Now marketing has entered the new millennium. The challenges businesses face in marketing activities have increased. There was a time when exists only a few companies where customers are influenced by companies’ products but now companies’ products are influenced by customers’ preferences.
With the call of the digital era, globalization, and the emergence of a global organization like WTO, the economy has become one village. And, global products have easily become available everywhere.
Here, we will discuss some common marketing challenges in this 21st century and some strategies you can adopt to overcome these challenges.
Challenges in Marketing
Following are the marketing challenges your business may get from the customers and competitors.
Consumers Expect Higher Quality
Consumers today expect higher product quality from companies. In this 21st century, marketing and selling product is not easy as it was. Now people have become quality-focused, they ignore low-quality products, and they even pay a higher price for quality products.
Expect Better Service
Only delivering products to the consumers does not make them satisfied nowadays they expect a variety of services attached to the product.
Providing better service has been a challenge as well as a benefit for companies. Challenge in the sense that it is hard to offer different product-attached services that may affect the profitability of the product. And, benefit in the sense that providing better service increases the chance of achieving a competitive position and advantage.
Now customers see all brands as similar in terms of attributes and end benefits. It led the marketing firms to work very hard to convince customers that they are different than other companies and that their offerings have greater benefits than others.
Decreased Brand Loyalty
Due to the presence of various similar types of businesses and products consumers show greater brand switching behavior. As a result, consumer loyalty and retention have become the major challenges for marketing firms today.
Internet Based Information
Today people are increasingly using the internet and has become their prime source of information about the company and products. They chat with current and past users for product-related information. This has substantially decreased the value of mass media marketing.
Consumers are now exercising their purchasing choice very wisely. Since the internet is available they have substantial information about the company and products. They come to a buy decision only after a careful evaluation of product alternatives and outlets. This has many high-cost retailers in difficult situations.
Increased Price Sensitivity
Although the customers are quality sensitive the availability of similar products also made them think about the price factors. As such they have become more price sensitive and search for the price value. A slight price advantage may make customers switch products or brands.
Marketing companies today face fierce competition from a number of global as well as domestic sources. Moving goods and services throughout the world is now relatively simple to globalization.
Franchises, licensing, and other official strategic alliances also introduce new kinds of rivalry. Due to this, the threat and uncertainty levels in the market have intensified.
High Promotion Costs and Low-Profit Margins
Over the past ten years, advertising and other promotional efforts have grown significantly. While their operating costs have increased, marketers must engage in strong price competition. This has significantly lowered their profit margins.
Change in Retail Businesses
Small store-based retailers are being replaced by large retail outlets such as departmental stores, supermarkets, megastores, etc.
Porter’s Five Forces
Porter’s five forces are considered an effective tool to understand the competition in today’s marketplace. His five forces include:
- Threat To New Entrants – The higher the chance of entering new businesses the more threat to existing businesses.
- Threat To Substitute Products – The availability of similar types of products increases the chances of customers shifting the brands.
- Bargaining Power of Customers – When customers are large and substitute products are available they can have a great influence on companies pricing factors.
- Bargaining Power of Suppliers – Fewer suppliers more buyers (companies), suppliers’ power is high, and vice versa.
- Competitive Rivalry – The more the rivals (competitors) the more intense battle will be.
Companies’ Response To These Marketing Challenges
Challenges are not always bad companies always have a way to get benefits from them if not they can always reduce their negative impacts. Following are some of the strategies your firms can use to overcome these marketing challenges.
Customer Relationship Marketing
Now firms are refocusing their business process from transaction marketing to relationship marketing. Your business focus should be on creating long-term relationships with customers and achieving customer satisfaction, retention, and loyalty.
You should define the market segment more accurately and specifically and operate within the boundary of the defined segment. Because the concept of selling to everyone has changed to selling to a well-defined target market.
Whenever and whatever possible your business should try to individualize and customize the offers and messages to customers.
Use Customers Database
Today marketing firms access, collect and store and use personal data about customers’ demographics, psychographics, media graphics, buying habits, and preferences.
This has given immense power to marketers to understand their customers more accurately and pinpoint their marketing efforts on a customer with a very high success rate.
Integrated Marketing Communication
Brand image and value have become very powerful in the 21st century. Marketers should blend different communication tools to project the brand image and personality of their efforts.
Partnership marketing will let your business collaborate with another business where both businesses can benefit from the marketing strategies implementation. However, you should choose a firm that has a great customer source which is your target market, and the ability to collaborate effectively.
Now businesses are increasingly emphasizing reorienting and retraining all company staff including CEOs and other departments employee to understand customers’ needs and preferences. The concept of every employee being a marketer is being adopted across various marketing organizations.
Make Information Based Decision
The decision made on intuition based does not get the desired results the decision should be based on hard data (facts) and information about the marketplace.
Adopting the methods and processes of most successful companies (Best Practice) for creating and delivering offers has gradually improved the quality of services of marketing firms and made them more competitive in the global markets.
Since globalization is enabled, marketing strategies and product decisions should be based on domestic preferences as well as international market preferences.