Transcript The New Role of Marketing in a Networked World

The New Role of Marketing
in a Networked World
Philip Kotler
Kellogg School of Management
Northwestern University
Ashok Leyland
Chennai
March 11, 2013
Kevin Roberts Warning!!!
• The End of Strategy
• The End of Management
• The End of Marketing
Growth
• In a recent survey, the Conference Board
asked CEOs to rank various business priorities
and found that the top priority was business
growth.
• P&G CEO Bob McDonald highlighted the
point by saying “We’ve got to grow; that’s
the main thing.”
High Performing Firms
• Here are two significant differences between the
high performing and low performing firms:
– High-performing firms were distinguished by a
greater level of commitment to marketing
strategy.
– High-performing firms had a stronger marketing
culture than low-performing firms.
•
Source: 2011 Kotler Marketing Group Research Report: Marketing in Difficult
Times: Best Practices of Companies that Found Ways to Prosper During the
Great Recession.
Marketing started because Sales departments
needed others to:
Conduct consumer
research
Find Leads
Prepare brochures and
other promotions
Job Positions in Today’s Marketing Organization
• Chief Marketing Officer (CMO) or
Marketing Vice President
• Brand managers
• Category managers
• Market segment managers
• Distribution channel managers
• Pricing managers
• Marketing communication managers
• Database managers
• Direct marketers
• Internet and social media managers
Four CEO Views of Marketing
The size and type of department depends on the type of
industry, size of company, nature of buying, and other factors.
Much depends on the CEO’s view of marketing.
•1P
•4P
•STP
•ME
CEO
CEO
CEO
CEO
What are the 6 Tasks of the CMO?
1.
Represent the voice of the customer (VOC).
2. Monitor the evolving business landscape.
3. Be the steward of the corporate brand and brand-building
practice.
4. Upgrade marketing technology and skills in the company.
5. Bring insight into the corporate portfolio and synergies.
6. Measure and account for marketing financial performance.
If You Are Appointed CMO, You Prefer That
Your Office Be Located Next To:
1. CEO office
?
2. CFO office
3. CTO office
4. CIO office
5. VPS office
?
Is Marketing Only A Department?
There are those who believe that marketing should be a
specialized department whose resources are drawn upon as
needed by the sales and other departments.
– This means that marketing is a cost center whose costs should be
charged to each internal client.
– Ideally marketing should measure the incremental revenue created
by their activities to see if these activities were profitable.
Can Marketing Help Engineer the
Company’s Future
There are others who believe that marketing should be a
leading player in developing the future growth plan of the
company.
– Marketing is in the best position to detect business opportunities,
calibrate their size and estimate their likely profitability.
– Marketing manages important intangible assets (brands, customer
relationship, networks, market position, market information)
Five shifts
Driving business
Impact
1st Shift
• Creating Marketing
Strategies
2nd Shift
• Controlling the
message
Galvanizing
your network
3rd Shift
• Incremental
improvement
Pervasive
innovation
4th Shift
• Managing marketing
investment
5th
• Operational Focus
Shift
Inspiring marketing
excellence
Relentless
customer focus
Marketing’s Change in Focus
1950s – 1960s
1970s – 1980s
1990s – 2000s
2010s – 2020s
Values-Based Model
COMPANY
INDIVIDUAL
Sustain Ability
DIFFERENTIATE
Make a
DIFFERENCE
(Why)
Return Ability
MISSION
Practise
COMPASSION
(What)
Realize
ASPIRATION
Deliver
SATISFACTION
VISION
Spirit
Profit Ability
(How)
Heart
VALUES
Mind
Be BETTER
Companies Americans Love
Amazon, Apple, Best Buy, BMW, CarMax,
Caterpillar, Commerce Bank, Container Store,
Costco, eBay, Google, Harley-Davidson, Honda,
IDEO, IKEA, JetBlue Johnson & Johnson, Jordan's
Furniture, L L Bean, New Balance, Patagonia,
Progressive Insurance, REI, Southwest, Starbucks,
Timberland, Toyota, Trader Joe's, UPS, Wegmans,
Whole Foods.
