Philip Kotler presentazione bologna - innovation talks 5 Ottobre 2017

1. The New Role of Marketing
in a Networked Global Economy
Milan, Bologna
October, 2017
Philip Kotler
Kellogg School of Management
Northwestern University

2. Session 3
Innovating
Your Path
to Success

3. Ob?
"Most innovations fail. And, companies that don't innovate die.“
(Henry Chesbrough)
"Most innovations fail. And, companies that don't innovate die.“
(Henry Chesbrough)
“A business has two—and only two—basic functions: marketing
and innovation. Marketing and innovation produce results: all the
rest are costs.”(Peter Drucker )
“A business has two—and only two—basic functions: marketing
and innovation. Marketing and innovation produce results: all the
rest are costs.”(Peter Drucker )
“While great devices are invented in the laboratory, great
products are invented in the Marketing Department.”
(William H. Davidow)
“While great devices are invented in the laboratory, great
products are invented in the Marketing Department.”
(William H. Davidow)
Source : google.com; http://blogbusinessworld.blogspot.com
Observations

4. Views of Innovation
• Innovation is unnatural for a company. It is more natural to
make the same thing or even improving its efficiency rather
than to search for new things to make.
• Most companies expect ideas and initiatives to come either
naturally, or through creativity training, or through setting
up skunk works.
• Some companies have innovation in their DNA: 3M, ITW,
Harley-Davidson, BMW, Progressive Insurance
• Innovation success depends upon “one percent inspiration
and 99 percent perspiration. “
Source: Vijay Govindarajan and Chris Trimble, The Other Side of Innovation: Solving the Execution
Challenge.

5. Some Examples of Innovation Failure
• Searle and its new betablocker
• A floor cleaner fails
• Motorola’s Iridium phone
• Philips moves to “Sense and Sensibility”

6. Sir James Dyson…The New Thomas Edison

7. Elon Musk – The New Henry Ford
Tesla
Solar Cit
Space X
Musk’s vision is to change the
world and humanity. His goals
include reducing global
warming through sustainable
energy production and
consumption, and reducing the
"risk of human extinction" by
"making life multiplanetary"
by establishing a human
Colony on Mars.

8. Types of Innovation
Product and
service
incremental
innovation
Product and
service
incremental
innovation
Business model
innovation
Business model
innovation
Marketing
innovation
Marketing
innovation
New to the
world innovation
New to the
world innovation
Source: http://2.bp.blogspot.com/_qD9Y8Ncd3I4/Sb6hKKOJkJI/AAAAAAAACDo/fHZHCQbvRe4/s400/BornToInnovate2009.jpg

9. A Balanced New Product Portfolio
Source: Rosabeth Moss Kanter

10. Innovation and Your Company
How are
innovative ideas
developed (build
internally or buy)?
How are
innovative ideas
developed (build
internally or buy)?
How do innovative
ideas flow in your
firm (top down or
bottom up)?
How do innovative
ideas flow in your
firm (top down or
bottom up)?
Where do you
focus your search
for innovation
(inside or outside
of the firm)?
Where do you
focus your search
for innovation
(inside or outside
of the firm)?
How is the
innovation process
managed (formal
processes or
informal
processes)?
How is the
innovation process
managed (formal
processes or
informal
processes)?
Where is the
innovation
organization
located?
Where is the
innovation
organization
located?
Source: http://www.henkel-cee.com/cee/content_images/36406_72dpi_605W.jpg

11. Lean Marketing – Eric Ries
• An entrepreneur needs to follow a Build-Measure-
Learn system. Answer: Iterative Rapid Prototyping.
• Identify a Minimum Viable Product (MVP)
• Then identify a Minimum Viable Approach (MVA)
• Chose an app distribution channel: Facebook, Google
• Examine the results and learn
– What need to be improved?
– Does the product really solve the problem?
– Why do customers not convert?
• This way you can continuously improve and adapt –
without becoming too expensive or too complex to
change.
• A team will do a daily “standup.” A daily “burndown”
of the time still needed to complete the current goal.
Meeting the “blockers” head on.

