‘We need to understand customers better than they understand themselves’
One of the most interesting challenges facing business practitioners and educators is the changing role of strategy and the structure of markets.
In the past, markets and the scope of competition were more clearly defined and more stable. Strategies were designed to respond to the current state of buyers and competitors.
Today, markets are more fluid, due to slower economic growth and the incredible pace of technology. As a result, competitive strategies are increasingly designed to redefine market boundaries and shape the future of markets.
Many of our fundamental concepts are not well suited to these circumstances.
We do not yet fully understand how buyers learn, how strategies change the scope and nature of competition or how markets evolve in response to various competitive dynamics. Developing an understanding of games without established rules will be
Marketers have always assumed that customers know best and then built a strategy to respond to their demands. But what will guide strategy in a world where customers appear to be poor guides? For that, we need new frameworks for understanding customers at an entirely new level. In fact, we need to understand customers better than they understand themselves.
In changing markets, brands assume two new roles: First, they slow competition. In a high-tech market, for instance, product-based advantage can last one cycle of the technology. Brands, however, introduce an element of stability that extends advantage beyond one cycle of the technology. Second, as products become more similar and competition more intense, brands become more important as differentiators. In markets where products last less than one year and are easily copied, brands endure and are difficult to copy. Enduring uniqueness commands a premium.
Finally, the pace of the market changes the types of organizations and people needed to run them. It used to take months to plan decisions within structured organizations. Today, those decisions take hours or are made in real time.
Management education will have to adapt too.
Business schools emerged from the social sciences. They largely have preserved the connections between economics and psychology, and those disciplines have enormous influence on management education. But there are even greater gains to be made through further multidisciplinary approaches — as we have seen in the physical and medical sciences.
Greater disciplinary integration offers an exciting future for management education. It would generate excellent research, create new fields rooted in the social sciences, and reach across the university, as medicine does, to have a fundamental impact on practice.
Achieving this will require a new, flexible educational model, with a broad scope and robust role for theory and practice.
Gregory Carpenter is the James Farley/Booz Allen Hamilton Professor of Marketing Strategy and director of the Center for Market Leadership at Kellogg. His teaching and research expertise includes competitive marketing strategy and brand management.