Marketing 4.0

1. MARKETING 4.0
Chapter 1
Power shifts due to increased Connectivity
Transformation of behaviour due to connectivity
Online communities and implication to strategy formulation

2. Power Shifts to the
Connected Customers

3. The end of the world- the select on
the boat
to save select groups of
the world’s population. The survivors on the
ships would be expected to start a new
civilization

4. Shift of Power
• Today, we are living in a whole new world. The power
structure we have come to know is experiencing drastic
changes.
• The internet, which brought connectivity and transparency to
our lives, has been largely responsible for these power shifts
• We are also seeing how a vertical power structure has been
diluted by a more horizontal force.
• The power shift also influences people. Now, the power lies
not with individuals but with social groups.
• The horizontal, inclusive, and social forces trump the vertical,
exclusive, Individual forces, customer communities have
become ever more powerful.

5. Shift of power from-
•Exclusive to Inclusive
•Vertical to Horizontal
•Individual to Social

6. From Exclusive to Inclusive MACRO
• At a macro level, the world is moving from a hegemony to a
multilateral power structure. West to East.
• Causes-
• Demographic profile of the emerging market populations:
younger, more productive, and growing in terms of income level.
It has created strong demand for products and services, which in
turn drives economic growth.
• Increasing innovation potential in the Asian Nations and
diminishing innovation in the US
• Political power is based on economic power and that is changing
the influence of the western super powers.
• Business itself is moving toward inclusivity. Technology enables
both automation and miniaturization, which bring down product
costs and allow companies to serve the new emerging markets

7. NANO – DISRUPTIVE INNOVATION

9. Aravind Eye Care System’s $16
cataract surgery

10. From Exclusive to Inclusive
MACRO
• Reverse innovation- The frugality and cost-consciousness
shown in developing products are becoming the new sources
of differentiation. GE’s Mac 400, a portable battery-operated
electrocardiogram machine, which was designed to serve rural
villagers in India.
• Entrepreneurs from emerging countries to draw inspiration
from their counterparts in developed countries. Amazon-
inspired Flipkart.com from India, Groupon-inspired Disdus
from Indonesia, PayPal-inspired Alipay in China, and Uber-
inspired Grab in Malaysia.

11. From Exclusive to Inclusive
MACRO
• The walls between industries are also blurring. The
convergence and integration of two or more industries are
trending. Medical tourism, telecommunication and finance-
MPesa
• Within an established industry, the sub-sectors will also be
difficult to distinguish. Financial services include many
subsectors.
• Vertical integration in one industry will create business entities
that engage incomprehensive roles from material supply to
production to distribution, making it difficult to define in
which business a company is active.

12. From Exclusive to Inclusive
MICRO
• Humans are embracing social inclusivity -Being inclusive is not
about being similar; it is about living harmoniously despite
differences.
• build relationships without geographic and demographic
barriers.
• Collaborative innovation- Wikipedia, InnoCentive
• Crowd-sourcing approach- SEE NEXT SLIDE
• Social inclusivity offline-
• concept of inclusive cities—cities that welcome the diversity of
their inhabitants. Welcoming minorities, migrants
• Fair trade, employment diversity, and empowerment of women.

13. CROWDSOURCING
INNOVATION

14. From Vertical to Horizontal
• Globalization creates a level playing field-a company can be
more competitive if it can connect with
• communities of customers
• partners for co-creation
• competitors for co-opetition
• Today, innovation is horizontal; the market supplies the ideas,
and companies commercialize the ideas. Unlike the vertical
system in the past. R&D was the basis of innovation. Research-
and-develop model into a connect-and-develop model.

15. From Vertical to Horizontal
• Chris Anderson’s long tail hypothesis -market is shifting away
from high-volume mainstream brands into low-volume niche
ones. The These goods have low distribution and production
costs, yet are readily available for sale.
• Small companies proliferate and increase competition threats
• Distinctions between industries are blurring and increasing
competition. Competitors in the future will come from the
same industry as well as from other relevant and connected
industries.
• Airbnb, Uber disrupted hotel and taxi businesses

16. From Vertical to Horizontal
To handle this companies have to
• start with consumer objectives and potential ways in which
these can be met.
• Track competitors outside home markets (Xiaomi and Oppo)
These companies have tough home markets, low cost,
resilience and innovation. They are in online- go to markets
• Customer are influenced by f-factor (friends, family, facebook
fans and twitter followers)
• Communal rating systems- Tripadvisor and Yelp.

