Since 1960, when Jerome McCarthy proposed the four Ps of marketing - product, promotion, price and place - the world has changed substantially. Back then, there was no Internet, mobile phones were an utopia and only a few visionaries could envision smartphones as we know them today - not to mention the artificial intelligence revolution that is currently underway. In an article published in Harvard Deusto Business Review, ESADE Associate Professor Ivana Casaburi and marketing expert Manu Monasterio have proposed an update to McCarthy's concept: the 8 Ms of artificial intelligence marketing.Although we do not see them in our homes, offices or streets, we are increasingly surrounded by robots that use algorithms to control enormous amounts of data and continuously make decisions. As Prof. Casaburi points out, robots control 90% of the information that exists about the market and the customers that companies wish to target. "Potential customers no longer want or accept marketing proposals that say - based on the good intentions and intuition of marketing managers, who have only 10% of the existing data on the market - that they 'could' satisfy the customers' needs," says Prof. Casaburi. Clearly it's time to upgrade the 4 Ps to the 8 Ms developed by Prof. Casaburi and Mr. Sanchez-Monasterio: 1. Machine to machine Communication between machines is essential in infinite aspects of daily life; the world of business is not an exception but a paradigm. Smart machines tell Wall Street brokers what assets to buy. At Amazon stores, humans play only a symbolic role, while robots do most of the work. And of course, iPhone's Siri manages our requests by contacting systems that have the information we need. 2. Man to machine Although communication between machines is what allows robots to access the bulk of the available information, human leadership is essential. "We are the ones who direct the smart machines based on the strategic marketing variables that we indicate," says Prof. Casaburi, citing elements such as benchmarks, analysis of competitors, and positioning in price or place as key elements for converting data into smart data. 3. Managing smart data Converting this huge volume of data into new customers and products or services that meet their needs is essential. To do this, it is necessary to manage the smart data generated by robots. One example of success in this regard is the American giant Walmart, which has combined online and offline data in order to continually adapt to its customers' needs. 4. M-Glocal Smartphones have helped to democratize Internet access. More importantly, they have allowed this access to become ubiquitous in our lives. This has turned internet sales - which, in turn, is managed by robots - into an everywhere market. Look no further than 'Chinese Black Friday': 90% of sales during this event - about €21.8 billion were made through mobile phones. 5. Making smart products The product - one of the key elements of the classic marketing mix - has been and will be revolutionized by artificial intelligence. The future belongs to smart products that are "tailor-made and the result of work between smart machines and managers," explains Prof. Casaburi. The iPhone X, Apple's latest flagship, is the best example of smart product. 6. Marketing dynamic prices Price is no longer a simple label. In real time, machines can combine the various factors that have traditionally conditioned pricing, including stock available in the warehouse, demand at the selling point, level of sales of the product by the competition, and the impact of marketing campaigns. Through its artificial intelligence system, Uber bases the price of its service on a personalized calculation of numerous factors, ranging from the time and place of travel to what each person is willing to pay. 7. Multi e-channels Robots are not only going to make key decisions when designing, pricing and promoting products. Their influence has also reached distribution, with drones acting as more spectacular but not unique protagonists. TMall, a portal of the Chinese giant Alibaba, has already been delivering the iPhone X to customers via drones. Other companies such as BMW and Volvo have introduced holograms at their points of sale. 8. Machine-generated communication Machines can also indicate the best means of reaching customers, a responsibility that now falls to creative directors. "Smart machines are capable of visualizing the most efficient means of getting a positioning proposal to the target customer," says Prof. Casaburi. This article was originally published in the ESADE Knowledge Pills magazine by Executive Education.

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The 8 Ms of artificial intelligence marketing

09/2018

Since 1960, when Jerome McCarthy proposed the four Ps of marketing - product, promotion, price and place - the world has changed substantially. Back then, there was no Internet, mobile phones were an utopia and only a few visionaries could envision smartphones as we know them today - not to mention the artificial intelligence revolution that is currently underway.


In an article published in Harvard Deusto Business Review, ESADE Associate Professor Ivana Casaburi and marketing expert Manu Monasterio have proposed an update to McCarthy's concept: the 8 Ms of artificial intelligence marketing.


Although we do not see them in our homes, offices or streets, we are increasingly surrounded by robots that use algorithms to control enormous amounts of data and continuously make decisions. As Prof. Casaburi points out, robots control 90% of the information that exists about the market and the customers that companies wish to target. "Potential customers no longer want or accept marketing proposals that say - based on the good intentions and intuition of marketing managers, who have only 10% of the existing data on the market - that they 'could' satisfy the customers' needs," says Prof. Casaburi.


Clearly it's time to upgrade the 4 Ps to the 8 Ms developed by Prof. Casaburi and Mr. Sanchez-Monasterio:


1. Machine to machine


Communication between machines is essential in infinite aspects of daily life; the world of business is not an exception but a paradigm. Smart machines tell Wall Street brokers what assets to buy. At Amazon stores, humans play only a symbolic role, while robots do most of the work. And of course, iPhone's Siri manages our requests by contacting systems that have the information we need.


2. Man to machine


Although communication between machines is what allows robots to access the bulk of the available information, human leadership is essential. "We are the ones who direct the smart machines based on the strategic marketing variables that we indicate," says Prof. Casaburi, citing elements such as benchmarks, analysis of competitors, and positioning in price or place as key elements for converting data into smart data.


3. Managing smart data


Converting this huge volume of data into new customers and products or services that meet their needs is essential. To do this, it is necessary to manage the smart data generated by robots. One example of success in this regard is the American giant Walmart, which has combined online and offline data in order to continually adapt to its customers' needs.


4. M-Glocal


Smartphones have helped to democratize Internet access. More importantly, they have allowed this access to become ubiquitous in our lives. This has turned internet sales - which, in turn, is managed by robots - into an everywhere market. Look no further than 'Chinese Black Friday': 90% of sales during this event - about €21.8 billion were made through mobile phones.


5. Making smart products


The product - one of the key elements of the classic marketing mix - has been and will be revolutionized by artificial intelligence. The future belongs to smart products that are "tailor-made and the result of work between smart machines and managers," explains Prof. Casaburi. The iPhone X, Apple's latest flagship, is the best example of smart product.


6. Marketing dynamic prices


Price is no longer a simple label. In real time, machines can combine the various factors that have traditionally conditioned pricing, including stock available in the warehouse, demand at the selling point, level of sales of the product by the competition, and the impact of marketing campaigns. Through its artificial intelligence system, Uber bases the price of its service on a personalized calculation of numerous factors, ranging from the time and place of travel to what each person is willing to pay.


7. Multi e-channels


Robots are not only going to make key decisions when designing, pricing and promoting products. Their influence has also reached distribution, with drones acting as more spectacular but not unique protagonists. TMall, a portal of the Chinese giant Alibaba, has already been delivering the iPhone X to customers via drones. Other companies such as BMW and Volvo have introduced holograms at their points of sale.


8. Machine-generated communication


Machines can also indicate the best means of reaching customers, a responsibility that now falls to creative directors. "Smart machines are capable of visualizing the most efficient means of getting a positioning proposal to the target customer," says Prof. Casaburi.


This article was originally published in the ESADE Knowledge Pills magazine by Executive Education.

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