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Brand Surrender

Brand Surrender

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Published by Jake Pearce
In the new economy you must surrender to consumers. Can you jive that?
In the new economy you must surrender to consumers. Can you jive that?

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Published by: Jake Pearce on Mar 02, 2009
Copyright:Attribution Non-commercial


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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 to suggest that maybe, just maybe, they are not. I did it to a colleague recently and had froth from his cappuccino blown at me in a loud hurrumph. He claimed his business was client-centred yet couldn’t tell me by what mechanisms customers help create new products. He claimed his range of branded products met customer needs but could only sketch those needs in terms defined by manufacturing 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 will choose to go with the brands that are built by “me” or “us” rather than those created for the convenience of the manufacturer. In such a world, marketing as we know it will be turned upside down 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 jeans with laser patterns and embroidery. It has also diversified its product range to suit much smaller market 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 1998 only 7% did. Over the same period privately-owned jean labels had increased their US market share from 3.2% to 20.4% and Levi’s had fallen from 48% to 25%. I wonder if the same forces are at 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. At www.mp3.com you compile your own music from obscure artists arranged in any order you select: by artist, by region, by style, by alphabet. At www.imagineradio.com listeners 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 is that you take a customer and put them at the centre of their own universe. They operate a ‘Katrina store’ 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 between the 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 executive director Kevin Kelly is right that “community precedes commerce” then the commerce is coming from new, unpredictable places. One example is in the hot, new vertical portal businesses such as Ariba and Commerce One, whose initial public offerings last year hit the stratosphere. These businesses create electronic meeting places for unique communities such as the petro-chemical industry and the plastics industry. The potential revenue in hosting these communities is huge. Business-to-business e-commerce is

expected to reach $US7 trillion by 2004, according to the Gartner Group. A lot of this will be done in discrete communities that most of us will never set foot in — for fear of boredom more than anything else. The key is that the communities drive the formation and shape of Ariba’s business, not vice versa. This is not all the domain of the funky, new Net start-ups. Early warnings are coming from the staid world of fast-moving consumer goods. Proctor & Gamble’s first attempt at mass customisation is www.reflect.com — a self-assembly beauty-products site. Customers select products according to their skin type, hair colour and style preferences in a way that “reflects” them. In the Internet age, brands relying on mass messages for average consumers are being punished by consumers wanting choice, customisation and personalisation. Are you ready to be really customer driven? Jake Pearce is a principal of Fast Forward Future Marketing
You can read up more on Jake Pearce at http://www.jakepearce.com

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