FEATURES: This is the year consumers take control - The times, they are a-changing ... and marketers had better be one step ahead

We saw rapid changes in the last few years of the 20th century, but change itself is changing; it is accelerating, moving in a way that is difficult to comprehend. The key driver behind this acceleration is the Internet. As we move deeper into the 21st century, we must prepare to do ebusiness at the speed of thought. To better understand where we are heading, let's first look briefly at the 20th century. The first half of the century saw the emergence of mass markets and the creation of the first mass brands such as Marlboro, Coke or McDonald's. By combining a unique identity with a guarantee of quality and a clear benefit, these brands conquered their commercial markets. The second half of the 20th century saw a proliferation of brands. Manufacturers focused more closely on consumer wants and needs and segmented the market to create stronger offers. This has happened in China, just as in the rest of the world. Last year, China saw advertising for 230 shampoo brands, 412 beer brands and more than 450 bottled water brands. In the 21st century, this segmentation and proliferation will continue. We will move from mass media and mass brands to 'narrowcast' media and highly specialised brands. Ultimately we will move from mass market to mass customisation. Consumers will take control and the personalisation of marketing communications will become key. They will become more involved with brands through targeted, two-way communications that allow them to interact. This will happen through the personal computer, telephone, direct personalised mail and through more targeted print and TV media. They will become what we call a 'me.2' (me dot two) consumer. In China, these will be the new young and confident consumers who have an individual outlook on life (me); they are comfortable with new technologies (dot); and they expect two-way communication. This exchange of information will mean that marketers are able to use a range of information to target communications at a personal level. The result will not just be targeted communications, but also tailored products, such as MyYahoo! In this new environment, the role of brands will change. They will no longer be just an identity or the promise of a benefit. Brands will become an experience. At Starbucks, for example, the coffee plays only a very small part in the experience that it offers. The whole retail environment, combined with the events that they run and the values that they communicate as a company create a complete experience for the consumer and a strong relationship between the consumer and the brand. When Richard Branson established Virgin Airlines, this type of experiential branding drove the whole business: "We didn't want to get into the transportation business. We're in the entertainment business at 25,000ft". The result was an airline that offered in-flight massages, business lounges with golfing facilities and ice-creams with the in-flight movies. Another great illustration of experiential marketing is Nokia. The company has consistently pursued a theme of 'Human Technology' and is constantly creating new experiences for consumers. Whether it is the covers that give colour and individuality to a phone, or easy-to-use personalisation, or new thinking about phones as 'the Internet in your pocket', Nokia has led the way in experiential marketing. This approach is enabled by technology, with Nokia taking a lead in WAP and third generation mobile phones that are Internet-enabled. In doing so, it has become the world's leading mobile phone manufacturer, shipping 37 million mobile phones in 1998. Economies all over the world are evolving from centrally-planned to consumer-driven, from production management to knowledge management. This in itself is driving enormous change in the way in which brands are marketed. This evolution is also redefining the ways in which business success is measured. Microsoft, with relatively limited fixed or tangible assets, has by far the largest market value of any company in the world. Valued at over US$400 billion, it is essentially a knowledge management business. The enabler of these market changes, and a huge driver of change, is the Internet. The explosive growth, combined with its power to change how businesses operate, will have an enormous impact. It has already been estimated that the 'knowledge economy' accounts for 51 per cent of total business output in the developed economies. These e-opportunities are not only changing the way that businesses operate, they are changing the way consumers behave, as they begin to explore the opportunities for knowledge, commerce and communication that exist in 'e-life'. To help create this 'e-life', the Internet provides a whole new set of communication tools for the brand manager. But it may well be that the brand's own presence on the Web is its best form of advertising. Using information, entertainment, community and utility, a website can lead the consumers' brand experience. An increasingly large part of this brand experience is about purchasing directly from the Internet. In more mature markets, consumers are purchasing everything from cars to appliances to clothes over the Internet. In this rapidly changing environment, perhaps because of this rapidly changing environment, the role of brands will remain central. Increasingly brands will act as 'life-guides', innovating ahead of customer expectations, leading the customer and showing them new opportunities. In this new environment advertising will be accountable. It will be targetable, trackable, flexible and interactive. Because of this the selling process will be compressed, so that the whole process of getting the customers' attention, providing the information they need and closing the sale in a single step. Brands will differentiate themselves by adding value to the experience and the relationship. Take the seroxat.com.cn site developed by Grey. Seroxat is an anti-depressant produced by SmithKline Beecham. The website offers information, builds a relationship between the company and its consumers, and creates community between consumers. The success of this approach has been demonstrated in business performance, with Seroxat now the market share leader in its category. Increasingly, it is not just existing brands being built in the interactive world. 'Cyber brands' such as Amazon.com and e-Bay.com are amongst the biggest spenders in conventional media. They are marketing across all media to achieve a truly integrated approach. As we step into the 21st century, look out for: - 'Software' (people, skills and ideas) being more important than 'hardware' (buildings, fixed assets, and other diminishing resources). - The death of distance, with manufacturers developing relationships directly with consumers. - Branding as an experience: based on services and relationship. - The Internet as the key delivery vehicle of information and sales. - A focus on the application of technology to offer service and value. - The convergence of TV, Internet and mobile to create an enriched experience. The integration of mobile will create new and unexpected opportunities to add value. - Increasingly enriched media that exploit broadband opportunities. - The continued growth of media choice: in terms of portals, ISPs and content providers. - The one-step selling process. - Knowledge workers: they need to be trained and retained. We must realise that what we have done in the past won't work in the future. We must strive to innovate, to excite the consumer and to lead them and guide them towards the future. Because if we don't, our competitors will.

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