By Kim Hegeman
If you’re in marketing you know the industry is constantly evolving, and digital transformation is no longer a buzzword but a key driver of marketing strategy. Michael D. Johnson, Marketing Department Chair at the Wisconsin School of Business and Dean and E.M. Statler Professor Emeritus at Cornell University, says that the trends in digital will continue to change the role marketing executives play in organizations.
In a recent interview, Johnson shared his insights into marketing industry trends for the near future and how these trends will affect marketing executives.
CPED: What trends are you seeing in the marketing industry’s near future?
JOHNSON: The continued growth of digital platforms is clearly one trend. Another is how these platforms are changing the way we collect data from customers and about competitors. Chatbots, online forms, message systems, website actions, and social media have emerged as important sources of market information.
A third trend, or problem really, is how to distill the right business intelligence from these new data sources in order to make sound business decisions. The information sources may be changing, but marketing success is still about understanding who wants what, who provides what, and who is not provided for!
CPED: How are these trends transforming both marketing and the roles of marketing executives?
JOHNSON: Overall, my sense is that these changes are creating greater and greater variance in the roles that marketing executives, such as CMOs, play in an organization. Digital platform companies, for example, eventually realize that being market-focused (versus technology-focused) is seeing the whole business from the customer’s perspective. In other cases, firms will continue to hold on to a narrow view of marketing as sales and advertising, which misses the point.
While traditional approaches to market segmentation are still highly relevant, the digital economy is allowing firms to better serve both market segments and individuals.Michael Johnson, Marketing Department Chair at the Wisconsin School of Business
CPED: How do you foresee digital transformation affecting the role of marketing executives?
JOHNSON: With the emergence of digital platforms such as Airbnb and Uber as alternatives to traditional businesses and brands, the role of marketing executives is clearly shifting. What used to be a process of using customer data to drive product and process change in an organization now involves using customer data to drive digital platform designs and the products and services offered through the platforms.
Executives in traditional product and service companies, in contrast, need to decide whether they should collaborate with the digital platforms or compete directly with them through their own platforms. This will depend largely on who has the power and brand strength in the market.
I believe that marketing executives will need to think through both what has changed and what has not changed in their companies and business environments. Understanding the digital economy is clearly a priority. But we need to make sure that executives don’t “throw the baby out with the bath water,” so to speak.
While the digital economy is changing how we learn about customers and market opportunities and presenting new business models, marketing is still about providing customers with a better value proposition than competitors. While traditional approaches to market segmentation are still highly relevant, the digital economy is allowing firms to better serve both market segments and individuals.
CPED: Where do you think marketing executives will see big wins in the near future?
JOHNSON: We are still recovering from one of the biggest economic shocks in decades, the pandemic. Thus, I believe that 2023 will see a continued rebound and growth in key service industries, from restaurants and hotels to some retail and healthcare. These are some of the industries that took the biggest hits during the pandemic. They are recovering, but doing so in an environment of high inflation, labor shortages, and recession worries. The executives who can find creative solutions to these constraints will do well.
CPED: What is your advice for current and future marketing executives?
JOHNSON: Build good customer information systems, use those systems to understand both your competitive advantages and vulnerabilities, and use that business intelligence to leverage the advantages and fix the vulnerabilities. Success will follow!
Current marketing executives and future marketing leaders who want to learn how to harness digital transformation and turn it in to a competitive advantage will want to enroll in CPED’s Chief Marketing Officer Leadership Program. This week-long immersive program will help marketing executives think beyond traditional marketing boundaries and use digital transformation to drive business growth and success.