Marketing Strategy in the Global Information Age
In turbulent markets that are affected by increasedpolitical and economic unrest in the global marketplace, continuing to follow the same paths for marketing andbusiness strategy is extremely risky, warnsYoram (Jerry) Wind of the Wharton School.Both the pace of change and the level ofcomplexity call for a new marketingparadigm, one that may well requirecompanies to scrap their current models andmethods and build a new approach to marketing.
Increasingly the unique product or service acompany develops and puts into themarketplace is competitive for a shorter andshorter time period. The challenge thatfirms face is how to differentiate productsin the marketplace when virtually everymanufactured good quickly becomes acommodity.
Most companies tend to underestimate themarket strength of their competitors andespecially of new competitors from outsidethe traditional boundaries of the industry.In addition, many companies do a poor jobdeveloping a strong understanding of theunique cultures that exist within eachcountry within which they do business.Many companies tend to stampede into newcultures without taking the time to learnabout those cultures, the differences andsimilarities between the new markets andcountries and the company's home country,and other countries in which it operates.The more a company truly understands theunique needs and desires of the newmarket, the more responsive it will be ableto be to that market.
Far too many companies develop productsor services for a general -- average -- globalmarket; few develop products for specific,unique domestic market segments as partof an "umbrella" global concept. Asurprisingly small number of companieshave top marketing teams that includeexecutives from various countries. And, onlya handful of companies have effectiveprocesses for knowledge transfer acrosscountries. According to Wind, a companyshould be a microcosm of the globalmarketplace. The diversity of its ownorganization will help the companyunderstand better the diverse needs, tastesand wants of the global economy.
The new paradigm that Wind describesfocuses on marketing as a businessphilosophy rather than just as one businessfunction. Marketing should become the eyesand ears of the firms and to provide it withthe needed early warning signals andinsights as to how to address thesechanges. This requires that the marketingconcepts and methods themselves have tobe adjusted constantly to reflect thesechanges.
Wind points out that among the mostimportant shifts suggested by the newmarketing paradigm is that which takesorganizations from a mass market mentalityto "segments of one". This shift is madepossible by the enormous advances indatabase marketing and masscustomization, which allow companies toreach individual consumers economicallywith customized messages, media and evenproducts and services. In the era of masscustomization and global markets, the focusis on breakthrough products and servicesdesigned for the target portfolio of localregional and global segments and whenappropriate customized to particularcustomers' needs.
The new business model will no longer bebased on transactions; it will be based onrelationships. Customer and supplier willwork cooperatively together. A company willnot sell products or services; rather, it willprovide solutions to customers' needs.Competitive advantage will not lie in just acompany's marketing power as much as itwill in the quality, finesse, and timing of itsmarketing efforts.
The new paradigm will lead to anorganizational culture that reflects theorganizational values and ideally thecharacteristics of successful 21st centuryenterprises. In designing the organizationalarchitecture for firms operating in the globalinformation age, technological competenceis a must, as well as geographical scopeand expertise. This requires the selection,hiring, development, motivation andretention of diverse workforce andstakeholders who are representative ofdifferent parts of the world, sensitive todifferent cultures, and capable of operatingeffectively and comfortably anywhere in theworld, utilizing available informationtechnology tools.
The case for change-truly radicalchange-is powerful if companies are toavoid the threats and capitalize on theopportunities of the changing globalinformation age. In a time of dynamicmovements in all aspects of the globalmarketplace, not being market driven andnot acting boldly and rapidly, along thelines suggested by the new marketingstrategy paradigm, is the riskiest decisionof all. Rethinking, reorganizing, andreinventing the future and global marketingstrategies are crucial.
All materials copyright © 1999 of the Wharton School of the University of Pennsylvania.