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Philip Kotler: the 10 principles of the New Marketing

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

philip-kotler

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:

About Product:

  • 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 Segmentation:

  • Customer satisfaction
  • Average price of sales to a customer
  • Number of customer complaints

About markets:

  • Market penetration
  • Market share
  • Increase in sales
  • Benefits

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.

Links:

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

Is it effective Google advertising among children under 25 years?

Judging by the headlines published in the press, it seems that this issue is the one that has preoccupied the media who have followed up our study of Eyetracking applied to Search Engine Marketing.

The truth is that in point 5 of our study we wondered if search engine advertising was still effective, and we concluded that yes, although we indicated as an observation that if a search for something specific (like the name of a hotel) segmentábamos 54 tests by age, we could see that none of the people in the age group under 25 years had looked at the Adwords side.Eyetracking menores 25

The Adwords Central looked almost everyone, but the sides were ignored by the vast majority of youth who participated in the study.

When asked users under 25 why they had not looked at the Adwords side, indicated that they had not done so because "It is advertising”.

If we look at the picture show with these words can observe the phenomenon. In this case, requesting find the website "Hotel Pulitzer Barcelona"And users could find it in Google Maps and the first SEO results. The heat map we see is the record built from the gaze of all those under 25 years.

The heat map created from other users is quite different, and shows even clicks on adwords side. (See second image)

The study also commented on the fact that in many cases, young people believe that advertising does not deserve your attention, it was an important issue and worthwhile treat in more detail some other time.

Let's treat now with a little more depth.

Theories of Postmodern Communication

These theories base their argument on the fact that Marketing is so pervasive in our society (the Consumer Society) Which certain groups to start to be immune to traditional marketing communications, including advertising.Eyetracking Hotel Pulitzer

Durante años nos hemos preocupado por cómo afectaría a nuestros hijos el gran número de impactos publicitarios que reciben desde que son niños hasta su madurez (al menos, como madre de 3, para mí ha sido un tema de especial interés y preocupación). Pues bien… parece que no había para tanto. El gran número de impactos publicitarios, sumado a su conocimiento sobre cómo funciona la Sociedad de Consumo, los ha hecho inmunes a una gran parte de la publicidad a la que están sometidos.

And not only they are immune, but have even appeared movements and anti-advertising groups. People who question the behavior of our own consumerist society, and some unethical practices of certain companies. The aim of these movements is to recover a life without much publicity. See for example Adbusters.

Is the end of the "era of Marketing"?

No, of course. It is only to some marketing activities and including some types of advertising.

Philip Kotler in his "10 Principles for the New Marketing"Assumes that Marketing as we know it is finished due to saturation of Marketing Communications and Advertising we receive, and must evolve into something much more in keeping with our time, in which the immediacy of information and total segmentation, have changed our consumption habits.

The truth is that marketing is so important in our society, as consumers increasingly have more knowledge on this subject. The implication of this is that consumers now are highly educated in marketing and advertising campaigns, public relations, direct marketing, etc. And therefore know all the tools and techniques used in communications with the intention to attract their attention, which to some extent makes them immune to them.

This causes the Marketing professionals have to seek new forms of communication to convey their messages. This is the Postmodern Communication, Internet and has a good field for expansion.

Are the Adwords Postmodern a form of advertising?

The term postmodern was coined in the 70s and refers to a type of society in which the lack of predictability and erratic vision of the world around us, as opposed to a science-based, objective knowledge world, laws are evidence universal and logical reasoning, which was where the "modern" world was based.

Applied to Marketing, this term refers to a type of communication oriented satisfy consumer habits at the individual level, the importance of brands when making a purchase decision, the importance of ensuring that individuals are not consumers feel normal, and the increasing intrusion of advertising in all areas of our life.

Because unfortunately, for a large part of society, what we consume comes to define who we are, from the point of view of advertisers it is extremely important to get their messages to each individual, no matter how difficult. Hence new types of advertising and marketing communication messages appear.

In this regard, Adwords, Communication can be considered Postmodern if we consider that segmentation can reach almost one to one. Also in the sense that intrude in many of our activities on the internet (to read the online press, to consult a search engine, to watch videos, etc ...). So the answer to the first question is "yes", the Adwords They can be considered a form of postmodern marketing communication.

To be a postmodern communication makes them more effective?

