The real deal

When Regis McKenna shares his thoughts on the future of marketing, marketers could do a lot worse than sit up and listen. The term marketing guru may be overused, but it's a fair description of McKenna who, in a career spanning over 40 years, has worked with more than 300 Silicon Valley start-ups, including the likes of Intel, Apple (his company developed the original, iconic Apple logo), 3Com, Compaq, Microsoft, America Online and National Semiconductor. Over the years, he has written and spoken extensively on the social and market effects of technological change.
McKenna believes firmly that marketing — in its traditional sense — is disappearing. His last book, Total Access (2002), looked at the need for a shift in marketing from focusing on promotion and branding to providing customers with what they want when they want it, and to facilitating the dialogue between the organisation and its customers. He argued that consumer access to and interaction with the marketplace is replacing the broadcast model and the marketing function is disappearing "into a network of relationships and responsibilities through the value chain". He said the factors driving the global marketplace — production capacity exceeding demand, programmability
allowing for almost limitless choice, highly developed logistics networks, two-way conversations between customer and supplier, and intense competition — mean businesses are now developing their information infrastructure to truly support their customers. For the future, therefore, marketers must manage that new infrastructure and shift their emphasis from creating brand awareness to satisfying customers.
When we speak following his recent trip to Dublin, during which he addressed an ICT Ireland conference on marketing in a total access world, he outlines some of the key factors that have influenced the direction of marketing over the past few years. "Technology has always had a huge impact on marketing," he says. "Mass marketing, which was the major influence on marketing over the past 125 years or so, could only be done if you had mass production. Once mass production came in and you were able to build various types of media on top of that technology — radio and then television — the production methods matched the availability to communicate product information and to show various types of circumstances that influenced people's buying behaviour.
“So the influences on marketing generally come from the outside. Marketing adapts to those technologies and generally uses them. How it's changed is that marketing was really uni-directional. It came at you from a variety of sources — broadcast, print media, billboards and so forth — and there was a huge infrastructure put in place to develop that."
According to McKenna, one of the first factors that fundamentally changed marketing was programmability. "You could not have one-to-one marketing without programmability," he explains. "You could not adapt the production line. The second and even more dramatic point is the internet, which has changed marketing forever, because marketing has become two-way. The only way you could work in marketing before in two-way was if you had focus groups and went out to talk to people. By the time you got their wishes designed into the strategy, business or product, the world had changed. The web put this two-way mechanism in place that allows the communications for marketing to be asynchronous. In this real-time world, marketing is now trying to see what you do every day, not what you say you're going to do.
“The third thing is Moore's Law. This wasn't about how you cram a lot of new functionality onto a piece of silicon. It was really about how you drive the cost down to where the devices that give you access to that network or to those service channels, is virtually free. With a billion people having access to feedback, plus all the other unintentional feedback like on-demand television, marketing should always be tuned in to what consumers are doing. We've shrunk the technology down and it delivers a lot more functionality at less cost. So the value isn't in the device, it is in the services you deliver through the device. That is why technology will continue to get cheaper and you'll see more and more windows where services are accessible.
“The fourth thing is that IT and marketing have converged — that is probably the most important aspect. The biggest complaints of consumers worldwide are poor service and that products are not available when they want them. Despite the advertising, the promotions and the billions of dollars spent on them, it comes down to the fact that the experience of the consumer only occurs once a transaction takes place."
He believes marketing is increasingly split between people who are information smart and those who are involved in more traditional marcomms functions. The latter, he says, do not have as much impact as IT on the marketplace or the business. "Knowing where your competitors are moving in terms of the marketplace will have a far greater impact than doing a focus group or logo," he explains.

Putting pigeonholing in its place
The perceived role of marketing is something that has disillusioned him over the years. "I found that in many of the companies we worked with, marketing had little influence over the whole infrastructure. I was told once when we found out a product was not very reliable that that was not our job. Customer feedback was telling us the product was not very stable or reliable. The marketing executive told me my job was to get it to be successful and accepted. That's when I decided 'this is the wrong business, this isn't solving people's problems'."
One of the challenges of marketing, he says, is to create the drive in the organisation to build products the customer wants that meet or exceed their expectations. "Today, when people look at the most successful companies, the driving force of marketing is generally the CEO, the CIO or one of the Cs," he says, before listing Steve Jobs, Bill Gates and Richard Branson as prime examples.
But he maintains that, to be successful, marketing has to be everyone's function. "Quality was once considered a particular task of an individual, but today it is built into the product. It's built into everything you do.
“Marketing will become an integrator in the future," he says. "At present, we're just playing with all these different toys in marketing. Marketers are using Facebook, they're using blogs, they're using all sorts of things, but in general we haven't seen marketing's role emerge as a clearly defined function in an enterprise that is respected as an influence that can change a product."
He says marketing must redefine itself as an information exchange for learning about the market and competitors, and it must do so within the constraints of new technology. "Delivering products, tracking them online and keeping stock keeping units (SKUs) current on the shelves are essentially done by an IT infrastructure that is increasingly becoming more aware of minute changes in the marketplace. If you don't have that, you can't succeed. So how can marketing run as a function by going next door to the CIO and saying, 'Let me teach you what I need to do in marketing'? I think the new marketers are going to be much more IT savvy. They're not necessarily going to be programmers but they're going to be much more aware of how to use IT as a tool to integrate the resources in the marketplace and the resources within their organisation and that's what will give them more power over the success of products."
He is critical of many of the common practices around branding. "What happens is someone says, 'we really need to create a
better brand here, improve our brand or launch a new brand'," he says. "What do they do? By and large, they deal with all
of the intangibles of the business, because they think brand is a concept, not something that's built inherently into the product
or service."

Brand, what brand?
Forget about brand, he says. "Focus on building your business and building the network that's asynchronous for your customers. Focus on it as a business process and your brand will emerge. Think about your business processes for creating a great experience for your customer. If you divorce the notion of brand from the experience or the product itself, then it has no value.
“Starbucks basically did no advertising at all until recently, and they have shown up on every corner. Their VP of marketing was a real-estate guy. Wal-Mart's success and Tesco's success, to a large extent, is about creating availability, and that is not done by marketing. Brand is the experience of the customer and brand must have a history to be anything. Forty years ago I said the first product a person buys is not as important as the second, because if they come back and buy the product, that means they had a good experience with the first one."
He points out that far too often marketers are more concerned with hype than with the product or service being sold. "I think marketers should be much more engaged in the interface itself. If you want to build a relationship with consumers you have to create consistency; consistency of experience is part and parcel of the service and the product itself."
McKenna's advice for today's marketers is to get out and about as much as possible. "You can't sit around in cubicles and read off the internet," he says. "You have to go out and visit companies to get a feeling of how the world is changing and what new technologies are coming along. I've found that as you engage more in looking at things, you start seeing trends emerging. I like the idea of people visiting the marketplace, because they will hear from their suppliers and customers and see what their competitors are doing. It's a great way to learn."
While he believes marketers are clearly aware of changes in the marketing landscape, he thinks there is a tendency to look at it as a series of applications rather than a more deep-seated change. "They think, 'Here's Facebook, how can I use that to create
some promotion?' or 'Here's the new interactive PDA, how can I broadcast my message to that?', rather than how marketing is changing from a fundamental business process and how it is integrated into every aspect of the business today. I think we need our quality revolution in marketing. How does marketing really become systemic to an organisation? That's where the progress has to be made."

By Grainne Rothery

This article first appeared in Marketing Age magazine.