We’ve written a lot about the rapidly changing world of marketing — with the advances in social media, technology, big data, etc. So, sometimes, we need to pause and reflect on things that are the constants in marketing.
In 1966, McKinsey published an article by John D. Louth on “The Changing Face of Marketing”: “This article from the McKinsey Quarterly archive analyzes six major changes that promised to transform future marketing efforts. These forces have largely proved to be as influential as predicted and continue to shape today’s challenges.”
The six major changes — which are really marketing constants — are as relevant today as they were nearly 50 years ago:
- The dominance of the customer — “It is nearly a truism that the needs and wants of the consumer are the critical issues today in creating new products and services, and developing the accompanying plans to merchandise them at a profit.”
- The spread of marketing research — “The second trend is the increased use of marketing research — in terms of both quantity and scope. To an important degree, of course, this trend is a response to the first. If knowledge about future customers is essential, and if the quality of the marketing output is materially affected by the caliber of the informational input, then marketing research is bound to increase in use and contribution as the interest in more scientific marketing grows.”
- The rise of the computer — “The third major trend marketing must consider is the emergence of electronic data-processing equipment as a major tool of scientific marketing not only for reporting data but also, more importantly, for planning and control by management.”
- Expanded use of test marketing — “A fourth important trend, in my opinion, will be toward more controlled experimentation to narrow the odds of an error in making marketing changes. Two major influences emphasize the need for further expansion of test marketing. The first is the rising cost of marketing changes: the costs, for example, of introducing new products and packaging, of developing new advertising and promotional programs, and of retraining salespeople. The second influence is the mounting investment in product research and development. About half of all corporate research-and-development activity in the United States today is concerned with the creation of new commercial products.”
- Metamorphosis of field selling — “The fifth trend I foresee is a shift in the nature of the field-selling job toward a more integrated, profit-oriented marketing effort. Key-account selling is becoming an increasingly crucial feature of the field-sales job—a trend with important implications. In many companies, a key-account selling program may entail special analysis of present and potential customers, and the establishment of related control reports to measure profit results with particular accounts.”
- Global market planning — “An ever-broadening application of the marketing concept to worldwide markets is the last of the six broad trends that I believe will change the face of marketing in the next few years. Over the past decade, the marketing concept has become widely accepted in the United States—perhaps, in some situations, too enthusiastically accepted and too indiscriminately applied. Nevertheless, I believe the concept of a completely integrated marketing effort is valid and will be increasingly adopted. In many companies operating worldwide, it will stimulate the development of global market planning.”
Click the image to read the full classic article.
There is no question that detailed, accurate information can help companies make better decisions and enact better tactics. Yet, having comprehensive, targeted data is not necessarily simple.
As Graham Winfrey reports for Inc.:
“Roughly half of business professionals cite ‘slow or untimely access to information’ as one of the obstacles holding their companies back. Making matters worse, a lot of the data available to businesses are essentially useless. The big lesson? When it comes to business intelligence, having smart data is more important than big data.”
The infographic below, developed by Boston University, focuses on some keys in using business intelligence for competitive advantage.
Boston University Online
As we have written before (see for example, 1, 2, 3), more and more marketers have become involved in big data analysis.
Now, comes new research from McKinsey about how the analysis of big data can be used to improve a company’s pricing decisions.
McKinsey’s Walter Baker, Dieter Kiewell, and Georg Winkler note that:
“It’s hard to overstate the importance of getting pricing right. On average, a 1 percent price increase translates into an 8.7 percent increase in operating profits (assuming no loss of volume, of course). Yet, we estimate that up to 30 percent of the thousands of pricing decisions companies make every year fail to deliver the best price. That’s a lot of lost revenue. And it’s particularly troubling considering that the flood of data now available provide companies with an opportunity to make significantly better pricing decisions. For those able to bring order to big data’s complexity, the value is substantial.”
“We’re not suggesting it’s easy: the number of customer touchpoints keeps exploding as digitization fuels growing multichannel complexity. Yet, price points need to keep pace. Without uncovering and acting on the opportunities big data present, many companies are leaving millions of dollars of profit on the table. The secret to increasing profit margins is to harness big data to find the best price at the product — not category — level, rather than drown in the numbers flood.”
Click the image to read a lot more.
For most companies, maximizing their return on investment (ROI) is a key goal that drives their strategies. But are they using and measuring ROI properly? Sometimes, ROI is not so easy to determine.
With this in mind, consider the slideshow “How to Determine the ROI of Anything” by Gary Vaynerchuk, working at VaynerMedia: “What’s the ROI of a piano? What’s the ROI of a YouTube channel? What’s the ROI of anything!? After you read this deck you’ll be able to answer all these questions easily.”
For many companies, innovation is the life blood for long-term success. Nonetheless, success with innovations can be elusive.
As Mindjet,which offers a platform for enterprise innovation, notes:
“Innovation is vital to achieve success in today’s evolving marketplace, but it’s easier said than done. In reality, most companies struggle to achieve true innovation, despite acknowledging its importance. Whether due to a lack of resources or ability, many companies remain stagnant. But recent data shows that’s only part of the puzzle, and that a holistic, structured approach to innovation is one that works — and that yields real business results. Check out the full infographic below for more on what really fosters innovation.
For some tips on innovation, take a look at this infographic from Mindjet and Column Five.
After a few hiccups (such as the introduction of dual subscriptions), Netflix is certainly on a roll again. And a large part of Netflix’s recent success has been tied to its development of original programming, including Emmy-winning House of Cards. This move has changed the business for the industry and drawn emulators like Amazon.
Here is a good infographic that shows “The Economics of Netflix: How to Make a $100 Million Show.” Click on the image for a larger version, and then scroll down to learn many interesting facts about the economics of programming.