Successful marketing needs strong relations with other functions, says Kotler

For a company’s marketing to work better, it has to build strong relationships with other functions be it sales and manufacturing or R&D and info systems. This may sound like a no-brainer but marketing guru Philip Kotler, on whose books several generations of B-school managers were weaned, says, “I’m appalled to learn that many organisations don’t even align their marketing and sales functions.” The alignment with other functions would be even less.

The 83-year-old Kotler, S.C. Johnson and Son Distinguished Professor of Marketing, Kellogg School of Management, Northwestern University, author of 52 books on marketing and still a keen student of the marketing discipline and its place in organisations, recently published along with Suj (Sujatha) Chandrasekhar, founding Principal of Strategic Insights Inc, a Washington DC-based business strategy firm, a paper on optimising the marketing and R&D relationship.

Kotler, in an interview to Business Line , calls scientists “masters of the possible, but they should really work with marketing who are masters of value.” A good example of this, he says, is consumer electronics company Philips, a very inventive company which churns out great inventions, “but they don’t really make money as either gadgets are overpriced or they don’t think of it as valuable enough.”

The role of marketing, says Suj Chandrasekhar, is in enabling innovation among different channels in an organisation. “Caterpillar,” she says, “does a good job of bringing in ideas through its distribution channels to R&D and we also found that Lego opens up the development of its products to the consumers, so there are different facets to it.” Kotler and Chandrasekhar had earlier published pieces on marketing and R&D in The Wall Street Journal and MIT Sloan Review.

In Chennai at the invitation of the Great Lakes Institute of Management to address its students, Kotler and Chandrasekhar also interacted with several Chennai-based companies in manufacturing and financial services. Talking about consumer insights, Kotler said it’s all very well to listen to the voice of the consumer, but marketers should read the signals right to get that insight.

“However important the voice of the customer is, it’s all about listening to it and turning it into insight. That’s why the stage gate system works very well, between R&D and all the way to marketing in the typical production innovation process.” The stage gate system is a technique where the development of a new product idea is divided into stages and the idea’s viability and continuation is examined at each stage.

Says Suj, “We found that companies that have a well-developed stage gate system, and commitment to this system, are more successful than others (at product innovation). GE is perhaps the best example and 3M and Caterpillar as well, in sticking to this system. The financial services industry is now warming up to that idea as well.”

Ask Kotler about what’s exercising marketing minds a great deal today – on how to use social media, he says, “We sometimes say old marketing is dead; by that I mean mass distribution, mass production, with no distinction of market segments. But, the thing is not to go overboard on online and not to avoid it either. Two mistakes companies make, ‘I am not going to do any online’ or the other mistake is go wholly online. We’ve seen companies go from 30 per cent to 50 per cent online (of marketing spends) and then they see their sales tumble.”

Kotler says in perhaps 30 years everything could be online and there may not be brick-and-mortar stores, but for now he advises blending the two: social and old media as the latter is still alive and kicking. One of the biggest challenges in social media is measuring the return on marketing investments, he says, adding, “There is a lot of work in developing metrics for FB and other new media.”

>Vinay.kamath@thehindu.co.in

COMMENT NOW