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Editor’s Note: Professor Dr. Philip Kotler is the S.C. Johnson & Son
Professor of International Marketing at the Kellogg School of
Management, Northwestern University, Evanston, Illinois. He has been
honored as one of the world’s Leading Marketing Thinkers. He received
his Master’s Degree at the University of Chicago and his PhD Degree
atMIT, both in Economics. He did post-doctoral work in Mathematics
atHarvard University and in Behavioral Science at the University of
Chicago.
Professor Kotler is the author of several bestselling books
includingMarketing Management: Analysis, Planning, Implementation
and Control.It is the most widely used marketing book in graduate
business schools worldwide. He has published over one hundred articles
in leading journals, several of which have received best-article awards.
He has been a consultant to IBM, General Electric, Sony, AT&T, Bank
of America, Merck, Motorola, Ford, and others. The Financial Times
included him in its list of the top 10 Business Thinkers.
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2. You can read his full bio from here, here, here, here and here.
eTalk’s Niaz Uddin has interviewed Philip Kotler recently to gain
insights about his ideas, research and works in the field of marketing and
creating better world.
Niaz: Dear Kotler, thank you so much for joining us. We are delighted
and honored to have you at eTalks.
Philip Kotler: Niaz, thank you for having me.
Niaz: You are an economist trained at the University of Chicago (M.A.)
and MIT (Ph.D.). Three of your Professors were Nobel Prize Economists
–Milton Friedman, Paul Samuelson, and Robert Solow. But you have
been cited as the world’s foremost expert on the Strategic Practice of
Marketing. Can you please tell us a little bit about yourself and why
marketing became such a big factor in your life?
Philip Kotler: Throughout my study of economic theory, I was
bothered by the absence of discussions of distribution institutions
(wholesalers, retailers, agents, jobbers, etc.) and promotional tools
(advertising, sales promotion, and salesforce). It seemed to me that the
level of market demand and individual company demand are heavily
influenced by these institutions and activities as well as price (which
absorbed the most attention of economists). When I was offered a
position to teach either economics or marketing at the Kellogg School of
Management atNorthwestern University, I chose to teach marketing so
that I could show that it was a branch of economic science.
I moved into the question of what influences the level, composition and
timing of customer demand and what are the determinants of individual
demand. Classic economics assumes a world of rational buyers and
rational producers. I always felt that this grossly oversimplified the
understanding of customer behavior and producer behavior. The recent
growth of interest in behavioral economics in contrast to classical
economics is bringing many missing institutions and activities into
economic focus.
Niaz: So how do you define Marketing?
Philip Kotler: The shortest definition of marketing is “Finding needs
and filling them profitably.” However, I would rather cite the American
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3. Marketing Association’s definition that says “Marketing is the activity,
set of institutions, and processes for creating, communicating,
delivering, and exchanging offerings that have value for consumers,
clients, partners, and society at large.” (American Marketing
Association, 2008)
Niaz: In this hyper competitive era, what do you think about the
Position of Marketing in Total Business Operation? How can marketing
change the entire game plan?
Philip Kotler: In spite of the fact that marketing is now headed by
a Chief Marketing Officer (CMO) who presumably participates in the
company’s strategy development, I find in many companies that the
CMO is not invited or expected to be an active participant in strategy
development. It’s as if senior management wants the CMO to continue
managing the marketing work without interfering with long range
strategic planning.
The irony is that the CMO is the person in the company who is closest to
the changing marketplace and is in the best position to spot new
opportunities for the company. Because the CMO is probably going to
have a left brand (analytical) and a right brain (creative), CMOs are
more likely to work as game changers during the planning process. We
expect CMOs to have a very deep understanding of customers,
competitors, distributors, and suppliers.
If I ran a company, I would want my Chief Marketing Officer (CMO) to
be modeled on Steve Jobs and come up with big, new ideas and also be
modeled on Bill Gates with a deep grasp of business analytics.
Niaz: Your Marketing Management book is in its 14th edition and is
used in most MBA Marketing courses worldwide. A certified classic, the
book has ranked among the Top 200 Titles on Amazon.com and been
named among the 50 Best Business Books of All Time by Financial
Times. You published the first edition of this book around 46 years
ago. So what are the revolutionary changes has occurred by this time in
our society?
