Marketing 3.0


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Marketing 3.0

  1. 1. Early Marketing Advertisements
  2. 2. Now a Days … • Anxieties : Solution about making globalized world a better place • Confusion : Deepest needs for social, environmental and economic justice in their mission, vision and values • Not only functional and emotional but human spirit fulfillment in products and services To be a competitor : All stakeholders Must SHARE its mission, vis ion and values AND MARKET that
  3. 3. MARKETING 3.0 Out with the OLD In with the NEW Harshit Dhora (PC-07) Vipul Patil (PA-20) Mihir Pandit (PC-09)
  4. 4. MARKETING 3.0 Philip kotler • IM professor at the Kellogg School of Management, NW Uni. Hermawan Kartajaya • Founder and CEO of MarkPlus, Inc. Iwan Setiawan • Senior consultant at MarkPlus, Inc. • Marketed and Distributed in India by Times Group Books • Published by John Wiley and Sons, Inc., Hoboken, New Jersey • Pages : 188 • Rs. 495 • 3 parts and 10 Chapters
  5. 5. MARKETING 3.0 Key business trends shape the human centric marketing imperative Foundation for Marketing 3.0 How the company can market corporate vision, mission and values to each of the stakeholders Implementations solving global issues such as wellness, poverty and environmental sustainability contribution by the implementing 3.0
  6. 6. MARKETING 3.0 Mind  Heart  Spirit Consumer centric Human centric Marketing 1.0 Marketing 2.0 Marketing 3.0 Product centric Mind, Heart, Spirit “Any customer can have a car painted any color that he wants so long as it is black”
  7. 7. MARKETING 3.0 Marketing 1.0 Product-centric Marketing 2.0 Consumer-centric Marketing 3.0 Value-centric Objective Sell products to the masses Satisfy customers & brand loyalty Meet emotional and rational needs of consumers Enabling Forces Industrial Revolution Information technology Connectedness of consumers How marketers see the market Mass market Smarter consumers & mass market People instead of segments Key Marketing Concept Product driven market Differentiation Value of product to consumers emotions Value Propositions Functional Functional & emotional Functional, emotional & rational Interaction with consumers Mass communication Micro segmentation Consumers collaborate with each other Power of branding Marketers/companies Marketers/consumers Consumers
  10. 10. MARKETING 3.0 : AGE OF GLOBALIZATION PARADOX AND CULTURAL MARKETING Political • Democracy vs Capitalism • China, Cash-rich nations Economic • Avg. CEO earns 400times more • India has MT 50 billionaires Sociocultural • Jihad vs McWorld by Benjamin Barber • Individual pressure WORLD IS STILL ROUND
  11. 11. MARKETING 3.0 : AGE OF CREATIVE SOCIETYAND HUMAN SPIRIT MARKETING Hunter Farmer Blue collar (Muscle power) White collar (Left brain) Artist (Right brain)
  12. 12. MARKETING 3.0 FUTURE OF MARKETING The Disciplines of Marketing Today’s Marketing Concept Future Marketing Concept Product Management 4 P‘s Cocreation Customer Management STP Communitization Brand Management Brand Building Character building
  13. 13. MARKETING 3.0 Communitiztion Pools Connected to IDEA (strong belief and affiliation) Webs Connected to ONE ANOTHER (one-to-one) Hubs Connected to a LEADER (loyal fan base) Cocreation : Platform , Match own unique identities, Feedback and Enrichment Character Building • Authenticity by Pine and Gilmore
  14. 14. MARKETING 3.0 Shift to Human Spirit : The 3i of Domino‘s 3i ‗Yeh Hai Rishton Ka Time‘ ‗Khushiyon ki Home Delivery‘ Domino‘s Introduces a new product or initiates a new promotion ―You get fresh, hot pizza delivered to your door in 30 minutes or less—or it‘s free.‖ brand integrity • Positioning : Just claim that alerts consumer to be cautious of inauthentic brand. • Differentiation: Brand‘s DNA that reflects true integrity of the brand. • Brand identity : Positioning of brand in the mind of consumers • Brand integrity : Fulfilling what is claimed through the positioning and differentiation (Credible, Promise and Trust)  Target is SPIRIT • Brand Image : Acquiring strong share of consumers‘ emotions
  15. 15. MARKETING 3.0 The 3i of Revital 3i ‗Jiyo ji bhar ke‘ – Live Life to the fullest Revital Daily Health Supplement Value Based brand integrity
  17. 17. Mission Sell more Pizza, have more fun! Vision No 1 in Pizza and People Values • Treat people as you'd like to be treated. • Produce the best for less. • Measure, manage and share what's important. • Think big and grow. • Incentivise what you want to change. • Set the bar high, train, never stop learning. • Promote from within. • We are not ordinary, we are exceptional.
