Page 23 - MYM 2015

customers bought the product, wanting to satisfy a need.
But how true is that today? Although there’s no shortage of people who seek to make their life more convenient, there’s almost nothing that people lack in their daily lives. Certainly in terms of quantity, but also quality, most of customers obvious needs have been satis ed, while new needs remain hidden.
Despite of that, many companies are still pouring efforts into improving existing products and trying
to communicate their bene ts through mass media. But unfortunately these small quality improvements
are dif cult to be perceived as added value by customers- because they are just upgrades to needs that have already been satis ed. It is not surprising that marketing strategies based on mass communications are not effective if customer needs are hidden and improvements don’t produce added value.
Curiously, marketing in Japan remains almost unchanged since Japan’s high-growth period. There’s no denying that Japan is a developed country, but one wonders if it’s an underdeveloped country in terms
of marketing. We need to rethink emerging economy type marketing that assumes growth based on steadily increasing population growth, and look towards new marketing for mature markets - without being bound by successes in the past.
From Customer-Based To Value-Driven Age
What should marketing for mature markets look like? “Marketing 3.0” holds a clue.
Marketing 1.0 is the model originating from US in the 1950s in which the manufacturing sector is centered on companies via technological innovation. Low- cost goods are created keeping production costs to
a minimum, and basic goods are sold targeting the mass-market. It is the strategy in an age where product feature is the value for customers.
However economic growth of developed countries began to show signs of decline due to the oil crisis of the 1970s; the 1980s were lled with uncertainty. Economic growth’s leading role shifted to emerging countries while demand in developing countries declined. At the same time this was also an era of commoditization of a myriad of goods to customers.
Since customers’ needs and desires were suf ciently addressed, it became dif cult to add value by product itself during this era. Still, in order to stimulate demand,
companies began customer-based marketing beyond product-based marketing. This is Marketing 2.0.
In 1980s the personal computer became a mainstream business, and moreover, the internet was born in the early 1990s, causing further changes in marketing to become sought after. The information gap has closed between companies and customers, and customers have become able to easily compare the quality of products and services, as well as prices. As a result,
it has come to an era where the customers, not the companies, de ne the value brought by the products or services.
In customer-oriented marketing, it is important for the companies to read into the customer needs. For this purpose, detailed market research and further market segmentation were conducted. It showed the shift from the former product development competition to the competition on differentiation, the collapse of business model of mass production/mass consumption, and new arrival of economy with high-variety low-volume model.
The perspectives such as CRM (customer relationship management) and LTV (customer lifetime value) resulted from the orientation to focus on the individual customers. Coupled with the development of IT technology in the Marketing 2.0 era, the companies faced a new challenge to analyze buying behavior of the individual customers and to select target customers to maximize the pro t. Furthermore, the movement on satisfying the customer’s individual needs brought the customer-oriented philosophy, exhibiting the idea that “the customer is always right,” and the requirements for the companies to take careful measures to satisfy such needs.
In Japan’s case, it faced a major economic changeover period known as the bubble economy collapse of the early 1990s. This event could have been an opportunity to drastically rethink conventional-type marketing,
and actually it should have been re-examined. But unfortunately Japan has been unable to create meaningful change.
Companies need to understand that value sought by customers differs depending on the degree of the market’s maturity .Diverse customer needs constantly change. In addition, the further development of IT technology has resulted inproviding the tools for the companies to more deeply engage with customers.
In this period, Marketing 3.0 is necessary. Marketing 3.0 aims at neither product-oriented nor customer- oriented, but at value-oriented marketing.
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