Philip Kotler: During this period, I have witnessed a lot of changes in
the marketplace and I have managed to portray them in each new edition
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4. ofMarketing Management, now in the 14th edition. My editions helped
emphasize the need to adopt a customer orientation; to precede the 4Ps
with segmentation, targeting and positioning (STP); to move into higher
mathematics and better marketing metrics to show accountability; to
emphasize the social responsibilities of marketing; to broaden marketing
to cover the marketing of places, people, and ideas; to recognize the
importance of relationship marketing over transaction marketing; and to
recognize the revolutionary power of digital and social marketing. My
next edition will enlarge on some new trends such as co-creation,
crowdsourcing, sustainability, dynamic pricing, digital marketing,
marketing automation, and growth strategies.
Niaz: What are the biggest shifts you see happening among consumer
attitudes and behaviors right now and how is technology influencing
this?
Philip Kotler: Consumers are worried about the future and their ability
to keep their job and hopefully earn a good and growing income. They
see the high level of unemployment in the U.S. and Europe and see a
growing number of industries – music, publishing, movies, retail book
stores – being disrupted by online and digital marketing. This leads
consumers to save more and spend less which only increases the loss of
jobs. And companies see only two ways to compete, either by
presenting a lower price to reach the mass market (Wal-Mart) or by
presenting a higher price to reach the affluent (Gucci). The middle is
gone.
Niaz: How are those shifts affecting Marketing?
Philip Kotler: The big problem facing companies today is how to grow
in a low growth market. My answer is that marketers face more
opportunities and hidden pockets of growth than they normally
recognize. I just published Market Your Way to Growth: Eight Ways to
Win. There are eight chapters and each examines a specific pathway to
growth. I worry that companies get stuck in one strategy that is now
showing diminishing returns and fail to shift in time to any of the other
seven pathways to growth.
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5. Niaz: What kind of impact are the Internet, Social Media and other
Advances in Communications Technology having on marketing?
Philip Kotler: The Internet is having an impact today that is
comparable to what the world felt when Gutenberg introduced the idea
of printing. The Internet, social media and new communication
technologies are major game changers in marketing. No longer does the
company own its brand by having a monopoly on communications about
their brands. It is the consumers and their peer-to-peer talk that is
shaping our images of brands and what to buy and how much to pay.
Furthermore, no company can afford to deceive customers without being
quickly exposed on the Internet.
Niaz: Are the ‘four Ps’ still a useful framework?
Philip Kotler: Yes. Please appreciate that the 4Ps are the basis of a
marketing plan. Any respectable marketing plan must discuss the
company’s decisions on Product, Price, Place and Promotion. If the
company wants to add some other things, they are either already implied
in the four Ps or could be added. For example, services are part of the
product, and sales force is part of promotion. Packaging is part of the
product. Recently Professor Jagdish Sheth introduced the four A’s –
Availability, Affordability, Acceptability, and Awareness – but I see the
4As not as a competitor but a useful complement that precedes the
setting of the 4Ps. The 4As identify the consumer conditions that should
be satisfied and it is the job of the 4Ps to follow upon the 4As.
Niaz: What do you see the role of technology being in the new
marketing mix?
Philip Kotler: New technologies affect all of the 4Ps. The advent of 3D
Printing will help entrepreneurs design new products cheaper and faster.
The development of software to do dynamic pricing will allow airlines
to change the price of seats depending on the number of seats already
sold. The development of new distribution channels such as online
selling and eBay are increasing the ease of transacting. The
development of social media technologies such as Facebook, Twitter
and YouTube are changing our tools for promotion.
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6. Niaz: Well known marketers like Yvon Chouinard, the founder of
Patagonia, believe that “traditional advertising is dead.” Is he correct
or misled, and why?
Philip Kotler: This statement makes a good headline but it is
inaccurate. Traditional advertising will continue in its role as brand
builder but it will have to do it with a lower budget. Some percentage of
every advertising budget will have to move into digital and social media
marketing. Right now this may be 5 percent, then 10 percent, and
conceivably in five or more years 50 percent. The more correct
statement of Yvon Chouinard would be that traditional advertising will
increasingly partner with digital marketing, one supporting the other in a
synergistic way.
I will add one more thought about advertising. What is most important
in advertising is copy, not media. The best media won’t make up for
poor copy. I don’t think advertising agencies come up with exceptional
campaigns. Of the last 10 campaigns that you saw, you are unlikely to
be impressed with more than one. Most campaigns simply lack
originality and punch. I prefer to hire three advertising agencies and pay
them for three campaign ideas for the same product and then choose the
best campaign idea and hire a separate media agency to develop the best
media mix to carry the best of the three campaign ideas to the target
audience.
