By: David Soberman & Dilip Soman

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According to the editors of Flux, in the last few years the landscape on which firms interact with customers is in a state of flux. Concurrently, the cost of collecting, storing and analysing customer data is dropping, and deep dive segmentation is now easier than ever.  Consequently, we need tools and techniques to address this flux. This book is a collection of essays, studies and manifestos brought together by the editors at the Rotman School of Management in Toronto. Join us for the next 10 minutes as we summarise some of our favourite parts.

Losing Control and Loving It, by David Dunne

Many of us will be aware of the classical approaches to marketing:

• The three Cs: Customer, Competition and Company.
• STP: Segmentation, targeting and positioning.
• The four Ps: Product, Price, Promotion and Place. 

Web 2.0 has turned much of this on its head. Take segmentation. As consumers have become more widely experienced and knowledgeable, the task of segmentation has become more challenging.  With the power of social networking and group sharing, the consumer is not just an independent entity to be served but also an influencer of others.  Consumers no longer belong to a single demographic set but to multiple tribes driven and determined by their interests, their peers and their lives both on and offline.

Therefore when a marketer takes a product forward they need to think beyond demographic influences and consider other factors such as a product’s innovative and viral capacity and the inclination of consumers to blog or tweet about it. This is not just pertinent to one tribe. It’s equally critical to be aware of how this tribe may influence another and vice versa.

Positioning is equally affected. In the classic model, positioning is what you do in the mind of a prospect. Now however, the advertiser is no longer the driver. Positioning is now more a hope that the end result is what is desired, and a realisation that the conversation between consumer and advertiser may lead anywhere... not just to where the advertiser wants. Mass marketing is dead. Long live me – marketing.

The marketing of today is all about the creation of meaning for the individual: a symbolic meaning associated with the product. In the world of Web 2.0, brands have become community property influenced from any direction by consumers, non-consumers, competitors, employees, distributors and more.

Dunne gives us three pieces of advice:

• Lose the illusion of control. Lead the discussion but don’t control it.
• Monitor your products' on-line presence.
• Engage your customers transparently, rapidly and honestly. Relate to them as people not targets.

Memory, Persuasion and Decision-Making, by Andrew A Mitchell

When we think of a brand, we think not only of the brand itself but all of the information linked to it.  When we used it last was it good or bad? Is it associated with pleasure points or pain points?  Does it align with other desirable or influential objects?

For example, the feeling of fear you experience when you see a wolf show its teeth invokes negative associations, so any product with such alignment can trigger an equal reaction. Why else are kittens used to promote softness and gentleness? Such associations may also be formed from an advertisement. If a consumer likes an advertisement they are likely to then associate the good feelings to the product as well.

When exposed to an advertisement, a consumer can react actively or passively. If they take an active role, they will consciously process the information provided and elaborate on it by extending their own thoughts — either agreeing or disagreeing with what is suggested.

If they agree, this additional information will eternally be associated with the product. If they disagree, then no added benefit is made. If the consumer takes a passive role, some information from the advertisement may become associated, but more at a subliminal level. Again kittens and softness align.

At any given point in time the information stored in a consumer’s memory will vary as to its accessibility. Some information is accessible because we are frequently exposed to it. The same thing happens when we are exposed to an advertisement. If we are able to immediately identify the brand, all associated information is accessed.

However if a different brand is identified, all positivity from the advertisement becomes associated with the second, incorrect brand.  This is amplified by the consumer’s willingness to know more about the product. If they have an appetite for knowledge, all positivity is enhanced, if they have less of an interest then passing on the information is more difficult.  In other words, the memorability of an advertisement is not guarantee of its persuasiveness.

Marketing Management when Facing Forward-looking Consumers, by Andrew T Ching

As information technology improves and becomes more accessible, it’s much easier for consumers to gather information and spend time thinking about how they would benefit from a product. These are forward-looking consumers.  When we see a 2-for-1 offer in a store for something we use regularly, it’s often the case that we will stock up for the future. We are looking forward.

When a new product enters the market it takes a while before it becomes established. One of the reasons is that consumers are uncertain of its quality. Due to risk-aversion they may not want to try it out. This is when free or discounted samples can be introduced. But how many and to who? The answer depends on what consumers think about the value of experimentation.

If they are forward looking they will have personal incentives to experiment with a new product.  If the product is exciting and of high value, then they can enjoy greater benefits and like Gladwell’s Mavens from The Tipping Point, they can pass the information on to others. If it fails to meet the mark, then only a little has been lost. No loss of status.

If most consumers are reluctant to experiment we may want to design our advertising in a way that informs the consumer of the facts they would have ascertained had they taken the risk. On the other hand, if they are experimenters then developing a differentiated brand is more beneficial.

Just Imagine: The Role of Visualisation in New Product Evaluation, by Min Zhao

With new product failures as high as 80%, it’s important to have our eyes and ears open for ways to reduce the risk of failure. The reluctance to accept new products can be attributed to the learning cost associated with new product adoption and consumers underestimation of the value it  brings.  This is the “what’s in it for me?” factor.

A key method employed with success is to structure marketing campaigns that help the consumer learn about the benefits and features through visualisation, For example, without actually using the product, consumers can be guided to mentally experience the new product – say a tablet PC – and to visualise where it can add value to their daily activities.

In doing so, benefits can become intrinsically associated with the product, leading to a greater desirability of the product.  If this is done well, even product release delays can have less of an impact as the desirability grows with lack of access.  The successful release of each iteration of the iPhone is testament to this benefit.

When people consider events in the future, they are more likely to be focused on overall benefits and neglect process related challenges. Therefore if our product has an operational benefit, it’s worth asking the consumer to visualise how the product would fit into their daily life — thereby reducing any potential gap between expectation and reality at launch.

Asking people to visualise process simulation is most effective when evaluating familiar products: because we already have a benchmark comparator. The opposite is true for novel products, as asking consumers to evaluate how they would use an unfamiliar product will tend to have them focus on the associated learning curve and challenges to adoption. People tend to give more weight to negative information and consequently bringing challenges to their attention is unproductive.

People are also more likely to identify benefits of visualisation when their personal thoughts are sought.  We are always more likely to think of the benefits to ourselves and the negative impact on others. Therefore any visualisation exercise needs to be internalised. 

Similarly, any visualisation premise should be forward looking not backward. For example, if we asked a business executive to visualise how they may have benefited from the use of an iPad on their last international trip they may identify some benefit, but are more likely to note that they did all right with what they had, and the new tech is not really necessary. 

Because people think of past events in a more detailed way and future events more abstractly, the purpose of visualisation exercises need to be well thought out to confirm expectation rather than unstructured and visceral.

How can different types of visualisation be employed in marketing practice?  Through interaction with salesmen, in TV commercials, in printed advertisements or even through product descriptions on product packaging. Whatever channel, visualisation needs to be made easy, because the more difficult the more negative the associations will be.

So there you have it, just a few of the many excellent approaches in Flux. To discover more, go buy the book!