Marketers are under the gun: Kotler

Hailed as the “Father of Marketing”, Philip Kotler’s views encapsulate A wide experience of working with successful marketing organisations globally. Author of business classics like Marketing Management, Building Global Biobrands and Marketing Insights from A to Z, the Professor of Internationational Marketing at the Kellogg Graduate School of Management visits Mumbai this week to talk on “Marketing for Results”. In an e-mail interview with DNA Money, Kotler talks about the changing face of marketing and more.

What has changed, and what has not, in marketing since the time you wrote your classic on “Marketing Management”.
I wrote the first edition of Marketing Management in 1967. Existing marketing textbooks were highly descriptive with little analysis and research findings. My book introduced a decision-oriented approach to help businesses decide on key questions such as how many sales people to employ, how much to spend on advertising, how to find and launch successful new products, and so on. I drew heavily from economic theory, mathematical theory, organisational theory and behavioural theory. 

My book used the 4Ps (marketing mix theory) and expanded on market segmentation and targeting, marketing models, advertising theory, and so on. Subsequent editions brought in the ideas of positioning, branding, concept testing and development, one-to-one marketing, customer relationship management, customer-centric marketing, e-marketing, etc. As new ideas came into marketing, I incorporated them in new editions.  

How much of has marketing changed fundamentally since then? Has this forced a revision in your views?
In the early days, and till today, most business people saw (and still see) marketing as selling and advertising. They see marketers as helping to sell more goods today. What has to change is to realise that marketing is in the business of getting everyone in the company to think customers and satisfy customers, to detect new unfulfilled needs and product opportunities, to build strong brands, and so on. Not everything is tactical.  Strategic marketing helps the firm align with new opportunities and changes in the marketplace.

There is much talk these days about how the old ideas of marketing are dated. Sergio Zyman (ex-Coke) talked about The End of Marketing, etc. Do you think the basics of marketing need to be rethought in the internet age?
Sergio used the title The End of Marketing for its shock value but his book just describes the old marketing. There is a New Marketing forming. The New Marketing will be more technological and financial. Marketers will rely more on building and mining rich customer databases, using new tools of marketing such as email, websites, blogs, podcasts, and virtual marketing. And marketers will be in a better position to account for the financial results of their major campaigns.

Your four P’s of marketing also seem to need the addition of many more P’s - Pace, people etc. What do you think of these additions? Are they material?
The four P’s framework buries a lot of variables that need more explicit attention. Packaging and services are  buried under Product, the sales force is buried under Promotion, the Internet is buried under Place, etc. It is not surprising that people have proposed more P’s and non-P’s. Yet the framework when used right is very helpful to organising marketing activity. My own view is that the job of a company is to create value (Product and Price), communicate value (Promotion), and deliver value (Place). That’s how you should think of the four P’s. Value is the most important concept in marketing.

In many companies, marketing as a function is being re-evaluated. Some even wonder if marketing at all serves any purpose. Your comment on this?
I would hate to see a large company operate without a marketing department. In such a company, the sales force would have to handle and use an advertising agency, commission research on customers, dealers, and competitors, prepare brochures and sales aids, prepare marketing plans, etc. The sales force doesn’t want to handle these activities. That’s what marketing is for. Furthermore, a part of marketing exists to take a long run view of the changing dynamics and opportunities in the marketplace. If there was only sales, everything would be tactical and working to get a sale today. 

Faced with the threat of brand commoditisation, many marketing companies seem to be emphasising tactics over strategy - price-offs, special offers, etc. Is this healthy? Are brands losing their pricing power altogether in several markets?
In spite of the fact that many products resemble each other, people still seem to have strong brand preferences. Some people prefer a Coke to a Pepsi and others prefer the reverse. Some people prefer a Marriott to a Hyatt hotel and others the reverse. Feeling a brand connection involves more than the physical product. It involves your image of a company, its ‘caring’ness, its innovativeness, the level of its service, and so on.  Differentiation takes many forms. The worst situation is for the company to think of itself as producing a commodity, as if differentiation possibilities didn’t exist. Today construction companies in Mexico are paying more for cement from Cemex (a Mexican cement company) than to its competitors because Cemex has figured out how to make a real difference in value delivery.

What are the really new cutting-edge ideas coming into marketing? Can you list some of them for us?
Here is a list: a) Predictive analytics where a company can predict the probability that a specific person will respond to a specific offer; b) Neuromarketing, where a company can research what parts of the brain are stimulated emotionally by different elements in a video or product; c) Sales automation, where the sales force can automate some of its activities; and d) Marketing automation, where companies can leave it to the computer to make decisions on re-pricing or finding prospects or choosing messages or media. But this is only a partial list.

Many companies are now demanding ROI (return on investment) on marketing spends. Can marketing spends actually be planned for measurable ROI?
This is a healthy new direction for marketing to get the marketing people to think more financially and be accountable. ROI is not necessarily the best measure. It is too short term. And, remember, marketing has long-term effects not captured by looking only at one period. There are many other metrics that marketers must introduce and use for measuring advertising effectiveness, sales effectiveness, distribution effectiveness, and pricing effectiveness. Some marketing activities are easier to evaluate than others: it is easier to size up the results of a direct mail campaign than of a mass advertising campaign. But marketers are now under the gun and working with chief financial officers to produce better measures of marketing impact.