IT's Role in the New Model of Marketing

FRAMINGHAM (07/31/2000) - Much of our thinking about marketing, encapsulated in the mnemonically perpetuated 4 P's - price, product, placement and promotion - is flawed.

There's a new model for marketing, the 4 C's: communication, customization, collaboration and clairvoyance. Information technology leaders in large organizations will be pleased to learn that at the operational heart of each of these new levers lies the informed and innovative practice of our craft: IT management. For now, let's focus on communication.

In the days of classic mass marketing, consumers were essentially told what they wanted. Communication worked in only one direction, creating demand. The primary task of marketing was simply to get the product on the shelf.

Fortunately, we have evolved. Professor Rashi Glazer, a colleague at the Haas School of Business at the University of California at Berkeley, uses the terms smart and dumb to describe contemporary markets that require informed interactivity. A smart market or product changes with the environment; a dumb market doesn't.

An example of smart marketing is the tactic used by shopping-mall bookstores of changing the displays in their windows during the day to reflect most of the traffic flowing past. In the early mornings, mall traffic is primarily made up of aged, but vibrant, mall walkers. The informed book shops have window displays geared to their interests. No sooner have the mall walkers hit the showers than a new group arrives: mothers with strollers. The shops replace the titles loved by the elderly to content that is more in tune with the moms' needs. They also clear the aisles of stand-alone displays that get in the way of the big-wheel baby carriers. And on and on it goes.

Jeff Williams, professor of strategy at Carnegie Mellon University's Graduate School of Industrial Administration, brings the concept of interactivity into the realm of creating strategy. Imagine you're 6 feet 6 inches tall. You're playing tennis. Your height is an advantage. You can recognize this and act. If you concentrate on your service and net game, which take advantage of your height and involve relatively low energy expenditures, you achieve a good competitive fit.

The next time, assume that your court opponent is 7 feet tall. What has changed? Have your capabilities changed? Yes, in the important competitive sense, even though you're the same in absolute terms. The point? Capabilities shouldn't be defined in isolation. Imagine you step onto the court and there is no net. In its place are a table and a chessboard. What has happened is that the rules of the game have changed. The key to being smart is being able to understand when things change. The strategic high ground belongs to companies that are able to create a communication channel that informs them when things change.

At last month's Computerworld Premier 100 IT Leaders Conference in Palm Desert, Calif., Charlie Feld, former CIO at Frito-Lay and Delta Air Lines Inc., explained that the bad state of customer service in many industries is directly due to not understanding "when things change," which, in turn, is due to poor communication. In the old days at Frito-Lay and Delta, the companies "knew" their customers. Unfortunately, as the businesses grew, the intimacy of those early days gave way to the customer becoming a faceless and nameless "thing" to be managed instead of a living, breathing, paying human to be delighted.

World-class companies are figuring out that it's "crazy" to try to dictate terms to the customer. Best practice involves creating a conversation in which the customer can tell you what he wants. Dell Computer continues to outperform rivals because it doesn't build a computer before the customer asks for it. The first step toward building a customer-centric, real-time organization is establishing a solid technological pathway for a customer to communicate with you. IT has a massive role in this build-out. IT leaders are engaged in talks with marketing executives on how to do this. Is this where you're spending your time?

Thornton May is vice president of research and education and corporate futurist at Cambridge Technology Partners Inc. in Cambridge, Mass. Contact him at tmay@ctp.com.

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