Article Type : Research Article
Authors : Kumar S*
Keywords : Marketing 5.0; Digitalization; Future strategies
The
digital movement is increasingly affecting every aspect of life. This change,
which affects all fields of science, has also had an impact on marketing
science. Today, marketing emerges as a philosophy that the consumer is king,
the sole purpose of the existence of the business is to serve the consumer, and
all commercial activities begin with the determination of the wishes and
desires of the consumers and end with the fastest and most effective way of
meeting these wishes and desires. Especially in digital transformation
processes, researches in the field of marketing are gaining more and more
importance every day. In the increasingly competitive environment over the
global world, it is inevitable for businesses that want to interact with their
target audiences to create their marketing strategies in the light of the new
marketing philosophy. Businesses that follow the developments in the field of
marketing and apply them in their own marketing activities will gain a
competitive advantage. It is necessary to understand today's marketing
techniques correctly and to use techniques that are compatible with the target
audience. Research Objective: The research examines critical aspects of
marketing 5.0 to deliver a better understanding of the future strategies in
use.
The
change and development of marketing consist of three basic processes. These
are; Marketing 1.0, Marketing 2.0, and Marketing 3.0. Marketing 1.0 is a
product-centered marketing approach. Marketing 2.0 is consumer-centered, and
Marketing 3.0 is human-centered. The Marketing 1.0 process started with the
Industrial Revolution. It refers to the mass and large-scale production process
of enterprises. The main thing is the product. In this context, standard
products were produced. The perspective of Ford owner Henry Ford is an example
of this marketing process. Henry Ford used the belt system and produced only
black Ford. Henry Ford used the following expressions for consumers who demand
different colors: “Every customer can have a car in any color, as long as the
color is black.” [1]. Marketing 2.0 emerged as a result of the developments in
information technologies in the 1980s. Marketing 2.0 is the marketing era in
the transition to the information society. It is a period when consumers can
easily access products and compare them with products of other brands.
Consumers prefer businesses that offer the quality they want in the product. It
is a period in which the global competitive environment has increased, the
flexible consumer profile has become widespread, and customer loyalty has
decreased. Consumers choose the most suitable product among the alternatives.
Businesses have started to give importance to consumers in their marketing
processes. The personalized product or service approach was initiated in the Marketing
3.0 process. Businesses have sought a way to establish sustainable and
profitable collaborations with customers. There was a value-centered
understanding of the relationship. There was a globally competitive
environment. Businesses need to carry out customer-centered business processes.
Personalized services are valued. Marketing 4.0 is the digital-centric
development of Marketing 3.0. It is an expanded and deepened version of
business-customer communication. Computers, mobile phones, and internet resources
are used in this context. For example, businesses can maintain sustainable
contact using social media platforms. In this way, businesses can monitor the
behavior of their customers and establish long-term and valuable communication.
Customers are not just a consumer, but also part of the production process. It
may be useful to make comparisons to distinguish between traditional and
digital marketing and to understand their differences. In this context, the
basic elements and differences between traditional marketing and digital
marketing are as follows: Traditional marketing has been used since the
beginning of marketing. Traditional marketing aims to sell more of a product or
service. There are efforts to reach consumers by using marketing tools such as
business cards, television and radio advertisements, flyers, brochures,
billboards, signage, and mailing. Sales techniques cover four basic elements.
These are; product, price, promotion, and distribution. There may be some
advantageous situations of traditional marketing. Traditional marketing can
have a higher level of trust. The possibilities of fraud are higher in digital
marketing. Fraud is not possible in traditional marketing. Businesses can reach
the target audience directly with traditional marketing methods. Traditional
marketing materials consist of more tangible and durable products. Traditional
marketing has some disadvantages. These are; a lack of pricing options due to
difficulties in providing personalized service, high cost, difficulty in
measuring the result quickly and effectively, being a static method, lack of
interaction, and a flexible marketing approach. Digital marketing encompasses
marketing activities using online marketing tactics such as search marketing,
email marketing, and social media marketing. It is a different type of
marketing from traditional marketing. Communication is easier in digital
marketing. Businesses can carry out personal and cost-effective marketing
activities (such as paid social media advertising, social media marketing,
content marketing, and search engine optimization). 7P constitutes the digital
marketing framework. In this context, it differs from traditional marketing. It
includes product, price, distribution and promotion, human, physical evidence,
and process activities. Businesses can implement marketing activities that are
more cost-effective and reach higher audiences. Businesses can establish a
dialogue with users and produce rich content. In this context, interactive and
powerful marketing processes can be carried out. Businesses can carry out
easily measurable, flexible, and personalized activities. There may also be
negative aspects of digital marketing. It can be easily accessed and copied by
competitors. In this respect, a copyright problem may occur. Internet and
connection problems may occur. Users may experience difficulties with e-payment
and trust. Internet-based marketing is mentioned. The product cannot be touched
or felt concretely. Therefore, users may not satisfy. Internet-based systems
may not be suitable for all users [2,3]. The advancement of digital
technologies has led to the emergence of a new dimension in marketing. This is
Marketing 5.0. Marketing 5.0 is made possible by the combination of some
technologies. These technologies are; artificial intelligence technologies,
robot technologies, virtual reality technologies, augmented reality
technologies, blockchain, and internet of things technologies. Marketing 5.0 is
the advanced version of Marketing 4.0. Although it is conceptually similar to
digital marketing, there are fundamental differences. Marketing 4.0 reflects
digital marketing. Marketing 5.0 refers to a platform that connects the
physical and digital worlds. In other words, it is enabling objects to
communicate through smart technologies. Communication channels in digital
marketing are technological tools such as computers, smartphones, and tablets.
