Trends
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Marketing Redefined Dr. Dawne Martin MKTG 241 January 19, 2012 © 2009 Prentice Hall Rethinking Marketing, 1st Edition 1-1 Who was Janus? • Janus was the Roman god of – Gates and doors – Beginnings and endings – Always represented with a double-faced head • Each face pointed in opposite direction – Transitions from • • • • Primitive life to civilization Countryside and city Peace and war Past and future © 2009 Prentice Hall Rethinking Marketing, 1st Edition 1-2 Learning Objectives • • • • Identify the meaning of a “Janus trend” List the eight Janus trends Explain how what is good is also bad Explain the difference between Evolutionary change Revolutionary change © 2009 Prentice Hall Rethinking Marketing, 1st Edition 1-3 Beginnings and Ends • Post-modern twenty-first trends paradoxical – Neither universally positive nor negative – Trends are not bad for everyone or good for everyone • Janus trends – Paradoxical – Seldom function in one direction © 2009 Prentice Hall Rethinking Marketing, 1st Edition 1-4 Trend 1: Growth and Prosperity vs. Poverty and Despair • More wealth – More than 7.7 million globally hold more than U.S. $1 million – 236,000 millionaires in China, 61,000 in India • Poverty and despair – 2001 2.7 billion people survive on less than $2 daily – 1960 (average income) 20% of world’s wealthiest population was 30 times higher than poorest 20% – 2001 It was 82 times higher! © 2009 Prentice Hall Rethinking Marketing, 1st Edition 1-5 Disparities Between Wealthy and Poor • Huge rise in elective surgery – – – – Facelifts Breast enhancements Liposuction Regular botox treatments © 2009 Prentice Hall • Preventable diseases that are three biggest killers of children – Measles – Malaria – Diarrhea • 30 million children are not immunized • 6 million children under age 5 die of hunger every year Rethinking Marketing, 1st Edition 1-6 Education and the Growing Disparities of Wealth • Every year cost of education worldwide increases by an average of 10% • 134 million children between ages 7–18 have never attended school • Girls are more likely than boys to not attend school – Middle East and Africa—only one-third of girls in proportion to boys attend school © 2009 Prentice Hall Rethinking Marketing, 1st Edition 1-7 Trend 2: Free Markets vs. Growing Protectionism • Free markets – WTO has 147 members representing 90% of world trade – Average tariff has fallen from 40% to less than 4% since 1950 – Over past decade freight and communication cost have declined sharply © 2009 Prentice Hall Rethinking Marketing, 1st Edition 1-8 <FIG>Figure 1.1 : <TTL>How Transport and Communication Costs Have Declined[SN1] © 2009 Prentice Hall Rethinking Marketing, 1st Edition 1-9 • Growing protectionism – EU agricultural tariffs remain at 20% restricting growth of poorest countries whose exports are 70% agriculture – United States enacts “safeguard quotas” against Chinese textiles – Ongoing row regarding Boeing and Airbus subsidies between United States and the European Union – 7 years from the Uruguay Round on textiles and clothing, few quota restrictions have phased out © 2009 Prentice Hall Rethinking Marketing, 1st Edition 1-10 © 2009 Prentice Hall Rethinking Marketing, 1st Edition 1-11 Trend 3: Population Growth vs. Population Shortages • Population growth – World’s population has doubled from 3 billion to 6 billion in past 40 years – By 2050 • World population expected to reach 9 billion • World’s 50 poorest countries will triple in population © 2009 Prentice Hall Rethinking Marketing, 1st Edition 1-12 <FIG>Figure 1.3: <TTL>The World’s Population © 2009 Prentice Hall Rethinking Marketing, 1st Edition 1-13 • Population growth—cont. – Five countries account for approximately one-half of the world’s population – Population of five largest cities exceeded or almost matched majority of world’s nations (including geographically large nations such as Australia and Canada) © 2009 Prentice Hall Rethinking Marketing, 1st Edition 1-14 Most populated countries Most populated cities © 2009 Prentice Hall Rethinking Marketing, 1st Edition 1-15 • Population shortages – 27 potential future members of European Union will experience 6% decrease in population through 2050 – Current EU members will also experience declines • Italy’s population by 12.5 million • Spain’s population by 3 million • Germany could experience 50 million decline by 2100 – Canada’s Alberta province despite economic boom lacks enough workers © 2009 Prentice Hall Rethinking Marketing, 1st Edition 1-16 Trend 4: Global Bliss vs. Global Gloom • Global bliss – Cultures and countries realizing • Greater similarities than differences • More to gain by cooperation than conflict – Global brands • • • • • • McDonald’s Starbucks Sony Coca Cola Mercedes Benz VISA and MasterCard © 2009 Prentice Hall Rethinking Marketing, 1st Edition 1-17 • Global bliss—cont. – Globally integrated production processes • Multiple sources of origin on products – Advances in logistics have lowered containerized transportation cost • Massive decrease in port handling