Philip Kotler’s hopes for marketing

It’s almost 1 p. m. at the Hilton in Chennai and one is waiting patiently in the lobby for marketing guru Philip Kotler to arrive after an intensive session with a financial services company. Later in the afternoon he’s going to address over a 100 executives, many of whom would have gone through B-school absorbing his wisdom. In Chennai at the invitation of the Great Lakes Institute of Management, the indefatigable, 83-year-old Kotler, S.C. Johnson and Son Distinguished Professor of Marketing, Kellogg School of Management, Northwestern University, is still a keen student of the marketing discipline and its place in organisations. Along with Suj Chandrasekhar, founding Principal of Strategic Insights Inc, a Washington DC-based business strategy firm, he recently published a paper on optimising the marketing and R&D relationship. Over lunch, Kotler spoke to BrandLine on a host of issues confronting the marketing function. The first part of this interview was published as an article in Business Line on March 14, headlined, ‘Successful marketing needs strong relations with other functions’. Excerpts from the interview:

On the marketing and sales functions

I am a little disappointed that there doesn’t seem to be much distinction between marketing and sales. The notion of marketing is that it is a separate group that does the homework that prepares the plan for succeeding in sales. Marketers don’t know anything about the market, says the sales function.

But, I want marketing to be two groups in the company, not just one - tactical marketing and strategic marketing. The former is a larger group as there is a lot of work for them, but I want a small group that will tell us what the market will look like three years from now. I don’t want them to be drawn into the tactical group and use up all their time and energy so that we don’t know what the picture is a few years down the line - what competition will look like, what products to launch, what will one be up against in competitors and technology down the line.

You may ask is that the role of strategic planning or marketing, but I want marketing to be part of that group. For example, Kodak is dying because it didn’t get out of film, it should have prepared itself earlier.

On marketing’s relationship with other functions

For marketing to work, it has to have strong relations with other functions. We were appalled to learn that many organisations don’t even align their marketing and sales. The other relationships, and there are several, are marketing and manufacturing, information systems, with R&D. We call R&D masters of the possible and we love them for the fact they are creative, but many of the things they create cannot sell. They should really work with marketing who are masters of value.

A good example of this is the Philips company. It has great inventions but doesn’t really make money because we either don’t understand what that gadget is or it’s overpriced or they don’t think of it as valuable enough. It hired C. K. Prahalad to bring in the marketing thinking. Philips is more balanced now, and what that means is let’s say R&D comes up with something, marketing has a testing period to give it to potential buyers, ask them if it’s too costly or see if a good solution is marketable and that’s how they should be working today.

On Steve Jobs and marketing

Steve Jobs was known to have said that he used no marketing. But I don’t believe that. There must have been some marketing in design, the size of the smart phone, the materials to use, consumer reactions. If he is saying that the idea came from his head and R&D and he didn’t really test it … how did he get to the price of it, did he test the price? Maybe he had some idea of marketing, even if he’s right and did little marketing. Marketing is two things, spotting opportunity and calibrating its size. When you go into another country (with a product) you don’t go in there without finding out how to put it into their markets and how to modify it so that it fits.

On social media as a marketing tool

We sometimes say marketing is dead; we mean the old marketing, 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; other mistake is go wholly online. We’ve seen companies go from 30 per cent to 50 per cent online and then they see their sales tumble. Because they haven’t even taught people how to use it. In India I don’t know how many people buy online. So, what we are saying is please use some online, even for just learning, but the main thing is don’t give up the old media either, blend the two.

On the CMOs

We have a nasty person in every company called the CFO. If he has to cut costs, first would be marketing, you can’t cut sales. That’s why I am happy there is a CMO, which is the name now of the old VP - Marketing. That means he sits next to the CFO and maybe he can have a direct line to the CEO.

On marketing to the poor

We distinguish between a marketing-driven company and a market-driving company. In the former, they follow the old maxim: just find a need and fill it with products. In a market-driving company, they find a need, raise higher standards, and give us products that we need. It comes from consumer insights; marketing created the middle-class, they sold a picture of aspirations, having a car, a fridge, a home … of a better life. But they serve only the middle-class, they have no answers for the poor people, something that was articulated by C. K. Prahalad. I hope marketing now turns its attention to serving the poor. Maybe deliver health clinics to poor areas, maybe schools to poor areas. It could be a chain of schools set up in the rural areas to help them move up in life.

On innovation

If you innovate you will fail and if you don’t you will die – it’s a paradox. So the notion is that you better do a lot of innovation and perhaps one of them can succeed. If you go back to Peter Drucker, only two things matter: innovation and marketing, all the rest are costs. So, I would hope more companies would do innovations. Samsung is doing a lot of innovation and even Japanese companies. I hope they measure the valuable rather than just the possible.

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