Communication is established with consumers through social media, mobile
applications, and e-mail. Marketing 5.0 technology includes a more advanced
dimension than digital marketing tools, namely the internet of things process.
Smart items and objects are used. They are marketing processes that affect
people's emotions and subconscious [4]. The research examines critical aspects
of marketing 5.0 to deliver a better understanding of the future strategies in
use.
Marketing 5.0 refers to digital marketing that emerged after developing digital technologies and artificial intelligence. The development of artificial intelligence increases the communication ability of objects. This development reveals a different dimension of interactive technology. Marketing 5.0 is more advanced marketing than Marketing 3.0 and Marketing 4.0. Marketing 5.0 is marketing that expresses digital and sustainable communication with customers. It refers to using artificial intelligence technologies to create value in customer interaction and maintain this relationship. Businesses use the roadmap of customers in the marketing process. Data ecosystem is used in marketing processes. Thus, businesses can create value from customer experiences. It refers to sustainable, smart, and renewable marketing strategies. Businesses need some requirements for Marketing 5.0 to be realized. First of all, an artificial intelligence systems ecosystem is required. Businesses should provide technical infrastructure with high-speed internet infrastructure [5]. Marketing 5.0 includes artificial intelligence technologies, robot technologies, virtual reality technologies, augmented reality technologies, blockchain, and internet of things technologies. The impact of technology on the modern world has become inevitable. Marketing is also an area affected by these developments. Kotler explained as follows.
Figure 1: Artificial Intelligence and Business-Customer Relationship (Perez- Vega et al., 2021).
The customer's digital
footprint and data at touchpoints have created the concept of big data
management. Businesses have to update their decisions with customer data.
Businesses should renew and develop themselves. Thanks to the development of
artificial intelligence technologies, businesses can manage sustainable and
effective marketing processes with customers. Figure 1 shows the relationship
between the customer and the business (Figure 1).
Marketing
5.0 includes five basic components with differentiating and distinctive
aspects. These; are agile marketing, data-driven marketing, predictive
marketing, contextual marketing, and augmented marketing. Data driven marketing
and agile marketing are two corporate disciplines; Predictive marketing,
contextual marketing, and augmented marketing refer to three applications.
Data-driven marketing
Data-driven marketing refers to the use of data collected from customers by businesses to provide personalized products or services. It is included in Marketing 5.0 and is based on decision processes. Data-driven marketing is about the management and processing of data called big data. It is the evaluation, processing and use of the customer's past and current data in processes. The data recorded at the customer's touchpoints are stored and processed for use. This data includes online and offline data. In this context, the customer's digital footprint is also used in the process. It is evaluated within the scope of many data such as purchasing and communication dialogues of customers, expressions on social media, likes, comments, historical data. Businesses can process data and use it depending on their purpose [6]. The key to success is understanding customer wants and needs. In this context, big data is very valuable. It is the processing of customer data needed to understand consumer preferences and meet their expectations. Businesses can gain some advantages with the effective execution of data-based marketing processes. These [7]:
Businesses
can offer personalized solutions with data-driven marketing. For example,
businesses can create a dynamic campaign system with the repeat purchase
behavior of the customer. An example is the application of a campaign that
customers benefit from when they prefer the same holiday destination.
Similarly, as a result of an internet search for processes such as renting a
car, buying a seat, or purchasing electronic goods, only the campaigns related
to the searched city are displayed on the screen. In this context, businesses
can use any step taken by customers within the scope of marketing activities in
the modern World [8].
Agile marketing
The
modern world has turned into an instantaneously changing global market. Market
structures have been affected by rapid developments in technology and
digitalization. Production patterns, consumption understanding, communication
methods, business environment, and many related factors have changed. It is not
possible for businesses that cannot keep up with the change in the global
competitive environment to be successful. Businesses should closely follow the
changing consumer structure, market situation, and current and possible
situations, and be able to manage dynamic decision processes effectively.
