Winning strategies for marketers

Kotler brought real-word examples, case studies and best practice to 450 marketers in Gauteng yesterday, Thursday, 27 July 2006, in his all-day, live strategic marketing presentation on winning strategies.

He addressed the audience on the latest marketing thoughts on 'How to Create, Win, and Dominate Markets'.

The three jobs you have as a marketer are to "explore value, create value, deliver value", says Kotler, describing them as follows:

• Explore value: know your customer's mind; our own competencies; what is our own resource base like? You will never do everything you need in your job as marketer, you're going to borrow resources too, like your advertising.
  
• Create value: through your value proposition, business model, business partners.
  
• Deliver value: with CRM and excellent supply chain management.

On customers

There are three types of customers according to Kotler:

1. Price oriented customers - who want value through lower costs. They know the product but only care about price. They don't want to see a salesperson.
2. Solutions oriented customers (consultative) want value through benefits and advice.

3. Strategic-value customer (enterprise selling) - value through high benefits and lower costs. Want supplier to co-invest and participate in the customer's business.
   

This is the most basic way to classify customers, Kotler says, and recommends a more holistic view.

"We tend to see our customers as people who buy our toothpaste. They are much more than that. They have a life, they have a lifestyle. It's the same with our distributors and dealers - we've got to look at them more broadly."

Kotler says the problem with marketers is that they never go into the store. "You need to observe how your customers use your products... whether it is a motorcycle or a soft drink."

Holistic marketing

Holistic marketing includes all the following disciplines, which also involves senior management and all staff in a company, not just the marketing department, in order for success to be achieved in any marketing strategy:

1. Internal Marketing - marketing department, senior management, other departments.
2. Socially Responsible Marketing - ethics, environment, legal, community.
3. Integrated Marketing - communications, products and services, channels.

4. Relationship Marketing - customers, channel partners.
   

"We know that in three years you will lose half your customers who are satisfied. Being just satisfied though doesn't hold on to customers," Kotler explains.

"So maybe, when thinking holistically, you should also look at your SRM policy. There is no hard evidence that consumes will choose more ethically, socially responsible companies over others offering low prices for example, some consumers don't factor that in. However, it can be a differentiator in a market where companies are similar in price, quality..."

Kotler recommends that marketers ask two questions of their value chain:

1. Who is involved? Customers, company, collaborators (ad agencies etc)...

2. How do we define the market space? A good definition of the space you are in - and what are the potential opportunities in that market space? A brand plan should have five opportunities marketers see ahead for the business. Don't only throw out five things to be cute, says Kotler, but opportunities to capitalise on.
   

Kotler says often the company which is in third place in the market comes up with the innovation - because they realise, that to become a market leader, they need to innovate. This often happens when spotting a niche... "You worry about China, but you shouldn't. China can't do everything. You need to try spot where your business can slot in and be the best at what you do - own your niche."

A 'nicher' knows who buys his products/services and knows them well and can satisfy them perfectly and get a perfect price, says Kotler.

Seven winning strategies

Strategies that really work, according to Kotler:

1. Cost reduction - be the company which finds a way to make something more affordable and good value. (Examples: knock-down furniture business Ikea. Southwest Airlines, Wal-Mart, Enterprise Rent-a-Car). "Why aren't Ikea here? They will come. And they will destroy everyone else in that market. It's not just value furniture, it's a whole experience. These are companies who found out how to be lean," Kotler explains.
   
2. Improved customer experience. "Can you be better at creating a better experience for customers? (Examples: Starbucks, Harley Davidson, who have also gone into apparel, pens, restaurants, clubs.)
   
3. Highest product quality. (Examples: P&G, Toyota). "Keep improving. High on quality."
   
4. Niching. (Examples: Progressive Insurance, Tetra.) They own their markets in quality service and products.
   
5. Innovative business model. (Examples: Barnes & Noble, Charles Schwab discount brokerage, FedEx.) Barnes & Noble were one of the first bookstores to provide tables and chairs, to have lectures from authors at night - a new business model.
   
6. Product Innovation. (Examples: iPod, Swatch watches).
   
7. Design. (Examples: Bang & Olufsen, Samsung.) These are brands which have added aesthetics for differentiation, says Kotler. And this is about more than style and looks, as the 'theme' has been thought through from the users point-of-view.