Kotler on Marketing How to Create, Win and Dominate Markets

1
Kotler on MarketingHow to Create, Win and
Dominate Markets
A STRATEGY DOCUMENT ON THE NEW MARKETING
PARADIGM
A synopsis prepared by Kuldeep Sharma
www.kuldeeponline.com surcon_at_rediffmail.com
2

• Kotler on The New Marketing Paradigm
• The three mantras being given in the beginning.
• Holistic Marketing
• Lateral Marketing
• Hi-Tech Marketing

3
It all started with a single most important
question from Indian Industry point of
view Do we have a global brand ? If the answer
is Yes Then name it and if the answer is
No Then lets try to find the answer ? Even
before finding the answer to it the important
issue is to negate certain myths like.
4
Is advertising the best tool to hard sell or
outsell yourself ? Shall we trust Marketing
Research for making major decision ? Can we
adopt someone elses segment saying that to be
ours ? Can we be a winner by getting cheaper and
cheaper ?? Can we afford to overlook
differentiation and if yes then for how Long ?
Can we think of selling a product with poor
service ? Can we create a good brand out of poor
quality ?
5
The answer to all the above questions is No
. Indeed today it is the Marketing Engineering
which is required more than the Product
Engineering in Indian Context. Globally the
product outsourced from India has the following
Cost statement of price
received Retailer in the developed world
50-60 Brand maker in the developed world
30-40 Manufacturers Price 10
Suggestive Measures To start from Low cost
average quality product for domestic market and
end up making Indian dominant brands at the
global level.
6
He also mentioned on 5 Cs favoring India
including Capital raising capability, Cost low
for production , Capability in terms of
knowledge , Consumers base and finally calm and
stability in the overall environment .
Talking on the neighboring Nations competence,
he briefed on the Strategy of Haier China on
becoming the leader in US market using Three
point formula of Fixing the quality,
diversification and Globalization. He also
pressed hard on the issues of innovative
differentiation amongst all elements of
marketing mix. He also mentioned that the
marketing without accountability is Like putting
all your resources on one P i.e Promotion.
Marketing Should understand and thus involve
itself in all kinds of activities Including
product development, pricing instead of doing
promotion and selling alone.
7
He said that most of the multinationals in their
spree to enjoy Economies of scale at times
sacrifice on customization and thus their
inability to adapt to the customized environment
leads to great deal Of problem in long runs. In
order to get the best of customization and
precision marketing projective techniques work
Better in Marketing Research than anything
else. Walmart doesnt believe in inventory..it
loves flow .. These tendencies have made the top
five retailers of US a powerful Group to affect
the sales of top five consumer goods suppliers
also. Great products are invented in marketing
departments.Manufacturing makes the product but
meaning is given by the marketing
department. Financial mindset is required in
marketing department.
8
So the first approach should be Holistic
Marketing. A more broader view is required to be
taken up for a. The targets activities,
lifestyle and social space. b.Companys Channels
,supply chain and communications. And lastly c.
the stake holders interests. It requires a
strong software support and integration and
networking is the key to success. The Holistic
relationship marketing may start from Customer
focus and using the Corporates core
competence gets fully developed
into Collaborative networks. This network wisely
directs the business investments into potential
Opportunities available in the market
space. Indeed every dream is an opportunity.
9
The same model may further be utilized for
exploring values in available space and then
creating value through marketing activities and
business architecture and finally delivering
value through Marketing activities and
operational systems. True value creations just
not possible without improving marketing
efficiency and marketing effectiveness. The
best way to do improve the efficiency is by
controlling inputs and outputs and
effectiveness by using resources for better
results.
10
Dont make the manufacturing companies. Make the
branding or marketing organisation. By not
investing in manufacturing and by outsourcing it
one could Achieve infinite return on investment
as anything divided by zero is Infinity. Once
your model of making become successful then apply
it to your Partners. Make less expenditure of
your own and make more partners. Nike doesnt
have any factory of its own. Advertising should
give higher sales quickly. Replace higher cost
channels with lower cost.
11
He gave too much of emphasis on cross selling and
up selling. He mentioned Cross selling as the
process of developing newer matching product
lines for your existing satisfied
customers. Like Adidas selling
shoes..Apparels..Personal care..Health
maintenance Products to their existing range of
customers . He defined Up selling as the
process to giving opportunity to your Existing
customer to graduate from the current range of
product to An upper range of product. E.g
Maruti nowadays are asking their satisfied 800
owners to exchange it for a wagon R or Esteem
customers to exchange for a Baleno. He also pin
pointed the need of predictive analysis of the
current Customers on their willingness to buy
new product lines or the upgraded products.
12

