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McKinsey On Marketing

A McKinsey Quarterly blog post on The Changing Face of Marketing contains the following:

“Change is the dominant fact of life in every business today. And the ability to master and exploit change has become one of the most sought-after management skills. This is particularly true in marketing, where the very tempo of change is constantly quickening.”

In a section titled The Dominance of the Customer, the author writes:

“The need to understand and anticipate future customers is bound to become even more essential than in the past, because the end users of almost every company’s products are shifting in makeup, location, and number at an ever-increasing rate.”

The author goes on to ask readers to:

“Consider a few of the changes in the nature of consumers and markets: 1) Sociologists and marketers agree that people are becoming more interested in use than in ownership; 2) There has been disproportionate growth in the market for personal services, including recreation, education, and travel; 3) A series of demographic changes hold significance for producers of consumer goods—in particular, the explosive growth of the teenage and young-adult market; and 4) People’s tastes are becoming more varied, flexible, and demanding.”

On the topic of customer segmentation the author says:

“Another important result of this growing consumer dominance is that today nearly all sales potentials are segmented. Typically, a total market now comprises a series of sub-markets, each with its own characteristics and each demanding a different sales approach.”

And, on the topic of technology, the author asserts:

“I think it must be conceded that companies have dragged their feet in taking advantage of technology to help make marketing more efficient.”

My take: I can’t find anything in the parts of the article that I cited that I would argue with, or dispute. Can you?

***

Here’s the thing I didn’t tell you about the McKinsey article: It was published 48 years ago (in 1966, in case you can’t do the math). The article was actually based on a presentation the author gave in 1964.

Some things never change, eh?

Now do you see why it drives me nuts when 25-year-old know-it-alls (who hadn’t even been born yet when the McKinsey piece came out, in case you can’t do the math) carry on about how “fundamentally different” things are today? Or how everything represents an “inflection point”? Or that every new company and every new announcement is “disruptive”?

***

What makes the McKinsey article particularly impressive is that, in 1966, marketers weren’t consumed with analyzing every last detail of the emerging generation like they are today. In fact, in 1966, the oldest Boomer at the time was just 20 years old, so the pronouncement of coming generational changes came before the fact.

***

I can only imagine what the author would think (he passed away at age 84 in 2003) of marketing today–particularly marketing research–considering his vision from the mid-60s. At the time, he wrote:

“I see a trend toward increased use of marketing research as a creative tool to help solve future management problems. For example, it can be used to help management determine the most effective channels of distribution for a particular product line. The broadening scope of marketing research should materially increase the efficiency of the total marketing function. In some companies today, the head of marketing research is a member of a product-planning committee, a marketing-strategy committee, or even a company-wide long-range planning committee—clear evidence of top management’s growing realization that marketing-research people can make a vital contribution to planning decisions and marketing strategies.”

I don’t know of too many large companies–financial services companies, in particular–where market research has a “seat at the table.” And based on the latest survey I conducted of the analytical models that FIs have at their disposal, the vast majority of these models as purchase-oriented predictive models, not spending-oriented optimization models.

***

Bottom line: Great article on marketing from McKinsey. Goes to show that, in some ways, the challenges the business world faces aren’t all that different from what they were 50 years ago.

p.s. If you think word-of-mouth marketing is new, you should check out this article from 1966:


Ron ShevlinRon Shevlin is a senior analyst at Aite Group, a Boston-based research and advisory firm serving the financial services industry. Ron is a frequent speaker at industry events and bank and credit union strategic planning sessions. His soon-to-be released book, Smarter Bank: Why Money Management is More Important than Money Movement to Banks and Credit Unions will be published in January 2015. Ron's popular blog, Snarketing 2.0, is now a permanent fixture here at The Financial Brand. You can follow Ron on Twitter.

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Comments

  1. This is too funny. I was halfway through when I glanced at your “My take” that you couldn’t find anything to argue with and asked us if we did. I was about to respond, “I don’t disagree with anything, but I get tired of all the pundits acting like this is something new, that the change is SO FAST that we must react now or die….” Then I saw the punchline–this was written in 1966. Game…set…match

  2. I came across this article on the McKinsey site as well and it is a great way to illustrate how the fundamentals of marketing haven’t changed … just the tools to accomplish the task. Unfortunately, many marketers look for the ‘next shiny object,’ when they haven’t grasped the tools already at their disposal. Thanks for sharing and illustrating why Snarketing 2.0 was established in the first place.

  3. Well said, Ron. Marketing is the art and science of the market. The only thing that has changed is society and cultural acceptance (or resistance) of it.

  4. While we are sharing classics… this one is my personal favorites… unlike the Biebs :)

    This is from circa 2009 via Scott Monty, who at the time was Ford’s head of social media. He often quoted an anecdote shared with him by Tactical Transparency author Shel Holtz:

    “A friend sent me a PDF of an article from a business journal in which a company expressed reservations about this new technology over which everyone seemed to be abuzz. They decided that they would restrict employees’ use of it, because of the fear of corporate secrets getting out, of insider information making its way to Wall Street, and of employees wasting their time on it. For that reason, they set up the hardware on a single station in the middle of everyone’s desks so that everyone could see how people were using it.

    “That PDF was an article from a 1930s business journal and the technology was the telephone.”

    It was always fun to use this one at conferences with bank and credit union excecs.

    Maybe the only thing that really does ever change is perspective and POV.

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