marketing evolution + revolution – the future marketing environment

Marketing Evolution + Revolution –Marketing Evolution + Revolution –the Future Marketing Environmentthe Future Marketing Environment

The New Consumer: From The New Consumer: From Prosumption and Downshifting to Prosumption and Downshifting to

Neuromarketing and Particle MarketingNeuromarketing and Particle Marketing

Professor Luiz MoutinhoProfessor Luiz Moutinho

Foundation Chair of MarketingFoundation Chair of Marketing

School of Business and ManagementSchool of Business and Management

University of Glasgow, ScotlandUniversity of Glasgow, Scotland

How will marketing developments How will marketing developments affect the New Society ?affect the New Society ?

Neo-Marketing and Consumer Neo-Marketing and Consumer Behaviour in a Changing Marketplace: Behaviour in a Changing Marketplace:

Seeing the Unseen . . .Seeing the Unseen . . .


The greatest challenge to The greatest challenge to management in the next decade management in the next decade will be to change fast enough to will be to change fast enough to keep pace with new technology, keep pace with new technology, new markets and new values.new markets and new values.

Either we take hold of the future Either we take hold of the future or the future will take hold of us.or the future will take hold of us.


The Need for ChangeThe Need for Change

SATURATIONSATURATION The Changing MarketThe Changing Market

GLOBALISATIONGLOBALISATION The Changing CompetitionThe Changing Competition

FRAGMENTATIONFRAGMENTATION

The Changing ConsumerThe Changing Consumer

DOWNSIZINGDOWNSIZING

The Changing OrganisationThe Changing Organisation

PRESSURES FOR PRESSURES FOR MARKETING MARKETING CHANGECHANGE


The Environment is changing . . .The Environment is changing . . .Technology is transforming what companies do, how Technology is transforming what companies do, how they do it, and how they communicate their offerthey do it, and how they communicate their offerThe power of information networksThe power of information networksDistributors are becoming new “virtual manufacturers”Distributors are becoming new “virtual manufacturers”Dramatic changes in consumers and mediaDramatic changes in consumers and mediaWe are rapidly becoming an information intense We are rapidly becoming an information intense society and entering the digital era and realm of virtual society and entering the digital era and realm of virtual marketspacemarketspaceInstant communication – epidemic chipInstant communication – epidemic chip


The world and the business environment can change The world and the business environment can change faster than most managers can make decisionsfaster than most managers can make decisionsRequires the ability to operate with rapid decision Requires the ability to operate with rapid decision cyclescyclesAgility and time-based competitionAgility and time-based competitionCompanies will become increasingly dependent Companies will become increasingly dependent upon the global market to achieve best-in-class upon the global market to achieve best-in-class services and minimise costs. The backlash against services and minimise costs. The backlash against offshore outsourcing will increase as it becomes a offshore outsourcing will increase as it becomes a political focus areapolitical focus areaThe companies using poor quality outsource firms The companies using poor quality outsource firms get back marks for customer service as their business get back marks for customer service as their business declinesdeclines


Marketing Innovation - TrendsMarketing Innovation - Trends

Marketing EnvironmentMarketing Environment

From virtual manufacturers to the feminisation of From virtual manufacturers to the feminisation of marketsmarkets

Marketing OrganisationMarketing Organisation

From process-based marketing management to synoptic From process-based marketing management to synoptic marketingmarketing

Consumer BehaviourConsumer Behaviour

From voluntary simplicity to prosumptionFrom voluntary simplicity to prosumption

Organisational Buying BehaviourOrganisational Buying Behaviour

From agile and fractal factories to the new From agile and fractal factories to the new “manufacturing plants” of the world (China and India)“manufacturing plants” of the world (China and India)

Marketing ResearchMarketing Research

From virtual reality (VR) marketing research to digital From virtual reality (VR) marketing research to digital marketing researchmarketing research


Marketing Innovation - TrendsMarketing Innovation - TrendsSegmentation, Targeting and PositioningSegmentation, Targeting and Positioning

From particle marketing and cybersegmentation to From particle marketing and cybersegmentation to modal segmentationmodal segmentation

Product PolicyProduct Policy

From product/service architectures to “smart” From product/service architectures to “smart” packagingpackaging

