This is a synthesis of the future scenario development, led by Peter Belohlavek, that was triggered by the research on global behaviors www.unicist.org/research_project3_en.pdf and was upgraded due to the stagnation of the growth of countries in the EU since 2008. It included the following countries: Argentina, Australia, Brazil, Canada, Chile, China, England, France, Germany, India, Japan, Mexico, Spain, Sweden, USA and Venezuela.
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Consumers and clients were the victims of the XXth century
The XXth century was strongly influenced by the battle between capitalist consumerism and communist anti-consumerism. Paradoxically, both positions are the two faces of the same coin: the transformation of consumers into survivors which drove them towards over-adaptive behaviors and addictions.
Ideologies prevailed over functional behaviors. Capitalism used the myth of “design globally, operate locally” to justify their actions on markets while Communism brought about the theory of the “Superior Human Being” in order to justify their lack of productivity.
Consumers paid the bills which drove to side effects that were extremely functional for this period while the understanding of the functional needs of consumers was left aside and money driven or ideology driven manipulation prevailed.
The lack of knowledge to develop an empathic relationship with consumers inevitably made materialistic or ideological justifications prevail in decision making. The less an individual knows about the true drivers of consumers’ behavior the more he needs to use manipulation to influence.
The knowledge of the drivers of buying decisions and the possibility to develop predictive interfaces to build adaptive automation allowed leaving behind behaviorism that worked as a palliative for almost 100 years.
A turning point
This future scenario implies a turning point. It is a turning point to increase the level of empathic influence on the markets in order to increase the adaptiveness of commercial processes.
Paradoxically, this turning point is a consequence of the same drivers that led to the stagnation which now triggers the next step. This next step appears in a context of new technologies that allowed the development of automated adaptive solutions to build empathic approaches with consumers.
The drivers to the turning point were:
1) Growth stagnation
3) Financial crises and the change of the role of banks as monetary circulation administrators
4) The massification of social virtual networks
5) The massification of personal communication
6) The increase of individualism
The new technologies that made the turning point possible were:
- The discovery that in nature there only exist stable relationships based on complementation and supplementation opened a new perspective on the management of complex adaptive systems. It allowed managing the integration between consumers, products and providers, and confirming the validity of mathematic analyses of consumers’ behavior when complementation or supplementation had been confirmed.
- The discovery of the double dialectical logic that allows emulating the dynamic of consumers’ behavior.
- The development of commercial, semiotic and semantic objects to build empathic relationships with consumers.
- The discovery of the drivers of consumers’ actions that allowed developing the functional, psychological, conceptual and lifestyle segmentation.
- The development of adaptive automated IT solutions to manage markets
- The discovery of behavioral predictors and the development of predictive interfaces for IT solutions.
- The use of structured commercial communities.
What will have happened within the next 10 years?
The following aspects will be the standards in consumer market management within the next 10 years:
- The segmentation of potential customers – including the hard, functional, psychological, conceptual and lifestyle segmentation – will have been used as a standard based on observable predictors to influence consumers with a more empathic approach.
- Cross-cultural segmentation will have been used to manage adaptive empathic influence worldwide.
- Object Driven Marketing will be a standard marketing approach.
- The use of commercial catalysts will have been applied in all the cases where they work.
- Client Centered Management and Object Driven Organization will have become standards in business architecture.
- Co-marketing and commercial alliances will have been multiplied
- Brand management will have become significantly more important to build product/service synergy.
- Hyper-segmentation will have been used in all those niches where there is no direct relationship between the value of products and their variable costs.
- The social networks will have become a commercial channel for complementary and supplementary products/services
- The aesthetics of products/services, in the sense of completing clients’ needs, being desirable, harmonic and having unreachable aspects, will be the exclusive trigger to access the mind of the consumer.
- Customer Relationship Management Systems will have become adaptive automated solutions.
- Market Labs will be regularly used to monitor markets using predictive interfaces.
