Marketing in the 21st century

With the rise of the Internet and, more recently, social media, the discipline of marketing has undergone huge changes. In the excerpt from the preface of the Oxford Dictionary of Marketing below, Charles Doyle explains what marketing means in the 21st century. You can find out more about the dictionary in the video at the end of the post.

Despite the criticism leveled at marketing, why has marketing continued its inexorable march into every aspect of life? Since the end of World War II, two major trends have been affecting the practice of marketing: customer power and self-service. Both trends have been accelerated by the Internet. Increasingly, customers are smarter, better informed, better protected and have a much greater range of choices. Greater choice and information have increased customer sophistication and buying power. Customers can better exploit a world of over-supply to hold down prices. This new power enables customers to negotiate better deals across a vast range of producers. The ways in which customers want to buy goods and services are also changing. Self-service, where companies enable customers to do things for themselves in the name of greater convenience, has been a powerful factor in the rise of consumer empowerment, particularly in services. We now pour our own petrol, become our own bank teller, pick and pack our own groceries, arrange our own holidays, process and print our own photographs, review books, publish ourselves, broadcast ourselves, analyse markets, buy and sell our own investments directly, and electronically deliver our own mail—activities that previously required a skilled assistant.

The consequence of these changes is that many of the ‘classic’ functions of marketing—such as mass advertising—are in decline in the West, and their effectiveness is questioned. In the industrial past, the mass market was served by a few mass media that could grab general attention and create demand for mass-produced products. The mass market was characterized by a common culture, a single geographical location and served by few but familiar types of media. No longer. The apparent decline in effectiveness of many of the classic marketing techniques is partly attributable to the changes in the market and to the vast range of media now available. With the proliferation of multimedia outlets and channels, there simply is no one medium that can any longer reach a mass audience on a continuous basis in the way that the press, radio, or public broadcaster could have done in the past. For example, as well as the mass media that boomed in the 20th century (such as radio, cinema, telephone, video, satellite and cable television, billboards, the popular printed press, and magazines) there is now the Internet, multimedia, interactive television, iPods and iPads, search engines, and personal mobile communications devices with advanced imaging combined with communications capability. Moreover, digitalization of content enables marketers to use media channels in different ways. Digital content can be distributed faster and wider than its physical counterpart. It can also be updated more rapidly and can be both corrected and replicated endlessly.

Not only are media and content proliferating, markets are simultaneously fragmenting and globalizing. This fragmentation of markets into smaller and smaller segments, but with wider and wider geographical reach, has caused the inexorable decline of what used to be known as the mass audience, or mass market. Within the world of proliferating media channels, the viewers’ control and ability to be their own programmers, to create their own viewing choices, and to pause live television has diminished the direct influence of media advertising. The use of the media has also been transformed in the process: people no longer obtain their breaking news from newspaper headlines or radio as they did in the first three-quarters of the 20th century. Now breaking news comes from 24-hour broadcasting channels and websites accessed on mobile devices. Newspapers are now read for analysis and commentary about news that has already been distributed through other more interactive and immediate media. Therefore, the fundamentals of ‘classic’ marketing in the 20th century—that it served the producer interest and that marketers could, through various ‘mixes’, control the market—are now of questionable validity. In the early 21st century we have entered a time when marketing has moved from the ‘production’ or ‘sales’ era to the ‘customer’ era and now to the ‘interactive era’. Customers can no longer be talked at, or sold to, or be told what is good for them, which was the essential marketing characteristic of the industrial production era.

Today, it is the retailers, online and offline, and the customers, individually and in aggregate, and not the producers and their middlemen, who control the market. Consequentially, the old ways of classifying and segmenting the market into producers and buyers are now strained and inadequate to the task of focusing and allocating market resources to a cornucopia of fragmented niches and customer groupings. Philip Kotler, one of the leading thinkers in marketing since the 1960s, summed up very succinctly the two most important changes in marketing in the last 30 years. ‘First, marketers have moved from thinking their job is to sell whatever the company makes to thinking that their job is to influence what the company makes. Second, marketers now have tools to focus their efforts on reaching and satisfying niches and individuals.’

Consequently, marketing is now the religion that instructs on how to worship at the altar of the glorified, and ever changing, capricious, global customer. It has helped to extend the concept of customer service beyond the simple commercial selling; now governments talk of citizens as customers, hospitals call patients customers, employees call each other internal customers, churches are even encouraged to think of their parishioners as consumers of religious services, and it has even been known for breadwinners to think of their own families as their ‘major customers’. All enterprises and organizations are expected to adopt a marketing orientation in order to understand, then to serve, customers more efficiently, effectively, and even, in some cases, to delight them. What is this much sought-after marketing orientation? In simplest terms, it means that companies now have to develop a much deeper insight into their customers’ wants, needs, and desires and seek to deliver satisfaction beyond their expectations in effective ways. Insight is more than analysing market data or conducting individual and group customer research. It is a deep desire to serve, and willingness to listen to, the marketplace, then to enable customers to define the products and services that they want and need, and then to let them determine how they wish to interact with the company. The customer moves to the centre of everything the company does and makes and determines how it allocates its human and capital resources.