Marketing 4.0: All About New Mindsets and New Approaches

Marketing 4.0: All About New Mindsets and New Approaches

Marketing is all about connecting with the customer. And in today’s marketplace, customers are changing. Their needs, demands, wants, attitudes, mindsets, behavior, habits, and approach to consumption and consumerism are changing — drastically. Especially given the rapid change not only in technological development and tools, but also their adoption into normal everyday life, marketing is — or needs to — change along with the times.

The changing customer base and its impact on business

Many consumers now demonstrate marked differences from the traditional customer. The latter is more predictable a creature of habit, if you will. The former is more socially aware, and thus often more responsive to socially responsible consumption of goods and services. Having more information at their fingertips, many customers are also much more informed and much more discerning, giving them more confidence — and also less inclined to blindly consume spoon-fed information from brands and companies. This means they are the new drivers for growth; they now have a bigger say (especially in certain business processes) in the way companies will evolve and more forward.

Millennials may seem like an overused term (especially in marketing) nowadays, but there is no denying the importance these customers have on the way companies do business (and develop marketing, for that matter). Millennials are soon poised to become the most dominant group in the customer base, eventually and slowly replacing the traditional customers that companies are used to interacting with.

Keeping this in mind, brands should be more conscious and wise in the way they interact with their clients and customers. Part of this is developing marketing that does not lose touch with customers; marketing that the customers of today can relate to. Companies’ survival will thus be contingent on better understanding this new crop of customers, as well as how the current environment — one that is largely digital in nature — factors into how these customers think, behave and consume. And thus, Marketing 4.0 was born.

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The evolution of marketing — 1.0, 2.0 and 3.0

But you cannot talk about Marketing 4.0 without tackling what came before. Marketing 1.0 was largely tactical and the most basic, born out of the manufacturing boom in the 1950’s.

But the crisis in the 70’s and 80’s created Marketing 2.0, which is also called relational marketing. Here, consumers started becoming more discerning and smarter in their spending (given the economic hardship prevalent at that time), meaning companies needed to find things customers could relate to in order to prompt a positive, beneficial response. Marketing departments now classified customers through basic profiling, and companies were beginning to understand the importance and impact of customer loyalty, engagement, and advocacy. As such, companies also needed to attach more value to their goods and services in order to attract more customers.

The evolution of the old approach gave birth to Marketing 3.0, where the objective was to meet both the rational and emotional needs of customers. It’s also called the “appeal to emotion,” or “emotional marketing.” This emphasized the connectedness of customers and tapped into the emerging trends of a more technologically-savvy world. As opposed to the two previous approaches where the market was seen as product driven (Marketing 1.0), mass market with smarter customers (Marketing 2.0), Marketing 3.0 saw customers as people, instead of just segments. Personalization and customization were the “in” thing, and companies began to see customers as individuals as opposed to faceless characters and consumers. Marketing 3.0 also recognized the collaboration and interaction between customers and by extension, acknowledged the power of reputation and word-of-mouth.

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The world — and more importantly, CUSTOMERS — are changing

Globalization, socio-economic and even political changes all around the world have drastically transformed the market and environment companies and brands now operate in. By extension, that also means that individuals’ purchasing and consumption behavior, as well as the mindset and reasoning behind that, has also changed. Their attention spans are shorter. They have much more options, as competition across all industries is at an all-time high. That means at the drop of a hat, a brand that fails a customer’s standards — regardless of how “established” and big they are — can just as easily lose that customer to a smaller competitor.

Taking all that into consideration, there is a consensus among marketing and business experts that a change in approach is needed in order to adapt to the times. An article by McKinsey & Company, a major management consulting firm, says, “Typically, a total market now comprises a series of submarkets, each with its own characteristics and each demanding a different sales approach. For most companies, it is a gross error to develop a marketing program aimed at the “average customer.”

Furthermore, AJ Agrawal, CEO of Alumnify writes in Inc. that traditional marketing strategies are much less impactful and effective than they once were. He adds, “Without practically limitless data online, customer reviews, and countless vendors to purchase from, the purchasing power is in the customer’s hands more than ever before,” leading to a lot of marketers’ campaign budgets “going to waste.”

The upside is there is an entirely new approach to marketing, one that opens a lot of doors and opportunities. Especially for early adopters who adjust to this new approach effectively, there is the chance to gain market share and tap in to markets that were previously neglected by the old approach. And that is Marketing 4.0.

Enter Marketing 4.0

This new approach to marketing was developed by Professor Philip Kotler, who wrote Marketing Management: Analysis, Planning, and Control, widely known as the “marketing bible” of sorts, way back 1967. The book is now on its 15th edition. There’s no disputing his knowledge and experience in marketing, which led him to come up with Marketing 4.0.

His book about the subject, “Marketing 4.0: Moving from Traditional to Digital” says that customers are changing, as they have less time and attention to devote to a brand, and they have so many options to choose from.

At its most basic, Marketing 4.0 recognizes how integral digital technology is into today’s society, and by extension, into the way customers consume products and engage with brands across all industries. The Marketing Journal cites things like mobile internet, the internet of things (IoT), cloud tech, and 3D printing as factors that are changing the way business is done in this modern age.

But in the same vein, Marketing 4.0 also acknowledges that customers still appreciate a balance of offline interaction with brands and companies. It emphasizes the need for marketing initiatives by companies to span a plethora of mediums of communication — multi or omni-channel, if you will — in order to engage with customers. It’s all about connectivity through various mediums.

This new marketing approach also factors in many consumers’ growing need to also make socially-responsible choices in the way they consumer and avail of goods and services. Marketing 4.0 shows the need for marketers to balance the immense power of technology with a genuine effort for a “human touch” while also being socially-responsible. The multichannel mindset also means that customers can continue to engage with companies even after a point-of-sale, meaning that a business should always be on their toes every time it connects with a customer, as a negative interaction even after a sale is made can have a significant impact on the company.

In addition, Marketing 4.0 introduces the concept of a customer community of sorts, where the traditional linear approach of company to customer is no longer valid. Customers have a more direct influence on a brand’s direction significantly due to a more intimate interaction through digital technology. While customers were important in previous marketing approaches, Marketing 4.0 emphasizes the shift in power to customers, as opposed to the traditional way of marketing that essentially talked down to customers. Customers also directly engage with brands more through efforts like customer journey mapping, where actual customer experiences are used to gauge and adjust certain operational aspects of a business or brand. Marketing 4.0 stresses the need for companies to dig deep into what drives and motivates customers.

In Marketing 4.0, brands also need to differentiate themselves from the competition in a very distinct manner. Not just in product, but in character and persona as well. Brands need to get customers to relate to them, and vice versa.

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A change in mindset is required

Marketers need to detach themselves from the old, traditional way of getting customers’ attention. The adage “tried and tested” no longer holds, as market forces change, and customer mindsets, attitudes, approaches, priorities, personalities and habits have also evolved. Marketing 4.0 urges companies to recognize these current forces, along with the power, influence and scope of digital technology to catch up and retain — or better yet, gain — market share.

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