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The End of Traditional Marketing: Myths and Limits of Marketing !

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  1. 1. « The Quaternary Marketing » The end of traditional marketing !Paris, 29th may 2012 Bruno TEBOUL
  2. 2. The author: Bruno TeboulCorporate Digital Marketing Director(The european leader in ICT)Master of Epistemology(1993 - University of Paris 12)Post Graduate Diploma in Cognitive Neurosciences(1994 - Ecole Polytechnique)Executive MBA(2003 - HEC/UCLA)PhD student in Marketing & Management Science(2012 University Paris-Dauphine) Bruno Teboul
  3. 3. The end of traditional marketing Bruno Teboul
  4. 4. Bruno Teboul
  5. 5. The end of traditional marketing Marketing success in a turbulent environment requires an approach that is different to that recommended by traditional strategic marketing theory, which is insufficient to guide marketers in markets in varying states of change and turbulence. This criticism of the traditional approach to marketing strategy is based on the fact that sequential strategic marketing planning does not suit a changing environment because it is too slow and unresponsive for a fast changing marketplace. Furthermore, it cannot keep up with customers requirements nor with aggressive competitors. In addition, traditional market research and traditional marketing mix models are too simplistic in order to understand complex marketing situations, as such models assume linear relationships between mix variables and the resultant outcomes ! Bruno Teboul
  6. 6. The end of traditional marketingSince the simplistic approaches recommended bytraditional theories can be dangerous, marketersshould consider the overall environmental positionwhen designing their strategies and adopt non-traditional marketing methodologies.In current complex and turbulent environments, speedin recognizing opportunities and developing newproducts, as well as reducing the time to market, isessential !Traditional marketing is an inadequate response to themarketing opportunities emerging in a moderneconomy and is inappropriate for dominate economicalscientific and technical revolutions: Digital & NBIC ! Bruno Teboul
  7. 7. The end of traditional marketingThis is similar to the economic theory that is at theheart of Philip Kotler’s Cognitive Marketing. ButKotler utilizes this concept of Cognitive Marketing inthe wrong sense: he believes that consumers arecognitive, thus rational and Bayesian.Its not a marketing inspired by the discoveries ofcognitive science, but one that considers theconsumer as a rational agent, capable of reasoning,a cognitive consumer, an understanding andknowing consumer.The contribution of psychology has awarded moreand more attention to the assumptions of an agentwho is not perfectly capable of emitting soundjudgments. Bruno Teboul
  8. 8. The end of traditional marketingMarketers have to be able to anticipate, cope with, andadapt to changes in the external environment.I believe, like an ever-increasing number of authors,that the new sciences, specifically the chaos andcomplexity theories, can provide a betterunderstanding of marketing theory.For example, Wollin and Perry (2004) maintain that:“Complexity theory in the form of complex adaptivesystems has implications for marketing managers as aholistic, self-consistent framework for understandingprofound forces within a market and provides someguides for action when operating within such asystem.” Bruno Teboul
  9. 9. Bruno Teboul
  10. 10. The end of the traditional marketing The limits The myths of marketing: of marketing: (1) Difficult to Measure (1) The rational consumer, (2) Difficult to understand (2) Consumer is a bayesian customer behaviour agent, (3) Fragmented audience (3) Homo Oeconomicus(4) Difficult to predict campaign (4) The mix-marketing results paradigm (n P’s),(5)The right product, at the right (5) The objectivity of the price, for the right target, at the customer responses,right time, via the right media… (6) Behaviour customer (6) Expensive segmentation, (7) Churn (7) CRM and BI. Bruno Teboul
  11. 11. The end of traditional marketing of the Marketing Idols…Bruno Teboul
  12. 12. The end of traditional marketing The model "problem/solution" invented in the 1960s in the USA, aimed to educate consumers on the basis of a new product. In a consumer society where technology evolves every single day, consumers need to be prepared for such advancements. However, they don’t seem to understand how to use it or how to keep up. The idea is, based on an analysis of consumers (search for insight) to develop a logic of persuasion starring a problem, a dissatisfaction with their experience of consumers in the use of the product category. Procter & Gamble Model: procterian marketing was born... Bruno Teboul
  13. 13. The end of traditional marketing It formulates the law of effect: so that the connection between a situation and a behavior is reinforced (that is to say to increase the probability of such behavior in this situation), it is necessary that such behavior in such situations will produce a satisfaction for the organization. The innovation of the brand advertised bringing them a solution. Hence the name model "problem / solution" inspired by experimental psychology and Behaviourism. Thorndike (1874 - 1949) first formulated the S > R (stimulus> response) and the law to strengthen this connection by studying the reward in rats. Thorndike in 1898 published the results of his early research in Animal Intelligence. Bruno Teboul
