Assessment 1

MK1102A
The Evolution of Marketing
How Technology and Social Media Have
Questioned the Relevancy of Marketing
Kevin Regan
1/11/2013

Kevin Regan
MK1102A
Marketing Management
Assessment #1
1/11/2013
Word Count: 3,322

After the industrial revolution, marketing’s role in the organization has been
continually redefined. As fierce competition developed in the beginning of the 20th
Century, the need arose to differentiate products and companies. Marketing as a
strategic and core function of the business thus began. The UK’s Chartered Institute of
Marketing defined the subject as “the management process responsible for identifying,
anticipating, and satisfying customer requirements profitably” (2009, p. 2). At first,
companies with excess production hired large sale staffs and aggressive advertising
approaches to sell goods (Brassington & Pettitt, 2003). Later, company’s adopted a
“marketing orientation” to discover the needs of the consumer first, and respond by
producing those requirements (Brassington & Pettitt, 2003, p. 10). However, many have
criticized the CIM definition for failing to reflect the realities of the 21st century
(Brassington & Pettitt, 2003). Branding, relationship marketing, and customer retention
now occupy a spot in marketing lexicon. New and evolving medium such as mobile
devices and apps have questioned marketing department’s ability to reach customers.
Perhaps even more alarming, the growth of social media and data technologies such as
search engine optimization has questioned the very relevancy of marketing in the new
century.
Much of the literature describing marketing management has focused on the
development of the marketing mix—the traditional four-P’s: Product, Price, Place, and
Promotion. By adding People, Process, and Physical Evidence, experts have extended
that concept to 7-P’s (Blythe, 2003). Yet no one can disagree that the product remains
the essential focus of the marketing mix today:

The product is at the heart of the marketing exchange. If the product does not deliver the benefits
the customer wanted or if it does not live up to the expectations created by other elements of the
marketing mix, then the whole exercise has been in vain. (Brassington & Pettitt, 2003, p. 267)
Today, corporations still need to develop an appropriate product line and mix, yet the
life cycle of these products must be closely monitored. Today’s environment of creative
destruction forces business to become increasingly innovative in order to survive. In a
way, everyone can be judged an early adopter, and companies need to be willing to
quickly go from development, to testing, to production. Yet certain well-known aspects
of the product marketing mix have become increasingly obsolete. Packaging, for
example, holds less importance as consumers buy more goods online, which now even
includes groceries at the supermarket. Some elements of the traditional marketing mix,
however, continue to occupy a critical role for the organization.
Many consider branding as the most important marketing strategy relating to the
product in today’s environment. Brassington and Pettitt define branding as the “creation
and communication of a three-dimensional character for a product that is not easily
copied or damaged by competitor’s efforts” (2003, p. 279). Successful brands create far
more than just a relationship with a particular label. They establish a connection to a
consumer that establishes an ethos for that particular company. It’s more than how a
product looks or the quality we perceive, but of the values it represent about our
individuality. Madeleine Bunting describes the world we live in:
Research and surveys repeatedly show that brands generate more trust than any institution -
government, church, politicians all fall before the credibility of some brands… We no longer identify with
churches, political parties or even our local community; we construct our sense of who we are through our
association with brands (2001, p. 2.4).

NY Times author Fred Vogelstein began an article with the quote, “An age of darkness
having spanned centuries…ended with a searing light, which shook the earth…and the
great device was rendered unto thee” (Vogelstein, 2013, p. MM36). Obviously the
beginning of the piece ties into Bunting’s argument of a brand image that has a spiritual
like quality. The article examines the development of the iPhone, which expanded upon
Apple’s brand awareness and launched the massive smartphone market we take for
granted today. However, Vogelstein discusses the risk that the company took…if the
product, which had numerous glitches, had failed, it would have tarnished Apple’s brand
image irreparably. Establishing a brand, like Apple has accomplished, enables a
company to develop new products and charge premium prices.
The price that a company decides to sell its product has many more implications
than a basic economic definition. A high price could be seen as high quality; a strong
brand image will allow a company to charge higher prices and extract larger profits. A
low price could increase quantity sold, however it could also signal poor quality.
Likewise, the places to which a company must deliver its products have varied. A
company must be ready to deliver its products at anytime and anyplace. Consumers will
seek out alternatives if their needs are not met. This changes the whole distribution
scheme for companies. The emergence of on-line retailers such as Amazon and
superstores such as Tesco has created more distribution networks for products. Despite
these changes, the promotion aspect of the marketing mix might have witnessed the
most dramatic transformation in the 21st century. As discussed later, consumers
increasingly block out marketing from mass media and potentially ignore all traditional
marketing efforts all together.