12. The Classic Stage-Gate Model
• Idea generation,
• Idea screening,
• Concept development and testing,
• Marketing strategy development,
• Business analysis,
• Product development,
• Market testing,
• Commercialization.
See Robert G. Cooper, Winning at New Products, Basic Books, 2011

13. Roles in a Company’s Innovation
Process
BrowsersBrowsersActivatorsActivators CreatorsCreators
ExecutorsExecutorsDevelopersDevelopers FinanciersFinanciers
Source: Philip Kotler and Fernando Trias de Bes, Winning at Innovation, 2011.
Roles in a Company’s Innovation Process:
The A to F Model

14. Innovativeness is a Capability
• Innovation requires organizing three markets within the firm:
– An idea market
– A capital market
– A talent market
• The best innovations provide solutions to customer
problems, not to the company’s product problems.
• Strong market-creating innovations have a long life and
create market leadership
Source: Gary Hamel, “Bringing Silicon Valley Inside,” Harvard Business Review, May 2000.

15. Major Sources of New Ideas
• Internal sources
– Marketing research department
– Salespeople
– Customer suggestions, inquiries, complaints
– Consumer behavior observation
– Employee suggestions
– R&D
• External sources
– Distributors
– Competitors
– Suppliers

16. New Technologies Abound
• Robotics (Your Own Butler)
• Artificial intelligence (IBM Chess, Watson)
• Neuroscience (Neuromarketing)
• Information technology (Big Data)
• Nanotechnology (New materials)
• Biotechnology (Customized drugs)
• Bioengineering (Artificial limbs)
• Digital and social media
• Energy science (Fracking)
• Food science (Nutrition movement)
• Education technology (Online and distant learning)
• Entertainment (Kidzania…Xavier Lopez Ancona)

17. “We have moved beyond the Information Age to the Age of Participation.”
GM ASKS CONSUMERS TO MAKE
VEHICLE ADS
BUILD YOUR OWN LEXUS AT
WWW.LEXUS.COM
Build your Lexus, complete with
available colors and options
Involve Your Customers in
Co-CreaInting Your Products
Invite Your Customers to Co-Create

18. Three Business Models for Innovation
• Whirlpool
• Shell Oil
• Samsung

19. The Relationship between Innovation
and Marketing
• How do the mindsets of Development and Marketing
differ, and what are their potential biases?
– Development: Masters of the Possible
– Marketing: Masters of the Valuable
• What are the reported levels of engagement between
Development and Marketing?
• What are the potential contributions of marketing to the
stages of the innovation process?
• What steps can a company take to improve the working
relationship between Development and Marketing ?

20. The Art of Creating Buzz
• Distinguish three types of diffusers
– Mavens: they are an expert on a topic. You
listen to them closely. Their motivation is to
inform or explain.
– Connectors: they know a lot of people. They
are social glue. They may mention things to
many others but are not seen as experts
– Salespeople: they are persuasive and help
create an epidemic of interest
From Malcolm Gladwell, Tipping Point

21. Empower your marketing engine…
1. Take advantage of turbulence and social problems.
2. Go to where the growth is.
3. Engage marketing and branding to drive your
future.
4. Intensify your online and social media activity.
5. Invite your customers and stakeholders to build
your brand and co-create your future.
6. Invest in innovation.
7. Develop the social responsibility side of your
business.
To Win at Marketing…

22. World-Class Marketers
• Driven by customer values and company values.
• Has an entrepreneurial and innovative culture.
• Continuous opportunity scanning and scoring.
• Uses scenario planning.
• Uses Big Data and market analytics to find customer
insight.
• Uses a mix of digital and traditional advertising to
reach and influence customers.
• Aims at customer engagement and advocacy.

23. Watch for the Sharing Society
• Millennials don’t want to own goods, but
borrow, rent and share cars (Uber, Zip), beds
Abnb, etc.
• Bad news for manufacturers because it
reduces volume and idles assets.
• Good news because of fewer cars, hard
copies of books, etc.

