The New Global Marketing Reality

Some time in the early to mid-1980s, in North America especially, the ‘classical’ approach to marketing management as then taught in business schools, and as practised by marketing powerhouses such as General Motors, Kodak, IBM and Procter & Gamble, began to change. This change process also spread to Europe and Asia, to include the likes of British Airways, Nokia, Philips, Unilever, Sony and Toyota. It is still going on for, just as there was no clear beginning, there appears to be no likely endgame either, where winner takes all. Winning nowadays is but transitory in any case.

In this chapter we consider the question of what are the complex and paradoxical pressures on businesses today to deliver, for example, more corporate value; more sales volume; more gross revenues; more profits; more quality; more cost savings; more technical advantages; more customer service; and so on. We consider the implications for marketing when companies are currently having to comply with so many differing measures (hard and soft) of accountability and performance? We attempt to make sense of their efforts to absorb and reconcile these pressures by first examining what they are actually doing. We use the example of McDonald’s to illustrate the struggles of one of the world’s great marketing corporations to hold its leadership position in a changing business, and consider whether or not it seems able to create a new business ‘model’ in response to these changes. We then explain the conceptual foundations that underpin the changes in marketing practices — and hence this book. We do this by examining the constituent parts of our ‘model’ of contemporary marketing practices that has been developed from our research and studies of the various discourses. This in turn will provide a framework for the remainder of the book.

This chapter seeks briefly to show how and why marketing has become an important business discipline. Towards the end of the twentieth century marketing experienced something of a reversal in popularity and esteem as a business function, with questions being asked as to the value of the contribution that marketing could make to business success. The classically successful approach to marketing, that which initially established it as a vital and perhaps even fashionable strategic tool, seemed to lose focus and application.

In this chapter we revisit the issue of pressures on business, by considering questions such as the following. How is strategy development and implementation shaped as a result of changing external pressures to grow the business and create more corporate value? What are the implications for companies opting to grow from within — as opposed to without — by, for example, mergers and acquisitions? And, in particular, how relevant nowadays are the marketing principles and practices that may have been instrumental in their glory days?

This chapter discusses growth and the paradox that growth does not necessarily generate value or profit. For example, external growth by a policy of mergers and acquisitions (M&A) may be attractive in the short term in terms of boosting top line revenue. However, the reality is that managing the complexities and uncertainties of M&As when under the unremitting scrutiny of the stock market may detract from, rather than enhance, corporate performance.

Customer attitudes and expectations have changed. At the same time competition has increased as the marketplace has switched from one of demand pull to supply push. There are more subtle changes as well, with the attitudes and expectations of customers becoming ever more stringent.

In this chapter we examine recent developments in information technologies (IT) and how these are affecting organizations. In particular, we are interested in understanding whether there is likely to be a widespread ‘organizational transformation’ as companies adapt to what are known as ‘inflection points’. The Internet is an inflection point. As we will show, companies as powerful as IBM and Intel, and even Microsoft, are neither immune nor immutable when confronted by an IT-induced inflection point.

In the last chapter we examined ‘inflection points’ and their implications. When considering the impacts of the Internet and IT-enabled interactivity as an inflection point, we ended up asking whether this was leading to an organizational transformation, and concluded there were a number of differing views on this. For example, the Internet is seen as: changing everything; as a tool; or as a channel. For others, its impact is seen in a more balanced fashion, in that companies need to integrate both their ‘bricks’ and their ‘clicks’ according to their situation. From that we asked the question, do organizations see an organizational transformation as necessary in order to incorporate IT-enabled interactivity, or is it merely a case of using ITenabled interactivity either to reinforce or to enhance the status quo?

This chapter discusses in detail the research work conducted by the Contemporary Marketing Practice (CMP) group. This work has a number of distinctive features: the connection that has been built between theory and practice, the wide-ranging nature of the research and the international context in which it has been conducted, and, not least, the quality of the findings that have emerged.

As we have seen throughout this book, the extent to which information technologies are reshaping marketing practices has become the subject of some debate. What is perhaps most challenging for many marketers is that they are accommodating the impacts of IT developments at the same time as they grapple with the processes of adopting a more relational approach to their marketing practices. These two issues are not mutually exclusive. As Gummesson (2002) says, ‘IT has a lot in common with RM’, adding, ‘Just like in RM, the heart of IT is relationships, networks and interaction.’ In an examination of the literature on the impacts of information technologies on marketing, Coviello, Milley and Marcolin (2002) note that the Internet creates new opportunities for firms to engage in ‘IT-enabled interactivity’, that is, ‘the creation of electronic dialogue with customers to allow for not only personalization but customization, and as such, enhanced customer relationships’ (Deighton, 1996a).