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Business to Society Marketing - Kotler's Marketing 3.0

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An article evaluating the recent brand communication strategies of some companies based on Dr. Philip Kotler's latest book - Marketing 3.0
This article aims at connecting dots in what has been taught in book and how it is being done on ground level.

Published in: Marketing
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Business to Society Marketing - Kotler's Marketing 3.0

  1. 1. B2Society Marketing – Is the Marketing Code finally cracked? Introduction Recently, there was an ad which went viral on the social media. The ad features a father in a small south Indian village walking on his hands with feet up, cheered and accompanied by the villagers. The father comes to ease after reaching the village temple on hilltop after telling the priest that his son has turned 5. A women tourist, who has joined the procession midway wonders ‘what’s the big deal about a child turning 5.’ She is then told, that he is his first kid who has survived till this age. The ad ends with message that such deaths can be prevented simply by washing hands. It’s only after the ad has ended, in last 5 seconds we see the logo of lifebuoy. It’s a “Help a child reach 5” campaign by HUL (Lifebuoy). The concept is entirely different from what is being taught in the traditional text books of the marketing. There is no concern about the Figure 1: Lifebuoy's Reach a Child 5 Campaign brand visibility or the brand communication. But, the brand has made the connect in phenomenal way. While at it, how can we not remember the recent Pantene’s anti-sexism commercial – ‘Don’t let the labels hold you back’, or TATA Tea’s ‘Jaago Re’ commercials. These ads have changed the way in which the brands communicated to the audience. The concept of the target audience is fast being replaced by target society. We would like to call this trend or phenomena, “Business 2 Society Marketing”. Renowned marketing guru, Dr. Philip Kotler has also recently acknowledged this emerging trend and refers to as Marketing 3.0 in his latest book. Figure 2: Pantene's #WhipIt Campaign A unique thing about all these campaigns is, they are no more talking about the product or the brand, but they are taking in their hands the social issues around us; and this is precisely the reason for their ‘virality’ and acceptance. These are strong purpose driven commercial which are focused on connecting, not just on individual level but to the society as whole. For quite some time now, companies
  2. 2. Figure 3: The Evolution of Marketing (Source: Kotler, P., Kartajaya, H., Setiawan, I. Marketing 3.0. 2010.) have been focusing on the sustainable solutions but that’s isn’t going to be enough as even the way of marketing has changed. If the brands of tomorrow plans on being #1, they need to understand that simply making sustainable products is not going to be enough, there is even stronger need to convey these messages to the society in a most empathetic way. In this article, we will discuss the evolution of the B2Society marketing, Marketing 3.0 framework, and some of the strategies to embrace the future of marketing. The Purpose & Evolution of Marketing 'Marketing' since inception has been thought of as the craft of linking the producers (or potential producers) of a product or service with customers, both existing and potential. While some believe Marketing is a science which can be applied in all political systems, and in many aspects of life. Marketing methods are informed by many of the social sciences, particularly psychology, sociology, and economics. Therefore, as very rightly put by Philip Kotler, marketing is “meeting needs profitably” i.e. identifying human and social needs and using it as a profitable business opportunity. The Marketing as we know it today has had a long journey (See figure 3). Businesses, in the beginning, were only concerned with production, manufacturing and efficiency issues. But post war i.e., around mid- 1950’s the orientation changed towards Sales which was mainly concerned with selling the products to masses to finally marketing around 1970’s due to changing consumer perspectives and expectations as well as changing global
  3. 3. Table 1: Key Characteristics of Marketing 1.0, 2.0 & 3.0 Product-centric Marketing (1.0) Consumer-centric Marketing (2.0) Value-centric Marketing (3.0) Objective Sell products to masses Satisfy consumers and brand loyalty Meet emotional and rational needs of consumers Enabling Forces Industrial Revolution Information Technology Connectedness of consumers How markets see the market Mass market Smarter consumers and mass market People instead of segments Key Marketing concept Product driven market Differentiation Value of product to consumers emotions Value Propositions Functional Functional and emotional Functional, emotional and rational Interaction with consumers Mass communication Micro segmentation Consumer collaborate with each other Power of branding Marketers/companies Marketers/consumers Consumers business scenarios. Technological advances such as internet and social media has impacted not only the B2B Marketing but also B2C marketing which can be very relevantly seen since 1980s with introduction of internet marketing to e-business to social media marketing. Hence to be more relevant to the highly evolving consumers the marketing has gone through an evolution as described by Kotler as ‘from Marketing 1.0 to Marketing 3.0’. The various aspects and how the business and consumer perspective has evolved in this journey have been discussed in the table – Key Characteristics of Marketing 1.0, 2.0 & 3.0. The Need of evolving to B2Society With rapid globalization and opening of the countries’ economies as well due to inclusion of e-commerce, the consumers have been loaded with a whole sea of options and thereby competition has reached its all-time high. In such a scenario, companies have realised that differentiation and adequate value-addition to the life of consumers’ life through their product is important to get the competitive advantage as well as to ensure brand loyalty and thereby create a good ROI. The customers are a lot more empowered today. The Social Media has evolved as a new boon as well as threat to the various brands. People now trust each other’s opinions, online reviews and feedbacks more than they trust the communication from the companies about their product. Thus, the old concept of making people aware of one’s product no longer helps because consumers are increasingly becoming more informed, smarter, media savvy and distrustful of marketing. Figure 4: Dove's Real Beauty Sketch Campaign