  18. 18. MARKETING 3.0 MIND HEART SPIRIT Free Home Delivery, Discounts, Birthday bangDeliver Delicious Pizza Different kinds of Pizza and side orders Constant Innovation Sustaining Values : Report Believing in people One of the 100 best companies for working with Less Costly with most benefits
  21. 21. MARKETING 3.0 COKE : Remember,1985 new coke story. Consumer backlash, not about new taste it ws about bond with the infamous secret formula. The new coke ruined the bond hence consumer shunned. Not case of product failure. Canada story was different because coke did not have iconic status there. Brand popularized the happy portrayal of Santa Claus in 1930. 1971”I would like to teach the world to sing” The mystery surrounding the original formula was considered the secret of happiness. 2009 “open happiness campaign” “CONSUMERS GUARDING THE BRAND” CONSUMERS ARE THE NEW BRAND OWNERS
  22. 22. MARKETING 3.0 CONSUMERS ARE THE NEW BRAND OWNERS IKEA 2009 in cost saving move changed font from custom futura to verdana Outrage on twitter. IKEA meant smart stylish lifestyle. Brands mission is implanted into consumers minds, hearts and spirits. Then brand is owned by consumers. Real mistake was that they did not understand their brand mission as their consumer did. Marketing 3.0 you really don’t own your brands once they are successful. Companies have to live with the fact that exerting control over brand is almost impossible.
  23. 23. MARKETING 3.0 GOOD MISSION DEFINED Means introducing new business perspective that can transform the lives of consumer. Good mission Consumer empowerm ent Bussiness as usual Story that moves people Business as usual HBR Publishes Break through ideas Need strategic foresight. Possessed by charismatic and visionary leaders. Their personal mission and brand mission are inseparable and most often same. Not necessarily innovators or pioneers. Anita Roddick's and bill gates Got inspiration from others made idea even bigger and more meaningful for humans.
  24. 24. MARKETING 3.0 Examples of business as unusual Anita Roddick's : Brand: “THE BODY SHOP” Although copied brand name and idea of recycled packaging fromUS Co,1976 She introduced idea of creating stories around cosmetics. Original brand mission: Embed social activism in business. Walt Disney: Brand: “THE WALT DISNEY CO.” Created successfully animated characters but also brought them into mainstream business with licensing and theme park experience. Original brand mission: Create magical world for families
  25. 25. MARKETING 3.0 Drucker mentioned “BUSSINESS SHOULD START FROM A GOOD MISSION , FINANCIAL RESULTS COME SECOND”. Eg Amazon.Com earned first profits in 2001 after 7 years of existence. Twitter Has not yet finalized on it s business model and how to monetize its service Mark Zuckerberg decided to build communities and not to exit and find a buyer for Facebook. GOOD MISSION Transformation or Change i.e making a difference consumer unconsciously accept it as a part of its daily life Human spirit marketing
  26. 26. MARKETING 3.0 Experience economy Transformation economy Where companies offering is consumers life transforming experience Eg Jeff Benzos created kindle after amazon Rethink how to persue their mission.
  27. 27. MARKETING 3.0 STORY THAT MOVES PEOPLE Build compelling stories around ideas and engage with people emotions. Example: Steve Jobs “ MASTER STORY TELLER ” He always begins with story after delivering stories he will talk about features and set of facts regarding the product. 1984 commercial introduction of Macintosh. 2001,i-pod would let people carry music libraries of entire life in their pockets. 2007,i-phone would easy to use device that combines music phone and internet. Thus, Steve has delivered the mission of transformation for computing, music and phone industry over past 25 years.