Therefore, the agile marketing approach has become a step that businesses
needing achieve. Businesses need to prepare themselves for current and possible
situations and carry out sustainable and dynamic processes. In this context,
businesses must respond in a customer focused manner. It should have a dynamic
structure [9]. Thus, businesses will be able to have a flexible, fast, and
dynamic structure and be successful with fast solution processes. Businesses
can gain a competitive advantage when they can renew and differentiate
themselves. Businesses need to be aware of the changes in the market and
potential customers in modern society where technology is developing rapidly.
Businesses should identify the current situation, possible situations,
opportunities, and threats in the market. Businesses can create a dynamic
business culture, renew themselves, and differentiate themselves [10]. Thus,
they will continue to expand their market shares and gain a competitive
advantage. In this context, businesses can develop innovative, different,
applicable, fast, and utilitarian solutions [11]. Businesses can differentiate
with agile marketing practices. For example, the first manufacturer to produce
and market NFTs, which means unique and unmatched digital content, realized the
need and desire of this market. Similarly, the Dyson company's launch of the
world's first bagless vacuum cleaners is an example of success. An example of
success in book retailing is Amazon's ability to quickly and cheaply offer
offers, such as online searches and book reviews [12].
Predictive marketing
Businesses
need to analyze target customer behaviors and create roadmaps. Predictive
marketing is one of the methods that businesses use to enter new markets, carry
out effective and efficient processes in customer relations, and increase
customer loyalty and productivity. Predictive marketing refers to the process
of creating and using analytical processes to predict the possible results of
the activities of the enterprise before it starts its marketing activities.
Businesses upload past descriptive statistics, market data, and business data
to a machine learning engine. The majority of analyzes are performed by
artificial intelligence. In this way, businesses can predict the potential
customer profile, which product can be sold, and which campaign can be applied
[13]. Predictive marketing is a process that shows which product the customer
might buy. Predictive marketing processes have become more effective with the
developments in technology. Customers' data is constantly stored and processed
with smart and connected objects. In this way, the purchasing habits, needs,
and possible movements of the customers can be observed by the businesses.
Businesses use and store data such as customers' digital footprints, document
documents, social network shares, scans, and geographic information systems in
processes. How managers process and evaluate data affects the success of the
process. Businesses can establish the right strategy and planning. So, they
will be able to increase their market share [14].
Contextual marketing
Contextual
marketing refers to presenting the information that consumers need in
real-time. Defined contextual marketing as the activities of providing personal
interactions with customers through sensors and digital interfaces in the
physical space. It is a kind of customer identification and profiling activity.
Thanks to contextual marketing, marketers can conduct personalized marketing
activities with customers. Contextual marketing is an online and mobile
marketing method that provides targeted advertising activities through the use
of customer information while consumers are searching on the internet.
Consumers are interested in advertisements that relate to their wants and
needs. The purpose of contextual marketing is to engage in advertising activities
for the needs and expectations of customers. Businesses should deliver special
messages to consumers at the right point. Businesses interacting more closely
and effectively with consumers can increase sales. Thus, customers can realize
their planned purchasing behavior. In this context, consumers' digital
footprints and personalized advertisements are used. For example, a consumer
looking for a vacation to Europe might see ads offering the cheapest flights to
France. Another example is if there is an internet search for Korean cuisine,
restaurant recommendations may come up [15]. Businesses can achieve more
successful results in personalized product or service delivery thanks to
contextual marketing. Businesses should develop their marketing activities following
the wishes and needs of the customers. Thus, marketing activities can lead to
an increase in sales. Businesses will be able to increase cross-selling and
create brand awareness and customer loyalty. So, they will positively affect
customers' repeat purchase habits and strengthen the business's market share.
Businesses will also be able to gain a competitive advantage by establishing
sustainable and valuable relationships with their customers.
Augmented marketing
Kottler
define augmented marketing as activities to increase marketing effectiveness by
using technologies that imitate human beings. Augmented marketing is based on
human-machine collaboration. Smart devices and digital technology have enabled
this type of marketing to flourish. In this context, layered interfaces can be
used in human-machine cooperation. The digital interface does some work that
people need to do. In this way, businesses were able to save time and energy
and increase work efficiency. One of the best examples that can be given in
this context is banking activities. Banks have many services such as augmented
reality supported mobile applications, self-service web services, and
artificial intelligence-supported chatbots. Customers usually make their first
connections with augmented reality-supported mobile applications and artificial
intelligence-supported chatbots. Customers, who first encounter artificial
intelligence-supported applications, can talk to a live sales representative
when they are not satisfied. For example, Garanti BBVA can perform more than
200 transactions, from card information to money transfers, with its smart
virtual assistant Ugi [16]. Thus, storage and process management can be managed
quite effectively. Customers' data can be easily stored, processed, and
re-evaluated. Marketing activities, campaigns, and processes can be carried
out.