These “firms of endearment” were highly
profitable. They outperformed the market by a 9to-1 ratio over a ten-year period. More fulfilled
employees, happy and loyal customers, innovative
and profitable suppliers, environmentally healthy
communities.
Characteristics of “Firms of Endearment”
Characteristics of Firms of Endearment
•
•
•
•
•
•
•
•
They align the interests of all stakeholder groups
Their executive salaries are relatively modest
They operate an open door policy to reach top management
Their employee compensation and benefits are high for the
category; their employee training is longer; and their employee
turnover is lower
They hire people who are passionate about customers
They view suppliers as true partners who collaborate in improving
productivity and quality and lowering costs
They believe that their corporate culture is their greatest asset and
primary source of competitive advantage.
Their marketing costs are much lower than their peers while
customer satisfaction and retention is much higher.
Your Brand Needs to Own a Word
• Mercedes – engineering
• BMW – driving
• Volvo - safety
Develop a Memorable Brand
Mantra, Slogan and Logo
• Nike: Its brand mantra is “authentic
athletic excellence.” Its brand slogan is
“Just Do It.” Its logo is a “swoosh.”
• GE: Its brand mantra is “better living.” Its
new brand slogan is “Imagination at
Work.” Its logo is
LEADING B2B BRANDING
COMPANIES
•DuPont
•Siemens
•Bosch
•General Electric
•Saint-Gobain
•UPS
•FedEx
•Microsoft
•Caterpillar
•IBM
•Daimler
•Michelin
•Tata Steel
•Morgan Stanley
•Volvo
Leading Ingredient Brands
Clothing: Gore-Tex, Lycra
Carpets: Stainmaster
Diet soft drinks (NutraSweet)
Cooking utensils (Teflon)
Bicycle gears (Shimano)
Sound systems (Dolby)
Computer chips (Intel)
Crystal components (Swarovski)
What Makes a Strong Brand?
• Strong brand = Product Benefits x Distinct
Identity x Emotional Values
Types of Innovation
Product and
service
incremental
innovation
Marketing
innovation
Business model
innovation
New to the world
innovation
Source: http://2.bp.blogspot.com/_qD9Y8Ncd3I4/Sb6hKKOJkJI/AAAAAAAACDo/fHZHCQbvRe4/s400/BornToInnovate2009.jpg
Roles in a Company’s Innovation
Process
Activators
Browsers
Creators
Developers
Executors
Financiers
Source: Philip Kotler and Fernando Trias de Bes, Winning at Innovation, 2011.
Offer Variety and Customization
1. Variety: Offer a wide product line so the customer
can choose something closer to the customer’s
desires.
2. Customization: Stand ready to customize according
to the customer’s wishes.
Involve Your Customers in
Co-Creating Your Products
“We have moved beyond the Information Age to the Age of Participation.”
GM ASKS CONSUMERS TO MAKE
VEHICLE ADS
'Apprentice' Task Turns Creation of
Commercials into Popular
Entertainment
BUILD YOUR OWN LEXUS AT
WWW.LEXUS.COM
Build your Lexus, complete with
available colors and options
Four Ways to Bring
In Innovative Thinking
• Train an internal staff in creative techniques
– Whirlpool
• Set up creative product groups
– Samsung
• Give employees a periodic opportunity to deliver
ideas to senior management
– Shell Oil
• Outsource creativity to other organizations
– Apple and Ideo
Actions That Produce More Loyal Customers
1. Extraordinary service
2. Extraordinary guarantees
3. Customer training and consulting
4. Supplying software/hardware
5. Offering entertainment/gifts
6. Managing the customer’s complexity
7. Align your marketing and sales groups
Marketing Challenges
• How to successfully link marketing,
branding, production, customers, and
operations with sales, profitability and
innovation?
• A new era in marketing – an era of
staggering proliferation
Marketing Challenges – Proliferation
Sales & service
channels
Media
Customer
segments
Design & manage
winning brand
portfolios
Brands
Marketing &
Sales
Integration
Transform sales
& service
Pricing
Find growth
opportunities
Marketing & sales
transformation
Boost returns on
marketing
investment
Leading
change
Is there really an issue between
Marketing and Sales?
