Since 1960, when Jerome McCarthy proposed the four Ps of marketing – product, promotion, price and place – the world has changed substantially.
This article is based on knowledge insights by Ivana Casaburi
Back then, there was no internet, mobile phones were an utopia and only a few visionaries could envision smartphones as we know them today – not to mention the artificial intelligence revolution that is currently underway.
In an article published in Harvard Deusto, Esade Associate Professor Ivana Casaburi and marketing expert Manu Monasterio propose an update to McCarthy's concept: the eight Ms of artificial intelligence marketing.
Although we do not see them in our homes, offices or streets, we are increasingly surrounded by robots that use algorithms to control enormous amounts of data and continuously make decisions.
Casaburi points out that robots control 90% of the information that exists about the market and the customers that companies wish to target.
"Potential customers no longer want or accept marketing proposals that say they can satisfy the customers' needs," says Casaburi. "These claims are usually based on the good intentions and intuition of marketing managers, who have only 10% of the existing data on the market."
What are the eight Ms of artificial intelligence marketing?
1. Machine to machine
Communication between machines is essential in infinite aspects of daily life; the world of business is not an exception but a paradigm. Smart machines tell Wall Street brokers what assets to buy. At Amazon stores, humans play only a symbolic role, while robots do most of the work. And of course, iPhone's Siri manages our requests by contacting systems that have the information we need.
2. Man to machine
Although communication between machines is what allows robots to access the bulk of the available information, human leadership is essential. "We are the ones who direct the smart machines based on the strategic marketing variables that we indicate," says Casaburi, citing elements such as benchmarks, analysis of competitors, and positioning in price or place as key elements for converting data into smart data.
3. Managing smart data
Converting this huge volume of data into new customers and products or services that meet their needs is essential. To do this, it is necessary to manage the smart data generated by robots. One example of success in this regard is the American giant Walmart, which has combined online and offline data to continually adapt to its customers' needs.
Smartphones have helped to democratise internet access. More importantly, they have allowed this access to become ubiquitous in our lives. This has turned internet sales – which, in turn, is managed by robots – into an everywhere market. Look no further than Chinese Black Friday: 90% of sales during this event – about €21.8 billion were made through mobile phones.
5. Making smart products
Products – one of the key elements of the classic marketing mix – have been and will be revolutionised by artificial intelligence. The future belongs to smart products that are "tailor-made and the result of work between smart machines and managers," explains Casaburi. The iPhone X, Apple's latest flagship, is the best example of smart product.
6. Marketing dynamic prices
Price is no longer a simple label. In real time, machines can combine the various factors that have traditionally conditioned pricing, including stock available in the warehouse, demand at the selling point, level of sales of the product by the competition, and the impact of marketing campaigns.
Through its artificial intelligence system, Uber bases the price of its service on a personalised calculation of numerous factors, ranging from the time and place of travel to what each person is willing to pay.
7. Multi e-channels
Robots are not only going to make key decisions when designing, pricing and promoting products. Their influence has also reached distribution, with drones acting as more spectacular but not unique protagonists. TMall, a portal of the Chinese giant Alibaba, has already been delivering the iPhone X to customers via drones. Other companies such as BMW and Volvo have introduced holograms at their points of sale.
8. Machine-generated communication
Machines can also indicate the best means of reaching customers, a responsibility that now falls to creative directors. "Smart machines are capable of visualising the most efficient means of getting a positioning proposal to the target customer," says Casaburi.
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