Sunday, 9 October 2011

Future of Marketing - EXCLUSIVE Article by Prof Malcolm McDonald

We are delighted to post this exclusive article by  Emeritus Professor Malcolm H.B. McDonald MA(Oxon), MSc, PhD, D.Litt. FCIM FRSA.and reproduced here with his kind permission.

Prof McDonald is the Academic Adviser to the City Digital Marketing Academy.


In a paper published in the UK’s leading academic journal, I cited fifty scholarly references testifying to the fact that marketing’s bright beginnings in the 1960s were not built on, that the academic community had become largely an irrelevancy, and that practitioners in the main have failed to embrace the marketing concept and the proven tools and techniques of marketing.

In the arid desert of marketing as a discipline, however, there still exists a wonderful oasis of very professional, market-orientated organisations that practice marketing
as I teach it, as a fully accountable discipline which drives corporate success. So, let me attempt to summarise briefly why some of the poisonous slurs thrown at our
discipline are, in the main, ill-judged and ill-founded and why we can be proud of the exemplary standards demonstrated by our leading companies.


In the late 1960s and early 1970s, there was a growing consciousness of the problems that mass consumption brought with it. A movement was formed which quickly Greening of America, Theodore Roszak’s The Making of a Counter Culture and Alvin Toffler’s Future Shock were published at that time. The basic message articulated was that the people could no longer be thought of as ‘consumers’ - some aggregate variable in the grand marketing design. Such feelings had led to a view that capitalism presented an unacceptable face in promoting an acquisitive and materialistic society. As a more visible manifestation of such activity, marketing was singled out for attention for playing on people’s weaknesses – by insidious means persuading the consumer to do things without which their lives would be incomplete.

This argument deserves closer examination, for it confuses needs with wants. But, even worse, it involves the notion of a defenceless consumer, a characterisation that any scrupulous marketer must reject. For no matter what ‘marketing’ is performed, the consumer remains free to make choices – either between competing products or
not to buy at all. Indeed, it could be argued that by extending the range of choices that the consumer has available, marketing is enhancing consumer sovereignty
rather than eroding it. Although promotional activity may persuade an individual to buy a product or service for the first time, promotion is unlikely to be the persuasive factor in any subsequent purchase, when the consumer will act from first-hand experience of the product.


Several specific issues have formed the focus of the debate on the ethics of marketing including:

• the contribution of marketing to materialism
• rising consumer expectations as a result of marketing
  pressure; and
• the use of advertising to mislead or distort
  Marketing, it has been suggested, helps to feed the materialistic
acquisitive urges of society, and in turn feeds on them itself.
  Of course 
implicit in such criticism is the value judgement that
  materialism and 
acquisitiveness are in themselves undesirable.

The argument is that marketing raises the level of consumer expectations. More than simple aspirations, there is desire to acquire a specific set of gratifications through the purchase of goods and services, fuelled by marketing’s insistent messages. Further, if at the same time the individual lacks the financial resources with which to
fulfil such expectations, then marketing inevitably adds to a greater awareness of differences in society, and to dissatisfaction and unrest among those finding themselves in this situation, as those apologists for the street riots in August claimed.

The counter-argument here is that marketing itself does not contribute to rising expectations and thus to social and economic disparity; it merely makes people aware of and better informed about the differences that already exist in society. In this respect, it can be claimed that its effects are beneficial, since it supports, even hastens, pressures for fairer distribution. It can also be argued that materialism is not a recent phenomenon correlated with the advent of mass marketing.


Closely connected with the ethics of marketing is that of consumerism (in the sense of the existence of a consumer movement and consumer activists). Ironically, this
movement is pro-marketing; it wants the marketing approach to business implemented in a sincere rather than cynical spirit. The ‘cynical’ implementation, which consumerists claim has been too widely practised, is no better than high-pressure salesmanship or misleading puffery. The ‘sincere’ implementation of a marketing based approach entails respect for each individual consumer served. Better marketing has always emanated from a deep understanding of consumer expectations combined with the consumer’s right to be informed and
protected and to enjoy a higher quality of life.

Most of the outstanding marketing skills on which most theory is based still reside in the FMCG sector. Whilst certainly adopted by leading industrial companies such
as GE and 3M, and by some of the top retailers such as Tesco and Sainsbury, in the main marketing has yet to storm the citadels of B2B and service sectors which
account for the majority of the UK’s GDP. In these, marketing is merely communications and a parody of best practice. For example, in the financial and
insurance sectors, very few brands have managed to create a complete set of perceptions in people’s minds. The large majority of consumers still cannot differentiate between the brands of major banks, building societies and insurance companies, in spite of the billions of pounds spent each year on image advertising.

