Tuesday, January 29, 2013

The Future of Marketing

In marketing, as in the rest of life, there is much to learn from history. Postmortems of marketing failures are important factors in making decisions about the future. The spectrum of marketing failures ranges from inadequate return on the original investment to corporate bankruptcy. According to the largest marketing research company in the world, the A.C. Nielsen Company, these are the thirteen most common marketing errors as per marketing basics:
 
                                                                                                        
 
 
1. Failure to keep a product up-to-date. Products must be suited to the market.
2. Failure to estimate the market potential accurately. Enthusiasm should be tempered with realism.
3. Failure to gauge the trend of the market. Adjustments in the marketing program must be made readily.
4. Failure to appreciate regional differences. Advertising and distribution efforts must reflect environmental and cultural limitations.
5. Failure to appreciate seasonal differences in demand. This is important not only among nations and cultures, but within product areas.
6. Failure to develop the advertising budget fully. Advertising budgets based on immediate sales are frequently short-sighted.
7. Failure to adhere to long-range goal policies. Significant trends need time to develop.
8. Failure to test-market new ideas. There is a difference between what people say and what they actually do.
9. Failure to differentiate between short-term tactics and long-range strategy. Special promotional activities cannot substitute for advertising.
10. Failure to try new ideas. Changes must be made before competitors force them.
11. Failure to integrate all phases into the overall program. Coordination is the key.
12. Failure to appraise the competition objectively. The tendency is to underestimate the resources and the ingenuity of the competition while overestimating one’s own position or reputation.
13. Failure to admit defeat. A realistic appraisal of errors is vital.
As production techniques and marketing systems become more sophisticated, cross-cultural trading increases. As people of different cultures become more dependent on each other for their living standards, they appreciate the need for peace and stability. Communication and transportation systems have created a small world, in a marketing sense. Every year more and more firms, even relatively small ones, enter the international market. The problems encountered there are significantly different from those encountered in domestic operations. Marketers are accustomed to risk-taking; but in interna- tional dealings the dimensions of these risks are often misjudged and misunderstood.
One area of special interest is the literal translation of advertising names, slogans, and concepts from one language and culture to another. It must have been embarrassing to General Motors when its "Body by Fisher" became "Corpse by Fisher" in Flemish. Colgate-Palmolive made an expensive mistake when it introduced its Cue toothpaste into French-speaking countries; the brand name and trademark turned out to be pornographic in French. Advertisements that do not conform to local lifestyles are wasted. One toothpaste manufacturer found that promising white teeth was inappropriate in many regions of Southeast Asia, where chewing betelnut is an elite habit and black teeth are symbols of prestige.
 
