Kellogg World



You are the center of the universe
Greg Carpenter explains how empowered customers are reshaping the modern corporation

Infographic by infogr8

Don Draper's struggle in Mad Men's sixth season to adjust to business and cultural shifts of the late 1960s seems quaint compared to what marketers face now. Companies today must manage an on-going dialogue with customers, who are enabled by new technology and across geographies. New devices and the dizzying speed of technological advancements are driving the activity.

To get a sense of how companies are adjusting to this environment, Greg Carpenter, faculty director for the Kellogg Markets and Customers Initiative and professor of marketing strategy, conducted in-depth qualitative research with chief marketing officers and other top executives across a range of industries. Here, Carpenter discusses some initial findings, highlights the rise of the consumer-focused enterprise and explains why the customer is now at the center of the corporate universe.

What factors have driven the evolution of the modern business environment?

For marketing, the past 40 years have brought unprecedented change in two different areas. First, political reforms have increased the reliance on markets, expanding consumer choice and creating massive wealth. Consider that in 1975, China's GDP was just one-tenth that of the United States. Now, of course, China is on its way to becoming the world's largest economy, and other emerging countries are seeing similar developments of their economies and the rise of a strong middle class. Second, technology has ushered in the digital age, which has empowered consumers across the globe as never before. Combined with greater choice and wealth, technology has produced an information revolution that has shifted the balance of power to favor consumers. For example, retailers are now at the mercy of consumers with smartphones comparing prices for everything imaginable.
What effect have these developments had on how companies approach marketing?
It's become exponentially more complex. Consumers enjoy expanded choice and unlimited information, which they share relentlessly. Disruptive innovation, amplified by interactive media, has accelerated the pace of competition. And now companies must operate in truly global markets against multinational and local rivals. The implications for marketing, product development and business strategy are profound. For example, it took Apple more than 20 years to sell 50 million Mac computers. With the iPad, they crossed that threshold in just two years. So the marketing challenge has never been more daunting, but businesses that get it right can reap incredible returns. Doing so, however, requires fundamentally new approaches to leadership and strategy development.
Explain the concept of the consumer-focused enterprise.
It really refers to a new model of management that infuses the consumer into every core process of the organization. Traditionally, the customer perspective was isolated in one function — marketing. As the speed of competition has increased, the traditional approach has proved too slow, too expensive and insufficiently responsive to customers. To create more nimble organizations, executives are changing everything from how they engage with consumers to the development of senior executives. The customer perspective has simply become too important to be relegated to one function. Indeed, it is increasingly central to the leadership of the firm, strategy and customer engagement. This change will reshape how organizations are led, allowing them to be more agile and innovative. For those of us who are passionate about customers, it's a fascinating time.

Download more insights about the Consumer-focused enterprise.

Kellogg Markets and Customers Initiative: Anticipating and meeting customers' needs is essential in today's economy. This initiative will generate and disseminate knowledge to help business leaders create and reinvent markets through greater customer insight and focus.