Presentazione del Prof. Philip Kotler al Philip Kotler Marketing Forum 2017: Session 1. Using marketing to drive your company’s growth. Session 2. Moving into Marketing 3.0 and 4.0.

1. The New Role of Marketing
in a Networked Global Economy
Milan, Bologna
October, 2017
Philip Kotler
Kellogg School of Management
Northwestern University

2. ScheduleToday’s Marketing Highlights
Session 1. Using marketing to drive
your company’s growth.
Session 2. Moving into Marketing
3.0 and 4.0.

3. Session 1
Using marketing
to drive your
company’s
growth

4. What is Marketing?
• Many people see marketing as using sales force,
advertising and promotion to increase sales.
• Marketing chooses a target market and uses
strategic analysis and planning to create,
communicate and deliver superior value (CCDV).
• Others see marketing as the business discipline
that drives a company’s growth.
• Marketing helps discover new opportunities,
identify new markets, and discover unsatisfied
customer needs and wants.

5. The Marketing Framework
• 5 C’s: Customers, Company, Collaborators,
Competitors, Context
• Old 4 P’s: Product, Price, Place, Promotion
• New Expanded Tactics:
– Product, Service, Brand, Price, Incentives,
Communication, Delivery
• Strategy:
– MR -> STP -> TM -> VP -> MP -> I -> C

6. Findings on Growth
• Companies pursuing organic growth
outperform those doing acquisition growth!
• Organic growth requires:
– Reallocating more money to the company’s high
growth products
– Innovating new products, services and business
models
– Optimizing sales, pricing, marketing and cost
management in existing businesses.

7. Main Features of the New Marketing
• Centering on mobile marketing.
• Gathering data on the customer’s journey.
• Engaging & building brand communities.
• Using social media apps for messaging.
• Managing content development and distribution.
• Using marketing automation.
• Winning with high quality service.
• Winning by building a reputation as an authentic
caring company.
Which of these 8 features describe your marketing?

8. Using Marketing Technology
and Measuring Results
• Predictive analytics
• Marketing metrics and
MROI
• Marketing models
• Sales automation
• Marketing automation
• Marketing dashboards

9. Marketing enters the Digital Age
• People are now connected around the world and can be
influenced by others besides company advertising.
• Mobile phones have become the dominant screen where
people check products, prices, ratings, etc.
• Companies collect data on individual consumers from DVRs,
digital set-top boxes, retail checkouts, credit cards,
transactions, airport check-in terminals, and call center logs.
• Analytics 1.0 correlates sales data with a few dozen discrete
variables.
• Analytics 2.0 correlates terabytes of data and hundreds of
variables in real time to reveal how sales touch points
interact dynamically.

10. How Does Your Company Rate?
__ Finding New Opportunities
__ Using Marketing Research and Marketing Analytics
__ Innovating Successfully
__ Using Communications Effectively
__ Running Your Sales Force Effectively
__ Running Your Distribution Channels Effectively
__ Having a Well-Thought-Out Marketing Strategy
__ Being Well Organized for Marketing
__ Corporate Social Responsibility and Environment
__ 45 is maximum

11. On Finding New Opportunities
• Are there opportunities in old industries?
– Yes, Starbucks, Zara, Zappos
• Are there opportunities in new industries?
– Yes, software and apps, robotics, nanotechnology, bioengineering, 3D
printing,
• Are there new opportunities in other countries?
– Yes, Asia is growing fast and Africa is the next frontier
• Are there new opportunities in the lower end of the market?
– Yes, in producing lower cost products: Tata Nano, $100 computer,
sneakers for $1
• Are there new opportunities in the higher end of the market?
– Yes, China and Russia now have so many new millionaires
• Are there new opportunities in specific sectors of the economy?
– Yes, health, education, energy

12. Watch These Megatrends
• Declining birthrate
• Improving status of women
• Faster growth in emerging economies
• Rapid urbanization
• Increasing shortages of water, food, energy,
depletion of forests and fisheries
• Climate change and more polluted air, water
• Weakening physical infrastructures
• Rise of biotech, nanotech, 3D printing, cloud
computing, Internet of Things

13. Watch for the Sharing Society
• Millennials don’t want to own goods, but
borrow, rent and share cars (Uber, Zip), beds
Abnb, etc.
• Bad news for manufacturers because it
reduces volume and idles assets.
• Good news because of fewer cars, hard
copies of books, etc.

