EDITOR'S NOTES - by Diane W. Collins

The Paradigm Shifts...Opportunity Abounds!
by Diane W. Collins

Every market has a paradigm..."a pattern, a model or way of doing things. But knowing what a paradigm is, is not enough. The most critical thing to understand about a paradigm is that in a paradigm shift, everything goes back to zero. What does that mean? It means that whatever made you successful in the old paradigm may not even be necessary in the new paradigm."
Tom Patty, Former President, tbwa/chiat/day - Los Angeles, World Wide Nissan Account Director.

One of the most brilliant treatise on marketing I have ever read is, How Not to be a Casualty of the Revolution, by Tom Patty, former President, tbwa/chiat/day - Los Angeles, World Wide Nissan Account Director. This concise article addresses the synergy of the new 5P's of Marketing which, according to Mr. Patty, "help us succeed in a world where chaos has replaced stability, where the fast-growing economy has slowed and a global competitive environment demands even greater improvements in effectiveness and efficiency." The 5P's are paradox, perspective, paradigm, persuasion, and passion. I would like to apply the principles of Mr. Patty's article to what I view as the current paradigm shift in the Internet. My purpose is to move our Community to seize the opportunity at ground zero.

Paradox: This new global world surrounds us with paradox. In order for companies to master paradox they must first identify the opportunity it contains. For example: As Mr. Patty points out, "...Nissan used paradox..by introducing the Altima as the first "Affordable Luxury Car." A paradox. A new category. A first." So what is the paradox which offers this Community opportunity? What is the paradox in the e-commerce market today as the demographics of the Internet shift and more of "main stream America gets online? The paradox is this:

Big Business creates market share through e-commerce, Big Business destroys market share through e-commerce
Marketingweb.com, "The Paradox"

What does this mean? Big Business is developing an e-commerce enabled Internet presence in order to sell direct, cut costs... eliminate the middle man. In most instances, "the middle man" is small businesses. Yet for some segments of Big Business, small businesses represent a very lucrative, high profit margin market. As one segment of Big Business eliminates the middle man and creates market share for itself through e-commerce, another segment of Big Business has market share destroyed.

For example, the Information Technology Industry (IT) currently enjoys $445 billion in annual sales derived from small businesses, according to the Yankee Group. A rather lucrative market. If that market were to be reduced through e-commerce by Big Business in general, IT would find its profits drastically effected. IT has a vested interest in bringing small businesses to the Internet and getting them e-commerce enabled. This needs to be accomplished before 2002, when 98% of all Big Business is expected to have an Internet presence, according to Forrester Research. There is a food chain in all things...business is no exception. Starting to see the opportunity?

Perspective: In order to exploit the opportunity within the paradox you must have the correct perspective. Perspective is " the ability to see things in their proper relationship to each other." Like the food chain we just described. In today's global world in order to take advantage of opportunity our perspective must be from the consumer's point of view. IT's largest collective consumer is small businesses. Yankee Group research reports state that small business "represents 98% of all US businesses, 50% of the GNP and spends approximately $445 billion annually on information technology."

Small businesses have concerns about getting online. Those concerns are web development costs, maintenance, security and how to service their customers, according to Cahners In-Stat Group. They also want to know how to market online once they get there. It isn't enough to just develop a web site. You must promote it. There is confusion. There is mistrust. IT needs to ask itself, "What business are we in?" The development of software and hardware? Or are we in the business of providing consumers with solutions? "Today we realize that we must look at every issue -- whether it's a product issue, a pricing issue or a distribution issue -- from a consumer's perspective." Those who successfully seize the opportunity will spend time devising solutions to consumer needs. They will ask, " What fundamental consumer need does my product or service satisfy?" "How does my product satisfy these needs differently and better than my competitors?" To answer those questions productively you must understand how to operate within the model, within the paradigm.

Paradigm: As mentioned, a paradigm is a pattern or model within which business currently operates. The current paradigm for the Internet is thought to be one of "techies," "nerds," a community whose majority is made up of young men in their mid-twenties to late thirties. This group is educated, mostly single, financially secure, and online purchasers of electronic equipment. Roll over Beethoven. The "masses" are on their way. The year of 1999 is predicted to be the one in which "the Main Stream gets wired." This is the paradigm shift. This is when everything that worked before doesn't necessarily work anymore! You can see it already drastically effecting the online advertising industry as evidenced by their confusion over banner campaign ineffectiveness. Advertising is selling to a model that is in the midst of a shift. Those who understand ground zero will survive.

The point is this. The paradigm shift, the "masses," represents the customers of small businesses. Small businesses needs to get online now or lose their clients to the Big Businesses who are already here. "The way to master a paradigm is first to identify the paradigm shift and second to make sure you are positioned to take advantage of the opportunities presented by this new paradigm." IT has the opportunity to educate and assist small business in establishing an Internet presence. This will help preserve the IT market share. Small businesses have the opportunity to ensure their economic future by working with IT in a symbiotic relationship. In order to do this, there must be trust. Both sides must be persuaded.

Persuasion: "The ability to induce someone to do or think something." You must, according to Mr. Patty, understand the three characteristics of persuasion in order to master it. The characteristics are: "the credibility of the speaker, the content of the message, and the involvement of the audience.

IT needs to be credible in their desire to bring small businesses online. "Credibility and trust are emotional, not rational things. You can't make someone trust you. You have to earn it over time." When credibility problems exist they can be addressed through carefully orchestrated publicity campaigns and controlled advertising. Both of these involve a third party who brings both sides to a better understanding of each other. Community can also establish trust and credibility. Consumer loyalty to products and services is the outcome of a relationship. Community provides relationship. But we need one more element.

Passion: The fifth element is passion. "You have to have a passion for what you do. In order to succeed, in order to capitalize on the opportunities of the 21st century..." You have to believe in what you do. As Mr. Patty points out mass markets and mass media have given way to individual products designed for specific needs and wants. "...advertising creates exciting, stimulating dialogues with consumers designed not just to make a sale but to create a relationship." He is correct in saying, "This is how we keep customers." It is also how we create community.

IT must passionately believe small businesses must be preserved. IT needs to become seriously involved in getting small businesses online. It is in IT's economic interest to do so! Our Community is composed of both sides... small businesses and Big Business IT. The symbiotic relationship exists. We have an opportunity to work together. The paradigm shifts... ground zero approaches. Seize the moment!

January 22, 1999
Copyright © 1999 MARKETINGWEB.COM. All Rights Reserved. Legal Notices.

Comments/Questions: dcollins@marketingweb.com

I wish to extend my profound thanks to Mr.Tom Patty, former President of tbwa/chiat/day - Los Angeles and World Wide Nissan Account Director. Had I never found tbwa/chiat/day or read his article, I would not have seen the opportunity. Diane W. Collins, President, Marketingweb.com

***SIDEBAR: I later had the opportunity to meet Tom Patty in California as a result of his reading my article online. Having someone you hold in such high regard, like Tom Patty call you directly can be somewhat unsettling. But, Tom quickly put me at ease and we had a great time talking ideas. (My favorite pass time.) Now retired, Tom's wit and joy of life as well as his dedication to helping businesses succeed has not slowed one bit. Hope you and Susan are enjoying that sailboat, Tom!

Best regards,
Diane W. Collins


Copyright © 2008 Marketingweb.com
All Rights Reserved.