MARKETING CHALLENGES IN THE 21st CENTURY

MARKETING CHALLENGES IN THE 21st CENTURY
A. Porter’s 5 Forces Model of Competition:

Marketing is facing different challenges in the 21st century to meet these Before entering the
business Porter model can be used to analyze the environment both for new and existing business
and can be used to overcome and meet the challenges.
• Threat of New Entrants
Ratio of new entrants in the industry greater the ratio greater will be intensity of competition
• Bargaining Power of
Buyers: When competition is intense and number of manufacturer is greater the buyer have
more options for product switching over this will increase the buying power of buyer
• Threat of Substitute: As
Obvious from the term greater the threat of new entrants will result in greater higher
Completion that in turn will result in increase in the number of substitutes
• Bargaining Power of Suppliers: Greater number of the supplier will provide the stronger
Buying power to the manufacturer/customer and vice versa
• Rivalry among Competing Firms in Industry: Larger number of the manufacturers and
greater number of product variety increases the rivalry among the competitors, which demands
for more quality and customer satisfying products in order to meet the competition.
A. The information technology revolution
The information age, particularly the advent of the Internet is having a major impact on the
direction of marketing science and practice.
Digitalization and Connectivity: The flow of digital information requires connectivity Intranets,
Extranets, and the Internet are key drivers of the “new economy
Technologies for Connecting
b. The major force behind the new connectedness is technology.
merging of these technologies, has had a major impact on the way businesses bring value to their
customers.
1). Using today’s powerful computers, marketers create detailed databases and use them to
target individual customers with offers designed to meet their specific needs and buying patterns.
2). Cell phones; fax machines, and CD-ROM to interactive TV are just a few of the tools
being used to make connections.
a). Electronic commerce allows consumers to shop and buy without ever leaving home.
b). Virtual reality displays, virtual shopping, and virtual salespeople are just a few of the
changes that consumers seem to be embracing. The Information Superhighway (and its
backbone--
the Internet) will link customers to companies in ways that were unimagined only a few years
ago.
The Internet is a vast and burgeoning global web of computer networks, with no central
management or ownership. The user-friendly World Wide Web has changed us all.
1). The Internet has been hailed as the technology behind a new model for doing business.
2). New applications include:
a). Internet--connecting with customers.
b). Intranets--connecting with others in the company.
c). Extranets--connecting with strategic partners, suppliers, and dealers.
3). Marketplaces have now become market spaces.
2). However, new opportunities abound.
• Connections with Customers
B. Rapid Globalisation
Technological and economic developments continue to shrink the distances between countries.
World is becoming global village due to advancement in the connecting technologies. The world
is
Shrinking rapidly with the advent of faster communication, and transportation, and financial
flows.
In the Twenty-First century, firms can no longer afford to pay attention only to their domestic
market, no matter how large it is. Many industries are global industries, and those firms that
operate globally achieve lower costs and higher brand awareness. At the same time, global
marketing is risky because of variable exchange rates, unstable governments, protectionist tariffs
and trade barriers, and other prohibitive factors
Global Marketing into the Twenty-First Century:

a. The world is shrinking rapidly with advent of faster communication, transportation, and
financial flows.
c. Domestic companies never thought about foreign competitors until they suddenly found
them in their backyard. The firm that stays at home to play it safe might not only lose its chance
to
enter other markets but also risks losing its home market.
d. Although some companies would like to stem the tide of foreign imports through
protectionism, this response would be only a temporary solution and, in the long run, would raise
the cost of living and protect inefficient firms.
e. The longer that companies delay taking steps toward internationalizing; the more they risk
being shut out of growing global markets.
h. A global firm, is a firm that, by operating in more than one country, gains marketing,
production, R&D, and financial advantages in its costs and reputation that are not available to
purely domestic competitors.
C. The Changing World Economy