  28. 28. MARKETING 3.0 CONSUMER EMPOWERMENT Though individual consumer is weak their collective power is always bigger than power of firm. Advertising network develop one-2-one, one-2-many or many-2-many. Eg .Low cost consumer packaged goods COALGATE : Brand mission to make people smile,is running consumer empowerment programme called “SMILE” TIDE : BRAND MISSION TO CLEAN CLOTHES. PROGRAMME “LOADS OF HOPE” Consumer should talk about brand story MARKETING 3.0:CONVERSATION IS NEW ADVERTISING AMAZON REVIEWS AND RECOMMENDATION FOR READERS. EBAYRATE BUYERS AND SELLERS Positive WOM consumer risk their own reputations.
  29. 29. MARKETING 3.0 CONSUMER EMPOWERMENT Conversation is so strong that it helps when brand is in trouble 2010, SAAB motors was debt and operations were about to be closed. “How saab saved my life” “the rituals of flashing lights to other SAAB drivers” The story of brands lives longer than the brand itself.
  31. 31. MARKETING 3.0 VALUES UNDER FIRE Marketing related profession car sales person and advertising person were least admired. Most admired were doctors teachers and nurses because they make personal difference in life of consumer. Scandals: Enron,Tyco,Worldcom, Satyam. Beating from both from consumers as well as employees. Marketing 3.0: Convince both to take their values more seriously. Same story telling approach.
  32. 32. MARKETING 3.0 VALUES DEFINED 1. Permission to play 2. Aspirational values 3. Accidental values Good values are those which are attracted collaborative technology , globalization cause cultural transformation to take quickly and frequently. collaboration cultural creativity 3M
  33. 33. MARKETING 3.0 VALUE WILL DO YOU GOOD ATTRACTING AND RETAINING TALENT Advantages for competing for talent . Attract employees and retain them longer Productivity higher. Prospective employees unconsciously compare their personal values with the values of corporation and look for a good fit. Stats 50%MBA grads say that they are willing to take a pay cut to work in a socially responsible co. Purpose and culture most important factor in BRIC countries. Well kept values improve employee loyalty. Change of ownership of a company reduce employee commitment. Eg. Body shop by Loreal Ben and jerry by Unilever
  34. 34. MARKETING 3.0 Back office productivity and front office quality Values-driven employees not only work harder but also become better face of company. Their behaviour will be the part of brand stories that customer talk about. Employees should be seen as “value ambassador” customer judge authenticity looking at employees.Eg Wegman employee are food ambassadors. Best sales people in world are people who use and understand their product inside out. Eg ciscoexperience daily what it means to be well connected to everyone being a network company. VALUE WILL DO YOU GOOD
  35. 35. MARKETING 3.0 VALUE WILL DO YOU GOOD INTEGRATING AND EMPOWERING DIFFERENCES Shared values integrate employees under one corporate culture. Eg Rent a Car Long standing routine Recruit new college graduates tell them to work hard by washing and shuttling cars , teach long term relationship with customers Progress up the ranks and give them branch to run when they are ready. Humility employee pick up while washing builds relationship and transform them into friendly people. SAME VALUES + LOCAL KNOWLEDGE = CUSTOMIZED LOCAL STRATEGY INTO DIFFERENT MARKET
  36. 36. MARKETING 3.0 PRACTICE WHAT YOU PREACH Training should be practiced not only preached. Marketing 3.0 Not just training and coaching but aligning values with behavior. Transforming employees and empowering them to transform others. CHANGE THE LIFE OF EMPLOYEES Eg.S.C Johnson puts value in employee like cutomers Balanced family-work lifestyle. Couple can expect to get an overseas assignment together No bussiness meetings on friday ,home aerly for family weekends.
