Rough Notes for Marketing 4.

0 by Philip Kotler
Marketing 1.0 : Product Driven
Marketing 2.0 : Customer Centric
Marketing 3.0 : Human Centric (Minds, Hearts,
Spirits)
Marketing 4.0 : Human Centric in Digital way!

Emerging Trends: Sharing Economy, Now

Economy, Omni channel Integration, Content
Marketing, Social CRM etc. (Digital Economy?)

9/27/2019 Restricted Circulation: For IIM Kashipur Internal Use Only 1

Part-1: Fundamentals Trends Shaping Marketing

1] Power Shifts to Connected Customers

• More Inclusivity (Living Harmoniously despite differences) and Socialness
• Customers Community becoming powerful (vocal)
• Random Conversations & Social Circles more credible
• Innovation in/for/from emerging markets
• Mass Markets: Product Available all over world
• Business Model Cloning (Flipkart from Amazon)
• Integration of Industries (Medical Tourism? M-Pesa?)
• Global Collaboration (Crowdsourcing)
• Entry Barriers Disappeared (Anyone can be your competition)
• Co-Creation & Co-Opetition
• Research & Develop Model transformed into Connect & Develop Model
• Online Go-to-Market Options Available
• F-Factor: Friends, Families, Fans & Followers
9/27/2019 Restricted Circulation: For IIM Kashipur Internal Use Only 2
Part-1: Fundamentals Trends Shaping Marketing

1] Power Shifts to Connected Customers

• Brand Authenticity & Honesty can only sustain
• Social Conformity is on rise
• Mobile Data Consumption is on Rise (Exponential)
• Crowd Wisdom: A Viral Concept!
• Impossible to hide flaws or hide customers complaints

9/27/2019 Restricted Circulation: For IIM Kashipur Internal Use Only 3

Part-1: Fundamentals Trends Shaping Marketing

2] The Paradoxes of Marketing to Connected-Customers

• ‘Marketing’ = ‘Market’ + ‘ing’, which means dealing with ever changing market
• New Emerging Customer: Young, Urban, Middle Class with strong mobility and
connectivity
• Connectivity changes the way we see customers & competition
• Screens accounts for 90% of our interaction with media
• Types of Connectivity: Mobile (Smartphone), Experiential (Internet is used to deliver a
superior customer experience in touchpoints between customers and brands) & Social
(Customer Community).
• Online & Offline Mode of Businesses (or Marketing) will coexist, converge and
complement each other.
• Customers not totally in control what they want to buy.
• 3 factors affecting customers: Marketing Communications, Opinions (Highly
Dependent) & Personal Knowledge (Attitude)
9/27/2019 Restricted Circulation: For IIM Kashipur Internal Use Only 4
Part-1: Fundamentals Trends Shaping Marketing

2] The Paradoxes of Marketing to Connected-Customers

• Average Span of Human Attention dropped to 8 sec
• Need to create brand conversations in consumer communities
• Connectivity creates a perfect environment of customer advocacy
• 3 Broad Categories of Customers (Based on advocacy): Promoters (+), Passives (0),
Detractors (-)
• Without –ve advocacy +ve advocacy might remain dormant
• McDonalds = 33% Promoters & 29% Detractors (Perfect, Brand Polarization)
• Detractors: Necessary evil!

9/27/2019 Restricted Circulation: For IIM Kashipur Internal Use Only 5

Part-1: Fundamentals Trends Shaping Marketing
3] The Influential Digital Subcultures
• Brand Advocacy: Not all customers are created equal
• YWN (Youth, Women & Netizens): 3 Major Segments (Relatively Larger Network of
communities)
• Common Among these 3: Influential Segments in Digital Era
• Youth set trends for their seniors | they help in acquiring the Mind Share
 In near future, potential customers
 Early Adopters, try new product & experiences
 Trendsetters
 Tribal Nature: Follow fragmented trends
 Primary driver of change
• Women: Gatekeeper of any product or service for family | help in growing market share
 Enormous size, Various Distinctive segments
 Information Collectors: Long Purchase Time, Price & Features comparison
 Holistic Shoppers: Consider everything before determining product’s true value
 Household Managers: CFOs of their families
9/27/2019 Restricted Circulation: For IIM Kashipur Internal Use Only 6
Part-1: Fundamentals Trends Shaping Marketing