14. Recent Innovations
• Uber and Airbnb
• Single serve coffee
• Kidzania
• IBMs Watson
• Warby Parker eye glasses
• “Reverse innovation”
• “Free marketing”
• Nike+ (platforms)

15. Disruptive Technologies
• Photographic film
• Wired telephones
• Store retailing
• Classroom education
• Offset printing
• General hospitals
• Open surgery
• Cardiac bypass surgery
• Manned fighters
• Full service stock brokerage
• Digital photography
• Mobile telephones
• On-line retailing
• Distance education
• Digital printing
• Outpatient clinics
• Endoscopic surgery
• Angioplasty
• Unmanned aircraft
• On-line stock brokerage
Source: Clayton M. Christensen, The Innovator’s Dilemma, p. xxix. ; google.com
OLDOLD NEWNEW
Disruptive Innovation Will Face You

16. Lean Marketing – Eric Ries
• An entrepreneur needs to follow a Build-Measure-
Learn system. Answer: Iterative Rapid Prototyping.
• Identify a Minimum Viable Product (MVP)
• Then identify a Minimum Viable Approach (MVA)
• Chose an app distribution channel: Facebook, Google
• Examine the results and learn
– What need to be improved?
– Does the product really solve the problem?
– Why do customers not convert?
• This way you can continuously improve and adapt –
without becoming too expensive or too complex to
change.
• A team will do a daily “standup.” A daily “burndown”
of the time still needed to complete the current goal.
Meeting the “blockers” head on.

17. Use These Tools!
• Vulnerability analysis
• Opportunity analysis
• Scenario planning
• Forecasting

18. How Customer Oriented Are You?
Linden and Chris Brown, The Customer Culture Imperative, McGraw Hill,
2014

19. Look for Niches and Micro-segments
• Hermann Simon’s book Hidden Champions
– Very large umbrellas
– Powerful military field glasses
• Mark Penn’s book: Micro-trends
– Working retirees
– Left-handed people
– Protestant Hispanics

20. Which Segment(s) to Grow?

21. My advice is…
ource: Vijay Govindarajan
Manage The
Present
Manage The
Present
Selectively
Forget The
Past
Selectively
Forget The
Past
Create The
Future
Create The
Future
Cut the fat, drop
unprofitable products,
segments, customers
and geographical
areas.
Make operational
improvements.
Right sizing.
Work on new products
that are ready.
Move into
opportunities.
Exploit nonlinear
changes.
Develop a big new
strategic intent (an
efficient electric car, a
cure for cancer…)
A strategic intent will
have direction,
motivation, and
challenge.
YOUR COMPANY SHOULD BE INVESTING
IN THREE BOXES
Page21

22. The CMO - Master of Growth
• CMO tenure is around three years. They come from
advertising, sales, research. All have a growth mandate.
• The days of the brand-oriented, marketing-
communications-focused creative-led CMO are waning.
• Today’s CMO must play a leadership role in data
analytics, customization, personalization and
optimization and drive complex, digital-led campaigns
and activities.
• The CMO must be able to show MROI for their
individual marketing investments.
• CMOs will be on the firing line if they don’t achieve
sales growth.
• CMOs spend 50% of their time managing traditional
marketing and 50% on aligning with the other business
functions.
• The CMO’s most important relationships are with the
CEO, Finance, IT and Sales.

23. Alternative Names for the CMO
• Vice President of Marketing
• Chief Customer Officer
• Chief Revenue Officer
• Chief Growth Officer
• Chief Commercial Officer

24. What are the 6 Tasks of the CMO?
1. Represent the voice of the customer (VOC)
2. Monitor the evolving business landscape and gather
customer insights
3. Be the steward of the corporate brand and brand-building
practice.
4. Upgrade marketing technology and skills in the company.
5. Bring insight into the corporate portfolio and synergies.
6. Measure and account for marketing’s financial performance

25. If You Are Appointed CMO, You Prefer That
Your Office Be Located Next To:
1. CEO office
2. CFO office
3. CTO office
4. CIO office
5. VPS office
??

