The Evolution of Marketing

The rapid rise of technology in the modern era has seen a major change in consumer expectations. The marketing communications environment has changed drastically over recent decades (Keller, 2009), and companies have had to adapt their strategies to survive. They have also had to cope with many other factors such as the effects of globalisation, the rise of consumerism and the effects of modern marketing ethics. This report will be discussing and analysing the key emerging trends in marketing today and explaining how consumer needs and expectations have also evolved, and conclude by suggesting possible strategies that could be successful today.

The Key Emerging Trends:

Technology & it's benefits

A number of trends have been emerging in marketing over the last few years, many of which have come about due to the advancements made in technology, which have completely 'reshaped the marketing mix' (Lamb, C. W. et al, 2010). For example, it has allowed companies to offer customised products to individuals for the first time, such as Coca-cola's recent 'share a coke' campaign that offered customers the chance to purchase coke products with their own names on. The success of this campaign, which ran in Australia in the summer of 2011 & many other countries since, can be seen in the diagram below.

It has also given businesses the opportunity to promote their products online. Online advertising has developed into 'a multi-faceted advertising channel with enormous growth prospects' (Boune et al, 2010), with it's popularity ever increasing due to the global audience that comes with it, thanks to websites such as Youtube (Kim, 2012). In fact, according to Alison Fennah of IAB Europe, the estimated value of the European online advertising market last year was 24.3 billion Euros (2012). One of the benefits of online promotion for consumers is that they can choose what information they receive. Also, customers can instantly compare prices online and choose the best deal for them, thanks to comparison websites such as Kelkoo. This had given the consumer more control over prices, since they can easily compare products.

It is fair to say that there is an 'ever-increasing importance of an online presence for businesses of all sizes and descriptions' (Shoosmith, 2012), and taking advantage of the possibilities that technology and the internet allow is essential in the modern marketing world if a business is to prosper.

Customer Relationship Marketing & The Social Media Invasion

The new forms of communication that have become available thanks to technology have meant that it is now much easier for firms to keep in contact with their existing customers, providing them with the chance to build relationships with the

m. This is called customer relationship marketing (CRM), and is all about 'developing strong connections with customers by directly providing them with information that is tailored to their needs, wants and interests' (Ciotti, 2013), encouraging them to come back and buy again from the same company. However, this can be potentially damaging if a firm's long term customers are not profitable, something that can be found in industries such as banking and finance (Stone et al, 2000).

The idea behind CRM has been around for a long time, but thanks to the developments made in technology, it has become much easier for companies to manager one-to-one relationships on a large scale (Jobber, 2010). One of the more popular ways that businesses are utilizing this method is to use social media outlets such as Facebook and Twitter to communicate with their customers (Evans, 2012). In fact, over 15 million businesses and companies are now active on Facebook (Koetsier, 2013). Not only can they freely advertise to anyone who 'likes' their page (obviously not a problem for large, well known brands like Adidas, whose official Facebook page currently has over 15.1 million likes), they can also see what people think of their products and services by looking at the feedback they receive on their page. Twitter works in a similar fashion; doing a simple search for any word (or brand) will show up any 'tweets' that users have posted about them. This is very useful for businesses, as it is another form of gaining feedback about their services for no cost. Both social networks allow brands to 'reach out to a wide audience simply and instantaneously' (Hilpern, 2013), allowing businesses access to both their existing and potential customers. Some of Twitter and Facebook's remarkable statistics can be seen in the diagram below (Mason, 2013).

However, social media can also have potential drawbacks for organizations, since any complains or negative feedback about them can be broadcast for all the world to see. For example, when British Gas announced a 10% increase in energy bills in October this year, 16,000 people voiced their largely negative opinions on Twitter, resulting in a 'public relations disaster' (Macalister & Rankin, 2013).

The Evolution of Consumer Needs & Expectations

New consumer groups

The ever-changing needs and expectations of consumers has seen a large rise in emerging consumer groups, such as political consumers, who base their buying behaviour around companies whose set of ethics they agree with (Micheletti, 2003), sometimes even going as far as to organise consumer boycotts against products or brands they feel particularly strongly against. Firms must also be aware of their effect on the environment and try to develop eco-friendly policies to avoid the wrath of 'green consumers', who have a commitment to greener lifestyles. Firms can face a public backlash if they come across as environmentally harming or wasteful, such as when Tesco announced they had wasted 30,000 tonnes of food in the first half of this year (BBC News, 2013). The rise of the green consumer has also seen the markets move away from mass-produced, artificial goods towards more organic products. The growth in US sales in this area is shown here (Huebner, 2009).

New niches & opportunities

Businesses must also consider how globalisation has impacted consumer buying habits. The 'consequences of globalisation can be felt everywhere' (Giddens, 2002), and even Asian brands and products have begun creeping into western markets, such as sushi bars and 'Hello Kitty' merchandise. They must also consider some of the new niches that have appeared in other areas of the market, such as the 'Pink Pound', the lesbian & gay market that is worth an estimated £6billion per year in Britain alone (Gentry, 2011), the male grooming products market, which grew 5% in the UK last year (King, 2013), and the effectiveness of 'pester power', where children ask purchasing requests of their parents and behave badly if they are declined (Lawlor & Prothero, 2011), making it easier for the parents to simply say yes and give in to their demands.

