Introduction  1

1  Introduction

Today, the world is changing at a faster pace than ever before. Not only

social and political developments, but also technological changes are

shaping modern human life. Twenty years ago, television was the sole

defining medium of developed countries. The triumph of the Internet

has not only changed the way we access information, but also the way

we communicate. The age of mass communication is slowly being replaced by the age of social media. The latter is mainly defining the way

people live by offering them new ways of communication. Those technological possibilities can also establish new ways for companies to

communicate with customers and represent opportunities as well as

risks.

It is pretty certain, that traditional ways of marketing are starting to become obsolete due to these changes in the process of communication.

One of the essential means of marketing, the advertising impact, which

represented the equality of investment in promotion and success in

sales, is losing its importance right now. Classical media advertising,

even within the new media, is depreciating compared to new forms of

marketing via social media.

New ways to find a customer base and to retain it are needed. Trust in

the brand or product can become one of the key elements, which can

only be established by the use of adequate kinds of communication with

customers and other stakeholders in the age of social media.

This paper is supposed to give insight into the opportunities to adjust

basic marketing concepts. For that purpose the future social, economi-

2  Introduction

cal and technological developments and their impact on media and

business will be examined in a basic analysis, before different concepts

to align marketing to these changes are introduced. Philip Kotler has

verbalized one method of resolution in his concept of Marketing 3.0,

which is one of the approaches, that are being critically evaluated, before using them as a base to design an own approach to adapt marketing

to future changes. This basic approach should be seen as a general suggestion for the alignment of marketing and communication methods,

and explicitly not as a blueprint which is usable in any economic sector.

A more practice-related framework, which will incorporate the specific

of different business models and economic sectors, can be developed in

future semesters.

Analysis  3

2  Analysis: How Does a Changing World Influence

Marketing?

2.1  The World of Tomorrow – Looking into the Future

It is hard to predict the future or even to imagine what the world might

look like in twenty or thirty years. Nevertheless, people have always

tried to make assumptions or predictions and created scenarios to predict future changes in our lives. Some of those predictions have proven

right, others still seem utopian. And many actual changes, like the

growing importance of the Internet in the last years, have not been foreseen, which in effect led to problems for many economic sectors. The

music industry for example rather reluctantly adapted to changes and

tried to hold on to the system that had been working for them for many

years instead of looking for new opportunities. As a result the industry

is losing importance as well as revenue.

Today, the technological and social changes are coming at an even

faster pace and it is getting even harder to keep track of them. Companies in many sectors have to pay very close attention to people’s behaviour and needs in order to stay on top of all developments and not to

lose relevance.

One of the most challenging tasks in this context is to understand the

crucial importance of social media and communication. The economy

is already trying to figure out how to involve the potential of social media into their marketing management and how to communicate with

their customers in the best way, while the numerous opportunities of

this world have not even been fully explored. However, companies

4  Analysis

have not yet found the one right way to use social media. The following

pages are meant to illustrate the role of communication and social media in a future society, to open up possibilities for companies to adapt

their marketing strategies accordingly.

2.1.1  What Is the Current Role of Social Media?

There are many examples of companies that have been negatively affected by social media because they underestimated its importance and

effects. In spite of this, more and more companies are cutting back on

traditional kinds of advertising, e.g. direct mail, for various reasons and

are moving their resources towards social media marketing, making it

an increasingly relevant part of their customer communications. However, there are conflicting views and research results on the impact of

social media on sales.

The recent study “The Social Habit 2011”, released in May 2011 by

Edison Research and Arbitron, takes a look at the influence of the

Internet and New Media on business. For this study, 2,020 United

States citizens were interviewed about their use of social media and

digital platforms. 24 per cent of all social network users cited Facebook

as an influence on their purchase decisions.

1

1

cf. Edison Research 2011.