26. The Four Tasks of the CMO

27. • Marketing is in the best position to detect
business opportunities, calibrate their size
and estimate their profitability.
• Marketing manages important intangible
assets (brands, customer relationships,
networks, market position, market
information).
Marketing Needs to be the Lead Player in
Building the Company’s Future

28. Five shifts
Driving business
Impact
Galvanizing
your network
Pervasive
innovation
Inspiring marketing
excellence
Relentless
customer focus

29. • Brand asset management.
• Customer relationship management (CRM). Big data and
database marketing, telemarketing.
• Partners relationship management (PRM).
• Integrated marketing communications blending traditional
with Internet and social media.
• Public relations marketing (including event and sponsorship
marketing).
• Service and experiential marketing.
• Profitability analysis by segment, customer, product,
channel.
Competency Skills Needed
by Today’s Marketers

30. The Marketing Management Process

31. Although some of the vendors play in more than one category, this summary is intended to classify software
providers by their predominant solution feature.
9) Yield-
Based
Pricing
Opt. Tools
8)
Personal-
ization
Platforms
7)
Marketing
Comm. /
Content
Mgmt.
Tools6) MRM
5) Mktg.
Mgmt.
Work-Flow
Solutions
4)
Campaign
Mgmt.
3)
Marketing
Mix
Modeling/
Predictive
Analytics
2)
Business
Intelligence
& Analytics
1)
Database
Mgmt. &
Ware-
housing
9) Yield-
Based
Pricing
Opt. Tools
8)
Personal-
ization
Platforms
7)
Marketing
Comm. /
Content
Mgmt.
Tools6) MRM
5) Mktg.
Mgmt.
Work-Flow
Solutions
4)
Campaign
Mgmt.
3)
Marketing
Mix
Modeling/
Predictive
Analytics
2)
Business
Intelligence
& Analytics
1)
Database
Mgmt. &
Ware-
housing
Examples of Vendors that Play in Each of these Spaces

32. The Sales Funnel
Prospecting Qualifying Defining
Needs
Contract
Negotiation
Developing
Solutions
Proposal
Preparation/
Presentation
Revision & Issue
Resolution
Implemen-
tation
Purchase
Intention
Purchase Loyalty Customer
Advocacy

33. The Marketing and Sales Funnel
Purchase
Intention
Customer
Awareness
Brand
Awareness
Brand
Consider-
ation
Brand
Preference
Purchase Loyalty Customer
Advocacy
Marketing
SalesHandoff

34. How is Sales Changing?
• Sales managers are moving toward a larger span of
control, given improvements in IT.
• Sales management is increasingly participating in
shaping the marketing plan.
• Sales forces are finding it more difficult to see
buyers.
• Sales forces are working harder to develop and send
content that will interest their customers.
• Price is becoming more important in securing
contracts

35. Are Sales/Marketing Aligned?
• Does the salesforce look favorably upon the advertising and
brochures created by marketing?
• Is marketing getting better at providing good leads to the
sales force?
• Is the sales force satisfied with the quotas that marketing
establishes or are they still viewed as too high?
• Does the CMO and Sales VP get along?
• Des marketing and sales have sufficient influence over the
products and services that the company is developing?
• Is marketing given sufficient influence to identify new
opportunities and calibrate them and drive the future of the
company?
How many “yesses” out of 6 for your company?

36. Session 2. Moving Into Marketing 3.0
and 4.0

37. Marketing’s Change in Focus
1950s – 1960s1950s – 1960s 1970s – 1980s1970s – 1980s 1990s – 2000s1990s – 2000s 2010s – 2020s2010s – 2020s

38. INDIVIDUAL
COMPANY
Mind Heart Spirit
Deliver
SATISFACTION
Realize
ASPIRATION
Practise
COMPASSION
Profit Ability Return Ability Sustain Ability
Be BETTER DIFFERENTIATE
Make a
DIFFERENCE
MISSION
(Why)
VISION
(What)
VALUES
(How)
Mind, Heart, and Spirit Marketing

39. Companies Americans Love
Amazon, Apple, Best Buy, BMW,
CarMax, Caterpillar, Commerce Bank,
Container Store, Costco, eBay,
Google, Harley-Davidson, Honda,
IDEO, IKEA, JetBlue Johnson &
Johnson, Jordan's Furniture, L L
Bean, New Balance, Patagonia,
Progressive Insurance, REI,
Southwest, Starbucks, Timberland,
Toyota, Trader Joe's, UPS, Wegmans,
Whole Foods.
These “firms of endearment” were
highly profitable. They outperformed
the market by a 9-to-1 ratio over a ten-
year period. More fulfilled employees,
happy and loyal customers,
innovative and profitable suppliers,
environmentally healthy communities.

