Many years ago marketers were practicing one to one marketing and they produced goods based on the specific requirements of the customers. With the industrialization companies started producing standardized product to satisfy average market to achieve economies of scale. This is known as mass marketing and this created the production era. Customer contacts were managed by the middlemen and this created a transaction oriented marketing where the middlemen focused on revenue from single transaction rather than long term profits. This approach ignored the customers and sellers simply believed that whatever produced by then can be sold and they kept on producing goods without considering customer needs.
But many changes on in marketing environment has forced companies to focus on one to one marketing with customer relationship management (CRM).
Why has the Role of Marketing Changed?
Customers are increasingly becoming aggressive and expect not only highest quality product with features but also to service them to provide better customer value. Customer expect customized services rather than standardized products and if a firm fails to customers surely competitors will do and overtake customers.
With the complicated needs and variety of needs customers become highly sophisticated creating different market segments and expect products to satisfy need of those segment. Marketers can not have a standardized product and cater to all segments and this has forced the firm to customized and change marketing strategies.
Organizations now focus of customer retention rather than attracting new customers as retention strategies are proved to be cost effective.
With globalization foreign companies are able to cater to local market and this has made a pressure on local supplier as anyone can enter the market without barriers. To make themselves competitive among local and other foreign players firm needs to focus more on customer needs and satisfy them effectively.
With the development of economic unions such as European economic union and SAARC free trade zone the trading among member countries are encouraged and many benefits such as duty relief are granted. Due to this reason firms from trading unions can enter local market with no barriers making the competition severe and firm need to change their marketing strategies to be competitive.
With free trade orientation it was made possible for anyone to enter the market to sell goods and this has increased the amount of sellers in the marketing. In contrast no of customers remain unchanged making the supply exceed the demand level. This has resulted in cut throat competitive situation in the market and to build sustainable competitive advantage firms need to change their marketing strategies.
The invention of internet, e-commerce and m-commerce has totally changed the way in which business activities are carried out. Online sales. online promotions, viral marketing, click and brick organizations, social network marketing and pure click organizations have changed the entire business world with cost effective marketing strategies which let firm to build cusotmer relationships at at a lesser cost. This has increased the amount of e-commerce users forcing companies to adopt e-commerce strategies.
Rapid developments in technology and change in the consumer needs and tastes have made the product life cycle shorter. Some products reach decline stage even without reaching maturity stage as they are replaced by a new invention. Shorter product life cycle forces companies to develop new products to cope up with new technologies and suit the changing customer preferences. Developing new products involve high cost and companies focuses on CRM strategies to lengthen the product life cycle.
The changes in economic situation such as financial crisis, high inflation, reduction in disposable income and increase in unemployment level and job redundancy level has forced the consumer to be more alert on their spending. Customers are more concerned about their spending level and they consider about value generated before spending. High price sensitiveness has resulted in difficulty to increase the price of goods and marketer have to change the role of marketing to earn revenue using means other than increasing prices. Additionally lower economic growth also has contributed to lower sales level giving pressure to change marketing activities.
Instability in global political situation has made business environment vulnerable. This situation has made the consumers very careful in their spending. This has made the organizations to build strong customer relationships and force the consumer to purchase from them.
Due above mentioned factors the role of marketing has changed and organizations focus on CRM to build strong customer relationships to achieve long term profitability.
2 thoughts on “Why has the Role of Marketing Changed?”
Nice Article keep up the good work
Comments are closed.