What’s Driving the “New Marketing?”

by James Heskett

Summing Up

Respondents to my column about the tenets of new strategic marketing by and large projected the view that new strategic marketing, as propounded by the authors of the new book, Marketing Moves: A New Approach to Profits, Growth and Renewal, by Philip Kotler, Suvit Maesincee, and Dipak C. Jain (Harvard Business School Publishing, 2002) is a fact in many organizations today. It can be summed up by the question, "What's new?"

Karl Hansen commented, "New Marketing is just another way to help people try to understand and define the role of marketing." Lee Vargas-Bianchi added, "I do think we need to advance...marketing concepts beyond the 4 Ps, but ultimately, didn't they imply to a certain extent what the authors now mean by 'value'?"

Perhaps we should be encouraged that the ideas excerpted from Marketing Moves (always at the risk of doing violence to the depth of the authors' arguments) raised so few eyebrows.—James Heskett

What seems to many to be new is the Internet. Comments Thomas Rector, "...the 4 Ps remain valid—even in the Internet age. ...'interactivity' provides the best opportunity to fine-tune the positioning (and sometimes the tangible features) of the product." He concurs with Balu Rajagopal who wrote, "The marketing 4 Ps are still a valid framework but the Internet has added a new dimension—interactivity. ... If there is a case to be made for a new '5P' framework then the fifth 'P' would be a 'Partner.' By 'Partner' I mean both the customers (who help define the value) as well as the enabling partners (who help in delivering the value)."

Perhaps we should be encouraged that the ideas excerpted from Marketing Moves (always at the risk of doing violence to the depth of the authors' arguments) raised so few eyebrows. Comments from readers of this column suggest that marketing has, in practice, moved beyond the product development, promotion, pricing, and distribution activities that defined the field five decades ago. Alternatively, the extent to which the Internet cuts across organizational boundaries and fuses various functions of a firm together (as well as a firm with its customers, suppliers, and partners) may suggest that marketing as we knew it has become so identified with the development and implementation of Internet-fueled strategies that it is losing its identify as a function. What do you think?

Original Article

Who doesn't remember the basic lesson from Marketing 101, the four Ps—which I don't even need to enumerate? They were based on concepts of a marketing mix developed in the 1950s and popularized for marketing instructors by Jerry McCarthy in 1962. Now the three authors of the book Marketing Moves, Philip Kotler, Dipak Jain, and Savit Maesincee, ask us to transform the thinking we explored in good old 101. The ideas gain added impact because the team of authors is led by Kotler, perhaps the most widely read marketing academic of the past three decades.

I basically agree to the premise that Internet has transformed the way we transact, but whether it really impacts the way people purchase is a point in question.
— Praveen
HCL Technologies

Basically, we are asked to put aside the strategic marketing tenets of the past when marketing was done by a marketing department and focused on the "interruption" of customer buying behaviors, the need to acquire new customers, immediate transactions, and the treatment of marketing costs as expenses. Instead we are asked to think of marketing as the work of exploring, creating, and delivering customer value. This work focuses on gaining the "permission" of customers to sell to them, customer retention and loyalty, the capture of lifetime value, and marketing expenditures as investments. Everything happens faster. And, among other things, product design is shifted from the manufacturer to the customer.

Many of the examples that the authors cite are from the world of the Internet and e-commerce. And yet, one can't help but ask the following questions: To what extent is the "new" marketing new? How much of it would have evolved regardless of the emergence of the Internet? And how has it really changed the life of marketing managers? What do you think?

    • Balu Rajagopal
    • VP of Marketing, Bossworks, Inc.

    The marketing four Ps are still a valid framework but the Internet has added a new dimension—interactivity.

    Interacting with customers and business/technology partners like never before has opened up opportunities for value creation in new ways. The information available to make decisions is not only vast but also rich. In effect, the decision-making processes affecting the marketing four Ps are more dynamic now than they were before the Internet.