The Grey Pound

The 'grey pound' refers to the ageing section of the population, who there are now more of than ever thanks to the post world-war II 'baby boom' (Van Bavel, 2013). There are now over 14 million people over 60 years old in the UK alone, with this figure set to rise to 29 million by 2033 (Hanson, 2010). The over-55s currently make up between 20 and 30 percent of the population of many of the countries in the EU (Brassington & Pettitt, 2006), so the sheer volume of people in this group means this is a very promising target market for firms today. The elderly are 'increasingly being recognized as icons of consumer power' (Tempest et al, 2011), and the spending power of the over-65s in Britain is expected to increase by £40billion in the next 20 years (Hopkins, 2013). One of the biggest sectors that provides a service for the older generation is the finance industry, offering long-term products such as life insurance and pension plans. Companies in the financial sector have realised that “much UK wealth is owned by people who are well over 50” (Gettinby, cited by Hanson, 2010), so targeting them is becoming more important as the ageing population increases.

However, despite these facts, there remains a feeling that this section of the market is still being neglected by many firms, with many of them failing to realise just how much spending power they have (Burrows, 2012), putting their focus on the younger, more technologically-capable generations instead. Having said this, it is true that some brands are beginning to take notice of the potential in this market. For example, Heineken announced earlier this year that they were going to start creating products aimed at over-60s in an attempt to 'stand apart from rivals focused on the youth segment' (Joseph, 2013). They achieved this by launching an innovative competition to find out as much as they possibly could about their target audience, called the 'Heineken 60+ Generation Innovation Challenge' (Hornsell, 2012). We could begin to see far more of this type of marketing emerging in the near future, as the average age of the population continues to rise.

Conclusion

This report will conclude by suggesting 3 possible marketing strategies that firms could use to be successful based on the emerging trends discussed above.

1): Customisation? There's an app for that: There is an increasing fear from store-only retailers that the balance of retailing power is shifting towards consumers thanks to mobile shoppers (Bustillo & Zimmerman, 2010). Potential customers can already find out what they need to know about most companies instantly just by using their mobile (FDC, 2011) and remarkably, 56% of American adults now own a smartphone (Rogowsky, 2013), allowing them access to the internet and the ever-growing world of mobile applications, all in the palm of their hand.

38% of smartphone users over 16 in the UK have installed online retail apps on their phone (Mintel, 2013), making mobile shopping a very profitable market already for any firm who currently sell their products through an app. Firms could expand upon this market by creating an app that allows customers to order customised versions of their products. This could be very beneficial for companies who already specialise in customisable products such as Moonpig. Ebay are the latest company to try this strategy, launching their app called 'Exact' earlier this year, which allows users to order customisable 3D-printed products (Betters, 2013). The app could also have many other benefits for the company, such as storing information about user buying habits to help with their selective target marketing and advertising policies.

2): Treat 'em green, keep 'em keen: In Britain, just over 40% of consumers consider recyclability to be an important factor in product packaging, with this figure rising to 60% in the over-55s (Mintel, 2013). More and more companies are jumping on the recycling bandwagon thanks to the rise of the green consumer (Young et al, 2009), with large supermarkets such as ASDA constantly reminding consumers what they are doing to reduce waste, such as setting up recycling facilities in some of their car parks.

One strategy that could make the most of this would be to reward customers who recycle the packaging from their products, or even the products themselves when they are no longer needed. Orange began using a similar strategy in 2009, offering customers the chance to send in their old mobile phones which they would recycle, in exchange for cash (BBC News, 2009). This could be very beneficial for companies whose products use a large amount of wasted packaging, such as in the food industry. For example, a sandwich company could ask customers to return the packaging from their products to them, and reward them by giving them money off their next purchase. The packaging could then be recycled and reused, potentially offsetting the discounts the firm are offering against they money they will save from the recycled packaging.

Firms should also emphasise whatever they are doing to help the environment, such as when Velvet announced last year that they would plant 3 trees for every 1 they use. Stunts like these can result in positive publicity, as well as appealing to the increasingly common green consumers that can be found in today's market.

3): 'Rewearning': Earn their loyalty, then reward it. Loyalty cards and schemes have long been around, providing consumers with a chance to gain discounts and special offers in return for their continued custom with a particular company or brand (Mägi, 2003). Not only does the company benefit from the extra sales they make to loyal customers, they can also gain valuable information about their customers buying habits, since the card records the details of all the purchases it is used with, making it a very effective tool for market research. This has been a very successful strategy for a number of large companies already, such as Tesco and their popular 'Clubcard' scheme (Rowley, 2005).

Brands could take this a step further by implicating consumer relationship management to try and retain their loyalty for life. For example, they could contact the customers who have signed up to their loyalty scheme and ask for their feedback about their service, how it could be improved and what they would like to see from them. This could also make the customers feel valued by the organisation, further encouraging them to buy from them again, especially if their suggestions are taken seriously.

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