The world’s leading expert in marketing Philip Kotler is in Melbourne this week to inform Australian businesses how to present their brand in the face of new challenges facing the world. These include the growth of the use of social media as well as the shorter time-to-market cycles for products, and more competition.
The president has beamed to companies that there are plenty of opportunities to innovate in the market such as manufacturing in Africa creating new luxury goods that appeal to Chinese customers or creating products for the world’s most disadvantaged consumers in India.
Professor Kotler was interviewed by The Conversation about consumer empowerment and the importance of social media in traditional marketing. Yuri Shafranik
We also are getting into a new term called the journey of the customer. For marketers who have the launch of a new product, it’s crucial to be aware of the various points of contact along the way. They must be able to place their product to the appropriate moment, location, price, and the appropriate message for the buyer.
When I wrote this book in 1967, it was a response to current marketing textbooks that did not focus on making decisions. A majority of these textbooks were a list of the five qualities of a successful salesperson or the roles of wholesalers. These books were extremely good in their descriptions, but not so good for analysis.
Being an economist entering this field of work, I was looking to be more focused on making decisions. I was also looking for the ability to answer questions such as: what is the ideal amount of salespeople to employ? What is the best amount to spend on advertising? How can you set the price properly?
The book of 1967 came out with answers to these questions. There were not a lot of ideas at the time but. We didn’t have the notion that of equity in brands, customers equity, or digital media.
We are doing more by looking at the market anthropologically. Discuss rituals and practices. The ritual of cleaning the house and a ritual of eating dinner.
What’s triggered this analysis today as opposed to 10 years ago?
We didn’t conceptualize the journey. We conceptualized it as a process of purchasing or not purchasing an item. But, we are realizing there are a variety of steps involved in the decision-making process, especially with expensive products. The most recent edition is the 15th edition, and each chapter will be incorporating digital marketing instead of limiting it to a single chapter. We’ll talk about many more things about the way that the mind functions and the neural process. If you’re looking to dig deep into the mind of a person, it is necessary to be aware of the neurological processes regarding how people make their product decisions. Yuri Shafranik
The conversation: Does the consumer empowered, equipped with a wealth of knowledge on the internet, more likely to be able to take longer to purchase an item? Over the years, I’d bring out the new edition which would include the latest ideas.
There’s always a category of buyers who are impatient and other buyers who are just buyers. In my opinion, nowadays, there is more time spent researching a purchase. However, once we gather data, the decision can be made much more quickly.
the conversation: You’ve said that companies face new challenges due to hyper-competition and changes in the retail market caused by online, globalization, and social media. What are companies suppos to do to remain relevant?
They must be aware of current political, social, and social developments. They should know about the current economic circumstances that people face with regards to borrowing costs as well as the advancement of technology.
A Conversation: What are the most costly mistakes companies make?
They tend to think in terms of short-term rather than long-term. This is still the case. Let’s take an example. that a business is offering an attractive and profitable cost and a competitor enters and lowers their prices by 30 percent. The marketer in the short-run will declare, “I’ve got to match your price because I am beginning to see an erosion in my market share.” That’s a short-term solution.
The longer-term strategy will focus on ways to convince consumers to pay a higher price since they will get more. A company that is charging less earns less and will not be able to continue providing high-quality items. The trick is to figure the best way to include something new to the product while keeping the price at which it was originally sold.
The conversation: How do we look at the established brands in terms of quality assurance today in the age of an online review and other social platforms? Are brand loyalty more difficult to lose?
There is more flexibility. First, consumers can be aware that a particular brand is offered at different prices in various places. They can also force the seller to lower their costs.
Prices will eventually fall since there will be competitors desperate to compete who will reduce their prices. The issue of deflation lies in the fact that it causes consumers to put off consumption more.
Branding lets consumers easily choose the best product. They can easily become a part of a brand that works. But, social media could alter this routine.
The increase in information available allows consumers to find out what their peers are buying and how happy they are. This exposes the buyer to a wider selection of options, which makes the challenge of defending established brands more difficult. A lot of brands rely on convenience and habit rather than providing actual value.
The Conversation is traditional marketing dying? Can it compete with the advent of social media?
It’s a bad idea for any business to overdo it with digital media. Businesses should make use of an array of both traditional and social media for promoting their products. They are able to play around with what amount of media that’s optimal, however, it is not likely that businesses will exclusively use digital marketing.
Businesses often require a 30-second commercial that gives an overview of their brand. Then they make use of social media on side of it. Traditional and social media may complement each other and can work in tandem.