<Back>

MARKETING METAMORPHOSIS

HOW & WHY?

INDEX:

1. SUMMARY
2. INTRODUCTION
3. CHANGES IN THE FORM OF MARKETING: CURRENT SCENARIO
o SEGMENT AND VALUE BASED MARKETING
o RELATIONSHIP BASED MARKETING
o INTEGRATED MARKETING
o ONE TO ONE MARKETING
o ELECTRONIC COMMERCE: THE BARTER SYSTEM
4.   WHY MARKETING METAMORPHOSIS
o CHANGING BUSINESS ENVIRONMENT
o INCREASING DEMAND FOR BETTER PRODUCT
o INCREASING DEMAND FOR VALUE FOR MONEY
o TECHNOLOGICAL IMPACT ON PRODUCT LIFE CYCLE
o BRAND IS DYING    
5. CONCLUSION

1. SUMMARY

In the current scenario, form of marketing is changing rapidly. Marketing is passing through the
turbulent phase; principles and theories which are relevant today are going to be passe tomorrow. Thus
marketer is routinely adopting different principles to remain customer and market focussed. The
changes which are taking place are unidirectional. All these transformations are focussed towards
customer. Marketer is giving due response to the customer by providing value for money. As the
objective of marketing is changing thus changes in marketing policies of the organizations are
inevitable. For a very long time theories and concepts developed for marketing products such as the
McCarthy’s 4Ps of marketing and marketing’s basic of STP i.e. segmenting, targeting and positioning
were dominant. But in the current scenario the whole marketing form is undergoing a metamorphosis,
marketers are increasingly providing more and more importance to the customer by offering value.
Marketing is changing its face from segment- based marketing to relationship marketing to One-on-one
marketing and pervading the latter is E-commerce that is barter system of marketing. There are
several reasons which account for transformation. Like: Indian business environment is changing very
rapidly after the liberalization. No longer Indian marketing environment is different from the world : we
are seeing the same changes in the Indian marketing environment as we are seeing in the world.
Customer’s perception of a product was that a product is just a Physical Good, but now the perception
is changing with the dynamic environment, increasing competition and ever increasing customer
demand. Marketers are forced to adopt a new marketing framework. An Indian customer is increasingly
looking for a complete product, in fact he asks for more than that, now he gives same priority to
Physical Good, Service and Idea. Expectations of customer are increasing, he asks for more and more
value for the same price, and whoever provides him increasing value for money, he buys product from
that marketer. With the increasing technological advances every day companies are coming with a new
and better product. Therefor the Life Cycle of product is decreasing.

The time is about to come when we will not be having brands. Consumer will become technologically
savvy in the future; he will ask for new quality product (Quality is something which satisfies the
customer) and whoever provides that the consumer will buy his product irrespective of the brand name.
He will get all the information on the Internet and will order the same on the net. Thus there will not be
any role for a brand. He will search just for an innovative product.

This Paper is an effort to bring forward all those transformations, which are taking place, at the
same time the reasons for the same.

2 INTRODUCTION

India has come a long way from protection to free market. The Indian industry which always had
protection from domestic and global competition, is experiencing the pressure of a free market and is
under the compulsion to perform or perish. It is explicit that it is the age of the survival of the fittest. The
days when government decided what is good for citizen are gone. The customer decides what to buy.
Increasingly customer is asking for more and more value for money. Indian marketers are feeling the
same. They have realized that they have to remain market focussed if they want to survive. Thus,
Marketing theories and concepts are undergoing the Metamorphosis
as Marketers are increasingly realizing that the old theories and concepts no longer serve their
purpose. Therefore we are seeing the emergence of several new marketing forms.

In the current scenario marketing is changing its form rapidly. Marketing is passing through the
turbulent phase, principles and theories which are relevant today but will be passe tomorrow. Thus
marketer is routinely adopting different principles to remain customer and market focussed. Current
changes are unidirectional. All these transformation are directed towards customer.

DIAGRAM 1- DEGREE OF INCREASING FOCUS AT THE CUSTOMER

Marketer is giving due response to the consumer by providing value for money. All these forms of
marketing focus on increasing attention on the customer. 

3 CHANGES IN THE FORM OF MARKETING: CURRENT SCENARIO

For a very long time theories and concepts developed for marketing products such as the McCarthy’s
4P of marketing and marketing’s basic of STP i.e. segmenting targeting and positioning were dominant
but in the current scenario the whole marketing form is undergoing a metamorphosis, marketers are
increasingly giving more and more importance to the customer by offering value. Marketing is changing
its face from segment based marketing to relationship marketing to One on one marketing to E-
commerce that is barter system of marketing.
DIAGRAM 2 MARKETING METAMORPHOSIS 

3.1 SEGMENT & VALUE BASED MARKETING:

This form of marketing is currently dominant in India and elsewhere in the world. A marketer sees the
market in terms of segments. The rationale behind this form of marketing is that a company can not
serve all customers in the market as the customer are too numerous and diverse in their buying
requirements. Thus it becomes inevitable for a company to select its market segments that it can serve
most effectively. Thus after segmenting the market, the marketer targets one or two market segments
and develops products and marketing programs tailored to each segment.