cost • Lower freight charges • Increased trade flow © 2009 Prentice Hall Rethinking Marketing, 1st Edition 1-18 Top 10 container shipping companies in order of TEU [SN1]capacity, first [SN2]January 2006 <COLH2>Company[SN3] TEU Capacity[5][SN4] Market Share (%) Number of Ships 1,665,272 18.2 549 Mediterranean Shipping Company S.A. 865,890 8.6 299 CMA CGM 507,954 5.6 256 Evergreen Marine Corporation 477,911 5.2 153 Hapag-Lloyd 412,344 4.5 140 China Shipping Container Lines 346,493 3.8 111 American President Lines 331,437 3.6 99 Hanjin-Senator 328,794 3.6 145 COSCO 322,326 3.5 118 NYK Line 302,213 3.3 105 <TB>A.P. Moller-Maersk Group © 2009 Prentice Hall Rethinking Marketing, 1st Edition 1-19 • Global bliss—cont. – Time boundaries all but eliminated • Internet • Cell phones – Regulatory boundaries fall as nations seek to increase trade • • • • NAFTA—North America EU—Europe ASEAN—Asia SADEC—Southern Africa © 2009 Prentice Hall Rethinking Marketing, 1st Edition 1-20 • Global gloom – Many people feel • Globalization is a bad thing • Majority of the world’s population is worse off • Undermines – – – – Environment Labor rights National sovereignty Great majority of people in developing world – Anti-globalization protests accompany most major meetings of political and business leaders • Protesters are united in their opposition to the power of large corporations – Diluting of local cultures by global brands © 2009 Prentice Hall Rethinking Marketing, 1st Edition 1-21 The Spread of "McWorld" (<SRC>from Source: <URL>http://www.worldwatch.org/node/814) • McDonald’s operates 30,000 restaurants in 119 countries and serves 46 million customers each day. Its total revenue was $15.4 billion in 2002. On opening day in Kuwait City, the line for the McDonald’s drive-through was more than 10 kilometers long. • Siemens, the German manufacturer of mobile phones, computers, medical supplies, lighting, and transportation systems, employs 426,000 people and is represented in 190 countries. In 2002, Siemens’ net sales amounted to $96.4 billion, of which 79% were international. © 2009 Prentice Hall Rethinking Marketing, 1st Edition 1-22 The Spread of “McWorld”—cont. • Levi Strauss sells clothing in more than 100 countries, and its trademark is registered in 160 countries. It employs 12,400 people worldwide. It reported total sales of $4.1 billion in 2002, and a net income of $151 million in 2001. • Coca-Cola sells more than 300 drink brands in more than 200 countries. More than 70% of the corporation’s income originates outside of the United States, and its net revenues reached $19.6 billion in 2002. Coca-Cola employs 60,000 people in Africa alone. © 2009 Prentice Hall Rethinking Marketing, 1st Edition 1-23 Trend 5: The MNCs vs. the Fragility of MNCs • The Power of MNCs – Of 100 largest economies 51 are corporations, 49 are nation states – Sales of Ford and GM > GDP of sub-Saharan Africa – Wal-Mart revenues > most economies of eastern Europe – MNCs’ powers increases as they merge and acquire firms across the world (as seen on next chart) © 2009 Prentice Hall Rethinking Marketing, 1st Edition 1-24 © 2009 Prentice Hall Rethinking Marketing, 1st Edition 1-25 • The Power of MNCs—cont. – Combined market shares of the 10 largest companies in • • • • • Automobile industry 80% Phamaceuticals 50% Computers 70% Telecommunications 86% Pesticides 85% – Strong emphasis on R&D – Aggressive intellectual property protection © 2009 Prentice Hall Rethinking Marketing, 1st Edition 1-26 • Fragility of MNCs – Modulation of value chain makes smaller companies more competitive – Vulnerable to “brand companies” • companies that outsource all activities except marketing of brand • More flexible, no overhead cost or investment in major infrastructure © 2009 Prentice Hall Rethinking Marketing, 1st Edition 1-27 • Fragility of MNCs—cont. – Susceptible to activities of so-called champions” “hidden • Small- to medium-sized firms with strong global presence – Pursue clearer strategy – Manage their finances more professionally – Provide superior customer service – Invest more heavily in R&D – Lack of adequate laws protecting intellectual property rights • Patents • Copyright protection © 2009 Prentice Hall Rethinking Marketing, 1st Edition 1-28 Trend 6: Worldwide Media Reach vs. Fragmentation of Media and Audience • Worldwide media reach – “Buying”new from CNN, SKY, BBC, extends smaller stations reach – Global availability of • • • • • Financial Times The Economist Time CNN MTV © 2009 Prentice Hall Rethinking Marketing, 1st Edition 1-29 © 2009 Prentice Hall Rethinking Marketing, 1st Edition 1-30 • Fragmentation of media and audiences – Advertising in video games • Advertisers pay large sums for product placement – Sony – Motorola – Shell – “U-commerce” • Commerce that is ubiquitous, universal, unique, and in unison with recipient • “Permission notification”—email notification that is recipient authorized • M (or mobile)-Media advertisements to cell phones and other portable devices © 2009 Prentice Hall Rethinking Marketing, 1st Edition 1-31 • Fragmentation of media and audiences