consumer insights

The Seven Big Problems of Marketing

Marketing has some big problems in today’s economy, ranging from how marketing works in the digital world and global marketplace to coping with exploding numbers of communications channels and disruptive technological change.

The American Marketing Association unveiled what it calls an “intellectual agenda” that identifies seven big marketing problems in the face of ever more fragmented and distracted groups of would-be customers.

AMA CEO Russ Klein says the seven big problems are intended as “above-the-din context” for addressing an increasingly challenging marketplace while maintaining objectivity and an action orientation.

Here are the seven big problems as described for AMA by Bernie Jaworski, Rob Malcolm and Neil Morgan:

1. Effectively targeting high-value sources of growth

Long gone are the days when brands could be one-trick products. Market segmentation is a bigger factor now than ever, which forces more critical choices about what segment to target that offers the best opportunity for a positive return.

After locating the ripest opportunity, brands need to decide how to position products and influence consumer decision-making. That can involve bumper-car competition with other brands that are trying to win in the same segment. Effective marketers call this “demand landscape mapping,” which still is more like the Lewis and Clark expedition than precise digital cartography.

2. The role of marketing in the firm and C-suite

Historically companies have focused on making and distributing products efficiently – the supply side of the equation. In today’s marketplace, consumer demand has become a more dominant driver, which means the marketing department that had been assigned a room down the hall has been summoned to the C-suite.

Company executives must decide how to integrate marketing into organizations weighted toward production. They also need to figure out whether marketing should be centralized or farmed out to individual product groups. There are company culture aspects to consider by switching to products consumers want from products you want to make.

3. The digital transformation of the modern corporation

The Internet of Things is forcing all kinds of companies to go from “dumb” to “smart.” This transition transcends Big Data and social media and goes to the heart of business models, company hierarchies and the consumer interface.

One way to think of this evolution is to imagine brands are going from a world of two-dimensional videos to three-dimensional video games. There is constant, often real-time interaction with consumers and competitors. There is less time to react and a higher premium on being nimble. The marketing department is arguably best suited to be the front line soldiers in this advancing battle.

4. Generating and using insight to share marketing practice

Research has always been a fundamental building block for disciplined marketers, but today’s challenge is a mound of information. There is a lot of data and plenty of analytics, and there also is the potential for overlooking insights gained by direct consumer contact.

The heart of this problem is whether it is better to analyze consumer behavior or actually observe it. Traditional research methods can reveal why a consumer chooses one brand over another and why. It may not reveal daily experience that could suggest an openness – or even eagerness – for a different alternative, a breakthrough product. A key question is to decipher what tools and techniques are more effective at breaking the “insights code.”

5. Dealing with an omni-channel world 

Even the most efficiently run companies have to face a world of chaotic communications and channels. Nothing illustrates this point better than the surging rise in online sales. A brand not only has to worry about shelf space and in-store promotions; it also has to contend with how to sell on Amazon. Bigger brands need to sort out the brick-and-click interplay. 

Brand marketers must engage consumers on what to buy as well as where to buy it. Many brands already have parallel marketing universes online and in-store, which often includes the option of buying online in a store for merchandise not in local inventory. However, this seems like just the beginning, not the end scene of effective omni-channel marketing.

6. Competing in dynamic, global markets

Globalization is usually described as manufacturing products offshore in low-wage countries to cut production costs. The recent release of the so-called Panama Papers reminds us that capital flows across international borders are a very big deal. But we may just be witnessing a burst of a different kind of international competition with the seemingly sudden introduction of brands we’ve never heard of before.

It wasn’t that long ago when Samsung and Kia became recognizable brands in our marketplace. Expect more. At the same time, wider arrays of U.S. brands have spread their wings and flown on to foreign markets, raising questions about supply chains, unfamiliar regulation and the cultural competency of marketing. The marketing role must take on a deeper role to perceive how a brand can withstand foreign competitors at home and abroad, to take advantage of global opportunities and to see trends as they emerge, not after they turn into tsunamis.

7. Balancing incremental and radical innovation

“Firms need to compete in two time periods: the present and the future.” How can companies achieve the ambidextrous skill to manage in dual universes that may be hugely different? More important, how will the customer experience evolve, especially given the growth of mobile devices that can be used to compare prices, search other distribution channels and pay for goods?

AMA suggests this balancing act will require thinking more about platform products, franchises and product ecosystems. Concepts like “fail fast” may become standard operating procedure. Are there models to emulate successful reinvention and what metrics matter for innovation? How do you go beyond product innovation to organizational, financial and marketing innovation?