40. Characteristics of “Firms of Endearment”
• They align the interests of all stakeholder groups.
• Their executive salaries are relatively modest.
• They operate an open door policy to reach top
management.
• Their employee compensation and benefits are high
for the category; their employee training is longer;
and their employee turnover is lower.
• They hire people who are passionate about
customers.
• They view suppliers as true partners who improve
productivity and quality and lower costs.
• They believe that their corporate culture is their
greatest asset and primary source of competitive
advantage.
• Their marketing costs are lower while customer
satisfaction and retention is much higher.

41. Map the Customer Journey
• A TV viewer spots a TV ad for a Toyota Camry.
• She looks up Camry car reviews on the Internet.
• She notices a display ad from a local dealership but
doesn’t do anything.
• She sees a YouTube video showing happy Camry
owners.
• She receives a direct mail piece from Toyota
offering a time-limited deal.
• She visits the dealer, test drives the car, negotiates
a special price and buys it.

42. The 5A’s of the Customer Journey
• Aware phase, customers are passively exposed to many
brands from past experience, marketing communications,
and/or advocacy of others.
• Appeal phase, customers focus on the most appealing
brands. (Appeal is influenced by the degree of Awareness,
Affordability, Accessibility, and Acceptibility - the 4A’s)
• Ask phase, customers can call friends, search online product
reviews, contact call centers and talk to sales agents.
• Act phase, customers purchase a brand and experience
brand usage and post-purchase services. If satisfied, there is
a high probability of buying the brand again.
• Advocate phase, customers spontaneously recommend
brands they love without being asked. They tell positive
stories to others and become evangelists.

43. The PAR and Bar Measures
• Purchase Action Ratio (PAR) measures how well companies ‘convert’
brand awareness into brand purchase.
• BAR measures how well companies ‘convert’ brand awareness into
brand advocacy.
• Essentially, track the number of customers who go from ‘Aware’ (A1) to
‘Act’ (A4) and eventually to ‘Advocate’ (A5).
• From a population of 100 people, suppose Brand X is known by 90.
Suppose it is bought only by 18 people and only 9 spontaneously
recommend the brand. Thus, the PAR for Brand X is 18/90 or 0.2 and the
BAR is 9/90 or 0.1. On the surface, Brand X looks promising since it has a
brand awareness of 0.9 while in fact it performs rather poorly. It fails to
convert 80% of the high level of brand awareness into sales.
• PAR and BAR allow marketers to measure the productivity of their
spending, particularly when generating brand awareness.

44. Marketing Analytics 2.0
• “The days of correlating sales data with a few dozen advertising
variables are over. Large companies are now deploying analytics 2.0,
a set of capabilities that can chew through terabytes of data and
hundreds of variables in real time to reveal how advertising touch-
points interact dynamically. The results: 10-30% improvements in
marketing performance.”
• Three broad activities:
– Attribution quantifies the contribution of each element of
advertising
– Optimization uses predictive analytics tools to run scenarios for
business planning.
– Allocation redistributes resources across marketing activities in
real time.
• Personalization Engines. These are data-driven systems that automate
decision making, trigger actions based on customer activity, and
iterate their communications based on what they learn.

