Ten things marketers will need to know in the year 2013

When I first became a brand manager in 1978 I knew what marketing did. The brand manager's job was to manage and develop the company's most important and valuable assets – its brands. One part of the job was to bring the outside world in – to ensure that what was important to consumers was brought to the attention of the company and acted on. The other side of the job was to manage, co-ordinate and motivate the range of business partners and agents who helped produce the materials to support the brands.

I still think this is a pretty good description of what marketing does. But the issues that will be facing us in 2013 will be quite different. Here is my list of ten things that marketers will need to know.

1. THINK GLOBAL

Marketing needs to think global and act global. The shift of economic growth from west to east is already in progress.

Global trade has grown radically in the past 50 years. The shipping container has transformed the ease with which goods can be transported and is one of the drivers of global trade. In 1955 Europe accounted for more than 60% of global trade; by 2005 this had fallen to 45%. Over the same period Asia's share rose from under 20% to more than 30%, and by 2013 may account for 40% of global trade. Recent growth has concentrated on the BRIC nations (Brazil, Russia, India and China) and this looks set to continue. All have resources of either oil and gas or vast populations of potential middle-class consumers. The challenge for China is to get rich before it gets old. The onechild policy means an ageing population and a 30 million shortfall of women.

As trade goes global, so will marketing. Expertise will be concentrated in the global centres of the multinationals – implemented by local teams with limited ability to change things.

Where, then, will future marketers learn their business?

2. THE STREETS ARE PAVED WITH GOLD Cities paved with streets of gold – metro marketing means marketing to the world in a single city.

By 2015 the majority of the world's population will live in cities. Alongside this will be a rise in the number of megacities (population of more than 10 million). In 1950 New York was the only megacity, by 2000 there were 20 and by 2050 there will be 43. People working in agriculture are drawn to the opportunities cities offer, but those cities become more dependent on the surrounding land for food. Manufacturing in China has been fuelled by migrant labour. In more than 50 countries legal and illegal migrants now account for more than 15% of the population.

This cultural diversity will make marketers' lives more complex. Mass production's mantra of 'one size fits all' risks alienating those who meld their identity of birth with their new identity. In the US the Hispanic market now accounts for 15% of US spending. A recent study by Coca-Cola concluded that the spending power of US ethnic audiences would make it the sixth richest nation in the world. Targeting will need to go beyond demographics and understand belief systems. Effective marketing needs to balance collective and individual identities simultaneously.

3. FROM YOUNG TO OLD

Marketing has always concentrated on youth; in the future the elderly will become a key audience.

The world is getting older. In 1950 the average of the global citizen was 46.5 years. By 2000 this had risen to 65 and by 2050 it is forecast to rise to 75 years. This is due to the combination of reduced infant mortality together with rising life expectancy.

In Britain for the first time ever there are now more pensioners than people under 16. The baby boomers (born 1947–1963) were the first generation to value 'youth' and are determined to cling to it despite reaching retirement age. Marketers will have to understand the values of different generations and find a way to reach those who are young in years and those who can only claim to be young at heart.

4. PERSONAL AND PLANET HEALTH

Marketing will be part of the growing concern for personal health and planet health. The ageing population will place pressure on both pensions and health care. The trend towards obesity will add further to health costs. Cardio-vascular disease remains Britain's biggest killer. Type 2 diabetes was an ailment associated with age but is now appearing in obese children. A total of 24% of British people are obese (BMI 30+), lower than the US (38%) but higher than the global average of 15%.

Concerns about obesity will increase governments' involvement in food and beverage packaging and communications. Self-regulation will be under pressure and governments' role likely to increase.

The health of the planet is an equal concern to that of human health. Weather instability has consequences for many markets. Tourism, agriculture, retailing and insurance are all affected by even short-term changes in weather. Food will become an environmental issue; meat production is carbon intensive. It takes 4,800g of carbon to produce 300g of beef vs 45g of carbon to produce a kilo of carrots.

Marketing will be asked to add these wider environmental and contextual issues to its consideration

5. THE ERA OF CHEAP FOOD, ENERGY AND FINANCE IS OVER

The battle for resources will transform how we design, transport and price products.

Growing affluence has relied on easy access to transport and finance. Consumption has relied on being able to make the most of low-cost production. One of the consequences is a highly interdependent world. It may be that supplies of energy and water will become more volatile. Loss of water and/or electricity takes society back to the dark ages within the space of days. Electricity is needed to pump the petrol and water, to power cash machines and mobile phones, as well as to deliver food and produce light and heat. Just-in-time systems mean that breaks in supply rapidly reveal unexpected consequences.

