Marketing Strategy In The Digital Age: Applying Kotler's Strategies To Digital Marketing. Milton Kotler
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to corporate positioning, from business brands to corporate brands, from channel to business model transformation and from brand asset to client asset management. Undoubtedly, marketing is the most important driving force for companies and CEOs to bring about strategic transformation. All business leaders with whom I have had contact, such as Louis Gerstner, Jeff Bezos, Mark Zuckerberg, Richard Branson and Alan G. Lafley, are excellent CEOs and also extraordinary marketing directors. The strategic and social role of marketing is growing exponentially. That is also the reason why Dr. Hermawan, another partner of mine, has successfully persuaded the Indonesian President to sponsor the construction of the world’s first marketing museum in Bali.
Different from the time when I wrote the first edition of Marketing Management in 1965, we are now in a “digital society”. This round of revolution took place in America, Europe, China and even Africa, significantly transforming infrastructure and social mentality. Then the concept of “digital transformation” was proposed as many enterprises were eager to find a way to integrate with the Internet. However, as the writers stated in the book, the Internet and mobile Internet build the “connections” between “individuals and things, individuals and information, as well as individuals and individuals”. Therefore, how to change strategies, improve the role of marketing and adopt emerging technological and data tools in the connection are issues faced by all senior marketing executives and CEOs.
The authors of this book are trying to answer these questions. To my delight, they have perceived not only what has changed but also “what remains unchanged” in digital marketing. The goal of rolling out a digital strategy is not to disrupt existing marketing, but to complement, integrate and develop the two at the same time. Demand management is always the priority in marketing since we cannot forget our original intention; otherwise, it is of no use to adopt better technology or to introduce more data. When I talked with our authors and partners, they raised an interesting question that was discussed by Chinese officials 150 years ago — whether “China should use western technologies to complement Confucian values and systems” or vice versa, as they faced the cultural shock from the west. It is a pleasant surprise for me to see that the writers provided detailed discussion and practical analysis on whether marketing should serve digital technologies or vice versa in the digital age.
The authors, with excellent theoretical basis, have long been active consultants. Their new framework is established based on years of interaction with CEOs and on hundreds of KMG consulting cases. Different from other books on “digital marketing”, it is more like “a digital marketing strategy for CEOs” with elaborate explanations on all aspects from strategic thinking to implementation framework. We are now in an age when changes in the world go beyond the changes in theories, and therefore, I hope that in the near future the content and framework will change with the times while also holding on to the essence of marketing at the same time.
Dr. Philip Kotler
Preface
Every Generation Needs a New Revolution
About 5 years ago, I started to notice that when Philip Kotler gave lectures to senior executives from the Fortune Global 500 companies around the globe, he always showed two slides at the beginning and at the end: the first slide stated, “Market changes faster than Marketing,” while the second stated, “Within five years, if you’re in the same business you are in now, you’re going to be out of business.” These statements have been proven to be true after 5 years, as many enterprises, losing their competitive edges in the digital era, have been squeezed out of the profit zone. This is a time in which revolutionary marketing patterns have upgraded and overturned the original ones and in which players who used to lead the market have lost their edge and brilliance. Even P&G, the “King of Consumer Marketing” in the age of traditional marketing, is now lacking an innovation force.
It is a time of transition and revolution. In the discourse of Michael E. Porter, “competitive edge” seems to have become a theoretical mirage. Anxiety caused by the popular Internet keeps many entrepreneurs awake at night. With new concepts, theories and scientific applications such as the Internet+, social media, big data, community groups and VR popping up, we need to change our thinking pattern and have access to practical tools and weapons. In terms of digital transition, we have to think about what to change, where to change and how to change, and in terms of Internet+, what to add, what to subtract and how to calculate.
Always interested in the area of “competitive strategy,” I found that many factors could lead to a company falling behind or being replaced. It may be due to the fact that rivals have seized customer resources or that enterprises suffer from low operating efficiency; however, another factor, more critical and irreversible, is that a market “turning point” has occurred. And this reason can be subdivided into three scenarios — reshuffle among players, among industries and between different times. This time, with digital revolution, is the third type — reshuffle between different times; in other words, all your strategic methodology needs to be upgraded.
Associated with the occurrence of particular “problems” under a wider historical context, many management concepts have come into being to respond to puzzles in management practices based on a “problem-oriented” approach and are developed into theories to guide operations of the entrepreneurs. For example, management by objectives (MBO) is a concept suggested in 1954 by Peter F. Drucker against the background that US companies expanded rapidly, while managers lacked a sense of duty and Ford Motor Company was on the verge of bankruptcy. The concept of Strategic Management was proposed by Igor Ansoff, a Russian American and father of strategic management, who joined the Rand Foundation as a researcher after World War II. The term mainly discusses how US companies, faced with external shocks, have grown in order and achieved organizational synergy since 1970s. “Profit pattern” was first proposed by experts such as Adrian Slywotzky, but it was not before the end of the last century during the dot-com bubble that the concept became popular. At that time, every enterprise founder or CFO had to explain how they were going to make profits to their investors. In other words, the truly valuable theories at any time reflect contemporary problems, and the one that we are facing now is how enterprises are to realize Internet+ transformation in the digital era.
While many a book has been published on “Internet + transition”, none so far has discussed from the perspective of digital marketing strategy, which has been a demand of a large number of consulting clients — CEOs and CMOs — and that is the very reason that my partners and I wanted to write this book.
Digital Revolution, More of a Thinking Revolution
Redefining “digital marketing strategic methodology” seems to be a responsibility and a mission, which makes us ecstatic. A recent KMG survey targeted at CEOs and CMOs shows that 81% of the enterprises believe that digital marketing is the key to their digital transition; 68% of the enterprises claim that they have no systematic digital marketing strategies; more importantly, 58% of the enterprises claim that digital marketing performance has not achieved its due expectations. Just like what has been written in Good Strategy, Bad Strategy by Richard Rumelt, perhaps no one would deny not having strategies, but one’s strategies may not be good. When we spoke with the marketing decision-makers, we found that the core problem is a lack of strategic thinking or a lack of good strategic thinking. Digital marketing is definitely not the low-level combination or a simple composition of different tools such as WeChat, microblog, Facebook, demand-side platforms (DSP) and location-based services (LBS). In the field of human conflict, firearms have always been the “tools” of generals. The more critical is the “art of military” on the battlefield recognized at home and abroad, from The Art of War by Sun Tzu
From our consulting experience, CEOs, CMOs and other senior executives pondered over the following questions:
• How to combine digital marketing and the Internet+ strategy of the company? What role does digital marketing strategy play in the overall digital