3] The Influential Digital Subcultures

• Netizens (Citizens of Internet): Highly Influential | Help in expanding heart share
 Actively contribute to internet, not just consume it
 Social Connectors
 Expressive Evangelists (themselves a part of f-factor)
 Content Contributors
• YWN not easy to impress, but if impressed, most loyal

9/27/2019 Restricted Circulation: For IIM Kashipur Internal Use Only 7

Part-1: Fundamentals Trends Shaping Marketing

4] Marketing 4.0 in Digital Economy

• Marketing 4.0 combines online & offline interaction between companies & customers
• Focal shift from Segmentation & Targeting to Customer communities
• Communities are naturally formed by consumers themselves & are immune to
spamming & irrelevant advertising: this requires Permission Marketing
• Shift from positioning to clarification of character & codes
• Change in Brand Definition: Representation of overall customer experience
• From selling the 4Ps (What to Offer: Product & Price, How to Offer: Place & Promotion)
to Commercializing 4Cs (Co-Creation {Product with Customer’s inputs}, Currency
{Dynamic Pricing}, Communal Activation {Peer-to-peer distribution} & Conversation {2
way communication; Promotion})
• Customer Service Process to Collaborative Customer Care
• Integrating Traditional & Digital marketing

9/27/2019 Restricted Circulation: For IIM Kashipur Internal Use Only 8

 Fig-1: The interchanging roles of traditional and digital marketing
9/27/2019 Restricted Circulation: For IIM Kashipur Internal Use Only 9
Part-2: New Frameworks for Marketing in the Digital Economy

5] The New Customer Path

• Limited time to consider brand
• Too much exposure of brands
• AIDA to 4 A’s (Aware, Attitude, Act, & Act Again) to 5 A’s (Aware, Appeal, Ask {social
step}, Act, & Advocate {social step})
• In 5 A’s, no shape of funnel, can expand or narrow
• 5 As flexible tool, applicable to all industries
• Followed in Spiral Sense, Any A can be skipped or clubbed with other A
• Three types of influences: 3 O’s or Ozone (Own, Others, & Outer Influence)

9/27/2019 Restricted Circulation: For IIM Kashipur Internal Use Only 10

 Fig-2: The Shifting Customer Path in a
Connected World

9/27/2019 Restricted Circulation: For IIM Kashipur Internal Use Only 11

 Fig-3: Mapping Customer Path through 5 A’s
9/27/2019 Restricted Circulation: For IIM Kashipur Internal Use Only 12
 Fig-4: Ozone across Customer Path (through 5 A’s)
9/27/2019 Restricted Circulation: For IIM Kashipur Internal Use Only 13
Part-2: New Frameworks for Marketing in the Digital Economy

6] Marketing Productivity Metrics

• Brand Awareness Goal is Top-of-the-mind recall (Works well for low involving products)
• But, for high involving product, it is just first step
• Ultimate goal is advocacy
• Any correlation between awareness & advocacy? Two Metrics to measure this
• PAR (Purchase Action Ratio): Awareness to Purchase Conversion
• BAR (Brand Advocacy Ratio): Awareness to Advocacy Conversion
• Aware -> Appeal => Attraction Level (too low is a sign of worry)
• Appeal -> Ask => Curiosity Level (Both, too high & too low is a sign of worry)
• Ask -> Act => Commitment Level (too low is a sign of worry)
• Act -> Advocate => Affinity Level (too low is a sign of worry)
• Ideal BAR=1
• Idea is to remove bottleneck & diagnoses the process, & improve BAR

