Prepared for the Canadian Marketing Association, October 2010
My Prediction: The future of marketing is going to become radically more seller-led (which, as a corollary, is counter to the ‘consumer-choice’-oriented edicts of recent discussion in marketing circles). In five years, marketing will be more about: how much distribution a seller has, how many of those points of distribution a seller has rights to, and how much exclusivity a seller can carve out in those areas.
Situation 1: Distribution
Go into any grocery store today. Take any product category, cheese, for example. The consumer is presented with a range of options; this range however is NOT representative of the full range of cheddar cheeses available on the market. What is made available is a pre-chosen selection of cheddar cheeses, there for a number of reasons, such as: a) the seller paid the grocery store an incentive to be there; b) it’s a popular enough cheddar cheese that the grocery store must carry it to please their customers or c) it is the grocery store’s own private label cheese. A seller may make the most delicious cheddar cheese in the country but unless it is on those shelves, enough shelves, the right shelves, it will not sell. And securing this distribution is becoming more complex. This is Part 1 of my Prediction. That Distribution will be increasingly critical to the Future of Marketing.
Situation 2: Rights
Anyone visit the CNE this year? The CNE this year had a selection of beverages available for purchase via vending machines conveniently located in many locations throughout the grounds. All those vending machines and all the beverages within were manufactured by ONE company. No other beverage company was able to make their beverages available for vending purchase to the roaming public at the CNE this year. Consumers had a number of types of beverage available to them, but only ONE manufacturer of those beverages. This was the result of a contractual agreement between the CNE and this beverage manufacturer. The CNE likely would have derived financial benefits for this partnership because the beverage manufacturer would have compensated the CNE for these Rights. The beverage manufacturer gained a strong incremental sales channel for their beverages. This likely resulted in a mutually-beneficial partnership. As well, this meant a range of other beverage manufacturers were locked out of this selling environment. This is Part 2 of my Prediction. That Rights will be increasingly critical to the Future of Marketing.
One more quick situation here: In many cases, ‘consumer-choice’ doesn’t actually exist because it is outside of the consumer’s control, dependant instead on the acquisition of rights by a seller. Take for example wireless services. Increasingly, consumer wireless use is happening in public places like coffee shops, airports or other public spaces. Wireless sellers negotiate contracts with the spaces and consumers by default are required to use that pre-selected service provider. This situation is transferable to many other seller situations. Another example for Part 2 of my Prediction, for how Rights will be increasingly critical to the Future of Marketing.
Situation 3: Exclusivity
Exclusivity puts pressure on the dynamics of distribution because it is about sellers offering something that only they can offer. Sellers create something or acquire rights to something that consumers’ value, and then make it singularly distributable through them. For example, a Canadian fashion retailer might negotiate with a designer to create and produce a line that only they can sell, or they may go outside the country to a seller not currently distributed in Canada and negotiate to be the singular place of access for those sellers’ goods in Canada. This requires that consumers must go and can only go to Seller A in order to get access to Seller B’s wares. This is Part 3 of my Point. That Exclusivity will be increasingly critical to the Future of Marketing.
Advice for Marketers:
There is opportunity for much more focus on the ‘seller’ strategy in order to gain competitive marketing advantage.
- Look to achieve as much distribution as possible, while of course being conscious of good contextual fit;
- Strive to secure rights, especially in new distribution spaces wherever possible;
- And look for ways to build exclusivity to influence the dynamics of distribution.
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