Water may become as politically charged a commodity as oil. Only 3% of the world's water is drinkable. Already more than 1 billion people lack access to safe drinking water. The forecasts are that the world will need 20% more water by 2030 and that two out of three people will have difficulty accessing water. The majority of water consumption is for agriculture, so lack of water affects food. All marketing practices will come under scrutiny and will be expected to adapt to these fundamental changes. Short-term pressure will come from the triumvirate of packaging reduction with increased recycling, reduced transport and distribution impact and increased pressure from retailers expecting brand owners to manage these pressures. European retailers will become more powerful and likely to demand central pricing and purchasing but local delivery.

6. MARKETING IS THE NATURAL DISCIPLINE TO MANAGE THE EMERGING TRANSPARENT COMPANY MODELS

The limited company structure (designed for the Industrial Revolution) may not be suited to future demands. Debt has been raised via increasingly complex (and opaque) financial instruments. Few were aware of the real risks. The credit crunch and subsequent loss of confidence are symptomatic of the dangers of a lack of transparency. The old silo system of command and control is too inflexible to meet future needs. As we move into the Information Age we need to develop a more flexible and transparent corporate model.

With the needs of many stakeholders to be considered we need to move to faster and more flexible structures. They will need to operate as networks, not silos. Networks based on cooperation. Ideas will be valued resources and at the heart of new transparent companies. Marketing is ideally suited to be at the centre of these organisations.

7. UNDERSTANDING GENERATIONAL DIFFERENCES

Marketers will have to understand the generational differences that drive the needs of both staff and customers.

Work is less central to the identity of the younger generations (X and Y) than it was for the boomer generation. They know there are no jobs for life and so are more transactional about work and want to build their own asset base of skills. They expect the company to engage them (not vice versa). Both customers and staff expect to be treated as equals. Most understand the rules of business and brands, and demand greater openness and honesty before they are prepared to trust.

This changes management styles. Motivation becomes a key skill. This has always been a core skill of a good brand manager and will attract an even greater premium. Marketing will have to become more cooperative, more interactive, with the higher levels of consultation and feedback.

8. NEW MEDIA

Marketers need to get real about new media. What can it deliver? Will it ever deliver its promise?

New media is not so new, it's now 15 years old. Many households may be online but highest use remains search. The internet is a powerful information medium but shows few signs of replacing traditional entertainment media. The fastest-growing UK sites are those of Channel 4, John Lewis, the Guardian and First Choice holidays. Not quite a hotbed of anti-consumerism or the new economy. Social networks are growing, but 42% of internet users don't know what social networking is. A total of 84% of British people own a mobile phone but use of new features remains limited. Only 31% have taken photos, 21% listened to music and only 5% have used the internet on their mobile.

The internet is powerful in the private 'dream' world where everything is free, but is less powerful in the 'public' paid-for world. Here it is primarily an information rather than an entertainment medium. It has transformed global access to products but delivery remains complex and expensive. The internet will grow, but traditional mass media will remain key channels for advertising in the foreseeable future.

9. BRAND COMMUNICATIONS IN 2013

Brand communications will be about the three 'C's: creation, content and cooperation.

People watch programmes, not channels. There has been as explosion of new channels, but no real increase in advertising budgets. The channels need content as well as ads. Will brands go back to the days of producing soap operas and barter content for airtime?

UGC (user-generated content) is the buzzword of the moment, but will it make money or is it just a fad? Word of mouth has always been the most powerful means of communication but it can't be engineered. Technology has released a passion for creating content, but is it content that will be of interest to anyone other than the creator? Are blogs and citizen journalism, YouTube and Flickr about creativity? Or are they driven by the desire for celebrity? Do consumers really want to engage themselves in commercial creativity?

New media creates opportunities for brands. Information overload may mean that brands have a role as trusted editors. Brands could share their power and influence with their customers by acting as 'hosts' and creating opportunities to develop new talent. If this is to happen we need a new model – 'creative capitalism'. The production of branded content, together with talent management, will become a key marketing skill.

10. NEW MARKETING NEEDS NEW AGENCY MODELS

Many clients believe that the current agency model is broken. Most agency networks have been built through acquisition rather than organic growth. The agencies often fail to deliver the necessary combination of marketing disciplines. The promised consistency and integration is lost in internal competition. Many agencies have effectively industrialised creativity. Agency margins rely on building factories for ideas, and many are burdened with high overheads.

One creative director said that, if you give £100K to a typical ad agency, 20% goes to the shareholders, 25% goes on overheads, and 30% goes on planning and account management. Only 25% will be spent on the core product – a creative idea. Some are experimenting with a more bespoke approach. Marketers will be looking to agencies to provide more effective and better value structures to meet the challenges that we are all going to be facing in 2013.

The fundamental role of a marketer remains the same, but the context in which marketing operates will change radically. Many of the future assets of companies will be intangible. Marketers will become managers of intellectual property, and marketing in 2013 will be just as demanding and rewarding a profession as ever.

SOURCES

Data from BBC News, United Nations, Office for National Statistics, Observer Food Monthly, Pew Internet and Euromonitor.