9/27/2019 Restricted Circulation: For IIM Kashipur Internal Use Only 14

Part-2: New Frameworks for Marketing in the Digital Economy

6] Marketing Productivity Metrics

• To increase awareness, trigger conversations among customers (Leverage, In Good
Times, Good & In Bad Times, Bad); Disadv: No Control
• To Increase Attraction: Improve Product or Brand or both (Element of Value Proposition
& Differentiation)
• To Optimize Curiosity: “When people confront surprise, they feel aroused and start to
explore” How? Content Marketing (Content Ideation & Creation: Stage-1; Content
Distribution & Amplification: Stage-2)
• To increase commitment: Channel Availability (Omnichannel Marketing), Seamless
Experience, remove organizational silos to take care of channel conflict
 Transforming market specialists channels & product specialists channels into
activities specialists channels
• To increase affinity: Enhancing post purchase experience, extend touch points, allow
more interaction, social media, gamification, rewards program
9/27/2019 Restricted Circulation: For IIM Kashipur Internal Use Only 15
 Fig-5: PAR

9/27/2019 Restricted Circulation: For IIM Kashipur Internal Use Only 16

 Fig-6: BAR
9/27/2019 Restricted Circulation: For IIM Kashipur Internal Use Only 17
 Fig-7: Intervention to increase conversion rates
9/27/2019 Restricted Circulation: For IIM Kashipur Internal Use Only 18
Part-2: New Frameworks for Marketing in the Digital Economy

7] Industry Archetypes & Best Practices

• Real life customer path: complex & heterogeneous
• 4 Major industry archetypes:
 Pattern-1 (Door Knob): Low Curiosity & high commitment eg- consumer packaged
goods (little research time, low price points, frequent & habitual purchase, instant &
impulsive purchase, availability important, brand switching common)
 Pattern-2 (Goldfish): High Curiosity eg- B2B (Competitor Study, multiple interactions,
long buying process, customer intimacy deciding factor)
 Pattern-3 (Trumpet): High affinity level eg- luxury goods (quality trust, more
advocacy, high involvement, presence of customer communities, exclusive channels)
 Pattern-4 (Funnel): eg- consumer durable goods & service industry (well planned
purchases, high involvement, positioning in sync with customer experience, manage
multiple touch points, low brand switching, prone to disruptive innovation because
of continuous customer expectations)
9/27/2019 Restricted Circulation: For IIM Kashipur Internal Use Only 19
 Fig-8: 4 Major industry archetypes
9/27/2019 Restricted Circulation: For IIM Kashipur Internal Use Only 20
Part-2: New Frameworks for Marketing in the Digital Economy

7] Industry Archetypes & Best Practices

• Pattern-5 (Bowtie): Ideal Customer Path Pattern, Aware = Advocate (BAR = 1), Appeal =
Act, Optimum Ask, helps to identify gaps & opportunities,

Fig-9: Bowtie pattern (Ideal)

9/27/2019 Restricted Circulation: For IIM Kashipur Internal Use Only 21

 Fig-10: Improving Industry Archetypes
9/27/2019 Restricted Circulation: For IIM Kashipur Internal Use Only 22
Part-2: New Frameworks for Marketing in the Digital Economy

7] Industry Archetypes & Best Practices

• If BAR Range wide: ‘Pull’ marketing
• If BAR Range narrow: ‘Push’ marketing

Fig-11: learnings from BAR

9/27/2019 Restricted Circulation: For IIM Kashipur Internal Use Only 23

Part-3: Tactical marketing Applications in the Digital Economy

8] Human Centric Marketing for Brand Attraction

• Today’s branding requires: authenticity & honesty, human centricity
• Marketers fulfill not only customer needs but also latent anxieties and desires
• Brands need to demonstrate human attributes as well
• Digital Anthropology: Nexus between Humanity & Digital Technology
• Methods to discover latent human anxieties & desires:
 Social Listening: Proactive Internet monitoring, Application includes- Campaign
Evaluation, Lead Identification, prospect Understanding, Social CRM, Competitive
Intelligence, market research (effective)
 Netnography: Ethnography focused on Internet (Natural Communities in
Unobtrusive Way)
 Emphatic Research: Human Centered Design

9/27/2019 Restricted Circulation: For IIM Kashipur Internal Use Only 24

Part-3: Tactical marketing Applications in the Digital Economy

8] Human Centric Marketing for Brand Attraction

• Six Traits for making brand human:
 Physicality: Unique attractions (logos, taglines, product/service design)
 Intellectuality: Innovation & Smartness (Tesla, Uber)
 Sociability: Proactiveness & Responsiveness, customer engagement, friendliness
 Emotionality: Evoking emotions
 Personability: Self-Awareness, Self-motivation
 Morality: Ethical, Integrity,

