As Industry 4.0 and the shared economy juggernaut rolls on, the rules of the marketing game are evolving too. The fundamentals of understanding the customer and providing better value remain unchanged, but the how and who in the value creation and delivery process are no longer a given. Industry boundaries have long since been blurred, customization is a hygiene factor and customers increasingly look for seamless experiences instead of discrete products and services. New marketing mantras are needed to play this game of Disaggregation, Connection and Integration.
As platform economies rise and IoT penetrates further, it is the eco-system which will rule and not individual players. Marketers need to figure out where they will fit in this eco-system and how they will connect to other partners. While on the one hand marketers can offer integrated solutions, on the other, they are also disaggregating products/solutions to allow for customization and integration with other elements in the eco system.
The 1st Mantra- Let the customer choose how they wish to partake your offering.
In order to do so, you have to break your product and services into discrete units much like Lego blocks which can be combined with similar blocks or with different blocks to create new structures.
The customer may buy your complete offering- your products, installation, service et al or may buy a part of the product alone or maybe the product and the service leaving the installation to other experts. As a restaurant owner I may provide the customer an incredible dining experience controlling the end to end process of raw material selection, cooking, collecting orders, presenting, serving and billing. Alternately I can disaggregate each element in this journey and give options to the customer. The customer then decides in which part/s of their journey do they wish to engage with my brand. I can partner with other players such as cloud kitchens and delivery apps at appropriate points in the customer journey. The customer experience still needs to be seamless but each player now participates in only a part of the journey. My access to customers may increase but my control over the entire customer experience will diminish. The 2nd Mantra – Find ways of identifying and influencing the right set of partners in the eco-system.
It is only with the right set of partners both from within and outside your industry that you can ensure superior value and a good brand experience for your customer. There has to be synergy and matching expertise to build relationships within the eco-systems. Diversity of players also ensures increasing the value and scope of the eco-system. For example, Legrand, the global specialist in electrical and digital building infrastructures, is working towards gradual incorporation of artificial intelligence (AI) technologies into its connected solutions and their compatibility with partner solutions such as Amazon Alexa, Google Assistant, Apple Siri and Microsoft Cortana. In the United States, Legrand is working on a behavior anticipation project with its technology partner Ivani. This tie up can helps switches offered by Legrand anticipate the user’s routine by observing the consumer’s behaviour over a period of time. Such collaborations can lead to many applications for housing, security systems, hotels, etc.
The primary assets in a platform economy are information and interactions with the focus being on decreasing barriers to production and consumption. This is in sharp contrast to the focus on controlling resources over a linear value chain in a traditional pipeline economy. The 3rd Mantra- Increase the flow of information and interactions in the eco-system
Information is power but this power is multiplied when information and resources are pooled within the eco-system. Better information flow between suppliers, producers, technology partners and customers ensures better solutions which in turn lead to high customer satisfaction. Customers find greater value in the eco-system and pull in other customers expanding the eco-system. As the network expands more players join in, further expanding the eco-system. AI and IoT play a key role in enhanced connectedness and easy flow of information. Amazon supports its smaller vendors with product selection and display based on their expertise and insights from customer data. Legrand trains its partners and promotes interoperability, enabling third parties to deliver services by means of Legrand’s solutions.
As the eco-system grows maintaining balance is important. The virtues of the platform economy can diminish significantly if platform participants defect and start competing with the platform itself or if some players start dominating the eco-system damaging the symbiotic relationships. As the dominant player starts dictating terms, or withholds critical information, other players are squeezed decreasing the overall value in the eco-system and putting a question mark on its sustainability. Recent cases of strikes by restaurant owners against platform owners/ delivery apps like Zomato and Swiggy and protests by cab drivers on the Ola and Uber networks are cases in point. The entire eco-system has to grow profitably for the system to work. This not only means that the players be fair it also means that the vulnerable members of the eco-system be protected. For example when Airbnb’s hosts faced problem of thefts, Airbnb stepped in and introduced safety features for the property owners, including property insurance which was not part of their original value proposition. Similarly due to customer safety concerns, cab aggregators have been forced to install alarm buttons in apps and provide emergency contact information.
As the eco system expands and number of players and customers grow, the system becomes more efficient but also begins to lose the safety net of personal connections. As many unknown people are connected in the network there are risks on the buyer as well as the seller side. Therefore reviews and reputation management become critical. The connectedness of the network can serve to amplify any small mistake in any one part of the eco-system having a damaging impact on more than one player. In this context, data mining and social listening become powerful tools helping marketers stay connected to the pulse of the customers and enabling corrective action in real time.The 4th mantra- Manage reputation and build trust
The platform providers have to identify and work towards mitigating risks as the platform evolves. Sampler in an article in the MIT Sloan Management Review (2018) states that matchmaking, regulating and arbitrating are all key functions which platform players need to perform in order to grow and access new markets.
There are expected to be 75 billion connected devices by 2020 and as devices talk to each other more and more, marketers too need to reach out and connect beyond their traditional boundaries.Views expressed in this article are personal and do not reflect the views of the organization.-Dr. Ruppal W Sharma, Marketing Professor and Head of SPJIMR Delhi Centre
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[This article has been reproduced with permission from SP Jain Institute of Management & Research, Mumbai. Views expressed by authors are personal.]