Effective marketing management has always been grounded in a company’s ability to successfully navigate and harness the power of marketing’s four Ps.
More often than not, if marketing can accurately decipher what their consumers want, how and where they want it, and the proper vehicles and messages to communicate the end benefits and stimulate purchase behavior, then they will likely experience at least of modicum of success in the marketplace.
Greater success, however, is dependent not on understanding what consumers want today, but rather, what they are going to want tomorrow.
Since technology has enabled consumers to have more instantaneous access to information than ever before, they have become smarter and more thoughtful in their deliberation regarding products and services they choose to buy. Furthermore, competitive intensity continues to escalate for market share, especially in more mature product categories where overall growth is hard to come by. Finally, cumbersome manufacturing, distribution, and selling processes, particularly in mature categories where the large companies are the majority, make it difficult for companies to properly predict and react to changing trends and adapt their product offerings and benefits to align with them.
While these challenges do create complications, marketing/product managers can take several actions to not only alleviate them, but to also get a leg up on competitors who are unable or unwilling to follow the proper steps. In order to succeed, marketing managers must become students and advocates of "marketing foresight." Marketing foresight is the understanding that strategy and planning must occur with predictive and future developments in mind, and with the knowledge of how much lead time is necessary to hit the sweet spot of consumer demand.
In order for a company to develop and plan a highly successful marketing strategy, it must do so with various lead times, depending on what they want to alter (see chart, above). Answers to the chart's questions are rapidly changing, and what may help a company win today may be outdated by tomorrow. So how can a company effectively get to these answers in a structured, scientific, and reliable manner? For our purposes, we’ll use "future customer" and "customer need" as examples.
Assessing a future customer target is a function of determining what the future consumer landscape will look like, and how their fundamental needs will change over time. A "need state" is an intersection between what a consumer wants and how they want it delivered. Understanding how this will evolve is imperative in sustaining a tangible competitive advantage. Executives and marketing managers can follow a simple three-step process to solve for this:
1. Identify and quantify consumers and need states today: It all starts with analyzing the market as we currently know it. However, doing so requires a multifaceted, comprehensive approach. It’s not enough to look at sales and consumer demographic data. It’s important to segment the market based on meaningful and practical criteria, as well as quantifying impact of consumer needs and drivers of choice.
For example, through consumer research in a particular product category we may see that a certain consumer segment (based on demographics, attitudes, or behaviors) may be making her product choice 60 percent based on taste, 30 percent based on convenience, and 10 percent based on health concerns. This understanding allows us to quantify the size of taste as a preference driver of choice in the category, and cross reference it with more traditional consumer segmentation criteria.
2. Identify and assess impact of future growth drivers: In order to determine what will happen, as opposed to what already has happened in the marketplace, it’s critical to assess trends and drivers that transcend a particular product category and are accurate reflections of how consumers are changing the ways they think and behave. This can be done by analyzing trends related to demographic, social, cultural/lifestyle, and economic dynamics, and identifying metrics that successfully capture the spirit of these trends (e.g., GDP growth, percent of consumers who own smartphones, etc.), which can be an enabler to step 3.
3. Align product category to trends and look forward: Using a set of advanced statistical analysis, it is then possible to connect trends to a particular product category, forecast category growth, and quantify impact of this growth as a function of changes in consumer needs. This analysis gives management the intelligence and firepower to make better and more impactful decisions regarding future customer focus, as well as decisions regarding product messaging, positioning, and even innovation.
In summary, the more a company knows about how its consumers will act in the future, the more impactful its decision making will be today. Only by adopting and practicing the discipline of marketing foresight can a company execute this effectively and capture the benefits of this approach.