A New Marketing Paradigm - Essay Example

?A New Marketing Paradigm Marketing has entered a post-modern era of fragmentation with a new emphasis on the creation of meaning through consumption. More than ever, reality is socially constructed with individuals having multiple identities, both virtual and real, spanning different activities, with distance being no object. Marketing is no longer an economic exchange but a way of defining products and services using values. Consumers control marketing communications, leaving marketers with little, if any, control over a marketing process that now goes beyond the traditional 4 Ps framework. Co-ordination and control of the marketing mix is an area contested by marketers and consumers with content being increasingly found within the consumer domain where it is reshaped into something other than the marketer’s message. The marketing environment has changed, requiring marketers to reconsider their approach to products and services, and how they are portrayed to consumers. Consumers increasingly filter marketing messages, ignoring hype and exaggeration, to home in on the essential features and benefits offered. Flexibility on the part of the marketer is essential. Balancing the increasing need for personalisation with integrated marketing communications, channel consistency and accurate reflection of corporate mission and values provides a new and complex challenge for those looking to encourage product purchase. As consumer markets become increasingly fragmented with multiple cross-overs, so marketers need to use database marketing and information technologies to customise products for the individual and take advantage of opportunities when they present themselves. This paper brings together the elements of a new marketing paradigm that requires marketers to see consumers as partners who change products’ meanings and values to suit their own contexts and needs. Brands provide a means for the development of relationship marketing as a mainstream activity, tying consumers in through brand loyalty. They have come to represent a way for consumers to be part of specific social groups. Values are identified and created before purchase and developed and changed after purchase, as consumers change identities and seek to define themselves in different ways and discover new experiences beyond the material. Distinct consumer groups may need the same message, but they cannot be easily identified as they do not conform to demographic or geographic categorisation, and are smaller than would ordinarily be considered viable for a target group. Consumers’ choices reflect their perceptions of their identity, bringing hyper-reality into the mix and providing further challenge for marketers, who must identify why their product is chosen over others, in terms of values and purchase motivations. Marketing must move away from mass customisation towards interactive ambiguity, where consumers control the brands and make them into what they want, leaving marketers a continually moving feast reflecting a new game with the players having changed sides. Where once the consumer was seen to dance to the tune of the marketer, the marketer now dances to the consumer beat. (470 words) Article The postmodern era has brought dramatic change in all fields, from arts to science, and from philosophy to economics; marketing is no exception. The present is characterized by increasing complexity and abstractness, and by rapid rates of change. As the Oxford dictionary explains, postmodernism is “characterized by a rejection of ideology and theory in favor of a plurality of values and techniques” (Oxford Dictionaries 2008). Among the defining characteristics of this era are: A new understanding of reality, which is not always and exclusively based on reason, and emerges as more complex and nuanced than the mere product of technology and science (Firat and Venkatesh 1995, p. 240). In the modern era science and reason reigned, while in the present world they are unable to establish order in (or categorize) all fields (such as ethics or personal relations). A separation of time and space, doubt, fragmentation and a categorical denial of universal truths. Certainty is replaced by reflexivity. Science becomes intimately related to the principle of doubt and open revision (Giddens 1991, p. 21). The prominent influence of culture on reality. Reality cannot be reduced to simple dichotomous categories, and individuals have many faces and identities in social interactions. Change is ubiquitous. New social dynamics. Social relations are articulated across vast distances (in time and space), and gain a global dimension (Giddens 1991, p. 20). Physical absence does not impede with the establishment of social relations. A new understanding of the world. The term “reality” understood as a universal, rational order is outdated. People construct their own realities. Hyper-reality is a more suitable concept to apply to the postmodern era. From a marketing perspective this reflects a revolution in consumption, values and buying motivations. Fragmentation stands at the base of postmodern societies, as an affirmation of individualism and as an attempt to create differentiation. Consumption becomes a defining (and self-defining) phenomenon in this social arena (Cova 1996). While modernism was a culture in which production occupied the central role, postmodernism becomes a culture of consumption, in which consumers are what they buy, based on the meanings and values associated with products. Reality is not given and universal, but rather constructed, symbolic and context-specific. The borders between real and non-real in postmodern societies are increasingly blurring, creating a complex web of realities. Individuals are historically and culturally constructed, products of their environments. Whereas in modern societies people were viewed as authentic entities driven by cognition, in the postmodern era people define themselves culturally through language and communication, they build made-up selves and identities through action and interaction. People “actively seek affiliation with like-minded people in a desperate search for social links” (Cova 1996, p. 495). Consumption experiences are central in this theoretical model as defining characteristics which drive social dynamics. Individuals who share similar consumption practices also share similar lifestyles and values. Fragmentation is also a key in this concept. It is an expression of individualism, multiplicity, lack of commitment to a central (uniforming) theme (Firat & Venkatesh 1995, p. 252). Consumption experiences are disjointed and reconfigured through marketing communication, forming communities of interests. These communities or affiliations are formed as juxtaposition of opposites, as ways to allow differences and individuality to exist freely, not as ways to reconcile or bridge them (Cova 1996; Christensen, Torp & Firat 2005). It becomes clear from this