Emeritus Professor Malcolm McDonald  

Malcolm, author of 43 books, was Professor of Marketing and Deputy Director Cranfield School of Management, is a graduate in English from Oxford University, in Business Studies from Bradford University Management Centre, has a PhD from Cranfield University and a D.Lit from Bradford University .  His extensive industrial experience includes a number of years as Marketing Director of Canada Dry.

He is Chairman of Brand Finance plc and five other companies. He spends much of his time working globally with the operating boards of the world’s biggest multinational companies.

In 2006 he was  listed by the Times as one of the country’s top ten consultants

He is Visiting Professor at Henley, Warwick, Aston and Bradford Business Schools and Emeritus Professor at Cranfield.

‘DOING DIGITAL’ – A Marketers View

Since its creation, the Internet has evolved from a nuclear resistant military communications network, via an academic knowledge-base, into a fully functional platform for global information, communications and commerce.

I recently met author James Glieck who said in his latest book The Information, “As the printing press, the telegraph, the typewriter, the telephone, the radio, the computer and the Internet prospered, each in its turn, people said, as if for the first time, that a burden had been placed upon human communication: new complexity, new detachment and a frightening excess.”
These advances have had a profound and disruptive effect on markets and marketing, and radically altered the way media is consumed, commerce is transacted and communications are facilitated.

I often characterise this as moving from ‘one market of a million’ to a ‘million markets of one’. This inversion permits different ways and new opportunities to engage with our customers, as individuals. It has changed how we might now undertake market research, new product development, channel selection, customer relationship management, advertising and marketing communications.

As all these processes undoubtedly contribute to successful marketing, how much more effective will we be when we increase two-way customer engagement and focus?  Digital marketing helps us to do this. 

If marketing is about ‘anticipating, identifying and satisfying customer wants and needs’, and creating products and services that ‘add value to, and are valued by customers’, we now have a far  broader range of tools and techniques available to realise these goals.

Some organisations believe that Digital Marketing should be outsourced to ‘specialists’. While there are some technical aspects that may demand this approach, I believe that it is critical for all executives and managers in all organisations to understand this new field, develop winning digital strategies, and then use appropriate internal or external resources to manage their tactical implementation.

People often have concerns relating to; safety and security, relevance and ‘noise’. Let me address these.

By far the biggest worry is data privacy and protection, hacking and bullying. The reality online is the same as it has always been in the non-digital world. Just as we secure our property and premises, it is important that we adopt Best Practice online in terms of up to date anti-virus and anti-hacking software. Take sensible precautions regarding passwords and backup data regularly. Decide how detailed and how publically visible you wish your online information to be and set the access controls accordingly. All reputable sites have facilities to block and even report unwanted attention, often in far more permanent and effective ways than in the non-digital world.

Some look at the main platforms available online; Google, Twitter, Facebook, LinkedIn, YouTube and the rest, and decide that these sites have certain drawbacks -  a lack of relevance, being just for younger people or the online equivalent of ‘junk-mail’. These views are largely due to a misunderstanding of their different strengths and weaknesses. Properly used as part of an integrated marketing and communications plan, they can provide substantial competitive and cost advantage. If Facebook was a country it would be the world’s third largest! Is that something we can really afford to ignore?

Problems can be caused by the enormous volumes of inconsistent and inconsequential data available online. Companies may find it hard to be heard, whilst consumers sometimes find it difficult to ‘cut through the noise’ to locate the information that they seek.

The solution requires efficient information filtering and sorting, in both directions. Search Engine Marketing and Search Engine Optimisation techniques are now very well developed and used to make sure that companies have a usable, prominent and visible web presence. On the customer side, communications delivery channels such as social media, Blogs, Wikis and mobile platforms allow them to receive just the information that they want, in the places and at the times that they want it.

In summary, a good digital strategy, properly implemented, can be a significant source of improved customer satisfaction, differentiation and cost reduction. As Charles Darwin said “it is not the strongest that survive, nor the most intelligent, but those most adaptable to change”.

It is time that we evolved!

Peter Rees DipM FCIM FRSA MCIPR Chartered Marketer

Twitter @citydigital

Unicorns and Rainbows - The Science of Social Media

This is a lecture given by Dan Zarrella, HubSpot's social media scientist, at Harvard a little earlier this year.


The Science of Social Media from HubSpot on Vimeo.

CRM Insights - Interview with MASTER Marketer - Prof. Merlin Stone

Customer Relationship Management (CRM) is one of the hot topics in marketing today.


