Kotler, et al, help marketers sense, thrive in new economy

“Marketing Moves”
By Philip Kotler, Dipak Jain & Suvit Maesingee
Harvard Business School Press, 2002


When mindset-altering changes hit us — scientific, business or mathematical — we, like a groggy boxer hit by a whammy, ask: “Wha’ happened?”

When Copernicus declared that the sun is the center of the universe, not the earth, that revolutionary statement rocked the scientific and theological foundations of the leaders of his time. When, after circumnavigating the world, the voyager said that the earth is round, not flat, everyone was confused and scholars went back to their drawing boards and threw away all studies that proceeded from a false premise.

When many scholars and businessmen declared that the “new economy” is upon us — driven by the information revolution — many wondered what happened, others wandered around in the “new wilderness” confused as ever, still many others unable to cope with dramatic changes went bankrupt — and the majority of us ask: “What is really happening?”

Many books have been written on the “new” economy, on “customer-driven” firms, on the meteorically rising and falling dot-coms, and on the baffling digital world. Many of these have been useful, giving us as they do, an understanding of one facet of such economy, or one astonishing aspect of such phenomenon. Thus, we sigh that, somehow, we can make sense out of this “new thing.”

But, it takes Philip Kotler, the marketing guru and principal author of “Marketing Moves” to make the “new economy” in its variegated forms understandable to many of us. Trust Kotler to spot previous concepts and say that they no longer hold true. For example, he juxtaposes two contrasting laws:

“Company growth in the industrial age was limited by the operation of the law of diminishing returns… (but) growth in the new economy is governed by self-reinforcing cycles. Consider Metcalfe’s law: The cost of the network expands linearly with increase in network size, but the value of the network increases exponentially.”

The above is just one of the nine “major shifts toward the digital economy,” which are discussed at length with a lot of insights in the book. You will be shocked to know that the phrases we used just yesterday have been thrown out of the window by Kotler and his team. For example, one other major movement is the shift “from corporate governance to market governance.” Just the other day, a seminar on corporate governance was held as if it was a newfound concept. Talking of keeping abreast of what is “in” and what is “out,” this book gives you a leading edge.

The book will not only make you fashionable and ahead of the rest. In fact, the more important contribution of this book is the way it has organized the new manifestations of the “digital economy” into bite-size clusters, making you able to relate otherwise separate developments.

The book says that marketing should not be the function of the marketing department alone — and that’s not new. What’s groundbreaking, though, is the authors’ construction of the “Holistic Marketing Framework” — which combines three important concerns — Customer Focus, Core Competencies and Collaborative Network.

At first glance, that doesn’t seem new either, until the authors show how market offerings, marketing activities, business architecture, and operational system all work together to drive corporate and business strategies that lead to profitability and shareholder value. Well, that’s a mouthful – but it is such because it delivers in a capsule how a company thrives in the digital economy.

Gird up for studying every “competitive platform” as prescribed by the guru himself. This book is not as thick as “Marketing Management,” authored by Kotler also and published two decades ago. (That’s our textbook at Asia’s premier graduate business school in the early eighties.) Has Kotler reinvented himself? Is he now saying that the concepts he introduced no longer hold?

Listen to him: “New business strategies call for new marketing strategies and practices. We no longer believe that the marketer’s job is limited to managing the four P’s or to determining segmentation, targeting, and positioning.” Yes, Kotler is acknowledging major changes — and he has revised his theories.

And yet, Kotler always manages to be at the crest of the wave of these changes — and, from that perch, he sees major patterns and thus composes the big picture. He points out: “The old economy is based on the model of manufacturing that came out of the industrial revolution… The new economy, by contrast, emerges from the information revolution, with its advances in computerization, digitization, and telecommunications.”

Again, trust Kotler to illuminate history and current events. And trust him, too, to make fine distinctions: “Unfortunately, many people confuse the new economy with the high-flying dot-coms that burst on the scene … But the new economy is not only about dot-coms. It is about something more fundamental: the emergence of a network economy.”

There lies the central truth in this book. Businesses are much more networked — and firms that use such “connectedness” to the hilt will not only survive — but thrive in this century. The last word of the book’s title — “MarketingMoves” — was set in italics to underscore a point: Everything is dynamic. What we know as truth now may change overnight. Kotler, the marketing guru, made sure that point sinks. He changed his mind on many concepts and strategies. It’s time we changed ours.