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There are no secrets. The networked market
knows more than companies do about their own
products. And whether the news is good or bad,
they tell everyone.
The Cluetrain Manifesto, Thesis 12.
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The Impact of Social Media
on Marketing Strategy
The Groundswell
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Key Characteristics of Social Media
WOM: “simply unlocked an existing human need”
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Key Characteristics of Social Media
Powerful: amplify “consumer-to-consumer
conversations in the marketplace”.
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Key Characteristics of Social Media
Trusted: unlike organisations.
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Key Characteristics of Social Media
Effective: achieve “results no media campaign
can achieve”.
WestJet Christmas
Miracle 2013
35 million views since
December 2013
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Key Characteristics of Social Media
Addictive:1/3 of all women aged 18-34yrs check
Facebook on waking before even visiting the
bathroom.
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The Strategic Nature of Social Media
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THE DECLINE OF
MARKETING
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The Decline of Marketing
Many academics state that Marketing is in decline.
‘in crisis’
‘dead in the water’
‘in mid-life crisis’
‘at saturation point’
‘broken’
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The Decline of Marketing
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Loss of Ascendency of Marketing
• Marketing has a reduced role and influence.
• Disconnect between marketing and corporate
strategies.
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Loss of Ascendency of Marketing
• Diminishing Corporate Marketing function
– Marketing has all but disappeared at corporate level.
– Now a cross-functional process with a disappearance
of boundaries between marketing and other functions.
– The Marketing Paradox
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The Challenge of Value Creation
• Difficulties with the concept of value.
• Difficulties in creating value.
• Difficulties over how Value is created.
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The Struggle for Innovation
• The need for Innovation.
• The stifling of Innovation.
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Rise of the New Consumer
• Characteristics of the New Consumer.
The media-, advertising-, brandand technology-literate consumer
presents one of the biggest
challenges facing marketers.
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Rise of the New Consumer
• Problems with the Consumer Buying DecisionMaking Process.
The Communications Spiral
Increased number of
communication attempts
Stronger urge to
communicate
Information
overload for
consumers
Decreased impact of
average message
A “feeling of overwhelming mass media spam”
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Rise of the New Consumer
• Brands end up ‘shouting’ at consumers ‘interruption marketing’.
• Marketing funnel is a broken metaphor – but still
trusted by marketers.
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The Limitations of Relationship Marketing
• RM no longer the current paradigm.
• High failure rates of CRM systems.
• Still high churn rates (10-30%).
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The Limitations of Relationship Marketing
• Aggressive marketing.
• Doubts over claims
about loyalty.
• Not CRM but CMR.
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Questioning of the Marketing Mix
Innovation spiral
Communication spiral
The Marketing
Spiral
Price spiral
Distribution spiral
• 4Ps = 4 downward spirals.
• Output is an increasingly undifferentiated, commoditised
product - ‘Walmartisation’.
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Questioning of the Marketing Mix
• Doubts over Mix’s ability to give differentiation =
no value = no competitive advantage.
• A straight-jacket.
• Only strategic innovation can enable escape
from the marketing spiral.
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The Challenge for Branding
• Due to problems with the Mix,
marketers have switched
attention to the Brand to seek
differentiation.
• Brands have a strategic role...
can transform markets.
• Brand equity is an intangible
asset that can offer a
sustainable advantage.
• Paradox: brands are in decline.
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The Challenge for Branding
Reasons for Brand decline:
•
•
•
•
Weakening of brands.
Internal forces.
Erosion of trust.
Loss of control.
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New Ways of Marketing
• How did these billion-dollar brands - Amazon,
Twitter or Google - become huge?
• “Distribution is now the number one problem that
faces every product and every start-up.”
• Solution? The Growth Hacker.
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Marketing’s Mid-life Crisis
Lack of Market-orientation in Organisations
• Customer-orientation vs. product-orientation.
• The ‘customer conundrum’.
• “There are now two types of corporation: those with
a marketing department and those with a marketing
soul”.
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Marketing’s Mid-life Crisis
What Academics say:
• Marketing is:
–
–
–
–
–
“suffocating under its own weight”
“appears to be in decline”
“no longer delivering”
“no longer seems to make sense”
and should be given “the dignified burial it deserves”.
• “Customers evolved, but did marketing?”
• “There doesn’t seem to be any time for marketers
these days to actually do any marketing”.
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Marketing’s Mid-life Crisis
What Practitioners say:
• Terry Leahy, ex-CEO of Tesco: Marketers “...have to
have to find their way back to true marketing, beginning
with customer and their fast-changing lives...”
• A.G. Lafley, CEO of Proctor & Gamble: “We need to
reinvent the way we market to consumers. We need a
new model”.
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THE PROMISE OF THE
SOCIAL WEB
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Restoring the lost art of Engagement
A: Can social media enable brands to re-connect with their customers?
Drivers for Engagement
• “Engaged customers drive word-of-mouth marketing
that is ten times more effective at resonating with a
target audience than television or print advertising”.
