A View From INSEAD
Professor Klaus Wertenboroch
Marketing has changed dramatically in the last decade. And the march of the internet, the fragmentation of television audiences and the globalization of markets continues apace. As one of the highest-ranked business schools in the world for its marketing research, INSEAD is at the forefront of research into all the latest marketing ideas. And the resulting insights are available to executives through our marketing courses, such as the Strategic Marketing Programme, directed by Professor Klaus Wertenbroch. Here he shares his views on the shifting landscape of marketing…
Has technology really changed marketing ideas and practice?
There’s no doubt about that. And it has particularly changed marketing communication. The rise of the internet and the fall of the traditional mass TV audience (apart from occasional big sporting events) means that marketers have to segment much more finely. Allocating budgets is also a lot more difficult, as there are so many more channels for reaching people. On the other hand, it’s important not to be too distracted by technology. The fundamental, strategic process of marketing – how to position your brand to generate value – remains the same. And there are other areas of change too, such as the globalisation of markets.
What challenges does globalisation pose to marketers?
The challenge is twofold. First, there’s the opportunity represented by the so-called “developing” markets. But you can’t just dump your products on them! You have to adapt them. For example, Chinese manufacturers want simpler, cheaper, less sophisticated machinery from their suppliers than most western factories demand. And second, there’s greater competition in established markets from new brands based in emerging markets, such as Chinese appliance manufacturer, Haier.
Which is the biggest challenge, do you think?
It depends on your industry. Right now, for example, consumer goods manufacturers are facing very serious competition from retailers’ private-label or own-brand products. This issue comes up all the time among executives on our marketing courses. For some of them it’s the biggest strategic challenge of them all – and the main area where they need to change their marketing ideas.
How does the Strategic Marketing Programme help executives rise to all these challenges?
Well, the course is 30 years old now, so it’s evolved with marketing itself! And we’re still adapting the content each time we run to keep up with trends. Most of the participants fall into two groups. On the one hand, there are people with little marketing experience, but who have new or increasing marketing responsibilities. On the other hand, there are experienced marketers who are looking to refresh their knowledge, gain new insights or get a rigorous conceptual background for the first time. But both groups have the same fundamental question: how do I write an effective marketing plan? Or, to put it a different way, how can I go to market with my products or services in today’s ever-more-complex world?
How do you personally see the future challenges of marketing?
That’s tricky. It seems clear that the trends I’ve already spoken about will continue. But I’d also like to single out two current crises, which I think will have a big effect on certain industries in the future. First there’s the financial crisis or the European debt crisis, which is a knock-on effect of the US subprime crisis. Second there’s the obesity crisis in the west. Both have to do with the fact that people tend to make suboptimal trade-offs between the present and the future! Borrowing too much money and eating too much sugar is a departure from the rational behaviour that economists have traditionally assumed – and is the main focus of my personal research interests. I think both crises will result in greater regulation, as governments seek to protect consumers – and a whole new set of marketing ideas.