Marketing used to be simple..... now in beta mode

MARKETING USED TO BE SIMPLE…NOW IN BETA MODE

From Objectifying Objects, Storied Products and MeMedia to the New Networked Self, Virtual Immortality, EnviroMENTAL Movement and Enviro-biographies.

Professor Luiz Moutinho

Foundation Chair in Marketing

University of Glasgow Business School

SCOTLAND

THE DNA of the INDUSTRIAL ERA still DOMINATES MARKETING…

…they still think they own the brand.

…they still think that customer wake up thinking about that brand.

…they are still walking the industrial walk.

…interrupting marketing to counting the 6Y. Success rate not the 9Y% failure rate.

…this is a pipeline leading nowhere.

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…Found new ways to turn us off.

…They have started invading every available piece of the brick and mortar and digital worlds to be our attention.

…They started talking about how “customer-centric” they are.

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How can companies be confident they are doing the right thing when they avoid contact with their customers?

Marketing has drifted too far from product reality. Essence, substance, the two cannot be separated. Essence – the feelings we get from buying, using or experiencing the thing.

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THE MARKERTING DIED WITH THE MAKER

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MARKETING MUST BE DISRUPTED

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GlobalisationGoing out into the world, absorbing influences. Blending of cultures “Collaboration Culture”

LocalisationGrowing national pride, growing cultural exports.

DigitalisationWe are all six degrees (or less) apart, ad loving it.

FragmentationThe splintering and fusing of popular culture. Cut’ n paste fashion. An explosion of the arts. Consumers are reaching out everywhere for everything: It is an information and ideas explosion.

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• Restraint remains the new normal.

• Growth is found in less-developed world. The less-developed regions will grown 31 times faster than the more developed ones.

• Marketers in the developed world will be locked into share wars while those able to complete in the less-developed world could see substantial growth.

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The Face of Recovery: Consumers are taking note of what the “new normal” looks like. Some have become forever-savers, some will return to a more discrete / timid spending, while others will prefer a return to big-spending ways when better times are back again.

Indulgence Offsetting: The great recession has rendered over-the-top expressions of luxury gauche. Yet consumers are still rewarding themselves, employing strategies ranging from permissible and rationalised indulgence.

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ATTENTION ECONOMY

• The attention economy is a marketplace where consumers agree to receive services in exchange for their attention (i.e., personalised news, personalised search, alerts and recommendations to buy).

• The Attention Economy is about the consumer having choice – they get to choose where their attention is “spent”. Another key ingredient in the attention game is relevance. As long as the consumer sees relevant content, he/she is going to stick around and that causes more opportunities.

• Expect to see this concept become more important to the webs economy over the next decade.

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VIRTUAL TOGETHERNESS

TV and Social Media will fuel an explosion in tools, technologies and platforms for

interaction and research.

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Platforms sell social currency not products

Rather than talking about it, Platforms do customer centricity.

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SEMANTIC WEB

• The semantic web is about machines talking to machines. It is about making the web more “intelligent”. Computers analysing all the data on the web – the content, links and transactions between people and computers.

• The building blocks of the semantic web are here already: RDF (Resource Description Framework), OWL (Web Ontology Language), microformats are a few of them.

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Technology eats into other categories and becomes a high priority for consumers. From EAT, PRAY, TECH

(high-tech devices and services are becoming as integral to people as food and clothing).

To DE-TECHING (choosing to log off, at least temporarily).

National Day of Unplugging.

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DIGITAL DOWNTIME

• Studies showing the benefits of taking time away from the multi-screen environment are encouraging people to DE-TECH for hours, every day at a time.

• These mindful breaks from digital input will be intended to relieve stress and foster creativity.

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APP OVERLOAD

Navigating the vast world of apps is already daunting, and the app-ifying of everything is only just beginning. Apple’s App store offers more than half a million options, with “copycat apps” cluttering up virtual shelves. The novelty of apps will wear off as consumers become paralysed by too many choices.

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TECH-ENABLED THROWBACKS

New technologies are taking people back to some pre-digital habits. Handwriting which has been shown to “boost the brain” is making a comeback thanks to touch screen technology.

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The tyranny of accountability morphs into responsibility. Marketers become responsible for every customer “moment of truth” and all the impressions created by the interactions between brand and the consumer.

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MARKETING USED TO BE SIMPLE

• When the media world was less fragmented and before the consumer has a digital megaphone that could influence millions, marketing was simple.

• Before the demand economy, brands could afford to evolve at their pace.

• Present conditions throttle marketing agility.

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IDEAS IN 21ST CENTURY MARKETING

1. The new core differentiator – Authenticity

2. The path to sustainable growth.

3. Marketing the shows respect

4. All digital world. Going beyond digital (transdigital).

5. Social everything

6. Deliver desirable experiences

7. Advertising ReEvolution

8. Brand more than Customer Interactions

9. Integrate or Die

10.Marketers as Growth Companions20

THE EYES HAVE IT:

MARKETERS NOW TRACK SHOPPERS RETINAS

Customer-products companies are turning to new technology to overcome the biggest obstacle to learning what shoppers really think: What the shopper say.