cont. – Internet • “Podcasting” anyone can be a broadcaster • YouTube permits anyone to upload video and others to download content • MySpace is a communications tool that also allows upload of video and download of content © 2009 Prentice Hall Rethinking Marketing, 1st Edition 1-32 Trend 7: Enhanced Service vs. Diminished Service • Enhanced service – Singapore Airlines • Pampers business class passenger – Elegant “Singapore girls” – Gourmet meals, fine wines – Nordstroms • Legendary return policy • Personal shoppers – FedEx • Guaranteed delivery © 2009 Prentice Hall Rethinking Marketing, 1st Edition 1-33 © 2009 Prentice Hall Rethinking Marketing, 1st Edition 1-34 • Diminished service – Demise of operated assisted calls in favor of direct dial – ATMs in place of bank tellers – Online statement retrieval in place of paper notification – Customers don’t always want warm delightful service—they want solutions – Customers want • Speed • Efficiency • control © 2009 Prentice Hall Rethinking Marketing, 1st Edition 1-35 Trend 8: The Age of Brands vs. The Era of the Anti-Brand • The age of brands – Brand equity—value of a brand name • brand recognition = brand equity – Brand equity in not-for-profit firms • Red Cross • Amnesty International • Habitat for Humanity © 2009 Prentice Hall Rethinking Marketing, 1st Edition 1-36 2006 Brand Value ($Millions) 21795 Marlboro McDonalds 27501 Disney 27848 Toyota 27941 30131 Nokia 32319 Intel 48907 GE IBM 56201 Microsoft 56926 67000 Coca Cola 0 © 2009 Prentice Hall 10000 20000 30000 40000 Rethinking Marketing, 1st Edition 50000 60000 70000 1-37 • The era of the anti-brand – Anti-globalization movement – Dilution of local culture – Exploitation of foreign workers “Free speech is meaningless if the commercial cacophony has risen to the point where no one can hear you.” —from Naomi Klein’s successful antibranding book No Logo © 2009 Prentice Hall Rethinking Marketing, 1st Edition 1-38 What is a marketer to do? Managing in an era of Janus trends • Balance tension between global scale efficiency and multinational flexibility – Continually explore innovations – Leverage knowledge on a worldwide basis • Achieve strategic balance – Firms need to evolve, making slow changes – Revolution—“evolution by jerks” © 2009 Prentice Hall Rethinking Marketing, 1st Edition 1-39 © 2009 Prentice Hall Rethinking Marketing, 1st Edition 1-40 • Edgy entrepreneurial communication strategies – Guerilla marketing—any nontraditional approach to marketing • Flyers on windshields • Personal letters • Broadcast emails and faxes – Ambush marketing—getting your brand viewed without paying for the privilege • Wearing logo brand apparel to a competitor’s sponsored event – Viral marketing—spread © 2009 Prentice Hall Rethinking Marketing, 1st Edition 1-41 Rethink Tool #1 • Think at the crossroads of disciplines to discover breakthrough ideas where different worlds collide. © 2009 Prentice Hall Rethinking Marketing, 1st Edition 1-42 • AMA in 2004 redefined marketing as “. . . an organizational function and a set of processes for creating, communication, and delivering value to customers and for managing customer relationships in a way that benefit the organization and its stakeholders” © 2009 Prentice Hall Rethinking Marketing, 1st Edition 2-43 Long Live the New 4 C’s 1. Co-created solutions/experience —Don’t presume you understand me —Don’t try to capture, captivate, or engage me 2. Communication with communities —I want interconnected interactions with minded others, not information like- 3. Customizable personal value —I am not cost-to-serve or one of many 4. Choice of convenience —I am here, why are you not? © 2009 Prentice Hall Rethinking Marketing, 1st Edition 2-44 Seven (or Eight) Steps in Marketing Process • Identify and understand changes in the external environment that creates opportunities • Identify and understand customer needs – Identify customer segments (groups of customers with similar needs and response to marketing offer) – Identify target market segments – segments chosen/where you offer the most value – Develop value statement and position relative to competition • Develop Marketing Mix – Develop the products, services or experiences to meet those needs – Price the products, services or experiences to create value for target customers Seven (or Eight) Steps in Marketing Process – Inform customers that these products, services, or experiences exist – and how they satisfy customer problems or needs – Deliver the products, services, or experiences efficiently and conveniently for customers – Identify the right people to create or deliver your product, service or experience • Ensure customer satisfaction during and after the exchange process (sale). • Build long term relationships with customers One-Page Opportunity Identification • Due: Thursday, January 26, 2012 • Trends: Identify, document and describe trends relevant to the opportunity • Opportunity: Describe the opportunity, including industry, business model and target market • Justification: Expand on trends and how the trends suggest this opportunity
