This morning I was working on an article about the different types of target audience for cultural tourism product, when I reminded the conference that gave Philip Kotler in Barcelona in late 2004 and to which I was lucky enough to attend. At this conference, Philip Kotler told us the 10 principles of the New Marketing and I remember that one of the slides that struck me was just a segmentation of target audience that Kotler showed us an example.
Although it has been 4 years since this conference today rereading the summary and seeing what Kotler proposed remains interesting, I decided to publish it again and do it with today's date instead of entering it in the blog earlier date as I have done with other articles'm finding the net and gave up for lost.
So here goes:
Philip Kotler - The 10 principles of the New Marketing - Introduction
Kotler is recognized as the world's foremost authority on Marketing and author of the most important works written in the field of Marketing. He has been a consultant for companies such as General Electric, General Motors, IBM, AT & T, Honeywell, Bank of America and Merck. He is the father of modern marketing, the marketing 2.0.
This article is the summary of the conference held at the Philip Kotler World Forum Marketing and SalesIn Barcelona in October 2004.
Kotler assumes that Marketing as we know it is finished and needs to evolve to something much more in keeping with our time, the immediacy of information and total segmentation, have completely changed our consumption habits.
Marketing productivity has been declining over time
TV ads are becoming less impact on the audience. According to a recent study, the ads have a return of 32 cents for every dollar invested.
Also traditional mail communication is increasingly poorer response and further telemarketing. Whereupon, it is increasingly difficult for the launch of a new product to be successful, since the resistance of consumers are reaching extremes that make all the assumptions of traditional marketing have to be revised.
According to Kotler, a person in the United States, is subject to between 3,000 and 5,000 advertising impacts the day. With what people are completely saturated.
- 60% of those interviewed in the study mentioned by Kotler, hates publicity and marketing.
- 70% of people, change the channel or leave the TV during commercial breaks.
- 60% of people want advertising in general is limited.
- 14% of people want the advertising ban.
- 41% of people would be willing to pay for that TV stations no advertising was aired.
- 70% would be willing to buy a product to help them eliminate advertising from their screens.
The other battlefield is in businessWhat a CFO thinks about Marketing your business?
- Less than 57% of CFOs believe that investment in marketing your company does, have a positive effect on the growth of it.
- 27% believe that Marketing is only useful as short-term tactic.
- 32% admit that in hard times for a company, the first budget to cut is marketing.
It is clear that marketing has to change, hence the 10 principles of new marketing
The 10 principles of the New Marketing Philip Kotler proposed
Principle No. 1 New Marketing: Recognize that power, the consumer now has:
Information is ubiquitous (is everywhere at the same time) and consumers are well informed about most products on those who are interested, so the sale should be based on dialogue and marketing "connect and collaborate" not a monologue selling and marketing focus on "direct and control" to the consumer. We offer our customers better solutions, most satisfying experiences and the opportunity to have a long-term relationship.
Principle No. 2 New Marketing: Develop the offer pointing directly only to the objective of that product or service public.
Kotler Here we illustrated with a quote from Tony O'Reilly, former CEO of Heinz Foods:
"Find a niche, and then make sure there is a market for that niche."
Among the curiosities that Kotler showed in his presentation struck me above all segmentation so brutal (hence the vocabulary used, and the volume), which even at the risk that this article should be split into 2 for ease of reading, I prefer to quote here the different types of groups of people who Kotler uses in its geo-demographic studies, sorted by type, not by annual income:
- The blue blood (income of over $ 70,000)
- Money and brain (income over $ 45,000)
- Hides and family cars ($ 50,000)
- Pool and Garden ($ 35,800)
- Two or more rugs ($ 31,200)
- Young people with influence ($ 30,400)
- Young approaching ($ 38,500)
- Fans of microchips ($ 32,200)
- Urbanitas the Gold Coast ($ 36,800)
- various Bohemians ($ 21,900)
- Companies Negras (33,150 dollars)
- New Beginnings ($ 24,800)
- From the land of God ($ 36,700) (guess refers to landowners)
- New owners ($ 25,900)
- Streets and cities ($ 17,800)
- Those who wear Levi's ($ 28,700)
- The Grey ($ 25,200) power (refers to the mass civil service)
- Rank and file ($ 26,200) (military)
- Blue Collars ($ 30,000) (media workers Industry)
- average American ($ 24,400)
- Coalburg & Corntown ($ 23,900) (translated becomes: miners and farmers [primary sector])
Even as part of this second point among the 10 features of the New Marketing, I think it's the slide that left me perplexed all we saw during the conference. And it is that 21 segmentation by income and type of person, had never seen ...