45. Companies Need to Show that
They Care to Raise Their Appeal
AvonAvon Breast cancerBreast cancer
General MillsGeneral Mills Better nutritionBetter nutrition
General MotorsGeneral Motors Traffic safetyTraffic safety
Home DepotHome Depot Habatat for HumanityHabatat for Humanity
KraftKraft Reducing obesityReducing obesity
Levi StraussLevi Strauss Preventing AIDSPreventing AIDS
MotorolaMotorola Reducing solid wasteReducing solid waste
Pepsi ColaPepsi Cola Staying activeStaying active
ShellShell Coastal cleanupCoastal cleanup
PetsmartPetsmart Animal adoptionAnimal adoption
AleveAleve ArthritisArthritis
British AirwaysBritish Airways Children in needChildren in need
StarbucksStarbucks Tropical rainforestsTropical rainforests
Best BuyBest Buy Recycle used electronicsRecycle used electronics

46. What is the Relationship between
Business and Society?
• Old philosophy: “What is good for business is good for
society!” The simple act of profit maximization is good
enough.
• New philosophy: “What is good for society is good for
business.” (GE)
– Every company should figure out not only how to
improve its output but also its outcomes. A food
company should improve nutrition; an energy company
should improve energy; a bank should improve sound
savings.
Michael Porter and Michael Kramer, “The Big Idea: Creating
Shared Value,” Harvard Business Review, January/February
2011.

47. Marketing 1.0 Marketing 2.0 Marketing 3.0
MIND HEART SPIRIT
PRODUCT-CENTERED CUSTOMER-
ORIENTED
VALUES-DRIVEN
ECONOMIC- VALUE PEOPLE-VALUE ENVIRONMENT-
VALUE
PROFITS SOCIAL PROGRESS HUMAN HAPPINESS
•Where is your company now?
•Where do you want it to be?
•Why?
•What would steps would you take?

48. “Within five years. If you’re in the same business you
are in now, you’re going to be out of business.”

49. Session 3
Building a
strong brand

50. Marketing Communication Tools

51. Building a Strong Brand

52. Brand Adds Value!
Source: Pine and Gilmore, The Experience Economy

53. Branding Commodities
• Chicken
• Cement
• Bricks
“It is possible to brand sand, wheat, beef, bricks, metals, concrete, chemicals, corn
grits, bananas, apples, aspirin, …”(Sam Hill, How to Brand Sand).

54. Develop a Memorable Brand
• Nike: Its brand mantra is “authentic athletic excellence.”
Its brand slogan is “Just Do It.” Its logo is a “s “swoosh.”
• GE: Its brand mantra is “better living.” Its new brand
slogan is “Imagination at Work.” Its logo is
WHAT DO YOU THINK OF THESE SLOGANS?
• Ford, “Quality is #1 Job”
• Holiday Inn, “No Surprises”
• Lloyds Bank, “The Bank that Likes to Say Yes”
• Philips, “From Sand to Chips”
» “Philips Invents for You”
» “Let’s Make Things Better”

55. A Brand Must be More
Than a Name, Slogan, and Logo
• A brand must trigger words or associations (features and
benefits).
• A brand should depict a process (McDonald’s, Amazon).
• A great brand triggers emotions (Harley-Davidson).
• A great brand represents a promise of value (Sony).
• The ultimate brand builders are your employees and
operations, i.e., your performance, not your marketing
communications.

56. Figure 9-3
BrandDynamics™
Pyramid
Bonding
Advantage
Performance
Relevance
Presence
Nothing else beats it
Does it offer something
Better than the others?
Can it deliver?
Does it offer
me something?
Do I know
about it?
Weak relationship/
Low share of category expenditure
Strong relationship/
High share of category expenditure

57. Brand Asset Valuator Model
ENERGIZED
DIFFERENTIATION
The brand’s point
of difference
Relates to margins
and cultural currency
ESTEEM
How you regard the
brand
Relates to perceptions
of quality and loyalty
KNOWLEDGE
An intimate
understanding
of the brand
Relates to awareness and
consumer experience
RELEVANCE
How appropriate the
brand is to you
Relates to consideration
and trial
Leading Indicator
Future Growth Value
Current Indicator
Current Operating Value
BRAND STRENGTH BRAND STATURE
Figure 2: BrandAsset ®Valuator Model

58. Your Company’s Brand
1. What word does your brand own?
2. Write down other words triggered by your brand name?
A. Circle the favorable words; square the unfavorable words.
B. Underline the words that are favorable but not widely known.
C. Double underline the words that are unique to your company.
3. Are any of the following a source for strengthening your brand’s
personality?
A. Founders
B. Spokespersons
C. Characters
D. Objects
E. Stories and mythologies

59. Strong Brands Supply Use Value
as Well as Purchase Value
Nestle:
• Sells baby food
• Provides free dietitian phone line
• Nestops along the highway
Carl Sewell Cadillac:
• Sells cars
• Free car wash during servicing
• Free emergency service and car loaners
Home Depot:
• Sells home improvement products, such as paint, electrical supplies,
plumbing
• Offers free kitchen remodeling design service
• Offers free workshops on how to paint, fix faucets, etc.