It turns out consumers aren’t a very reliable source of information about their own preferences.

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Procter and Gamble Co, Unilever PLC and Kimberly-Clark Corp, are combing three-dimensional computer simulations of product designs and store layouts with eye-tracking technology. And that, in turn is helping them roll out new products faster and come up with designs and shelf layouts that boost sales.

Kimberly-Clark’s researchers used computer screens outfitted with retina-tracking cameras.

Their goal was to find which designs got noticed in the first 10 seconds a shopper looked at a shelf-a crucial window when products are recognized and placed in the shopping cart.

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ELECTRONIC PROFILING

We are getting even closer to Minority Report. Out of Japan comes a “mind-reading vending machine” that extrapolates facial characteristics into demographic information to predict leverage choice. And facial recognition billboards in Japan identify gender with 85-90 percent accuracy, changing the message accordingly.

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OBJECTIFYING OBJECTS – Motivational Objects

The more that objects become replaced by digital/virtual counterparts – from records and books to photo albums and even cash-watch for people to fetishize the physical object. Books are being turned into decorative accessories, for example, and records into art.

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SMALLER SKUS

F&B brands are swinging in the opposite direction from the mega-sizes and bek offerings they have targeted at budgets-savy consumers. Smaller sizes at minimal prices will target extremely cost-sensitive customers in the developed world. E.g., Heinz – 99 cents (USA), 1 Euro ketchup, Kraft – 50 cent

Navigating the New Normal

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STRIPPED DOWN PRODUCTS/SERVICES

More brands in more categories will enhance the idea of “pay less, get less”, with “less” referring to amenities, features, conveniences, etc… the no-one wants.

e.g., public hotels, value-oriented hotels, that “will only offer services that mater, those that guests really want and need rather than an array of superfluous services they do not use”…

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STORIED PRODUCTS

Consumers are increasingly looking for a personal connection to brands, and we will see more brands playing up the people and stories behind the products – people, ingredients, employees, etc.

e.g., Boticca (London), e-commerce site for accessories – “I’d rather wear a unique story”.

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• An inconvenient truth: classical brands communication is getting more and more ineffective and inefficient.

• No longer the classical principal of “sender –

Recipient”.

• No longer the classical principal of conditioning.

• No longer the classical “volume-principle”.

• Any product is replaceable. Nobody only cares for a specific brand anymore.

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LIQUID BRANDS

Today’s consumers are capricious and non-committal. Brands will have to become more liquid to keep up with their constantly moving targets.

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GROUP MANIPULATED PRICING

Group buying online went from a blip on the radar to a bonanza. As the idea matures, we will see more inventive variations.

Uniglos Lucky Counter. Rather than a fixed price, the price will decrease in real time as more people opt in.

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The Difference: Communication offers a Counter-Value

For attention instead of just enforcing it.

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Interruptional Communication

Supportive Communication

… Buy it ‘cos we are great.

… Buy it ‘cos we want you to be great.

BEYOND ADVERTISING BUSINESS MODEL

“Transparency Triumph”. Reviewing is the new advertising.

A business model based on facilitating both customer and partners in trust building and on-demand interacting.

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TRANSMEDIA PLANNING

• Extending narratives across media platforms

• Narrative continuity across multiple platforms.

• Creation of original storylines for new platforms.

• Entertainment content.

• MeMedia

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TRENDS IN CONSUMER MARKETING LANDSCAPE1. Desire for greater control in our lives and over our interactions.

2. Search for meaning and authenticity.

3. Search for trust. Deep void of trust between consumers and business.

4. Experience matters. Trysummers

5. Participation as consumption.

6. Web 2.0 is mainstream

7. Social patterns enforced through digital tools.

8. Immersion of technology into our daily lives.

9. The Connected Consumer

10.Non-Linear purchase funnel.

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THE PERSONAL RETAILER

There is a new wrinkle in the product – personalisation trend: Consumers profiting from their creations while benefiting the brand. Beverage company Uflavor will soon enable customers to dream up flavour combos, adding the option to test ad sell the drinks via social media. Converse is testing a Facebook app the lets users market their custom designed trainers to friends (receiving freebies in return for sales). And the Kaiser Chiefs let fans select songs and artwork to create their own version of 2011’s “the Future is Medieval” – Then take a commission on sales.

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MAKING A DIFFERENCE TO SOMEONE WHO HAS

INFINITE CHOICE.

• Choice fatigued consumers

• Treat markets like “people” and let go of mindless segmentation.

• Ensure that your brand tells the truth when it makes a promise.

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THE NEW NETWORK SELF

• Identity Flux – technology allowed to experiment with different personalities. A much more fluid sense of who we are. After virtual liberation, we are starting to reject the singularly defined roles we are expected to play in society.

• Gender – neutrality goes mainstream

• Virtual Immortality – consumers creating existences in the virtual world – dressing up their avatars. Multiple lives.

