Marketing 3.0 summary 2

Marketing 3.0
The Once and Future State of the Art
Gregory F. (Greg) Zerovnik. EMBA, PhD
Copyright © 2012, Gregory F. Zerovnik, all rights reserved.

The importance of marketing
• “Because the purpose of business is to create a customer,
the business enterprise has two—and only two—basic
functions: marketing and innovation. Marketing and
innovation produce results; all the rest are costs.
Marketing is the distinguishing, unique function
of the business.”
—Peter F. Drucker

The evolution of marketing
• Marketing as an idea rests on certain assumptions:
• Willing buyers
• Willing sellers
• Enabling mechanisms exist that facilitate transactions
• Enforceable contracts (rule of law)
• Level playing field
• Money and banking
• Media and communications

• When Henry Ford invented the assembly line to make
cars, he was the “only game in town” for quite a while
• He could set prices as he wished
• He set them low in order to create a class of customers who up
to then, could not afford to buy a car
• He boasted his own workers could afford to buy a Ford!
• Choice was limited (any color, as long as it’s black)
• PRODUCT focus
• Marketing’s job is to sell what we make!
• The company is in control

• When firms no longer have “sole provider” status and
must compete, they realize that sales is not enough!
• A single buy-sell transaction is not enough to insure the
firm’s long term survival
• The firm must develop a way to create a repeat customer
Thus, the Marketing Concept is born
“Management philosophy according to which
a firm’s goals can be best achieved through
identification and satisfaction of the customer’s
stated and unstated needs and wants.”
—Business Dictionary.com

Marketing 1.0
• The 4 Ps (1960, E. Jerome McCarthy)
• Product
• The thing being marketed
• Product, service, idea
• Price
• What the provider charges to cover cost & yield profit
• Place
• The “marketplace”—it’s where people go to purchase
• Promotion
• You may have built a better mouse trap, but if you don’t tell
people about it, you won’t sell any
• The “Promotion Mix”
• ads, PR, personal selling, sales promotion, direct marketing,
social media

Marketing 2.0
• As competition increases, marketers come to realize that
they are no longer in control.
• “The consumer is boss!” (A.G. Lafley, CEO [ret.] Procter & Gamble)
• Marketing needs to focus on building relationships
• Relationships lead to repeat sales and customer loyalty
• In the 1970s, a couple of models called “the 4Cs” are
proposed
• The one we use here was proposed
by Philip Kotler, textbook author and
professor at Northwestern U.

Marketing 2.0
• The 4 Cs
• Consumer
• Focus is off the producer and onto the consumer or customer
• Rather than sell what you make, you make what customers want
• Cost to provide customer satisfaction
• Customers have expectations; it’s best to exceed them
• Expectations tend to rise over time; you still need to meet them
• Convenience for the customer to acquire what you offer
• Instead of the customer going to you, you go to the customer
• Rise of Internet shopping
• Communication is no longer one-way and one-to-many
• Now it’s two-way and often many-to-many (social media)

Marketing 3.0
• Marketing continues to evolve
• Competitive pressures
• Environmental changes (technology, sociology, gov’t, etc.)
• People’s expectations continue to expand
• People want their brands to be more reflective of who
they are, what they believe in
• And today, more and more people want to see companies
that are socially responsible

Marketing 3.0
• In the 1980s, Nobel-laureate economist Milton Friedman
famously said that companies had no business meddling
with environmentalism and social responsibility
• The sole focus of management needed to be creating
profits for shareholders (owners); otherwise they were
failing to exercise what is called “fiduciary
responsibility”
• This is simply no longer sufficient

Marketing 3.0
• Today, corporate boards and managers are talking about
“The Triple Bottom Line”
• People
• Planet
• Profit
• Consumers want to buy from brands that reflect their own
personal values
• Marketing 3.0 is all about the shift to
values-based marketing

Marketing 3.0
• Apple is a beloved brand
• But when sweat shop conditions
and worker suicides at their
Chinese contract factories came
to light, they suffered as a result
• Apple responded reactively by hiring inspectors and
threatening contract cancelations if factories didn’t
improve worker treatment and conditions = Good!
• Better = Body Shop and Starbucks proactively institute
fair trade practices right from the start!

Marketing 3.0
• Branding is one of marketing’s master concepts
• Kotler and his colleagues now give us
• The 3 Is
• Brand Image (appearance, what the public sees)
• Brand Identity (who the brand is, what are its values)
• Brand Integrity (the brand “walks the talk”)

Marketing 3.0
• Values are part of corporate DNA
• Values can only be successfully derived when the firm
knows what its MISSION is
• Mission is the heart of the firm
• It is why the company or organization exists
• Making profits is insufficient as a mission
• As Peter Drucker noted, “If you take care
of your customers, your customers will
take care of you!”

Sales Management
• The Role of Sales in Marketing 3.0
• Sales becomes an interactive function
• Selling is a process, not an end in itself
• Two-way communication is required
• Customer needs must be discovered and addressed
• Customer wants must be anticipated with good research
• Customer Satisfaction is the Goal
• Happy customers are repeat customers
• Repeat customers give you good Word of Mouth
• Good Word of Mouth spreads with social media

1.0 + 2.0 + 3.0 = Success
• The Marketing Concept did not replace sales
• The 4 Ps did not replace the Marketing Concept
• The 4 Cs did not replace the 4 Ps
• The 3 Is do not replace the 4 Cs
• We need them all!

Marketing 3.0 summary 2

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