The Impact of Technology on Marketing Early 1990s to Today Abstract This paper discusses the impact of technology on marketing

g practice in the last twenty years and proposes a new conceptual framework for marketing management called the New DNA of Marketing. The paper is based on many discussions with academics and practitioners over a two year period examining developments in both data driven marketing and digital marketing communications. It is was clear from these discussions that the nature of marketing management has seen a paradigm shift over the last 15 to 20 years, with new concepts and ideas replacing time worn concepts such as the marketing mix. In producing a new conceptual framework the bio-metaphor provides a useful descriptive model. In the biological world the DNA molecule is made up of a two stranded chemical structure the double helix. In the marketing DNA model these represent the two key roles of marketing - its customer facing role and its organisation facing role; the chemicals being the marketing activities that enable those two roles to be performed. Again, biologically, the DNA molecule contains the instructions needed for an organism to develop, survive and reproduce (National Human Genome Research Institute, 2010) and similarly it can be said the marketing DNA contains the knowledge, skills and tools to enable an organisation to compete and develop.

The Impact of Technology on Marketing Early 1990s to Today Introduction This paper discusses the impact of technology on marketing practice in the last twenty years and proposes a new conceptual framework for marketing management called the New DNA of Marketing. The paper is based on many discussions with academics and practitioners over a two year period, but the conclusions are the authors own. Impact of Data management From the mid 1990s developments in both computer technology and software has enabled the capture and analysis of vast amounts customer data. The early developments of customer relationship management (CRM) software towards the end of the 90s were basically capturing customer transaction data for the purposes of cross-selling products and services. Today CRM provides the basis for determining marketing strategy (Kumar and Reinartz, 2006) and by providing the basis for analysing customer behaviour, delivers customer insight, profiles customers and develops segmentation models. Evidence of new developments can be seen in examples such as the use of loyalty cards to electronically observe and conduct experiments with consumers; the use of geodemographic information systems to map out consumer attitudes and behaviour; customer relationship management systems and the operational data of e-commerce that describes and models consumer behaviour; the use of data-mining and modeling techniques to uncover new meaning in the relationship between marketers and their consumers and the growth of ethnographic approaches to add richness to the huge amounts of quantitative data now available. There has been a quantum leap in the collection and storage and analysis of data in the last 10 years. For example, dunnhumby now process 13 billion rows of data per year through the Tesco clubcard and 19 million transactions are captured every week (Humby et al, 2008). Such developments now enable far more sophisticated approaches to marketing analysis and the information systems that support it. The competitive environment has also become more intense with globalisation, increased consumer sophistication and new business models developing through the use of the Internet to an extent that competitive advantage comes increasingly through knowledge of the marketplace and rapid response to developments in that knowledge (Davenport & Harris, 2007). This has led to a growth in the employment of people who can analyse data such as marketing analysts and latterly web analysts. There has been increased use of statistical and modeling techniques and the creation of software platforms as typified by SAS in Figure 1. Increasing too has been the access to data for marketing executives in real time giving feedback on the results of marketing interventions through user friendly dashboards (Few, 2006). For example, Omnitures Discovery package (Searle, 2008) allows marketers to monitor transactional behaviour at any point in time and using metrics of their own choosing whilst on the move. In terms of understanding the customer, there has been significant growth in the use of customer insight teams. Initially this seemed to be a new term for marketing research and it appears that many marketing researchers were relabeled customer insight executives.

However the emphasis is now on a holistic 360 degree view of the customer built from a number of sources transactional data analysis, qualitative market research, in-depth understanding of customer behaviour and experiential knowledge (Hulbert & Burst, 2009). The mantra here is to use insight to drive marketing interventions and to take data through to marketing actions that potentially change customer transactional behaviour. Figure 1 SAS Customer Intelligence Platform

Sourced from SAS 2009

Impact of Digital Communication In the last ten years there has been significant change in the development and adoption of digital communication technology. The speed of interpersonal communications has increased rapidly with the widespread adoption of mobile technology (Figure 2) and the Internet (Figure 3); emails in the professional world; text messaging (SMS) and social networking in personal communications. This has given new impetus to direct marketing approaches and delivered power into the hands of the consumer. Thus, in the world of marketing communication we are seeing a digital tidal wave. The adoption and use of the internet has changed the dynamics of the market place so that we now talk of market space and word of mouth has become word of mouse. Broadband penetration and home wireless networking has dramatically increased the amount of time consumers spend using the Internet as shown in Figure 4.

