Out of the Box

Predicting the Future an Obsession of Marketers

By Menachem Lubinsky on May 04 2007

Imagine being a person that is being asked to predict the future of a brand. Even better, imagine a company that subsequently spends millions based on that prediction. It appears that marketers are being asked not only to interpret the habits of the current generation and convert it into a marketing strategy but also to look into some sort of crystal ball to predict how a future generation will behave. Why? Many companies believe that being one step ahead of a trend is essential to their existence.

Take Coca Cola as an example. In the 1980s, they asked a futurist to predict how consumers’ taste in beverages would change in the coming decades. The answer was “water” which, she predicted, would ultimately outsell soft drinks. This seemed so far fetched to a world icon like Coca Cola that it did not believe the prediction. But today high-priced water in gourmet bottles are the rage around the world. I wouldn’t cry for Coca Cola since they obviously are not suffering, but the point is that large companies are obsessed with predicting the future. Incidentally, Coca Cola is into water in a big way.

I imagine that there must have been a time when the high and mighty American automobile industry would scoff at the idea that cars made in Japan would outsell them. The term “Made in Japan” was mocked by most Americans as goods that are inexpensive and not made well. Even as late as 2002 General Motors executives sported lapel pins embossed with the number 29, representing the company’s market-share goal after it had reached a dominant 28.6%. Recently it became clear that Toyota replaced GM as the world’s largest seller of automobiles. After 76 years as the world’s leader, it had been replaced by the Japanese car maker as the number one seller of cars.

The question that has to be raised is whether even if a futurist or future-looking marketer had told GM years earlier that it would be dethroned, would they have done anything different? Would they have produced smaller and more fuel efficient cars? Could they have foreseen the changes in the world’s oil situation? The point is that now that its

76-year reign as the planet’s largest car seller has come to an end, the Detroit giant is officially singing a different tune. It’s not a share game anymore, according to the automaker. It’s just a question of staying competitive.

As long as we’re on automobiles, let’s take a look at Chrysler as yet another example of how wrong the futurists can be. The auto giant, which has had its share of financial troubles over the past two decades, made prediction after prediction that the worst was behind it. It proudly rolled out new cars that it suggested would turn the tide. Now word is that Chrysler is for sale, for as little as $7 billion compared to its $36 billion valuation of the original merger. But the new owner of Chrysler will have to market its way out of one of the great automaker inventory gluts of all time—a surplus of steel that drove Chrysler into the red last year. Perhaps a good prediction of what Americans will be looking for in the cars of tomorrow would help the new owners.

Air travel is yet another example of how the aerospace manufacturers are involved in the guessing or predictions game. You may be old enough to remember how much hope was placed on the slick Concorde. The Europeans, namely the British and the French, thought that they would finally have an edge over American technology. They would give the world supersonic aircraft with all of the conveniences that it would provide. Cutting air travel time in half would be the preferred method of travel. But the experiment turned out to be very costly and after a runway accident, the age of the Concorde abruptly came to an end and there is no talk of supersonic travel in the immediate future. So much for the predictions.

Even more recently, Airbus in Europe and Boeing in the US were trying to make good on yet another prediction. Soaring fuel costs and increased air travel would create a market for even larger aircraft than today’s jumbo planes. But Boeing couldn’t generate the orders quick enough and Airbus faced delay after delay. To be sure the bigger jets are coming, the double-decker Airbus A380 and the Boeing 787. Airport runways are being widened, but the jury is still out whether these giant jets will really take off.

To some extent, all businessmen at one time or another become involved in predictions. They do it to justify a business move that may on the surface appear to be less than sound. Some people tend to be more conservative and only follow those predictions that have a sound basis for the prediction. Many marketers suggest that some form of prediction is a necessary risk that can help propel a business. But the important thing to understand is that predicting is a risky business, so in the very least it needs some sound reasoning and conservative financing.

Out of the Box is a collection of strategic marketing articles that Lubicom has published on various topics, trends and ideas in the marketing world. The articles have been published in the Hamodia weekly newspaper circulated on three continents to a readership of well over 100,000.

The name, "Out of the Box" is a term used frequently in business nowadays to describe creative thinking that is not the norm. It is meant to help a business pull away from the pack or separate oneself from the competition. It is to some extent fraught with risk, simply because it is not the run of the mill thinking, but it is at the same time the key to reaching the next opportunity.