An assumption was made that in the market there are several people similar in choice who form a
sufficiently large group so that it becomes viable to launch product for the target group. Marketers have
realized that all the marketers are providing the same value and are following the same principles of
STP and 4Ps of marketing. Therefore it becomes imperative for them to provide extra value to the
customer to influence their needs and wants to convert them into demands. Marketers have realized
that the expectation of the customer is increasing rapidly .If we see the product offering augmented
product is increasingly becoming the part of the expected product and the horizon for potential product
is increasingly widening and the marketer is providing the same as this is the only tool left with a
marketer to remain competitive in the marketplace.
DIAGRAM 3 DIAGRAM: PRODUCT OFFERING

USE OF MARKETING UNIVERSALS:

Marketing universals are defined as consumer behaviors within a segment and towards a particular
product category that are invariant across cultures. Brand, price, retailer reputation, and physical
product appearances are signals of quality across cultures for a product. As all these increase the
Brand Equity of a product from the consumers point of view, thus use of marketing universals increase
the value of the product. At the same time marketers are also providing several services which
customer could not expect in the past. In this way currently marketer is providing value to the customer.

3.2 RELATIONSHIP MARKETING:

Alvin Toffler has written in his book Power Shift :
" No one buys a share of Apple Computer or IBM stock because of the firm's material assets. What
counts are not the company's buildings or machines, but the contacts (relationships) and power of its
marketing and sales force, the organizational capacity of its management…"

This point is amply reinforced by the acquisition of Kraft by Philip Morris for a sum of $12.9 billion which
was six times Kraft's net asset value. Philip Morris was willing to pay billions for a set of relationships
and the anticipated support such relationships would provide.
                                                                                                          LONG TERM RELATIONSHIPS

                                                                                     DIAGRAM 4

In recent years companies have put their concerted efforts into increasing production, accounting and
administrative efficiencies mainly through reengineering and TQM applications, Marketing, on the other
hand, had become "ill-focused and overindulged" and compared to other divisions, the function was
"critically ill". Thus, companies have started focussing on changing the face of marketing from
traditional to integrated marketing which is a cross-functional process of reengineering of brand
relationships through focus on people and core competencies, corporate communication(i.e Integrated
Marketing Communication) and planning, and marketing of corporate mission. The very goal is to
deliver long term value to customers, and the measure of success is long term customer satisfaction. It
acutely needs cooperation and coordination of other departments with the marketing wing to build
relationships at various levels- economic, social, technical, and legal, leading to high customer loyalty.

Therefore relationship marketing can be defined as " the practice of building long term satisfying
relations with the customer in order to retain their long term preferences and business". Relationship
marketing results in strong economic, and social ties mutually beneficial to both parties i.e. marketer
and the customer. It cuts down on transaction costs and time.

3.3 INTEGRATED MARKETING:

This form of marketing is the amalgamation of Relationship marketing and One-to-one marketing. As
has been pointed earlier we are also witnessing the emergence of this form of marketing. 

DIAGRAM 5 INTEGRATED MARKETING FRAMEWORK

3.4 ONE-ON-ONE MARKETING:

Integrated marketing is transitional and turbulent phase of continuous fragmentation and consolidation
of the marketplace which is ultimately likely to give way to one-on-one marketing because the
comparatively advantageous features generated by the integrated marketing are likely to be emulated
by the competitors because of continuous improvements in technology and subsequent free and
widespread availability of information. The companies will then have to focus on establishing deeper
relationships with the individual customer on a more personalized basis. We are likely to see a
progressive movement of most of the companies towards the "Partnership" end on the Customer-
relationship continuum. At present, relationship exposures of different companies with their customers
go on differing from one company to another. The levels are :

BASIC : Once the company sells the product, it doesn't follow-up in any way.

REACTIVE : The salesman sells the product and tries to encourage customers call on whenever the
problems are faced.

ACCOUNTABLE : The salesperson himself checks with the customers to know whether the product is
meeting the customers expectations and tries to improve the company's offering.

COMPANY'S SHIFTING FOCUS

DIAGRAM 6 CUSTOMER-RELATIONSHIP CONTINUUM

      
PRO-ACTIVE : The salesperson checks from time-to-time with the customer in search of suitable
suggestions to improve the product use or to make them useful to the new products.

PARTNERSHIP : The company works continuously with customers to discover ways to deliver better
value. Obviously, a company's one-on-one relationship marketing strategy will depend on how many
customers it has and their profitability.