    The Internet has had a profound impact, more so in the area of market intelligence than in any other. Before Internet technology touched the business-computing environment, market intelligence gathering had an inherent latency that marketers had to take into account in developing a "go-to-market" plan. This latency affected not only the time to respond customer needs but also the time to respond to competitive moves.

    The Internet has helped reduce this latency by orders of magnitude. This has allowed savvy marketers to not only respond to market conditions much sooner, but also to collect market intelligence in new ways.

    Marketers who can leverage Internet technology to gather market intelligence will be able to identify unmet needs, create new market segments, and find new ways to satisfy them much faster than has been possible before the Internet.

    If there is a case to be made for a new "five P" framework then the fifth "P" would be a "Partner." By "Partner" I mean both the customers (who help define the value) as well as the enabling partners (who help in delivering the value).

    • Praveen
    • Manager Quality, HCL Technologies

    I basically agree to the premise that Internet has transformed the way we transact, but whether it really impacts the way people purchase is a point in question. Intrinsically, buying behavior is more of a culture-driven and socioeconomic paradigm than simply a thought pattern that can be readily altered.

    The concept of a New Marketing that entails a premise of value creation for customers is an old phenomenon—even our "Grand Uncle Ford" believed it when he produced his famous Model T. Yet, as times change, I believe it is the change in technology that really alters behavior patterns more than anything else. And a new product reaches its optimum value proposition only when the market is prepared for it. For example, 3GL was not accepted because no amount of marketing could show value to customers in terms of accessing their TV sets through mobile phones, especially in an economically battered Japan, which otherwise led the world in terms of new product usage. Marketing managers can really leverage the Net at best to create a more user-friendly transaction mechanism.

    • Dinis Silva
    • Marketing Manager, Edifer Group (Portuguese Construction Group)

    The New Marketing is always The Marketing.

    There are many cases in the e-business but one of the most significant examples of this New Marketing is construction marketing. The design is the responsibility of the customer, the product is unique, the value is essential for the customer and the business developer of the construction company are the key to achieve and gain news clients many months and years before the investment decision.

    • Lee Vargas-Bianchi
    • Head of IMC Department, University of Piura (Peru)

    It would be interesting to discuss what we understand by "value," whether we apply it to brands or to customers. I do think we need to advance marketing concepts beyond the four Ps, but ultimately, didn't they imply to a certain extent what the authors now mean by "value?"

    • David Keuhner
    • Director of Sales, Fishbowl

    I believe the new medium of marketing for the restaurant industry is "permission-based" email marketing. First, it allows restaurants to know their customers.

    Second, the customer is telling you that they want to hear from you. What other market niche gives you "permission" to speak to your customer? If anything, it allows you to simply say thank you.

    Third, it gives the restaurant the opportunity to reward loyalty anytime without the burden of coordinating a direct mail, radio, or TV campaign.

    The key, I believe, to a successful email marketing campaign is to be "low-frequency," but high quality and meaningful. If I were a restaurant manager I would not come to your table five times in one dining experience, so don't litter the customers' email box with worthless messages.

    • Michael Fischer
    • Media Consultant

    Is new marketing really "new?" Not really...the only thing new is that technology now allows us to reach people in a quicker and more targeted way. The automation of tedious database management and Internet connectivity has allowed us to augment "old" marketing into new, better delivery systems. As a result, we are able to communicate faster and more accurately.

    • Steve Harvey
    • President, Global Research Advisors

    "New Marketing" is just another nice term to use but really doesn't help. One size terminology does not apply to all of marketing.

    Compare a new restaurant that wants to serve hamburgers to a product manager creating something that never existed before, like the ill-fated consumer oriented information appliances. With a hamburger, research may show that the value is serving it made-to-order or serving it fast. Both ideas create value for the customer and are discovered by exploring, creating and delivering the value, which is totally different than the problems of introducing a new product concept.

    For an information appliance you could compare its function to that of a daily planner. Everyone enters names, addresses, and their schedule. The marketing problem is that the value of "syncing" your PDA is not as obvious as getting a burger made to order. The value of having to learn to write in "graffiti" compared to your own freestyle manner inhibits consumers' perception of the value. This of course is not even considering a price tag of hundreds of dollars compared to the cheapest daily planner, which can be found for under ten bucks.

