The New Marketing and Sales The New Marketing and Sales Strategies and Tactics Strategies and Tactics  Philip Kotler, Ph.D Philip Kotler, Ph.D  Kellogg School of Kellogg School of Management Management  Northwestern University Northwestern University  Kiev, Ukraine Kiev, Ukraine  May 19, 2006 May 19, 2006 My Message My Message  Marketing’s performance has been Marketing’s performance has been disappointing. disappointing.  You must replace your Old Marketing with You must replace your Old Marketing with New Marketing that is: New Marketing that is:  Holistic Holistic  strategic strategic  technology-enabled technology-enabled  financially-oriented financially-oriented The New Marketplace The New Marketplace  Commoditization. Commoditization.  Competition of cheaper brands from China. Competition of cheaper brands from China.  Rising selling and promotion costs. Rising selling and promotion costs.  Proliferation of distribution and media channels. Proliferation of distribution and media channels.  Power shifting to giant retailers. Power shifting to giant retailers.  Power shifting to increasingly informed customers. Power shifting to increasingly informed customers.  Shrinking margins. Shrinking margins.  Mergers, bankruptcies. Mergers, bankruptcies. Marketing’s Results Marketing’s Results Are Embarrassing Are Embarrassing  TV advertising has lost much of TV advertising has lost much of its former efficiency. its former efficiency.  Sales promotions are mostly Sales promotions are mostly wasted. wasted.  Direct marketing mailings have Direct marketing mailings have poor response. poor response.  Too many sales calls done by Too many sales calls done by the numbers. the numbers.  High rate of new product failure. High rate of new product failure.  Marketing focuses too much on Marketing focuses too much on the short run. the short run.  Marketing has become a one P Marketing has become a one P function. function. How Do CEOs See Marketing? How Do CEOs See Marketing?  Marketing is Advertising and Selling. Marketing is Advertising and Selling.  Marketing is 4Ps. Marketing is 4Ps.  Marketing is STP and 4Ps. Marketing is STP and 4Ps. (STP: Segmentation, Targeting, Positioning) (STP: Segmentation, Targeting, Positioning) Overview Overview  Part 1. Part 1. Improving the Relationship Between Improving the Relationship Between Marketing, Sales and Service Marketing, Sales and Service  Part 2 Part 2 . Applying Holistic Marketing . Applying Holistic Marketing  Part 3. Part 3. Developing A Winning Strategy Developing A Winning Strategy  Part 4. Part 4. Developing New Product Ideas Developing New Product Ideas  Part 5 Part 5 . Improving Communications . Improving Communications  Part 6 Part 6 . Moving to High-Tech Marketing . Moving to High-Tech Marketing Sales Precedes Marketing Sales Precedes Marketing  In the beginning there was sales. In the beginning there was sales.  Marketing appeared later to help sales people: Marketing appeared later to help sales people:  By using marketing research to size and segment the By using marketing research to size and segment the market market  By using communications to build the brand and By using communications to build the brand and develop collateral materials develop collateral materials  By finding leads through direct marketing and trade By finding leads through direct marketing and trade shows shows  Marketing was originally located in the sales department. Marketing was originally located in the sales department.  Then marketing grew as a separate department responsible Then marketing grew as a separate department responsible for the marketing plan (4Ps) and brand-building. for the marketing plan (4Ps) and brand-building. Differences in Mindset and Style Differences in Mindset and Style  Marketing Marketing  Profit oriented Profit oriented  Data oriented Data oriented  Analytical Analytical  Likes planning Likes planning  Team-oriented Team-oriented  MBA educated MBA educated  Focused on whole Focused on whole market and market market and market segments segments  Sales Sales  Volume oriented Volume oriented  Action oriented Action oriented  Intuitive Intuitive  Prefers doing Prefers doing  Individualistic Individualistic  Undergraduate and Undergraduate and “street smart” “street smart”  Focused on each Focused on each customer customer Hypothesis: Hypothesis: The integration of sales and marketing tends to progress through four The integration of sales and marketing tends to progress through four distinct stages or levels of complexity. distinct stages or levels of complexity. Caution! Caution! The most appropriate stage for a company will depend on many factors. The most appropriate stage for a company will depend on many factors. More integrated will not always mean more effective. More integrated will not always mean more effective. Identify the Existing Level of Relationship Identify the Existing Level of Relationship Undefined Defined Aligned Integrated Buying Funnel Buying Funnel Purchase Intention Customer Awareness Brand Awareness Brand Consider- ation Brand Preference Purchase Loyalty Customer Advocacy Marketing Sales Handoff [...]