Markets today are changing fast.
Price-sensitive customers, new competitors, new distribution channels, new communication channels, the Internet, wireless commerce, globalization, deregulation, privatization ... the list goes on.
And it is not only markets that are changing, but the technologies that support them: e-commerce, e-mail, mobile phones, fax machines, sales and marketing automation, cable TV video-conferencing.
It is imperative that companies think through the revolutionary impact of these new technologies.
Companies also need to think through the opportunities and perils of globalization.
Foreign markets are a source of lower-cost goods for production and a market for a company’s brands.
At the same time they pose risks due to differences in laws, language, business objectives, and supply systems.
Today’s major economic problem is overcapacity in most of the world’s industries.
Customers are scarce, not products.
Demand, not supply, is the problem.
Overcapacity leads to hyper-competition, with too many goods chasing too few customers.
And most goods and services lack differentiation.
The result: dog-eat-dog pricing and mounting business failures.
The Internet, technology, and globalization have combined to create a new economy.
The old economy is built on the logic of managing manufacturing industries, the new economy is built on the logic of managing information and information industries.
The new economy holds that those competitors with the best information systems and intelligence will be the winners.
Not surprisingly, many companies are quickly digitizing their businesses to achieve cost savings and increased market reach and penetration.
The Internet has given new capabilities to both consumers and producers.
Previously the company had been the hunter searching for customers; now the consumer has become the hunter.
The consumer informs the company of his specific requirements, proposes the price he will pay, establishes how he wants to receive the goods, and decides whether he will give permission to receive company information and advertising.
The old economy is not gone, however.
Today’s economy is a mix of the old economy and the new economy.
Companies need to retain most of their skills and competencies that have worked in the past.
But they also need to acquire new mind-sets and competencies if they hope to prosper in the future.
The bottom line is that markets are changing faster than our marketing.
The classic marketing model needs to be future-fitted.
Marketing must be deconstructed, redefined, and stretched.
Marketing is not going to work if its only charge is to pump up the sales of existing goods (i.e., traditional make-and-sell marketing).
Marketers need to get more involved in deciding what goods to pump out.
Smart firms are adopting a sense-and-respond marketing mind-set.
Today’s businesses must strive to satisfy customers’ needs in the most convenient way, minimizing the time and energy that customers spend in searching for, ordering, and receiving goods and services.
Businesses must make better use of their collaborators (e.g., suppliers, distributors, employees, and community) if they hope to ensure that their customers’ needs are fulfilled more satisfactorily and more cost effectively.
Businesses must deal with the two fundamental forces affecting businesses: supply-side commoditization and demand-side customization.
Businesses need to shift from focusing on their product portfolios to focusing on their customer portfolios.
Today’s marketing is increasingly about customer relationship management.
Companies need skills in measuring customer profitability and customer lifetime value, in upselling and cross-selling, and in data mining customer databases and customizing messages and offerings.
Marketing strategy must be developed in the context of corporate strategy.
Marketing integrates the work of creating and delivering customer value and must have more influence on the rest of the organization.
We hold that marketing should be positioned as the driver of corporate strategy in the digital economy.
Companies need a new corporate and marketing mind-set to perform successfully in the digital age.