Welcome to Management TV. Today we're once again with Philip Kotler. Phil is the world's most renowned expert on marketing.
He is the creator of the field and has written over 50 books, 10 of which have been in the last 5 or 6 years, and has recently published a book on Marketing 3.0. And we're going to learn about it with him today. Thank you very much, Phil, for being with us today. Happy to be with you always, Eduardo.
Marketing 3.0, what is it all about? Well, let me give you a preview. Yes.
It turns out that I believe most companies are in Marketing 1.0, which I will explain. A small percentage are in 2.0, and a few now are in 3.0. And by the way, no company should jump from being 1.0 to 3.0.
They better crawl before they get to that stage if they want to get to that stage. A Marketing 1.0 company is doing the job, a good job. They are being efficient and profitable, making something for a lot of people.
However, some companies have decided to learn more about who they're selling to. They move from just making and selling a good product to understanding their customers with big databases and watching movements in their customer fans and so on. And that is 2.0.
And 3.0 goes further than that. Before 2.0, if you were to describe it in one word or one concept, what is Marketing 1.0? Well, 1.0 is appealing to the customer's mind, wherever you can find customers.
Okay. And 2.0 is appealing to the customer's heart by knowing a lot about the customer and trying to get closer to serving the customer. Okay.
And now, yes, Marketing 3.0? And Marketing 3.0 is about... Knowing the customer is more than a person simply interested in a product that you're providing, but it's a person who has concerns because the world is kind of getting more and more unstable.
There's the question of will the planet run out of resources? There's the question of poverty, water shortage. And so it's a context for a company saying we care too.
We not only want to sell what you want in the best form possible, But we would like to make sure that we understand the world you're living in, and we're trying to make a difference and also make a better world. That's 3.0. In one word, it would be?
Caring. Caring about the planet and the world. Okay.
Let's try to define the basic marketing concepts and apply them to marketing 1.0, 2.0, or 3.0. For example, positioning. What is positioning?
Well, positioning is letting your target customers know how you will differ from the other competitors in offering points of difference and not only points of parity. We use those terms. Most companies have to at least do the same thing the other companies are doing.
Then they're on par with that. But you take a company like Starbucks, they not only make sure that the coffee is fresh. And that the, and it delivers what coffee should deliver, but they add much more. They're positioned as giving a finer coffee, more types of coffee, and a whole experience in a place where you're going to enjoy the moment of coffee.
Being, that's positioning. Segmentation. Segmentation is the recognition you can't serve everyone with equal satisfaction.
I'll give you an example of that. McDonald's believes in the thing they call brand journalism. That is, they stand for this idea of QSCV.
Let me explain. Their formula is always quality, service, cleanliness, and value. QSCV. But you know, what they should really emphasize differs from whether they're trying to reach the teenager, they're trying to reach the mother of children, the senior citizen.
And so within the QSCV, they have a different but consistent message with the QSCV for each segment of the market. In both positioning and segmentation, the difference between marketing 2.0 and 3.0 is to add those dimensions of caring society and planet? Yes, right, right. When you're a 3.0, you also have to be a 1.0 and 2.0. They're an addition, more pillars to your marketing strategy.
By all means. Don't become good at 3.0 without being good, basically, with your basic product and your customer understanding. The marketing mix, the four Ps, is it still a valid concept for the marketing 3.0? It is definitely still the basis of any brand plan, but there's one addition now called co-creation that was missing.
Namely, the four Ps is what the company does on its own to set the product, features, the price, the place or distribution, and also the promotion. But you know, in setting those things, they ought to engage their customers who really love them. Let's assume that some companies have customers who love them.
Companies like, for example, Harley-Davidson, where people who drive motorcycles, they often say, Harley, can we help you? You're making the next motorcycle. We have some ideas. Can we hang around? We don't want to be paid.
We just want to join you. What are... successful companies doing to co-create with their companies with their customers sorry they're they're basically building a love affair with their customers and I can say more about what we've learned about that it's not only in a book love marks but there's a lot there's a book called firms of endearment that have taught us how to Turn on your own customers as well as your employees. There's a lot involved in getting closer to your... There's a thing we call crowd sourcing.
It's a term used in a book called The Wisdom of Crowds which say that there are a lot of people out there who would like to participate, participate in your company in one way or another. And not only in what your product might become, but also what your advertising might become. Wonderful story about Doritos, which is a snack food like a potato chip. They decided not to use their advertising agency to develop a new ad campaign. And they said to all of you people who love Doritos, any of you who want to create a campaign for us, an advertising campaign, please send it to us.
We will choose the best ones and reward you for it. And not only that, the very best one will be used for our next campaign, which means that they're bypassing the ad agency, and they ended up with a brilliant campaign that no ad agency would have probably, with its narrow interest in a few concepts, have come up with. That's crowdsourcing, getting the crowd to join you, or it's co-creation with your...
That's a great example on one of the four Ps that would be the promotion. Let's take on the product side. How can you invite specifically your customers or customers-to-be to design the product with you?
Well, you know, it's been done for a long time within the B2B world, the business-to-business world. Any business firm that's making a technical component will go through an alpha and a beta test. Now the alpha test is to make sure that the component works, doesn't break down, inside the company, using your own scientists. But then they select a subset of customers with whom they have a good relation, and they ask them to try the product and to suggest any improvements before they do a launch of the final product. So beta testing is the same as co-creation.
The question is, what about a consumer packaged goods company? Well, they do it by having maybe a consumer panel. In fact, do you remember research being done at MIT called Lead Users?
Lead Users. The professor in that area has shown many companies that they will always have some users who are demanding. In fact, they take the product they just bought from you and...
improve it themselves. It could be a computer where they play around with the software or the hardware and make it work better. Lead users is another version of watching people take your product and make it better.
Let's see co-creation with price. Is that possible or that's too risky? How can customers help you set the appropriate price?
Well, you know, it's done in the following way, which most companies can't do it that way. When you say, as a restaurant, and this has happened. Come in, order what you want, and then pay whatever you want. That is to say, and a movie theater could do it. A movie theater could say, just come in, watch the movie, and just leave whatever you thought the movie was worth.
It hasn't spread, but it is a way of saying, let the customer be the judge of the value of the product. And finally, if we go to the four Ps with co-creation, would be... Place, distribution, how can customers help you co-create your distribution channels?
Well, it isn't the final customers there, it is the distribution channels that are your customers at the intermediate level. Yes. And do you know many of the middlemen have been actually reshaping the product?
The history of Walmart is telling a toy manufacturer their box or their package is too big for the shelf and... Almost giving the design for a better box or package or actually saying we won't accept it at that size, go back and so on. So I would say that is co-creation with your distribution system.