Principle No. 3 New Marketing: Designing marketing strategies from the point of view of the customer.
Once we are clear what segment we went with our product, Kotler recommends that we focus on the value proposition we offer our customers and we design a marketing campaign aimed to communicate this value proposition, not the characteristics of our product it is what is usually done normally.
In order to discover what things considered "value propositions" Our customers, Kotler advises:
- Identify the expectations of our customers or potential customers.
- Decide which of these values are going to compete (for example, Nike competes for: win, beat the masses, extreme exertion, the smell of sweat ... However New Balace, competing in the same segment, but does so with values: self-improvement, inner harmony, the smell of nature, spiritual development, etc ...)
- To analyze the ability of our organization to those values to our customers.
- The message we must communicate and sell, is about the value we pass on, not about the features of our product.
- Make sure we give the value promised and that over time we will improve and expand this model of value.
To encourage and guide the listeners, Kotler showed us some examples of sales messages designed to convey the value offered to the user, instead of orienting the product.
Here are some of them:
- Product sold: liters of paint to paint cars. Message to convey: we actually painted cars.
- Product: pet food. Message: health and animal weight gain.
- Product: diesel engines. Message: power is never interrupted.
- Product: explosives. Message: rocks made crumbs.
Principle No. 4 New Marketing: Focus on how to distribute / deliver the product, not the product itself.
Kotler proposes to ask ourselves if we can find a way to redefine our distribution network and delivery to provide more value to the user. Some companies have already done, in the case of Dell Ikea online and offline world level.
Principle No. 5 New Marketing: Going customer to jointly create more value: the role of business has changed.
With Transactional Marketing (about 1950), the company defined and created value for consumers. With Relationship Marketing (1980 to present), the company focused on attracting, developing and retaining profitable customers. The new Marketing, or Marketing Collaborative (as he calls Kotler) should focus on working with the client so that together, create new and unique ways to create value. It proposes that we establish dialogue with our customers and the communities of consumers of our products.
The collaborative marketing can be done from two aspects:
- Offering a product line so that the customer can find the one closest to your wishes. For example, 20 different colors for the same item, or 26 different options for hockey sticks (this is a real case).
- Have everything ready to adapt our product to the specific needs of a client. The clearest example of this is buying a Dell computer, but Kotler showed us many other examples of online businesses and offline also made products for normal consumption, as the buyer (tailored jeans, makeup, perfumes, candles, golf clubs, breakfast cereals, credit cards, etc ...)
Although Kotler also proposes to let the customer participate in the original design of the products, for example asking for advice based customers while product prototypes are developed.
Principle No. 6 New Marketing: Use new ways to reach customers with our messages.
... And especially watch a lot with unhappy customers, since Internet permits you to reach many people, and can do much harm if not properly treated.
As for our marketing, Kotler special emphasis on the "permition Marketing" (or Marketing with permission) because it is a good way for the customer to indicate whether or not to receive such advertising and needless that trouble those who do not want it.
Regarding what to use new ways to reach customers, recommended that we include our advertisements always 3 things:
- The value we want to convey.
- useful for the user.
- Something that fun or at least entertain it.
And about new ways to advertise, he stressed the importance of sponsorships, mentions of our products in TV shows or entertainment programs or their appearance at festivals, and above all, the direct promotion on the street.
Llegados a este punto, Kotler nos ilustró con un divertido ejemplo de una práctica que por lo visto se ha puesto de moda en algunas zonas turísticas. Cerca de algún monumento interesante se sitúa a una azafata/vendedora camuflada de turista, que solicita a otros turistas que le hagan una fotografía con un móvil/cámara digital. La azafata/vendedora explica a los turistas cómo funciona la cámara y sus ventajas. Los turistas le hacen la foto y ven el resultado en la pantalla. Sin saberlo, han estado participando en la demo de un producto, prestando una atención del 100% a las explicaciones del vendedor.
