Marketing Challenges into the New “Connected” Millennium
Marketing Challenges into the New “Connected” Millennium
a. Marketing operates within a dynamic changing environment.
o The major marketing developments as we enter the new millennium
can be summed up in a single theme: connectedness.
o Now more than ever, we are connected to one another.
Technologies for Connecting
b. The major force behind the new connectedness is technology.
c. The boom in computer, telecommunications, and information technology,
as well as the merging of these technologies, has had a major impact on
the way businesses bring value to their customers.
o Using today’s powerful computers, marketers create detailed
databases and use them to target individual customers with offers
designed to meet their specific needs and buying patterns.
o Cell phones, fax machines, and CD-ROM to interactive TV are just
a few of the tools being used to make connections.
Electronic commerce allows consumers to shop and buy
without ever leaving home.
Virtual reality displays, virtual shopping, and virtual
salespeople are just a few of the changes that consumers
seem to be embracing.
d. The Information Superhighway (and its backbone—the Internet) will link
customers to companies in ways that were unimagined only a few years
ago. The Internet is a vast and burgeoning global web of computer
networks, with no central management or ownership. The user-friendly
World Wide Web has changed us all.
o The Internet has been hailed as the technology behind a new
model for doing business.
o Marketplaces have now become marketspaces.
e. The U.S. Internet penetration is approaching 60 percent, with some 160
million people accessing the Web in any given month.
o Worldwide usage is expected to approach 1 billion by 2004.
o Many companies have now become “click and mortar” companies.
o Though there was a meltdown in 2000, .com companies still
abound on the Internet.
o Business-to-business transactions online are expected to reach
$3.6 trillion in 2003. By 2005, more than 500,000 businesses will
engage in business online.
Connections with Customers
f. Today, most marketers are realizing that they don’t want to connect with
just any customers. Instead, most are targeting fewer, potentially more
profitable customers.
o Greater diversity and new consumer connections have meant
greater market fragmentation.
Marketers have responded by moving to more segmented
marketing where they target carefully chosen submarkets or
even individual buyers.
One-to-one marketing has become the order of the day.
Extensive databases allows this procedure to go forward.
o At the same time, companies are analyzing the value of the
customer to the firm. What value does the customer bring to the
organization? Are they worth pursuing?
Connect with those that will be bring in profits.
g. Connect for a customer’s lifetime.
o Rather than always looking for new customers, the focus has now
shifted to keeping current customers and building lasting
relationships based on superior satisfaction and value.
o Long-term profits have superseded short-term gain.
o Companies are spending more time considering “share of
customer” and less time worrying about “share of market.”
Employees are being trained in cross-selling.
Up-selling is now a common practice.
h. Today, beyond connecting more deeply, many companies are also taking
advantage of new technologies that let them connect more directly with
their customers.
o Products are now available via telephone, mail-order catalogs,
kiosks, and electronic commerce.
o Business-to-business purchasing over the Internet has increased
even faster than online consumer buying.
o Some firms sell only via direct channels (Example: Dell Computer,
Amazon.com).
o Other firms use a combination of traditional selling and direct selling
methods.
i. Direct marketing is redefining the buyer’s role in connecting with sellers.
o Buyers are now active participants in shaping the marketing offer
and process.
o Some companies allow buyers to design their own products online.
o Some marketers have hailed direct marketing as the “marketing
model of the next millennium.”
Connections with Marketing’s Partners
j. Connecting inside the company—traditionally, marketers have played the
role of intermediary, charged with understanding customer needs and
representing the customer to different company departments, which then
acted upon these needs.
o Marketing no longer has sole ownership of customer interactions.
Now, every employee must be customer-focused.
Companies are reorganizing their operations to align them
better with customer needs.
Teams coordinate efforts toward the customer.
k. Connecting with outside partners—most companies today are networked
companies, relying heavily on partnerships with other firms.
o Supply chain management—the supply chain describes a longer
channel, stretching from raw materials to components to final
products that are carried to final buyers. Each member of the
supply chain creates and captures only a portion of the total value
generated by the supply chain.
o Supply chain management allows all partners to strengthen
relationships.
o Strategic alliances—companies need strategic partners.