  4. 4. Therefore, as discussed by sales-expert, Grant Leboff in his book ‘Sticky Marketing’, companies now need to focus on creating an experience for their consumers through their products or services and that they need to shift their strategy from creating a USP (Unique Selling Proposition) to creating Customer Engagement Points by offering an ‘emotional selling proposition’. In wake of the same, a newer concept has evolved in marketing, which aims to link social responsibility and environment sustainability as an integral part of company’s strategy. A shining example of the same is HUL’s Project Sunlight Sustainability Campaign. However, that has a fallout that it’s not possible for all companies to chase after the sustainability or responsibility race. Famous brand building expert Denise Lee Yohn says, “This is not necessarily wrong, but they’re not considering what’s really right for the business.” She talks about the shift away from the ‘giving back’ and ‘move toward creating a shared value’. Essentially, when we are talking about the rise of purpose driven social brands, it’s actually about becoming socially more relevant. Bestselling author and founder of social branding firm WeFirst, Simon Mainwaring argues, “people want to invest in brands that positively change the world, and the most iconic brands of the future will be those that drive the most meaningful social change.” Social campaigns, thus needs to be perceived as running marketing campaigns because they are just equally capable of expressing the brand identity or strengthen the brand’s competitive positioning. Simon Mainwaring, in his article ‘Marketing 3.0 will be won by Purpose-Driven Social Brands’, makes a strong point that B2Society marketing is even more critical because of its ability to impact the reputation, bottom line and even the employee productivity of the company. 87% of global consumers have voiced that companies must put an equal weightage on the society’s interest as on business interests. A clear implication of why Societal Marketing is very crucial lies in the fact that 80% of global consumers believe that companies should make them aware of their efforts to address the societal issues and only 20% of brands worldwide are seen to meaningfully and positively impact people’s lives. Even more appealing reasons for engaging in B2S are, 47% of consumers buy brands, that support a good cause, at least monthly and 91% global consumers will switch brands if a different brand of similar price & quality supported a good cause. On the flip side, 90% consumers would boycott a brand if they learned that they are involved in irresponsible business practices and 55% have already done so in past 12 months (as in July, 2013). Even from the perspective of the talent acquisition, the impact is significant. A whopping 81% of prospective employees consider CSR when deciding where to work while 54% believe that their company’s purpose is not clear to them. Beyond the 4P’s – Framework for B2Society Marketing In marketing, the concept of being relevant to the consumer’s mind was first introduced by Al Ries and Jack Trout in their classic book, Positioning – The Battle for Your Mind.They described it as creating a meaningful and unique impression of the the product in the minds of the target customers. For Example,Reckitt Benckiser has successfully planted the idea of Dettol as a synonym of cleanliness.
  5. 5. The next wave of marketing, emotional marketing then addressed the emotional component of the human psyche was earlier being neglected. A very successful campaign that truly recognizes the power of emotional marketing is by Procter & Gamble’s “Thank You, Mom” campaign. P&G’s “Proud Sponsor of Moms” campaign appealed to the emotions of the moms (target) and the normal consumers in an authentic way. However, the relevance is no more sufficient to consumers, the concept has now evolved to relevance to the very society we live in. There is now a need to address the spirit of the consumers. Dr. Kotler believes there is now a need to “unlock the soul’s code” in order to stay relevant. This is possible only if companies devise their mission, vision and values such that it incorporates compassion, sustainability and ‘make a difference’ strategy. Shift to Human Spirit – 3i Model In the wake of this emerging trend where the brands have a potential to create an impact on issues such as poverty, socio-cultural change and environmental sustainability, the traditional 4P’s and STP models no more offer adequate tools to remain relevant to the consumers. Dr. Kotler, in his latest book, along with authors Hermawan Kartajaya and Iwan Setiawan offers a new model for Marketing 3.0. Authors claim that in 3.0, the marketing needs to be redefined as a consonant triangle of brand, positioning and differentiation, and thus offers 3i model to complete this triangle. The 3i’s are – brand identity, brand integrity and brand image. Brand identity is about uniquely positioning brand in the minds of the consumers by becoming relevant to the rational needs and wants of the consumers. Brand integrity targets the spirit of the consumers by building the credibility of the brand and gaining consumer’s trust through the fulfillment of the claims made through the positioning and differentiation. Figure 5: Future Model of Marketing - 3i Model Finally, brand image is about acquiring a strong share of the consumer’s emotions. The brand value needs to appeal to consumers’ emotional needs and desires beyond product functionalities and features. And thus the 3i is expected to be relevant to the consumers’ minds, hearts, and spirits. (As described in the book “From Products to Customers to the Human Spirit: Marketing 3.0”). Adopting the Right Strategy B2Society is a relatively new concept in marketing hence while some companies are completely into this others are gradually taking this up.As with any business case, there is never a “one” right strategy. However, Dr. Kotler suggests the main ingredients of formulating the right strategy would be marketing mission to consumer, values to employees and channel partners and vision to stakeholders. Thus, the crucial factors are defining the mission, inventing the future (vision) and identifying the values for success. Previously, when we discussed the 3i model under frameworks for B2Society, we left out a values-driven marketing, a part of the framework which we will discuss now. This model, in a way describes the central theme of the Marketing 3.0.
