Philip Kotler who coined the gospel of marketing, the four Ps (product, price, place and promotion), has added a fifth – Purpose.
The 83-year old author of 50 books and the SC Johnson & Son Distinguished Professor of International Marketing at Northwestern University’s Kellogg Graduate School of Management says that a study reveals that businesses that were ‘firms of endearment’ were highly profitable.
This means companies which were the best places to work for and also focused on the bottom of the pyramid are known to outperform the market in a nine to one ratio over a ten-year period.
Kotler says that it is interesting to note that the marketing costs of such companies are much lower than its peers on the one hand, whereas on the other, customer satisfaction and retention is much higher.
He explains that this is because if a company has the interest of customers, employees and the supplier aligned to its business then it will make everyone happy thus improving the overall profitability of the business and that is why, Purpose, should also form the core of the business.
“Another thing that is a huge asset to the company is its corporate culture. For instance, for Apple, the core is innovation and that is what they have thrived on. On the other hand, a bank can succeed only if its corporate culture is friendly.”
Taking the example of Ikea, the world’s largest furniture retailer, he explains how businesses that care do well.
“If you look at Ikea, they have a child care centre. This allows people to leave their kids at a safe place while they shop. Then they also have great restaurant that has very good food at a reasonable rate. A happy customer means good business and greater brand loyalty for the furniture retailer,” adds Kotler, who is often referred to as ‘the father of marketing’.
Entrepreneurs and CEOs globally believe that all businesses should strive at creating fans instead of a consumer base.
Kotler believes brands such as Google, Starbucks, Apple and Harley Davidson have managed to do just that.