brief introduction that the broad context in which marketing is defined has undergone dramatic change in perspective and theoretical background, bringing new challenges to the discipline. The traditional marketing framework of “economic exchange” between companies and customers has long been outdated and presents numerous shortcomings in the complex environment of the present, forcing both practitioners and the academia to develop new (and more viable) approaches and understanding. A vast body of literature written over the last decade (including Harwood, Garry & Broderick 2008; Gronroos 2007; and Brown & Hayes 2008) concludes that the traditional 4P (product, price, place and promotion) framework does not accurately address the needs and complexity of the discipline in the present. Coordinating and controlling the different elements of the marketing mix is becoming increasingly difficult as marketers lose power over content to customers (Schultz, Tannenbaum & Lauterborn 1993). We live in an over-communicated world, in which people are continually assaulted with thousands of promotional messages on a daily basis. On one hand organizations have to communicate in a personalized and relevant manner with multiple (and many times overlapping) stakeholder groups in order to engage in a dialogue with them and to break through their built-up resistance to promotional messages. At the same time, considering the transparency of new media, their interactive nature and the increasing power users have over content, the messages sent by organizations have to be consistent across channels, and have to be aligned with the corporate mission and identity in order to be effective (Pelsmacker, Geuens & Bergh 2007; Kitchen, Brignell, Jones & Li 2004; Duncan 2005). This is a paradox and represents a difficult challenge for marketers – to reconcile the need for flexibility in communication with an imperative for consistency. Authenticity is the only solution. The turbulence in the environment has to be compensated with creativity, responsiveness, flexibility and openness to change (Christensen et al. 2008). In the new marketing paradigm customers are empowered and highly unpredictable. The gradual fragmentation of markets into smaller and smaller segments has completely changed marketing rules, calling for new approaches to segmentation. Consumers have shifting and dynamic lifestyles, adapting products and services to their needs and conveying meanings in their purchase decisions. This phenomenon has important practical implications for marketing programs, which have to become much more flexible and adaptive to external data in order to effectively target small consumer segments. It forces companies to renounce traditional mass segmentation and positioning (which relies on demographic profiles and average customers), and to adopt a more direct and data-driven approach in order to take advantage of market opportunities. An exemplary instance of this paradigm shift can be observed in the practice of retail marketing, pioneered by Tesco's innovative Clubcard loyalty scheme – which enabled the company to effectively customize direct marketing initiatives to millions of different target consumer segments based on their behavior (and not on averaged data). The fact that companies are faced with the challenge of giving up mass segmentation and of developing personalized tools is an important opportunity according to Proctor and Kitchen (2002), making them more relevant for target groups and stimulating positive engagement. Another defining trend of the new paradigm regards the values that consumers associate with products or services. The focus has changed from “material values” to “experiential values” as drivers for consumption (Firat & Dholakia 2006, p. 140), from concrete to more abstract elements. Due to high rates of imitation and technological advancements products are very alike in terms of physical features, and differentiation is built at other levels. As previously mentioned, hyper-reality is a central concept in postmodern marketing – reality is commonly constructed, shared and meaningful, but it isn't universal (Firat & Venkatesh 1995). Understanding consumers' realities (perceptions and motivations) becomes a crucial activity in marketing planning, especially in an environment in which the balance of power between consumers and organizations in changing in favor of the former. Consumers gradually gain a more prominent role as partners for companies in all stages of meanings creation. New media and technology have transformed the nature of the traditional exchange transaction between organizations and consumers, and therefore strategic marketing objectives have also been altered in the process. As Firat and Dholakia (2006) point out, in the new paradigm organizations don't strive for consumer satisfaction anymore, but rather for consumer empowerment – which subsequently strengthens consumer involvement if properly managed. Empowered consumers are more involved with brands as they reshape, create and associate their own meanings to them – they transform brands to better suit their needs, and therefore make them more relevant. Companies have less control over the effect of their promotional messages, over the image of their brands and over the meanings and values that their brands convey to consumers (Addis & Podesta 2005; Christensen et al. 2005). The partnership between brands and consumers goes one step further. Through technological advancements and new media, innovative ways of collaboration and interactivity are possible, and consumers are invited to participate in product development and promotion. Crowd-sourcing and word-of-mouth have become buzz-words in this new marketing paradigm (based on the assumption that empowerment increases involvement). In contrast with the traditional approach, the act of purchasing is not the only activity in the exchange between companies and consumers (Firat & Dholakia 2006; Brown & Hayes 2008). The focus is shifted in this perspective from short-term results to long-term engagement, from immediate profits to relationship building. The more relevant a brand is for narrow segments of consumers, the higher their involvement will be in the long-term (Pelsmacker et al. 2007). Loyalty is gained and enforced through relationship marketing. The new marketing landscape is characterized by contradictions and extremes. Companies have to make the transition from mass marketing to one-to-one marketing, but at the same time they have to consider new disciplines such as experience marketing, tribal marketing and value marketing. With the increased fragmentation of audiences the field of marketing has become more complex, requiring a wider range of approaches and tools to keep up with the changing needs or habits of consumers. Customizing the message and making it relevant to individualistic consumers in this multimedia environment is the greatest challenge marketers are facing. Brands