MANAGEMENT PERSPECTIVE

Subject: October 2001 ECMgt.com: The New Face of Marketing
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October 1, 2001 *4,300 subscribers* Volume 3, Issue 10
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The New Face of Marketing
Management Perspective
by Mitchell Levy, Author, E-Volve-or-Die.com

As companies continue to wrestle with issues about online and offline branding, we are entering a new era of personalization. Marketing will be faced with implementing new approaches in the Internet-enabled world. Let's start with a look at the marketing landscape in 2001.

Marketing in 2001 - the changing global picture

  • Multi-cultural, multi-lingual
  • Real-time consumer touch-point data
  • Geopolitical and economic changes - new market stability
  • Customer centric vs. product centric marketing
  • Radical demographic shifts - new psychographic data
  • Category management vs. brand management
  • Quality and experience becomes brand, especially for the Internet
  • Build-to-order creates micro-brand / micro-product awareness
  • Delivery channels and how we buy and receive goods and services is changing
    • VMI and direct commerce creates a new retail model
  • Business-to-business and collaborative commerce intersect
    • Marketplaces drive information and product / service transactions

Fundamentally a company has two goals:

1) Knowing a customer
2) Satisfying a customer

In 2001 and going forward, service as an experience will be integral to product performance, price will become less important, and value will become brand.

We live in a world of short-lived brands, brand pollution, and increasingly complex buying and delivery channels. In the book "The Experience Economy", experience with a service or total product performance drives brand. Amazon.com, as a brand, is the perfect shopping and delivery experience. Being the "World's Largest Bookstore" is one thing, but the experience we have with Amazon is really the brand.

In a world where "leveraging your brand" often means extending a corporate name into new categories, the issue of online vs. offline branding creates a new paradigm. In 2001, ubiquitous networks, CRM and PRM applications, and sophisticated data mining tools make it possible for you to know your customer through every transaction and inquiry. And business customers expect the converse of us.

Why then do we ask about "brand identity" - offline vs. offline? Is this logical? Barnes and Noble.com Crate and Barrel, Eddie Bauer and Land's End have learned the importance of treating the customer the same way no matter what the channel, capturing transactions, and delivering messages to customers in preferred formats.

The initial concept of treating a distribution channel as a separate brand led to confusion for some of these retailers. Certainly the "dot.com" frenzy and Internet branding did each a disservice until the iron rule of "experience branding" was applied. Are we serving our customer and meeting their most urgent needs? And is their total "brand experience" with us one hundred percent to their satisfaction? Certainly in retail this is obvious. In enterprise environments, particularly with partner channels, complicated supply and value chains, and increasingly complex product and service integration, this is a real challenge.

How then do we use new business and technology tools to meet the challenge of marketing in 2001?

The answer is straightforward. Focus on the tools and processes that address customer knowledge, and customer satisfaction. Often marketers will simply say this is "personalization". But personalization has two key components, measurement and collection of transaction data, and personalization in response. These break down further into CRM applications - for selling and customer knowledge, including service and support, and PRM, applications for addressing delivery needs of complex products and solutions through partner channels. In the middle is classical ERP, which now must join these two ends, creating the magic "360 degree view". Yet most large enterprises have not created the technology and process foundation required for shared knowledge, data integration, and "personalization" for messaging and product design. But the quest has begun.

Best practices for creating enterprise brands include Dell, Cisco, Intel, and Charles Schwab. Where did this begin? The "click and mortar evolution" in the B2C space was mirrored in the extension of classic B2B process from a two way experience to networked integration of partners. Firms such as Dell and Cisco, and later Intel, integrated electronic commerce and business into their business plans and models first, and then created the technologies for execution. Our "brand experience" with Dell is custom configuration, personalized electronic support, and complete enterprise knowledge of us. Cisco built in electronic configuration and ordering from day one, and their product configurator is considered best in class - so much so that their partners use Cisco's own site for building and quoting prototype installations. Intel drove extranets for customers and integration of inventory management in an increasingly complex and commodity-driven global technology market. Charles Schwab fought the common and incorrect assumption that branding your online services with "dot.com" was foolish and non-differentiating. Almost half of all trades and two thirds of new accounts have come from their online channel. The "brand" is the experience of solid trading performance backed by expert online advice, and the ability to apply self-service to managing a broad portfolio of assets and financial instruments. If there is confusion in the analyst or branding community, it is the failure to see that Schwab extended their "experience" into the holistic world of networked e-business. Schwab.com merely is the name of the "channel" by which many of their customers know them. But that is the essence of successful Internet branding.

