Marketing and the Changing Information Environment: Implications for Strategy, Structure, and the Marketing Mix

Marketing and the Changing Information Environment: Implications for Strategy, Structure, and the Marketing Mix

Dramatic changes in the “information environment’ are transforming all phases of business and economic activity. Information technology is the know-how available for collecting, processing, and transmitting information. The technology is embodied in both hardware and software and is most notably associated with computers and telecommunications.

This chapter is concerned with the impact of information technology on marketing—as well as with the input to and output from that technology. Thus, information itself is considered an important variable for analysis and a valuable asset to be managed by firms. The emerging appreciation of information and information technology as resources has important implications at the levels of marketing strategy, organizational structure, and tactical marketing mix decisions.

In order to be of use to both marketing managers and academics, meaningful measures of the information construct must be developed. This has proved difficult to do, in part because of the particular nature of [Page 128]information as an economic commodity and in part because, since all measurement is information, the act of measuring information itself belongs to the realm of “metameasurement,” or measuring the measuring rod.

In the area of marketing strategy, current thinking about the two dimensions of strategic thinking—market attractiveness and relative competitive position—can be significantly influenced by including an “information variable” in the analysis. In rapidly changing information environments, the traditional standards of industry attractiveness such as steady product lifecycles/growth rates and predictable “rules of the game” are disrupted. As such, the ability to undertake strategic planning (which is dependent on environmental stability) is called into question.

With regard to relative competitive position, the two generic marketing strategies of market share and differentiation/focus can be seen as involving the trade-off between two types of information (or knowledge)—product experience/knowledge for market experience/knowledge. One of the most profound implications of information-processing technology is that this traditional trade-off may be obsolete and firms may be able to reap the benefits of scale and production experience without sacrificing the ability to target specific customer segments.

In such a world, two strategic directions are emerging: On one hand, as specific features associated with a given product become less important, the goodwill or franchise embodied in the brand itself becomes the carrier of value. At the same time, there is a growing emphasis on creating loyal customers who purchase a wide and diverse array of products, often under a single umbrella name, from the same firm. Furthermore, the notion of creating loyal customers extends to forming sustainable strategic alliances or partnerships with all members of the value-added chain—upstream, to suppliers; downstream, to distributors and retailers. Such linkages are forged primarily through transaction-based information systems, which typify the emerging focus on cooperative rather than competitive strategy.

With respect to organizational structure, the main impact of information is that the boundaries between inside and outside the firm, as well as between marketing and other functional areas, are dissolving. Furthermore, in viewing the firm as an information processor, the changing environment is resulting in a movement away from a sequential linear mode toward one of parallel-distributed processing in which the focus is less on planning than on pattern recognition and response.

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