The Adwords no longer an ad in many cases easily identifiable. And therefore, as we have seen in the heat maps, users are able to detect and classify it as advertising, which reduces their effectiveness, especially if they are located away from information that is relevant to them. Hence Adwords plants are more effective than the Adwords side.

As for saturation, in this study we have found that certainly the youngest segments of our population begin to be saturated with advertising and have become immune to it. All that considered advertising no longer of interest to them. If they can not even look to the areas where advertising is.

We have seen even some of them go so far as to consider advertising the results of Google Maps and not watch them. Fortunately, not in all cases so, as we can see in the first heat map we have shown. Map I remember again, is only for users under 25 years.

The other looked at over 25 advertising side, as shown in the second map.

Learn how the Internet has affected the Porter 5 Forces

Internet has changed some of the bases that Michael Porter started in 1980 when he published 5 Forces involved the success or failure of a sector or a company.
Michael Porter
Over recent years, Porter has been modifying and clarifying 5 forces. In this article we will see how they have evolved to adapt to new times.

Michael Porter will be in Spain during the 12th and on May 13 giving a lecture under Expomanagement Madrid 2005. It will be an excellent opportunity to see first hand their views on the changes that the Internet is occurring in our economy and moment forces the move.

What are 5 forces of Porter?

In 1980 Michael Porter developed this method of analysis in order to discover what factors determine the profitability of an industry and its companies. For Porter, there are 5 different types of forces that mark the success or failure of a sector or a company:

  1. The rivalry between competitors
  2. The threat of new entrants into the market
  3. The threat of products that substitute to ours
  4. The bargaining power of buyers
  5. The bargaining power of suppliers

When the analysis of Porter's 5 Forces used?

  1. When you want to develop a competitive advantage over your rivals.
  2. When you want to better understand the dynamics that influence your industry and / or what your position in it.
  3. When you analyze your strategic position and looking initiatives that are disruptive and make you better.

But the Internet has changed some of the bases from which Porter started in 1980 for each of the 5 factors. Porter himself, over the years has been modifying them and adapting them to today's world.

In this article we will discuss 5 forces and see how the Internet has changed the rules of the game and what we should consider if we want to continue to use this type of analysis.

1. The rivalry between competitors:

Porter focuses on developing its recommendations differences between our products and those of competitors, to avoid falling into competing on price, a strategy that ultimately end up affecting the profitability of both companies.

  • Pero Internet ha permitido que realmente se puedan reducir los costes en empresas cuyos costes están relacionados con la comunicación, con la recepción de información o con la concertación de transacciones. Así que una gran parte de las empresas que han sabido aprovechar las ventajas que les brinda Internet y la tecnología asociada a la red, acaban pudiendo ofrecer precios más bajos y por lo tanto, compitiendo por precio en su mercado. Ante un mismo producto, con dos precios diferentes, la fidelización del cliente sólo influye en la pequeña cantidad de diferencia de precio que el cliente tolerará antes de abandonarnos e ir a la competencia. Internet permite que la rivalidad sea por precio, sin que esto lleve a una guerra donde no haya ganador.
  • Internet has also made appear on the market many products that were previously only intended for a local market, so even if our product was unique in our market, now appear identical products to our ... so again just competing by price .
  • La relación entre competidores ha cambiado radicalmente con la globalización de los mercados. Los clusters locales especializados en la producción de determinado producto o servicio, hacen que la relación entre empresas competidoras sea colaborativa, con objetivos con miras a desarrollar juntas tecnologías, investigación que hagan subir la productividad y la innovación de las empresas que participan en el cluster. Silicon Valley y Hollywood son los clusters más famosos, pero existen cientos de miles de clusters locales que han cambiado radicalmente la relación entre competidores.

There is information on the effect of local clusters in the relationship between competitors in various articles published by the same Michael Porter. At the end of the article we quoted one.

2. The threat of new entrants:

The threat of new entrants to enter our market is higher, when barriers to entry are low, when companies involved in a market do not want to fight the new players and when a new player has high expectations of profits if it goes into the market. So Porter advocates increasing entry barriers in a market. Their recommendations are as follows:

  1. Take advantage of economies of scale to lower costs
  2. Create differentiated products and patent them.
  3. Develop the brand image of the company, for customers to them more difficult to switch brands.
  4. Close access to distribution channels.
  5. Have restrictions for new players, dictated by government institutions.