The study “The Purchase

Path of Online Buyers”, conducted during the 2010 holiday season by

GSI Commerce and Forrester, shows a different result. Data captured

from 15 online retailers from November 12th, 2010 until December

20th, 2010 indicates that less than two per cent of orders were the result

Analysis  5

of shoppers being redirected from Facebook or any other social network.

2

These results illustrate the growing importance of social media in an

economical context, but also reveal the fact, that companies have not

found sufficient strategies to use those channels to generate revenue.

The world of social media is still a very new place for economical

communication and marketing, which is why companies need to figure

out how to successfully integrate it into their marketing concept. These

days, strategies in social media still seem closer to traditional marketing

campaigns than to innovative ones matched to the new environment,

which may be one of the reasons for the lack of success. In effect, it is

inevitable to figure out a way to make this sector more usable, since the

world of social media and its importance are continuing to grow rapidly.

2.1.2  What Will the World Look Like in 2050?

According to the report “Vision 2050” by the World Business Council

for Sustainable Development, an estimated number of nine billion people will live on the planet forty years from now.

3

2

cf. Forrester 2011.

Just like many other

reports and articles that deal with the future, “Vision 2050” is emphasizing the issue of sustainability and corporate social responsibility. The

large number of people will make resources diminish increasingly,

which is why these issues will be of high importance.

3

cf. WBCSD 2010.

6  Analysis

Therefore, companies have to communicate an efficient and sustainable

message and need to offer products that not only stand out by their

quality but also by their benefit for society and nature. The more transparent the future world gets, the more accurate will those assumptions

be.

If information coming from one end of the world can reach the other

end in a matter of seconds, behaving responsible and communicating

this message will help deal with consumers, who are potentially much

more informed than today. The goods, that people are consuming, will

reflect their more sustainable lifestyle. The increasing consumption of

fair trade coffee is a suitable present-day example for this development,

which has to be one of the focal points of future marketing.

Social media will play an important role in the communication process,

not only concerning the information coming directly from companies,

but also from the customers’ perspective. One company’s failure will

be transmitted from one part of the world to the rest of the planet immediately. Paying attention to what is talked about and responding to

problems or failures in certain ways will influence the company’s survival. In any case, the digital and physical world will be more connected than ever before, even if social media will not become one of the

future’s major shopping channels, which cannot be determined yet.

2.1.3  Key Aspects of Success in a Future World

Besides the growing importance of social media, which is changing the

(economic) world around us already, there are many other contributing

Analysis  7

factors to the future success of a business, such as transparency, individual communication or the efficient use of resources. Another key

element of economical success will be information. The rising importance of global networks, social media and individual search for content

will give people the power over information and offer it to them instantly. The amount of easily accessible information floating around

will increase dramatically:

“In 2010, there were 12.5 billion devices connected to the Internet. Looking to the future, Cisco IBSG predicts there will be 25

billion devices connected to the Internet by 2015, and 50 billion

by 2020“

4

This means more information to process for every single person. Especially for this reason, people will need to have access to quality information, that will have a positive influence on their lives, since they will

not be able to continuously filter the bulk of information themselves.

This process applies to the whole world, i.e. not just western countries,

where trends like mobile phones and social media are created and first

picked up, but especially in developing or newly industrialized countries, where social media become an integral part of social progress by

connecting the people with each other.

A perfect example is the significance of social media in the 2009–2010

Iranian election protests and especially in a heavily controlled country

like Iran; the importance of social media as a means not to be silenced

is becoming apparent.

4

Evans 2011.

8  Analysis

This can be applied to numerous places all over the world, e.g. the entire continent of Africa, where the mobile phone market has been growing rapidly in recent years with more than 400 million subscribers at the

present day. Social media is always a part of that kind of technological

advancement today, and in effect, Facebook and Twitter are today’s

most visited websites in many parts of Africa, having accumulated a

number of more than 17 million users from this continent.

5

The economic system has to become aware of the dangers within social

media, but also more importantly about the possibilities and the responsibilities for every company.

