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Marketing Management in the 21st Century

Modern society is rapidly changing due to increasing development of information technology, telecommunications and globalization. All aspects of human life are affected by these changes, and marketing management in the 21st century is also experiencing changes. Overall, there are two types of environment affecting marketing: task environment and broad environment. While task environment is market-specific, as it includes different subjects engaged in production, promotion and distribution activities, the broad environment relates to external factor shaping marketing.

It is possible to outline six components of broad environment: economy, socio-cultural environment, demography, technology, politics and natural environment (Kotler & Keller, 2011). All these components change in the 21st century, and create specific societal forces affecting marketing management. The purpose of this paper is to consider these forces, to analyze the new challenges and opportunities created by these forces and to discuss their impact on marketing management.

There is a variety of changes in modern society and forces conditioning these changes; it is possible to outline 12 key recent factors affecting modern marketplace. These factors are globalization, the development of information technology and networks, focus on private ownership, deregulation, intensification of competition, convergence of different industries, growth of online services, increased consumer awareness (Kourdi, 2011), growing power of consumers, increasing consumer participation, consumer resistance and increasing importance of service component for all businesses, referred to as “retail transformation” by Kotler and Keller (2011).

The most important societal force is the “digital revolution” (Kotler and Keller, 2011), in other words, this force is characterized by rapid development of information technologies and networks. This factor has shaped many other societal forces affecting the marketplace, such as globalization, consumer power and awareness, increase of online services, etc.

The opportunities created by IT technologies have changed communications by making videoconferencing, calls and remote collaboration possible for people all over the world. This force has also changed access to information and the role of information in the society. Currently almost all customers rely on web search to get information about the products they need and to a large extent the preferences of customers are shaped by the reviews published online and by the preferences of friends or respected people of the customers. Digital revolution also changed the effectiveness of production, distribution and pricing – it has made these factors more precise and targeted (Keillor, 2007).

Globalization is the second force shaping the markets now. Due to advance of technology and transportation, economical systems of the world are becoming more interrelated, and the boundaries between markets disappear. A specific trend of 21st century is privatization (Kotler & Keller, 2011): in order to increase the effectiveness of large companies, many countries opt to convert large public companies into private ones.

A strongly related factor is deregulation – adoption of favorable laws in order to foster competition (Kotler & Keller, 2011). This trend also leads to the creation of global economic powers, such as Google Inc., Apple, Walmart, etc. As a result of all previously mentioned forces, one more global societal trend has emerged – worldwide intensification of competition (Keillor, 2007).

The other side of IT revolution and availability of information nowadays is high consumer awareness, increased participation of consumers and growing consumer power. Awareness increases because information associated with any company is openly available in Internet. Everyone can post reviews and share experience, and this is the cause of increased participation.

As boundaries disappear, companies also search for new ways of development, and explore different industries. This tendency leads to the convergence of different industries. All companies tend to perform at least part of business operations online, because these activities allow to reach disintermediation and reduce the costs compared to traditional brick-and-mortar businesses (Kourdi, 2011). This trend also increases the power of consumers because they have a wider choice of offers nowadays. This factor is also closely related to the growth of service component for all businesses: since buyer power is increasing, customer relationship management becomes a highly important part of the business. Kotler and Keller (2011) call this phenomenon a Retail transformation”, because retailers add specific features to attract customers, but in non-retail sectors the situation is practically the same: companies need pay more attention to CRM and to their reputation in order to retain and attract customers (Keillor, 2007).

12 societal forces described above have created new business capabilities with regard to marketing management. First of all, Internet is a highly important source of information not only for consumers, but for businesses as well. It is now possible to analyze the market using online tools, reach customers directly on the web, collect detailed information about the market dynamics, trends and competition, in order to develop a more successful marketing strategy. Internet can also be used as a separate sales channel, and it also allows to get direct customer feedback, in fact performing the functions of a “mystery shopper” for business owners (Keillor, 2007).

Internet and improved telecommunication technologies help to speed up communication with customers and can be used to attract new customers, or to reward loyal customers, by offering them coupons, discounts and various prizes online. Internet is also a perfect method of sharing company news with the customers.

Many marketing opportunities are created by social networks and other social media (e.g. Twitter). Online communities also represent new opportunities for marketing. Companies can now use Internet to connect directly with their customers, and can create own online communities (Kourdi, 2011). Businesses can even crowdsource generation of new ideas and selection of development strategy, like Starbucks does with its site, mystarbucksidea.com.

A very important trend is mobile marketing: using different wireless technologies, marketers can send information to a specific target group of customers; it is also possible to customize the information according to the customer’s location (e.g. show closest stores or cafes using special apps). Context advertising is a very powerful thing for marketing because it uses the previous searches of the user to show appropriate ads, and it works in a more efficient way than traditional advertising (Kourdi, 2011). Furthermore, companies can create individualized goods, e.g. personalized items, items upon request, etc (Kourdi, 2011).

Information technologies can be used to improve all internal processes of the company, such as recruitment, training, purchasing, etc (Kotler & Keller, 2011). These activities can be marketed and advertised to draw customer attention to the company. IT technologies and networks can also be used to reduce costs and to improve financial efficiency of the company. Another important opportunity is corporate social responsibility, which is easily communicated through internet, and can have a tremendous impact on business reputation (Keillor, 2007). Overall, key societal forces of the 21st century have dramatically changed marketing management. Nowadays, marketing management has become more customer-centered, flexible, targeted and cost-effective.

 

References

Keillor, B.D. (2007). Marketing in the 21st century. Greenwood Publishing Group.
Kotler, P. & Keller, K.L. (2011). Marketing Management. Prentice Hall.
Kourdi, J.J. (2011). The Marketing Century: How Marketing Drives Business and Shapes Society. John Wiley and Sons.