Marketing Challenges into the Next Century

Marketing operates within a dynamic global environment. Every decade calls
upon marketing managers to think afresh about their marketing objectives and
practices. Rapid changes can quickly make yesterday's winning strategies out of
date. As management thought-leader Peter Drueker once observed, a company's
winning formula for the last decade will probably be its undoing in the next
decade.
What are the marketing challenges as we head into the twenty-first century?
Today's companies are wrestling with changing customer values and orientations,
increased global competition, environmental decline, economic stagnation and a
host of other economic, political and social problems. In the European Union
(EU), as the concept of nationally separate markets vaporizes, competition among
sellers will further intensify. There is increasing pressure on individual firms
within member countries to adjust to evolving deregulation and advancement of
universal trading standards within the single market. However, these problems
also provide marketing opportunities.
We now look more deeply into several key trends and forces that are changing
the marketing landscape and challenging marketing strategy: the growth of nonprofit
marketing, the information technology boom, rapid globalization, the
changing world economy and the call for more socially responsible actions.

In the past, marketing has been most widely applied in the business sector. In
recent years, however, marketing also has become a major component in the
strategies of many non-profit organizations, such as colleges, charities, churches,
hospitals, museums, performing arts groups and even police departments.
Consider the following examples:
Faced with the daunting task of selling the single currency to European
citizens, many of whom appeared disturbed by the economic sacrifices
involved, the European Commission turned to marketing and media
experts to develop a strategy to promote the 'euro', Pan-European
advertising campaigns were also launched to reinforce national initiatives
to influence public opinion in favour of replacing national currencies.'5
To stem the falling number of church-goers, many of Britain's church
groups are seeking more effective ways to attract members and maintain
financial support. Increasingly, and despite the controversy, preachers
are using the press, television and radio to advertise religion to the
general public. They are conducting marketing research to better
understand member needs and are redesigning their 'service offerings'
accordingly. Some evangelical groups are even starting their own radio
and television stations. The Vatican has been known to have appointed
the advertising agency, Saatchi and Saatchi, to run a £2,5m television
campaign."'
Over the past decade, many charities have moved on from tin-rattling
and tombolas to employing some of the most sophisticated marketing
tools, to win support for their causes. For example, the Royal Society for
the Protection of Birds (RSPB) is Europe's largest wildlife conservation
charity, dealing with issues as wide-ranging as biodiversity, protection of
wildlife sites, and marine life. The charity hired a marketing agency to
run an awareness advertising campaign for them, which aimed to take
their membership up to one million in 1997. They also tied in the
campaign with direct marketing activity. One of the objectives is to reach
a younger audience than the RSPB's traditional 55+, the 30-somethings,
who get more worried about the environment when they have kids of
their own. The campaign used a message that suggested birds are a
barometer of the health of the environment.
Many longstanding non-profit organizations - the YMCA, the Red Cross,
the Salvation Army, the Girl Scouts - are striving to modernize their
missions and 'products' to attract more members and donors.17
Finally, government agencies have shown an increased interest in
marketing. For example, various government agencies are now designing
social marketing campaigns to encourage energy conservation and
concern for the environment, or to discourage smoking, excessive
drinking and drug use.1N
The continued growth of non-profit and public sector marketing presents new and
exciting challenges for marketing managers.

The explosive growth in computer, telecommunications and information technology
has had a major impact on the way companies bring value to their
customers. The technology boom has created exciting new ways to learn about
and track customers, create products and services tailored Co meet customer
needs, distribute products more efficiently and effectively, and communicate with
customers in large groups or one-to-one. For example, through videoconferencing,
marketing researchers at a company's headquarters in Mew York can look
in on focus groups in Chicago or ljaris without ever stepping on to a plane. With
only a few clicks of a mouse button, a direct marketer can tap into online data
services to learn anything from what car you drive to what you read to what
flavour of iee cream you prefer.
Using today's vastly more powerful computers, marketers create detailed
databases and use them to target individual customers with offers designed to
meet their specific needs and buying patterns. With a new wave of communication
and advertising tools - ranging from eel! phones, fax machines and CD-ROMS
to interactive TV and video kiosks at airports and shopping malls - marketers can
zero in on selected customers with carefully targeted messages. Through electronic
commerce, customers can design, order and pay for products and services -
all without ever leaving home. From virtual reality displays that test new products
to online virtual stores that sell them, the boom in computer, telecommunications
and information technology is affecting every aspect of marketing.