BrandingBranding

From brand ubiquity to no brandingFrom brand ubiquity to no branding

New Product DevelopmentNew Product Development

From very short, non-sequential and concurrent NPD to From very short, non-sequential and concurrent NPD to computerised planogrammingcomputerised planogramming

PricingPricing

From target costing to one-to-one pricingFrom target costing to one-to-one pricing

Integrated Marketing CommunicationIntegrated Marketing Communication

From place-based advertising to brand velocityFrom place-based advertising to brand velocityProfessor Luiz MoutinhoProfessor Luiz Moutinho

Marketing Innovation - TrendsMarketing Innovation - TrendsSales Management (IMCSales Management (IMC))

From value-balanced selling time-based competitive From value-balanced selling time-based competitive selling and sales automation tools to sales without selling and sales automation tools to sales without sellingselling

Distribution ManagementDistribution Management

From efficient consumer response (ECR) to diagonal From efficient consumer response (ECR) to diagonal integrationintegration

Strategic Thinking in MarketingStrategic Thinking in Marketing

From a new competitive structure: networks of From a new competitive structure: networks of companies to bidding farewell to strategy based on old companies to bidding farewell to strategy based on old 4 P’s4 P’s

Marketing Planning and ProgrammingMarketing Planning and Programming

From the focus on marketing productivity to product From the focus on marketing productivity to product fact books (PFB)fact books (PFB)

International/Global MarketingInternational/Global Marketing

From Glocal to Global individualismFrom Glocal to Global individualism Professor Luiz MoutinhoProfessor Luiz Moutinho

Companies have spent Companies have spent the best part of the past the best part of the past decade re-engineering decade re-engineering business processes . . . . . business processes . . . . . but they have ignored but they have ignored customers’ processes !customers’ processes !


Setting the SceneSetting the Scene

Businesses are increasingly Businesses are increasingly driven by consumer pressure !driven by consumer pressure !Consumers have never been Consumers have never been totally powerless, but the balance totally powerless, but the balance of power is tilting in their favour and of power is tilting in their favour and will continue to do so.will continue to do so.


Marketing lives and breathes two core functions: Marketing lives and breathes two core functions: matching supply to demand, and connecting matching supply to demand, and connecting buyers and sellers as efficiently and effectively buyers and sellers as efficiently and effectively as possible. Both these functions are critically as possible. Both these functions are critically dependent on consumer understandingdependent on consumer understanding

Customer centricityCustomer centricity

The creation of the unique customer value The creation of the unique customer value proposition – proposition – customer bondingcustomer bonding as the as the foundation of economic value creation is foundation of economic value creation is paramount !paramount !

CUSTOMER EQUITYCUSTOMER EQUITY


Customer focus has become a cliché among Customer focus has become a cliché among marketing departments keen to win competitive marketing departments keen to win competitive edge. But it deserves to be taken more edge. But it deserves to be taken more seriously, as it disguises a paradigm shift from seriously, as it disguises a paradigm shift from share of brand to share of brand to share of customershare of customer..Intelligent and integrated marketing and Intelligent and integrated marketing and management.management.An “Intelligent Dialogue” with customers !An “Intelligent Dialogue” with customers !BRAIN to BRAIN – shared emotionBRAIN to BRAIN – shared emotion

New Marketing, New ThinkingNew Marketing, New Thinking


How many opportunities are being missed because How many opportunities are being missed because old-fashioned marketers still assume they know old-fashioned marketers still assume they know everything there is to know about knowing their everything there is to know about knowing their customers?customers?The “real-time” organisation strives to be available to The “real-time” organisation strives to be available to its customers “all the time” and its marketers must its customers “all the time” and its marketers must expand their toolkit of sensors . . .expand their toolkit of sensors . . .This is not just abstract theory. Success is down to a This is not just abstract theory. Success is down to a new model: new model: to operate on a sense and respond basisto operate on a sense and respond basis..One of the main sources of ideas for new products and One of the main sources of ideas for new products and services is sensing customers’ needs in “real time”.services is sensing customers’ needs in “real time”.Similarly, the whole idea of partnership sourcing or Similarly, the whole idea of partnership sourcing or virtual integration is an application of the virtual integration is an application of the sense/response model.sense/response model.