Even as new markets open to rising affluence in such countries as the "new industrialised"
pacific
rim, poverty in many areas and slowed economies in previously industrial nations has already
changed the world economy. The New Economy presents many new challenges and
opportunities
for the marketer. The most important point is that the New Economy assuredly places the
customer more firmly in the driver’s seat for decisions on her/his product and service choices
(customization and customerization). In addition, there have been and will be many changes in
business and marketing practices as both consumers and businesses have virtual and real-time
access to literally millions of products, offers, options, prices, people, competitors, and sources
of
information that did not exist until recent years. As a result, the marketing mix will change as
marketers and firms identify new uses for intangible assets and effective customer relationship
management that is more than a marketing term. We can assume that this increasingly rapid
growth and rate of change will continue, and despite the dot-com bust, recession, and other major
social, political, and economic adjustments, the Internet and the New Economy have changed
marketers and marketing for the long-term future.
D. The Call for More Ethics and Social Responsibility
The greed of the 1980's and the problems caused by pollution in Eastern Europe and elsewhere
has spurred a new interest in ethical conduct in business. Social and ethical issues in marketing:
Connections with our values and social responsibilities--as the worldwide consumerism and
environmentalism movements mature, today’s marketers are being called upon to take greater
responsibility for the social and environmental impact of their actions. The social responsibility
and
environmental movements will place even stricter demands on companies in the future. Those
that resist will be forced into compliance by legislation or consumer outcries.
1. High Prices High Costs of Distribution can be misleading. Among other reasons, consumers
want to know about products, it is expensive to advertise and promote, brands provide
psychological benefits and quality standards, and distribution costs include delivering the
product
not just promoting it. High Advertising and Promotion Costs are determined in a competitive
marketplace where consumers often have real choices. Excessive Markups are the exception
rather
than the rule and are more likely in uncompetitive industries. Ethics can influence strategic
decisions on such pricing decisions as market penetration versus market skimming
2. High costs of distribution. It is often argued that middlemen are greedy and mark up
prices beyond the value of their services. A comprehensive implementation of marketing ethics
should include policies and guidelines for defining the company's relationship with distributors
3. High advertising and promotion costs. Modern marketing is also accused of pushing
prices up to cover the costs of heavy advertising and sales promotion. When considered in light
of
increasing activism among consumer groups to regulate advertising, marketers have a unique
opportunity to proactively address the needs for strong advertising ethical standards. While
protecting free speech, marketers could adopt a statement on ethics in advertising that promotes
accurate information exchange, encourages creative and innovative message generation.
4. Excessive middlemen gross profit margins. Critics say that middlemens gross margins
are excessive.
5. Deceptive Practices Deceptive pricing includes practices such as falsely advertising "factory"
or "wholesale" prices or a large price reduction from a phoney high list price. Deceptive
promotion
includes practices such as overstating the product's features or performance, luring the customer
to
the store for a bargain that is out of stock, or running rigged contests. Deceptive packaging
includes
exaggerating package contents through subtle design, not filling the package to the top, using
misleading labeling, or describing size in misleading terms.
6. High-Pressure Selling People are free to not respond to selling tactics. Moreover, most
states have "cooling off" periods that allow buyers to return products or back out of a
purchase for large ticket items.
7. Unsafe Products Dangerous products are most often illegal.
Corporate marketing policies can provide broad guidelines that everyone in the organization
must
Follow
Product Development. Product development may be influenced by ethical codes seeking

more desirable products or changes is salutary product concepts to make them more desirable.
E. The New Marketing Landscape
The new marketing landscape is a dynamic, fast-paced and evolving function of all these
changes
and opportunities. More than ever there is no static formula for success. Customer is known as
the
king in the marketing and all efforts of the organization rate directed towards the customer
satisfaction this provides new landscape to the marketing and development of the connecting
technologies are playing primary role in this concern.

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MARKETING CHALLENGES IN THE 21st CENTURY

A. Porter’s 5 Forces Model of Competition:

Global Marketing into the Twenty-First Century:

C. The Changing World Economy

Product Development. Product development may be influenced by ethical codes seeking

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