“Empathic adaptiveness is the name of the new era”
The paradoxical results of behaviorism
Behaviorism (John B. Watson) can be considered perhaps the earliest approach to complexity science considering human behavior as a complex system where the unique results subject to measurement are the observable behaviors of individuals. It was a functional palliative for empathic adaptiveness for almost 100 years.
The use of behaviorism to define adaptive actions to markets drove to the development of hard segmentations that are extremely simple to measure but at the same time have only a hypothetical relationship with the true drivers of the consumer’s actions. Statistics of results prevailed over the knowledge of the behavior of consumers.
A natural consequence of the use of behaviorism to segment markets, was the fact that people needed to use additional tools to influence the potential buyers. Manipulation became a professional disease of salesmen/women.
Manipulation is the palliative to avoid adapting
Thus psychopathic manipulation substituted de understanding of the buying processes transforming salesmen/women into forced manipulators because of their lack of knowledge of the buying drivers to influence the prospects.
How do buying processes work?
All buying processes imply the integration of emotions (desires), ideals or limits and conveniences. This integration varies depending on the needs that are being satisfied, the characteristics of the buyer and the characteristics of the seller.
These levels are interdependent complex systems that are integrated hierarchically and include the following aspects of the products or services: 1) the hard characteristics, 2) the functionality, 3) the role for the buyer, 4) the concept and 5) the social role.
Depending on the concept of the product/service, some of these levels can be considered as given or as limits to develop an empathic adaptive approach to the buyer. Every individual has a predefined position at each level which defines her/his segment.
Each segment is a universe in itself composed by those people who have similar structural beliefs in a buying process. This knowledge is used to build empathic relationships to influence the buying processes.
In the following lines, you will find a description of how these segmentations work in order to be used to increase the adaptiveness of the value propositions. There is no need to make a description of the hard characteristics of a product or service. That is why we start with the description of the functional segmentation.
Functionality is defined as the capacity of something to fill an individual’s need. Functionality is homologous to aesthetics. When talking about functionality we refer to the perceived functionality which defines what we call the hard segmentation.
This segment considers the attributes of products without “anesthesia”. It eliminates apparent superfluous attributes not considering any complementation.
The “Attractive” segment buys the products/services based on their hidden inaccessible attributes that make them attractive. This segment is a buyer of utopias. It often falls in the trap of over-promises.
This segment perceives functionality based on benchmarking. This implies a classic approach with little space for unconventional attributes. It is a segment that buys classic functionality with little sophistication.
The conceptual segment seeks the essential complementation of the products and needs. This segment’s final approval occurs when the products/services are used.
It is the segmentation that defines the type of relation an individual has with a product/service. An individual adapts to reality within limits. Psychology established the limits of an individual’s context.
The psychological segments are:
This typology establishes emotional relations with products and services. These relations are naturally unstable. When “emotive” individuals are in the expansive cycle they establish pleasure-driven relations. When they are in the contractive cycle they establish a “child-child” relation with products.
The affective typology seeks stable caring relations with products and services. There is an implicit fear of abandonment. They cannot let go. When they are in the expansive cycle they establish interdependent relations. When they are in the contractive cycle they establish a “child-parent” relation with products.
“Protective” individuals protect the goods they buy. They care about them. When they are in the expansive cycle they establish dominant relations. When they are in the contractive cycle they establish a protective “mother-child” relation with the product. They need to possess products so they feel they are in charge of them.
They use products and services functionally and carefully. They respect the identity of objects. When they are in the expansive cycle they establish functional relations. When they are in the contractive cycle they establish a “father-child” relation with products. They change the products/services when they do not fulfill the implicit promises.
Conceptual Market Segmentation
The conceptual market segmentation describes the nature of a product as perceived by the market.
Conceptual market segmentation describes the concept implicit in a product or service, which is based on:
- Its purpose: being the final functional objective of the product/service as seen by a user.
- The procedure: being the verbal function that materializes the purpose in a concrete added value. This is the active function that necessarily produces entropy.
- The action guide: being the adverbial function that limits the actions of the procedure to ensure the fulfillment of the purpose of the product. This is the energy conservation function that limits the entropy of the verbal function.