60. Narrative Branding
• The new media – websites, video, podcasts,
consumer generated content – are long-form
media. Marketers need to design compelling
brand stories with richness and depth.
• Narrative Branding, like a story, is inclusive:
emotional and rational; creative and strategic. It
is designed around all senses: sight, sound, taste,
touch and smell.
• Chose a different value proposition for each
customer or segment. You want coherence, not
consistency.

61. What Makes a Strong Brand?
• Strong brand = Dramatic Product Benefits x
Readiness to Believe x Distinct Identity x
Emotional Values

62. Creating genuine customer value:
Progressive Insurance
Name Your Price lets
customers customize
their policy to fit their
budget.
“ I want an easier way to see how I
can meet my insurance needs at a
great price.”
MyRate rewards lower risk
drivers with lower rates.
“ I don’t drive a lot of miles, I’m a safe
driver, and I’m not usually on the road
late at night when accidents are most
likely to happen. Since I’m less likely to
be in an accident, shouldn’t I pay less for
car insurance?”

63. Build Strong Brand Loyalty,
Engagement and Advocacy
• Select customers who are most likely to be
interested in your offer.
• Develop a compelling value proposition and use it
consistently.
• Touch the customer emotionally and not just
functionally. Make your product friendly and
easy to use.
• Send relevant content to your customers. Position
your company as a ‘thought leader.”
• Ask customers how your company might improve
its product or customer experience.
• Demonstrate that you care not only about
customers, but also stakeholders, and the planet.

64. Build a Brand Community!
• Examples: Harley Davidson, Saturn, Porsche, BMW,
Apple user groups, Lexus owners, Barnes and Noble
bookstores, The Body Shop, Ikea.
• Harley’s Owner Groups:
– HOGs have 250,000 members divided into 800
chapters: VietNam vets, lesbians, born again
Christians, Ladies on Harleys.
– Tools include: Rallies, anniversaries, lectures on
maintenance and safety, competitions, shows,
internet sites.
– The researchers describe Harley as “a religious icon
around which an entire ideology of consumption is
articulated.”

65. HYPOTHETICAL STARBUCKS BRAND POSITIONING BULLSEYE
Consumer
Target
Discerning
Coffee
Drinker
Consumer
Insight
Coffee and the
drinking
experience is
often
unsatisfying
Consumer
Need State
Desire for
better coffee
and a better
consumption
experience
Competitive
Product Set
Local cafes
Fast food &
convenience
shops
Consumer
Takeaway
Starbucks
gives me the
richest
possible
sensory
experience
drinking
coffee
Brand
Mantra
Rich, Rewarding
Coffee Experience
Fairly
Priced
Relaxing,
rewarding
moments
Responsible,
locally involved
Rich sensory
consumption
experience
Varied, exotic
coffee drinks
Fresh high
quality coffee
24 hour
training of
baristas
Green &
Earth Colors
Siren
logo
Caring
Contemporary
Thoughtful
Convenient,
friendly
service
Triple
Filtrated
water
Totally
integrated
system
Stock options/
health benefits
or baristas

66. Measure Your Brand Effectiveness
• Customer perceived value
• Customer satisfaction
• Customer repeat purchase
• Customer advocacy (NPS)
• Customer co-creation

67. LEADING B2B BRANDING
COMPANIES
•DuPont
•Siemens
•Bosch
•General Electric
•Saint-Gobain
•UPS
•FedEx
•Tentra Pak
•Microsoft
•Caterpillar
•IBM
•Daimler
•Michelin
•Tata Steel
•Morgan Stanley