As a challenge to the entrenched ideas of the marketing mix, a new term
emerged in the literature of the late 1980’s and through the 1990’s. Companies began
using phrases like customer equity, brand value, and retention rate that were grouped
into an overall philosophy known as relationship marketing. Christian Gronroos, a leader
in the new school of thought, believed the traditional 4-P’s worked well for a system
consistent with “consumer packaged goods in a North American environment with huge
mass markets, a highly competitive distribution system, and very commercial mass
media” (1994, p. 6). The marketing mix geared to a production orientated company and
didn’t fit with the changing realities of the world. As customers demanded mass-
customization and increased attention, leading marketers realized the need to provide
added value to the consumer in order to increase customer retention. In Relationship
Marketing, the authors described the change:
The traditional focus of marketing has been on winning customers, with the emphasis on the
value of an individual sale. This traditional approach has been replaced by a relationship marketing
approach, emphasizing the value of long-term relationships and repeat purchases (Peck, et al., 1999, p.
44)
The organization now focused on the consumer. By creating greater value for the
customer, firms could establish loyalty to increase profitability.
Of course, for many years, companies have focused on providing quality and
customer satisfaction. Recently, however, studies have shown that’s this should be the
firm’s primary concern, Andersen and Fornell believed that improving product quality did
not have the same economic benefits of creating loyalty: “Empirical evidence casts
doubt on whether companies’ efforts to improve customer satisfaction through
implementary approaches such as a total quality management are having the desired

effects”. (1994, p. 53). Customer satisfaction should focus on establishing customer
loyalty and generating repeat purchases. This would create the economic benefit the
firm desires. According to the authors, loyal cosumers would be less price elastic and
less likely to switch to competitors. The firm itself would have an increased reputation
and, in the future, lower costs of attracting new customers. These benefits would
translate into a physical return on investment for the marketing department. A review by
Reciheld and Sasser concluded that every 5% increase in customer retention could
create an increased net present value of 20-125%. (Peck, et al., 1999). The company
could amortize the original cost of attracting a new sale, and retained customers serve
as an important source of referrals (Peck, et al., 1999). Organizations have started to
think beyond the single transaction, and marketers must follow the course.
At its core, and consistent with traditional marketing theory, the business serves
to fill the needs of the customer. The most successul companies will establish a
connection to their customers and forge long-term relationships. Firms should think “not
about selling products but about keeping customers” (Blattberg & Deighton, 1996, p.
136). Yet, to succeed companies must continually attract new customers as well as
retain current customers. This balancing act could prove most difficult in the decades
ahead:
[Organizations] should think of marketing as good conversation, as a process of drawing potential
customers into progressively more satisfying back-and-forth relationships with the company…the goal of
maximizing customer equity by balancing acquisition and retention efforts properly should serve as the
star by which a company steers its entire marketing program (Blattberg & Deighton, 1996, pp. 137-138)
By establishing customer satisfaction and brand loyalty companies can recruit new
customers thorugh the important influence and reference markets—a cost-effective way

of attracting new sales. As discussed earlier, branding will play a large part in this, as
“brands...are magnet to attract new customers and an anchor to hold existing
customers.” (Blattberg & Deighton, 1996, p. 143) The company must carefully monitor
customer satisfaction and not rely too heavily on past brand image. Loyalty in the new
millennium could prove fleeting.
As we enter the 21st century, do advertising and marketing still play a role in
people’s daily lives? Consumers tune out traditional forms of media: iPods replacing
radio in the car, the web replacing newspapers, and digital recording devices blocking
out advertisements even when people still do watch television. Certainly, the
development of search engines has questioned the relevance of marketing today.
Consumers can bypass any traditional forms of media, type a query of exactly what they
are searching for, and have an algorithm deliver relevant results. Instead of admitting
defeat in the face of this new behavior, marketing departments can seize on this
opportunity and incorporate search technology into the traditional marketing mix. As a
Mickinsey report stated, “Search and search advertising raise awareness…web
searches are the most influential touch point, even higher than in-store touch points
such as meeting with a sales representative” (Bughin, et al., 2011, p. 23). Firms must
understand this new environment and must see that search rankings are a new form of
promotion. Developing the theme of relationship marketing, companies can better
serve their customers’ needs by matching their search to relevant products. Firms can
also develop a strategy to reach niche markets and engage in a form of mass
customization that consumers now expect. The companies that can make effective use
of this new technology will thrive in the new age.

