Marketing in Polycentric World: Adapting to Global Economy of Changing Markets, Business, Technology–New Thinking…

“The aim of marketing is to know and understand the customer so well the product or service fits him and sells itself.” ~Peter F. Drucker

According to Gerry McGovern; “New Thinking in the Digital Age”: The collapse of geography; the death of distance; the doubling of power and the halving of price: Hyper change. Something is happening and many of us are scrambling to try to understand just what. The Digital Age is about revolutionary change inspired by the convergence of computers, communications, and globalization. Marketing is at the forefront, and through new and creative thinking it must lead the dramatic and profound charge for change.

In the book “The Old Rules of Marketing Are Dead” by Timothy R. Pearson writes: Brands must be true to their essence and be reinvented to remain relevant in this radically changed, information-rich, and Internet-oriented world. Completely revamping old-school marketing is the only way to drive profitable sales, create growing brands, and increase market share in today’s recession business landscape.

Throw-out almost everything you hold dear and embrace technology, a new role in business, and real accountability. Company’s must break out of old, established routines and reinvent their organization’s marketing by:
• Positioning marketing as a business partner; not as a tool for meeting a strategic objective.
• Holding marketing accountable for results with the application of hard data; not vague qualitative measurements.
• Providing leadership within the organization; not following the direction of everyone else.

In the article “How Chief Marketing Officers Can Drive a New Growth Agenda” by Nick Smith writes: Companies that continue to practice marketing in the same way that made their brands successful in the past may destroy equity and erode profits. The fundamentals of marketing have not changed; companies still need to increase their relevance with customers, differentiate their offerings and improve overall brand value.

But, the new business environment means that every business decision should be made with the customer in mind. To truly operate that way, and not just speak that way, marketing needs to help shape strategy, not just execute it. Marketing executives must transform themselves and their organizations to accept that kind of challenge:

Four characteristics will define the marketing leaders of the future:
• Release the oxygen: More rigor, discipline and metrics, enabling new efficiencies that can “release the oxygen” needed to support growth.
• Find the sweet spots: Leverage next-generation market research and analytics, helping the entire business find the “sweet spots” in terms of consumer trends and market demand.
• Reinvent the offer: Turn insight into action; into more relevant and thus more profitable products, while also optimizing sales channels and making them more efficient.
• Drive customer engagement: Generate long-term relationships with customers, based on continuous engagement; relevant offers and the encouragement of social networking that create communities of interest in brands and products.

In the article “Winning in a Polycentric World: Globalization and the Changing World of Business” by Jim Turley writes: The story of business today is one of a tension between the flattening effect of globalization and significant variation across international markets. The challenge will be to balance between these opposing forces and achieve both scale and local relevance.

Four priorities for rethinking globalization in a “polycentric” world:
• Redefine global and local: Adopt a balanced approach whereby local autonomy is combined with globally consistent strategic direction, a shared corporate culture and set of values.
• Develop a “polycentric” approach to innovation: Decentralize the innovation process and develop products, processes or components primarily with local markets in mind, but reapplied when appropriate in other markets.
• Rethink relationships with government and tax administrations: Government is playing a bigger role in business and companies must think carefully about how they engage with the public sector, and manage and anticipate potential risks on a global basis.
• Build diverse leadership teams with strong global experience: While business success in developed markets has been more recently rooted in process and efficiency, emerging markets demand experimentation, risk-taking and entrepreneurship.

In the article “IBM’s CMO Describes the New Marketing Organization” by Christopher Brown writes: In an interview with ‘Marketing Management’, Jon Iwata, IBM, described the future of the marketing organization. Question to Jon: If you were about to create a new marketing department, what would be in it? “I do think brand and culture has to be managed as one indivisible mission …

I think the ideal marketing department would have strong collaborative skills to collaborate with external entities, starting with clients, but also strong collaborative skills to collaborate with HR, legal and sales. What is very clear is that for marketing to continue to be a meaningful contributor to business performance it not only has to enable delivery of short-term growth objectives but also needs to tackle the strategic issues of leveraging and aligning the culture in a way that maximizes the success of the organization.

Marketing needs to use its skills not only to influence customer behavior but also that of employees inside the organization to truly create lasting sustainable value. Market-driven firms must build a culture that creates the type of customer experiences that drives customer satisfaction, advocacy and ultimately the bottom line. Marketing as a function clearly has the opportunity and obligation to take on this role now and in the future.”

In the article “Global Players Urged to Adapt to New Rule of Game” by Ernst & Young writes: The report ‘Winning in a Polycentric World’ highlights the tension between the flattening effect of globalization and significant variations across markets. While the former encourages companies to roll out business and operating models ‘globally’, the market differences demand a more ‘localized’ approach. The future challenge for business will be to strike the balance between these opposing forces of globalization and national markets and achieve both scale and local relevance.

Business opportunities are now distributed more evenly around the world than at any time in history and the convergence of market potential between the developed and emerging world means that the number of markets that multinationals must consider as ‘strategic’ has increased. “But, at the same time, the nature of the opportunities in those markets can be fundamentally different”, says Ernst & Young’s John Ferraro. “In the developed world, companies have well established business models and asset bases but face weak growth prospects. In the emerging economies, this situation is often reversed”.

Companies must now operate in a ‘polycentric world’ in which there are multiple but divergent spheres of influence in both developed and developing markets. It is not just ‘opportunities’ that are located in these multiple centers. Competition, capabilities and resources can all now reside anywhere in the world and travel in new, sometimes unexpected directions.

Ernst & Young suggests four priorities to focus on to win in this polycentric world:
• Redefine global and local.
• Develop a polycentric approach to innovation.
• Rethink relationships with government and tax administrations.
• Build leadership teams with strong global experience.

The ‘World Development Report’ by The World Bank indicates that the world is becoming increasingly interdependent for its economic progress. Terms such as “global village” and “world economy” have become very fashionable.

Whether an organization markets its goods and services domestically or internationally, the definition of marketing still applies, however, the scope of marketing is broadened when the organization decides to sell across international boundaries. The long held tenants of marketing are; ‘customer value’, ‘competitive advantage’, and ‘focus’.

This means that organizations have to study the market, develop products or services that satisfy customer needs and wants, develop the ‘correct’ marketing mix and satisfy its own objectives as well as giving customer satisfaction on a continuing basis. However, it became clear in the 1980s that this definition of marketing was too narrow; so ‘strategic marketing’ was born.

The focus was shifted from knowing everything about the customer, to knowing the customer in a context which includes competition, government policy and regulations, and the broader economic, social and political macro forces that shape the evolution of markets. In ‘global marketing’ terms this means forging relationships or developing networks, working closely with home country government officials and industry competitors to gain access to a target market.

Whether one takes the definition of ‘marketing’ or ‘strategic marketing’, ‘global marketing’; ‘marketing’ must still be regarded as both a philosophy and a set of functional activities, and continually evolve to met the ever-changing needs of the global economy…

“The sole purpose of marketing is to sell more to more people, more often and at higher prices. There is no other reason to do it.” ~Sergio Zyman