Marketing Challenges In The 21st Century
The evolution of marketing concepts in a way explains the dramatic change the marketing sector has seen in the last century. Now, the focus of marketing has on customers were in the past focus was on production and selling. The competition is intense between businesses and the focus is on innovation and building successful relationships with customers. This makes marketing a very tough job these eras and all marketers or firms are facing challenges in one way or another.
In this context, Michael Porter has identified five marketing challenges of the firm’s competitive position.
Porter’s Five Forces Model of Competition
Michael E Porter, a professor at Harvard Business School introduced Porter’s Five Forces Model. Porter’s Five Forces model is a framework that analyzes the level of competition. The five forces are:
The Threat of new entrants: A marketer or business firm is always conscious of the new entrants. The threat of new entrants refers to the easy way a new marketer or firm has a chance to enter a new market. When there is easiness for the new firm to enter the market the greater the completion is and vice versa.
Bargaining power of customers: Buyers have a stake in the business firm. They are powerful when they put their collective pressure on the firm’s offerings. Customers may have more bargaining power when there is a number of the same products in the market and when buyers gather and want to influence the firm.
The Threat of substitute products: The threat of substitutes is also one of the challenges in marketing. A substitute product is one that has similar offerings and advantages to other products. Most of the customers see substitute products as the same as others. For example, internet service providers provide the same speed of net, same gas cylinder shape, and weight, etc. The higher the substitute products in the market, the higher the challenge to the firm stand in the market confidently.
Bargaining power of suppliers: Regular supply of raw materials and other important materials for production is important in the business firm. Suppliers have a dominant effect on the profitability of the firm. If the suppliers are less they may increase the price of materials and they have more power. When suppliers are high firms can enjoy the discounts and shift from one supplier to another.
Competitive rivalry within an industry: The intensity of battle among competitors is another major difficulty the marketer must face. It refers to the extent to which a firm within an industry puts pressure on another, limiting the profit potential. When there is a higher number of businesses along with a variety of offerings, the rivalry is strong and vice-versa.
The other significant marketing challenges in the 21st century are listed as follows:
- Customers are more savvy or informative than marketers.
- Customers are increasingly demanding better quality and reliability in the products and services they buy.
- Customer wants, needs and expectations are changing more rapidly
- Marketers operate in a market where all customers want mostly the same thing
- New products and services are coming to market more quickly than in the past
- Competitors have introduced multiple brands for their products and competition for sales is intense
- Media are being more fragmented and expensive for advertising the products
- Competition is now global
- Competition is well established and entrenched
- Information technology is having a significant impact on business practices
- The accountability of the marketers has been increasing rapidly towards their customers.
Analyzing and understanding the marketing challenges above, they can be aggregated into four significant challenges:
Media have become fragmented, sophisticated, and expensive. Therefore, media planning, scheduling, and planning have become a challenge for marketers. In this regard, budget allocation has become a difficult and challenging task for the marketer.
Almost all competing firms create and broadcast advertisements on various channels and customers watch such advertisements on television for homogeneous and differentiated products and services. Competitors make an effort to present their products and services in distinct ways to attract and motivate customers. These days, it has become a difficult task for marketers to differentiate their products and services through advertisements.
There are unaccountable numbers of brand names in the market for competing products and services. Marketers advertise their products and services for brand recall. But after a certain period, customers may forget the advertisements of the firm. To maintain brand recall in the market, marketers need to use several marketing tactics and spend a lot of money on advertisements, which is a challenging task for marketers.
Every marketer must try to achieve the right positioning for the brand. Brand positioning has become an essential and holistic activity for all marketers. Every marketer wants their product to be number one in the market and sends the message to the customers through advertisements.
Firm’s Responses To Marketing Challenges
The following strategies can be suggested to respond to the marketing challenges of the 21st century.
- Developing marketing plans that are designed to build long-term profitability.
- Developing cogent arguments to protect, or increase, the investment in marketing.
- Develop a framework of marketing strategy that balances the needs of customers and the organization.
- Developing effective strategies that engage those outsides of the marketing firm but were crucial in delivering the promise to consumers.
- Developing the right metrics to monitor progress and provide accountability.
- Motivating others to be passionate about data quality, as ‘fit for purpose’ data is vital in direct, digital, and CRM-based marketing. Moreover, it is important in monitoring performance against marketing goals.