We are therefore delighted to post this interview with one of the most advanced practitioners and pioneers in this important area - Professor Merlin Stone.

Merlin is Head of Research at The Customer Framework. He is a leading expert in customer management, including strategies and tactics for customer recruitment, retention, and development and has been a leading contributor to the development of the customer management assessment methodologies for which The Customer Framework is best known. His work focuses on improving customer experience, satisfaction, loyalty and trust, and also the customer research, data analysis, systems decisions and supplier selection and management needed to support improved management of customers. He is also well known for his work on thought leadership and public relations – improving clients’ communications to the media and customers, including explaining complex propositions and conducting media interviews. This includes conference speaking (especially for client events) and thought leadership research, which focuses on clients’ customers and prospects, the issues they face, how they handle them, and where they need help. He is an active researcher on many aspects of customer management.

He advises a number of smaller companies in marketing services and related areas. These include Clear Cell, MarketPoint and Aerice.

He is author or co-author of many articles and thirty books on customer management, many of them with Neil Woodcock, Chairman of the Customer Framework The UK’s Chartered Institute of Marketing listed him in 2003 as one of the world’s top 50 marketing thinkers, he was nominated as one of the 20 most influential people in the direct marketing industry in a Precision Marketing readership poll in 2003, while NOP World nominated him in 2004 as one of 100 most influential individuals for their input and influence on the development and growth of e-commerce and the internet in the UK over the previous 10 years. He is a Fellow of the Chartered Institute of Marketing and an Honorary Life Fellow of the UK’s Institute of Direct Marketing. He is also on the editorial advisory boards of several academic journals

He has a first class honours degree and doctorate in economics from Sussex University, UK. In parallel to his business career, he has also pursued a full academic career, holding senior posts at various universities. He is now a visiting professor at De Montfort, Oxford Brookes and Portsmouth Universities and teaches economics for the Open University.

Question 1: You are perhaps best known for your innovation and developments in the field of Relationship Marketing. What attracted you to this field, and how would you define it?

I was invited into it, when a client (Mike Wallbridge), who had been at Xerox with me and had moved to BT to manage their below the line communications, asked me to help. He met me while I was training the marketing department of Xerox’s UK operation, and said I talked sense, which was very kind of him. I did know a lot about the marketing of computers (and industrial products in general – I’d worked in the engineering industry), and applied it to learning about the use of computers in marketing. It fitted well with my academic training – my doctorate was on product innovation, and the work I did at university on the diffusion of innovations has always been useful to me, even today. Much of my work since then has been with big users of CRM e.g. financial services, telcos, media, retailing and high tech.

The definition is still the same as it was – with the balance more even between suppliers and customers – so today it would be more about helping suppliers and customers to manage each other to mutual benefit. Of course, we’ve used lots of different ways of expressing the same idea.

Question 2: Why is it so important and what is different about it?

It’s at the core of marketing – perhaps a different angle on it - so it doesn’t need justifying. It’s special because it blends the classic marketing mix disciplines with a range of other areas - IT, customer service, quality, social media etc.

Question 3: What are the differences and similarities between ‘Relationship Marketing’ and ‘Customer Relationship Management’ (CRM)?

They represent different stages of historical evolution. RM was a grown-up version of direct marketing, with much more emphasis on databases. CRM focuses on all aspects of how the mutual relationship is managed, across all functions and throughout the relationship.

Question 4: How do these approaches fit in with traditional approaches to the Marketing Planning process and to Marketing Tactics, such as the ‘Marketing Mix’?

I think they fit very well, but there are still some classic marketers, brought up in traditions such as brand management and market research, and perhaps some sales managers, who don’t value the CRM approach as much as they ought, but the advent of social media is starting to change their minds, even in business to business markets, where customers talk to each other all the time, and are often ahead of their suppliers in learning how to use the latter’s products and services.

Question 5: How will the emergent area of ‘Digital Marketing’ affect things and how can these technique be used to build better, enduring Customer Relationships?

It has revolutionised much of what we do, so it is impossible to consult or teach in this area without strong experience of using the digital approach. There are of course fad elements around, and we’re wary of those, but in most markets, with most customers, their migration to the use of digital communications has meant that we’ve had to use the same channels as them – at a minimum, although the most advanced companies are leading customers rather than following them. At The Customer Framework, we’ve revised all our toolsets to include the latest digital marketing ideas, and are heavily engaged in social media-based CRM work with some of the world’s leading consumer brands. 

This doesn’t mean that all our work has a big digital element, as there is plenty to do in the classic CRM area as well.

Further information:

It covers all our work in the above areas, so please explore the full content.