Marketing 5.0 is the most recent evolution of marketing theory and practice, defined by the incorporation of sophisticated technology into marketing tactics such as artificial intelligence, the Internet of Things, and big data analytics. This new marketing period is also marked by a shift in consumer behavior, as customers become more empowered by digital technology and have access to large volumes of information about products and services. The greater use of modern technologies in marketing tactics is one of the most significant improvements brought about by Marketing 5.0. AI and machine learning (ML) are being used to evaluate massive volumes of data, such as customer behavior and preferences, in order to build tailored and targeted marketing efforts. The Internet of Things (IoT) is also being used to connect gadgets and collect real-time data on consumer activity, allowing for more accurate targeting and personalization. Big data analytics is also playing an important role in Marketing 5.0, allowing organizations to examine enormous amounts of data to obtain insights into consumer behavior and preferences and make better marketing decisions. Another distinguishing feature of Marketing 5.0 is the shift in consumer behavior. Consumers have been empowered by the rise of digital technology, which has provided them with access to large volumes of information about products and services. As a result, consumers are becoming more knowledgeable, sophisticated, and demanding, and traditional marketing approaches are less likely to sway them. As a result, "pull" marketing has grown in popularity, in which buyers actively seek out items and services rather than being "pushed" to buy them through advertising. Businesses and marketers are adapting new techniques to reach and engage customers in response to these shifts. One of the most notable developments is the shift toward customer-centric marketing, in which organizations focus on understanding and serving their consumers' needs and desires. Data and analytics are used to acquire insights into customer behavior and preferences, while personalization and targeting are used to build customized marketing efforts. The use of social media and other digital platforms to reach and engage clients is another significant trend in Marketing 5.0. Social media platforms like Facebook, Instagram, and Twitter have evolved into powerful marketing tools for businesses, allowing them to engage with customers and establish brand loyalty. Content marketing is also gaining traction as firms employ entertaining and informative content to attract and keep customers. Marketing 5.0 also entails a revolution in how organizations communicate with their customers. A more interactive, two-way communication model is replacing the conventional "one-way" communication approach in which corporations broadcast messages to customers. Businesses are now using social media and other digital channels to engage in customer dialogues and collect feedback and insights. This enables organizations to better understand their clients' requirements and desires, allowing them to develop more effective marketing tactics. The following are some specific techniques that organizations and marketers can use to stay ahead in the Marketing 5.0 era: Individualization and targeting:
Companies
collaborate with other businesses and organizations to develop mutually
beneficial marketing strategies. This involves co-branding and cross-promotion,
as well as forming alliances with influencers and other businesses in order to
reach new audiences. Immersive technologies such as virtual and augmented
reality are being used by businesses to provide unique and engaging experiences
for customers. Virtual product demos, virtual store tours, and even virtual
reality shopping experiences are examples of this. Businesses are embracing automation to
streamline and optimize their marketing processes. This includes leveraging
automation technologies to manage social media, email, and other marketing
initiatives, as well as analyzing data and making marketing strategy decisions.
These strategies are not mutually exclusive and can be used to form a
comprehensive marketing strategy. As technology and customer behavior evolve,
businesses and marketers must remain on top of the latest trends and adjust
their strategies to stay ahead of the competition. As Marketing 5.0 evolves,
several new trends are likely to develop in the near future such as increased
use of virtual and augmented reality; increased use of voice assistants and
chatbots; more emphasis on video marketing; Increased adoption of blockchain
technology; Predictive analytics will be used more frequently by businesses to
anticipate customer behavior and preferences and generate more effective
marketing efforts; Greater emphasis on data privacy and security; More emphasis
on sustainability; Increased use of automation; and AI-driven personalization.
These trends are not mutually exclusive and can be used in tandem to generate
more effective marketing efforts. Businesses and marketers will need to keep on
top of the newest trends and change their strategies accordingly as technology
and customer behavior continue to evolve.
To adapt and respond to radical and rapid changes of technologies and consumer behaviors, values, life styles, and expectation in this era of Marketing 5.0—the era of technology for humanity, marketers should do the following.
Marketing
5.0 is a marketing strategy that is positioned as technology for humanity. It
is the time when technologies and humans collaborate to create experiences for
consumers. It is a time for revolutionary changes that need a quantum leap and
agility. It is a marketing strategy that takes place in the digital context
that prompt all of us to change. Transformation is inevitable, and it should be
done with agile management. Brands must be immersed in consumers’ lives as
their part of life they cannot live without. Brands will be sustainable if they
can create symbolic meanings that are compatible with consumers’ values. This
is an age of “Experience Economy”; therefore, it’s experience that counts.
Impressive experiences will lead to relationship that can enhances
entanglement.