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Toward Stronger Marketing

Philip Kotler, Ph.D


Kellogg School of
Management
Northwestern
University

Advertising
Research
Foundation
Chicago, Illinois
October 24, 2005
Thesis
MARKETS ARE CHANGING.

THEREFORE MARKETING MUST


CHANGE!
Marketing is Changing!
1. Marketing is much more than an
advertising/selling/brochure support
function.
Newer Ways to Reach Customers

Sponsorships

Product placement

Street-level promotion

Festivals

Webinairs, podcasting, etc.

Buzz troops and non-clutter media

Mobile billboards
Marketing is Changing
2. Marketing must align better with sales.
Four Levels of Relationship
Hypothesis:
The integration of sales and marketing tends to progress
through four distinct stages or levels of complexity.

Undefined Defined Aligned Integrated

Caution!
The most appropriate stage for a company will depend on
many factors. More integrated will not always mean more
effective.
Buying Funnel

Customer Brand Brand Brand Purchase Purchase Loyalty Customer


Awareness Awareness Consider- Preference Intention Advocacy
ation

Handoff Sales
Marketing
Integrating Marketing
Into the Sales Funnel
Purchase Purchase Loyalty Customer
Intention Advocacy

Prospecting Qualifying Defining Developing Proposal Revision & Contract Implemen


Needs Solutions Preparation/ Issue Negotiation -tation
Presentation Resolution
Marketing is Changing!
3. Marketing now participates more
actively in the designing of new
products and consumers are joining
in as well.
Cases
Microsoft
– Marketing participates in product development!

Virgin Atlanta Airways


– Virgin invites a sample of its devoted business customers to
spend the night in a mock airplane cabinet, complete with
flight attendants, food and entertainment.

Lego
– LEGO invites small groups of kids to see the company
facilities and work closely with product designers and
developers, model makers and marketing planners.
Marketing is Changing!
4. Marketing is moving toward more
financial accountability.
Marketing is Changing!
5. Marketing is automating more of the
company’s customer-related
activities.
Marketing Automation
IT reduces the cost of acquiring, analyzing, storing
and mediating information for customers and
company.

Closed-loop marketing architecture must include


ATM, phone, www, kiosk, call center, dealer, branch,
agent, all supported by relational databases,
transaction systems, and external data sources.

More and more marketing activities will disappear


into the network. Customer interaction and support
will be increasingly automated.

Source: Regis McKenna lecture


Marketing is Changing!
6. Marketing is acquiring new skills.
Examining the Marketing Talent Pool
Skills required Skills inventory Action plan

Product development 1

Marketing PR 3 Recruit talent

Market research 3 Executive education

Direct marketing 1

Mass-media advertising 2

Channel management 3 Executive education

Strategic pricing 2

Customer relationship mgt 4 Outsource

Database management 4 Outsource


CMO’s Key Responsibilities

1. Strengthening the brands


2. Measuring marketing effectiveness
3. Driving new product development
based on customer needs
4. Gathering meaningful customer
insights
5. Utilizing new marketing technology
6. Improving the customer experience.
Source: McKinsey study
Conclusions
The Old Marketing is broken. A New Marketing is
needed.

Marketers need to adopt a financial mindset and


an IT mindset as well as some additional skills.

Superior marketing performance will increasingly


require integrated systems, processes,
relationships, and information.
“This time like all times is a good one,
if we but know what to do with it.”

-Ralph Waldo Emerson