• In a dynamic situations where differentiation is
  getting saturated,
• Horizontal integration leading to failures, lower
  opportunities in
• crossing borders, lower success rates for new
  products, price cutting
• Becoming too imitable and price raising becoming
  too unjustifiable
• and lastly cost cutting heading for bleeding in
  the system rather than
• Making it leaner
• Leaders keeps a watch on the changes taking place
  at market place and
• they are the fastest in copying them with
  modifications and improvements.
• He suggested five winning strategies as
• Cost Reduction Using ideas of operational staff
  ( Southwest airlines)
• Improved customer Experience(Starbucks)
• Innovative Business Model ( Fed Ex)
• Improved Product quality ( Toyota) and
• Niching( Tetra in fish foods)

13
The need is not to look and plan for customers ,
competitors, products, Value creation means,
channels , promotional tools and business
Definition of today but the survival will depend
on your capabilities to plan and do it for
tomorrow. All this require to think beyond the
horizon and out of the box. In simplest term he
mentioned it to be the era of Lateral
Marketing Thinking laterally not only from the
product point of view but for Promotions, pricing
and distribution channels also. Huggies pull
ups, Walkman, seven eleven are the true examples
of Lateral Marketing. A book is also available
on the same by Philip Kotler and Fernando and
published by John Wiley and sons USA. The
largest garment manufacturer in the world unit
wise is the company which makes garment
accessories for Barbie dolls.
14
The turning point of the session was when he
shifted the focus to more Micro issue of
branding. He did a microscopic examination of
Customer Equity and Brand Equity. He redefined
Marketing as the art of brand building, he also
reiterated his belief in the very convention
given by Peter Drucker that Marketing is a
process to make selling superfluous and Marketing
is a process of developing a customer who is
ready to buy. Being an expert lexicon on
marketing related issues he emphasized that if
you are not a brand then you are a
commodity. Price in most of the cases is
everything and low cost producer is the only
winner provided he brands it well. He also warned
people to not to brand a high cost or poor
quality product
15
The best example for branding was given for
general motors Nummi plant which manufactures
two identical models as Toyota corolla and
Chevrolet Prizm Ironically Toyota sold 230000
cars as against 52000 of prizm And that too at a
price USD 650 higher ! Over and above the
importance of the name in a brand enough of
Attention is required to be given on promise of
values, culture, Relationship, personality and
above all the capability of your team To live up
to the brand meaning. Volvo was the last one to
develop a car with GPS or a convertible Because
Volvo as a brand connotes safety and while gps
leads to Distraction, converti averse the chances
of survival in case the car Topples down.
Finally Volvo created the safest converti and
GPS Enabled cars.
16
He Empirically coined a relationship between
Strong Brands and Product benefits, distinct
identity and Emotional values. Referring to
Peter Doyle book on Marketing Management
Strategy He mentioned that Strong Brand is a
product of the latter three. He also considered
the brands with high vitality but low stature to
Have excellent potential. On the contrary he
highlighted the downfall trajectory for a brand
also By saying that when a brands
differentiation and relevance start slipping,
esteem will slip next and then familiarity will
decline. Strong Brand not only supply use value
but purchase also ( Nestle, Volvo) . Good brands
depicts a process and raises the emotions. Any
opportunity for Brand stretching should not be
missed. Double underline the words that best
describes your competitors brand.
17
Over and above the brand equity..customer equity
is also an equally Important exercise. It has to
be done by measuring the customer Centered ness
of your organization and how can you improve
it. How much use of technology and training is
carried out by you and What does the cost benefit
analysis for the same tell you. ROI is the key
parameter in assigning any resource to any
functional area of the organization. No one
in the organization could make it to the top
without being zestful to numbers. It is because
of these reasons only that Japanese Maintain a
sequence of sending the marketing aspirants in
their organization to go through the rigorous
trainings at Production, Purchase, service,
Finance, sales and then marketing in the same
order.
18
Customer Equity is driven by Value , Brand and
Relationship equity CRM thus becomes an