• Correlation between engagement
and financial performance.
• Engaged customers – build your
brand, co-create, share
knowledge.
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Restoring the lost art of Engagement
The key to Engagement:
• Four elements:
–
–
–
–
Customer value proposition
Customer experience
Brand
Internal culture
• “Engagement is all about content”. It is “no
longer something you push out. Content is an
invitation to engage with your brand”.
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Restoring the lost art of Engagement
Engagement tools:
Blogs, micro-blogs, user-generated content,
forums, aggregators, communities, and social
networks.
Burger King ‘Whopper
Sacrifice’
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Measuring Engagement
• The Net Promoter Score (NPS) measures how ‘how
likely a consumer will promote a product.
• ‘Buzz’ & sentiment can be measured via many
different paid-for listening tools.
• Lots of free, but lesser tools.
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Influencing Buyer Behaviour via Social Media
B: Can social media enable organisations to influence buyer behaviour?
How Social Media influence the Buying Process
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Influencing Buyer Behaviour via Social Media
Segmenting the Social Web to find Brand Champions
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Influencing Buyer Behaviour via Social Media
Example:
• Adult Fans of Lego
(AFOLs) are
important, being
responsible for 5-10%
of Lego sales (£50m).
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Social Media bringing Organisational change
C: Can social media change orgs and make them market-oriented?
The Case for Market-orientation
• A market-oriented organisation is one which
“continuously gathers information about customers,
competitors, and markets”
• Giving increased marketing effectiveness, superior
business performance and an ability to provide superior
customer value...
• ...leading to competitive advantage.
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Social Media bringing Organisational change
Towards a Listening, Learning Organisation
• Listening enables companies to measure engagement
AND learn.
• “Listening is perhaps the most essential neglected skill in
business”.
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Social Media bringing Organisational change
Changing the Organisation from within
• Listening not enough - the
organisation must re-align.
• Create an internal ‘minigroundswell’.
• Enterprise social networks
– Socialcast
– Yammer
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Social Media bringing Organisational change
Employee Empowerment
• Up to 9/10 firms have strategy
failures because strategy
execution is flawed.
• Solution: create engaged
employees to act as brand
advocates and meet customer
needs better
• e.g. Best Buy’s Twelpforce
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Social Media bringing Organisational change
Employee Innovation tools
• A by-product of empowerment.
• Examples
– Orange’s ‘intrapreneurial’
engagement program, idClic
– LinkedIn
– IBM internal crowdfunding
– But Google’s ‘Innovation Time Off’
is effectively dead!
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Creating Value with Social Media
D: Do social media enable organisations to create and deliver value for
customers and organisations?
Co-creation and Value
• Now the “customer is always a co-producer” of value.
• Value is created not just when goods or services are
consumed but in the experiences generated.
• A “social solvent; freeing value from places we hardly
knew we had places”.
• Examples
– LEGO, Threadless.com, Orange, Intuit.
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Creating Value with Social Media
Co-creation drivers for Organisations
• The failure of existing value generation methods.
• The high failure rates of new products.
• 2 major sources of competitive
advantage: improved efficiency
and effectiveness.
• A perfect antidote to the
commoditisation of the
marketing mix.
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Social Media as a source of Innovation
E: Can social media help organisations to innovate?
Value Innovation
• Innovation not limited to NPD but other areas e.g.
marketing practices.
• Not just gain competitive advantage – but sustain it.
• Value + innovation.
• Incremental vs. radical innovation.
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Social Media as a source of Innovation
Innovation via Co-creation
• Co-creation is not just about value but innovation as well.
• Companies which lack good ideas do so because they
lack external and internal networks.
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Social Media as a source of Innovation
The Solution: Open Innovation
• Crowdsourcing: “Harnessing distributed intelligence”.
• Wikipedia.
• Brands doing it via social networks.
– Coca Cola, Pepsico, Oreo, Patagonia.
• Platforms & Brand Communities.
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Brand-building via Social Media
G: Can Social Media restore trust in brands and build brand equity?
What is a Brand in the Web 2.0 era?
• Brand equity is no longer brand essence and recall, the
era of “stationery brands like Gillette, Kodak, Disney and
Kellogg’s” is over.
• Today’s brand is a “living, changing thing” e.g. Google.
• “Based on the dialogue you have with your customers
and prospects – the stronger the dialogue, the stronger
the brand”.
• Essentially, “your brand is what your customers say it is”.
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Brand-building via Social Media
• Four ways of brand building:
–
–
–
–
Posting a viral video (boosts awareness).
Engaging with consumers in social networks (WOM).
Writing blogs (solves complexity).
Creating specific online communities (accessibility).
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Brand-building via Social Media
Brand building via Social Media
• Blendtec’s ‘Will it blend?’
• The Dove ‘Campaign for Real Beauty’ Evolution
• Ford’s Fiesta Movement
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www.mcs-organisation.com
Tel: +44 (0)560 1416963
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