'The Greatest Danger in Times of Turbulence...

by on 14 July, 2006 - 08:35

by: Chris Lawer

...is not the turbulence: it is to act with yesterday's logic. "

I love that quote from Peter Drucker as it describes perfectly how marketing is struggling to adapt to create and deliver value in today's experience-centred, co-creative markets.  Here is a quick contrast between the "old" and the "new" marketing logics:

Old Marketing Logic

• Emphasises value-creation at point of delivery
• Communicates mostly tangible value through attributes of the product
• Focuses on transaction and exchange value
• Can't help but provide asymmetric Information (selective communication of product value attributes to stimulate desired customer response)
• Customers are viewed as passive objects or resources to be acted upon and owned for lifetime value
• Aims to merely satisfy the customer through mixing the firms marketing resources (4P's)
• Manipulates the language and systems of relationship marketing to suit own ends
• Places primacy of firm over customer value

New Marketing Logic

• Emphasises engagement and exchange of intangibles such as skills, knowledge and processes
• Provides "offerings" which generate experiences which create personalised value
• Generates a two-way flow of value between firm and customer, therefore values these interactions as learning investments
• Moves into the customer sphere of "value-in-use" by assisting the customer to derive value from multiple, ongoing interactions with the firm and its products and services
• Focuses on assisting customer to achieve multiple experience desired outcomes, which vary according to unique customer events and contexts
• Develops customer capabilities and makes knowledge the primary source of competitive advantage
• Aligns business partners with the customer's view of value
• Creates mutual alignment and a blurring of roles between firm and customer and the co-creation of value
• Marketing shifts to centre stage as an holistic organising process of value-creation

What is preventing Marketing from making this shift to a new logic? There are several factors, each of which is deserving of a blog entry in their own right. They include:

• The lack of a "new marketing logic" representation in many marketing education and MBA syllabuses
• Separation of strategy, innovation and marketing functions and specialisations
• Marketing's love of strategic planning, SWOT and PEST and the fallacy of strategy-plan-act approaches
• The thrill of the customer chase ("hunter and the hunted") embodied by the militaristic marketing language and mindset of "campaigns", "targets" and "frontline" staff
• The challenge of identifying desired customer experience outcomes, i.e. knowing what customers want and how these vary across events and contexts
• The complexity of creating experience environments and multiple partner management

If you want to read more about the new logic, check out this great series of resources on the service-dominant logic at www.sdlogic.net.

Original Post: http://chrislawer.blogs.com/chris_lawer/2006/07/the_greatest_da.html