    Exploring, creating and delivering customer value are not nice-to-haves but have-to-haves. You cannot stop there. Don't underestimate the difficulties of new product introduction without considering all of the variables, of which consumer behavior is most important.

    Maybe the year 2003 will become the year to focus on consumer behavior. Hopefully not as a new marketing flavor of the day, but a real transition to understanding consumer adoption behavior in order to calculate better forecasts of both products and services. A leading consultant said only too recently "build it and they will come if it is a good, solid product." I think we have seen a number of good products sit on the shelf—all because someone underestimated what it would take to change a current pattern of behavior in order to sell the latest gadget.

    • Greg Linnemanstons
    • President, Weidert Group, Inc

    Identifying and delivering customer value within a profitable business model has long been the realm of marketers. The freedom of information brought by the Internet has only made this approach more obvious. Any who believed they could succeed long term with only a transaction focus probably also believe branding is more about advertising than about brand performance.

    • Karl Hansen
    • Marketing, Hansen Marketing

    The basic issue is the lack of understanding of the role of marketing in most companies and organizations. People at all levels of the organization do not understand the role or roles that marketing professionals serve in the organization. So many times marketing is limited to making things look good and sales support functions. This is but one of the many roles marketing plays in an organization.

    The Internet has made people rethink the role of marketing as new ideas, technologies, and channels to communicate to customers have developed. Marketing fills the role of collecting information and identifying the highest and best use for the organization to attack the market or maintain market share.

    Marketing's role is the four Ps: Product, Price, Promotion, and Place. The sales role is volume and customer relationships. It is when the roles are not clearly identified and defined in an organization that we seek new definitions on what marketing is and how it should be measured. If marketing is not involved in the business at many different levels and departments, the role of marketing in the organization is not defined, and then Marketing has to justify its role on a day-to-day basis within the organization.

    Marketing is a difficult concept to define but when the role and mission are clearly defined strong brands, sales, information, positioning, new product innovation, and leading organizations are created.

    New Marketing is just another way to help people try to understand and define the role of marketing.

    • Anonymous

    Waffle, waffle, waffle. I am so tired of all this marketing propaganda. We threw out our television because of it and are trying to pare down our lives to a Socratic minimum. After wasting thousands on clothes over the past ten years, I've finally taught myself to sew and can now whip up a linen skirt for about $10 (in an hour), instead of working for two to pay for it. I'm also teaching three friends who are also tired of cheap junk being sold to us as "fashion." We're also making our own skin/hair products but are in no way "hippies" or "alternative types." You would have us work like slaves to buy rubbish and I think the American middle class is starting to turn against you. Your business and psychology degrees have only turned you into verbose peddlers of trash and you ought to be ashamed of yourselves for not doing something more worthwhile with your minds and your "fine" educations.

    • Thomas Rector
    • Chief Client Officer, The Effess group

    The short article does not give me enough insight into their full theory, but in my mind the four Ps remain valid—even in the Internet age. "Place" can still be identified, the combination of "Price" and "Promotion" creates "Customer Value," an evolved method of discussing this same concept. Identifying the customer remains the most difficult and elusive issue, and as was identified by Mr. Rajagopal's comment, "interactivity" provides the best opportunity to fine-tune the positioning (and sometimes the tangible features) of the product.

    I look forward to reading this interesting new look at marketing in today's environment.

    • Name: Dr B. V. Krishnamurthy
    • Professor, M.P. Birla Institute of Management

    The domains of knowledge in general and that of management in particular seem to have an uncanny appetite for buzzwords.

    Long before the four Ps became popular, Mahatma Gandhi, the Indian leader who led the struggle for Indian independence, emphasized that an organization owed its existence to the customer. Gandhi was neither a management expert nor a businessman. The venerable Peter Drucker has outlined the only relevant purpose for a business as "to create a satisfied customer." The value creation process, sought to be popularized by Kotler et al, has its roots in the seminal work of Michael Porter in the 1980s and in his concepts of the Value Chain and the Value System.