A sluggish world economy has resulted in more difficult times for both consumers
and marketers. Around the world, people's needs are greater than ever, but in many
areas, people lack the means to pay for needed goods. Markets, after all, consist of
people with needs and purchasing power. In many cases, the latter is currently
lacking. In the developed western and Asian economies, although wages have risen,
real buying power has declined, especially for the less skilled members of the
workforce. Many households have managed to maintain their buying power only
because both spouses work. However, many workers have lost their jobs as manufacturers
have automated to improve productivity or 'downsized' to cut costs.
Current economic conditions create both problems and opportunities for
marketers. Some companies are facing declining demand and see few opportunities
for growth. Others, however, are developing new solutions to changing
consumer problems. Stronger businesses have recognized and taken advantage of
recent developments in communications and related technologies. These developments
have raised customers' expectations of product quality, performance
and durability. They no longer accept or tolerate shoddy products. Power and
control have also shifted from brand manufacturers to channel members, which
have become as sophisticated at marketing and exploiting technology as
producers themselves. Many are finding ways to offer consumers 'more for less',
like Sweden's IKEA and America's Toys 'JT Us. Heavy discounters are emerging to
offer consumers quality merchandise at everyday low prices. These days,
customers want value and more value. Increasingly, marketers must deliver offerings
that delight, not merely satisfy, customers, Toyota has succeeded in doing
that: its highly acclaimed Lexus luxury line offers consumers all the technology
(gadgetry) and comfort they can ever dream of, and, at about £44,000, is considered
exceptionally good value tor money, compared to rival offerings in its class.

A third factor in today's marketing environment is the increased call for companies
to take responsibility for the social and environmental impact of their
actions. Corporate ethics has become a hot topic in almost every business arena,
from the corporate boardroom to the business school classroom. And few companies
can ignore the renewed and very demanding environmental movement.
The ethics and environmental movements will place even stricter demands
on companies in the future. In the former Eastern bloc and many Asian countries,
air, water and soil pollution has added to our environmental concerns. These and
other governments across the world must consider how to handle such problems
as the destruction of rain forests, global warming, endangered species and other
environmental threats. The pressure is on businesses to 'ciean up' our environment.
Clearly, in the future, companies will he held to an increasingly high standard
of environmental responsibility in their marketing and manufacturing activities.25
More specifically, in the EU, the continuing trend towards tougher environmental
rules should drive non-conforniers out of business, while others who are
committed to 'cleaning up' or 'greening' their practices and operations will
emerge the stronger. .Specialist industries for environmental goods and services
(e.g. paper, bottle and tyre recyclers) have expanded quickly in recent years. As
they say, 'there is money in Europe's muck

The past deeade taught business firms everywhere a humbling lesson. Domestic
companies learned that they can no longer ignore global markets and competitors.
Successful firms in mature industries learned that they cannot overlook
emerging markets, technologies and management approaches. Companies of
every sort learned that they cannot remain inwardly focused, ignoring the needs
of their customers.
Prominent western multinationals of the 1970s which floundered at
marketing, including Philips, Volvo, General Motors and RCA, are all struggling to
revive their fortunes today. They failed to understand their changing marketplace,
their customers and the need to provide value. Today, General Motors is
still trying to figure out why so many consumers around the world have switched
to Japanese and European cars. In the consumer electronics industry, Philips has
lost its way, losing share to Japanese competitors that have been more successful
in turning expensive technologies into mass consumer products. Volvo, which has
long capitalized on its safety positioning, has, of late, lost this unique selling point
to other car manufacturers, which have turned the safety benefit into a universal
feature: many large European and Japanese ear producers now offer, as standard
features, driver and passenger airbags, anti-lock braking system and other safety
devices. RCA. inventor of so many new products, never quite mastered the art of
marketing and now puts its name on products largely imported from Asia.
As we move into the twenty-first century, companies must become customeroriented
and market driven in all that they do. It is not enough to be product or
technology driven - too many companies still design their products without
customer input, only to find them rejected in the marketplace. It is not enough to
be good at winning" new customers - too many companies forget about customers
after the sale, only to lose their future business. Not surprisingly, we are now
seeing a flood of books with titles such as The Customer Driven Company,
Customers for Life, Turning Lost Customers Into Gold, Customer Bonding,
Sustaining Knock Your Socks Off Service and The Loyalty Effect.21 These books
emphasize that the key to success on the rapidly changing marketing landscape
will be a strong focus on the marketplace and a total marketing commitment to
providing value to customers.