The New Rules of Marketing & PR

The New Rules of Marketing and PR by David Meerman Scott reveals how the internet has transformed the world of advertising and public relations into an opportunity to reach niche buyers directly with targeted messages that cost a fraction of what big budget advertising used to cost. The average person gets bombarded with hundreds, even thousands of commercial messages a day and most of the time, they ignore them. At least I do anyway. Traditional advertising is so wide and broad that it has become an ineffective way to reach your customers. Big media advertising is still effective for products that have wide distribution and mass appeal; however, it doesn’t work for niche products, local services, and specialized nonprofit organizations. Traditional advertising focuses on interrupting a person and getting that person to pay attention to a message, whereas web marketing and advertising focuses on giving practical information at the exact moment, at the right place, and the right time a buyer needs it. The web doesn’t need to interrupt a person to get their attention, people Google the web and use search engines to visit websites to gain information about a product they are interested in and want to hear reviews about what other people have to say about a company’s product, not what the media has to say.

            Scott provides an excellent perspective on the effectiveness of web advertising but still makes the point that big budget media advertising is still very effective for very large companies and very famous people. It all depends on the company and the products they are advertising to determine which method would work best. Basically, Scott states that there are easier and more efficient ways to inform your audience about your products and the web allows direct access to that. If a small company or average person has something to say, they media will not relay that information and nobody will hear about it. Instead, the internet provides the perfect medium to reach buyers directly. Best of all, it can be done for a very small fee if not, for FREE! To take advantage of the opportunities that the web provides, it is necessary to forget about the old rules of marketing and public relations and realize that one-way marketing isn’t that effective anymore.

            It is important to understand that web marketing isn’t about flashy advertisements and cool sound effects but to understand the keywords and phrases that consumers are using to search for the content that they seek. Companies like Amazon, Netflix, and iTunes are perfect examples. You can search for any niche book, movie, or CD and get informed about what similar consumers also purchased. Most websites give people a place to search for information to solve their problems; however, it doesn’t offer them a place to browse for additional products. These three companies that I just mentioned understand that concept and even take it a step further. They begin to answer questions before the consumer even asks.

            Since the focus of this book is on the new rules of marketing and PR I figured I should include Scotts new list:

            -Marketing is more than just advertising

            -PR is for more than just a mainstream media audience

            -You are what you publish

            -People want authenticity, not spin       

            -People want participation, not propaganda

-Instead of causing one-way interruption, marketing is about delivering content at                                                 just the precise moment your audience needs it

-Marketers must shift their thinking from mainstream marketing to the masses to a strategy of reaching vast numbers of underserved audiences via the web

-PR is not about your boss seeing your company on TV. It’s about your buyers seeing your company on the web

-Marketing is not about your agency winning awards. It’s about your organization winning business

-The Internet has made public relations public again, after years of almost exclusive focus on media

-Companies must drive people into the purchasing process with great online content

-Blogs, podcasts, e-books, news releases, and other forms of online content let organizations communicate directly with buyers in a form they appreciate

-On the web, the lines between marketing and PR have blurred

            Getting people to write about your products on blogs can be compared to getting your products an article on the front page of any newspaper. If you can get hundreds of bloggers to write something about your product, the combined reach can be thousands, if not millions of consumers. Old marketing and PR strategies focused on the wrong things such as getting advertising awards and such. Nowadays, successful organizations focus on news releases, blogs, websites, podcasts, and other content that draws visitors into considering the purchase of their products. Last I checked, winning an advertising award wasn’t the same as drawing potential buyers into the sales-consideration cycle.

"Should You Invest in the Long Tail?"

The article “Should You Invest in the Long Tail?” provides an interesting perspective on the blockbuster “hits” and the niche “misses.” Online access has significantly increased everyone’s ability to find products tailored to their obscure needs which has created the long tail. The article provides evidence that businesses should avoid concentrating on the niche markets and only focus on the blockbuster hits because that’s where all the profits are. After reading the article, the author presented some good points about why businesses should focus on the blockbusters instead of the niches. Obviously the hits are attracted by the majority of the population, which makes high demand for these products. For brick and mortar business, this would and still is the only business model that can provide the most profits. If businesses tried to carry products that are tailored to the small markets, the demand for such products is spread too thinly. The cost of holding that inventory would be too high to be profitable and their simply isn’t enough demand in the local market for those products. This is the reason why that article focuses on businesses pursuing the strategies revolving around the blockbuster hits.