  37. 37. MARKETING 3.0 PRACTICE WHAT YOU PREACH SIX SEGMENTS OF EMPLOYEES: 1. Low obligation and easy income:Quick wins 2. Flexible support segment:Goes with flows 3. Risk and reward: job challenges and excites 4. Individual expertise and team success:Seeks collaboration 5. Secure progress:Promising career path 6. Expensive legacy:Lasting impact on co. This segmentation helps company design signature experience and weed out unsuitable employees. EMPOWER EMPLOYEE TO MAKE CHANGE CHINESE PROVERB``TELL ME AND I WILL FORGET;SHOW ME AND I MAY REMEMBER;INVOLVE ME AND I WILL UNDERSTAND” So companies need to invoved and empowered
  39. 39. MARKETING 3.0 GROWTH MIGRATION AND COLLABORATIVE IMPERATIVE By 1999,dell was largest seller on internet ahead of Amazon.Com,E-bay and Yahoo combined. In 2005,growth stalled as in mature markets consumers saw computers as commodities and less concerned about customization. Dell needed direct indirect collaborating models. Problems in Mature market: Consumer found other alternatives attractive. In growth markets chindia people preferred high touch human interface than high tech internet interface. Dell secretly started in 2002 and in 2007 announced partnership with 11500 partners. MARKETING 3.0: Channel partners are HYBRID of company consumers and employee. They have their own mission vision value and business model Only thing is they send to end consumers and form consumer interface just like employees.
  40. 40. MARKETING 3.0 CHANNEL AS COLLABORATOR In marketing 3.0 They act as • Collaborator • Cultural change agent • Creative partners CHANNEL AS COLLABORATOR: (SELECT THE FIT) . Mirroring the process.Should have identical purpose-identity-value PURPOSE:Overall key objective of potential partner.Relatively easy to observe IDENTITY:Relates to character of potential partner requires deeper investigation. VALUES: More difficult to observe.They invove shared beliefs eith the channel partner. Mirroring Purpose Identity Purpose Identity Channel Partners Company Values Values
  41. 41. MARKETING 3.0 CHANNEL AS COLLABORATOR Body shop : As imperative for growth emerged multi channel approach was adopted. Anita Roddick's was interested in people interested to make difference rather than people making profits. Women were more likely than men to share her same social and environmental values.(90%partners were women initially). Channel partners as cultural change agents (distributing the story) Sometimes channel partners manage consumer interface Co does not directly communicate with consumers It demands consistent personal approach. Eco friendly benefits. Eg Maria Yee the role of partners is not only to convince Brand positioning but also to promote overall eco friendly Benefits.
  42. 42. MARKETING 3.0 CHANNEL AS COLLABORATOR CONSUMERS THEMSELVES ARE CHANNEL PARTNERS Biggest issue in marketing for poor is access. India: Socially responsible distribution is best modeled. ITC: e-choupal:enables farmers to access information on weather and crop prices and sell their produce directly through consumers without middle men. Also choupal sagars concept of minimalls that sell products from consumer goods to health and financial services. Hindustan levers Empower rural women”Shakti Amma”
  43. 43. MARKETING 3.0 CHANNEL AS CREATIVE ALLY :MANAGING THE RELATIONSHIP They not only distribute but also provide customer touch points In it industry the channel partners are perceived as value added resellers capable of delivering solutions while manufacturers are peceived as seller of commodities. Retailers help in regular info sharing & strategy planning. CREATIVE CHANNEL PARTNER STAGES: 1. Single stage channel 2. Multistage channel 3. Territory based channel 4. Integrated multichannel stages.
  45. 45. MARKETING 3.0 SHORT TERMISM HURTS ECONOMY Sep 2008 LEHMAN BROTHER collapse 158 years old company survived turbulent times of great depression in 1930’s But couldn’t survive 13 months of financial crisis. Warren Buffet and Louis Gerstner put joint statement to put an end to short term in financial markets. It hurts long term value creation for shareholders and hurts economy badly. And encourage patience in investments. Not only Share holders but all stake holders like consumers, employees channel partners, government non profits and public at large.
  46. 46. MARKETING 3.0 Long term shareholder value = Vision of Sustainability POLARIZATION:MATURE MARKETS OR IMPOVERISHED MARKET Top end market Is maturing and high end consumers are becoming more concerned about sustainability They need to touch human spirit with sustainable business model. They pay higher for sustainable practices. In growth markets, Large consumer base at bottom of pyramid, Disruptive technologies is normally solution for poor society. SCARCE RESOURCES AND EARTH HAS A LIMIT: 1980’s focus was on preventing pollution 1990’s consumer centric practices product steward Practices.Enviornment friendly products. Those who manage scarcity of resources will be ultimate winners. Initially whole foods for niche markets then 2006 walmart embraced the same concept no longer to be niche.
