The Universe of marketing has undergone tectonic change.

To face up, one

You have said that the average company is using about only about 10 per cent of the
Internet’s potential. Which ‘e-avenues’ are particularly under used?

Companies should be increasingly turning to the new media, not to replace the old media, but to
Find blends of the new and the old that work well together. Tools that should be considered
include webinars, blogs, podcasts, and most importantly, mining the social networks, where so
much dialogue takes place about products and services (both favorable and non-favorable). We
haven’t yet figured out how to use these new avenues and vehicles profitably; we’re still in the
experimentation level phase. Most companies are still using traditional media for the bulk of
their promotions, but they should also be carrying out experiments to determine where they can
mine some ‘gold’ in the new media.

You are credited with creating the concept of ‘social marketing’, which seeks to discourage
unhealthy behavior amongst consumers. Are you pleased with the results so far?

Very pleased, but social marketing involves much more than efforts to discourage unhealthy
behavior. The purpose is to really encourage positive behavior and maintenance of such
behavior, and to show the people that they are free to make their own choices; some choices are
very counterproductive to their lifestyles and goals. Social marketing ideas have been widely
applied to well known causes like ‘say no to drugs’, ‘exercise more faithfully’ and eat healthier’,
but they can also be applied to broader social causes.

You believe that we have entered an Age of Turbulence, marked by ‘interlocking fragility’
in the world economy. What are some of the key elements of this new age?

There has always been turbulence, so that isn’t anything new. What is new is heightened
turbulence, resulting from the global interconnectedness of countries and supply chains.
Nowadays, one country can sneeze, and everyone else gets a cold, which is exactly what
happened with the recent financial meltdown. Two key factors- globalization and digitization-
are amongst the elements that feed into this idea of increased turbulence and fragility. I want to
distinguish this concept from the concept of the business cycle, which is more of a Sine Curve.
The business cycle is an element of the turbulence, but even after the economy starts to turn
upwards, turbulent conditions will continue to plague us; unfortunately, there is no end in sight.
Creative destruction is part of capitalism, and many companies will rise and fall on the degree to
which they provide real value to the ‘voters’ (i.e. consumers).

You have said that turbulence often leads to all the wrong responses from management.
Like what?
One wrong move is to do nothing- to continue with the way you have been doing things. A
second wrong response would be to panic, which often leads people to behave so conservatively
that they forget that, as a wise person once said, ‘a crisis is something that shouldn’t be wasted’.
Crises produce all sorts of new opportunities. The third wrong response is to just cut budgets
across the board by some fixed percentage. Let’s say a service focused company cuts its service
budget by 20 per cent. This basically removes the key factors that led people to prefer this
company over others in the first place. So if there must be cuts- and often there will be slashes in
both budgets and in hiring- this must be done with great selectively and care.

Until now, many business leaders have operated with a ‘playbook’ based on two underlying
market conditions: a bull market and a bear market. Is this approach suitable for the Age
of Turbulence?

These two playbooks will always be of some use, depending on whether the business cycle is
going up or down, but as I’ve indicated, we are now also dealing with all kinds of unexpected
disturbances. Just one disruptive technology entering an industry can have the effect of an
earthquake: the ‘plates’ can move and suddenly an industry can find itself destroyed. Look at
what happened with Kodak and film: we all stopped buying film for our cameras.

Luckily, there are things you can do in the face of such disruptions. One is to have an early
warning system in place, because you will be in a better position if you can detect early signs of
trouble; you can make preparations and adjustments. An early warning system would survey all
of the external forces that could potentially damage your company. The second thing you can do
is scenario planning. A lot of value can come from thinking about what you would do if an
extremely pessimistic scenario took place. Not that this scenario will actually occur, but what
would you do if, in fact, things actually got that bad? Suppose a competitor was to invent a better
– quality product and sell it at half your price. What would you do? Another way to stretch your
team’s thinking is to have them consider a highly favorable scenario and what they would do in
that case. Such – scenario building exercises have long been used by the military, and they can
help companies think about what they would do under different ‘what if’ conditions.

The third thing we need is flexible budgets. Instead of every department having a firm budget,
regardless of what happens, each department should be prepared to say what they would cut if
they had to cut 20 per cent from their budget, and what amount money they would ask for if
things suddenly got so good that they could capitalize on some amazing new opportunities.
These three tools- early warning systems, scenario planning, and flexible budget- can provide a
strong defense against surprise developments that affect every industry.