24. Recent Innovations
• Uber and Airbnb
• Single serve coffee
• Kidzania
• IBMs Watson
• Warby Parker eye glasses
• “Reverse innovation”
• “Free marketing”
• Nike+ (platforms)

25. Disruptive Technologies
• Photographic film
• Wired telephones
• Store retailing
• Classroom education
• Offset printing
• General hospitals
• Open surgery
• Cardiac bypass surgery
• Manned fighters
• Full service stock brokerage
• Digital photography
• Mobile telephones
• On-line retailing
• Distance education
• Digital printing
• Outpatient clinics
• Endoscopic surgery
• Angioplasty
• Unmanned aircraft
• On-line stock brokerage
Source: Clayton M. Christensen, The Innovator’s Dilemma, p. xxix. ; google.com
OLDOLD NEWNEW
Disruptive Innovation Will Face You

26. “Within five years. If you’re in the same business you
are in now, you’re going to be out of business.”

27. Performance Platform

28. Current Marketing Ideas
• Customer journey
• Content development
• Native advertising
• Brand storytelling
• Brand equity and
resonance
• Brand association maps
• Marketing automation
• Visual design, motion
graphics
• Web development
• Social media platforms
• Sharing society
• Social trend spotting
• Social conversation
monitoring
• Industry and
competition audits
• Big data
• Customer score cards
• Predictive analytics
• Neuralmarketing
• Buyer experience design
• Insight labs
• Virtual reality
• Omnichannel marketing

29. Session 4
Building a
strong brand

30. Marketing Communication Tools

31. Building a Strong Brand

32. Brand Adds Value!
Source: Pine and Gilmore, The Experience Economy

33. Branding Commodities
• Chicken
• Cement
• Bricks
“It is possible to brand sand, wheat, beef, bricks, metals, concrete, chemicals, corn
grits, bananas, apples, aspirin, …”(Sam Hill, How to Brand Sand).

34. Develop a Memorable Brand
• Nike: Its brand mantra is “authentic athletic excellence.”
Its brand slogan is “Just Do It.” Its logo is a “s “swoosh.”
• GE: Its brand mantra is “better living.” Its new brand
slogan is “Imagination at Work.” Its logo is
WHAT DO YOU THINK OF THESE SLOGANS?
• Ford, “Quality is #1 Job”
• Holiday Inn, “No Surprises”
• Lloyds Bank, “The Bank that Likes to Say Yes”
• Philips, “From Sand to Chips”
» “Philips Invents for You”
» “Let’s Make Things Better”

35. A Brand Must be More
Than a Name, Slogan, and Logo
• A brand must trigger words or associations (features and
benefits).
• A brand should depict a process (McDonald’s, Amazon).
• A great brand triggers emotions (Harley-Davidson).
• A great brand represents a promise of value (Sony).
• The ultimate brand builders are your employees and
operations, i.e., your performance, not your marketing
communications.

36. Figure 9-3
BrandDynamics™
Pyramid
Bonding
Advantage
Performance
Relevance
Presence
Nothing else beats it
Does it offer something
Better than the others?
Can it deliver?
Does it offer
me something?
Do I know
about it?
Weak relationship/
Low share of category expenditure
Strong relationship/
High share of category expenditure

37. Brand Asset Valuator Model
ENERGIZED
DIFFERENTIATION
The brand’s point
of difference
Relates to margins
and cultural currency
ESTEEM
How you regard the
brand
Relates to perceptions
of quality and loyalty
KNOWLEDGE
An intimate
understanding
of the brand
Relates to awareness and
consumer experience
RELEVANCE
How appropriate the
brand is to you
Relates to consideration
and trial
Leading Indicator
Future Growth Value
Current Indicator
Current Operating Value
BRAND STRENGTH BRAND STATURE
Figure 2: BrandAsset ®Valuator Model

38. Your Company’s Brand
1. What word does your brand own?
2. Write down other words triggered by your brand name?
A. Circle the favorable words; square the unfavorable words.
B. Underline the words that are favorable but not widely known.
C. Double underline the words that are unique to your company.
3. Are any of the following a source for strengthening your brand’s
personality?
A. Founders
B. Spokespersons
C. Characters
D. Objects
E. Stories and mythologies

39. Strong Brands Supply Use Value
as Well as Purchase Value
Nestle:
• Sells baby food
• Provides free dietitian phone line
• Nestops along the highway
Carl Sewell Cadillac:
• Sells cars
• Free car wash during servicing
• Free emergency service and car loaners
Home Depot:
• Sells home improvement products, such as paint, electrical supplies,
plumbing
• Offers free kitchen remodeling design service
• Offers free workshops on how to paint, fix faucets, etc.