  47. 47. MARKETING 3.0 Wal-Mart Turns Green Walmart pledged to improve productivity more enviornmentally sound practices. By going green. Wal-Mart announced in 2005 that it will be a “good steward to the environment” and will spend $500 million a year to increase fuel efficiency in Wal-Mart’s truck fleet by 25% over three years; reduce greenhouse gases by 20% in seven years; reduce energy use at stores by 30%; and cut solid waste from U.S. stores and Sam’s Clubs by 25% in three years. ENVIORNMENTAL SUSTAINABILITY WILL SHAPE FUTURE OF BUSSINESS IN NEXT 25 YEARS.
  48. 48. MARKETING 3.0 SUSTANABILITY AND SHAREHOLDER VALUE Indices now measure how well a company performs in the triple bottom line: profit, planet, and people. The AIM: To encourage companies to improve their economic, environmental, and social impact on the society. Company Approach FTSE4Good Index Good companies work toward environmental sustainability, have positive relationship with all stakeholders, protect universal human rights, possess good supply chain labor standards, and counter bribery practices Dow Jones Sustainability Index Corporate sustainability as “a business approach that creates long- term shareholder value by embracing opportunities and managing risks deriving from economic, environmental and social developments.” Goldman Sachs Introduce the GS Sustain Focus List, which includes the list of companies with sustainable practices How Will Your Company Be Measured?
  49. 49. MARKETING 3.0 MARKETING A VISIONARY STRATEGY To convince shareholders, the company needs to provide tangible evidence that the practice of sustainability will improve shareholder value by creating a competitive advantage. ? Sustainability Profitability Returnability The issue is to find a linkage of between sustainability, profitabili ty, and returnability Profitability :short term goal Returnability :long term goal. Eg Amazon.Com and e-bay, Promise of returnability prevents shareholders from withdrawing investment's.
  50. 50. MARKETING 3.0 MARKETING A VISIONARY STRATEGY THREE important metrics that can be quantified financially: Improved cost productivityINFLUENCE PROFITABILITY Higher corporate brand value INFLUENCE RETURNABILITY Higher revenue from new market opportunities INFLUENCE BOTH. Improved cost productivity: Making a compelling story and communicate this long termsavings shareholders.Hence,CA bcoz of higher productivity as cost are rising. Higher corporate brand value: Body shop challenged by journalist. Who doubted animal testing practices. So company cited its corporate brand that it is well known as non animal testing symbol Now consulting firms like interbrand and brand finance valuate corporate barnd reputation and equity.
  52. 52.  Marketing to the Post growth market- Challenge  Product- As Commodities  85% of American consumers have positive image of companies that supports social challenges- Survey by Cone  Companies need to address the challenges in society and participate in finding solution MARKETING 3.0 Delivering Socio-cultural Transformation
  53. 53. Two Forces oblige companies in a mature market to support a Transformation MARKETING 3.0 Need for future growth E.g. Disney on Children’s Nutrition Call for strong differentiation E.g. Wegmans on Healthy living
  54. 54. MARKETING 3.0 From Philanthropy to Transformation Vertical Company Empowered Horizontal Consumer Empowered Philanthropy Cause Marketing Socio-Culture Transformation Self-Actualization Basic Needs CreativitySpectrum Collaborative Spectrum Education- 75% Companies -American Express Body Shop
  55. 55. MARKETING 3.0 Three Stages of Transformation Identify Socio- Cultural Challenges - Identify current and predict future challenges - Challenges may include wellness (nutrition and healthcare),educa tion, or social injustice - For immediate impact : select constituents such as the middle class, woman, or the elderly - For future impact : select children and youth - Provide behavior- changing solutions moving up the Maslow Pyramid - Aim toward more collaborative, cultural, and creative transformation Select Target Constituents Offer Transformational Solution
  56. 56. MARKETING 3.0 Quiz 1
  57. 57. From Pyramid to Diamond From Aid to Entrepreneurship  Increased access amongst poor to IT Infrastructure  Hyper competition at top and middle of the pyramid  Govt. policy to discourage people from migrating to over crowded urban areas. Great Leap Downward Disruptive Innovation MARKETING 3.0 Creating Emerging Market Entrepreneurs