NEW LAWS OF BRANDING:
Rapid brand creation and deployment requires driving publicity electronically and then advertising and reinforcing name recognition through a number of business channels. The successful company is one whose marketing can keep ahead of the fast-changing global marketplace, and keep the company's visibility high in an era of "brand pollution". The aim of marketing strategy becomes to drive the market, particularly category management - to influence the customer's learning process to the company's advantage. Creating new categories of transactions, performance, and experience through synergistic delivery channels is the next frontier. Enron.com has become a leading player through its novel market making commodity distribution and management services.

Branding faces new challenges through complex distribution chains. Disintermediation of wholesalers and retailers through electronic commerce is still an unproven theory. In fact, re-intermediation through vendor managed inventory and contextual commerce have created merchandizing mechanisms with benefit to wholesalers, distributors, and customer facing portal and marketplaces. Here it is important to understand that an Internet brand combines name recognition with channel performance.

Businesses are doing a better job of retaining customers by finding imaginative ways to exceed customer expectations. Most companies have built proprietary customer databases containing rich information on individual customer preferences and requirements. This information is used to "mass customize" marketing and sales promotions to individuals, as well as to alert appropriate personnel when transactions or inquiry behavior indicate that a buying decision, or product performance issue, needs more attention.

Most companies are networked and rely heavily on alliances with partners and suppliers. PRM now joins CRM in delivering a unified message to prospects, including rapid quoting of complex offerings with minimal errors. Within PRM, franchises have joined corporate sales in a more "holistic" sales force. Many customers now prefer the sales interface of a computer screen to "human" interaction. Actually, they prefer the ability to interact and configure on their terms. This gives corporations unique opportunities to better manage and respond to product and service needs, and allow customers to "create" their own solutions.

In building "experience brands", companies will focus more on building customer share rather than market share. Cross-selling and up selling are challenges for interactive sales tools. Many companies are formulating reward packages and incentives for their more profitable customers, and have switched from a transaction perspective to a customer loyalty-building perspective. In the future of transparent commerce, companies will observe transactions of their customers, and model "personalized" services around then that create more value at less cost, increasing the favorable experience with the brand.

While companies believe that their only sustainable advantage lies in an ability to learn and change faster, total brand experience is reinforced by consistency of personalized service, and the ability to create personalized products through build-to-order and mass customization. Marketers are reaching an increasing percentage of customers by advertising through opt-in email, which continues to rise in favor, while banner ads decline even further. Increasingly, executives use the Internet for industry news; placement of informative messaging mixed with "branding" is a powerful tool used by IBM, Oracle, and Sun.

Throughout the evolution of the marketing concept, the basic notion that "competitive advantage can be created by giving customers what they want" has remained unchanged. All that has changed is the way in which customers are satisfied. Holistic enterprises that watch, think, and respond in personalized product and service offerings will increase the positive brand experience for all their customers.

BRANDING:

B2B BRANDING:

CRM (CUSTOMER RELATIONSHIP MANAGMENT):

PRM (PARTNER RELATIONSHIP MANAGEMENT):

DATA MINING AND BUSINESS INTELLIGENCE:

The Experience Economy, B. Joseph Pine, James Gilmore, and B. Joseph Pine II Harvard Business School Pr; ISBN: 0875848192

 

About Mitchell Levy
Mitchell Levy, is President and CEO of ECnow.com (
http://ecnow.com), a training business service provider helping companies transition its employees, partners and customers to the Internet age through off-the-shelf and customized on-line and on-ground training. He is the author of E-Volve-or-Die.com, Executive Producer of ECMgt.com, an on-line E-Commerce Management (ECM) e-zine, Chair of comdex.biz at Comdex Fall and Chicago and the Founder and Program Coordinator of the premier San Jose State E-Commerce Management Certificate Program (http://ecmtraining.com/sjsu). Mitchell is a popular speaker, lecturing on ECM issues throughout the U.S. and around the world.

I hope you enjoy this eZine.
See you in cyberspace,

Mitchell Levy
Executive Producer, ECMgt.com <
http://ECMgt.com>
President, ECnow.com <
http://ecnow.com>
Founder and Coordinator, SJSU-PD ECM Certificate Program <
http://ecmtraining.com/sjsu>

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