Discuss about the New Dynamics in Marketing.
With rapid globalization and increased competition across the world organizations have started improving their qualities as well as services to maintain their existing customers along with gaining more new customers. Relationship marketing or modern marketing is the new phenomenon which is adapting to the needs of worldwide development of the business (Egan, 2008) . Modern marketing is emerging as fast catching trend that assists the company to manage long-term relationships with their participants for example the suppliers, competitors, employees, customers as well as others that impact the business. However traditional marketing theories as well as practices have always focussed on attracting new customers for the purpose of making the sales (Harwood et al., 2008). This report will also analyse the shift of traditional marketing form just being customer centric to modern marketing that involves building long term relationships with stakeholders that involves customers as well.
Difference between Traditional Marketing and Modern Marketing
Traditional marketing is quite different from modern or societal marketing and the major difference can be seen in the scope of their message. The major factor in current scenario is whether societal interests are part of marketing strategies or not. However, it has been found that modern marketers do not have any issues or problems with the traditional marketing concepts.
In case of some organizations for example the computer and electronics retailer TigerDirect , they have started updating their titles from just being traditional ones , to the marketing titles that also describe their functions as well as roles in the new era of marketing (Oracle, 2012).
Factors Causing the Shift of Traditional Marketing towards Modern Marketing
Due to information explosion with the rise of internet and rapid globalization, the markets are turning out to be highly competitive across the globe. Thus it becomes all the more crucial to develop as well as maintain long-term commercial relationships with not just the customers but also with the service providers, economic partners, financial partners etc., at varied levels of marketing channels in this broad business environment (Christopher et al., 1991). The modern marketing developed through three stages which includes - the production era, the sales era as well as the era of the marketing concept. During the production era the major cause of shift towards modern marketing came from the Industrial Revolution. With the introduction of machinery along with steam power that replaced the manual labour , products were being produced in huge quantities and large scale distribution was required this gave rise to modern marketing. Further globalization of the markets and advent of technology in the form of mobile phones, tablets and laptops required that the companies should connect with the customers in real-time (Benady, 2014). Some other reasons that have brought this shift in marketing from traditional to modern marketing are: customers really do not want to be disturbed or interrupted, moreover there are no more mass channels. It has become very hard to reach buyers mainly the young and etch-savvy ones using traditional marketing channels as well as media outlets (Mukerjee, 2009). On the other hand various new technologies like mobile and broadband have combined with social computing and have developed a “Cambrian Explosion” where experiments are done with marketing channels as well as media. This kind of fragmentation has lead to diminishing effect of traditional marketing and has simultaneously helped in creating better opportunities to connect with the customers in new ways using modern marketing channels. Moreover marketing cannot nowadays get away by simply standing not accountable like traditional marketing. The new modern marketing channels like Pay per Click (PPC or search engine marketing) have resulted in increased expectations for making marketing much more accountable (Rahnama & Beiki, 2013). The money does not get wastes like it gets in traditional marketing channels like television etc.
Factors Impacting Marketing (PESTEL Analysis)
PESTEL is the well known acronym which is used in marketing planning and helps in reviewing the broader forces which are also referred to as ‘macroenvironment’ that help in shaping the business.
PESTEL analysis the topmost marketing model which is being used in digital marketing or the modern marketing. HMV, a famous UK music retailer, for years together ignored the PESTEL factors and failed to address the sociological effect of Internet, mainly the factor of online retailing. This lead to the drop in sales of the company and the emerging organizations like Spotify and Napster , offered the download services as well as music streaming, thus made HMV totally redundant in current markets (Jones, 2002).
Political Factors: The political environment has a strong impact on the marketing decisions and thus impacts traditional marketing. The political environment comprises of pressure groups, laws or the governmental agencies which either limit or cast impact on the organizations in the society (Rahnama & Beiki, 2013). Legislations that impact business across the globe have also enhanced in the past few years. There are laws that include fair trade practices, product safety, truth advertising, pricing, packing & labelling etc. Many nations have gone far and wide than US and have passed strong consumerism legislations. For example in Norway many forms of sales promotions , contests, trading stamps as well as premiums are banned and considered inappropriate or supposed to be unfair methods of promoting products (Lehtisaari, 2015). European countries have strict pollution laws imposed by governments and that is why companies like Toyota have started manufacturing hybrid vehicles to conform to those laws.
Social Factors : The study of demography is very crucial factor which the modern marketers use for modern marketing , as it covers people and in turn it is these people who make-up the markets. The growth of population is happening at an explosive rate and it is estimated that it will exceed 7.9 billion by the year 2025 (Lehtisaari, 2015). This major rise in population brings both challenges as well as opportunities in traditional marketing. The modern marketing therefore needs to keep a closer track on the demographic developments as well as trends happening in the markets. The track of demographic changes needs to be kept both locally at home as well as globally so that proper marketing strategies can be designed. That is how social factors impact traditional marketing. Sustainable marketing is critical part of modern marketing for example Tobacco companies need to mention statutory warning on each and every cigarette packet and they can sell them to specific target groups only or oversell them.
Economic Factors: The economic environment that impacts the marketers includes various factors that also affect the spending patterns as well as purchasing powers of consumers. All the countries have different levels as well as distribution of income. Like the industrial economies offer better marketing opportunities while agriculture based economies offer just few marketing opportunities. The modern marketers should also keep a close watch on the average income along with income distribution patterns for effective marketing as these social factors also impact marketing in critical way (Pondicherry University, 2014). For example giant retail supermarket chains Tesco achieve success in the markets by offering cheaper alternatives as compared to the local supermarkets and it also needs to introduce local produce in their range of products.
Environmental Factors: The environmental factors cover the natural environment or resources that are required as inputs by the marketers or get affected by the various marketing activities. Thus it is important that the marketers should be quite aware of the several trends occurring in the natural environment around them. There is rising shortage of raw materials because of air and water pollution and exploitation of natural resources by organizations. Many organizations manufacturing products from scare resources need to keep a check on how they manage and use non-renewable resources. The environment is also getting destroyed because of severe pollution caused by industries that dispose nuclear and chemical wastes and this negatively impacts the natural environment. The third trend is more intervention by government in the management of natural resources. This also impacts the marketing decisions of the companies (Pondicherry University, 2014). For example Starbucks adopts environment friendly approach by following corporate social responsibility while sourcing coffee beans for its entire coffee range and promotes ethical behaviour in the African region while sourcing coffee from suppliers.
In current scenario the emphasis can be clearly seen as the modern marketing is trying to create long term relationships with customers so that they can be retained for long term through long-lasting relationships with stakeholders. The conversations that happen in real-time with people by the brands while they interact through websites or apps has clearly brought major changes in the traditional marketing and shift towards modern trends of marketing. The areas of traditional marketing that have changed due to digital or modern marketing are speed, reach of campaigns as well as their relevance. Political factors like the rules and regulations concerning marketing of products have been more descriptive and these factors also seriously impact the marketing and causing shift of traditional marketing towards modern marketing which considers and takes cares of all the necessary legislations regarding marketing. Modern marketers have tools that help in easily keeping track of the changing family structures, age, educational characteristics, population diversity as well as geographic population shifts and this has lead to the shift of marketing from traditional one towards modern marketing. It is very important for the modern marketers to pay close attention the key trends as well as the spending patterns of the consumers not just within then nation but also in the world across markets. Thus it can be said that various environment related trends like rise in pollution, decrease in non-renewable resources etc. is also causing the shift of traditional marketing towards modern marketing. This is why there are new dynamic of marketing which is bringing about major changes in being a successful marketer by adopting the modern marketing trends.
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