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BW Businessworld

The 4th ‘P’ Poses A Challenge

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It's the end of a long day — well past 7 pm — and his staff wants Philip Kotler to rest rather than give interviews to journalists. But the 81-year-old marketing guru, who is on a whirlwind tour of India at the invitation of JRE School of Management, shows no signs of fatigue, and cheerfully takes questions on the relevance of his marketing framework in the digital era. Now in its 14th edition, Kotler's Marketing Management continues to be the most widely used textbook in B-schools, showing how, even as the tools and language of marketing have changed, the principles still remain the same. Edited excerpts from an interview:

In the digital marketing era, are the 4Ps still relevant — especially Place, since place now stretches just about everywhere without any boundaries?
Let's look at all the 4Ps. First is Product. That P is going to always be there — whether it's a physical or a service product — something that can be sold. And Price has to be put to the product. So far, digital marketing has done nothing to change product and price planning. Third is Place — by place, one means how do you make the product available and accessible to people. In the old days, you put it into retail shops. Today people can buy the product online, without going to a store. But all it does is add another channel — another way to get a product. So place hasn't changed.
But the fourth P — Promotion — has gotten challenging. In the old days, it used to be handled by the five old media. Classic media should not be given up, it is important. But now, we have all kinds of new ways to deliver messages to people. The real challenge is blending old and new media. The old media has to mention in the ads the WWW (world-wide web) for more information. And new media has to refer back to the big ad campaign in classic media.
The question that then comes up is, what percentage of a media budget will eventually be spent on digital media, compared to the conventional. My recommendation would be to go up to 10 per cent.

Only 10 per cent?
To start with. Don't make the mistake of not spending anything at all on digital. If you don't do any digital now, you will be left far behind. The 10 per cent is an investment in learning. So you have to get a page on Facebook, form a club, have people interested in content.
Content is not leading to sales. Content only leads to interest and building engagement with the company. Coca-Cola managed to do that with its Facebook page — there are a lot of things happening on that page that is not about buying Coke. It's about helping young people have some ideas on things. That means, if you are doing content marketing, it is an expense without bringing in any revenue. But it will turn into revenue later on when these kids make their buying choices.
I don't think someone should say what's the ROMI — return on marketing investment — of our Facebook work. Because that work is to engage the audience. But, if whatever you are doing with that 10 per cent starts to look really good, raise it to 15 per cent or 20 per cent.

So, will the old media get sacrificed?
Well, radio is having its own history and effectiveness issues. Maybe radio will get more on our minds now. I wouldn't even say that the five major old media are always to be used in the same proportion — for example, the cost of radio may be going down and the cost of TV may be going up, so one has to switch around a little bit.
I would say that the media problem is the major challenge in today's digital era because media is more fragmented now. You are not going to get big audiences for any of your messages. However, you may be reaching audiences that are more precise for whatever you are selling. Therefore, your messages are going to be more relevant. Isn't that a paradox? That you are not going to get volumes but you are getting the right audiences.
Do you think a fifth P should be added? There have been some suggestions about ‘people' who are involved in co-creation.
Well then it is under product itself. You don't have to put a separate chapter for people. People are there in all the Ps. You don't think about price before studying what people think about the costs. Maybe the economy is down so you have to bring price down because people don't have purchasing power. They dictate prices.
A lot of Ps have been suggested. Packaging, for instance. But I say ‘package' is the product. Then they say where are the salespeople. That's an S. I don't need an S, becauses salespeople are already there in promotion. They are the big force in promoting products.
Recently, Jagdish Sheth (professor of marketing at Emory University) came out with 4As — that's a good contribution. Because his As are not about what the company does, but about what the customers want. Customers want Acceptability, Accessibility, Affordability and Awareness. So, you can start with the 4As the customer wants and then go on to build the 4Ps.
By the way, there is no law that a company needs to stick to four Ps. It can add any P it likes.
Every decade has seen its great marketing battle — Coke vs Pepsi, Unilever vs P&G…and today it is Samsung vs Apple. What's your bet on that one?  
I love those battles. Some think that the best marketers are those who think strategically in the military way. I wrote an article on it many decades ago and that's how the term ‘marketing warfare' came. There's a book on it and now another book is coming out. But I don't like that metaphor anymore. It puts too much focus on the competitor. And it takes the focus away from the customer you want to win (over).

“You don't have to put a separate chapter for people. People are there in all the Ps... They dictate prices”
But I think Apple vs Samsung is going to be a big battle. Samsung has been so clever in getting rid of so many of the other companies — we no longer think of Motorola, Nokia. Isn't it wonderful that you can say Big Two instead of Big Five? We cannot carry two phones — though now I have begun to notice some people carrying both iPhone and a Samsung Note with that little pencil. I think Samsung doesn't have to worry about anyone else except a competitor from China, who will come out with a phone that will please a billion people .
So a third factor may come in?
Yes, another brand will come in from China.
Between Apple and Samsung — you don't want to take a bet on who will win?
Well, I personally have an iPhone. But I appreciate what Samsung is doing. It has been brilliant in getting up there fast. Part of the reason is that the people at Samsung don't wait before making their next phone. They didn't make any money out of the first phone yet, but are already changing it. I don't see anyone else doing that kind of acceleration. I don't think iPhone is changing that fast either. I don't know if there are many new things you can do to a phone (to make it better). But we will wait and see.
You have been evangelising a lot about social marketing. How is it working?
Social marketing is my shortened word for social-cause marketing. But I think it's not a good term anymore because it is getting mixed up with social-media marketing. Maybe we should change it to just ‘cause marketing'. There are 2,000 social cause marketers in the world, who are professional, and always invited when a campaign is going to be done on preventing children from eating bad food or whatever. We have wonderful studies on what works in cause marketing. I feel we made a contribution to the fall in cigarette smoking by broadcasting about it.
We are inviting research scholars at universities to take any problem — say, water shortage, poor education methodologies — set up an incubator, which means get some money and test new improved approaches. We have four new incubators going on now. One in India, two in Bangladesh and one in Australia.
Will social marketing help in meeting or solving the millennium development goals?
They set up the goals in 2000 and wanted to cut poverty in half. They couldn't do that because of the financial collapse. Though poverty has been reduced considerably around the world, it is still there. We want the World Marketing Summit to address those issues, and not the conventional issues of how to sell soup because marketing can make a contribution to a better world.  
(This story was published in BW | Businessworld Issue Dated 08-04-2013)