 I am not writing this post to say that businesses shouldn’t operate like that, but, I am saying that I do believe that the long tail of niche products is very profitable for those businesses who can take advantage of having an unlimited online inventory that virtually costs them nothing. By providing endless arrays of products to a market segment the size of the world, which the internet has created, businesses can and do become profitable. Those consumers who navigate themselves through search filters and recommendations find products that suit their individual needs, wants and desires. Those products become a perfect match to those individuals. This creates an ideal experience for those individuals and the internet was able to connect the supply to the demand for that product. Once people begin to navigate away from the blockbuster hits and into the niche marketplace I feel that they would spend most of their time searching for products in the long tail. People get more satisfaction out of products that become custom to a certain niche as opposed to those that purchase products that are tailored to the mass market. I think its experiences like these that keep people away from the head of the demand curve, and focus on the niche markets.

THe Long Tail: A Closer Look

Does the long tail exist simply because the internet has provided a vehicle to promote inferior products to a market that is still dominated by “hits?”  I would have to agree that the long tail does exist because the internet has provided a vehicle to promote inferior products to the market that is dominated by “hits”. This internet can provide an unlimited shelf space that no brick and mortar store can achieve. With the help of search filters, one can easily navigate the long tail to find their niche products. If their wasn’t an internet, businesses would not be able to afford carrying every product because the cost of inventory would be too high compared to the number or items that would get sold. Collectively, all of these niches can add up and make a significant market. Companies can now provide a variety of smaller niches and become a viable entity. When consumers are given the choice as well as the option to travel down the long tail which can focus more on niche markets and products, they will move away from the “hits” that are provided by the economy to the niche products that suit their needs better. The digital revolution has provided consumers with shipping innovations that enable products to reach their intended destination in efficient ways which reduce the cost of doing business. Democratizing the tools of production populates the tail, democratizing distribution creates availability, and connecting supply and demand creates the community where these products can be bought, sold, and discussed with one another.

Does the Long Tail result in Tyranny of Choice, or, Paradise of Choice? I would defiantly have to say that the long tail results in a paradise of choice. For consumers to walk into any physical store they could be faced with the Tyranny of Choice due to the limited shelf space. For example let’s talk about books. Let’s say you go to Barnes and Noble and search for a specific book that you want. Unfortunately, that book was not a best-seller and they do not carry that item. This would give you the tyranny of choice because you are unable to get the product that you really want. The internet enables any consumer to achieve the paradise of choice because you can search through millions of books over the internet and you will be able to find THE book that you are searching for. Some companies print books on demand. This has been an excellent inventory model and comes to be very efficient and cost affective. This gives some companies to virtually carry no inventory and only print books after an order has been received.

What are your thoughts about the long tail concept (provide specific thoughts supported by information from the text or other sources, not a general and amorphous comment)?

The long tail concept can be explained in one word, brilliant. The long tail has been created through the advent of the internet as an effective marketplace. The internet has evolved into the perfect marketing mix; providing every product, at a convenient place, with the lowest price, and the best of all promotion (word of mouth). Every product has reviews about how the consumer appreciates or dislikes any product. Before purchasing, each consumer can read reviews about anything to either make or break the sale. Also, when/if someone purchases a product, there are also suggestions for what similar customers also purchased. This can be an affective form of advertising because it promotes similar products that individuals that focus on that specific niche would purchase. This model is a great form of advertising.