For the

people in Africa, the use of social media equals a much stronger voice,

e.g. concerning incidents regarding western companies on their continent that will be noticed in other parts of the world firstly via social

media.

2.1.4  Conclusion

Concerning the most crucial developments that will impact marketing

and especially communication, the world of tomorrow will be formed

by a continuation of present events. This way, interactivity and transparency will be an integral part of the media, which influences society

as well as economy. Like any prediction of the future, these are just

assumptions that might or might not come true one day, but not raising

these questions in a fast changing world would equals ignoring the future. The questions concerning business and the ways of communica-5

cf. Essoungou 2010.

Analysis  9

tion are becoming especially relevant in a country like China, whose

rapidly growing economy has long-lasting ramifications on other fields.

The next chapter will discuss this topic.

2.2  The International Dimension: Different Values in

Different Cultures

China and its significant economical upturn has become the subject of a

huge part of news media over the last few years. The country’s positive

development was regarded with envy by many western countries, e.g.

because of the financial crisis in 2008 leaving China largely unscathed.

Partly fueled by this envy, there is also a negative coverage about China

including ecology-based-subjects like the climate protection, social

problems like corruption and a lack of corporate social responsibility.

But today, China is changing just like the rest of the world, and the Internet, especially the instruments of social media, have an immense influence on it.

2.2.1  The Structure of Chinese Economy

Compared to the U.S. or Europe, the Chinese management system and

philosophy must be evaluated differently, because of China’s economical and political history and current situation.

China’s present economy has its origins in the planned economy of a

socialist state, which is one of the reasons, why the change to a free

market economy led to a huge economic boom. This boom is the result

10  Analysis

of a learning process during several periods between 1978 and today.

This way, the Chinese economy did not only grow substantially, but the

Chinese learned to develop their own management system based on

their traditional values and their spiritual culture. For example, the Ging

hexagrams contain information about how to deal with unexpected incidents and the Daoism principles dictate the acceptance of anything

that happens. Spiritual dimensions like these allow the Chinese “to go

with the flow” and to be more tolerant to changes, while the western

management often tries to minimize the role of luck. Furthermore, as a

result of the strong spiritual component, the group (family, corporation,

party, country, e.g.) is more important compared to a single individual

member of society. The Chinese management system is dynamic, flexible and natural but also mutual, disciplined and consensual. In the Chinese view, the world is malleable and Chinese entrepreneurs have a

positive attitude to risk and optimism.

6

Currently, the entrepreneurs as well as the Chinese government are

primarily focusing on rapid growth. However, this also results in a lack

of welfare and corporate social responsibility, which might lead to

problems, as the society itself is developing as well.

2.2.2  Corporate Social Responsibility

Corporate Social Responsibility has not been an issue in China for

many years, in spite of economical development. While for European

countries the term Corporate Social Responsibility means commitment

6

cf. Bouée 2011.

Analysis  11

to economic and social topics, in China it is often used as a supplementary tool to implement laws. Although there are laws concerning workers’ rights or pollution control, it is very difficult to enforce them and to

control companies in a large and decentralized country. Over the last

years the Chinese government has committed itself to attach importance

to Corporate Social Responsibility issues by international cooperation

and agreements. Private companies shall be modeled as state-owned

and international enterprises. But China will not reach international

standards for a long time although during the earthquake crisis in 2008

and the Beijing Olympics taking place in the same year people watched

the companies’ activities.

7

Not only but also the Internet and the instruments of social media had

played a major role. Western countries, visitors and journalists forced

the Chinese to address international interests and open their country to

the attention of the global community. In addition, the Chinese people

came in contact with social media.

8 9

2.2.3  The Role of Social Media in China

When European people think about social media in China, they think of

censorship. Social media exists in China, but it in a politically correct

way. Officially about 404 million Chinese people used the Internet in

2010, over 90 per cent visit social media pages at least three times a

7

cf. Zyhiyi 2011.

8

cf. Chahoud 2008.

9

cf. CSR weltweit 2011.