But…

  • Este modelo es válido para mercados estáticos. Internet ha propiciado multitud de mercados dinámicos que no permiten aplicar las recomendaciones de Porter. La consolidación de las empresas puntocom supervivientes al crac del 2000/2001 han cambiado los modelos de negocio y las cadenas de valor. Las puntocom han destruido eslabones de la cadena y han creado nuevos escenarios competitivos en los que han sido aplicaciones asesinas de muchos servicios ofrecidos hasta ese momento sólo por el mundo offline (ejemplo: las bolsas de trabajo online, las páginas web de clasificados de compraventa, las subastas online, etc.).
  • Network externalities, on the other hand, lead to the creation of natural monopolies because they generate positive feedback processes that make each new user of a service it has more value for the next user.

3. The threat of the development of substitutes:

Porter is considered a substitute of another product, only if you replace a product of a different industry sector to yours. For example, the price of aluminum beverage cans, is based on fluctuations in the price of glass bottles and plastic bottles. They are substitutes packaging, but are not rivals coming from the aluminum packaging industry.

  • La tecnología cada vez más permite la generación de nuevos negocios que hasta ahora eran impensables. Los cambios tecnológicos radicales que estamos sufriendo no permiten realizar ningún tipo de predicción ni análisis previo sobre este punto. Por ejemplo, pensemos en el mercado del ancho de banda: tenemos las conexiones vía cable telefónico, vía satelital, vía red eléctrica, etc… todas aparecidas y desplegadas en un espacio de tiempo relativamente corto. Se hace difícil poder prever y contrarrestar los efectos de este tipo de productos. El usuario cambiará tan pronto como perciba que el coste del nuevo producto es más bajo o cuando obtenga nuevas funcionalidades.
  • Internet also enables other ways to meet needs and functions, creating new and unimaginable substitutes.

4. The bargaining power of buyers:

For Porter this threat must be neutralized with an appropriate strategy to pursue this end.

  • The truth is that thanks to the Internet, customers increasingly have more power. Although it is seen from the point of view of the traditional company that is not exactly positive:
  1. Internet increases the information on products and market reality.
  2. Increases the bargaining power because it provides more direct routes and eliminates customer links in the distribution of products.
  3. It provides an unbeatable consumers to join and perform lobbying against certain companies when customers are dissatisfied frame.
  4. To better understand this point I recommend reading the summary of the conference by Philip Kotler at the World Forum of Marketing and Sales (Barcelona 2004): The 10 principles of "new Marketing

5. The bargaining power of suppliers:

Porter focuses the analysis of this point by remarking that the power of suppliers depends on the importance of them (think of providers who have captive market for example .: Telefónica, Microsoft, etc.).

  • The current trend is to treat suppliers as business partners, and share with them the ultimate goal of meeting the needs of our customers. The customer-supplier relationship is changing.

Although all qualified in the comments at 5 forces suggests that the Internet has forced companies to compete on price, the Internet has also led some of them have achieved great success in their differentiation strategies. These companies are the companies that are strong in:

  • Scientific investigation.
  • Product development teams with talent and creativity.
  • Sales teams with great communication skills and awareness of the needs of a changing market.
  • Brand image that conveys innovation and quality.

But the risks associated with differentiation have also been magnified by Internet:

  • Imitation of our products by others that have not invested in R & D.
  • The changing and unpredictable tastes of customers.
  • So to round off the article I say that the Internet has made the analysis of Porter's 5 forces still remain valid today, is much more complex than it was and with many more variables to consider.

Related information

Article by Michael Porter on Local Clusters.
Harvard Business Review: Local Clusters

Article summary of the conference about the New Philip Kotler Marketing and increased consumer power. Philip Kotler: the 10 principles of "New Marketing"

Information about Expomanagement, Madrid 2005, where Michael Porter will lecture about the results-oriented strategy:

  • The results-oriented strategy
  • The economic logic of higher returns
  • How to recognize what kind of business your company competes
  • The importance of abandoning the destructive competition and adopt strategic competition
  • What are the five keys to an effective strategy
  • Why most companies have no strategy
  • How to find the right strategy
  • How to successfully communicate and implement a strategy: essential steps

http://www.expomanagement.es/congreso/congreso.html