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Environ MENTAL Movement – the next consumer-led reaction will be against the mental pollution caused by marketers. Consumers are starting to say they have had enough. Companies are expected to reduce the amount of damage they are doing to our minds. Marketing – free white spaces instead of polluting the environment with models and logos.

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PRODUCT PLACEMENT

• Consumers are much more concerned about the consequences of consumption. Is my garbage poisoning someone in a developing country?

• In the future, Enviro-biographies will be attached to just about everything, letting consumers know the entire life story of a product.

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LOYALTY MARKETING NEEDS A REVOLUTION

The raison d’etre of loyalty marketing – identifying customers (via opt0in), understanding their current and potential value, and then treating them differently – still seems to be missing from most companies’ loyalty and relationship marketing practices.

It’s too much mass direct marketing; not enough true relationship marketing.

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Loyalty “programs” will be increasingly invisible. Published programs are not going away. But they will be increasingly overshadowed by what happens privately between brands and select customers.

Customer experience should be more consistently sync with the brand promise.

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Revolutionary loyalty “programs” will be:

1. Unpublished, real time and difficult to replicate

2. Built on proprietary data and insights

3. Able to recognise customers accordingly

4. Driven by customers not brands, in social as well as all channels.

5. The largest organic growth engine available to a company.

Loyalty programs need to have meaning I consumers lives.

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• Consumers face intense levels of message saturation and intrusion from marketing today.

• Consumers have, therefore, cultivated much higher levels of resistance to marketing practices and messages.

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Social Media Scale – Back: Savy consumers are now in the process of deciding what degree of personal disclosures and social-net activity they can deal with.

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Facebook Alternatives

With over 800 million people on Facebook, social networkers will be exploring more niche communities, greater exclusivity and privacy – Appleseed, OneSocialWeb, Diaspora, Pip.io, the fridge and college only, including DIY Social Networks, invite-only offerings and student networks. E.g., Path – “the personal network” – “a place to by yourself”, limits members to 50 connections.

Watch for counter-loves from Facebook – Groups Feature.

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• Strategy is not about “The Internet”.

• It is about BEHAVIOUR, not TECHNOLOGY.

• It is about STORIES and VALUES, not FUNCTIONALITY.

• We need to get inside the situation and measure real value as it is happening.

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The old paradigm of ever increased consumption, with growth at any price, is no longer valid. Companies that will succeed in the future will be those that reduce their environmental impact while increasing their economic and social impacts.

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MARKETS ARE CONVERSATIONS – Business Model

• “Foreverism”. Consumers and businesses embracing conversations, lifestyles and products that are “never done”.

• Think operating in a humble, transparent, unpolished, almost human-like forever Beta mode, not just for one product, but for an entire organisation.

• Permanent bite-mode – how to humanise brands.

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A POSSIBLE FOUNDATION OF THE SYSTEM IS TO RECREATE CONSUMERS AS AGENTS

Talking Drivers Connections Affinities Rationality

Searching Awareness Relationships Media Impact Emotion

Posting Perceptions Influence Total Exposure Hiearchies

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Behaviours Profiles Interactions Touchpoints

DecisionMaking

FULL JOURNEY ATTRIBUTION

Simulates the interactions of all touch points – both media and non-media that reflect the market reality and layers in the impact of product usage, WOM and online behaviour to provide a complete picture of the path-to-purchase.

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• BOUNDED RATIONALITY

• Accounts for the nuances of a real market through a decision engine that uses behavioural economics to recreate consumer choice.

• Artificial consumers are populated with a “brain” in order to replicate fundamental elements of human behaviour, including emotion, irrationality and choice.

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ENVIRONOMICS: Econ-Sumerism

Sustainagility. Consumer experience. Translating insights into products, designs and strategies that satisfy market needs and are good for the environment. Eco-design. Self-production. Laser cutting, rapid prototyping. Dematerialisation. Namo technology. Ubiquitous computing. Designpreneurs.

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BENEFIT CORPORATIONS

While corporation traditionally focus on increasing shareholder value, benefit corporations operate under legal provisions that enable a company to take all stakeholders into consideration, not only stakeholders.

The legislation allows businesses to embed sustainability principles into their DNA. B Corps. Nonprofit B lab offers certification. Close to 500 (2012) have now been certified in North America and Europe. As shared value gains steam, watch for more corporations to tweak the modern capitalist models.

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FOR-PROFIT CHAINS, NONPROFIT STORES

Retail chains are testing an innovative idea in social responsibility: non-profit retail/endeavours that leverage what the companies do best to benefit communities. Customers take part by simple consumer as normal. Nordstorm’s new Manhattan concept store, treasure & bond, gives all proceeds to local charities, as does panera bread. Co’s Panera Cares restaurants, where customers can pay what they wish. With growing expectations that brands enhance the well-being of the communities where they do business, watch for these nonprofits to gain wider adoption.

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THEY KEY TO FUTURE SUCCESS LIES IN REDUCING COMPLEXITY

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IF YOU DON’T LIKE CHANGE, YOU’RE GOING TO LIKE IRRELEVANCE EVER

LESS.

(Eric Shimeski)

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