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DonE.SchultzPh.D.,Dallas,TX,AViewoftheInteractiveMarketplaceattheBeginningOftheThirdMillenium-AStoryinFiveParts,Part1TraditionalMarketingandMarketingCommunicationAreinTrouble-WhatAreYouDoingtoHelp?,Challenges:,MarketingbeingpushedfurtherandfurtherdowninmanagementlevelsofthefirmToomuchmarketingconsidered“soft,squishy,notrelevant”,Marketingexpenseincreasing-fewmeasuresofreturnsToomuchattentiontomassmarket/massmediainworldofone-to-oneAwards,“creativity”,self-adulation,MostofAll,theImpactandInfluenceofElectronicCommunicationandCommerce-Interactivity,ChangingtheMarketingandCommunicationFocus,FromtacticalactivitiestostrategicmanagerialdecisionsDrivingshareholdervalueMeasurabilityand“outcomes”,notjust“outputs”,ManagementAlternativestoIncreaseShareholderValue,InnovationinproductsorservicesEnhancementsinsupplychainmanagementCustomerrelationshipmanagement-expandmarketingcapability,HowCanMarketingandCommunicationImpactCorporateResults?,IncreaseoracceleratecashflowsStabilizeorreducevolatilityofcashflowsIncreaseshareholdervaluebybuildingbrandequity,MostPowerfulTools,BrandsandCommunication!,BothAreWoefullyUnderdevelopedinManyOrganizations,Primary21stCenturyMission:MarketingandCommunicationtoDirect,DriveandFulfillCorporateStrategy,QuestionsorComments?,Part2Understandingthe21stCenturyMarketplace,TheChallengeIsTransition,,1980,1970,1960,1990,2000,MarketplaceDevelopment,Re-emergenceofcompetition,Globalization,RiseofQuality,PriceCompetition,Cost-CuttingRe-engineering,Logistics/Digitalization,TransitionofInformationTechnology,InteractiveMarketplace,Consumer,ThreeTypesofOrganizationsHaveDeveloped,Historical,Current,Interactive,Product-DrivenOrganizationsFocuson4Ps,ProductPricePlace(Distribution)Promotion,Product-DrivenFirms,RawMaterialsTechnology,,FacilitiesMoney,,Distribution,Location,Distribution,Aggregation,Needs/Wants,PurchasingPower,,,,Consumer,Media,Channel,Marketer,,Information,Distribution-DrivenFirmsFocuson:,LocationLogisticsChannelsUbiquity,Distribution-DrivenFirms,DistributionConcentration,LocationsTechnology,,,,,,,,Consumer,Media,Mktr.,,,,Mktr.,Mktr.,,Channel(Logistics),Information,Consumer-DrivenFirmsFocuson,ConsumersBrandsRelationshipsShareholdervalue,,,Consumer-DrivenFirms,Needs/WantsChoice,,PurchasingPowerTechnology,,,,,,,Consumer,,Channel,Mktr.,,,,,,,,Mktr.,Mktr.,,,Channel,,,,,,,,,Information,Media,Media,Media,UntiltheEarly1990s,EveryOrganizationHadtobeEitherProductorDistributionDriven,,1980,1970,1960,1990,2000,MarketplaceDevelopment,Re-emergenceofcompetition,Globalization,RiseofQuality,PriceCompetition,Cost-CuttingRe-engineering,Logistics/Digitalization,TransitionofInformationTechnology,InteractiveMarketplace,LackofResourcesPreventedUsfromKnowingMuchAboutConsumers,CustomersorProspects,InformationTechnologyChangedThat!,,,,,,,,,,,,,,Consumer,Media,Channel,Marketer,,Information,ProductMarketers,,Consumer,,Information,Channel,,Mktr.,,Mktr.,,Mktr.,DistributionMarketers,,Media,,,,Consumer,Channel,,Mktr.,,,,,Information,,,,,,Mktr.,,Mktr.,Channel,Media,Media,,ConsumerMarketers,Media,,,,,,,,,,,,,,Consumer,Media,Channel,Marketer,,Information,ProductMarketers,,Consumer,,Information,Channel,,Mktr.,,Mktr.,,Mktr.,DistributionMarketers,,Media,,,,Consumer,Channel,,Mktr.,,,,,Information,,,,,,Mktr.,,Mktr.,Channel,Media,Media,,ConsumerMarketers,Media,,But,InteractivityHasCreatedaShiftofMarketplacePower,MostOrganizationsTodayAreStrugglingwithHowto:,BecomeconsumerfocusedMarketgloballyStructuretheorganizationtofitmarketplaceIntegratealltheactivitiesandresources,WhattoDo?,QuestionsorComments?,Part3:TheTransitionofInformationTechnologyDrivestheNeedForBrands,CommunicationAndConsumerRelationships,Inthe21stCentury,theBrandAndCommunicationWillBeTheFirm’sOnlySustainableCompetitiveAdvantages,NoproductadvantageNopriceadvantageNoplace/distributionadvantageNopromotionadvantage,TheShiftofInformationTechnologyForcestheOrganizationtoMovefromThe4Pstothe4Rs,,,,,,,,,,,,,,Consumer,Media,Channel,Marketer,,Information,ProductMarketers,,Consumer,,Information,Channel,,Mktr.,,Mktr.,,Mktr.,DistributionMarketers,,Media,,,,Consumer,Channel,,Mktr.,,,,,Information,,,,,,Mktr.,,Mktr.,Channel,Media,Media,,ConsumerMarketers,Media,TheNew4RsofMarketing,ResponsivenessRelevanceReceptivityRelationships,AllofWhichAreBoundUpinBrandsandBranding,,Marketer,,Consumer,BrandsAreRelationships,TheReasontheBrandBecomesMoreImportant:InteractivityIsaDifferentMarketingModel,From“mass”to“interpersonal”From“marketeradvantage”to“brandcompatibility”,From“short-term”to“long-term”From“transactions”to“relationshipsFrom“persuasiveness”to“sharedvalues”,BrandsCreateReciprocityWithConsumers,NotMarketerAdvantage!,ANewBrand-ConsumerModelIsRequired,Notjustthetraditionalvalueoftheconsumertothebrand,I.e.,financialvaluetobeextractedInstead,valueofthebrandtothecustomerorconsumer-fillsneeds,wants,desires,etc.inadditiontotraditionalvalue,ANewWaytoThinkAboutRelationships,StartingPoint:Twoentitiesintherelationship;twopointsofviewtoconsider--inthiscaseconsumersandbrandsStrongConsumer-BrandrelationshipsrequiresomemutuallevelofinterestThis“mutualinterest”isvalue--beginthinkingaboutrelationshipsasamutualvalueexchange,NewConsumerBrandRelationshipModel,,ValueoftheBrandtotheConsumer(ConsumerPOV),ValueofConsumertotheBrand(BrandPOV),,,,HIGH,LOW,HIGH,LOW,Current&PotentialValue($),,C-BCompatibility,,RelationshipStrength=f(ConsumerValue,C-BCompatibility),STRONGRelationships,MODERATE,WEAK,MODERATE,Define&AssessC-BRelationships,,ValueoftheBrandtotheConsumer(ConsumerPOV),ValueofConsumertotheBrand(BrandPOV),,,,HIGH,LOW,HIGH,LOW,Current&PotentialValue($),,C-BCompatibility,,RelationshipStrength=f(ConsumerValue,C-BCompatibility),STRONGRetentionStrategies,MODERATEBusiness-BuildingStrategies,WEAKLowPriority,MODERATEBrand-BuildingStrategies,Define&AssessC-BRelationships,ValueoftheBrandtotheConsumer(ConsumerPOV),ValueofConsumertotheBrand(BrandPOV),HIGH,LOW,HIGH,LOW,BehavioralData,,AttitudinalData,,RelationshipStrength=f(behaviors,attitudes),,,,,STRONGRetentionStrategies,MODERATEBusiness-BuildingStrategies,WEAKLowPriority,MODERATEBrand-BuildingStrategies,Define&AssessC-BRelationships,,,,,C-BCompatibility,BrandProductoffersCommunication(image)Marketingcapabilities,ConsumerNeedsMindsetsEnvironments,,,,AttitudinalCommitmenttotheBrandCustomerSatisfactionBrandShareofPreference,Consumer’sViewoftheBrand,,,,,,,BehavioralCommitment(SOR),ConsumerValue(CBR),,,,Brand’sViewoftheConsumer,AllDonein“RealTime”,,,,,,,,,,,,,,Consumer,Media,Channel,Marketer,,Information,ProductMarketers,,Consumer,,Information,Channel,,Mktr.,,Mktr.,,Mktr.,DistributionMarketers,,Media,,,,Consumer,Channel,,Mktr.,,,,,Information,,,,,,Mktr.,,Mktr.,Channel,Media,Media,,ConsumerMarketers,Media,ThePrimaryWaytoBuildTrueBrandValue,i.e.,Relationships,WillbeThroughIntegratingAllFormsofMarketingCommunication,ProductDesign,Pricing,Distribution,Advertising,SalesPromotion,In-StoreDisplays,DirectMail,CustomerService,ConsumerViewofBrandCommunication,,,TraditionalMarketingandCommunication,,,NewInteractiveMarketingandCommuni-cation,,MarketplaceResults,BuildingandMaintainingBrandReciprocityMayBecometheMostImportantActivityfortheFirm,And,ThatWillRequireaWholeNewWayofThinkingAbout,InvestinginandMeasuringTheResultsofBrandPrograms,TheConundrum:,Howtobuildlong-term,consumer-brandvalueusingashort-term,interactivesystemHowtoinvestforlong-termbrandreturns,usingshort-term,“realtime”marketingactivities,QuestionsorComments?,Part4MeasuringtheFinancialReturnsfromBrandCommunicationPrograms,In1961,theCommunicationsIndustryAbandonedAnyAttempttobeFinanciallyResponsibleAdults,HierarchyofEffectstheoryDAGMAR,,,,Traditional“Advertising-Based”ViewofCommunications,,,,,Conviction,Preference,Knowledge,Attitudes/Awareness,PurchaseBehavior,MediaAdver-tising,,One-Way,,Linear,“ActingonConsumers”,ThoseAttitudinalMeasuresAreStillPrevalent,AttitudeandawarenessRecallandrecognitionIntent-to-buyTrackingstudiesShareofvoice,DespitetheFactthatWeStillHaveGreatTroubleConnectingAttitudestoBehaviorsandEvenMoretoSalesandFinancialReturns,ASolution:MeasuringConsumerBehaviorsOverTime,ClosedloopsystemsIncrementalincomeUseofincomeflowsFinancialtimeframes,BasicPremise:BrandsandConsumersAreFirm’sAssets,ProduceincomeRenewableManagedforgrowthandvalueDepreciateovertime,,ClosedLoopSystems,,,,MeasurableConsumerBehavior,,PresentConsumerDatabase,Measurable,Marketer-ControlledBrandMessages,,,NewMeasures,,,,,UncontrollableBrandMessagesFromEnvironment,BaseMeasure$IncomeFlows,MarketingCommunicationPlanningMatrix,WeNeedaDifferentInvestmentApproach:SeparateBusiness-BuildingFromBrand-Building,Long-termvs.short-term,Definitions:,Business-Building:returnswithinorganization’sfiscalyearBrand-Building:returnsovermultipleyears,BusinessBuildingShort-termreturnsTransactionsImmediateexpenseOnthemarginVariablecost,BrandBuildingLong-termreturnsBrandasassetAmortized/accrualReplenishmentFixedCost,MeasuringReturnsonMarketingandCommunicationPrograms,IncreaseincashflowsAccelerationofcashflowsStabilizationofcashflowsIncreaseinbrandequityorshareholdervalue,InanInteractiveMarketplaceKeystoSuccessWillBe,ConsumerfocusAchievingcorporateobjectivesBrandsandbrandingMeasurability,ANewPlanningModel,Adapt,INTERACTIVE,,,Sense,Respond,Part5WhatDoYouNeedtoDotoMeettheChallenges?,QuestionsorComments?,ThankYouforYourTime,YourAttentionandYourInterest,
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