  58. 58. “A company that is making money while impacting the society in which it operates”  Measures:  Stretches disposable income  Expand disposable income  Increase disposable income “ Teaches people how to fish instead of giving them free fish” MARKETING 3.0 SBE [ Social Business Enterprise]
  59. 59. MARKETING 3.0 The Marketing Model of an SBE 1 Segmentation Bottom of the Pyramid 2 Targeting High volume communities 3 Positioning Social business enterprise 4 Differentiation Social entrepreneurship 5 Marketing Mix  Product Products not Currently Accessible for low-income Customer  Price Affordable  Promotion Word-of-Mouth  Place Community Distribution 6 Selling Sales Force of Social Entrepreneurs 7 Brand Iconic 8 Service No-Frills 9 Process Low-Cost No Elements of Marketing Social Business Enterprise Business Model
  60. 60. MARKETING 3.0 Alleviating poverty by Encouraging Entrepreneurship
  61. 61. Make a difference to solve the biggest issues of our times: Environmental sustainability 3 Actors in Sustaining the Environment  The Innovator  The Propagator  The Investor MARKETING 3.0 Green Marketing
  62. 62. The innovator invents the products that have the potential to save the environment, not products that simply do not harm nature and are environment friendly. • Gas emission reduce to 72% and further reduce to 15 % in 2015 MARKETING 3.0 The Innovator – Dupont case
  63. 63. Dupont’s Executive: “ My team knows when they walk into my office with an idea about a new product, it would better have a reduced environmental footprint or they walk right out because (if it doesn’t) I am not listening.” “Its not easy being green……Being green is a catalyst for innovation” MARKETING 3.0
  64. 64.  Walmart- Never rated high as a good corporate citizen  Ignorant of environmental issues  8% public discontinued their regular shopping- McKinsey report  “ Investor is someone who puts (money) to use, by purchase or expenditure, in something offering potential profitable returns, as interest, income or appreciation in value” MARKETING 3.0 The Investor- Walmart case
  65. 65. “ The propagator is usually a smaller size company in a non- chemical/ biotechnology/ energy/ high tech industry.”  The core differentiation usually lied in its green business model.  “Nutrition label” on each pair of shoes MARKETING 3.0 The Propagator- Timberland case
  66. 66. MARKETING 3.0 Innovator Propagator Investor Enabler Promoter Amplifier  Natural resources dependence  Current exposure to regulation  Increasing potential for regulation  Competitive market for talent  Low market power in highly competitive market  Good environmental track records  High brand exposure  Big environmental impact Motivation of different actors
  67. 67. MARKETING 3.0 Four segments of the Green market Trendsetter Value seeker Standard matcher Cautious buyer Segment profile Tree hugger or visionary environmental enthusiast Environmental pragmatist Environmental conservative Environmental skeptics Emotional and spiritual motivation for using green product Rational motivation for using green product Wait and see for green product to reach mass usage Do not believe in green products Positioning Eco advantage Eco efficiency Eco standard Not worth
  68. 68. MARKETING 3.0 Putting it all together Credo 1: Love your Customers. Respect your Competitors Credo 2: Be sensitive to change, be ready to transform Credo 3: Guard your name, be clear about who you are Credo 4: Customers are diverse; go first to those who can benefit most from you Credo 5: Always offer a good package at a fair price Credo 6: Always make yourself available, spread the good news Credo 7: Get your customers, keep and grow them Credo 8: Whatever your business it is a service business Credo 9: Always refine your business process in terms of quality, cost, and delivery Credo 10: Gather relevant information, but use wisdom in making your final decision
  69. 69. “ For too long, marketers thought customer satisfaction was the goal of marketing activities. Marketing 3.0 makes the persuasive case that customer and societal welfare is the next frontier for companies” Reference: Marketing 3.0 by Philip kotler, Hermawan Kartajaya, Iwan Setiawan MARKETING 3.0