Different approaches to marketing

Criteria Relationship Marketing One to One marketing
   
Orientation  Customer competitor and    Individual
company oriented. customer
Product   orientation
 Value added and
  customized product/service  Highest level of
with price premium variety at relatively
low cost
Scale of
economies  Economies of scope
Knowledge of  Mass customization
the customer  Comprehensive knowl-
edge to get other  In depth for the
Competition products /service of the product/service
company sold to the considered
customer
Competing  High-tech
 Monopolistic competi-tion competition
Features at the niche area
 Customization of
Pricing  Customized service pr-oduct plus
service
 Premium price based on
Advertising &  Relatively low price
special services offered
Promotion
   Interactive Dialogue
Scope of the
 Database marketing  
market
communication
 Local marketing
Nature of the   globally oriented
marketing  Integrated with
 Global marketing with local design
touch production, delivery
Nature of
company
 Partially integrated with  Local-Global
production & delivery company
 

 Multi-domestic company

 
3.5 IT DRIVEN MARKETING OR BARTER SYSTEM OF MARKETING:

The impact of IT on marketing is dramatic. Customer segmentation is entering into a new information
rich era based on behavior rather than the traditional demographic methods. Sales promotions are
becoming more targeted as a result of more and better information.

It can be predicted that at last this transformation will lead us to Barter system of marketing similar to
that which was prevalent in the past. This is due to the fact that as customer will himself search for
information about the product and this will give way to "SELF MARKETING" as customer himself is
involved in the process. The customer will himself ask for a product directly from the seller and instead
of giving him money will offer some other good as in that era we won’t be talking about money as we
mean it today rather we will exchange services or goods on the Internet, or we will pay in some
electronic form. 

TRADITIONAL IT DRIVEN MARKETING

MARKETING STREAM 
     

SEGMENTATION DEMOGRAPHIC BEHAVIORAL

ADVERTISING PUSH PULL

PROMOTIONS MASS TAILORED

PRICING SET BY FIRM SET BY CUSTOMER

SALES MANAGEMENT DATA FROM SALES MARKETING AND SALES

COMPLIMENTARY

DISTRIBUTION INTERMEDIARIES MULTI-CHANNEL,

CHANNEL MARKETING

CONSTRAINED EXPANSION
NEW PRODUCT
SHARE, PROFIT NEW METRICS
CONTROL
 

WHY MARKETING METAMORPHOSIS: -

CHANGING BUSINESS ENVIRONMENT: -

Indian business environment is changing very rapidly after the liberalization. No longer Indian
marketing environment is different from the world; we are seeing the same changes in the Indian
marketing environment as we are seeing in the world.

CHANGES IN INDIAN BUSINESS ENVIRONMENT

INCREASING DEMAND FOR BETTER PRODUCT: -

For a very long time theories and concepts developed for marketing products such as the McCarthy’s
4Ps of marketing and marketing’s basic of STP i.e. segmenting, targeting and positioning were
dominant. These principles were serving the purpose of a marketer at that time when competition was
not stiff, and customer’s perception of a product was that a product is just a Physical Good.

Physical Good
DIAGRAM 7 - PRODUCT OFFERING TO AN TRADITIONAL INDIAN CUSTOMER

Idea, Physical Good, Service

DIAGRAM 8 -ACTUAL PRODUCT WHICH A MARKETER SHOULD OFFER TO A CUSTOMER

With the dynamic environment and increasing competition and ever increasing customer demand
marketers are forced to adopt a new marketing framework. An Indian customer is increasingly looking
for a complete product, in fact he asks for more than that, now they give same priority to Physical
Good, Service and Idea.

DIAGRAM 9 PRODUCT DEMANDED BY AN INDIAN CUSTOMER TODAY.

Duct 

INCREASING DEMAND FOR VALUE FOR MONEY:-

Expectation of customer is increasing, he asks for more and more for the same price, and whomsoever
provides him increasing value for money, he buys product from that marketer.

DIAGRAM 10

TECHNOLOGICAL IMPACT ON PRODUCT LIFE CYCLE: - With the increasing technological

advances every day companies are coming with a new and better product. Therefor the Life Cycle of
product is decreasing.

DIAGRAM 11 PRODUCT LIFE CYCLE IN OLDER TIMES (JUST A FEW YEARS AGO)
DIAGRAM 12 PRODUCT LIFE CYCLE A FEW YEARS LATER 

As the PLC is decreasing marketer is under immense pressure to recover the costs as quickly as
possible from that product. Thus he finds it increasingly important to reach directly to the customer.

BRAND IS DYING:

The time is about to come when we will not be having brands. Consumer will become technological
savvy in the future, he will ask for new quality product (Quality is something which satisfies the
customer) and whoever provides that the consumer will buy his product irrespective of the brand name.
He will get all the information on the Internet and he will order the same on the net. Thus there will not
be any role for a brand. The consumer will search just for an Innovative product.

5 CONCLUSION:

Marketing has came a long way in a very short time. The turbulence it is facing today will completely
change what is happening today, and this will be true in the future also.