The Buying Funnel
Customer
Awareness
Brand
Awareness
Brand
Consideration
Brand
Preference
Purchase
Intention
Marketing
Purchase
Loyalty
Customer
Advocacy
Sales
Handoff
How do Sales and Marketing work
together?
Undefined
How do Sales and Marketing work
together?
Undefined
Defined
How do Sales and Marketing work
together?
Undefined
Defined
Aligned
How do Sales and Marketing work
together?
Undefined
Defined
Aligned
Integrated
What happens when the Sales and
Marketing relationship works?
Undefined
Defined
Aligned
Integrated
Levels of Sales-Marketing Integration
UNDEFINED
DEFINED
ALIGNED
INTEGRATED
Sales and marketing have given little
or no systematic thought to the
relationship between them
Sales and marketing have defined
roles and handoffs and attempt to
prevent conflicts, though some
conflicts still arise
The boundaries between sales and
marketing are defined but flexible;
there is some joint planning and
interchange of people & resources
Marketing is so embedded into the
sales process that sales’ and
marketing’s traditional roles and
identities are blurred
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Value
Communication
Implementation
Relevant Value
Creation
Contract
Negotiation
Overcoming
Objections
Revision &
Issue
Resolution
Proposal
Preparation/
Presentation
Relevant Value
Identification
Value
Articulation
Developing
Solutions
Defining
Needs
Qualifying
Analytics
Driven
Prospecting
Linking Marketing and Sales for Customer Value Management
Relevant Value
Articulation
Buying Scenarios / Playbook
Value Management Evaluation-Internal vs Customer View
( Slideshow Version)
(Scale of 1-7 where 7 is highest)
(interpretation from interviews)
5.9
Technical
Vendor
5.4
4.9
4.4
Innovation
Partner
3.9
Value identification
Value assessment
Value proposition
Value communication DMU value deliverance
N: Technical=12, Sales=15, Marketing=17
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Brand Scenarios
Understand
where current
brands play
Determine
required roles
and brand
moves
Integrate
brand moves
to transform
portfolio
Avoiding Disconnected Views
Market
Research
Brand Teams
Profusion of data
Sales transaction
data
Consumer data
Regional
Sales
Touchpoint data
New techniques
Channel
Partners
Sales and Marketing Integration Checklist
Integrate activities
Integrate
processes &
systems
• Bullet box
Jointly involve sales and
marketing in:
 Product planning and
in setting sales targets
 Generating value
propositions for different
market segments
 Implement systems to
track and manage sales
and marketing’s joint
activities
 Utilize and regularly
update shared databases
 Establish common
metrics
 Assessing customer
needs
 Create reward systems
 Signing off on
advertising materials
 Mandate that sales and
marketing meet to review
and improve relations
 Analyzing the top
opportunities by segment
 Require sales and
marketing heads to attend
each other’s budget
reviews with the CEO
Enable the culture Integrate
organizational
structures
 Emphasize shared
responsibility for results
between the different
divisions of the
organization
 Emphasize metrics
 Tie rewards to results
 Enforce divisions’
conformity to systems
and processes
 Split marketing into
upstream and downstream
teams
 Hire a chief revenue
officer
Feedback from Luxury Marketing Council
Self-Classified
Integrated
Undefined
15%
24%
18%
Aligned
42%
Defined
Feedback from Luxury Marketing Council
Strongly agree
Agree
0%
Sales and marketing manage their SALES
activities using jointly developed
business funnels, processes or
pipelines that seamlessly span theMARKETING
whole business chain from initial
market sensing to customer service
20%
There is a strong and shared
‘we rise or fall’ culture between
sales and marketing
40%
60
6
Disagree
Strongly disagree
60%
80%
20
22
SALES
MARKETING
Neither
28
17
17
20
39
80
11
100%
6
20
44
11
Feedback from Luxury Marketing Council
Strongly agree
Agree
0%
20%
SALES
Marketing people often
meet with key customers
during the sales process
The sales force willingly
cooperates in supplying
feedback requested by
marketing
40%
Disagree
22
SALES
20
11
Strongly disagree
60%
60
MARKETING
MARKETING
Neither
80%
20
33
100%
20
39
6
80
44
11
28
6