When I teach, I like to begin by exploring on the vanishing mass market, the world of marketing in the 20th century, the world of marketing as we knew it.
I like to begin with an example taken from The Long Tail by Chris Anderson. “Think about the Kansas prairie farmer of the late 1800’s living several hours from the nearest general store, where you could buy a limited number of items, primarily in bulk. Then one day in 1897 the mail brings you your first Sears and Roebuck catalog with 786 pages of everything you could wish. Even in an era of Amazon.com it is astonishing with 200,000 items and variations: 67 kinds of teas, 38 of coffee and 29 types of cocoa. Mind blowing stuff for the rural farm family."
Today, the supermarket represents the very apex of this business model: a highly structured, tightly controlled, hierarchical organization which uses economies of scale to drive down prices and increase demand. Supermarkets have made a science out of the calculation of shelf space, inventory turns, store layout and organization. They offer proximity, convenience, and price.
The supermarket is also the poster child for principles of mass marketing, selling large amounts of the most commonly demanded, some might say lowest common denominator of, goods to the largest swaths of customers. It is the place you go to buy what you know: Campbell’s soup, Coca-Cola, Kraft cheese, or Jolly Green Giant peas. These popular brands are mass produced, pre-measured and pre-packaged, with an easily recognized label and look. Comfortingly you can buy the same bottle of Ketchup in any store that carries the Heinz label from coast-to-coast or even country-to-country. www.popcitymedia.com/
Supermarkets leverage the power of mass media: TV, radio, newspapers and magazines, to appeal to the largest possible audience with massive outlays in broadcast and print advertising. These announce special sales, seasonal purchases and coupons all with the purpose of getting you to buy.
Now consider the Souk. “The term, used to designate the bustling market in any Arab city,” which I am using to describe the market or bazaar found almost anywhere in the world. The Souk is noisy, messy, and chaotic. It is not so much a business, as it is an organizing principle around which a cosmos of local merchants swirl. These homegrown entrepreneurs come together to sell locally raised, grown or hand-crafted products, typically sold in smaller numbers. Product quality, size and price will vary from stall-to-stall and from market-to-market. And customers will bargain for what they want.
The Souk is a microcosm of the village itself, and a place where the community may gather to exchange information, offer an opinion, see friends, or just spend time. It is a place where marketing is done on the basis of relationship, one-on- one, through word of mouth or simply by wondering around.
So to recap:
. Large, homogeneous mass markets,
. where products are sold according to the broadest common denominator of taste
. market of branded products or “hits”
. where the consumer is passive
. the prices are set
. the structure is hierarchical, top down (command and control) and tightly controlled
. where promotion is broadcast over mass media to the greatest number of consumers, where programming has a set day and time
. where sales are based on location and price
. Small, ever-changing small niches
. where goods sold in bulk, measured to order
. market where they may sell a Coke or two, but mostly they offer basic food types: fruits, vegetables, beans, spices, bread, meat
. the consumer is pro-active
. the prices are negotiated
. the structure is flat, democratic,
. where promotion is done by word-of-mouth, one-on-one, anywhere, anytime
. and where sales are based on relationship and price
. and people may come just for a sense of community
Now, which model in your mind is the Internet? I would like to suggest that they both are.
The Web provides companies with an unprecedented level of control, to slice and dice – and measure -- their business as never before, to carve out what they offer for the narrow niche of consumer, to measure, track to his or her response in the most customized way. It is command and control taken to an even higher level, while offering a degree of customization and choice never before imagined.
The Web also provides for unprecedented freedom: chaotic, unruly, uncontrollable and totally democratic. The Web is a place where disparate consumers can find you or your organization, or one another, connect and become a community and even a force to be reckoned. And the beauty of the Web, as with the Souk, is that it is not just for the “big guys” who can pay to be seen and heard. Rather any individual, any size organization, can find a voice to express themselves and be found on the level playing field of customer interest.
Today both paradigms, the Supermarket and the Souk offer a compelling model for how the new technologies can be integrated and used, and we need to understand how to work with both and when and how to apply them. And in this course, that is what we shall do.
Neither metaphor, however, replaces marketing fundamentals. You still need to know who your target customers are, what they want, and how you will reach them. And neither replace the fundamental need to have a strong underlying business model.