68. Leading Ingredient Brands
Clothing: Gore-Tex, Lycra
Carpets: Stainmaster
Diet soft drinks (NutraSweet)
Cooking utensils (Teflon)
Bicycle gears (Shimano)
Sound systems (Dolby)
Computer chips (Intel)
Crystal components (Swarovski)

69. Session 4
Innovating
Your Path
to Success

70. Ob?
"Most innovations fail. And, companies that don't
innovate die.“
(Henry Chesbrough)
"Most innovations fail. And, companies that don't
innovate die.“
(Henry Chesbrough)
“A business has two—and only two—basic functions:
marketing and innovation. Marketing and
innovation produce results: all the rest are
costs.”(Peter Drucker )
“A business has two—and only two—basic functions:
marketing and innovation. Marketing and
innovation produce results: all the rest are
costs.”(Peter Drucker )
“While great devices are invented in the laboratory,
great products are invented in the Marketing
Department.” (William H. Davidow)
“While great devices are invented in the laboratory,
great products are invented in the Marketing
Department.” (William H. Davidow)
Source : google.com; http://blogbusinessworld.blogspot.com
Observations

71. Views of Innovation
• Innovation is unnatural for a company. It is more natural to
make the same thing or even improving its efficiency rather
than to search for new things to make.
• Most companies expect ideas and initiatives to come either
naturally, or through creativity training, or through setting
up skunk works.
• Some companies have innovation in their DNA: 3M, ITW,
Harley-Davidson, BMW, Progressive Insurance
• Innovation success depends upon “one percent inspiration
and 99 percent perspiration. “
Source: Vijay Govindarajan and Chris Trimble, The Other Side of Innovation: Solving the Execution
Challenge.

72. Some Examples of Innovation Failure
• Searle and its new betablocker
• A floor cleaner fails
• Motorola’s Iridium phone
• Philips moves to “Sense and Sensibility”

73. Sir James Dyson…The New Thomas Edison

74. Elon Musk – The New Henry Ford
Tesla
Solar Cit
Space X
Musk’s vision is to change the
world and humanity. His goals
include reducing global
warming through sustainable
energy production and
consumption, and reducing the
"risk of human extinction" by
"making life multiplanetary"
by establishing a human
Colony on Mars.

75. Types of Innovation
Product and
service
incremental
innovation
Product and
service
incremental
innovation
Business model
innovation
Business model
innovation
Marketing
innovation
Marketing
innovation
New to the
world innovation
New to the
world innovation
Source: http://2.bp.blogspot.com/_qD9Y8Ncd3I4/Sb6hKKOJkJI/AAAAAAAACDo/fHZHCQbvRe4/s400/BornToInnovate2009.jpg

76. A Balanced New Product Portfolio
Source: Rosabeth Moss Kanter

77. Innovation and Your Company
How are
innovative ideas
developed (build
internally or buy)?
How are
innovative ideas
developed (build
internally or buy)?
How do innovative
ideas flow in your
firm (top down or
bottom up)?
How do innovative
ideas flow in your
firm (top down or
bottom up)?
Where do you
focus your search
for innovation
(inside or outside
of the firm)?
Where do you
focus your search
for innovation
(inside or outside
of the firm)?
How is the
innovation process
managed (formal
processes or
informal
processes)?
How is the
innovation process
managed (formal
processes or
informal
processes)?
Where is the
innovation
organization
located?
Where is the
innovation
organization
located?
Source: http://www.henkel-cee.com/cee/content_images/36406_72dpi_605W.jpg

78. Lean Marketing – Eric Ries
• An entrepreneur needs to follow a Build-Measure-
Learn system. Answer: Iterative Rapid Prototyping.
• Identify a Minimum Viable Product (MVP)
• Then identify a Minimum Viable Approach (MVA)
• Chose an app distribution channel: Facebook, Google
• Examine the results and learn
– What need to be improved?
– Does the product really solve the problem?
– Why do customers not convert?
• This way you can continuously improve and adapt –
without becoming too expensive or too complex to
change.
• A team will do a daily “standup.” A daily “burndown”
of the time still needed to complete the current goal.
Meeting the “blockers” head on.

