In his book, (Can Capitalism Survive?) Joseph Schumpeter described capitalism as a form of economic change that is characterized by industrial revolutions that are followed by phases of adaptation. According to Schumpeter, phases of adaptation allow the economic system to absorb the results and effects of the revolution, and in the process, revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one.”
Whilst some of us may find Schumpeter's choice of words a little intriguing, the fact of the matter however, is that the gale of creative destruction is a reality of life and cannot be wished away. My sense however, is that the current phase of adaptation has been a little aggressive this time around, especially judging by the number firms (big and small) that collapsed all over the world, the number of job losses in South Africa (475 000) in the first two quarters of 2009, impact on wages and salaries, severe deceleration of consumer spending, wealth effects etc.,
Whilst the interplay of the above elements has already set in motion, some cyclical adjustments on consumption patterns, to enable consumers to see this period of adaptation through, my sense however, is that these only serve as a prelude to the fundamental changes in consumer preferences, habits and practices that are on the horizon. My feeling is that the corporate scandals that were widely reported all over the world, the collapse of established financial institutions, price collusion and anti-competitive behavior widely reported in South Africa and activism against high prices such as banking fees, all conspire to erode the equity and trust in brands, their pulling and pricing power, thus making marketing harder than it already is, especially coupled with the fact that consumers do not seem ready as yet to let their wallets do the talking.
Whilst this may seem negative at first glance, I think that this puts a spotlight back on marketing, especially in sectors and enterprises where marketing is a back bencher. The key question however is, are you ready for the spotlight, demands and expectations that come with the spotlight? More importantly, have you positioned your marketing function appropriately and have you geared up your marketing operating model and your delivery network for this eventuality? If not, you may need to retool and rewire your marketing factory otherwise your marketing function may not see the light.
