Trends Shaping the Marketplace
Kimberli Munkres, Senior Public Relations Strategist &
Greg Timpany, Research Director
Wilkin Guge Marketing, Inc.
The one truth we all live with is that change is inevitable. It impacts us on a micro or daily level, yet also has a longer, almost hidden, cycle that cannot be easily seen. Using sources that include studies, public conversation, news reports and industry literature, the thought leaders at Wilkin Guge Marketing have identified several key trends that will have both an immediate and long-run impact on your business and the broader social climate.
Changing Consumer Landscape
Two trends of interest have emerged in the consumer landscape. The rise in the economic power of the Hispanic consumer cannot be ignored. Both U.S. citizens and those here illegally spend their incomes on a diverse slate of goods and services. Expect this trend to grow for two primary reasons: (1) higher than average birthrates (Hispanics maintain higher birthrates than other ethnic groups) and (2) the movement of second- and third-generation Hispanics who continue to increase their education, breaking down doors to more affluent occupations.
The Barbell Phenomenon happens when economic and regulatory pressures squeeze the middle class out of its majority position. The net effect is that some will end up on the richer side of the equation while others will join the have-nots. The “normal” distribution with the majority being in the middle class becomes old-school, and you are left with a bi-modal distribution (picture weights on a barbell) where there are approximately equal numbers of wealthy and poor with a much diminished middle class.
Brand Democratization
Power to the people! There is a shift, sometimes subtle and other times brutal, toward the consumer holding more power in the marketplace. The Internet, like no other medium in recent memory, has changed the way consumers and marketers behave. Consumers have become content providers who are willing and able to share their opinions on what’s hot and what’s not. On the other side of the coin, marketers are now pressed to involve consumers in their efforts to generate “buzz”.
The influence of the Internet is being felt the hardest by the media. Web sites exist to fit every niche, making general interest publications less relevant. With the decline of general interest media, Madison Avenue is taking its clients’ messages to the streets. Personalized communication based upon expressed behavior is replacing mass advertising as the vehicle of choice for reaching consumers in the digital age.
Convergence of workflow via real-time information access
Convergence is defined as the occurrence of two or more things coming together. During no other period has the time to converge been quicker than it is today. An example is the transition of the voice over Internet protocol (VoIP) from a consumer product to a business cost-savings model with the potential to replace PBX-style networks. Cellular phones are no longer voice only. Convergence has led to instances where voice, video and data can be accessed in real time by devices smaller than your wallet. This will open up new avenues for paid messaging.
Think Globally, Act Globally
Emerging economies - China and India, in particular - are recognizing their new place in the global economy. India has taken a leadership role in IT and call center outsourcing. U.S. firms can no longer ignore the potential cost savings that can be achieved by shifting this type of work to India. China, despite its trappings of a communist society, is engineering an economic growth spurt. In 2005, according to the CIA, China’s economy was third largest in the world behind the United States and the European Union (EU), when measured on a purchasing power parity (PPP) basis. China is struggling, though, to sustain adequate job growth for the tens of millions of workers that have been laid off from state-owned enterprises. The Internet has played a significant hand in the growth of these two economies.
Transparency
The fall from grace by Enron, and other large corporations, is leading the call for more transparency between the inner workings of the boardroom and the public eye. According to Wikipedia, the concept of transparency, in the humanities, implies openness, communication and accountability. It applies to both corporate and governmental entities and is the opposite of privacy. When transactions are transparent, all information about them is open and freely available. Transparency may soon become a prerequisite for trust not just for customers or investors but also for employees, vendors and other stakeholders.
New market concepts rather than new market products
The mantra of new product development has been ingrained in U.S. corporate culture for decades. Time for a new mantra! The tune may just be sung to the melody of the new market concept. Buying music online is a BIG new market concept. At some point, being able to download machine independent videos will be a new market concept. These concepts are “new market,” because they are replacing older, established ways of selling in a way that makes them difficult to copy by the competition. The trend is less about specific products and more about using that innovation to define a market space in which many products can be successful.
Idea Agencies versus the Big Guys
There is a showdown brewing in the Madison Avenue Corral. Instead of gunslingers, the new combatants are large media-centric agencies, steeped in tradition and slow to maneuver as opposed to smaller “idea agencies”. The new breed of marketer is not tied to tradition and can produce multi-faceted brand building campaigns, generally faster and with more buzz than the big guys. The time may soon be upon us where large accounts use multiple agencies and designate them to fill specific media and channel-neutral tasks within the marketing mix.
The new face of the entrepreneur
According to the Center for Women’s Business Research, women-owned businesses grew by 28% between 1997 and 2004, three times the rate of business growth overall. More women, and especially women of color, are taking over family companies, adopting new technologies and assuming leadership roles in male-dominated fields. Micro-lending is fueling this trend in emerging economies.
You cannot control what you cannot measure
It is safe to say we are awash in data but thirsty for the type of marketing information that can make a difference. The Internet-era has generated new concepts such as behavioral targeting and data-mining in response to this flood of data. Yet having new tools to slice into the data is akin to having a sharp knife and a well-prepared steak but no appetite. The tools and the data are present, but marketing departments need both the desire to measure that data and specific skills training in order to maximize their ability to generate useful information.
Security, personal freedom and the convenience miracle
The stage is set for a match between the country’s post-9/11 need for security, a tradition of personal freedom and the consumer’s desire for convenience. Response to the recent London terrorist plans is a prime example of how far governments are willing to go to “protect” the public. Where the line will be finally drawn is anyone’s guess. However, it is safe to say that our government will argue the need for more security, Libertarians and the ACLU will hoist the Constitution and decry a loss of freedom and consumers will become tired of standing in ever-increasing lines at the airport.