40. Narrative Branding
• The new media – websites, video, podcasts,
consumer generated content – are long-form
media. Marketers need to design compelling
brand stories with richness and depth.
• Narrative Branding, like a story, is inclusive:
emotional and rational; creative and strategic. It
is designed around all senses: sight, sound, taste,
touch and smell.
• Chose a different value proposition for each
customer or segment. You want coherence, not
consistency.

41. What Makes a Strong Brand?
• Strong brand = Dramatic Product Benefits x
Readiness to Believe x Distinct Identity x
Emotional Values

42. Creating genuine customer value:
Progressive Insurance
Name Your Price lets
customers customize
their policy to fit their
budget.
“ I want an easier way to see how I
can meet my insurance needs at a
great price.”
MyRate rewards lower risk
drivers with lower rates.
“ I don’t drive a lot of miles, I’m a safe
driver, and I’m not usually on the road
late at night when accidents are most
likely to happen. Since I’m less likely to
be in an accident, shouldn’t I pay less for
car insurance?”

43. Build Strong Brand Loyalty,
Engagement and Advocacy
• Select customers who are most likely to be
interested in your offer.
• Develop a compelling value proposition and use it
consistently.
• Touch the customer emotionally and not just
functionally. Make your product friendly and
easy to use.
• Send relevant content to your customers. Position
your company as a ‘thought leader.”
• Ask customers how your company might improve
its product or customer experience.
• Demonstrate that you care not only about
customers, but also stakeholders, and the planet.

44. Build a Brand Community!
• Examples: Harley Davidson, Saturn, Porsche, BMW,
Apple user groups, Lexus owners, Barnes and Noble
bookstores, The Body Shop, Ikea.
• Harley’s Owner Groups:
– HOGs have 250,000 members divided into 800
chapters: VietNam vets, lesbians, born again
Christians, Ladies on Harleys.
– Tools include: Rallies, anniversaries, lectures on
maintenance and safety, competitions, shows,
internet sites.
– The researchers describe Harley as “a religious icon
around which an entire ideology of consumption is
articulated.”

45. HYPOTHETICAL STARBUCKS BRAND POSITIONING BULLSEYE
Consumer
Target
Discerning
Coffee
Drinker
Consumer
Insight
Coffee and the
drinking
experience is
often
unsatisfying
Consumer
Need State
Desire for
better coffee
and a better
consumption
experience
Competitive
Product Set
Local cafes
Fast food &
convenience
shops
Consumer
Takeaway
Starbucks
gives me the
richest
possible
sensory
experience
drinking
coffee
Brand
Mantra
Rich, Rewarding
Coffee Experience
Fairly
Priced
Relaxing,
rewarding
moments
Responsible,
locally involved
Rich sensory
consumption
experience
Varied, exotic
coffee drinks
Fresh high
quality coffee
24 hour
training of
baristas
Green &
Earth Colors
Siren
logo
Caring
Contemporary
Thoughtful
Convenient,
friendly
service
Triple
Filtrated
water
Totally
integrated
system
Stock options/
health benefits
or baristas

46. Measure Your Brand Effectiveness
• Customer perceived value
• Customer satisfaction
• Customer repeat purchase
• Customer advocacy (NPS)
• Customer co-creation

47. LEADING B2B BRANDING
COMPANIES
•DuPont
•Siemens
•Bosch
•General Electric
•Saint-Gobain
•UPS
•FedEx
•Tentra Pak
•Microsoft
•Caterpillar
•IBM
•Daimler
•Michelin
•Tata Steel
•Morgan Stanley

48. Leading Ingredient Brands
Clothing: Gore-Tex, Lycra
Carpets: Stainmaster
Diet soft drinks (NutraSweet)
Cooking utensils (Teflon)
Bicycle gears (Shimano)
Sound systems (Dolby)
Computer chips (Intel)
Crystal components (Swarovski)