The Long Tail Post

The theory of the Long Tail is truly amazing. Our economy and culture has increasingly shifted from the focus on a small number of hits at the head of the demand curve and moving towards the massive number of niches towards the tail of the demand curve. With the help of the internet and an unlimited shelf space, business can   form new strategies in ways they never could have imagined ten or fifteen years ago. Now, businesses such as NetFlix, iTunes, Rhapsody, eBay, and Amazon have realized the success of providing niche products to the market and are taking over the profits that used to be captured by brick and mortar stores such as Blockbuster (movies), Barnes and Noble (books), and Best Buy and Wal-Mart (music). The idea of zero inventory is every businesses dream, and unfortunately not all businesses can pursue such a strategy. However, the new business models that are revolving around the philosophy of zero inventory are realizing the successes of such strategies. For example, lets talk about print on demand books. Who would have ever thought that this could have been an effective way of selling books? Publishers used/still create batches of books that range up to 50,000 per batch. Depending on what their estimates of demand would be, they would have to guess whether or not they should make more in that batch and chance having too much supply and not enough demand, or risk not making enough books and forgoing profits. Now with the print on demand capabilities, there never has to be an inventory for most book titles. Each book is just a mouse click away from creating something that did not have a shelf life minutes before that click of the mouse. Since there are so many book titles that are not in high demand, it would not be beneficial for anybody to carry all of those book titles that may sell one or two copies a year. However, you multiply that by the huge size of the long tail and you get a market that crushes the top fifty selling books.
Internet sales have been growing and especially this past holiday season. The Coremetrics Holiday Online Shopping Report is proof of that and it doesn't look like that trend isn't going to continue to increase. As more and more people are shopping online, the Long Tail becomes even longer. People are not going to settle for a product because they can't find the ideal product they are looking for in a brick and mortar store. They are going to get on their smartphone phone, lap top, or iPad and become a mouse click away from getting any product they choose.
The three videos that were posted about the Long Tail, two of which by RonAmok and one by Chris Anderson highlight these points in just a few short minutes. RonAmok makes a wonderful point when discussing the double value curve that exists in the market. As mentioned in his video, the value of information is directly proportional to how much an individual needs it at any given moment and it is important to understand that the value of content has to do with the immediate need of a customer.
Chris Anderson makes a great point about the Long Tail when discussing movies that enter the cinemas. Just because these films have it into the cinemas, doesn't make them the hits. Movie theathers are limited to showing about 120 movies each year that represent the so called "hits". However, the number of movies watched outside the cinemas far exceeds those movies any given year. Since Hollywood and high level business executives are creating the head of the demand curve in the movie industry, its clear to make a point in stating that the head of the demand curve in all industries is created by each industries suppliers instead of the consumers- which results in the long tail.    

“Out with the Old and In with the New!” I thought it was very interesting how the definition of marketing changed so much from 1960 to 1985 and again to 2011. In 1960 the definition focused more so on the channel of distribution bringing the products from suppliers to the consumers whereas in 1985 it focuses more so on the actual conception of the product with relation to its price, promotion, distribution, and the product itself and its ability to satisfy individuals (aka marketing mix).The definition of marketing in 2011 now focuses more on creating, communicating, and delivering value to the customer. If the customer does not receive the value that marketing is attempting to create for the consumer then the game is over, it’s a failed attempt at marketing.

I really enjoyed the discussion about the marketing mix with relations to solutions, value, convenience, and conversation. Obviously as consumers we purchase products because we have a need for them. At that moment the consumer is faced with a dilemma or a problem and the only way to solve it is by purchasing a product, which is the solution to the problem. The same holds true when you are sick and go to the doctor. You have a problem (e.g. sickness) the doctor then writes you a prescription (e.g. solution) to solve your problem. After you get the prescription you travel to the pharmacy and pay a price for that prescription. Hopefully the price is worth the value you receive from the medication and the pharmacy should be a convenient place for you to go to.

Response to Four Videos

"What is Marketing" This short clip provides an interesting view of what marketing is. To give a good definition of marketing, he starts out in stating what a market actually is. A market is a place where goods and services trade hands according to the laws of supply and demand. Thus, marketing is a tool that increases the demand for products and services. For every need, there is a product or service that can be consumed to satisfy that need. Since the economy depends on consumption of goods and services, marketing becomes a vital tool to keep the economy from stagnating. As more goods and services become marketed, the demand will increase and provide the necessary ingredients to stimulate demand in the market place. I thought it was very interesting how he brought up the Great Depression and the reason for its occurrence. The Great Depression resulted from having too much supply and not enough demand. Therefore, marketing becomes a necessary component of a prosperous economy and a primary component of a growth economy. "If the economy stops growing, it will crash." This quote alone shows how important marketing is to the economy. Without marketing, demand for products and services declines and when there is too much supply and not enough demand, the market will crash just like a plane running out of fuel.

