pepsi, and Diet Pepsi in 1989 to encourage people to purchase more cola. The majority of customers, however, were unable to recall whether Joe Montana and Don Johnson drank Coke, Pepsi, or both once the smoke and mirrors had passed. Or the true reason it mattered.
The second factor contributing to the fall of advertising is a byproduct of the first: as advertisements have multiplied and become more obnoxiously persistent, consumers have grown weary of them. More people try to block out advertising the more it tries to encroach. When Disney announced that it will stop screening its movies in theatres that aired advertising before the feature, the business received a round of appreciation from consumers who were sick of seeing them. “Movie theatres should be kept as locations where consumers may escape from the pervasive barrage of advertising,” a Disney executive was quoted as saying. In support of its claims, the corporation claimed survey information from moviegoers, 90% of whom stated they preferred not to see advertising in theatres while 95% preferred to see sneak peeks of upcoming events.
More recently, the U.S. Congress took action in response to the growing worries of parents and educators regarding the commercial content of children’s television after several failed attempts. The Federal Communications Commission is required by a new law to examine “program-length commercials”—cartoon shows linked to specific product lines—and to make each television station’s contribution to children’s educational needs a requirement for licence renewal. The new law also limits the amount of time that commercials can run. This concern over advertising is reflected in a number of contexts, from calls for more ecologically friendly packaging and products to public anger over cigarette marketing campaigns that targeted women and minorities.
The fundamental cause of both of these elements is advertising’s dirty little secret: it has no redeeming value. Advertising in today’s market simply ignores the core principles of marketing, which are adaptation, flexibility, and response. The feedback loop that is necessary for the new marketing is absent from the monologue of advertising but is included in the dialogue of marketing. A truly market-driven organisation is one that quickly adjusts to the shifting needs of the client, and this requires a feedback loop between the company and the customer.
One such company is Apple. Its Macintosh computer is credited with starting a revolution. When it first appeared in 1984, business observers praised and hailed it. In retrospect, the original Macintosh had a number of flaws, including a black-and-white screen, little to no software, and restricted, nonexpandable memory. Despite all of these flaws, the Mac had two advantages that more than made up for them: it was extraordinarily simple to use, and its user base was ready to both publicly praise the product at its launch and privately offer Apple suggestions for improvements. It contained a feedback loop, in other terms. This feedback loop was what caused the Mac to evolve into the open, flexible, and vibrant computer that it is today. And what kept it was changing the Mac.
Apple provided a demo of the Mac to 100 powerful Americans months before the product’s release so they could utilise it and provide feedback. It signed up 100 independent software developers who started to think of ways to make use of the simplicity of the Mac in their products. It provided hands-on Mac demonstrations to analysts and industry insiders over the course of a full day and taught over 4,000 dealer representatives. This network gave Apple two advantages: knowledgeable Mac users who could credibly promote the device to the press and invested customers who could advise the firm on what the Mac needed. Customer feedback and media acclaim were more valuable than any publicity that could be obtained through advertising.
Apple’s strategy exemplifies the new marketing paradigm, which moves from monologue to dialogue. It is done through experience-based marketing, in which businesses provide consumers and potential customers the chance to try out their products and then give feedback. It is done through beta sites, where a business can install a prelaunch product and research its use and any improvements that are required. Experience-based marketing enables a business to collaborate closely with a client to modify a product and adapt the technology, acknowledging that no product created by engineers is flawless. Xerox specifically used this interaction as the basis for its recently unveiled Docutech System. 25 beta sites were set up by Xerox seven months prior to launch. From its prelaunch customers, Xerox learnt what improvements and related new products it should next deliver, as well as what services and support it should offer.
The end result is adaptive marketing, which emphasises sensitivity, adaptability, and resilience. Sensitivity results from having a wide range of modes and channels through which businesses can read the environment, from sophisticated consumer scanners that provide data on customer choice in real time to user groups that provide live feedback. Flexibility is achieved by developing an organisational framework and a mode of operation that enable the business to seize fresh opportunities brought forth by client input. Learning from errors and responsive marketing are two things that build resilience.
The distinction between goods and services is quickly blurring. The servicization of goods and the productization of services have changed what formerly seemed to be a fixed dichotomy into a hybrid. Is General Motors promoting its products or its services if it makes more money from lending its customers money to purchase its automobiles than it does from making the cars? Is IBM promoting its products or its services when it declares to the entire world that it is now in the systems-integration business—the customer may buy any box from any vendor and IBM will offer the systems know-how to make the whole thing work together? In actuality, the majority of the computer industry’s revenue now comes from services, which include applications expertise, systems engineering, systems analysis, systems integration, networking solutions, security, and maintenance.
The argument holds true for less extravagant businesses and consumer goods as well. Consider the sizable neighbourhood drugstore, which has thousands of items, from watches to cosmetics. Although the items are on sale, the business is really advertising a service—the convenience of having such a wide selection gathered and displayed in one place. Or use any of the common household items, such as cereal boxes, table lamps, or VCRs. All of them include some kind of information that is intended to serve a purpose, such as nutritional data to show the cereal’s actual nutritional value to health-conscious consumers, a United Laboratories label on the lamp as proof of testing, or an operating manual to assist the non-technical VCR customer in setting up the new device. There is plenty of space to enhance the usefulness, convenience, or even entertainment value of this information, but in virtually every situation, the service information is an essential part of the product.
