Leading companies now understand they must reach highly aware, technology savvy customers. Kotler, Kartajaya and Setiawan say that the ‘old rules' of product-based and consumer-based marketing will fail to do this. Companies need instead, to focus on creating products, services and entire corporate cultures, which are customer value driven at a more multi-dimensional, fundamental level.
Philip Kotler is widely regarded as one of the world's leading authorities on marketing, having written a number of defining texts on the subject. He is Professor of International Marketing at Northwestern University's School of Management.
Hermawan Kartajaya is a well known Indonesian author and speaker in marketing, who combines the strategic rigour of a western approach, with the heart and soul of his eastern perspective. He is the founder and CEO of MarkPlus Inc., a Jakarta based marketing strategy, research and training organisation.
Iwan Setiawan is a senior consultant at MarkPlus Inc.
Central ideas and argument
To put the thesis of the book in context, the authors describe 3 ‘ages' of marketing:
Marketing 1.0 - product-centric, or the marketing of the industrial age, when marketing was about selling factory outputs. Marketing was transaction orientated: how to make a sale.
Marketing 2.0 - consumer-based, where marketing is relationship orientated -how to keep customers coming back and buying more.
Marketing 3.0 - the linkage of three building blocks
Participation and collaborative marketing has been enabled by new wave technology, namely cheap computers and mobile phones, lower cost internet and open source, allowing individual self expression and collaboration with others, facilitated by social media. Marketing has shifted to inviting consumers to participate in the company's development of products and communications.
Globalization paradox and cultural marketing. The authors argue that with globalization, comes a number of paradoxes: it liberates, but puts pressure on nations creating a level playing field for countries, but at the same time threatening them; it opens nations economically, but not politically. As a consequence, there is a need to put cultural issues at the heart of a company's business model.
The rise in the creative society shapes the search for experiences. Consumers are now not only looking for products and services that satisfy their needs, but also experiences and business models that touch their spiritual side.
So marketing has evolved. The contention is that companies hoping to thrive in the 3.0 future cannot do so alone. In this interlinked economy, to thrive they must collaborate with one another, with their shareholders, channel partners, their employees and their consumers.
Interesting examples/case studies
Along with extensive citations from relevant literature, Marketing 3.0 is bursting with examples used to illustrate many of the arguments put forward. Among these, the authors refer to a number of well known examples, such as how Apple's Steve Jobs tells compelling stories around his ideas, to engage with people's emotions and how Amazon and eBay use consumer empowerment as a platform for many-to-many consumer conversations, as a means to leverage the power of consumer networks.
Additionally there are some newer examples, a number of which are drawn from emerging markets in Latin America and Asia. How did the 50:50 joint venture between Grameen the Bangladesh microfinance institution and Groupe Danone, set out a disruptive innovation that addresses the reduction of poverty in a significant way? An affordable dairy product created several hundred livestock-farming and distribution jobs in the local community. The mission was to "save the world with a cup of yoghurt". This case underlines the possibilities of doing well by doing good disruptively, by investing in emerging markets, or in the low end of the established market. Here, at the bottom of the economic pyramid, innovation addresses the social challenges caused by imbalances created by economic growth. Marketing mix variables have been re-designed, resulting in a superior and streamlined business model that challenges conventional ones.
Summary and key points
The authors assert that there are three stages in the relationship between marketing and values: first when marketing and values are polarised i.e. at odds; secondly when they are balanced where businesses operate a conventional business model, yet donate a proportion of profits to social causes; thirdly the ultimate stage of integration where there is no separation between marketing and values.
The book concludes with 10 indisputable credos that integrate marketing and values in this way:
Love you customers, respect your competitors
Be sensitive to change, be ready to transform
- Guard your name, be clear about who you are
Customers are diverse; go first to those who can benefit most from you
Always offer a good package at a fair price
Always make yourself available, spread the good news
Get your customers, keep and grow them
Whatever your business, it is a service business
Always refine your business process in terms of quality, cost and delivery
Gather relevant information, but use wisdom in making your final decision