Generating a high ranking on search engines such as Google has become an
important goal for companies. A high search engines ranking serves a clear advertising
purpose: “When Internet users are primed to search along a particular brand attribute,
they are more likely to recognize an unknown brand if it is displayed before well-known
brands in the SERP [Search Engine Ranking Page]” (Dou, et al., 2010, p. 274). This is a
powerful tool for emerging companies to get brand awareness and recognition, but the
authors also suggests that large firms should continually monitor their SERP positioning
for potential threats (Dou, et al., 2010). A 2010 study by the Chitka Network reported
that moving from 11th to 10th in the SERP will increase web traffic by 134% (Qualman,
2009). Even more powerful, recent research suggests that consumers do not look past
the top few search results (Panda, 2013). Rather than taking a reactive approach and
hoping their website attracts a good ranking, firms must look forward and seize the
opportunity to use search as a powerful marketing tool; “search has proven to be an
extremely effective means of matching relevant information with user needs, helping
advertisers target the right audience” (Bughin, et al., 2011, p. 23). Despite the
innovative new method, firms should view search engine optimization as another tool in
the promotional aspect of the marketing mix.
Savvy use of new technologies to impact search results and drive consumer
behavior will be a powerful force in the promotion of the brand in the 21st century. A high
search engine ranking may result in a greater economic benefit than just click-through
to the website: “Web designers are recognizing that search result can have branding
implications…because the results offer a natural way for internet users to gather
information about brands” (Dou, et al., 2010, p. 263). A high place on the organic results

of a Google search carries a prestige—an implication of quality that in the past might
have been secured by placing a product on the cover of a magazine. Also new
monitoring technologies will enable organization to target consumers on a more
individual basis. People are 14 times more likely to click on an advertisement that
matches their profile (Freedman, 2005). Also, according to a survey by the Penomenon
Institute, consumers believe “targeted ads would be less annoying, and 45% would
exchange personal information for advertising relevance” (Freedman, 2005, p. 74).
Collabritive filtering on sites such as Amazon use past searching data as a way to
match consumer’s interests with new products. These new technologies enable a
marketing department to reach consumers in a new and ever expanding way. Instead of
relegating marketing to the back of the organization, these new tools should force
companies to recognize the need to stay increasingly aware of their message to their
customers and to the channels open for competitors to attract defectors. The methods
may have changed, but the ability to interact with and retain customers will give
companies the competitive edge in the 21st century.
The growth of social networks has placed the most serious challenge to the
organization’s marketing role. Consumers are “reducing their reliance on advertising as
a source of information to guide their purchase decision making” (Mangold & Faulds,
2009, p. 361). Customers can now search for information online, read reviews and blog
posts, and form opinions from their networks through Facebook and Twitter. As
customers begin to exchange information so rapidly, and as organizations lose the
ability to create this content, does this limit the role of the marketing function? To the
contrary, firms should see the growth of this media as an opportunity rather than a