important activity in formulating Customer
Equity. However Kotler had his own point of
view.. He advocated CMR ( Customer Managed
Relationship) over CRM ( Customer Relationship
Management) and thus UMP ( Unique Marketing
Proposition)over USP ( Unique Selling
Proposition). He did not say anything against
Customer Retrenchment but he suggested to give
the low value provider customer a chance to
continue the relationship by increasing the
price of your offering or decreasing The
services offered. This make the transactional
marketing obsolete in long run in certain cases.
19
Right from the beginning Kotler was not too
positive on Database Marketing or the marketing
with 1 response rate. He rather pressed Hard on
the needs of Data mining and then to proceed to
the target Having willingness to go for the
purchase. This led to the third key issue of the
convention I.e Need for Technology Enabled
Marketing which combines information technology,
analytical capacities, marketing data and
marketing knowledge. It is required to
differentiate amongst most profitable v/s
unprofitable and most growable v/s most
vulnerable customers. So the key question is
does everyone requires CRM .The answer is Yes
But for all the business except where Customer
Lifetime value is low, High churn in the
customers, non existent buyer seller interface.
20
The right use of high tech marketing may lead to
knowing your customer more precisely and thus
Precision marketing becomes the order of the
day. Precision marketing is also useful in
shifting from mass marketing to One to one
marketing. It also supports the consumer concept
of marketing. Internet is adjudged to be the
best forum for testing the product or idea and
even in developing all kinds of customer support
systems For your products. One can also test out
the non existent segments Also in chatting room
where the target lives with their virtual self
. But a word of caution for old organization for
high tech marketing Says that New Technology in
old organization makes it an Expensive Old
Organization.
21
A lot of discussion was being done on Buzz
marketing wherein the Importance of opinion
leader or word of mouth marketing could not be
discounted. A buzz is what all required to
convert a new idea the talk of the town. It
could be done by using mobile modes of
communications also like IBM used German
Shepherds to roam around with their owners in the
Business streets in morning hours wearing
jackets with IBM ThinkPad Written on that. The
mobile phone with Camera also got launched By
creating a lot of buzz in the marketplace amongst
the potential Prospects.
22
While being asked on the questions related to his
marketing mantra for poor consumers belonging to
India having low purchasing power He answered
very aptly that 85 of the people in world have
low purchasing power so the issue is not with
their paying capacities, The problem is with your
costs. He also mentioned that even 100 market
share is not to be preferred As the cost of
acquiring new customer increases very sharply.
He also said that the quality of market share
is much more important than the market share
itself. On this When Mr Kuldeep Sharma ,
Marketing Faculty from Amity Business School
asked his comment on The empirical statement that
the Optimum market share is the one where the
marginal cost of acquiring new customer is
minimum Kotler appreciated and said that yes but
it may require some further research.
23
The ten Commandments for the new paradigm as
given by the Guru As conclusion are 1.Recognize
Growing customer R Empowerment 2.Develop a
focused offering to the target market. 3. Design
the marketing from Customer Back. 4. Focus on
delivering outcomes,not products. 5.Draw in the
customer to Co-Create value. 6. Use newer ways to
reach the customer with a message. 7.Develop
metrics and ROI measurements. 8.Develop High-tech
marketing. 9.Focus on building long term
assets. 10.View marketing holistically to regain
influence in the company.
24

• List of the books as Bibliography for his
  presentation
• Lateral Marketing by Kotler
• Marketing Engineering
• Marketing Models by Kotler
• Business Marketing Management
• Tipping Point by Malcolm Gladwell
• How customer Thinks
• Marketing for Non Profit organization by Kotler
• How to make more money selling to the poor by CK
  Prahlad
• Marketing Moves by Kotler
• The loyalty effect by Frederick Reicheld
• Marketing Insights A to Z by Kotler
• Marketing Management 11th edition by Kotler

25
Great people never forget to follow the
footsteps of other great people And Kotler
finished his full day deliberation with the
following lines of Emerson This time like all
times is a good one , if we but know what to do
with it .