Figure 2: UK Uptake of Mobile Phone Usage

Source: Ofcom 2009 Figure 3: UK Uptake of Internet

Source: Ofcom 2009 Figure 4: Press Release from EIAA Mediascope 2008 Study Key European Findings 178 million Europeans are online each week Over half (55%) of internet users online everyday Time online by 25-34s is driving digital growth in 2008 Online research influences brand decisions for 41%

 Almost half (49%) of all broadband users are now wireless Source : EIAA 2008 The amount of time consumers spend online now closely relates to the amount of time spent watching television. There is a significant shift in advertising spend to online media (see Figure 5) and new marketing activities such as e-mail marketing, search engine marketing, social media marketing and affiliate marketing have developed in the last 10 years. Figure 5: Marketing Changes Advertising Expenditure

Source: Ofcom 2009 According to a recent report about the advertising industry (Vollmer, 2009), advertising is evolving from an interruption grabbing attention for a product or brand into an experience, an application, a service that the consumer actually wants. This renewal of direct marketing has also focused on the return on investment (ROI) of marketing interventions which is often quoted, for example, as a justification for spending on web analytics (Burby & Atchison, 2007). This seems, in turn, to have fueled the debate on the measurement of marketing effectiveness both online and offline with increasing demands for marketers to be accountable for (and demonstrate the value of) the substantial sums invested in marketing campaigns. Marketing Management in 2010 Whether the growth in digital technology has been the enabler or the instigator of change to marketing practice is not always clear. Certainly the 1990s saw the birth in new marketing thinking such as one-to-one marketing (Peppers and Rogers,1994); Relationship Marketing (Gummesson, 1999); the Value Proposition (Lanning and Michaeis,1988; Lanning, 1998) or the role of marketing in delivering shareholder value (Doyle, 2000). The realisation of these areas has certainly been made possible by the processing power of todays computers and the increasingly sophisticated data mining techniques now available.

Again it is not clear whether the increase in competitive pressure these developments heralded preceded a renewed emphasis on understanding the customer in a drive to gain competitive advantage. Certainly there is a renewed interest to getting into the mind of the customer typical of which is the interest in the importance of emotions in customer satisfaction and understanding the customer experience journey (Shaw, 2007); biological response to stimuli (neuro marketing (Lindstrom, 2008); how values, attitudes and behaviours are formed and change (cultural dynamics) (Dade, 2008) and the how customers perceive value (the customer value equation) (Ferrell, & Hartline, 2005). What can be said is that customer insight is increasingly at the heart of developing marketing strategies. Looking through the eyes of the customer has led to the formation of new value propositions and the development of new segmentation and positioning strategies. A Paradigm Shift A New Conceptual Model It is clear then, that the nature of marketing management has seen a paradigm shift over the last 15 to 20 years, with new concepts and ideas replacing time worn concepts such as the marketing mix. The response to this is to propose a new conceptual framework for the theory and practice of marketing management - a new DNA of Marketing - given diagrammatically in Appendix 1. The bio-metaphor is a useful descriptive model. Just as in the natural world the body is made up of cells and each cell carries the DNA molecule, so in the economic world each economy is made up of companies and organisations (both private and public sector) carrying out economic activities and each of these have a marketing element. In the biological world the DNA molecule is made up of a two stranded chemical structure the double helix. In the marketing DNA model these represent the two key roles of marketing - its customer facing role and its organisation facing role; the chemicals being the marketing activities that enable those two roles to be performed. Again, biologically, the DNA molecule contains the instructions needed for an organism to develop, survive and reproduce (National Human Genome Research Institute, 2010) and similarly it can be said the marketing DNA contains the knowledge, skills and tools to enable an organisation to compete and develop. In the natural world the DNA module is made of the same building blocks but individuals have a unique identity, so a further benefit of the bio metaphor is that it allows different interpretations of marketing activities and different contexts to be presented. Conclusions One conclusion which can be drawn from this discussion is that marketing activities should play a central role in delivering value to both customers and shareholders and that digital technology plays a significant part in this. In this context marketing can be seen as being at the interface between the customer and the organisation it interprets the needs, desires and changing values of customers for the organisation and at the same time presents the organisations response in terms of services or products to the customer. These marketing activities are not necessarily conducted by, or the responsibility of, the marketing function or department in part because modern marketing requires analytical, numeric and data management skills not traditionally part of the marketing skill set. The conceptual framework presented here attempts to bring coherence to understanding the disparate knowledge and skills required in 21st century marketing. In terms of validity, a major qualitative research project to test the model with marketing professionals has