threat. To survive businesses must switch from traditional mass media to a “new
communications paradigm that acknowledges the pervasiveness of information now
being exchanged among consumers in the social media space” (Mangold & Faulds,
2009, p. 364). Just as firms began to realize the importance of relationship marketing for
all types of industries, organizations must nurture these virtual relationships through a
consistent message. They must use the platform to engage with the customer in an
information sharing partnership, and switch the thinking from a one-to-many mass
market media strategy to a one-to-one relationship with customers. As Eric Qualman,
author of Socialnomics says, “Business don’thave the choice on whether or not they do
social media, the choice is on how well to do it” (Qualman, 2009, p. xxii). Rather than
throwing up one’s hands in the face of this new consumer power and declaring the
marketing function dead, savvy companies should embrace this new form of
communication as a powerful new tool in the marketing mix.
As consumers have more access to information and feel more empowered about
buying decisions, the companies that can establish a personal connection will be able to
attract and retain customers in the new century. Jagdish Sheth and Rajenda Sisodia
believe a company must develop “virtual empathy” on a one-to-one basis to succeed
(1997, p. 88). As marketing departments in the past attempted to create a relationship
ladder to develop potential customers into eventual advocates, they should now seek to
create a social network contributions ladder, where “lurkers” would become “celebrities”
citing a company’s brand in the social network (Harridge-March & Quinton, 2009, p.
176). How does a company establish such a presence in the social media landscape?
Hoffman and Fodor:

In a well-designed social media campaign, consumers are likely to spread viral videos, create
additional brand related content, tweet about the brand, and post about their experience on Facebook
(2010, p. 49)
Many articles have pointed to the campaign of blender-maker K-Tec as a successful
social media strategy. The company’s CEO posted You-Tube clips entitled “Will it
Blend?”, showing its product blending everything from golf balls to iPads and ultimately
reached 100 million views. The company reported increased sales of nearly 20% the
following year. The costs of production and distribution for that advertisement would be
a fraction of a traditional television advertisement and blanketed a much wider
audience. Not only did the company benefit from the increased web traffic and added
sales, but also from gaining a prestigious brand image in a crowded marketplace that
should help to build customer loyalty for new products in the future.
The development of long-term relationships with customers remains the most
important benefit from establishing a social media presence is. Marketing departments
need understand the long-term impact, not just the short-term goals of attracting
customers and increasing sales. As studies into relationship marketing have shown,
retaining customers could potentially be far more lucrative:
Instead of emphasizing their own marketing investment and calculating the returns in terms of
customer response, managers should begin by considering consumer motivations to use social media
and then measure the social media investments customers make as they engage with the marketers’
brand (Hoffman & Fodor, 2010, p. 42)
Having a social media presence after a sale, such as maintaining a Twitter account to
interact with customers can help increase loyalty. Harridge-March and Quinton believe
this strategy can “create a barrier to entry to other consumers or even organizations and
potentially lead to a sustainable competitive advantage” (2009, p. 175). If businesses

believe they can ignore social media and rely on a mix of traditional media and search
engine optimization, they will be mistaken:
Users are increasingly navigating to web sites from links on social networks, a role that search
engines had traditionally dominated. Algorithmic search engines are now starting to incorporate social
cues—for example, information about content that users have tagged—into their relevance-ranking
algorithms (Bughin, et al., 2011, p. 13)
Clearly, having a social media presence is a necessity. However, the companies that
fully embrace social media, as much as they have traditional media in the past, will
succeed. Marketing departments must look at this new form of media not as an affront
to the traditional theory of marketing, but as one more tool to profitably reach and
engage customers.
Clearly the subject of marketing has seen an incredible transformation through
time. In today’s world of data mining, search engine optimization, collaborative filtering,
behavioral targeting, and social media, some have questioned the relevancy of the
marketing function. Yet, the core principles remain the same. Marketing departments
still seek to identify and satisfy customer requirements. Today, however, the
organization must adapt quickly, and can use social network as a way to learn and
anticipate customer needs quickly—the same way as traditional customer surveys and
market research would have done 50 years ago. The ability to generate a high search
page ranking may seem out of touch with marketing, but in reality is it any different than
struggling to place a product in the right aisle of the supermarket, or on the right space
of a trade floor show? A vibrant social media campaign can maintain customer loyalty
and engagement far more effectively than the old call center with a toll-free number
pasted at the bottom of a product’s package. Rather than diminishing marketing’s role,

these new developments have enhanced it. Marketing departments must be experts at
managing relationships and generating loyalty to one’s brand. They must take the lead
to create content that will be disseminated throughout the virtual landscape, both
strengthening existing relationships and generating new ones. The tools have become
more complex, and the time to accomplish goals has shrunk, yet the theory and function
of marketing have remained as relevant today as when the first ads hit television over
70 years ago (Wikipedia, 2013).

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