In this case, the purpose of the automation of an industrial process is defined as: Process Improvement.
The procedure or verbal function is the Automation itself, which generates entropy within this system.
The action guide or adverbial function is the Reliability of the system.
This conceptual market segmentation describes the nature of industrial process automation as perceived from its four segments: Technological Industry, Market-driven Industry, Professional Industry and Artisan Industry.
Unicist Anthropology: Lifestyle Segmentation
Lifestyle segmentation underlies human behavior. It establishes the parameters of normality and the “ethical mask” of a society. Describing the lifestyles of a country permits establishing the limits within which segmentations can work. Only in the case of basic human needs lifestyles are not a limit but only a gravitational force.
The unicist lifestyle segmentation is analogous to the VALS segmentation of SRI. But, while VALS uses psychology to segment people according to their distinct personality traits, Unicist Lifestyle Segmentation uses unicist anthropological invariables and country archetypes to segment people.
Lifestyles are the archetypical behavior patterns of a society and its members. These archetypes serve a group as automatisms to carry out the everyday activities that are functional to that society’s purpose.
Archetypes resolve the weaknesses of a social group by turning uncertainties into assertive answers which guarantee the success of individual and social purposes.
An individual’s lifestyle makes him acceptable and functional to the society’s needs. It also allows him to find groups of identification across different cultures or communities.
There are four main lifestyle types: “Artisan”, “Rationalist”, “Doer”, and “Innovator”.
These four lifestyles have two sub-styles:
1) One sub-style for stable or evolution stages
2) One sub-style for unstable or involution stages
Whether a society is in a stable or unstable situation or in an evolution or involution process is ultimately subjective, and results from the perception of the collective unconscious.
The lifestyle segments are:
The Artisans live within the beliefs of a culture, relate subjectively and develop their activity based on individual efforts and significant utopias. When they are expanding, they exercise pressure to introduce new ideas within a communitarian approach. When they try to avoid contraction, they seek individual benefits.
The Rationalists approach reality based on judgments that make them feel dominant in their area. They are brand and image-driven and use their analytical approach to understand reality. They align based on rational ideas. When they are expanding, they align within the values of a culture. When they try to avoid contraction, they justify their individual values to adapt.
The “Doers” are driven by the values of a culture. They do what is necessary to fulfill the needs of a group. They are added value-driven and their goal is to be recognized as a VIP. When they are expanding, they add value to obtain a materialistic and spiritual benefit. When they try to avoid contraction, they add value to dominate.
They are driven by leading through innovation. They are risk takers and idealist. They usually try to materialize new utopias. When Innovators are driven by expansion, they add value based on generating new ideas. On the other hand, materialistic creations are their way to avoid contraction.
The Era of Empathic Adaptiveness
The use of functional, psychological, conceptual and lifestyle segmentations allows building empathic adaptive relationships with the market. There is no need to manipulate when people are understood.
The era for expansive market actions has begun. There is lots of room for small companies who do not have the capacity or possibility to expand. Manipulation will remain a natural attitude in marketing processes in spite of its paradoxical side effects.
Expansiveness implies necessarily going beyond the boundaries of the present business. It might imply expanding in width or in depth. In both cases there is a need to understand the segments that are aimed at. This understanding implies being able to model their behavior in order to use the information to design value propositions and communication.
The understanding of the different levels that participate in a buying decision help to achieve this goal and also provides the information to build commercial, semiotic and semantic objects to influence the market.
“Design globally, operate locally” has been a motto for many years. Now it became true using segmentation and commercial, semiotic and semantic objects adequately.
This approach allows upgrading the databases by integrating universal market segmentations that allow increasing notoriously the productivity of their results.
The building of functional commercial communities is meaningless without having a true segmentation of the participants.
The 10 year Future Scenario of Global Consumer Markets,
defined as the era “Empathic Adaptiveness” is already here and has three names:
“Design, Segmentation & Adaptive Automation”
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NOTE: The Unicist Research Institute was the pioneer in complexity science research and became a private global decentralized leading research organization in the field of human adaptive systems.