Manage-Wise

The marketer’s challenge

The craft of marketing has not kept pace with the changing world in which marketers ply their trade. In fact, the disconnect between the environment and the craft has become so pronounced that the need to predict and measure results, impose order on and optimize marketing spending, and continuously improve customer insights and creative responses has become a matter of urgent concern.

The theory and practice of marketing management as a science first gelled in the 1950s. It was designed for an Ozzie and Harriet world where the nuclear family was still intact and happily migrating to new homes in the fast-expanding suburbs. Everybody read magazines such as Life or the Saturday Evening Post, subscribed to the local newspaper, and watched the Big Three television networks. The marketer’s stock in trade was his or her ability to influence a monolithic, easy-to-reach market.

Marketers’ perspective

The 1960s celebrated iconoclasm, but, from the marketer’s perspective, little had changed. Marketers had to learn the language of a new generation, but once they were fluent, they discovered that the baby boomers consumed goods with an appetite unmatched in history. A brand could still hitch its star to a clever ad campaign and sales would then soar.

In the 1970s, however, fundamental environmental change did impact the marketer’s craft. Oil embargoes by the Organization of the Petroleum Exporting Countries (OPEC) and the Iranian hostage crisis brought globalization to the doorstep—or, more precisely, the gas tanks—of the developed nations. Runaway inflation and a deep recession constrained both consumer spending and business growth. The Nixon administration imposed price controls, which unwittingly stimulated the growth of trade spending— companies began hiking list prices to avoid future price freezes and then reimbursing customers through trade allowances. It wasn’t so easy to be a marketer anymore. But it was easy, and perhaps even justified, to blame the economy rather than the marketer’s capabilities.

The economy recovered in the 1980s, but the media landscape pixilated. Niche magazines, videocassette recorders (VCRs), CNN’s 24-hour news cycle, MTV’s quick-cut music videos, personal computers (PCs), and video games diverted and shortened customers’ attention spans. But the TV networks could still deliver mass audiences, and so marketers were slow to respond to the growing number of new vehicles. Their marketing mix stayed the same, but they did reduce the 60-second TV spot to 30 seconds, running more ads, as well as experimenting with cable advertising. The fault line between environment and craft began to open under the marketers’ feet.

In the 1990s the fault split wide open. The growth of the Internet and the continued fragmentation of media made it harder than ever to reach customers en masse. There were fewer and fewer viewers for the 30-second spot. At the same time, retailers consolidated into larger and larger chains, and “big-box” competitors emerged in every segment. The power of the retailer was growing, and, as a result, spending to support retailers became a bigger and bigger expense, eventually eclipsing advertising spending in many companies. The traditional marketing model was failing, and still too many marketers continued to think in terms of yesteryear’s mass media and markets.

Changes in the new era

In the new millennium, shocks and uncertainties have become a way of life, symbolized by the terrorist events of September 11, 2001, but also manifest in the world of business and commerce. Globalization, wireless communications networks, and rising information transparency have led to an increasingly mobile work-force, disruptive technologies and business models, and customers who are harder to reach and to engage than ever (think: Do Not Call Registry and new demands such as “green” products and services). Customers have many new media options—iPods, social utilities, and online video gaming, to name a few—which have changed the way they consume information and entertainment. And marketers are finding it more and more difficult to keep up with customers, let alone effectively deploy the rapidly multiplying vehicles. The fault between the marketers’ environment and the craft has become a chasm.

Marketers weren’t sleeping as all this change was occurring. They refined their ability to elicit insight about and from consumers (adopting ever-more-sophisticated segmentation strategies and market research techniques, for instance) and they improved their creative responses. But, these tactics alone haven’t been enough to keep pace with the radical change we have experienced. In the past few years, marketers have come to realize that the climate requires that they rethink their craft, and today even the best of them are still grappling with the issues and searching for solutions.

This hard reality has created a tremendous amount of pressure and tension in the profession. Here, we will explore how two forces, the same two great forces that are driving the continuing reordering of our entire world, are creating and feeding this pressure and tension within marketing. How the first force, technology, has fundamentally altered the marketing landscape by empowering customers and giving rise to new media, and how the second, globalization, has created a migration of hard skills and a consolidation in many industries that has shifted the sources of corporate competitive advantage as well as growth. Also, we will discuss how these forces have raised the corporate demand for marketing efficacy and accountability to new heights, a third major source of the pressure and tension that many marketers are feeling.

Technological change has irrevocably altered the behavior of customers. Think about the changes in customers’ personal habits wrought by the revolution in technology over the past decade. How do they plan a vacation or book a business trip; shop for a new car, home appliances, or clothing; share the photos they takes; choose a restaurant; listen to music; pick a book to read or a movie to watch; or decide on medical care or fill a prescription? People are approaching many, if not all, of these tasks in ways that are fundamentally different than in the past because of advances in technology. These advances also permit them almost instantaneous access to product and service information and a vast number of new buying opportunities.

Excerpt from: ‘The Four Pillars of Profit-Driven Marketing’ by Leslie H. Moeller and Edward C. Landry. Reproduced with permission © 2009, Tata McGraw-Hill Publishing Company Limited. Price: Rs 525. Vishwanath_Ghanekar@mcgraw-hill.com