Professor Luiz MoutinhoProfessor Luiz MoutinhoProfessor Luiz MoutinhoProfessor Luiz Moutinho

The idea is that consumers’ desires The idea is that consumers’ desires should not only should not only influenceinfluence our our our our business decisions, they should business decisions, they should directdirect our business operations !our business operations !

A new type of operation is turning “the A new type of operation is turning “the supply chain” into a demand value chain, supply chain” into a demand value chain, by reversing the flow of marketing from by reversing the flow of marketing from “Company to Customer” to “Customer to “Company to Customer” to “Customer to Company”Company”

NEW SOCIOQUAKENEW SOCIOQUAKENEW SOCIAL VALUESNEW SOCIAL VALUES

CocooningCocooning Fantasy adventureFantasy adventure Small indulgenciesSmall indulgencies EgonomicsEgonomics The Vigilante ConsumerThe Vigilante Consumer 99 Lives99 Lives Icon topplingIcon toppling

S O SS O S Possible deconsumptionPossible deconsumption Home is hotHome is hot Down-ageingDown-ageing AnchoringAnchoring MancipationMancipation ClanningClanning EvelutionEvelution



The New ConsumerThe New Consumer (1)(1)

Hard on Hard, Soft on SoftHard on Hard, Soft on SoftParity markets and smaller zones of tolerance.Parity markets and smaller zones of tolerance.Organised, in control and an “intelligent agent”. Organised, in control and an “intelligent agent”. Consumers get more power.Consumers get more power.Voluntary simplicity. Downshifting.Voluntary simplicity. Downshifting.Satisfaction? Ecstasy? Limen “Relationship” ? …. No Satisfaction? Ecstasy? Limen “Relationship” ? …. No Fuss !Fuss !A spirit of sophistication and realism of the commercial A spirit of sophistication and realism of the commercial world.world.Contingency mentality.Contingency mentality.Customer Contempt.Customer Contempt.Buzz networks – Groups of ReferenceBuzz networks – Groups of Reference

AFFLUENZAAFFLUENZA

Increasing signs that a shift away from Increasing signs that a shift away from a work-obsessed lifestyle is becoming a a work-obsessed lifestyle is becoming a significant trend.significant trend.Voluntary simplicity: towards a way of Voluntary simplicity: towards a way of life that is outwardly simple, inwardly life that is outwardly simple, inwardly rich.rich.

. . . . . Your money or your life !. . . . . Your money or your life !


The New Consumer The New Consumer (2)(2)

The Why generationThe Why generationProsumption and prosumersProsumption and prosumersConsciousness paradigmConsciousness paradigmAware of product parity. Aware of product parity. Demanding on “value”. Knows Demanding on “value”. Knows what is behind the brand . . .what is behind the brand . . .



Prosumption Prosumption (Co-creation(Co-creation))

Those consumers who “buy” the Those consumers who “buy” the marketing may well go a step forward, marketing may well go a step forward, and become “and become “PROSUMERSPROSUMERS” - people who ” - people who actively and deliberately take part in actively and deliberately take part in the process of design, shaping or even the process of design, shaping or even producing a product/service, knowing it producing a product/service, knowing it is “for them”. (e.g., customatix.com)is “for them”. (e.g., customatix.com)

Consumer Behaviour TrendsConsumer Behaviour Trends

Quality rather than quantityQuality rather than quantityConsumers do not want more of Consumers do not want more of the same, but different and betterthe same, but different and betterFrom matter to mindFrom matter to mind


Increasingly, products and Increasingly, products and services are consumed by services are consumed by the mind as experiences !the mind as experiences !


Consumer Behaviour – A new Look . . .Consumer Behaviour – A new Look . . .

Higher “Psychological Deficits”Higher “Psychological Deficits”Disconnecting and exit customersDisconnecting and exit customersHere and now !Here and now !Consumers are increasingly “time Consumers are increasingly “time and effort starved”and effort starved”Virtual and E-shopping behaviourVirtual and E-shopping behaviour


Markets consist of human Markets consist of human beings not demographic sectorsbeings not demographic sectors

Contingency MarketingContingency Marketing


The challenge for marketers is The challenge for marketers is to understand consumers in a to understand consumers in a much more complex much more complex environment rather than a environment rather than a simple two or three-dimensional simple two or three-dimensional customer model: customers customer model: customers who will use different devices who will use different devices for different transactions at for different transactions at different times of the day ...different times of the day ...


