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What’s Next?The Future of Marketing

Philip KotlerKellogg School of ManagementNorthwestern University Yangon, Oct. 6, 2019

Overview

• Part 1. The History of Marketing

• Part 2. Today’s Marketing

• Part 3. The Future of Marketing: What’s Next

• Part 3. The Future of Marketing: what's next

Part 1. The History of Marketing

• Before 1900s, only sales.

• 1900s, marketing emerges.

• 1950s, consumer-oriented marketing.

• 2000, digital and social marketing

emerges.

• 2020, shared value marketing.

Marketing’s Changing Focus

• 1950-1970 Product orientation

• 1970-1990 Customer orientation

• 1990-2010 Branding orientation

• 2010-2015 Digital orientation

• 2015-2020 Social and values orientation

Where is your company now?

Part 2. Today’s Marketing: Major Tenets

• Buyer centered, not product-centered

• The 4Ps

• STP: Market segmentation, targeting and

positioning

• Marketing process: MR->STP->TM->VP->MP->I->C

• Target marketing with 30 second commercials

How Customer Oriented Are You?

Linden,Chris Brown, The Customer Culture Imperative, McGraw Hill, 2014

The Four Tasks of the CMO

Part 3. The Future of Marketing: What’s Next

Does Marketing Need a Major Update?

• Yes!!!

• Consumers have changed; they are in control.

• Distribution has changed.

• Technology has changed.

• Geographical markets have changed.

• Competitors have changed (FAAG).

What are the major features of The New Marketing?

• AI (social/digital media, algorithms)

• Marketing automation

• Customer journeys mapping

• Data scientists, 1 to 1 mktg.

• Building personas

• Content marketing

• Omnichannel marketing

• New metrics

• Predictive analysis

• Lean marketing

• Influencer marketing

Niche Marketing:Data Broker Industry Lists

Are You Ready to Do Digital Marketing?

• Have you hired enough young people with digital skills?

• Have you invested enough to collect and analyze Big Data?

• Have you set up a digital marketing budget and carried out

trials with Facebook, Google, Instagram, You Tube, Linkedin.

• Do you now know which digital and social tools work best?

• Has your campaign balanced traditional and digital

advertising?

• How would you state your company’s digital attitude?

– Denier – Avoider – Camouflager -- Transformer

Audit Your Digital Activities - 1

• Establish a website that people register to use and build a large customer database.

• Buy customer information from firms that track the consumption patterns of specific consumers based on the sites they navigate and other information.

• Encourage consumers to send emails with questions, concerns, and ideas, therefore creating learning relationships with consumers. (Starbucks).

• Increase “content marketing” to customers and prospects who give permission.

• Offer coupons-on-demand (Cool Savings, Netbonus) or samples of new products on demand (Samples.com).

• Monitor social talk for insights and trends.

Increase Your Digital Activities

Who should manage company marketing?

• Vice President of Sales (VPS)

• Chief Marketing Officer (CMO)?

• Chief Revenue Officer (CRO)?

• Chief Growth Officer (CGO)

• Chief Customer Officer (CCO)?

• Chief Commercial Offer (CC0)

The CMO - Master of Growth• CMO tenure is around 2-3 years. They come from

advertising, sales, research.

• The days of the brand-oriented, marketing-communications-focused creative-led CMO are waning.

• Today’s CMO must lead in data analytics, customization, personalization and optimization and drive complex, digital-led campaigns and activities.

• The CMO must show MROI for their individual marketing investments to keep their job.

• CMOs spend 50% of their time managing traditional marketing and 50% on aligning with the other business functions.

• The CMO’s most important relationships are with the CEO, Finance, IT, Development and Sales.

If You Are Appointed CMO, You Prefer That Your Office Be Located Next To:

1. CEO office

2. CFO office

3. CTO office

4. CIO office

5. VPS office

??

What is the relation between marketing and the sales force?

• How do sales people view marketing?

• How can marketing do a better job of serving the sales group?

• Are sales people still needed in an online world?

The Relationship between Development and Marketing

• How do the mindsets of Development and Marketing differ, and what are their potential biases?

– Development: Masters of the Possible

– Marketing: Masters of the Valuable

• What are the reported levels of engagement between Development and Marketing?

• What are the potential contributions of marketing to the stages of the innovation process?

• What steps can a company take to improve the working relationship between Development and Marketing ?

What is happening to retail marketing?

• Will online buying kill store-based retailing?