18. From Vertical to Horizontal
• So brands have to view customers more than mere
targets.Brand is an outer shell packaging to the true value.
Customers guard themselves from fake values of brands that
target them through communities.
• Customer should be peer and friend of the brand
• Brand has to be authentic to be trustworthy

20. From Individual to Social
• Individual preference and conformity drive purchases.
• Weight of social conformity has increased.
• Customers paint their own picture of brands. They share
opinions and compile reviews.
• Wisdom of the crowd will drive decisions
• In store research using mobile phones.
• Customers are no longer passive targets but are active
communicators.
• Companies lose control over generated opinions and if the
censor it there will be backlashes
• Digital world increases transparency

21. The Paradoxes of
Marketing to
Connected
Customers
Online vs. Offline Interaction,
Informed vs. Distracted Customer,
and Negative vs. Positive Advocacy

22. A new breed of customer
emerging globally is
• young, urban, middle-class with strong mobility and
connectivity.
• Mature markets have aging populations, emerging markets
have the demographic dividend
• They move around a lot, often commute, and live life at a
faster pace. Everything should be instant and time-efficient.
• Digital natives- they can make purchase decisions anywhere
and anytime, involving a wide range of devices.
• They value high-touch engagement when interacting with
brands.
• They are also very social; they communicate with and trust
one another.

23. However, even if
the millennial
market is growing,
we cannot
discount on the
“older” generation
There are
platforms that
cater to the
mature and
professional
market: LinkedIn,
even Facebook
and Youtube.

24. The game changer -
connectivity
• Connectivity has made us question many mainstream theories
and major assumptions that we have learned about customer,
product, and brand management.
• Connectivity significantly reduces the costs of interaction
among companies, employees, channel partners, customers,
and other relevant parties. This in turn lowers the barriers to
entering new markets, enables concurrent product
development, and shortens the time frame for brand building

25. What Connectivity does…
Connectivity
Assumptions
about brands ,
customers and
engagements
Significantly
reduces the costs
of interaction
between value
chain
lowers the barriers
to entering new
markets
enables
concurrent
product
development
Shortens time for
brand building
changes the way
we see the
competition and
customers

26. What connectivity is mistaken
to be-
• mere application of technology
• simply as an enabling platform and infrastructure that support
the overall direction
• It is the base of strategy!!!
• connectivity transforms the way customers behave
• to fully embrace connectivity we need to view it holistically!!!
The importance of connectivity will transcend technology and
demographic segment.
Connectivity changes the key foundation of marketing: the
market itself.

27. CONNECTIVITY
Mobile connectivity
internet serves only as
a communications
infrastructure
WIDTH
Experiential connectivity
internet is used to
deliver a superior
customer experience in
touchpoints between
customers and brands
DEPTH
Social connectivity
strength of connection
in communities of
customers
STRENGTH

28. Paradox No. 1: Online Interaction
versus Offline Interaction
• ONLINE VS. OFFLINE INTERACTION: In the highly connected
world created by technology, both interactions should co-
exist and complement each other to deliver a great customer
experience.
• Online companies extend to give brick and mortar
experiencies. Brick and mortar- provide online reach.
• Sensor technologies, such as near field communication (NFC)
and location-based iBeacon, provide a far more compelling
customer experience.
• In the engine room, big-data analytics enables the
personalization that new customers are longing for. All of
these complement the traditional human interface that was
the backbone of marketing before the rise of the internet.

29. Paradox No. 1: Online
Interaction
versus Offline Interaction
• Traditional and contemporary media for marketing
communications such as television and social media will also
complement each other. Many people go to Twitter for
breaking news but eventually return to television and watch
CNN for more credible and deeper news coverage.

30. Brand awareness
from analytics,
past experiences
and FFF
Research, utilizing
the reviews from
other customers—
again online and
offline.
Purchase-a
personalized touch
from both the
machine and the
human interface.
Become advocates
for inexperienced
customers
Experiences are
recorded, which
further improves
the accuracy of the
analytics engine.