On the surface, “consumer understanding” On the surface, “consumer understanding” seems like a Motherhood and Apple Pie seems like a Motherhood and Apple Pie “good” that no one could sensibly object to. “good” that no one could sensibly object to. In fact, our whole approach to consumer In fact, our whole approach to consumer understanding – how we go about achieving understanding – how we go about achieving it, for what purposes – masks a seller-it, for what purposes – masks a seller-centric, command and control ideology of centric, command and control ideology of marketing. Successful companies are marketing. Successful companies are breaking free of this ideology, and breaking free of this ideology, and reinventing marketing in the process.reinventing marketing in the process.


We are only at the very beginning of a We are only at the very beginning of a new journey – from “brand building” and new journey – from “brand building” and “customer relationship management” to “customer relationship management” to ““consumer agencyconsumer agency” !” !

The new type of understanding is driven The new type of understanding is driven less by knowing about consumers and less by knowing about consumers and more by understanding with them !more by understanding with them !


Many actions of contemporary consumer Many actions of contemporary consumer marketing are not focused on consumers’ marketing are not focused on consumers’ needs . . .needs . . .

They are focused on the needs of the They are focused on the needs of the seller, how to change buyers’ attitudes seller, how to change buyers’ attitudes and behaviours to suit the seller’s brand !and behaviours to suit the seller’s brand !


Missing the notion of VALUEMissing the notion of VALUEVALUE GAPSVALUE GAPSNeed to get the balance right !Need to get the balance right !Enlightened marketers should collaborate with Enlightened marketers should collaborate with consumers to build a dialogue and exchange consumers to build a dialogue and exchange process that creates value for both parties . . .process that creates value for both parties . . .

FAIRER EXCHANGESFAIRER EXCHANGES - FAIRER MARKETING- FAIRER MARKETING

CSCS MKMK BOI (Best of Individual) BOI (Best of Individual) valuesvalues

Integrity (e.g. do we sell other Integrity (e.g. do we sell other people’s products if they are people’s products if they are better?)better?) EmpathyEmpathy Transformation (doing it Transformation (doing it better)better) PassionPassion

Companies set up to deliver “value from our Companies set up to deliver “value from our operations” are not designed to deliver consumers’ operations” are not designed to deliver consumers’ ““value in my lifevalue in my life”.”.

Entails searching for and sourcing best value for Entails searching for and sourcing best value for genuinely customised and personalised service for genuinely customised and personalised service for solutions designed to improve solutions designed to improve personal personal productivity and emotional authenticityproductivity and emotional authenticity

Helping individuals manage aspects of their lives Helping individuals manage aspects of their lives better (“solution assembly”) and helping better (“solution assembly”) and helping individuals reaching important personal goals individuals reaching important personal goals (“Passion Partnership”)(“Passion Partnership”)

Marketers can get too Marketers can get too wrapped up in the science of wrapped up in the science of marketing and its techniques marketing and its techniques and forget about the and forget about the customer . . .customer . . .


Hard-Edged MarketingHard-Edged Marketing

What’s going on inside the What’s going on inside the customer head?customer head?A new mind setA new mind setNeuroMarketingNeuroMarketing

–New connections?New connections?

–How to create and maintain an How to create and maintain an emotional relationship with customers?emotional relationship with customers?


. . . From solicited information to . . . From solicited information to volunteeredvolunteered

. . . The challenge for an organisation . . . The challenge for an organisation is to move to a situation where the is to move to a situation where the customer starts buying from you rather customer starts buying from you rather than being sold to . . . !than being sold to . . . !


New Leading Indicators for CSNew Leading Indicators for CS

Process-Based Management – derived Customer SATISFACTION

ProcessabilityProcessabilityMultidimensionalityMultidimensionalityMeasurabilityMeasurabilityDetailabilityDetailability

. . . and. . . andNon-Artificiality !Non-Artificiality !

TRUE

LONG-TERM

SUSTAINABLE PREFERENCE

(L-TSP)

The death of corporate The death of corporate loyalty?loyalty?