                                

“A Short Introduction to Marketing” I really enjoyed this clip as it provides some key concepts that are essential to marketing. Marketing assists in meeting the objectives of an organization by ensuring that the products or services are sold to the right market at a price to ensure a profit. The customer value proposition (CVP) is the fundamental premise that underpins all marketing activities. The integration of product, price, place, and promotion (the marketing mix) supports the CVP. In a market there are collections of buyers and sellers where the sellers send products or services as well as communication (e.g. advertisements) to the buyers in the market; in return, the sellers receive money and information (e.g. customer feedback, sales data, etc.) I thought the Chartered Institute of Marketing provided an accurate definition of marketing which is “Getting the right goods, to the right people, in the right place, at the right time, at the right price, with the right level of communication profitably.” However, Peter Drucker states “the aim of marketing is to make selling unnecessary.”  I feel that this definition fits perfectly into the actual concept or idea of marketing. Instead of persuading customers to come and purchase a product or service, the customer finds out about the product and they come to you. This is the best and most effective strategy that any organization can have and should be the goal of any marketing department. Most importantly, marketing is the process of understanding what your customers want, providing them with what they want, and communicating with them the fact that those products and services are readily available to them.

In this video, Philip Kotler @ London Business School provides his perspective of marketing strategy. CCDVTP which means Create, Communicate, Deliver Value, to the Target market, for a Profit. I really enjoyed his view of brand management, product management, and customer management where product management is the process of creating value, brand management is the communication of value to your customers, and customer management is the process of delivering value to the customers. The idea of customer management is to get the customer involved. Phil Kotler ends this clip in a very powerful way in stating as marketers, we want to hear what the customer has to say. We want to meet the customers and known them personally. We want to get the customers help to co-create our products and co-create the advertisements. This ensures that we can effectively communicate with the intended target markets which are the consumers.

Seth Godin video- In this video Seth Godin presents his interesting perspective on marketing and how important it is to be able to spread the word about an idea. Just having an exceptional product alone is nothing without an idea to get the consumer excited about it. I enjoyed his reference to the long tail of marketing when he states that you should not be marketing toward the majority because they are really good at ignoring advertisements but to market towards the smaller percentage of the population (innovators and early adaptors) because they care about your products and they will listen and they will spread the word to their friends, family, etc. I also liked his rationale on how good products are boring. You need to make something fresh, new, and exciting; and you need to find the right people to get excited about it. I enjoyed his example of Silk soymilk and how it was such a success. Put it in the milk section at the grocery store and it was an instant success. 

Response to First Two Articles

The first article by Frederick E. Webster Jr. about marketing management brought up some very interesting topics. It is crucial for businesses to realize the importance of the service part of their product offering because that is what differentiates them from their competitors. Building marketing strategies around customer needs instead of company needs is the ideal. Since hundreds of companies can offer the same product worldwide, how are consumers to choose which company to purchase their products from? The final decision would revolve around a company's marketing strategy. Those companies that can market their products to meet the needs of the consumers have won the battle. Businesses need the ability to articulate a clear, concise value proposition that communicates how they will create superior value to their customers. The core customer value proposition must be based on customer information and understanding of that information. Customers purchase products because they have a need that can not be satisfied without the purchase of a new product. Identifying that need for customers and linking it with their marketing strategy in the main goal of a firm. Gathering, analyzing, and communicating that information is the central responsibility of the marketing department. The fundamental role of profit is not simply to reward shareholders but to ensure the long-term viability of the firm and its ability to attract all of the resource providers necessary to create value with and for customers. Johnson and Johnson did just that in their credo which gives first priority to the doctors, nurses and patients, mothers and fathers, and others who use their products.

The second article by Stephan Haeckel does a good job mentioning the importance of the four pillars of managerial framework:: purpose, strategy, structure, and governance.