Next time you order a home delivery pizza, try not to think of it contemptuously as mere fast food, but as a paradigm for 21st century marketing. In primitive form, the home delivery pizza parlour does many of the things tomorrow’s superbrands are likely to do.
It focuses directly on delivering the result, or experience, the customer actually wants – the delicious piping-hot pizza, ready to eat – rather than merely purveying ingredients such as flour, tinned tomatoes and pepperoni sausage.
And it re-engineers all the things consumers normally have to do to achieve this desired result, such as shopping for these ingredients, preparing, mixing, and cooking them: it sells a better use of time, as well as a better product.
In doing so, it renders once-separate, stand-alone brands representing ingredients like flour and tinned tomatoes invisible. And it bypasses both traditional manufacturer and retailer: their respective marketing and branding efforts become irrelevant as customers don’t go anywhere near the store they both depend on.
It also rises above the technology-specific divisions of labour that define industries. The economics of flour milling and tomato processing are crucial to our flour and tinned tomato brands – but mean little to the small, local, low-cost pizza parlour, which has completely different financial requirements and operating imperatives.
If Imperial College professor of marketing Sandra Vandermerwe is right, virtually every familiar brand – from most grocery and over-the-counter products, through retailers and banks, to cars and airlines – could soon be given the pizza parlour treatment.
Like the flour and tinned tomato, they are mere part-solutions – ingredient brands – just waiting to be combined by some integrated solution provider.
The market revolutions we see around us today, Vandermerwe writes in her new book Customer Capitalism, are not just about core items with an edge – the loan, the book, the car, the medical supplies, the insurance policy – they invent new ways of doing things for customers.
Instead of thinking in terms of product or technology-defined markets, marketers should focus on market spacesÃ¢ where many different products, services, industries and technologies are connected to provide customers with the end result they want.
“The source of value,” she says, “is the linking of benefits into what the customer experiences.”
Personal mobility is one such potential market space. A solution provider might gather together car manufacturers, car hire businesses, providers of loans and insurance, taxi and chauffeur companies, and car repair and navigational services, to provide a single integrated mobility service depending on your need: an eight-seater for the family holiday, a compact car for town chores, taxis to the airport.
Then there’s the wellbeing market space for “unpatients”: people who are prepared to pay good money to stay fit and healthy. This integrated service may include pharmaceuticals, nutrition advice, bio-measurement systems, infor- mation technology, stress management and counselling, and fitness products and services.
Other market spaces suggested by Vandermerwe include cupboard management (a service that ensures you are never out of stock of any home essentials), and home and family “edutainment” encompassing toys, education and entertainment products and services, computers, and consumer electronics.
Likewise, at the recent ECR Europe conference in Paris, Research International’s Maureen Johnson predicted the rise of new services such as home care, healthcare and personal finance management. British Airways, meanwhile, talks about managing the entire travel experience from planning to reflection.
Some of these services may take the form of outsourcing. But the dilemma Vandermerwe raises is that existing players’ current focus on selling their ingredient products or services makes it hard for them to focus on the integrated experiences customers want.
Is BA the best brand to organise a total travel experience for its customers? Would it, for example, recommend a Virgin flight if that particular flight happened to be the one which best fitted the customer’s circumstances? Or is total brand experience just a better means of pushing products and services through the system (as Vandermerwe describes it)?
The difference between BA and an independent third party acting as an integrated solution organiser is that BA has an installed base of planes that it has to fill, whereas the only installed base the new solution provider has to worry about is its customers. This customer capitalist uses IT communications to co-ordinate offers from unconnected suppliers, saving customers the time, money and hassle of doing it for themselves.
Whereas merely pushing products and services leads to diminishing returns, according to Vandermerwe, focusing on customers’ needs leads to increasing returns based on improved loyalty, mutual understanding and a rising share of purse. It is a completely different model from the past.
The implication is this: unless existing incumbents are either very brave or very strong, the best people to tackle new market spaces are newcomers who, by rising above the confused melee of ingredient brands to bundle them together, act as a sort of meta- or super-brand. In doing so, they spark a new kind of brand warfare.
As Vandermerwe remarks, there is no way that an integrated solution provider can sell his offer as a jumble of ten brands. “It has to be a brand. This is one of the big issues of 21st century marketing.”
If Vandermerwe is right, no established brand is immune, as Unilever chairman Niall Fitzgerald seems to have recognised. “We have to be continuously asking, do consumers really want to go to the supermarket and pick up a 5kg box of detergent, lug it home, and go through the messy business of putting it in a washing machine? Of course they don’t,” he recently told the Marketing Society journal Market Leader.
“What consumers actually want is clean clothes without any bother. We have to stop thinking of ourselves as a manufacturer and start thinking of ourselves as the company best suited to serve consumers.”
Question: where does that leave the Persil brand manager?