Without going to these extremes of "cheating" the potential client, Kotler outlined some examples of campaigns in the street who have given very good results:
Campaign Vespa through the streets of Los Angeles: Some more or less known models walked for a while through the streets of Los Angeles, with these bikes, visiting the trendy bars and talking to the people who frequented.
Ford campaign for the launch of the Ford Focus: Ford identified 120 people in 6 key markets, and let them use for free for 6 months a Focus and promotional material thereof. This same practice often do video game companies with hundreds of teenagers who enjoy free games in exchange for talking about them to their friends.
Principle No. 7 New Marketing: Develop metrics and analyze the ROI (Return on Investment)
Philip Kotler stressed the importance of having a scorecard that gives us an accurate picture of how they are evolving each of the factors involved in the sales process.
I list below some of the metrics that Kotler considered essential:
- Improvements in quality: measure how many improvements have been implemented in our products.
- Percentages of sales of new products
- I profit generated by product
- Customer satisfaction
- Average price of sales to a customer
- Number of customer complaints
- Market penetration
- Market share
- Increase in sales
Principle 8 of the New Marketing: Develop high-tech marketing.
At this point, Kotler warned that although high technology is required, it is not to the same degree for all companies. Nor is it only in implementing a CRM or ERP.
Anecdotally, Kotler told us of a funny equation: OO + NT = EOO
New Technology + Old Organization = Expensive Old Organization
The 8 Pillars of the high technology applied to marketing are:
- Performing predictive analysis
- Automation of sales: the aim is to provide sellers bargaining power. They must know in real time stock status, margins by product, etc ...
- Marketing automation: there are many threads that can be automated marketing: the selection of names for a particular campaign, making decision on whether you have a credit or not, send samples to a particular target, etc ...
- Modeling: engineering marketing, Kotler called
- The table creation process: graphic representation of processes such as growth in new customers, billing customers, billing, etc ...
- Creating performance tables: by object and person results.
- The management of campaigns
- Project management
- A new product management
Kotler emphasizes the direction of campaigns, projects and products, especially since it was detected that the main stumbling block in implementing high technology, is the ignorance of the existence of it, by the marketing professionals. Hence the direction of these three sections is key when implementing it.
Principle No. 9 New Marketing: Focus on creating long-term assets
6 Key to create long-term assets factors:
- Being honest with our brand
- Being honest with our customers
- Providing quality service
- Maintaining good relations with our shareholders
- Being aware of our intellectual capital
- Create a corporate reputation
Kotler highlighted the difference between a profit-oriented, with respect to achieving oriented customer loyalty business enterprise:
- Oriented company benefits: Reduced costs, replacing people with technology, reduces the price and value of the products, get many customers.
- The company oriented customer loyalty: Investing in marketing assets, empowers employees using technology, seeks to reduce product prices to reward customer inquires how you can give more value to your customer, select customers getting.
Principle No. 10 New Marketing: Looking at marketing as a whole, to regain influence in your own company.
Marketing affects all processes of a company and this is what we convey in our own company.
Decisions made in maketing affect customers, members of the company and external collaborators. Together we must define what the market that the company is heading. Together they have to discover what opportunities appearing on the market (Kotler proposes to think it at least 5 opportunities each year), and together they should find out what training and infrastructure will be needed to carry it all out.
The intervention of these 3 factors: customers, the company and the network of partners in the marketing of our company, is what will show us that we are on track and we are beginning to apply the rules of the New Marketing.
And with this last point, we finished the "summary" of the conference by Philip Kotler in the framework of the World Forum of Marketing and Sales. The truth is that the conference really paid off and that all attendees left her with a huge desire to start applying what they have learned. The downside is that it costs him his power to implement concrete actions explained to the company, but at least Kotler was quite clear and we illustrated with many examples.
Link not to miss for the world: Power Point Presentation of a seminar Kotler, which includes the 10 principles outlined in this article. It is in English, but is very good and very complete. Philip Kotler
FMMV website: Program and speaker bios - Maketing and Sales