Today’s consumers continue to receive traditional advertising messages, but they also
survey their peers on Face book, Twitter and MySpace. Will word-of-mouth marketing
eclipse traditional marketing at some point?

There is no doubt that a company’s commercial messages - as expressed through ads and other
means - are becoming a smaller and smaller fraction of all the ‘buzz’ about any particular
company or product. This doesn’t necessarily mean that firms should stop their advertising
campaigns; maybe advertising used to have a 50 per cent influence on brand choice and now it
has a 20 per cent influence. The real implication is that companies must monitor what is being
said in the social media about their products and services, as well as those of their competitors. If
you don’t have the resources in-house, you can hire external firms to do this for you. One of the
four things will happen. First, you may find that all the talk is negative, in which case your
company may be doomed. Second, there may be no talk about your company on Face or
elsewhere. That isn’t very good either- it’s what we call “benign neglect”. The third possibility is
that mixed feelings are being expressed: some people are speaking very highly about your
offerings and others are dismissing them. The fourth and best case scenario would be what with
the ‘i–Phone’, where everyone raved about the product to their friends, leading them to purchase
it. I do believe that with time, the effects of person-to-person and person-to-whole-friendship-
circles and networks talk will go relative to the amount of promotional messaging that is under a
company’s control.

Many companies see marketing as mainly a department, but you have described it as a
total company and philosophy and practice. Please explain?

I would go so far as to say that I see marketing as the potential growth planner and growth
engine of a company. To understand this, let me step back for a moment. Marketing grew out of
the sales department, because sales people didn’t want to write brochures or ads or do marketing
research; they wanted to be in their customers’ offices, selling. So sales departments added a
marketing researcher and an advertising manager. Over time, more people were added until
marketing became a separate function – never as big as the sales force, but separate from it.

Now, in some companies today-Procter & Gamble is one of them-marketing departments are
given a certain level of responsibility for the company’s growth. It is the marketing department
that identifies and tests proposed marketing opportunities and outline a path of growth. If your
marketing group is lucky enough to have a bold thinker at the helm, this department can even
manage new product development efforts. Larry Light, the former chief marketing officer
(CMO) at MacDonald’s, helped it get back on a growth track through a program of renovation,
innovation and marketing. If you can get that level of talent in your marketing department, it can
be entrusted with defining the future growth path for you company.

In your view, which new marketing trend or concept has the most traction?

I’m fascinated with is the concept of ‘co-creation’, whereby companies invite their customers to
be their partners in evolving their future offerings. For examples, Harley Davidson has
‘enthusiasts’ who hang around and watch the engineers develop the next motorcycle, or even
tinker with it themselves. And the Danish company Lego has enthusiasts helping invent new
offerings or building new sculptures with the blocks. This goes way beyond a company just
inventing its next offering on its own and then testing it with customers; that should be done
regardless. Co-creation goes a step further by inviting enthusiastic customers to partner in the
evolution of a company’s offerings.

Your marketing text book is in its 13th edition and is used in most MBA Marketing courses
worldwide. Are the ‘four P’s’ still a useful framework?

Definitely, because all marketing plans still have to address those four big questions- Product,
Price, Place and Promotion. However, we are working on a new framework that will involve a
more holistic set of considerations. What we call ‘holistic marketing’ entails the development,
design and implementation of marketing programs, processes and activities that recognize a wide
range of interdependencies, including the work of integrated marketing (the four P’s); internal
marketing (i.e. getting support from the other functional areas); performance marketing (i.e.
developing metrics to indicate what you’ve accomplished); and relationship marketing. So this
new concept of holistic marketing goes way beyond just the four P’s.

Major shifts in the marketing mindset:

From….. Marketers thinking about customers to everyone in the company thinking about
customers.

From….. Selling to everyone to trying to be the best at serving well-defined target

From….. Organizing by products to organizing by customer segments.

From….. Emphasizing tangible assets to emphasizing intangible marketing assets such as

From….. Building brands through advertising to building brands through integrated

From….. Making everything inside the company to buying more goods and services from
outside.

From….. Making profit on every sale to building long-term customer value.

From….. Aiming for more market share to aiming for more share of each customer’s
wallet.

From….. Being local to being ‘glocal’ – both global and local.

From….. Focusing on shareholder benefit to focusing on stakeholder benefit.

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