Transforming Marketing with AI and Science-Driven Strategy

The digital revolution persists in incredibly impacting the business world. Artificial intelligence (AI), now at the forefront of technological advancements, has sparked a competitive race among companies, driving business leaders to create strategies to adopt and implement AI into their operations (Ye?i?n, 2020). Further, as AI capabilities evolve with giant strides, it will become more feasible to create tools that enhance efficiency, facilitate superior decision-making, and assist in keeping ahead in innovation and competitors.?However, the latest problem is that more and more AI tools are coming into the market each day, promising increased productivity, cost savings, and the ability to extract valuable insights from large amounts of data. As a result, business leaders face significant challenges in deciding which AI tools to integrate into their business practices. Some key hurdles include understanding the complex technology and its potential applications, managing the costs associated with implementation, addressing employee resistance and fears, ensuring data privacy and ethical use of AI, and navigating regulatory uncertainties (Davenport et al., 2020). Balancing innovation with risk management is crucial to successful AI integration, requiring strategic planning and a forward-thinking approach from business leaders to position an organization for long-term prosperity.

Consequently, the marketing landscape is experiencing a profound transformation, as revealed by multiple scholarly research papers in marketing science. Critical findings point to three major forces driving marketing changes: technological, socioeconomic, and geopolitical trends (Rust, 2020). These changes are drastically shaping all areas of the business environment, offering great opportunities but posing serious risks, requiring a more in-depth examination and adaptation of a marketing strategy to better align with today's consumer needs.

Traditional Marketing vs. AI

While traditional marketing methods have proven to have some effectiveness over time, a study that analyzed and compared standard marketing methods vs. artificial intelligence (AI) found that marketing performed with AI was more effective than traditional marketing (K., 2022). AI delivered better results, enabling businesses to gain and maintain a competitive edge. Additionally, research findings indicate that technological advancements will continue to revolutionize marketing, eventually making the four Ps of marketing obsolete (Rust, 2020). For this reason, evaluating and implementing new marketing science methods and tools into marketing strategies that keep pace with the changing business landscape is imperative for an organization's long-term success. In fact, being aware of critical factors that fall under the technological, socioeconomic, and geopolitical trends, is advantageous. Some of the key factors, as suggested by Roland T. Rust in?"The Future of Marketing,"?are Focus on Service, Artificial Intelligence, Personalization and Privacy, Discrimination, Inequality of Wealth, Free Trade vs. Protectionism, and Climate Change. Given the scale and nature of these changes, these noted factors are essential to consider and can provide clear guidance on the necessary transformation that the marketing strategy, along with the business strategy must undergo to better target and satisfy customers.

Technological Trends

Focus on Service:

• A long-term trend that will continue to influence marketing is the constant growth of the service sector (Rust, Ronald T. & Chung, 2006), which has been an increasing part of the economy for more than 100 years. This expansion extends notably to B2B (Lilien, 2016) and B2G areas (Josephson et al., 2019)
• Goods-producing companies should consider transitioning towards services, mainly information services, which represents a significant economic growth opportunity.
• Due to the increased capabilities of technological advancements, businesses can more effectively communicate with customers and store and analyze customer information, allowing for deeper customer relationships. This shift challenges traditional marketing beliefs, signifying a move from promoting and selling physical goods to cultivating long-term customer connections.?

Artificial Intelligence:

• Integrate AI to effectively communicate with customers and store and analyze customer information, allowing for deeper customer relationships.?
• With AI handling analytical work, shift management focus towards effectively managing collaboration between AI and human intelligence (HI) teams.
• Leverage AI to overcome language barriers, making international collaborations more feasible.
• Explore and capitalize on the Internet of Things (IoT), which provides real-time continuous communication opportunities among customers, machines, and companies.

Personalization and Privacy:

• Recognize AI as the key technology enabling adaptive personalization.
• Implement personalization systems that adapt over time based on observed customer behavior.
• Protecting customer privacy is top priority to limit legal risks.
• Move away from standardized offerings and prioritize tailoring products or services to meet the unique needs of individual customers.

Socioeconomic Trends

Discrimination:

• The problem of discrimination is expected to grow in the future due to the rising trend of people moving from less-developed to more-developed countries which will create an "under class". Providing different service levels to consumers from groups that, on average, are less profitable may be a practical business approach to making optimal profits in the short term (Ukanwa & Rust, 2018).

Inequality of Wealth:

• Capitalize on wealth inequality (Cingano, 2014). Understanding that extreme differences in wealth present marketing opportunities. Consider the vast number of potential customers who on average are less profitable. Conversely, an unprecedented number of wealthy individuals make luxury marketing a crucial focus area.

Geopolitical Trends

Free Trade vs. Protectionism:

• International marketing is heavily influenced by changes in the global trade landscape, mainly free trade agreements, protectionism, and tariffs. It is important to understand that recent disruptions not only affect international sales but also the supply chain, especially for companies operating across national borders.

Climate Change:

• Climate change can significantly affect agriculture and severe weather events and influence global supply and demand patterns. Additionally, it has led to the rise of green marketing and sustainable products.

Conclusion

The scholarly research emphasizes the pressing need for a shift toward marketing science. While traditional methods can produce limited results, the global marketplace demands a more precise, data-driven, and culturally sensitive approach. The suggested factors to consider highlight the potential benefits of marketing science, emphasizing its ability to enhance consumer insights, global sensitivity, personalization, and risk mitigation, providing the necessary guidance to develop more effective marketing strategies.

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References:

Cingano, F. (2014). Trends in Income Inequality and its Impact on Economic Growth. éditions OCDE / OECD Publishing. 10.1787/5jxrjncwxv6j-en

Davenport, T., Guha, A., Grewal, D., & Bressgott, T. (2020). How artificial intelligence will change the future of marketing. Journal of the Academy of Marketing Science, 48(1), 24-42. 10.1007/s11747-019-00696-0

K., S. (2022). A Comparative Analysis of Artificial Intelligence in Marketing and Traditional Marketing. International Journal of Business Analytics & Intelligence (IJBAI), 10(1), 16-21.

Lilien, G. L. (2016). The B2B Knowledge Gap. International Journal of Research in Marketing, 33(3), 543-556. 10.1016/j.ijresmar.2016.01.003

Rust, R. T. (2020). The future of marketing. International Journal of Research in Marketing, 37(1), 15-26. 10.1016/j.ijresmar.2019.08.002

Rust, R. T., & Chung, T. S. (2006). Marketing Models of Service and Relationships. Marketing Science, 35(6), 560-580. https://pubsonline.informs.org/doi/10.1287/mksc.1050.0139

Rust, R. T., & Huang, M. (2014). The Service Revolution and the Transformation of Marketing Science. Marketing Science, 33(2), 206-221. https://search.ebscohost.com/login.aspx?direct=true&AuthType=sso&db=edsjsr&AN=edsjsr.24544825&site=eds-live&scope=site&custid=natuniv

Ukanwa, K., & Rust, R. T. (2018). Discrimination in Service. Marketing Science Institute, https://thearf-org-unified-admin.s3.amazonaws.com/MSI/2020/06/MSI_Report_18-121-1.pdf

Ye?i?n, T. (2020). THE PLACE AND FUTURE OF ARTIFICIAL INTELLIGENCE IN MARKETING STRATEGIES: (Ara?t?rma Makalesi): Pazarlama Stratejilerinde Yapay Zekanin Yeri ve Gelece?i. Ekev Academic Review, 24(81), 489-506. https://search.ebscohost.com/login.aspx?direct=true&AuthType=sso&db=a9h&AN=142664051&site=eds-live&scope=site&custid=natuniv

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