recently been completed and initial analysis provides evidence to support the model in that four major aspects of marketing management in the early 21st century were identified: customers at the heart of strategy, delivery of value, accountability for marketing spend and pervasive use of digital technology. The qualitative study will be the subject of a further paper and an international quantitative study based on its findings is now planned. References
Burby J & Atchison S (2007) Actionable Web Analytics. Sybex. Dade, P. (2008) Becoming the Now People: The Human Face of Strategy and Cultural Change. Southampton University UK. Unpublished Seminar Paper Davenport T. H. & Harris J.G (2007) Competing on Analytics: the New Science of Winning. Harvard Business School Press Doyle P. (2000) Value Based Marketing. London. Wiley Humby, C., Hunt, T. and Phillips, T. (2008) Scoring Points: How Tesco Continues to Win Customer Loyalty, London. Kogan Page Limited, EIAA Mediascope 2008 Study. Retrieved Nov 19, 2008 from http://eiaa.net/news/eiaa-articlesdetails.asp?id=181&lang=1 Ferrell, O.C. & Hartline, M.D. (2005) Marketing Strategy 3rd ed. South Western, Ohio. USA Thomson Fry S (2006) Information Dashboard Design. OReilly Sebastopol, Italy Gummesson, E. (1999), Marketing-orientation Revisited: The Crucial Role of the Part-time Marketer, European Journal of Marketing, vol. 25, no. 2, pp. 60-75. Hulbert, B. J. and Burst, I. (2009), Towards a 360-degree view of the customer: A conceptual model for customer insight as a strategic asset, presented at the Academy of Marketing Conference, Leeds, UK., July Kumar & Reinartz (2006) Customer Relationship Management - A Databased Approach Wiley Lanning, M. J. (1998), Delivering Profitable Value. Reading MA: Perseus Books Lanning, M. J. & Michaeis E. G. (1988) A Business is a Value Delivery System. Retrieved Oct 10, 2006 from www.mckinseyquarterley.com/article_page.aspx?ar=1055 Lindstrom, M (2008) Buy-ology Random House Business Books National Human Genome Research Institute (2010) Deoxyribonucliec Acid (DNA) Retrieved Jan 27 2010 from http:www.genome.gov/25520880 Ofcom (2009)The Communications Market 2009 (August) retrieved Aug 30 2009, from http://www.ofcom.org.uk/research/cm/cmr09/cmr09.pdf Peppers and Rogers (1994) The One to One Future. Piatkus Books SAS (2009) Capabilities that enable a best practice result.Retrieved Oct 3 2009, from http://www.sas.com/resources/brochure/sas-customer-intelligence-overview.pdf Searle D (2008). Seminar demonstration of Omniture Discovery software. University of Southampton. Nov 2008 Shaw, C. (2007) The DNA of Customer Experience: How Emotions Drive Value. Palgrave Macmillan

Tashakkori, A. and Teddlie, C. (2003), Handbook of Mixed Methods in Social and Behavioral Research, California: Sage Publications. Vollmer, C. (2009) Digital Darwinism. Retrieved May 14, 2005 from http://www. strategybusiness/resilience/rr00069?

Appendix 1 Figure 6: The New DNA of Marketing

Organisation

Customer led Marketing Data driven marketing

Value driven

- Customer insight - Market insight - Customer behaviour and motivations - Customer Experiences

Strategic marketing

CRM CEM MRM - Data mining - Statistics Analytics (inc. dashboards) -Predictive analysis ROI (campaign level)

-Strategic decision making - Value Propositions Relational vs. transactional Branding - Customer equity/ CLV
Channels

Online and offline integrated marketing communications

- Bricks and mortar - Online - People - Service delivery - Marketing and logistics interface

- IMC - Creating a promotional mix (selling, PR etc.) - Digital marketing communications - Maximising sales performance

Customer
University of Southampton 2009