Companies need to give careful thought to finding partners
who might complement their strengths and offset their
weaknesses.
Connections with the World Around Us
l. Marketers are taking a fresh look at how they connect with the broader
world around them.
o Global connections—geographical and cultural differences and
distances have shrunk dramatically in the last decade.
o Today, almost every company, large or small, is touched in some
way by global competition.
American firms are challenged by international competitors
in their once safe domestic market.
Companies are not only exporting, but buying more
components and supplies from abroad.
Domestically purchased goods and services are hybrids
(with components coming from many international sources).
The secret for business success in the next century will be to
build good global networks.
o Connections with our values and social responsibilities—as the
worldwide consumerism and environmentalism movements mature,
today’s marketers are being called upon to take greater
responsibility for the social and environmental impact of their
actions.
The social responsibility and environmental movements will
place even stricter demands on companies in the future.
Those that resist will be forced into compliance by legislation
or consumer outcries.
Several companies are beginning to practice “caring
capitalism” (Example: Ben & Jerry’s and Saturn). These
companies are building social responsibility and action into
their company value and mission statements.
o Broadening connections—marketing can be used to connect with
customers and other important constituencies.
Marketing has become a major component in not-for-profit
businesses.
Even government agencies have shown an increased
interest in marketing.
The New Connected World of Marketing
m. Smart marketers of all kinds are taking advantage of new opportunities for
connecting with their customers, marketing partners, and the world around
them.
o The old marketing thinking saw marketing as little more than selling
or advertising. It emphasized:
Customer acquisition.
Short-term profit.
Goal—sell products.
o The new marketing thinking believes that improving customer
knowledge and customer connections is a corporate goal.
Target profitable customers.
Find innovative ways to capture and keep these customers.
Form direct connections and build lasting customer
relationships.
• Use targeted media.
• Integrate communications.
• Use technologies to provide connections.
• View suppliers and distributors as partners, not
adversaries.
• Deliver superior value.
a. Marketing operates within a dynamic changing environment.
o The major marketing developments as we enter the new millennium
can be summed up in a single theme: connectedness.
o Now more than ever, we are connected to one another.
Technologies for Connecting
b. The major force behind the new connectedness is technology.
c. The boom in computer, telecommunications, and information technology,
as well as the merging of these technologies, has had a major impact on
the way businesses bring value to their customers.
o Using today’s powerful computers, marketers create detailed
databases and use them to target individual customers with offers
designed to meet their specific needs and buying patterns.
o Cell phones, fax machines, and CD-ROM to interactive TV are just
a few of the tools being used to make connections.
Electronic commerce allows consumers to shop and buy
without ever leaving home.
Virtual reality displays, virtual shopping, and virtual
salespeople are just a few of the changes that consumers
seem to be embracing.
d. The Information Superhighway (and its backbone—the Internet) will link
customers to companies in ways that were unimagined only a few years
ago. The Internet is a vast and burgeoning global web of computer
networks, with no central management or ownership. The user-friendly
World Wide Web has changed us all.
o The Internet has been hailed as the technology behind a new
model for doing business.
o Marketplaces have now become marketspaces.
e. The U.S. Internet penetration is approaching 60 percent, with some 160
million people accessing the Web in any given month.
o Worldwide usage is expected to approach 1 billion by 2004.
o Many companies have now become “click and mortar” companies.
o Though there was a meltdown in 2000, .com companies still
abound on the Internet.
o Business-to-business transactions online are expected to reach
$3.6 trillion in 2003. By 2005, more than 500,000 businesses will
engage in business online.
Connections with Customers
f. Today, most marketers are realizing that they don’t want to connect with
just any customers. Instead, most are targeting fewer, potentially more
profitable customers.
o Greater diversity and new consumer connections have meant
greater market fragmentation.
Marketers have responded by moving to more segmented
marketing where they target carefully chosen submarkets or
even individual buyers.
One-to-one marketing has become the order of the day.