    And yet, the fascination for new words and phrases, accompanied by carefully chosen examples, continues. Thus, value engineering of the 1920s has become business process reengineering in the 1990s. The simple concept of retrenchment has spawned over twenty-five alternate terms including downsizing, rightsizing and de-employment. The value system so beautifully developed by Porter has given birth to two esoteric disciplines—SCM and CRM. And thanks to the Internet, we now have eCRM too.

    The other parallel phenomenon is the appearance, at regular intervals, of books, meant to be read from start to finish in one sitting, providing "valuable new insights" into one dimension of management or another. Tom Peters came into the limelight with his book (with Robert Waterman) In Search of Excellence. That most of these companies are no longer excellent is another matter. But that has still not prevented Peters from becoming a brand himself (as mentioned in Kotler's classic book on marketing). Al Ries and Jack Trout became celebrities with their book on branding, although it is difficult to understand what is immutable about their laws. Now Jack Trout is the champion of positioning, which he claims to be superior to strategy.

    Where are we heading? What does this mindless explosion of terms and phrases mean to academics, students, and managers?

    Any discipline, if it has to be widely accepted, should have the bedrock of repeatability, a basic premise in science. In our anxiety to create new sets of jargon, we seem to be driving management more and more into the realm of art—abstract, difficult to comprehend, and certainly not scientific.

    One cannot help agreeing with Lawrence Peter: "Progress is our ability to complicate the simple."

    • Richard Affolter
    • Marketing Manager, Switzerland

    One of the biggest problems I see, as an online business consultant, is people trying to diversify. In other words, trying many marketing ideas or products all at the same time. Their concept is to go with the one that is profitable. You are destined for failure if you spread yourself too thinly.

    Once you decide on a viable business, spend all the necessary time on the one concept to reap the full potential of the profit from that business.

    I often see clients take a product or idea and attempt to market it to the best of their knowledge. They break even or make a small profit only to drop the idea or product hoping they will find a way to make bigger profits. This is a mistake. You want to tap into the idea to its full potential. When you find something that breaks even or makes a small profit, why not refine it so it becomes really profitable?

    • Charlie Cullinane
    • VP/GM, Everbrite

    I don't believe that the "new marketing is new." Focusing on the customer, doing what you say you will do, developing long-term loyal customers, is what marketing and business is all about, this has not changed. Granted the Internet is changing the way marketing is done but not the reasons. Good marketing has always been customer centered and successful businesses will utilize new technology to service the customer better and faster.

    The Internet has increased the speed of all aspects of business not just marketing. Technology will continue to do that, but the great companies will still focus on the customer.

    • Allen Roberts
    • General Manager, Agri Chain Solutions Ltd

    The effective practice of marketing has always been a reflection of the way a society works. In a time where societies are changing at an unprecedented pace, driven by the globalization of capital, information, and resources, the paradox is that individuals are becoming isolated. The human being is a herd animal, and the rise of digital technology is reducing our capacity to relate to others in a herd.

    Effective marketing is therefore becoming a challenge of reaching the individual in such a way that they feel part of a herd again, delivering reassurance as part of the product/service offer.

    • Francisco Moctezuma
    • Consultant, Business Associates

    There is no big answer. The new marketing is driven by the "1 N"— and that is NEED. I am talking about the needs of the customer in the new driven economy, however you name it: Internet, globalization, etc.

    • Matthew Childs
    • Director, eBrands

    I know it sounds a bit trite but there is nothing new about this marketing...really. If you look at some long-standing retail traditions, the principles have been there all along.

    The new tool of the Internet has simply created a customer environment in which all experiences have pressure on them to become consumer-like retail experiences. Because Internet technologies have leveled the playing field in terms of information, the point of differentiation has become the service and the brand values that "wrap" the vendor's products and/or services. At least for those privileged enough to have access to the Internet.