have to relate to and focus on the consumer's need for belonging to social groups (of like-minded individuals) – which are not necessarily aggregated geographically or demographically. Material products often fall secondary as factors of influence in the purchase decision making process. The interest showed in the past for the objects of consumption (when the purchase decision was driven rationally by an assessment of quality and features) is now gradually replaced by an interest in the social links and identities expressed through consumption (Cova & Cova 2002). “You are what you buy” seems to be the underlying assumption of this paradigm. This finding underlines another important juxtaposition of opposites that marketers have to understand and address in their strategies: customization and individualization of products and services is required in order to stay relevant to an increasingly fragmented market, but at the same time products are expected to provide social value to consumers, to stimulate and encourage social interaction in communities (Cova 1996, p. 496). Cova (1996) used the term hyper-reality to refer to this tendency of consumers to attach new meanings and value to products, separating them at time from their original utilitarian “meaning” or purpose. As mentioned in the introduction, hyper-reality is a central concept of the postmodern paradigm, and should be further investigated in order to gain insight into changing consumption patterns. Hyper-reality is essentially an image that has the power to distort reality; it is the transformation into reality of something that was initially a simulation. Simulation is a fundamental concept in hyper-reality, characterized “by a blending of ‘reality’ and representation, where there is no clear indication of where the former stops and the latter begins” (Oberly 2003). Consumers invest products with meaning associating them with an image that is appealing to them as consumers (or which provides social value), and in their reality the respective products become that image. Consumers give meanings to products based on the fashion system, relying on advertising channels and adopting them to their own consumption rituals (McCracken 1986). In this paradigm products are less valuable from a utilitarian perspective than they are for their experiential and symbolic dimensions. Consumers buy Apple, Puma, Gucci (or any other brand) for the value they can gain due to brand associations (both at an individual and social level). Brands gain a more prominent role in the life and self-identity creation of consumers. The purchase of a product is only a first step in the attribution of meaning. In social interactions and in personal rituals involving the purchased object products gain symbolic value. Brand advertising and image communication can only account as a partial influence in this process of meaning creation. Companies have limited control over how their products (and consequently their brands) are perceived by consumers (Christensen et al. 2008). Consumers also assess products based on the social links they facilitate. A pair of All Stars Converse sneakers or a Prada shades communicate something about the wearer, and either strengthens or loosens social links through the values they convey. Thus, in this highly abstract and symbolic environment companies have to demonstrate expertise in negotiating with various audiences the meanings and associations behind their products. Brands have to engage with consumers in playful dialogues, they have to encourage conversations and to map the experiences and values constructed by consumers and attributed to the products/brands (Christensen et al. 2008). In order to actively engage in these dialogues and negotiation of meaning, brands have to provide new forms of marketing, distant from the traditional mass communication paradigm. Present day marketing, as Cova (1996) noted more than a decade ago, has to be interactive, experience-based, involving, it has to stimulate connectivity and participation. Centralized and integrated communication initiatives are increasingly difficult to implement in this context due to this fragmentation, instability and continual change. As the environment clearly cannot be controlled, companies should learn to exploit and embrace instability and disorder, and to partially give up control over their brands to consumers, who become active producers of meaning and symbolic value (Proctor & Kitchen 2002). Consumption in postmodernism represents, for companies and consumer alike, a value creation activity. The main functions of marketing are to guide consumers through the meaning creation process and to build long-lasting relationships. These roles are facilitated through developments in IT, through the emergence of new media and channels, and through new technological abilities allowing organizations to customize services and products. Marketers are forced to continually evaluate and rethink their strategies in order to address the challenges raised by postmodern consumers. Conclusion The speed of change within marketing continues, with developments in key areas that require a new outlook on how marketing is constructed and how consumers construct both marketing and the products and services it represents. With an increasing focus on consumption as a defining activity, the values attributed to products become key focus points for consumers and marketers need to change how they view the products they promote to see how consumers see them, without using hype or making exaggerated claims. New technology provides new ways to meet the complexity of this new marketing, but also renders transparent carefully crafted marketing messages, revealing any poetic license and creating high levels of consumer cynicism. The only response that allows the message to get through is authenticity. Brands take up a new role, with marketers as creators of a work-in-progress that is finalised by the consumer, then remade on demand to accommodate different identities and social links. The experience counts for more than utility and purchasing a particular brand is seen as bestowing particular values on the consumer. It is these values that provide the focus for marketers and the catalyst for consumer action. Relationship marketing is more important than ever, as markets and segments fragment. Approaches are more varied and contradictory, requiring skill to balance the need for individuality and group messages. The loss of control of the marketing mix by marketers needs a different mindset to craft engaging and empowering concepts that appeal to consumer values both pre- and post-purchase. This article serves as a reminder of the different elements of the new marketing paradigm for marketers across all sectors and the increasing complexity of delivering a consistent message across all channels while avoiding hype and generating social links and a sense of belonging for consumers. (297 words) Read More