79. The Classic Stage-Gate Model
• Idea generation,
• Idea screening,
• Concept development and testing,
• Marketing strategy development,
• Business analysis,
• Product development,
• Market testing,
• Commercialization.
See Robert G. Cooper, Winning at New Products, Basic Books, 2011

80. Roles in a Company’s Innovation
Process
BrowsersBrowsersActivatorsActivators CreatorsCreators
ExecutorsExecutorsDevelopersDevelopers FinanciersFinanciers
Source: Philip Kotler and Fernando Trias de Bes, Winning at Innovation, 2011.
Roles in a Company’s Innovation Process:
The A to F Model

81. Innovativeness is a Capability
• Innovation requires organizing three markets within the firm:
– An idea market
– A capital market
– A talent market
• The best innovations provide solutions to customer
problems, not to the company’s product problems.
• Strong market-creating innovations have a long life and
create market leadership
Source: Gary Hamel, “Bringing Silicon Valley Inside,” Harvard Business Review, May 2000.

82. Major Sources of New Ideas
• Internal sources
– Marketing research department
– Salespeople
– Customer suggestions, inquiries, complaints
– Consumer behavior observation
– Employee suggestions
– R&D
• External sources
– Distributors
– Competitors
– Suppliers

83. New Technologies Abound
• Robotics (Your Own Butler)
• Artificial intelligence (IBM Chess, Watson)
• Neuroscience (Neuromarketing)
• Information technology (Big Data)
• Nanotechnology (New materials)
• Biotechnology (Customized drugs)
• Bioengineering (Artificial limbs)
• Digital and social media
• Energy science (Fracking)
• Food science (Nutrition movement)
• Education technology (Online and distant learning)
• Entertainment (Kidzania…Xavier Lopez Ancona)

84. “We have moved beyond the Information Age to the Age of Participation.”
GM ASKS CONSUMERS TO MAKE
VEHICLE ADS
BUILD YOUR OWN LEXUS AT
WWW.LEXUS.COM
Build your Lexus, complete with
available colors and options
Involve Your Customers in
Co-CreaInting Your Products
Invite Your Customers to Co-Create

85. Three Business Models for Innovation
• Whirlpool
• Shell Oil
• Samsung

86. The Relationship between Innovation
and Marketing
• How do the mindsets of Development and Marketing
differ, and what are their potential biases?
– Development: Masters of the Possible
– Marketing: Masters of the Valuable
• What are the reported levels of engagement between
Development and Marketing?
• What are the potential contributions of marketing to the
stages of the innovation process?
• What steps can a company take to improve the working
relationship between Development and Marketing ?

87. The Art of Creating Buzz
• Distinguish three types of diffusers
– Mavens: they are an expert on a topic. You
listen to them closely. Their motivation is to
inform or explain.
– Connectors: they know a lot of people. They
are social glue. They may mention things to
many others but are not seen as experts
– Salespeople: they are persuasive and help
create an epidemic of interest
From Malcolm Gladwell, Tipping Point

88. Empower your marketing engine…
1. Take advantage of turbulence and social problems.
2. Go to where the growth is.
3. Engage marketing and branding to drive your
future.
4. Intensify your online and social media activity.
5. Invite your customers and stakeholders to build
your brand and co-create your future.
6. Invest in innovation.
7. Develop the social responsibility side of your
business.
To Win at Marketing…

89. World-Class Marketers
• Driven by customer values and company values.
• Has an entrepreneurial and innovative culture.
• Continuous opportunity scanning and scoring.
• Uses scenario planning.
• Uses Big Data and market analytics to find customer
insight.
• Uses a mix of digital and traditional advertising to
reach and influence customers.
• Aims at customer engagement and advocacy.

90. “Within five years. If you’re in the same business you
are in now, you’re going to be out of business.”

91. Performance Platform

92. Current Marketing Ideas
• Customer journey
• Content development
• Native advertising
• Brand storytelling
• Brand equity and
resonance
• Brand association maps
• Marketing automation
• Visual design, motion
graphics
• Web development
• Social media platforms
• Sharing society
• Social trend spotting
• Social conversation
monitoring
• Industry and
competition audits
• Big data
• Customer score cards
• Predictive analytics
• Neuralmarketing
• Buyer experience design
• Insight labs
• Virtual reality
• Omnichannel marketing