Feature

Direct Approach: The age of convergence

The increasingly integrated approach allows marketers to target consumers from many angles.

Haven't marketing and marketing communications always been integrated? Hasn't the marketing concept always been to focus on the customer and then provide the products/services to meet customer needs?

The concept of marketing is naturally integrated. However, it is commonly integrated only from the view of the marketer, not from that of the customer. For the most part, modern marketing is built on a marketing theory that is Industrial Age. It focuses primarily on product and distribution (place, pricing and promotion - the traditional "three Ps"). This approach was relevant in the 50s and 60s but, today, the marketplace has changed.

Today, we live in an interactive, globally connected, customer-driven service economy, where time and speed are of the essence. The traditional approaches to marketing and marketing communication, based on the efficiencies of mass-production and mass-consumption, are giving way to mass-customisation. Today:

- a laptop computer can be built to the customer's order, shipped and received in less than a week

- communication no longer takes place primarily by letters and correspondence but by e-mail and websites

- there is no "established price" and all products and services are essentially negotiable

- the focus is on the supply chain where, commonly, much more value is created than on the factory floor.

Most of these changes have been brought about by information and communications technology.

Shift in market and power

To understand why integrated marketing and integrated communications are so important to marketing organisations around the world, you need to understand the basic shifts in power in the marketplace that have created the need for this change.

Marketing was not invented for the benefit of customers and consumers, but for the benefit of sellers. In this type of mass-production, mass-distribution and mass-communications, the seller holds all the cards and marketplace power. The information technology is held by the producers, allowing them to understand customer demand, identify price points, manage logistics and control inventories.

The shift came in the late 70s and early 80s when point-of-sale systems began to develop in the US and UK. IT shifted the balance of power to the channels as they were able to identify the individual customers through various forms of data capture. Retailers and other channel marketers began to understand how customers actually responded to various types of marketing and marketing communication efforts.

In the early 90s, the system changed radically. With the advent of the internet, the worldwide web and other forms of electronic communication and data interchange, power shifted again, this time from the channel or distributor to the consumer. As consumers and customers got more and more IT (such as the web, the internet, e-mail, faxes and so on), they effectively took power from the marketer and the distributor - and created what we know today as the interactive and networked marketplace.

While the three marketplaces and the transitions are easy to understand, they are not easy to manage. The growth of the networked and interactive marketplace and the shift of power to the consumer or customer makes it easy to see why integrated marketing and integrated marketing communications have become such important issues to all types of marketers. It's the same whether they still operate in the product-driven arena, or they have shifted to the distribution-driven system, or they are engaging in true networked and interactive marketing approaches we define as customer-driven.

Convergence

This new "one-to-one marketplace" has been widely publicised and often criticised. Indeed, the challenge for the marketing organisation of the 21st century is how to combine mass and one-to-one marketing into a coherent whole. There is a need to combine traditional mass and individualised marketing in what we call "convergence".

The goal, then, is to combine traditional marketing, much of which is still relevant in both sophisticated and emerging markets, with the new approaches offered by electronic systems. In many cases, the same consumer who sees a TV commercial also surfs the net; it is the same person who buys online who also goes into traditional bricks-and-mortar stores to purchase products. In short, it is a combined, converging, interactive, inter-connected, and networked system of customers, marketers, distributors and technology that challenges today's marketing organisation.

Adding value

Direct marketers' great strength has been their ability to understand and predict consumer behaviour through the use of data. The internet and the growth of online interactions mean brands can make one-to-one communications that are data-rich. The digital revolution is not just a set of channels, but a new way of thinking about marketing. At its heart, digital is not only faster and more flexible; it is about targeting and measurement. As communications digitise, they will become increasingly more accountable and the above/below-the-line distinction will disappear.

In the digital world, all marketing will become direct in the sense it is targeted, personal and measured. In addition, in terms of contact and consumer engagement, digital marketing brings the brand alive.

Marketing will no longer be stop-start communications and, what's more, with an always-on channel like the web, it can target direct segments more frequently with lower volumes. The richness of the digital experience creates a depth of brand experience that is more likely to convert to sales at a lower cost. Digital marketing places the customer centre-stage.

Taking this one step further with user-generated content, such as blogs and chatrooms, it is possible to provide a service to introduce brand-positive comment that builds advocacy online. For every business, it is vital to understand the integrated marketing communications of the future. It is a truly customer-centric philosophy, in which communications are built around the customer experience. Increasingly, these communications will be automated, driven through personal information data.

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