07JAN How Companies Can Befriend a Trend
Trend research is a booming business. Many agencies and self-appointed gurus announce the latest trends from their perspective, generating publicity and awareness. This can be particularly confusing for multinational
corporations because, apart from localand regional trends, they have to identify international and cross-regional trends, and incorporate them into their strategic planning and decisions.
But trends and trend research are an integral part of business in the global marketplace. If companies miss out on market developments that fundamentally change customer interactions, they are doomed to fail. Just think of Kodak’s neglect of tectonic shifts in the photography market. But misjudging a blip for a trend may cost a firm critical amounts of money and reputation. Even today people still cite the 1958 example of the Ford Edsel which, though leading-edge in technology, failed in the market.
A trend identification at an early stage can significantly help a firm to distinguish itself from competitors and lastingly strengthen its brand. Toyota demonstrated this with the Prius. The Japanese carmaker realized early on that fuel efficiency and “green driving” are not only ecological necessities, but also a growing customer preference.
What Exactly Is a Trend?
A trend is not simply a future occurrence, but rather an event line that becomes apparent through current incidents pointing in the same direction. The challenge is to see through a multitude of ambivalent incidents to find those that eventually will become a straight line of change. Single events don’t make a trend but may well mark the beginning of one and therefore need to be tracked.
Trends affect marketing actions in various ways: Product technology can be influenced and changed by a trend. Take electric mobility as a current example: The electric impulse generation in new automobiles differs fundamentally from the traditional fuel engine. Companies must acquire completely new technology competencies in order to compete. In the electric car, the energy storage in the battery is the decisive component. Car companies that engaged full-fledged with this technology early on, acquired know-how and cooperated with partners have developed and maintained key competitive advantages.
Technological changes also can lead to different pricing models due to a change in cost structures. A trend may influence the way that multinational corporations interact with their clients or lead to new customer needs and preferences. Trends can cause the development of new distribution or sales channels, or lead to changes in the existing sales structure.
May 20, 2017
May 20, 2017