  6. 6. VBM – Shift to Values-driven Marketing Figure 6: Value Based Matrix Model (VBM) In Value Based Matrix (VBM), on one axis the company strives to achieve the 3i’s (Mind, Heart and Spirit of consumer) and on the other axis, company’s vision, mission and values are defined. Thus, the matrix in totality reflects the roadmap to share the same dream as consumers and to make a difference. Kotler also talks about the 10 indisputable credos for integrating marketing with the values. These credos along with VBM can help identifying or defining the way in which company aspires to make the connect with the consumer. Different Companies, Different Strategies Different organizations, the ones which have realized the significance of the B2Society marketing have adopted the different strategies for appealing to the consumers on societal level. Kotler suggests delivering the socio- cultural changes for the post-growth market and creating the entrepreneurs in emerging markets. He has also suggested a 3-step model for delivering the socio-cultural transformations. However, we believe that both the strategies on the core become one and same and creating entrepreneurs can also be looked at as a way of bringing the socio-cultural transformations. Figure 7: Kotler's 10 Credos 3 Steps to Transformation – A New STP? In a long term, consumers expect the companies to bring the socio-cultural development rather than simply being the engines of the profit making. An increasing number of consumers today judge the organizations by their willingness to take part and level of commitment in addressing the societal causes. The three step model, in such a scenario, provide for a way to achieve this while making sure that the profits are not forgone. The 3 steps of this model are – 1. Identifying the socio-cultural challenges 2. Select Target Constituents 3. Offer a transformational solution
  7. 7. Figure 8: 3 Steps to Socio-Cultural Transformation An implementation of similar model can be seen in HUL’s Project Shakti. (Case Data taken from official Project Shakti webpage at http://www.hul.co.in/sustainable- living/casestudies/). HUL realised that India has more than 6,30,000 villages, most of which are 'hard to reach' and offer relatively lower business potential. Hence, reaching them through the conventional distribution system was a challenge. Inline with motive of “doing well by doing good”, HUL launched Project Shakti as a rural distribution network targeting small villages.The company benefitted by enhancing its direct rural reach while creating employment opportunities for under-privileged rural women. The model involves a member from a village SHG who is selected as a Shakti entrepreneur, commonly referred as 'Shakti Amma'. She receives stocks from rural distributor and then sells directly to consumers and retailers in the village. She is not only a consumer for the products but acts as the brand ambassador for the village. This involvement of consumer by HUL succinctly illustrates what is often referred to as value co-creation. Project Shakti has now provided business opportunity to the male members of the family (called Shaktimaan) too, who could service outlets not only in their own village but also of the nearby villages by providing bicycles, thereby increasing HUL’s sales and distribution reach and providing the rural villagers with a significant disposable income. Conclusion The concept of B2Society marketing may be the answer to the long-due and often- asked question, is it possible for a company to be human-centric while being profitable or vice- versa? With the emergence of new technologies and new modes of accessing information, the companies today are very much open to public inspection. The increased awareness about the social issues and an increased debate about sustainable living has made it necessary for organizations to perform not only on functional level but even so more on social level. The current generation of the consumers is much more concerned with the social issues and concerns. Thus, the time now is ripe for companies to reinvent themselves leaving the past practices of product and consumer centric marketing and move swiftly towards the world of Business2Society marketing.  Richa Prasad (SPJIMR, Mumbai)  Nakul Patel (NITIE, Mumbai)
  8. 8. References  Kotler, P., Kartajaya, H., Setiawan, I. Marketing 3.0. 2010.  Mainwaring, S. Marketing 3.0: The Rise of Purpose-Driven Social Brands [Infographic]. July, 2013. http://simonmainwaring.com/future/marketing-3-0-the-rise-of-purpose-driven-social-brands- infographic/  Wayhart, S. Marketing 3.0 – Kotler’s New Values Based Model. June, 2013. http://www.brandmill.com/featured/marketing-3-0-kotler-value-based-marketing-3-0-model/  Desai, M. Web film: Lifebouy – Help a Child Reach 5. Feb, 2013. http://www.impactonnet.com/node/1416  Vizard, S. Brands starting to shout about sustainability. Nov, 2013. http://www.marketingweek.co.uk/news/brands-starting-to-shout-about- sustainability/4008675.article  Adloo.in. Advertisements with Social Messages. Apr, 2010. http://adloo.blogspot.in/2010/04/advertisements-with-social-messages.html  Yohn, D. L. Companies should aim for social relevance, not responsibility. Nov, 2013. http://smartblogs.com/leadership/2012/11/30/companies-aim-social-relevance-responsibility/

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