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Global Marketing

Creative Destruction in Global Marketing

In this blog post, we want to look at the concept of creative destruction which was listed under “Gaining Competitive Advantage” in Class 3’s PowerPoint. Creative Destruction is a concept created in the 1940s by Australian economist Joseph Schumpeter. It is defined as destroying established processes in order to create room for improvement. Schumpeter believed that in order for innovation to take place, long-standing arrangements must be broken down first. This concept is often used when talking about technology such as railroads or the internet. 

When learning more about creative destruction, we wanted to look at how it relates to globalization as a whole. In this TedTalk titled “Globalization and the power of creative destruction”, Tom Palmer looked at the concept of creative destruction from the perspective of whether it has a positive or negative effect. He notes that there are no longer phone booths or typewriters but are now replaced with much more powerful phones and computers. A story he tells is when he was teaching at Francisco Marroquín University, about Guatemalan women and the traditional clothes they wear called Huipil and Corté. In recent times, visitors frequently complained that they were no longer wearing their traditional clothing. Palmer explains that this is a result of globalization because the Corté as often because they are more expensive now and are now saved for special occasions. Instead, she can now make a Corté, sell it, and then buy 5 normal Brazilian outfits or use the money for other expenses. He concludes his TedTalk with a statistic about how only ten firms from the 1960 S&P 100 are still on the list in 2012. 

An article that we also looked at discusses how creative destruction relates to marketing. A quote from the article states “Marketing as we knew it is dead – but marketing as we now know it is ubiquitous.” They open by explaining how in today's environment every interaction is a form of marketing. Generating customer insight from their experience and using it to develop strategies is very important. When marketing a bike in the past, the strategy was predominantly geared toward the product itself. Marketers would highlight the specifications and features of the bike. Now with online bike-sharing services, marketing is focused on the experience of it rather than the specifics of the bike itself. 

 They conclude by saying that companies need to be prepared to creatively destruct their own practices to rebuild and adapt to our times now. In order to adapt to new technology, companies need to “operate at scale, across borders, and in an integrated way.” They also need to build their expertise around technology. 

Work Cited

https://www.youtube.com/watch?v=w_lLOI12a5g&ab_channel=TEDxTalks

https://www.pluralstrategy.com/creative-destruction-the-reinvention-of-marketing/

https://www.investopedia.com/terms/c/creativedestruction.asp

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