Brand surrender
In the new economy you must surrender to consumers. Can you jive that?
Saturday, 1 April, 2000
It’s so common now for marketers to style themselves “customer-focused” it’s near heresy tosuggest that maybe, just maybe, they are not. I did it to a colleague recently and had froth from hiscappuccino blown at me in a loud hurrumph. He claimed his business was client-centred yetcouldn’t tell me by what mechanisms customers help create new products. He claimed his rangeof branded products met customer needs but could only sketch those needs in terms defined bymanufacturing economies of scale. He’s in good company. Most brands are “vendor-centric”,reckons McKinsey consultant John Hagel, quoted in UK magazine
Marketing Week
in January.“They are statements about the qualities or attributes of the product or vendor.”
In the future, Hagel expects brands will increasingly become customer-centric; customers willchoose to go with the brands that are built by “me” or “us” rather than those created for theconvenience of the manufacturer. In such a world, marketing as we know it will be turned upsidedown and “mass customisation” rather than “mass marketing” will become the new paradigm.
Actually, that time is already here. At Levi’s flagship London store, shoppers customise their jeanswith laser patterns and embroidery. It has also diversified its product range to suit much smallermarket niches.
That’s a smart move considering it’s a mass-market brand in decline. According to
Fortune
magazine, Levi’s lost touch with a generation of young hipsters who didn’t want to wear the same jeans as their parents. Funny that. In 1994, 21% of teenage boys regarded Levi’s as cool. In 1998only 7% did. Over the same period privately-owned jean labels had increased their US marketshare from 3.2% to 20.4% and Levi’s had fallen from 48% to 25%. I wonder if the same forces areat work behind the falling share prices of other mass-market brands like Coke, McDonald’s and,until recently, General Motors?
Mass customisation is being driven by the Internet. Atwww.mp3.comyou compile your own music
from obscure artists arranged in any order you select: by artist, by region, by style, by alphabet. Atwww.imagineradio.comlisteners assemble their own radio stations to play songs of their choice.
Amazon founder Jeff Bezos is applying the same thinking behind his latest initiative — zShops —an online mall that may become a near-infinite number of clicks-and-mortar shops. “The notion isthat you take a customer and put them at the centre of their own universe. They operate a ‘Katrinastore’ or a ‘Jeff store’,” says Bezos.
There are two implications for marketers. First, the new paradigm is about buying, not selling.Consumers’ expectations for fast service and infinite choice does not respect boundaries betweenthe online and offline worlds. If I can order my Dell PC online according to whatever specs I like,why can’t I build my car the same way? Good question.
Second, the Net is accelerating the birth of new communities. And, if former
Wired
executivedirector Kevin Kelly is right that “community precedes commerce” then the commerce is comingfrom new, unpredictable places. One example is in the hot, new vertical portal businesses such asAriba and Commerce One, whose initial public offerings last year hit the stratosphere. Thesebusinesses create electronic meeting places for unique communities such as the petro-chemicalindustry and the plastics industry.The potential revenue in hosting these communities is huge. Business-to-business e-commerce is
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