Niaz: Let’s look at marketing in the future. What changes are going to
occur within in next couple of decades?
Philip Kotler: Here are four changes out of many:
1. Companies will increasingly invite customers to co-create products
with the company.
2. Companies will increasingly resort to crowdsourcing to get ideas for
new products, new advertising campaigns, and new sales promotion
ideas.
3. Companies will increasingly move to marketing automation where
they use artificial intelligence to carry out marketing activities that were
formerly done by skilled marketers.
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7. 4. Companies will increasingly learn how to produce “lovemarks” with
their customers and employees.
Niaz: What are the points that a CMO must remember now before
setting marketing plan?
Philip Kotler: The first need is to get each marketing planner to
carefully define the target audience and deeply understand their needs
and desires and the main triggers to purchase. The aim should be to
discover something new about that target audience, some new insight
into their psyche that will cause them to want to take the offer.
Niaz: As you know Disruptive Innovation sometimes makes Customer
Driven Company obsolete. In addition to giving most priority to
customers, companies now need to focus on some other important
factors like changing technological trend, innovation, market shifts and
so on. Now, what are your suggestions for companies to set marketing
plans in order to save their companies from getting obsolete
forDisruptive Innovation?
Philip Kotler: Every company and industry is in danger of disruption.
The choice facing a company is whether to be disrupted or be the
disrupter. I would advise a company to run a meeting ever so often to
consider everything that might disrupt the company, whether it is a new
technology, a shift in consumer tastes or their pocketbook, etc.
Each possible disruption needs to be assessed for its severity and its
probability of happening. A serious probable disruption poses the
following choice. Either sell the business now before it loses its value
due to the imminent disruption, or invest in the disruption to replace
your business and become the disrupter.
Niaz: How can marketing help Startups to survive in front of giant
competitors like Google, Facebook, Amazon and Apple?
Philip Kotler: Many entrepreneurs precisely try to take a bite out of a
giant competitor. Right now, several companies are trying to hit Google
by setting up a more focused search system. Their aim is not to slay
Google so much as ironically to sell out to Google. Giant companies are
well prepared to buy up any company that carries a disruptive potential
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8. and either bury it on the shelf or expand it into another business
opportunity.
Niaz: What are the secrets of revolutionary marketing?
Philip Kotler: I don’t use the term revolutionary marketing. You might
mean Guerrilla Marketing whereby a small company attacks a giant firm
on a hit and miss basis. Or do you mean a company that will create a
paradigm change? For example, Tom’s shoes has proven that online
selling of shoes works. Tom’s offers to send three different sizes of the
same shoe, expecting the customer to buy the best fit and return the
other two pairs. In addition, Tom says that it will give a free pair of
shoes to a poor person for every pair sold to a customer. This principle
is now adopted by a new eye glass company that will send several glass
frames by mail from which the customer makes a choice, and in addition
the company will supply a free pair of glasses to a poor person who
can’t afford to pay.
Niaz: One of your recent books is Chaotics. Can you please give us a
brief of ‘Chaotics’?
Philip Kotler: John Caslione and I wrote Chaotics right after the
financial crash that took place in 2007 to caution companies against
making the wrong responses to the crisis. Most companies wanted to cut
their costs and lower their prices. This is not always the most
appropriate response in chaotic, turbulent times. Some companies
should actually increase their marketing spend and take advantage of the
crisis. Consider that some competitors are weakened more than your
company and this is the time to attack, not withdraw. This is the time to
build your market share which in normal times cannot be moved a few
points. We discuss the appropriate decisions that companies in different
situations need to make in their marketing, production, finance and other
functions to take advantage of the turbulence.
Niaz: You have published the seminal article in 1971 coining the term
“Social Marketing” in its original use. Can you please tell us about
‘Social Marketing’?
Philip Kotler: Forty two years ago, Gerald Zaltman and I
published “Social Marketing: An Approach to Planned Social
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9. Change” in the Journal of Marketing. We felt that marketing science
can apply to more than the marketing of goods and services. Marketing
can help in designing and promoting solutions to social problems, such
as smoking, hard drugs, poverty, hunger, and others. Marketing always
starts with a customer analysis of the barriers and benefits that influence
customer behavior. In the case of tobacco use, we need to distinguish the
different segments of smokers and prepare a different 4P marketing
campaign to help facilitate the decision to stop smoking. We could have
named this “cause marketing” but we chose to name it “social
marketing” to imply that marketing has a social side, not just a
commercial side. Today there are thousands of social marketers trained
in the basics of marketing and applying marketing to alleviate problems
of poverty, hunger, poor nutrition, education, and health. Recently the
third World Social Marketing conference was held in Toronto, Canada
with 600 attendees.
Niaz: You are the first recipient of the American Marketing Association
Foundation’s “Marketing for a Better World” Award. Can you please
tell us how can marketing be used to make this world a better place?
Philip Kotler: We can create a better world through marketing in
several ways. Commercially, we can improve our products and services
and find ways to lower their prices and costs. Socially, we can work on
specific social problems and reduce their severity through the
application of social marketing. Societally, we can assist companies in
defining the areas where they can make charitable contributions and
work with others to improve the quality of life.
Niaz: Is there a personal influence or anecdote from your own life that
you can share regarding the attention you’ve given to solving social
problems?
Philip Kotler: When HIV/AIDs broke out as a major disease and took
the lives of so many young adults, I developed a strategy for influencing
young adults to avoid situations where they could contract AIDS. It was
important to avoid these situations and also get early testing if they
might have contracted the disease. I worked with the YMCA and other
organizations to help them develop campaigns. I didn’t think that
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10. straight education campaigns on the dangers of AIDS would be enough
to demotivate certain behaviors. Happily, modern medicines began to
appear to help AIDS victims lead a longer life.
Niaz: Why do you think marketing is a great tool to change the world?
Philip Kotler: Marketing’s starting point is with consumer well-being.
Marketing is about the maximization of consumer well-being. It also
takes into account the well-being of employees, distributors, suppliers,
investors and other stakeholders.
Niaz: How does Marketing can help us profoundly to change the world
to make it a better place to live?
Philip Kotler: There are at least three types of marketing that will
contribute greatly to making the world a better place to live.
1. Commercial marketing, in assisting companies to make better
products and services for the poor, the middle class, and the affluent.
2. Social marketing, in assisting governments, nonprofit organizations
and “caring” companies to influence more salutary behaviors such as
better nutrition, regular exercise, desisting from smoking or using hard
drugs, being environmental, etc.
3. Place marketing, in assisting cities, regions and nations to attract
tourists and visitors and new residents and factories and retail chains so
that life can be improved for all in those places.
Niaz: Thanks you so much for your invaluable time. All the best wishes
for your good health and impressive works. We are grateful to have you
at eTalks. Your ideas, knowledge and expertise are worth spreading.
Thank you once again.
Philip Kotler: You are welcome Niaz. I must compliment you on
raising very good questions.
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11. II. Video marketing tips
#1: Make your title count
Just like a headline to a blog post,
video titles can pull powerful
traffic. There are two main reasons
why the title is so important. One,
a great title can instantly grab a
viewer’s attention.
Two, when you use the appropriate keywords in your title, you are more
likely to show up on search engines when people are searching for your
topic. And remember Google owns YouTube, so there’s a story
connection between video and searching.
#2: Provide excellent content
Take some time to think about your ideal viewer. What do you know
that they’ll find valuable? What can you teach them? “How-to” videos
are extremely successful because not only do they offer great value to
your viewer, but also you’re able to showcase your knowledge and skill,
thus positioning yourself as an expert. This is key as you continue to
grow your brand.
#3: Include your URL in your video
When you edit your video, take advantage of the different editing
features. One easy feature is to add a text box to your video. This is
where you can display your website address and it’s a great way to get
exposure.
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12. Here’s a screen shot of Mari Smith’s YouTube channel. Notice how she
used a text box in her video to display key information, including her
website URL at the end of her video. Smart move!
#4: Take advantage of video’s branding opportunities
For branding purposes, have your company logo displayed prominently
somewhere on the screen. You can do this at all times, or during key
times in your video.
In the image below, notice how the company logo is displayed in the
upper-left corner. You can display your logo throughout your video or
only at key times.
#5: Always provide an HTML link
When you post on YouTube, you have the option to write a short
description of your video. Always start with the link you want to drive
your viewers to so you don’t miss this key opportunity.
Here’s a snapshot of the description boxes from one of my YouTube
videos. Notice the placement of my website URL (it’s the first thing
you want to put in the box!) and the keywords I used in my title as well
as the description.
#6: Go beyond YouTube
Most people post their videos on YouTube. In addition to this, make
sure to always embed your video on your own website. This will
increase the amount of time people spend on your website and help grow
a captive audience.
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13. Also, Google’s algorithms consider how many times a video is viewed,
and embedded video views you receive get added to the ‘views’ tally on
YouTube. This is important for showing up in Google search results!
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