Service providers are acknowledging the productization of services on the other side of the hybrid. Service providers, including banks, insurance businesses, consulting organisations, even airlines and radio stations, are developing concrete events, predictable and repeated tasks, standard packages, and adaptable options that constitute product services. A frequent listener or flier programme, regular audits carried out by consulting organisations, or fresh loan packages put together by banks in response to shifting economic situations are all examples of product services.
It is crucial for marketers to grasp exactly what marketing the new hybrid is not as products and services mix. Repairing a broken product does not satisfy the service component. A warranty, an 800 number, or a customer satisfaction survey do not suffice either. The quality and intangibility of a product are frequently what buyers value most; the service is what makes a product successful. Service is a process that creates an environment of knowledge, assurance, and comfort for the customer, not an event.
In all honesty, the answer depends on how you anticipate the store will react. But equally honestly, the majority of customers value a business that supports open communication by resolving all customer issues. In the end, a service environment promotes honesty. In the face of difficulty, the business that adopts a “we’ll make good on it, no questions asked” approach may gain a lifelong client.
Marketers who pay little attention to the services that go with their products concentrate on ways to stand out from the competition and break into new markets. Marketers who understand the value of the product-service hybrid place a strong emphasis on developing devoted clientele.
In the past, marketing and technology could have seemed incompatible. Technology’s impersonal coldness and marketing’s high-touch, distinctive humanness looked inherently at odds with one another. Marketing would never be able to learn to enjoy the aesthetics of computers, databases, and other high-tech accoutrements, which would only make marketing less human.
In the end, a cease-fire was negotiated on the basis of cost. Simply put, marketers realised that by leveraging technology to perform tasks that historically necessitated costly, time-consuming, and frequently risky people-directed field operations, meaningful savings could be realised. Marketers discovered, for instance, that by matching a database with a marketing plan to mimic a new product launch on a computer, they could complete the task in 90 days and for $50,000 instead of the year and at least several hundred thousand dollars that it would otherwise require.
However, technology and marketing have now combined and started to feed back on each other after moving past the simple automation for cost-saving stage. As a result, both the client and the firm are changed, along with the technology and the product. Information can now move back and forth between a corporation and its customers thanks to technology. It establishes the feedback loop that incorporates the client into the business, enables market ownership, allows for customisation, fosters communication, and transforms products into services and services into products.
The direction Genentech has taken with its usage of laptop and mobile devices is one example of how technology may evolve as it combines with marketing. The biotechnology company first intended to automate the sales process by requiring salespeople to have laptops with them when making sales calls. Sales representatives would utilise laptops to place orders, access company press releases and information updates, send and receive email, prepare reports using computerised “templates,” and get and send electronic mail. The laptops would also allow sales representatives to maintain databases that would track clients’ purchasing patterns and business performance. The initial level of anticipation was really low.
In fact, the convergence of marketing and technology has fundamentally changed how customers and businesses interact, as well as how sales representatives perform their jobs. Sales representatives are now acting as marketing advisors. Sales representatives can offer their customers, who are mostly pharmacists and doctors, a useful educational service by arming themselves with technical data produced and gathered by Genentech. For instance, only Genentech and its agents have access to the analysis of the largest study of children with the illness known as short stature. Doctors may more accurately determine when to provide the growth hormone Protropin according to this analysis, which is based on clinical investigations of 6,000 people between the ages of one month and 30 years.
A general education element is also included in the Genentech system. To assist doctors in staying current, sales representatives can utilise their laptops to view the most recent articles or technical reports from medical conferences. Additionally, the computers enable doctors to collaborate on research projects with salespeople: Medical experts employed by Genentech are capable of responding to extremely technical queries submitted via an online question-and-answer form. The email function promptly sends a query that sales representatives enter on the template to the right specialist. Online responses for reasonably straightforward queries reach the sales representative within a day.
The laptop system developed by Genentech and the countless other programmes that appeared in the 1980s to automate sales, marketing, service, and distribution will appear as a very apparent and archaic method of fusing technology and marketing in the 1990s. A custom processor that can be built into anything anywhere to create intelligence on a countertop or a dashboard, scanners that read text, networks that instantly create and distribute vast reaches of information, and personal computers, databases, CD-ROMs, graphic displays, multimedia, colour terminals, computer-video technology, are just a few of the tools available to the marketer.
Marketing will work to close the gap between production and consumption when “real time” procedures are implemented in design and manufacturing. The end result will be marketing workstations, which are CAD/CAM systems for marketers as opposed to engineers’ and product designers’ CAD/CAM systems. A network of databases will provide graphic, audio, video, and numerical data for the marketing workstation. The marketer will be able to use the workstation’s windows to modify data, model markets and products, get feedback on ideas from people in other cities, make production orders for product designs and packaging concepts, and get prices, delivery estimates, and other information.
Marketers will utilise the workstation to play both designer and consumer, much as computer-savvy kids today have no problem manipulating figures and playing great games on the same colour screens. The workstation would enable marketers to incorporate historical sales and cost data as well as information on industry trends and consumer behaviour. Marketers will be able to develop and test ads and promotions at the same time as they assess media possibilities and examine viewer and readership statistics. Finally, marketers will be able to quickly put marketing ideas into production and get immediate feedback on concepts and plans.
A new ability to explore novel ideas, test them against the reactions of actual customers in real time, and move forward to experience-based leaps of faith should result from the union of technology and marketing. It ought to serve as a means of getting customers into the business and of placing marketing at its core.
In the 1990s, marketing functions ultimately make up the crucial aspects of the business, encompassing all the characteristics that collectively determine how the organisation operates. Because of this, marketing is everyone’s responsibility and marketing is everything.