Extensive databases allows this procedure to go forward.
o At the same time, companies are analyzing the value of the
customer to the firm. What value does the customer bring to the
organization? Are they worth pursuing?
Connect with those that will be bring in profits.
g. Connect for a customer’s lifetime.
o Rather than always looking for new customers, the focus has now
shifted to keeping current customers and building lasting
relationships based on superior satisfaction and value.
o Long-term profits have superseded short-term gain.
o Companies are spending more time considering “share of
customer” and less time worrying about “share of market.”
Employees are being trained in cross-selling.
Up-selling is now a common practice.
h. Today, beyond connecting more deeply, many companies are also taking
advantage of new technologies that let them connect more directly with
their customers.
o Products are now available via telephone, mail-order catalogs,
kiosks, and electronic commerce.
o Business-to-business purchasing over the Internet has increased
even faster than online consumer buying.
o Some firms sell only via direct channels (Example: Dell Computer,
Amazon.com).
o Other firms use a combination of traditional selling and direct selling
methods.
i. Direct marketing is redefining the buyer’s role in connecting with sellers.
o Buyers are now active participants in shaping the marketing offer
and process.
o Some companies allow buyers to design their own products online.
o Some marketers have hailed direct marketing as the “marketing
model of the next millennium.”
Connections with Marketing’s Partners
j. Connecting inside the company—traditionally, marketers have played the
role of intermediary, charged with understanding customer needs and
representing the customer to different company departments, which then
acted upon these needs.
o Marketing no longer has sole ownership of customer interactions.
Now, every employee must be customer-focused.
Companies are reorganizing their operations to align them
better with customer needs.
Teams coordinate efforts toward the customer.
k. Connecting with outside partners—most companies today are networked
companies, relying heavily on partnerships with other firms.
o Supply chain management—the supply chain describes a longer
channel, stretching from raw materials to components to final
products that are carried to final buyers. Each member of the
supply chain creates and captures only a portion of the total value
generated by the supply chain.
o Supply chain management allows all partners to strengthen
relationships.
o Strategic alliances—companies need strategic partners.
Companies need to give careful thought to finding partners
who might complement their strengths and offset their
weaknesses.
Connections with the World Around Us
l. Marketers are taking a fresh look at how they connect with the broader
world around them.
o Global connections—geographical and cultural differences and
distances have shrunk dramatically in the last decade.
o Today, almost every company, large or small, is touched in some
way by global competition.
American firms are challenged by international competitors
in their once safe domestic market.
Companies are not only exporting, but buying more
components and supplies from abroad.
Domestically purchased goods and services are hybrids
(with components coming from many international sources).
The secret for business success in the next century will be to
build good global networks.
o Connections with our values and social responsibilities—as the
worldwide consumerism and environmentalism movements mature,
today’s marketers are being called upon to take greater
responsibility for the social and environmental impact of their
actions.
The social responsibility and environmental movements will
place even stricter demands on companies in the future.
Those that resist will be forced into compliance by legislation
or consumer outcries.
Several companies are beginning to practice “caring
capitalism” (Example: Ben & Jerry’s and Saturn). These
companies are building social responsibility and action into
their company value and mission statements.
o Broadening connections—marketing can be used to connect with
customers and other important constituencies.
Marketing has become a major component in not-for-profit
businesses.
Even government agencies have shown an increased
interest in marketing.
The New Connected World of Marketing
m. Smart marketers of all kinds are taking advantage of new opportunities for
connecting with their customers, marketing partners, and the world around
them.
o The old marketing thinking saw marketing as little more than selling
or advertising. It emphasized:
Customer acquisition.
Short-term profit.
Goal—sell products.
o The new marketing thinking believes that improving customer
knowledge and customer connections is a corporate goal.
Target profitable customers.
Find innovative ways to capture and keep these customers.
Form direct connections and build lasting customer
relationships.
• Use targeted media.
• Integrate communications.
• Use technologies to provide connections.
• View suppliers and distributors as partners, not
adversaries.
• Deliver superior value.
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