Page 35 - Marketing Management

12 PART 1 UNDERSTANDING MARKETING MANAGEMENT

totes, yogurt cups become plant holders, and cookie wrappers become notebook covers, all distributed by
major retailers such as Home Depot, Whole Foods, and Walmart. The firm also has partnerships with Kraft,
Target, Honest Tea, Stonyfield Farms, and others. Schools, churches, wineries, and nonprofits provide space
to store donated used bottles, corks, and candy wrappers. For each item collected,TerraCycle makes a dona-
tion to a charity (typically 2 cents). 19

Allrecipes.com Allrecipes.com Allrecipes.com has cooked up a winning online formula by
blending recipes posted by individuals with those provided by corporations promoting their own
products like Kraft cheese or Campbell’s Soup. After almost a 50 percent increase in site visits
and unique visitors in 2009, the Web site overtook the Food Network’s recipe site as the market
leader. With tens of thousands of posted recipes, it thrives on people’s willingness to share
recipes and the satisfaction they feel if their recipe becomes popular with others.The viral nature of the site’s
success is obvious—it doesn’t spend any money on advertising! Users tend to think of it as “their” site—not
something with a big company behind it. 20

The New Marketing Realities

We can say with some confidence that the marketplace isn’t what it used to be. It is dramatically dif-
ferent from what it was even 10 years ago.

Major Societal Forces

Today, major, and sometimes interlinking, societal forces have created new marketing behaviors,
opportunities, and challenges. Here are 12 key ones.
• Network information technology. The digital revolution has created an Information Age that
promises to lead to more accurate levels of production, more targeted communications, and
more relevant pricing.
• Globalization. Technological advances in transportation, shipping, and communication have
made it easier for companies to market in, and consumers to buy from, almost any country in
the world. International travel has continued to grow as more people work and play in other
countries.
• Deregulation. Many countries have deregulated industries to create greater competition
and growth opportunities. In the United States, laws restricting financial services,
telecommunications, and electric utilities have all been loosened in the spirit of greater
competition.
• Privatization. Many countries have converted public companies to private ownership and
management to increase their efficiency, such as the massive telecom company Telefónica CTC
in Chile and the international airline British Airways in the United Kingdom.
• Heightened competition. Intense competition among domestic and foreign brands raises
marketing costs and shrinks profit margins. Brand manufacturers are further buffeted by pow-
erful retailers that market their own store brands. Many strong brands have become
megabrands and extended into a wide variety of related product categories, presenting a sig-
nificant competitive threat.
• Industry convergence. Industry boundaries are blurring as companies recognize new
opportunities at the intersection of two or more industries. The computing and consumer
electronics industries are converging, for example, as Apple, Sony, and Samsung release a
stream of entertainment devices from MP3 players to plasma TVs and camcorders. Digital
technology fuels this massive convergence. 21
• Retail transformation. Store-based retailers face competition from catalog houses; direct-
mail firms; newspaper, magazine, and TV direct-to-customer ads; home shopping TV;
and e-commerce. In response, entrepreneurial retailers are building entertainment into