Companies should no longer Companies should no longer expect loyalty: they should expect loyalty: they should accept the need to attract accept the need to attract and addict people on a and addict people on a continuous basis !continuous basis !

Trends in MK DSSTrends in MK DSS

Environmental Scanning and Environmental Scanning and ForecastingForecastingIncreased Market IntelligenceIncreased Market IntelligenceGlobal MISs (I.e, JIGSAW Project)Global MISs (I.e, JIGSAW Project)Data Fusion, Data Mining, Neuro-Data Fusion, Data Mining, Neuro-

biographic Clustering and Beyond biographic Clustering and Beyond ……Use of Live DataUse of Live DataExternal research Associates (ERAs)External research Associates (ERAs)Deontology IssuesDeontology Issues


The rise of data-led marketing, The rise of data-led marketing, and the analytical and and the analytical and experimental mindexperimental mind Data warehousing / data martsData warehousing / data marts SoftwareSoftware


Companies are pursuing a new Companies are pursuing a new way of using marketing way of using marketing information to improve the information to improve the return-on-investment in return-on-investment in information and to gain a information and to gain a competitive edge in marketing competitive edge in marketing effectiveness.effectiveness.


Rather than review of a Rather than review of a multitude of individual facts, multitude of individual facts, the role of marketing research the role of marketing research evolved to manipulate data to evolved to manipulate data to summarise the underlying summarise the underlying patterns.patterns.


The aim is a consumer who thinks, “I The aim is a consumer who thinks, “I will invest my information (and time, and will invest my information (and time, and attention as well as my money) with you attention as well as my money) with you because you are good at using it for me, because you are good at using it for me, on my behalf.” It makes marketing on my behalf.” It makes marketing research a service to the consumer. It research a service to the consumer. It requires the company (and marketing) to requires the company (and marketing) to embrace a new role as consumer agent.embrace a new role as consumer agent.


New Consumer Marketing New Consumer Marketing ResearchResearch

From Mass, Anonymous, Aggregated and From Mass, Anonymous, Aggregated and Sample Data to Names, Individual and Sample Data to Names, Individual and Specific !Specific !

In addition to segmenting the customers in the In addition to segmenting the customers in the marketplace, and designing campaigns for marketplace, and designing campaigns for each segment, marketers will be asked to go each segment, marketers will be asked to go further and, for each segment, provide a way further and, for each segment, provide a way to personalise the campaign for each person in to personalise the campaign for each person in the segment … the beginning of the segment … the beginning of PARTICLE PARTICLE MARKETING.MARKETING.


Trends in Segmentation, Targeting and Trends in Segmentation, Targeting and Positioning Positioning (1)(1)

SyncographicsSyncographicsMotigraphicsMotigraphicsDirect Marketing Technology. Persona TechnologiesDirect Marketing Technology. Persona TechnologiesCybersegmentation. CLIP (A Classification of Cybersegmentation. CLIP (A Classification of Internet People) Segmography. Internet People) Segmography. DBS (Direct Broadcasting Satellite Systems)DBS (Direct Broadcasting Satellite Systems)RFID (Radio Frequency Identification)RFID (Radio Frequency Identification)Particle marketing (Physics) and Particle marketing (Physics) and Neurolinguistics (Genetics)Neurolinguistics (Genetics)““Solutions” positioning Solutions” positioning vsvs Fuzzy Value Fuzzy Value Propositions and/or confusion marketingPropositions and/or confusion marketing


Trends in Segmentation, Targeting and Trends in Segmentation, Targeting and Positioning Positioning (2)(2)

Forget traditional positioning and Forget traditional positioning and brand-centric approaches to marketing. brand-centric approaches to marketing. We are now in the “We are now in the “Age of the NarrativeAge of the Narrative” ” where the biggest challenge facing where the biggest challenge facing companies is how to tell, communicate companies is how to tell, communicate their story in the most compelling, their story in the most compelling, consistent and credible way possible – consistent and credible way possible – both internally and externally!both internally and externally!


““COMPANIES NEED COMPANIES NEED

FORESIGHT, NOT FORESIGHT, NOT

HINDSIGHT” !HINDSIGHT” !


marketing evolution + revolution – the future marketing environment

Documents

new society

new technology

new markets

new values

new competitive structure

changing marketplace

new manufacturing plants

business environment