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

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.


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



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 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

Marketing Can Help
Marketing Can Help
in the Sales Process
in the Sales Process

Prospecting and qualifying
Prospecting and qualifying

Marketing develops high quality leads for the sales force.
Marketing develops high quality leads for the sales force.

Defining needs
Defining needs

Marketing works with sales to develop value propositions for customer
Marketing works with sales to develop value propositions for customer
segments, sub-segments and even individual accounts.
segments, sub-segments and even individual accounts.

Developing solutions
Developing solutions

Marketing provides “solution collateral” – organized templates and
Marketing provides “solution collateral” – organized templates and
customizing guides so that salespeople can develop solutions at lower
customizing guides so that salespeople can develop solutions at lower
cost without constantly reinventing the wheel.
cost without constantly reinventing the wheel.

Proposal preparation

team.

SF contributes to voice-of-customer
SF contributes to voice-of-customer
research.
research.

SF contributes to offer development.
SF contributes to offer development.

SF reviews creative.
SF reviews creative.

SF contributes to database development.
SF contributes to database development.

SF defines lead criteria and helps designs
SF defines lead criteria and helps designs
lead management systems.
lead management systems.

SF contributes to metrics.
SF contributes to metrics.
Eight Ways to Improve
Eight Ways to Improve
Marketing/Sales Alignment
Marketing/Sales Alignment

Hold regularly scheduled meetings between marketing and
Hold regularly scheduled meetings between marketing and


Improve sales force feedback.
Improve sales force feedback. USE APPROPRIATE CHANNELS FOR DIFFERENT CUSTOMER S EGMENTS AND
USE APPROPRIATE CHANNELS FOR DIFFERENT CUSTOMER S EGMENTS AND
TASKS
TASKS
M
A
R
K
E
T
I
N
G

C
H
A
N
N
E
L
C
U
S
T

Repair
Train
Install +
Set Up
Post During
Understand
IT Options
Develop Systems
Integration
Purchase
deciding
what to do
keeping it
going
doing it
Customer
Activity Cycle
(CAC)
Source : Sandra Vandermerwe, From Tin Soldiers to Russian Dolls : Creating Added Value thorugh Services
CUSTOMER ACTIVITY CYCLE : IBM BANK CUSTOMER (SIMPLIFIED)
Planned Maintenance
Preventative maintenance
Expand
Renew
Review plan
needs + system
Repair
Replace
Renovate
Training getting

Customer
Activity Cycle
(CAC)
System +software
integration
Three Types of Customers
Three Types of Customers

Price-oriented customers (transactional selling)
Price-oriented customers (transactional selling)

They want value through lowering cost. They
They want value through lowering cost. They
know the product and care only about the price.
know the product and care only about the price.
They don’t want to see a salesperson.
They don’t want to see a salesperson.

Solution-oriented customers (consultative selling)
Solution-oriented customers (consultative selling)

They want value through more benefits and
They want value through more benefits and
advice.
advice.
Strategic-value customers (enterprise selling)
Strategic-value customers (enterprise selling)

the company’s communications.

the company’s stakeholders’ interests.
the company’s stakeholders’ interests.

Source: Philip Kotler, Dipak Jain, and Suvit Maesincee,
Source: Philip Kotler, Dipak Jain, and Suvit Maesincee,
Marketing Moves: A
Marketing Moves: A
New Approach to Profits, Growth, and Renewal
New Approach to Profits, Growth, and Renewal
(Harvard Business School
(Harvard Business School
Press, 2002)
Press, 2002)
Holistic Marketing
Holistic Marketing
HOLISTIC RELATIONSHIP MARKETING FRAMEWORK
HOLISTIC RELATIONSHIP MARKETING FRAMEWORK
MARKET
SPACE
POTENTIAL
OPPORTUNITIES
BUSINESS
INVESTMENT
CUSTOMERS
CORPORATION COLLABORATORS
CUSTOMER
CUSTOMER
FOCUS

PARTNERS
CRM ERP
RESOURCE
SPACE
SCM
Marketing
Activities
Operational
System
Exploring
Exploring
Value
Value
Creating
Creating
Value
Value
Delivering
Delivering
Value
Value
Customer
Customer
Focus
Focus
Core
Core
Competencies
Competencies
Collaborative

opportunities because either the good
opportunities because either the good
markets are overcrowded or the poor
markets are overcrowded or the poor
markets have no money.
markets have no money.

New products
New products
unfortunately fail more
unfortunately fail more
times than they succeed.
times than they succeed.

Price cutting
Price cutting
doesn’t work because
doesn’t work because
competitors will match.
competitors will match.

Pricing raising
Pricing raising
doesn’t work since
doesn’t work since
there isn’t enough differentiation to
there isn’t enough differentiation to
support it.
support it.


3.
Highest product quality
Highest product quality
(P&G, Toyota).
(P&G, Toyota).
4.
4.
Niching
Niching
(Progressive Insurance, Tetra)
(Progressive Insurance, Tetra)
5.
5.
Innovative business model
Innovative business model
(Barnes & Noble, Charles
(Barnes & Noble, Charles
Schwab, FedEx)
Schwab, FedEx)
6.
6.
Product Innovation
Product Innovation
(IPOD, Swatch watch)
(IPOD, Swatch watch)
7.
7.
Design
Design
(Bang & Olufsen)