... marketing to live with the sales force and help marketers understand sales problems better Locate the marketing and sales people in the same building or location to maximize their encounters Set shared revenue objectives and reward systems Define more carefully the steps in the marketing/ sales funnel Improve sales force feedback US E APPROPRIATE CHANNELS FOR DIFFERENT CUS TOMER S EGMENTS AND TAS KS Le ad... criteria and helps designs lead management systems SF contributes to metrics Eight Ways to Improve Marketing/ Sales Alignment         Hold regularly scheduled meetings between marketing and sales Make it easier for marketing and sales people to communicate with each other Arrange for more joint work assignments and job rotation between marketing and sales people Appoint a liason person from marketing. .. solutions   Marketing develops high quality leads for the sales force Marketing prepares case study material, success stories and site visits to help resolve customer concerns about moving ahead with the purchase Contract negotiation  Marketing acts as an advisor to sales teams in negotiation planning and pricing Involve the Sales Force in Marketing Planning        SF is a key member of the cross-functional... care only about the price They don’t want to see a salesperson  Solution-oriented customers (consultative selling)  They want value through more benefits and advice  Strategic-value customers (enterprise selling)  They want value through higher benefits and lower costs They want the supplier to coinvest and participate in the customer’s business Part 2 Applying Holistic Marketing  Marketing must... with your brand than his store brand Produce the store brand for the retailer Buy the retailer Sell your brand Strategies for Meeting Chinese Competition 1 2 3 4 5 Reduce your costs to a minimum Reduce your prices Shift your production to China Add new features and improved quality Strengthen the brand image Part 4 Developing New Product Ideas In mature markets, the growing number of competitors ... become strategic and drive business strategy  A company needs to take a more holistic view of:  the target customers’ activities, lifestyle, and social space  the company’s channels and supply chain  the company’s communications  the company’s stakeholders’ interests  Source: Philip Kotler, Dipak Jain, and Suvit Maesincee, Marketing Moves: A New Approach to Profits, Growth, and Renewal (Harvard... see the signal, it doesn’t reach top management and if it does, top management chooses to ignore it or responds halfheartedly Strategies for National Brands Facing Store Brands 1 2 3 4 5 6 7 8 9 Reduce your prices Keep improving your quality Innovate new features Strengthen your brand image Develop better designed and aesthetic packaging Show the retailer that he makes more money with your brand than...Integrating Marketing Into the Sales Funnel Purchase Intention Prospecting Qualifying Defining Needs Purchase Developing Solutions Loyalty Proposal Preparation/ Presentation Customer Advocacy Revision & Issue Resolution Contract Negotiation Implementation Marketing Can Help in the Sales Process  Prospecting and qualifying   Defining needs   Marketing organizes proposal collateral and libraries to help salespeople... all competitors The case of Cereal Bars New category Cereals for breakfast market into Cereal varieties STREETS = The case of Barbie Teenager Baby dolls market To feel as Doll varieties New category = Other Examples of Lateral Marketing  Kinder Surprise = candy + toy  Seven Eleven = food + depot  Gas station stores = gas station + food  Cyber cafes = cafeteria + Internet  “Be the godfather of a kid”... faster, more responsive and more persuasive proposals Issue resolution   Marketing provides “solution collateral” – organized templates and customizing guides so that salespeople can develop solutions at lower cost without constantly reinventing the wheel Proposal preparation   Marketing works with sales to develop value propositions for customer segments, sub-segments and even individual accounts . The New Marketing and Sales The New Marketing and Sales Strategies and Tactics Strategies and Tactics  Philip Kotler, Ph.D. High-Tech Marketing Sales Precedes Marketing Sales Precedes Marketing  In the beginning there was sales. In the beginning there was sales.  Marketing