• What can store-based retailers do to remain profitable and exciting?

• Answer:

Experiential Marketing

Brand Activism - 1

• There is a collapse of trust in companies.– Mylan Pharmaceuticals chose to hike prices from $100 to $600 when

they acquired the life-saving product.

• It is not enough for businesses to give some money to well-run charities.

• People want businesses to show their value, their values, and take a stand on social issues.

• Businesses now need to take some responsibility for making the world a better place.

Brand Activism - 2

• A company’s task is to adopt a relevant social objective:– Stephen Hahn-Griffiths, Reputation Institute: “It’s not enough to just

have a high-quality product and deliver results on Wall Street. Social activism, aligning with communities, what you do to make the world a better place—that’s the metric.”

– Larry Fink, CEO of Black Rock group, “Society is demanding that companies, both public and private, serve a social purpose. To prosper over time, every company must not only deliver financial performance but also show how it makes a positive contribution to society.”

• Companies that take a stand: Starbucks, Unilever, Levi Strauss, Nike, Body Shop, Patagonia, Ben and Jerry’s…

Which companies in your country are taking a stand?

Should your company adopt brand activism?

What’s Driving Brand Activism?

Customers are worried about:• Dissatisfaction with government• Immigration/illegal aliens• Race relations• Ethics/moral decline• Healthcare/Hospitals• Gun control• Federal budget deficit/Debt• International issues• Cost of college education• Future of jobs with accelerating

automation

Generate Value for all Stakeholders

• Customers – listen with empathy; respond responsibly

• Employees – involve them in innovations and design; pay well; build a satisfying culture

• Distributors – welcome their ideas; motivate successfully; reward appropriately

• Suppliers – collaborate to build superior value chain

• Community – learn their problems; contribute generously

The New Story of Business

Companies will be judged by their performance with:• Financial• People• Environment• Community

Marketing 1.0 Marketing 2.0 Marketing 3.0

MIND HEART SPIRIT

PRODUCT-CENTERED

CUSTOMER-ORIENTED

VALUES-DRIVEN

ECONOMIC-VALUE

PEOPLE-VALUE ENVIRONMENT-VALUE

PROFITS SOCIAL PROGRESS HUMAN HAPPINESS

•Where is your company now?•Where do you want it to be?•Why?•What would steps would you take?

What are the major ways to win with marketing?

Lean Marketing – Eric Ries• An entrepreneur needs to follow a Build-Measure-

Learn system. Answer: Iterative Rapid Prototyping.• Identify a Minimum Viable Product (MVP)• Then identify a Minimum Viable Approach (MVA) • Chose an app distribution channel: Facebook, Google• Examine the results and learn

– What need to be improved?– Does the product really solve the problem?– Why do customers not convert?

• This way you can continuously improve and adapt –without becoming too expensive or too complex to change.

• A team will do a daily “standup.” A daily “burndown” of the time still needed to complete the current goal. Meeting the “blockers” head on.

Leading Megatrends• Declining birthrate

• Declining birthrate • Improving status of women• Faster growth in emerging economies• Rapid urbanization• Increasing shortages of water, food, energy, depletion of

forests and fisheries leading to more “demarketing”• Climate change and more polluted air, water, soil• Weakening physical infrastructures• Rise of biotech, nanotech, 3D printing, cloud computing,

robotics, Internet of Things (IoT)• From ownership to leasing or renting• Rise of social marketing and nudging

Declining birthrate

• Improving status of women• Faster growth in emerging economies• Rapid urbanization

Innovations changing the world

• Self-driving cars

• Flying taxis, piloted and unpiloted

• Self-ordering refrigerators with drone delivery

• Self-adjusting clothing with health readings

• Computerized machinery with built-in preventative maintenance and repair

• Smart mattresses tracking sleep

• Medical implants that anticipate or correct problems in persons and animals

What’s NextIn the Information Age, consumers will be able to select the best brands

• In the Information Age, consumers select the best brands without resorting to advertising or salespeople. Marketing success will depend mostly on smart pricing and owning strong channel positions.

• Marketing creativity will be crucial in the area of experiential marketing.

• Marketers will make more use of customer journey mapping and personas and content.

• Marketers will increase their use of virtual reality to deliver better product understanding to their prospects.

• Marketers will make greater use neural networking to identify best stimuli.

• Marketers will use predictive analytics and machine learning to identity and convert the hottest prospects.

“Within five years. If you’re in the same business you are in now, you’re going to be out of business.”