32. INFORMED VS. DISTRACTED
CUSTOMERS
• In making purchase decisions, customers are essentially
influenced by three factors.
• First, they are influenced by marketing communications in various
media such as television ads, print ads, and public relations.
• Second, they are persuaded by the opinions of their friends and
family.
• Third, they also have personal knowledge and an attitude about
certain brands based on past experiences
• Today’s customers have become highly dependent and would
likely conform with other’s influence despite having the power
to search information which will guide personal decision
making

33. INFORMED VS. DISTRACTED
CUSTOMERS
• Connectivity brings a lot of
protection and confidence. In
the customers’ minds, their
inner circle of friends and
family provides protection
against bad brands and
companies.
• Convenient to receive advice
from others, the importance
of word of mouth is growing
in the final purchase decision
• Connectivity, along with the
presence of multiple devices
and screens, also brings
distractions. It hampers the
customers’ ability to focus
and often limits their ability
to decide. Thus, many
customers make their
decisions by following the
wisdom of the crowd.
• This is further fueled by the
low level of trust that
customers put in advertising
and the limited time they
have to compare qualities and
prices.

34. INFORMED VS. DISTRACTED
CUSTOMERS
• Marketers challenge!
• Get customer attention
• WOW them to retain loyalty and convert them into advocates

37. NEGATIVE VS. POSITIVE
ADVOCACY:
• Delighted customers would likely advocate the brand spontaneously.
• Other’s however need to be prompted by negative advocacies which in
general create brand conversations.
• The most famous measurement of brand advocacy is arguably the Net
Promoter Score designed by Frederick Reichheld.
• He argues that there are three broad categories of customers with regard
to their attitude toward a brand:
• promoters, who recommend the brand
• passives, who are neutral
• detractors, who are unlikely to recommend the brand
• The Net Promoter Score is measured by the percentage of promoters
subtracted from the percentage of detractors.
• The key argument is that the ill effect of negative word of mouth reduces
the good effect of positive word of mouth.

38. Brand Advocacy
• When a brand stays true to its DNA and consistently pursues
its target segment, the brand polarizes the market. Some
become lovers and others become haters of the brand.
• Sometimes a brand needs negative advocacy to trigger
positive advocacy from others. Without negative advocacy,
positive advocacy might remain dormant.
• Brand advocacy can be spontaneous or it can prompted.
• The group of haters is a necessary evil that activates the group
of lovers to defend. They promote conversation on the brand
• Ultimate sales force: an army of lovers who are willing to
guard the brand in the digital world

39. Definition
• Digital marketing encompasses all marketing efforts that use
an electronic device or the internet. Businesses leverage
digital channels such as search engines, social media, email,
and other websites to connect with current and prospective
customers.
• Digital marketing is any form of marketing products or
services that involves electronic devices.
• It can be online or offline

40. On line Communities
• An online community is a group of people who have a common
interest and communicate through the Internet. They get together
online through websites, discussion boards, instant messaging,
email, etc., and pursue their interests over time. An online
community is a network of individuals who communicate with one
another online.
• We also call it an Internet community. It is a virtual community, i.e.,
a social network of individuals who interact online.
• “Online communities are not just a random gathering. They’re a
group of people who come together for a purpose.
• In a VisionCritical article, Kelvin Claveria wrote that for the
marketing executive, there are four types of online communities.
There are social, support, advocate, and insight communities.

41. Types of online communities
Social online
community
Facebook
Twitter
Instagram
Brands use them
to make strategies
and know about
rivals
Support Online
Community
Provide tips to
customers
Brands use them
to monitor product
and service related
chats
Advocate Online
Community
Loyal customers
spread WoM
Brands reward
them
Insight Online
Community
Select customers
with long term
relationships
Used for
continuous, high
quality feedback

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Contribute to the community

44. activity by an individual or
group that aims to influence
decisions within political,
economic, and social systems
and institutions.

45. Insight communities

46. STRATEGIES
1. Consistency/Content
2. Designed To Share
3. Be On Social Media
4. Engaging/Caring – respond
5. Enabling Others To Promote Your Work – give credit to
others
6. Interviews
7. Promoting Others & Telling Them About It (seek permission
and post)
8. Guest Posts/Videos/Articles
9. PR:
10.Live Events/Speaking