Much has been spoken about the New Economy and the radical change that businesses may expect. Unfortunately most of this talk focussed on the development of start-up companies which aimed to take significant market share away from established companies by marketing on the internet. The failure of many of these companies has led some people to conclude that the New Economy is a fallacy and it's "business as usual."

However the New Economy is based on more than web marketing and it is having a fundamental effect on the way we do businesses. It is about the emergence of technology which allows marketing and management of enterprises to develop radically new techniques and continuously improve productivity. This has led to a move away from the mass market economy to the "market of individuals" model with more consumer choice.

21^st Century Marketing

The factors which are influencing changes in the way we market are the increase in consumer choice, the more knowledgeable consumer, growth in the media available to marketers (and the consequent overload in information) and increasing regulation of marketing.

And as the market becomes more individualised they are seeking new ways of targeting and creating dialogue with their markets. New technology permits new methods of two-way communication with customers and prospects, and techniques such as "permission marketing" are emerging.

Customer relations play an even more important role in customer retention and in developing market intelligence. Again technology is developing this into an increasingly sophisticated science through the introduction of Customer Relation Management software.

The role of the brand becomes more important where there is an abundance of choice and it is becoming less specific to particular products or services.

Measuring Marketing Success

Traditionally Marketers have considered themselves successful when factors such as market share, customer satisfaction and market awareness improve. However these in themselves do not necessarily create shareholder value. So their measurement is only valuable when we can see how they contribute to a marketing strategy. Marketing goals should be about gross profit rather than sales, creating growth potential through product and market development, and customer retention.

As production costs reduce so marketing efficiency becomes key; marketers must make sure that they are employing best practice.

The Role of the Management Accountant

The ability of a company to generate cash and to grow now depend more on intangible marketing assets than fixed assets. The Management Accountant's role in the 21^st Century will therefore have to adapt and focus more on the measurement of assets such as customer retention, brand value, intellectual property, marketing knowledge and new product development.

Understanding the company's marketing strategy is essential if the management accountant is to perform this responsibility rigorously. For these assets have little value outside the context of an integrated plan.

Equally expenditure on marketing tactics in order to achieve increase in the value of these assets should be viewed as an essential investment, without which the shareholder value of the company will surely decline.