Prologue: From Marketing 0 to Marketing 0
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Management and Cost Accounting Bhimani
| how to offer (place and promotion). Companies need to determine where to distribute the product with the objective of making it conveniently available and accessible to customers. Companies also need to communicate the information about the product to the target audience through various methods such as advertising, public relations, and sales promotions. When the four P's of the marketing mix are optimally designed and aligned, selling becomes less challenging as customers are attracted to the value propositions. In a connected world, the concept of marketing mix has evolved to accommodate more customer participation. Marketing mix (the four P's) should be redefined as the four C's (co-creation, currency, communal activation, and conversation). In the digital economy, co-creation is the new product development strategy. Through co-creation and involving customers early in the ideation stage, companies can improve the success rate of new product development. Co- creation also allows customers to customize and personalize products and services, thereby creating superior value propositions. The concept of pricing is also evolving in the digital era from standardized to dynamic pricing. Dynamic pricing—setting flexible prices based on market demand and capacity utilization—is not new in some industries such as hospitality and airlines. But advancement in technology has brought the practice to other industries. Online retailers, for instance, collect a massive amount of data, which allows them to perform big-data analytics and in turn to offer a unique pricing for each customer. With dynamic pricing, companies can optimize profitability by charging different customers differently based on historical purchase patterns, proximity to store locations, and other customer-profile aspects. In the digital economy, price is similar to currency, which fluctuates depending on market demand. The concept of channel is also changing. In the sharing economy, the most potent distribution concept is peer-to-peer distribution. Players such as Airbnb, Uber, Zipcar, and Lending Club are disrupting the hotel, taxi, auto rental, and banking industries, respectively. They provide customers easy access to the products and services not owned by them but by other customers. The rise of 3-D printing will spur this peer-to-peer distribution even more in the near future. Imagine customers wanting a product and in a matter of minutes receiving the product printed in front of them. In a connected world, customers demand access to products and services almost instantly, which can only be served with their peers in close proximity. This is the essence of communal activation. The concept of promotion has also evolved in recent years. Traditionally, promotion has always been a one-sided affair, with companies sending messages to customers as audiences. Today, the proliferation of social media enables customers to respond to those messages. It also allows customers to converse about the messages with other customers. The rise of customer- rating systems such as TripAdvisor and Yelp provide a platform for customers to have conversations about and offer evaluations of brands they have interacted with. With a connected marketing mix (the four C's) companies have a high likelihood of surviving in the digital economy. However, the paradigm of selling needs to change as well. Traditionally, customers are passive objects of selling techniques. In a connected world, the idea is to have both sides actively obtain commercial value. With increased customer participation, companies are engaging customers in transparent commercialization. From Customer Service Processes to Collaborative Customer Care Prior to purchase, customers are treated as targets. Once they decide to buy, they are considered kings in a traditional customer-service perspective. Shifting to the customer-care approach, companies view customers as equals. Instead of serving customers, a company demonstrates its genuine concern for the customer by listening, responding, and consistently following through on terms dictated by both the company and the customer. In traditional customer-service, personnel are responsible for performing specific roles and processes according to strict guidelines and standard operating procedures. This situation often puts service personnel in a dilemma over conflicting objectives. In a connected world, collaboration is the key to customer-care success. Collaboration happens when companies invite customers to participate in the process by using self-service facilities. Integrating Traditional and Digital Marketing Digital marketing is not meant to replace traditional marketing. Instead, the two should coexist with interchanging roles across the customer path (details about customer path are provided in Chapter 5 ). In the early stage of interaction between companies and customers, traditional marketing plays a major role in building awareness and interest. As the interaction progresses and customers demand closer relationships with companies, digital marketing rises in importance. The most important role of digital marketing is to drive action and advocacy. Since digital marketing is more accountable than traditional marketing, its focus is to drive results whereas traditional marketing's focus is on initiating customer interaction. (See Figure 4.1 .) Download 1.31 Mb. Share with your friends:
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