9/27/2019 Restricted Circulation: For IIM Kashipur Internal Use Only 25

Part-3: Tactical marketing Applications in the Digital Economy

9] Content Marketing (Brand Journalism or Brand Publishing) for Brand Curiosity

• Content is the new ad
• #hashtag is the new tagline
• It is a marketing approach that involves creating, curating, distributing, and amplifying
content that is interesting, relevant and useful to a clearly defined group in order to
create conversations about the content.
• Major Shift from brand promoters to story tellers
• First 5 Seconds of any ad is crucial
• Without proper pre-production and post production activities, don’t directly jump into
content production
• Content Marketing metrics: Visible (Aware), Relatable (Appeal), Searchable (Ask),
Actionable (Act), Shareable (Advocate)

9/27/2019 Restricted Circulation: For IIM Kashipur Internal Use Only 26

 Fig-12: Step by Step Content Marketing
9/27/2019 Restricted Circulation: For IIM Kashipur Internal Use Only 27
Part-3: Tactical marketing Applications in the Digital Economy

9] Omnichannel Marketing for Brand Commitment

• Integrating Traditional & Digital Media Experiences (Showrooming, Webrooming etc)
• Customers have become mobile and channel agnostic
• Seamless & Consistent Experience Expectations
• Some Key Trends:
 Trend-1: Focusing on Mobile Commerce in the ‘Now’ Economy: Time Scarcest
Resource in Customer’s lives
 Trend-2: Bringing webrooming into offline channels
 Trend-3: Bringing showrooming into online channels
• Role of Big Data in Omichannel Experience Optimization

9/27/2019 Restricted Circulation: For IIM Kashipur Internal Use Only 28

Part-3: Tactical marketing Applications in the Digital Economy

9] Omnichannel Marketing for Brand Commitment

• Step by Step Omnichannel Marketing:
1. Map all possible touchpoints and channels across the customer path (More touch
points and channels lead to more market coverage for the brand, but also increase
complexity)
2. Identify the most critical touchpoints and channels (Pareto or 80-20 Rule)
3. Improve & integrate the most critical touch points and channels (Creating an
organizational structure that can operationalize the strategy)

9/27/2019 Restricted Circulation: For IIM Kashipur Internal Use Only 29

 Fig-13: Mapping Touchpoints
9/27/2019 Restricted Circulation: For IIM Kashipur Internal Use Only 30
 Fig-14: Identify critical touchpoints & channels
9/27/2019 Restricted Circulation: For IIM Kashipur Internal Use Only 31
Part-3: Tactical marketing Applications in the Digital Economy

10] Engagement Marketing for Brand Affinity

• In digital economy the power of advocacy is amplified by the unprecedented proliferations
of mobile connectivity and social media communities.
• 3 Popular Engagement Marketing Activities (Not Mutually Exclusive):
 Use of Mobile App (How to design?)
1. Determine Use Cases (Objectives Customer wants to achieve)
2. Design Key Functionalities & User Interface (Use of SoLoMo: Social, Location &
Mobile)
3. Develop back end integration
 Social CRM (Conversations): Traditional CRM is company driven, social CRM is customer
driven. 3 Key uses:
1. Listen Customer’s Voice, 2. Brand Involvement in Conversation, 3. Handle
Complaints to avoid brand crises
 Gamification (Use of gaming Principles in non gaming context) Done by Loyalty
Programs & Customer Communities. Steps to Implement: 1. Define objectives
(Customer Actions?) 2. Way of Enrolment & Tiering & 3. Way of recognition
9/27/2019 Restricted Circulation: For IIM Kashipur Internal Use Only 32
The End Lesson!

What are the characteristics of WOW moment for a customer?

• WOW is surprising (Enjoy)
• WOW is personal (Experience)
• WOW is contagious (Engage)
• Is WOW dependent on Chance or can be designed? Design!

Watch: https://www.youtube.com/watch?v=7Ax2CsVbrX0

9/27/2019 Restricted Circulation: For IIM Kashipur Internal Use Only 33