Philip Kotler is the S. C. Johnson Distinguished Professor of International Marketing at the J.L.
Kellogg Graduate School of Management, Northwestern University. Kotler is one of the leading authorities on marketing. He received his master’s degree from the University of Chicago and has a Ph.D. from MIT – both in economics. He has worked at Harvard, where he studied mathematics as a postdoctoral student, and at the University of Chicago where he worked on behavioral science.
He is a prolific author. As well as Marketing Management: Analysis, Planning, Implementation and Control, the most widely used marketing book in business schools, his books include Principles of Marketing. Marketing Models, Strategic Marketing for Non-Profit Organizations; The New Competition and High Visibility; Social Marketing.
Strategies for Changing Public Behavior and Marketing Places.
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n advertisement for a Philip Kotler seminar features four neat aphorisms by way of a summary of marketing in the 1990s: ‘Companies pay too much attention to the cost of doing something. They should worry more about the cost of not doing it; ‘Every company should work hard to obsolete its own product line . . . before its competitors do’; ‘Your company does not belong in any market where it can’t be the best’; and ‘Marketing takes a day to learn. Unfortunately it takes a life time to master’.
Such observations distill Kotler’s massive productiveness down to a few memorable phrases. This is grossly unrepresentative. Kotler’s books are text books in the best sense and Marketing Management the definitive marketing textbook of our times. It is now in its eighth edition.
Marketing Management is tightly argued and all- encompassing. Through its various editions, its content has been expanded and brought up-to-date. The emerging challenge to all those involved in marketing is potently mapped out by Kotler in the eighth edition, published in 1994. ‘The marketing discipline is redeveloping its assumptions, concepts.’ skills, tools, and systems for making sound business decisions,’ writes Kotler. ‘Marketers must know when to cultivate large markets and when to niche; when to launch new brands and when to extend existing brand names; when to push products through distribution and when to pull them through distribution; when to protect the domestic market and when to penetrate aggressively into foreign markets; when to add more benefits to the offer and when to reduce the price; and when to expand and when to contract their budgets for salesforce, advertising, and other marketing tools.’ The scope of marketing is expanding exponentially as is demonstrated by the size and scope of Marketing Management – its contents range from industry and competitor analysis to designing strategies for the global marketplace, from managing product life cycle strategies to retailing, wholesaling and physical distribution systems.
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Kotler examines the shift in emphasis from ‘transaction oriented’ marketing to ‘relationship marketing’. ‘Good customers are an asset which, when well managed and served, will return a handsome lifetime income stream to the company. In the intensely competitive marketplace, the company’s first order of business is to retain customer loyalty through continually satisfying their needs in a superior way,’
says Kotler.
For the aspiring or practicing marketer, the attraction of Marketing Management lies in the clarity of its definitions of key phrases and roles. It defines marketing as ‘a social and managerial process by which individuals and groups obtain what they need and want through creating, offering, and exchanging products of value with others’. Kotler goes on to explain the concept of a market as consisting ‘of all the potential customers sharing a particular need or want who might be willing and able to engage in exchange to satisfy that need or want’. Marketing management, therefore, ‘is the process of planning and executing the conception, pricing, promotion, and distribution of goods, services, and ideas to create exchanges with target groups that satisfy customer and organizational objectives’.
The clarity of Marketing Management enables Kotler to return to the fundamentals. His examination of what makes up a product is typical. Kotler defines a product as ‘anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or need’. He says that a product has five levels: the core benefit (‘Marketers must see themselves as benefit providers’); the generic product; the expected product (the normal expectations the customer has of the product); the augmented product (the additional services or benefits added to the product) and, finally, the potential product (‘all of the augmentations and transformations that this product might ultimately undergo in the future’).
Kotler explores what he labels ‘customer delivered value’
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which he defines as ‘the difference between total customer value and total customer cost. And total customer value is the bundle of benefits customers expect from a given product or service’. Total customer value is made up of product value, service value, personnel value and image value. Total customer cost is made up of monetary price, time cost, energy cost and psychic cost. The two are combined to produce customer delivered value.
Given the scale and challenge of modem marketing outlined by Kotler, it is perhaps little wonder that he laments that so few companies are actually adept and committed to marketing. His list of successful marketing organizations is notable for its brevity. In the United States he identifies Procter & Gamble, Apple, Disney, Nordstrom, Wal-Mart, Milliken, McDonald’s, Marriott Hotels and Delta Airlines as true marketing organizations. Elsewhere, the list is even shorter. In Europe, Kotler highlights IKEA, Club Med, Ericsson, Bang & Olufsen and Marks & Spencer and, in Japan, only Sony, Toyota and Canon.
In order to become marketing-oriented, Kotler believes organizations encounter three common hurdles:
1 Organized resistance – entrenched functional behavior tends to oppose increased emphasis on marketing as it is seen as undermining functional power bases.
2 Slow learning – most companies are only capable of slowly embracing the marketing concept. In the banking industry, Kotler says that marketing has passed through five stages. In the first marketing was regarded as sales promotion and publicity. Then it was taken to be smiling and providing a friendly atmosphere. Banks moved on to segmentation and innovation, and then regarded marketing as positioning. Finally, they came to see marketing as marketing analysis, planning and control.
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3 Fast forgetting – companies which embrace marketing concepts tend, over time, to lose touch with core marketing principles. Various US companies have sought to establish their products in Europe with little knowledge of the differences in the marketplace.
For all the practical difficulties and the limitations of our concept of marketing, Kotler regards it as the essence of business and more. ‘Good companies will meet needs; great companies will create markets,’ he writes. ‘Market leadership is gained by envisioning new products, services, lifestyles, and ways to raise living standards. There is a vast difference between companies that offer me-too products and those that create new product and service values not even imagined by the marketplace. Ultimately, marketing at its best is about value creation and raising the world’s living standards.’