"The greatest danger in times of turbulence...

...is not the turbulence: it is to act with yesterday's logic. "

I love that quote from Peter Drucker as it describes perfectly how marketing is struggling to adapt to create and deliver value in today's experience-centred, co-creative markets.  Here is a quick contrast between the "old" and the "new" marketing logics:

Old Marketing Logic

• Emphasises value-creation at point of delivery
• Communicates mostly tangible value through attributes of the product
• Focuses on transaction and exchange value
• Can't help but provide asymmetric Information (selective communication of product value attributes to stimulate desired customer response)
• Customers are viewed as passive objects or resources to be acted upon and owned for lifetime value
• Aims to merely satisfy the customer through mixing the firms marketing resources (4P's)
• Manipulates the language and systems of relationship marketing to suit own ends
• Places primacy of firm over customer value

New Marketing Logic

• Emphasises engagement and exchange of intangibles such as skills, knowledge and processes
• Provides "offerings" which generate experiences which create personalised value
• Generates a two-way flow of value between firm and customer, therefore values these interactions as learning investments
• Moves into the customer sphere of "value-in-use" by assisting the customer to derive value from multiple, ongoing interactions with the firm and its products and services
• Focuses on assisting customer to achieve multiple experience desired outcomes, which vary according to unique customer events and contexts
• Develops customer capabilities and makes knowledge the primary source of competitive advantage
• Aligns business partners with the customer's view of value
• Creates mutual alignment and a blurring of roles between firm and customer and the co-creation of value
• Marketing shifts to centre stage as an holistic organising process of value-creation

What is preventing Marketing from making this shift to a new logic? There are several factors, each of which is deserving of a blog entry in their own right. They include:

• The lack of a "new marketing logic" representation in many marketing education and MBA syllabuses
• Separation of strategy, innovation and marketing functions and specialisations
• Marketing's love of strategic planning, SWOT and PEST and the fallacy of strategy-plan-act approaches
• The thrill of the customer chase ("hunter and the hunted") embodied by the militaristic marketing language and mindset of "campaigns", "targets" and "frontline" staff
• The challenge of identifying desired customer experience outcomes, i.e. knowing what customers want and how these vary across events and contexts
• The complexity of creating experience environments and multiple partner management

If you want to read more about the new logic, check out this great series of resources on the service-dominant logic at www.sdlogic.net

Comments

[James Thomson]

great clear analysis - and you are so right to say that most points deserve a blog entry of their own. I like, most, the reference to blurring; there is convergence all over the place and it upsets the status quo. I am still not suprised that (1) 'what we know best' ie old marketing truths, (2) what we have physically invested in (ie these systems and these old alliances) alongside good old industrial inertia must hold back change. Likewise significant change tends to be generational. Old dogs, old tricks kind of stuff at the top of many companies.

Looks to me that web 2.0 (or social media) tool consultants are just like the older more mainstream Change Consultants. My conclusion is that we are moving into an age of greatly accelerated WOM marketing where the effect of this acceleration will change various balances and require a new understanding from old marketing ideals. The interim will be a disruptive and confusing blurring - especailly for many established businesses.