New marketing trends favour entrepreneurs

Philip KotlerBOOK REVIEW: Marketing 3.0  –  From Products to Customers to the Human Spirit by Philip Kotler, Hermawan Kartaua and Iwan Setiawan. Published by John Wiley & Sons. 2010.

The title of this book by marketing guru Philip Kotler, and his associates, says it all – marketing has entered a new era because customer demands are fast moving beyond what current marketing approaches can deliver.

Marketing 3.0 represents a “definitive break” with past ways of attracting customers. Of course, if this is the era for Marketing 3.0, there must have been a 1.0 and a 2.0.

Kotler’s observations on how Marketing 1.0 as product-based approach focussing on the “mind”, moved into Marketing 2.0 as consumer-based approach focusing on the “heart”, reads like a brief history of marketing. He refers to the thought leaders of the time, who  provide the words describing what was considered “best practice” at that point in time. The shift in consumer behaviour, which Kotler writes about, has moved marketing into a values-based discipline focusing on the “spirit”, which he calls Marketing 3.0.

During the Marketing 1.0 era, successful companies were able to standardise their production and delivery, with the result that they could reduce their price and increase their market share. But over time, when competition increased and consumers became more informed, a new approach was needed. That was when Marketing 2.0 emerged as the dominant way of reaching customers. This approach shifted the focus to segmenting the market, producing products or offering services addressing the needs of that specific segment, and then launching marketing campaigns aimed at this audience, who remained passive recipients of the message with the desired outcome that they buy more.

This is the conventional way of looking at marketing, which Kotler says is fast being overtaken by shifts in the global economy and new trends in consumer demand. No longer are consumers only looking for “functional and emotional fulfilment”. They are also looking for “human spirit fulfilment” in the products and services they choose. Consumers want to know that the values of the company they buy from are congruent to making the world a better place. In the wake of the “credit crunch”, and increased economic and social uncertainties, consumers are seeking out those companies that put into reality ecologically sound business practices and those that get involved in solving the social problems of our era. Companies that neglect “human spirit” will do so at their own peril.

The value of the book lies in the practical models offered for companies to use in their marketing strategy. For instance, the 3i-model provides guidance in brand positioning and differentiation within the context of Marketing 3.0. In this regard he observes:

“(M)arketers should target consumers minds and spirits simultaneously to touch their hearts.  Positioning will trigger the mind to consider a buying decision. A brand requires an authentic differentiation for the human spirit to confirm the decision. Finally the heart will lead a consumer to act and make the buying decision.”

Another useful tool offered by Kotler is the Values-Based Matrix, or VBM, which guides a company in utilising their Mission to answer the “why-question”, their Vision to answer the “what-question” and their Values to answer the “how-question” for all three dimensions of mind, heart and spirit.

Within this context marketing is firmly placed within all spheres inside the company and its relationships with the wider world. In the section of the book dealing with strategy, they deal chapter-by-chapter with each of the important aspects of building and maintaining trust relationships, moving from consumers, to employees, to channel partners, to shareholders.

While this book is aimed at the general business market and specifically larger companies, it becomes very interesting when you read it from the perspective of an entrepreneur. The trends driving Marketing 3.0 are levelling the playing field. Small businesses can now compete with larger corporations, or dare I say, entrepreneurial companies will soon have a great advantage over large corporations.

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