In turbulent markets that are affected by increased political and economic unrest in the global marketplace, continuing to follow the same paths for marketing and business strategy is extremely risky, warns Yoram (Jerry) Wind of the Wharton School. Both the pace of change and the level of complexity call for a new marketing paradigm, one that may well require companies to scrap their current models and methods and build a new approach to marketing.
Increasingly the unique product or service a company develops and puts into the marketplace is competitive for a shorter and shorter time period. The challenge that firms face is how to differentiate products in the marketplace when virtually every manufactured good quickly becomes a commodity.
Most companies tend to underestimate the market strength of their competitors and especially of new competitors from outside the traditional boundaries of the industry. In addition, many companies do a poor job developing a strong understanding of the unique cultures that exist within each country within which they do business. Many companies tend to stampede into new cultures without taking the time to learn about those cultures, the differences and similarities between the new markets and countries and the company’s home country, and other countries in which it operates. The more a company truly understands the unique needs and desires of the new market, the more responsive it will be able to be to that market.
Far too many companies develop products or services for a general – average – global market; few develop products for specific, unique domestic market segments as part of an "umbrella" global concept. A surprisingly small number of companies have top marketing teams that include executives from various countries. And, only a handful of companies have effective processes for knowledge transfer across countries. According to Wind, a company should be a microcosm of the global marketplace. The diversity of its own organization will help the company understand better the diverse needs, tastes and wants of the global economy.
The new paradigm that Wind describes focuses on marketing as a business philosophy rather than just as one business function. Marketing should become the eyes and ears of the firms and to provide it with the needed early warning signals and insights as to how to address these changes. This requires that the marketing concepts and methods themselves have to be adjusted constantly to reflect these changes.
Wind points out that among the most important shifts suggested by the new marketing paradigm is that which takes organizations from a mass market mentality to "segments of one". This shift is made possible by the enormous advances in database marketing and mass customization, which allow companies to reach individual consumers economically with customized messages, media and even products and services. In the era of mass customization and global markets, the focus is on breakthrough products and services designed for the target portfolio of local regional and global segments and when appropriate customized to particular customers’ needs.
The new business model will no longer be based on transactions; it will be based on relationships. Customer and supplier will work cooperatively together. A company will not sell products or services; rather, it will provide solutions to customers’ needs. Competitive advantage will not lie in just a company’s marketing power as much as it will in the quality, finesse, and timing of its marketing efforts.
The new paradigm will lead to an organizational culture that reflects the organizational values and ideally the characteristics of successful 21st century enterprises. In designing the organizational architecture for firms operating in the global information age, technological competence is a must, as well as geographical scope and expertise. This requires the selection, hiring, development, motivation and retention of diverse workforce and stakeholders who are representative of different parts of the world, sensitive to different cultures, and capable of operating effectively and comfortably anywhere in the world, utilizing available information technology tools.
The case for changetruly radical changeis powerful if companies are to avoid the threats and capitalize on the opportunities of the changing global information age. In a time of dynamic movements in all aspect of the global marketplace, not being market driven and not acting boldly and rapidly, along the lines suggested by the new marketing strategy paradigm, is the riskiest decision of all. Rethinking, reorganizing, and reinventing the future and global marketing strategies are crucial.