Export marketing companies are another result of international marketing. These independent businesses act as agents for firms that want to participate in worldwide trade, instead of their own names, they often use special letterheads showing their address as the manufacturer's "export department" or "international division." The services performed by the export company for its client include:
1. Researching the foreign market;
2. Conducting on-site tours to determine the best methods of distribution;
3. Appointing commission representatives, sometimes within an existing sales network, in the foreign country;
4. Exhibiting the products at overseas trade shows;
5. Handling the paperwork of export and import declarations, shipping and customs documentation, insurance, banking, instructions for special handling, and similar details;
6. Preparing and adapting appropriate sales literature;
7. Adapting the goods to local conditions and legal and trade standards;
8. Meeting patent and trademark requirements.
The emergence of the multinational corporation (MNC) is of major significance in the future of marketing. Many firms that entered the export business in a modest way eventually became fully committed to an international perspective. The two basic roles of these MNCs are the transmission of resources, especially technological and managerial skills, and organization of the economic activities of several nations. Global approaches to economic decisions often differ with the aims of specific countries. There may be resistance to multinational activities for reasons of nationalism, control, and the extraction of profits.
It is enormously expensive, in global terms, for each country to duplicate advanced research, technology, and production. Despite obstacles, multinationals have expanded steadily because they reduce this duplication and contribute to the economy of their host nations. It seems likely that those MNCs that can evolve effective accommodations with nationalism will flourish.
General improvements in marketing can be expected in three major areas. The first is the enterprise of private traders and corporations seeking profits. Competition will always stimulate cheaper and more effective distribution methods, more economical production, and the reduction of profit margins.
The second is joint action by firms or individuals. More and more cooperative will provide economical marketing facilities and a firm bargaining base for their members. Many marketing boards have developed to require producers and handlers of certain commodities to observe rules and procedures. In some countries, such a board assumes full responsibility for marketing certain products, either with its own staff or with private firms and cooperatives. In the United States, a board of trade, or commodity exchange, is an organized market for agricultural goods, handling commodities in much the same way as stock exchanges do for stocks and bonds. Trading companies in Japan function similarly; their combined sales figures represent almost 30 percent of Japan's GNP. They are involved in trading, resource development, manufacturing, mining, urban and regional development, and a number of service industries.
One facet of the trend toward joint action in world marketing is the formation of cartels. These may be made up of individual companies, marketing boards, trading companies, or a combination; their influence, particularly on raw materials markets, is substantial. Probably the most renowned group of this sort is OPEC, the Organization of Petroleum Exporting Countries, which has controlled the marketing of petroleum products in virtually every nation in the world.
The third area in which marketing improvements are expected is governmental assistance. This can take three major forms:
Regulatory aid includes the standardization of weights, measures, and containers, and the establishment of minimum health standards. Quality inspection and grading is vital to everyone, and the regulation of transport and market facilities helps insure fair practices. Some laws are designed to define sales contracts and how they must be fulfilled. Laws prohibiting deceptive advertising, price discrimination, and price-fixing protect consumers. Anti-trust laws prohibiting monopolies and assisting fair competition create a healthy market climate. Other laws deal with bankruptcy, patents and trademarks, and financial statements.
Facilitating aid provides market information and statistics, sets up training and extension services, and finances research into ways of raising efficiency or reducing marketing costs.
Direct intervention is government involvement in the purchase, sale, storage, and movement of goods. In some cases, a government will be its own largest consumer and may be so involved in purchasing goods and services for defense and social welfare that it virtually defines the marketing process from start to finish. Governments may influence prices, supplement existing market channels, and increase competition. They also try to protect producers and consumers against emergency pressures or chronic weaknesses in a marketing system. Some governments practice such support activities as stockpiling, subsidies, and a price equalization aid to farmers known as parity.
The trends noted in this unit will all affect the future of marketing, as will the new attitudes, customs, mores, institutions, and economic systems. The following is an outline of the major forces in society which will affect marketing in the years ahead. The main headings represent the four major breakdowns of the system in which marketing operates.
A. Sociocultural
1. Demographics : A slowing population growth with corresponding smaller family size, in industrial nations and regions; a rising average age in the United States as post-World War II babies move through their life cycle; increased participation of women in the work force.
2. Knowledge: increasing education and sophistication with less faith and acceptance.
3. Values: More secular, humanistic, and rational; less traditional, religious, and mystic.
4. Social Structure: More open and fluid societies; more varied subcultures and life styles; patterns of a "one-world" mentality.
B. Economic
1. Structure: More concentration, larger companies, and more multinational trade.
2. Competition: More visible; closer government observation,'
3. Technology: Extremely important; accelerated.
C. Governmental
1. Increased complexity and size.
2. More interaction with business.
3. More direct intervention in the economic system,
4. More restrictions on marketing with a struggle surrounding the regulatory role.
D. Ecological
1. Much of the world burdened by population growth.
2. Limited resources.
3. Increased interdependence among nations.
4. Need to preserve the environment.
Marketing is more than business techniques and economic activities; it is a social process that fulfills a basic social need. It is comprised of and affected by the diverse interrelationships of individuals, organizations, governments, and society. What forms it will take in the future depend on political and economic changes, but one thing is certain; marketing will always be with us in an important way.

5 comments: