Tag Archives: philip kotler

Marketing 3.0 by Philip Kotler, Hermawan Kartajaha and Iwan Setiawan


Looking for big ideas to take your marketing to the next level?  Marketing 3.0 proposes a fundamental evolution to our marketing strategies.  It seeks to move our focus from product and customer models to a human-centric model.  It challenges us to evolve from pushing products to solving real world socio-cultural issues, while concurrently creating relevant value propositions that ultimately lead to higher profits.

To better understand the theory behind Marketing 3.0 it helps to place it in some context.  Marketing 1.0 was developed in the Industrial Age, a “product-centric” era focused on mass selling products through functional value propositions.  Marketing 2.0 was developed during the Information Age and adopted emotional value propositions.  The authors of Marketing 3.0 propose that we are now at the dawn of the “values-driven” era, characterized by consumers who want to satisfy functional, emotional and spiritual needs.  Marketing 3.0 seeks to satisfy the whole person – mind, body and soul.

Human CentricWhy this evolution to human-centric value propositions?  The authors point to three trends that are shaping the future of marketing.

The first trend is mass participation/ collaborative marketing.  Social media has tapped into natural human desires for connectivity and interactivity.  People not only consume media, news and entertainment, but also seek to produce its content (via blogs, FB, twitter, YouTube, etc.).  This move from consumer to “prosumer” is not simply reserved for the individual, but also enables mass to mass collaboration (think Wikipedia, Craigslist, InnoCentive).  As influencers have gained power and status, companies should seek collaborative marketing strategies; co-creation of products and services, with consumers, employees, channel partners and other firms with similar goals and values.

The second trend is global paradox. Ease of travel and technology advances have created truly “global citizens” who still want to be considered individuals.  Marketing that addresses both local and global communities will succeed. For example, marketers should seek to create micro-communities that serve the interest of its members.

The third trend is the rise of a creative society and human spirit marketing. The authors suggest that the influence and status of creative people – who generally tend to innovate, collaborate and express themselves more than others – is on the rise because the creative class pursue self-actualization and place the same demands on the products and services they consume. Marketers wishing to capitalize on this trend should focus on communicating credibility and supplying meaning to its consumers.

So how does a marketer function in Marketing 3.0?  Borrowing from Ries and Trout, the authors suggest that marketing 3.0 should be redefined as a triangle of brand, positioning and differentiation, but then build on this formula by introducing their own “3i” model, which they feel completes the connections in the Ries/Trout model.

In the Marketing 3.0 model, the 3is stand for Identity, Image and Integrity.:

  1. Identity is the relationship between positioning and brand and seeks to address the rational portion of the value proposition. In Marketing 3.0, the key here is how you address the mind, the consumer’s rational thoughts about the brand.
  2. Image lies at the juncture of differentiation and brand, and strives to capture the emotions of the target audience. Here the key here is how you address the consumer’s heart – what they feel about the brand, themselves, the category, etc.
  3. Integrity is the intersection of positioning and differentiation and aims to authentically fulfill the brand promise and foster trust. This is the “newest” of the three “I”s, and speaks to such issues as authenticity and soul – of the consumer and the product.

At first glance Marketing 3.0 appears overly ambitious. The idea of addressing the whole person – and doing so on a global scale –  is difficult to grasp from a segmentation perspective.  However, the book provides strong evidence and references to human-centric marketing currently underway.  And I can personally vouch for the practicality of their thesis as I find myself attempting to solve both human and global concerns via our strategic alignment and collaboration with key constituents.

My only criticism of the book is the 3i model.  The section is underdeveloped and its theory is ambiguous.  Had they made this more of a “how to” chapter, explaining step-by-step how marketers could implement it, their thinking would have been much more useful.

Marketing is evolving and the stakes are higher.  If you want to differentiate, you cannot do so through tactics, you must choose a different strategy.  Marketing 3.0 can raise your thinking to the next level.

Good marketing!

This book review was published in PM360.

Ad Age publishes Marketing 3.0 book review


Readers,

A personal aspiration is to share through my personal experience the science & art of marketing.  To that end, I have been sharing marketing book reviews with you. 

I love books because I see them as conversations with thoughtleaders in the field.

Ad Age has recently published my book report for Marketing 3.0 in its CMO Strategy section.  I invite you read & comment on this highly visible forum.  Click HERE!

Ramiro Roman

Related video:

BOOK REVIEW : The Next Evolution of Marketing


Why do you work in healthcare marketing? Meaning. If you’re like me, you believe the work you do matters at a very high level because it ultimately improves human healthcare. The products or services you market either literally touch patients’ lives or are one degree away from doing so.

Yet in an exchange I had with author Bob Gilbreath, a P&G vet and author, he appropriately reminds me that “trust in many healthcare companies, particularly pharma companies, continues to decline and has about the same trust levels as the tobacco and oil industries.”  He’s right. Much of this distrust is due to our marketing strategies and tactics. This is why I found the concept of marketing with meaning in his book The Next Evolution of Marketing: Connect with Your Customers by Marketing with Meaning refreshingly innovative, customer centric, and purposeful to me as practicing marketer.

Marketing with Meaning

His book, an Ad Age top 10 for 2009, challenges us to move away from talking at customers through traditional marketing tactics, like TV advertising, e-mail blasts, and sell sheets. It classifies these tactics as interruptive, self-serving, and ultimately ineffective.

Marketing with meaning attracts customer participation by providing unique and personally valuable benefits. It aims to educate, inspire, and earn credibility, rather than promote—pull versus push. It’s marketing that people chose, want, and even seek to engage with. The book’s primary premise is that our marketing, itself, can directly improve customers’ lives and in return improve our business outcomes.

The Hierarchy of Meaningful Marketing

To create personally valuable marketing, you have to deeply understand your target audience. Bob aligns his marketing model with Maslow’s Hierarchy of Needs as a way to uncover unmet needs and desires. The model is a pyramid with three phases:

1) Solution marketing: provide valuable information, incentives, and services, for example, how-to education, samples, and coupons.

2) Connection marketing: create value-added experiences that customers can share with others, for instance, contests, viral entertainment, and community building.

3) Achievement marketing: help customers improve themselves, their families, and the world, for example, linking your product to a relevant social cause, teaching a skill, and improving their health beyond the use of a product.

When you elevate your marketing within your target audience into the higher marketing phases, customers will seek to engage with your brand. Meaningful engagement will lead to product differentiation, price protection, and long-term loyalty. Ultimately, it will lead to better business outcomes.

From Concept to Implementation

Once you settle on a strategy, there are hundreds of examples, case studies, and ideas peppered in this book that can help you brainstorm. In my dialogue with the author, he cited three recent healthcare best practices: “Bayer partnered with Nintendo to create a video game that helps kids with diabetes learn how to test their blood sugar regularly. Also in the diabetes category, Sanofi-Aventis created an iPhone app called GoMeals that helps people manage their diet. And last year, Pfizer created a program that provides free prescriptions to people who lost their jobs due to the economy.”

The book gets into detail on how to implement this type of marketing with metrics, objectives, and processes. For more information, you can download a free iPhone app in Bob’s blog (marketingwithmeaning.com) that has links to over 500 examples. You can also view a video presentation at Authors@Google.

I recommend this book to marketers who are looking for new ideas to drive business by better serving their target audience. The concept, if executed, can also help you live a more fulfilling career. In our way, as marketers, it serves as a reminder that through our work we can better our world.

Good marketing!

Ramiro Roman

 
Published in PM360

Book Review of Chaotics: The Business of Managing and Marketing in the Age of Turbulence


I recommend!

The New Normality: 2009 delivered a sobering reminder that we now live in the Age of Turbulence, defined by unpredictable and rapid changes that can severely impact a company’s performance. Globalization and technology—creating unprecedented speed and magnitudeare two primary forces that established this new level of interlocking fragility. To manage through this new normality, authors Kotler and Caslione propose a systematic process and organizational behaviors to ensure that businesses succeed and thrive in this new age.

Strategic Framework and Behaviors

Chaotics management provides a framework to detect early signals of turbulence, construct key scenarios, and develop critical strategic responses to mitigate vulnerabilities and capitalize on opportunities, even in today’s highly turbulent times. This novel framework has a foundation in strategic scenario planning, commonly know as war games or game theory. Adding to those strategic planning tools, Chaotics management seeks to elevate organizational readiness in radically uncertain contexts where the relationship between cause and effect are impossible to determine or no manageable patterns exist.

To apply this framework, companies must grow into living, responsive, robust, and resilient organizations. Leaders must nurture new behaviors to address unpredicted chaos on an ongoing basis. Kotler and Caslione offer a five-step process to execute strategic behaviors that should be applied throughout the organization:

1. Reconfirm the current business model and strategy.

2. Assess the organization’s ability to execute strategy under chaos.

3. Define the strategic behaviors execution processes.

4. Execute the new strategic behaviors.

5. Reassess and revise.

In addition, the authors offer practical and behavioral considerations for Finance, IT, Operations, Purchasing, HR, and Sales and Marketing departments in response to turbulent outbreaks.

Marketing Considerations

Kotler and Caslione warn about the three biggest marketing mistakes companies make during turbulent times.

• Stretching to attract new customers before securing the core.

• Cutting marketing budgets in a competitive landscape.

• Neglecting the transparency of today’s environment.

Beyond these warnings, marketers must seek to understand the major changes that have taken place in the marketplace (for example, with clients, competitors, suppliers, and media) as a result of the chaos.

ChaoticsThe unpredictability of today’s environment challenges marketers to nourish a new mindset of always being ready to activate formulated strategies based on the Chaotics Management System. To facilitate organizational readiness, marketers are urged to make strategic planning more dynamic, interactive, and frequent, to drive cross-functional decision making, and to break into smaller and flatter groups to achieve faster reaction time. In creating Chaotics marketing strategies, marketers should consider eight factors:

1. Secure your market share from your core customer segments.

2. Push aggressively for greater market share from competitors matching up to your core customer segments.

3. Research customers more now because their needs and wants are in flux.

4. Seek to increase—or at least maintain—your marketing budget.

5. Focus on all that is safe about your product or service.

6. Quickly drop marketing programs that are not working for you.

7. Do not discount your best brands or offerings.

8. Save your strongest brandsor offerings, and shed the weak.

In the Age of Turbulence, marketers must remain focused on satisfying their target customers and paying disproportionate attention to their most profitable segments. Each marketer must act in a way that best promises to preserve customer base, brand strength, and long-term goals. Chaotics offers both a strong model and a practical set of strategic behaviors to manage through the turbulent environment for the foreseeable future.

This article was published in PM360.

February 2010

Good marketing!

@RamiroRoman