Marketing Strategy and Competitive Positioning pdf ebook

Figure 3.6 
The growth of the Internet of Things
Source
: NCTA (5 May 2014).
BILLIONS OF DEVICE
YEAR
2002
2003
0.5 BILLION
2012
8.7 BILLION
2013
11.2 BILLION
2014
50
40
30
20
10
0
'00
'02
'04
'06
'08
'00
'02
'04
'06
'08
'10
'12
'14
'16
'18
'20
14.4 BILLION
2016
22.9 BILLION
2017
28.4 BILLION
2015
18.2 BILLION
2019
42.1 BILLION
2020
50.1 BILLION
2018
34.8 BILLION
THE INTERNET OF THINGS
AN EXPL
OSION OF CONNEC
TED POSSIBILIT
Y
2009
IoT INCEPTION
1,000,000

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CHAPTER 3 THE CHANGING MARKET ENVIRONMENT
Changes in the way in which computer chips are made are likely to further boost com-
puter power and lower costs. The newer laser-assisted direct impact technique allows 
minute features to be stamped on to molten silicon. As of 2017, the highest number of 
transistors per chip is over 30 billion, to be found in an IBM chip. Moore’s law (the doubling 
of transistor counts every two years) is still valid 50 years on. 
Time and distance are shrinking rapidly as firms use the Internet to market their offer-
ings to truly global markets. One result is that cross-national segments are now emerging 
for products and services, from fast foods, through books and toys, to computers and 
automobiles.
3.5 
Changes in marketing infrastructure and practices 
In addition to the changes noted previously, there are several important changes taking place 
in the general marketing environment and in marketing practices. 
In many markets increased levels of competition, both domestic and international, are 
reaching unprecedented levels. In the three years following the start of the global recovery 
in 2010, Britain’s exports increased by 14.7 per cent in terms of value, and volumes rose by 
7.2 per cent. Exports increased to a record £304.3 billion in 2013, up from £300.5 billion in 
2012, according to the Office for National Statistics. HSBC had forecast that UK exports 
would increase by 5 per cent between 2016 and 2020 and then decrease to 4 per cent between 
2020 and 2030. 
3.5.1 Globalisation of markets 
Many markets are global in nature and no business, however big or small, is exempt from 
global competition. The reasoning centres on the impact of technology on people through-
out the world. Technology has made products more available and potential consumers more 
aware of them. Over the years we have witnessed a move towards gigantic, world-scale 
markets where economies of scale in production, marketing and distribution could be vig-
orously pursued. The result has been significantly lower costs, creating major problems for 
competitors that do not operate on a global scale. Many of these cost advantages have been 
realised as companies operating within the EU’s Single Market rationalise their production 
and distribution facilities. This is one of the reasons cited for Japanese car companies stop-
ping investing in the UK two years after the Brexit referendum. Similarly, Dyson has decided 
to move its headquarters from the UK to Singapore to ‘future-proof” the company and to 
be close to what it sees as a critical future market. 
The counter-argument to the globalisation thesis is that markets are becoming more 
fragmented, with consumers more concerned to express their individuality than to buy 
mass-produced, mass-marketed products. In addition, there is little evidence of the exist-
ence of widespread preference for the cheapest products available. The demand for low 
prices, relative to other product benefits and extras, is not proven in many markets. 
Each market should be examined individually and the factors likely to affect it explored. 
Whether one subscribes to the globalisation argument or not, one factor is clear: organi-
sations ignore international competition at their peril. The UK motorcycle industry is a 
textbook example of a once-supreme industry now virtually non-existent because of its 
failure to recognise and respond to the threat posed by cheap, good-quality, Japanese 
motorbikes. 
At the same time as markets are becoming more global, so the existence of distinct mar-
ket segments is becoming clearer. The most successful firms are those that have recognised 

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CHANGES IN MARKETING INFRASTRUCTURE AND PRACTICES
this increasing importance of segmentation and positioned their companies so as to take 
best advantage of it.
Founded in 1953 by Bernard and Laura Ashley, the Laura Ashley company was based 
on a quintessentially British design concept, characterised by the long flowing skirts and 
romantic floral designs that were the foundation of the company’s success in the 1960s 
and 1970s. With its Victorian- and Edwardian-style designs, Laura Ashley wallcoverings 
were favoured in locations such as the British Embassy in Washington and at Highgrove, 
home of the Prince of Wales, and its floral smocks and chintzes were favoured by the 
young Princess Diana. From its early designs for women’s clothes the company expanded 
rapidly into fabrics, wallcoverings and paints, linked by the central design concept. Manu-
facturing plants were established in Wales, and by 1997 the company operated more than 
400 retail stores worldwide covering dozens of countries, including more than 150 in the 
United States. By 1997 the company had sales of £320 million, but was issuing repeated 
profit warnings, and its shares had lost three-quarters of their value in 12 months. The 
loss-making manufacturing units started to declare redundancies. The death of the founder 
in 1985 had marked a turning point. The loss of vision for the company at that point 
was accompanied by losses in most of the following 12 years. Ann Iverson (then chief 
executive) faced the problem of turning the company around and reclaiming its position 
with the affluent 35–50-year-old female fashion buyer. City commentators pointed to the 
strength of new competitors such as Ralph Lauren in this core market and concluded that 
‘its management must decide what to be, preferably before the money runs out’ (Daily 
Telegraph, 1997; Olins, 1997a). Unfortunately, the company incurred heavy losses in 1998 
and was bought the same year by MUI Asia Ltd, but initially the company still had no 
focus. Over the years, until 2015, fashion’s share of the overall business decreased to 17 
per cent. Despite a commitment to increasing brand awareness, ensuring global relevance 
of the products and growth, the company reported a four-year-low profit (March 2016) 
of £19.4m and sales down to £289.5m. This was attributed to the franchise business, with 
the UK business remaining strong. Laura Ashley’s chairman said: ‘We remain optimistic 
for the future and are confident that the strength of the brand and the enduring appeal of 
our product ranges mean we are well positioned for continued growth’ (Financial Times, 
2016, March 23).
3.5.2 The role of marketing
The role of marketing in the modern corporation has been subject to far-reaching 
re appraisal. Kotler et al. (2018) argue a new approach to marketing that brings together 
online and offline in a systematic way:
The concept focuses on how, in the times of a digital economy boom, offline touch serves 
as a major differentiation in an increasingly online world. It also encompasses how style 
blends with substance, in that even as brands need to adopt flexible and adaptive styles in 
view of fast-changing technological developments, the brand’s core, authentic character 
is ever more important. Brands need to come across as true to their identity and authentic 
in their messages – this perceived substance is a valuable asset in an increasingly trans-
parent world. And finally, Marketing 4.0 is about balancing machine-to-machine (M2M) 
with human-to-human (H2H). As connected devices become more commonplace on the 
back of artificial intelligence and loT, resulting in greater marketing productivity, they need 
to go hand-in-hand with human-to-human connectivity in order to strengthen customer 
engagement.
Moving towards Marketing 4.0 requires balancing our use of machines and devices with 
human contact to strengthen customer engagement.

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