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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. 1 The Impact of Social Media on Marketing Strategy The Groundswell 3 Key Characteristics of Social Media WOM: “simply unlocked an existing human need” 4 Key Characteristics of Social Media Powerful: amplify “consumer-to-consumer conversations in the marketplace”. 5 Key Characteristics of Social Media Trusted: unlike organisations. 6 Key Characteristics of Social Media Effective: achieve “results no media campaign can achieve”. WestJet Christmas Miracle 2013 35 million views since December 2013 7 Key Characteristics of Social Media Addictive:1/3 of all women aged 18-34yrs check Facebook on waking before even visiting the bathroom. 8 The Strategic Nature of Social Media 9 THE DECLINE OF MARKETING 10 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’ 11 The Decline of Marketing 12 Loss of Ascendency of Marketing • Marketing has a reduced role and influence. • Disconnect between marketing and corporate strategies. 13 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 14 The Challenge of Value Creation • Difficulties with the concept of value. • Difficulties in creating value. • Difficulties over how Value is created. 15 The Struggle for Innovation • The need for Innovation. • The stifling of Innovation. 16 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. 17 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” 18 Rise of the New Consumer • Brands end up ‘shouting’ at consumers ‘interruption marketing’. • Marketing funnel is a broken metaphor – but still trusted by marketers. 19 The Limitations of Relationship Marketing • RM no longer the current paradigm. • High failure rates of CRM systems. • Still high churn rates (10-30%). 20 The Limitations of Relationship Marketing • Aggressive marketing. • Doubts over claims about loyalty. • Not CRM but CMR. 21 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’. 22 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. 23 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. 24 The Challenge for Branding Reasons for Brand decline: • • • • Weakening of brands. Internal forces. Erosion of trust. Loss of control. 25 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. 26 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”. 27 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”. 28 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”. 29 THE PROMISE OF THE SOCIAL WEB 30 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. 31 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”. 32 Restoring the lost art of Engagement Engagement tools: Blogs, micro-blogs, user-generated content, forums, aggregators, communities, and social networks. Burger King ‘Whopper Sacrifice’ 33 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. 34 Influencing Buyer Behaviour via Social Media B: Can social media enable organisations to influence buyer behaviour? How Social Media influence the Buying Process 35 Influencing Buyer Behaviour via Social Media Segmenting the Social Web to find Brand Champions 36 Influencing Buyer Behaviour via Social Media Example: • Adult Fans of Lego (AFOLs) are important, being responsible for 5-10% of Lego sales (£50m). 37 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. 38 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”. 39 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 40 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 41 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! 42 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. 43 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. 44 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. 45 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. 46 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. 47 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”. 48 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). 49 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 50 www.mcs-organisation.com Tel: +44 (0)560 1416963 51