  14. 14. The end of traditional marketingIndeed, the concept of behavioral type "stimulus>response" has been scientifically refuted by the rise ofneuroscience and cognitive paradigm.Cognitivism takes the foot against behaviorism bylooking at what exists between stimulus and behavior,the mental functioning of the individual ("black box").Stimulti >>>>>>>>>>>>>>> Response (Kotler, Procter).Stimuli >>>> >>>>> Response (Neuroscience,heuristics ...).Behaviorists doubted the possibility of a scientificinvestigation of what they called the "black box".Cognitivists from the 50s will try to exceed the projectseeking to identify the structures and processesresponsible for the hypothetical behavior. Bruno Teboul
  15. 15. Bruno Teboul
  16. 16. The end of traditional marketing Why the Mix-Marketing Paradigm is obsolete ?Philip Kotler still considers the Mix as one of theelements of the Marketing strategy, yet this approachhas developed gradually over the years from the“academic” perspective (Kotler 1976) to a more“practical” one (Kotler 1984).In his more recent books the author becomes morecritical by underlining one of the main limitations of theMix namely the internal orientation arguing that “thefour P’s represent the sellers’ view of the marketingtools available for influencing buyers” (Kotler 2003). Bruno Teboul
  17. 17. The end of traditional marketing Why the Mix-Marketing Paradigm is obsolete ?Since the 1960s, there has been an inflation in the numberof P constituting the model of the Marketing Mix classical:indeed, since Kotler we went from 4Ps to 10Ps and it stilldoes not address the inherent problem of this obsoletemodel. It is not the number of members or parts of themodel that make the relevance and validity.It is the model definition and its underlying rules that makeit a paradigm or not. Outside, in the case of ParadigmMarketing Mix, it is his logic that is lacking today: becauseit is impossible to build a reliable marketing plan followingthe simplistic approach of the Marketing Mix! Bruno Teboul
  18. 18. The end of traditional marketing Why the Mix-Marketing Paradigm is obsolete ?What Marketing Director can claim to have found thegrail using this formula: “the right product at theright price, right place, right time, right promotion,via the right medium” !The Marketing Mix is rather dangerous because itblinds the Marketing Director, its hierarchy, andignores the deep emotions of customers and theirdecision making!The Marketing Mix inflicts a double penalty: if youdistill a poison that you would spend for a cure, thatpoison can be prescribed by a charlatan who wouldlike to be a doctor!The Marketing Mix that ignores all the non-rationalconsumers likes to believe that it is the basicstructure of marketing: but it is the precipice, theultimate end, the medieval castle that collapses ! Bruno Teboul
  19. 19. The end of the traditional marketing Obsolete traditional CRM approach:Bruno Teboul
  20. 20. The end of the traditional marketing New CRM Big Data approach…Reporting, Analytics, DataVisualisation & Statisitics ManagementData AccessData Processing ZooKeeper*Data Storage Data Customer Store Data eCRM AccountsSocial Networks Web sites Bruno Teboul
  21. 21. The end of the traditional marketing To a SmartData CRM approach…Data enables us to understand customers and to managecontact and content strategy. Data is a core component ofintegrated marketing and, via an integrated approach, we canspeak with a single voice across channels and lines ofbusiness.However, to succeed in a meaningful way at that level ofcustomer centricity, we have to manage all that data in a waythat holistically fuels customer engagement and experience.That effort requires a whole ecosystem of people, processes,and technology.Even the most sophisticated and modern businesses todayare surprisingly ill equipped to manage even the most basicdigital marketing standards and activities, let alone jettisonforward into the new world of Big Data techniques. Bruno Teboul
  22. 22. From the Quaternary Economy to the « Quaternary Marketing »… Bruno Teboul
  23. 23. From the Quaternary Economy to the « Quaternary Marketing »…Michèle Debonneuil Bruno Teboul
  24. 24. From the Quaternary Economy to the « Quaternary Marketing »… Quaternary Economy essentially incorporates an economic sector combining the secondary and the tertiary sectors whose products are neither goods nor services, but "new services incorporating property, the temporary provision of goods, persons, or combinations of goods and people.“ Besides these products, the quaternary sector includes information, technology, and communication (ICT) , the training associated with them, and the actions of the State to support its development. Bruno Teboul
  25. 25. Quaternary Economy and NBIC… Nanotechnology, Biology, Information and Cognition (NBIC) M.C. Roco and W.S. Bainbridge (2002) “We stand at the threshold of a new renaissance in science and technology, based on a comprehensive understanding of the structure and behavior of matter from the nanoscale up to the most complex system yet discovered, the human brain. Unification of science based on unity in nature and its holistic investigation will lead to technological convergence and a more efficient societal structure for reaching human goals. In the early decades of the twenty-first century, concentrated effort can bring together nanotechnology, biotechnology, information technology, and new technologies based in cognitive science”. Bruno Teboul