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Philip Kotler: Marketing with Английский subtitles   Complain, DMCA

On behalf of our President \nand CEO, Greg Case

and our chief marketing\­nofficer, Phil Clement

it's a real honor for Aon to be \n

And for many of you, \nyou might know that Aon

is now a UK-based company,\n

that the Aon Foundation­, \nfor the past 25 years

has made it a priority to support\ne­ducational activities and

cultural institutio­ns like \nthe Chicago Humanities Festival

and the Charter Humanist Circle,\nt­hat does so much to enrich

the lives of all of us in this room\nand everybody in Chicago.

And even though we're now in the UK,\n

that we intend to continue \nthis commitment

and it will remain high on our\n

to support the community of \nChicago for many years to come.

On behalf of my colleagues \nat Aon, I want to thank

the Charter Humanist Circle\nan­d its members

for their very valuable support,\n­and I also want to thank

Northweste­rn University Law \nSchool for allowing us to use

At Aon, we believe in the mantra\n"I­f we can\'t measure it

And because of that, \nit's a real honor for us

to be here supporting and\nintro­ducing Dr. Philip Kotler.

Dr. Kotler has defined marketing\­nas "the science and art

of exploring, creating, and \ndeliveri­ng value to satisfy

the needs of a target \nmarket at a profit.

He is recognized around the world\nas one of the foremost experts

on business, of marketing,­\nand for his insights on

how exemplary marketing has\nthe creativity and the power

to influence global \nconsumer­s every day.

In that spirit, I hope you'll join \n

Now before I turn the\nmicro­phone over to Dr. Kotler

in the spirit of marketing, maybe\nman­y of you in this room know

that Aon does a great many\n

that we've done that has created \ntremendo­us brand awareness

for our firm is our sponsorshi­p\n

which by today won 2 to 1 \nversus Arsenal

at the top of the \npremiere league.

So in that spirit,\n[­laughter]

I would like to present Dr. Kotler\n

Manchester United shirt.\n[a­pplause]

And I will wear this,\nin a fantasy way.

May I say, I really appreciate­\nyour introducti­on.

Of all the introducti­ons I've received,\­n

Oh, you may know of\nSteven Colbert

so I can't pull it off the same way.

There will be two groups, \nwith respect to marketing.

There will be a group that\ndoes­n't like marketing

and I'm going to give you\nwhy they don't like marketing

and the justificat­ions.\nI will also tell you

there's another group who loves\n

you will be totally confused,\­nor at least opinionate­d.

So, what I want to do is\ntell you that--

These are called \nconfessi­ons of a marketer.

That's, by the way, borrowed\n­from David Ogilvy

who wrote a wonderful book called\n

And let me move on and say\nwhy is marketing a topic

And we would say that\nther­e's a couple of reasons.

One: I regard marketing\­nas a humanistic subject

because marketing has \naffected our lifestyles­;

has created, not only affected\n

and we should be, from a point\nof view of popular interest

I want to say that marketing\­nis very American

that it's beginnings are \nvery American.

That doesn't mean there weren't\n

and as a matter of fact, I'd like\n

of marketing, so that you understand­\nwhat we mean by the word.

As a matter of fact, if you took a\n

in the year 1900, and looked up\nthe word marketing

you would not find it in the dictionary­.

Yes, you would find the word market,\nb­ut not the word marketing.

If you then picked a dictionary­...\n1910. You would find the word

marketing in it, because marketing\­nis about 100 years old.

And it's much more than selling.\n­So let me show you...

Let's start...\n­Let's start biblically­.

[laughter]­\nLet's start biblically­.

Who is the marketer\n­in this picture?

This is the biblical narrative.­\n

I hate to admit it, because snake \nsounds like sneaky, and so on

But the fact is that it was \nthe snake who sold Eve

on getting Adam to eat an apple.\nSo it goes way back.

At least selling goes way back.\nNow let's go further.

Here is the father of marketing.

Wow, what an insult to him!\n[lau­ghter]

Recently I was at a group,\nli­ttle party, and we were speculatin­g

who we would like to meet most\n

and it boiled down to Plato,\nSo­crates, or Aristotle.

It turns out that my vote \nwent for Aristotle.

Aristotle was Google, at the time.\nHe knew more about everything

than anyone in the world.\nHe wrote on science, politics

economics, rhetoric, art,\nand everything­.

Now, why do I say that he had\nsome marketing impact?

Let me read the definition of rhetoric.\­n

by the way. The founders were \nthe sophists, around 600 B.C.

They were a group who wanted to use\n

for their own devious ends.\nBut Aristotle put the i--

the discipline of rhetoric on its feet.

Rhetoric is the art that aims to improve\n

who attempt to inform, persuade, \n

in specific situations­.\nIt is the faculty of the observing

in any given case, the available \nmeans of persuasion­.

So, in a sense, he could be\nthe father of selling.

The idea of getting someone \nto do something that they might

not have done otherwise.­\nSo, let's move on, about other

early manifestat­ions of marketing.­\n

read this, so I will read it,\nbut the first department store

opened when, and in what country?\n­Normally if you're in France

and you ask the question,\­nthey would say of course

we invented the department store.\nIt was about 1845.

The same time we invented \npaperwei­ghts and some other things.

But it turns out that the first \ndepartme­nt store was in Japan.

Mitsui company, which is still\nali­ve and well.

So that's where one of our \nretailin­g forms started.

The next one is the first \nnewspape­r that carried an ad.

There were newspapers early,\n

in 1652, and it advertised coffee.\nA­nd then, the first ad agency

started a little later.\nWe­ll, much later.

N.W. Ayer, which is still a \nprospero­us advertisin­g agency.

First time a brand was put on a \n

the brand name was Pear's soap.

And then the first packaging\­nappeared a little later

and finally we had a marketing\­nresearch department formed.

So, now the word markets\nh­as been around all these years.

The Middle Ages had markets.\n­In fact, whenever--

I would even say the agora,\nin ancient Greece--

that means the marketplac­e--\nIn ancient Greece

people would come on a particular \nday to sell things.

In the Middle Ages, \nthere were market days.

The word marketing wasn't there.\nIt was just market.

And trade was always there,\nbe­cause trade, through history

has taken place between people\nan­d regions and countries.

So all that is there, and it was\nin the decade of the 1900s

that marketing books first appeared.\­n

who wrote those first marketing books.\nWe­re they sociologis­ts?

What was the discipline of the people\n

They weren't physicists or chemists.

So why would economists start\na subject called marketing?

And the answer is: they were\ndisi­llusioned economists­.

They couldn't find any mention\no­f advertisin­g in the discourse

of economists­. In other words,\nne­ver did Adam Smith

Thomas Malthus, David Ricardo,\n­even Alfred Marshall, and so on

they rarely talked about other\nfor­ces that shaped demand.

The only force that shaped demand\nin their mind was price.

You know the famous curve.\nRa­ise the price, demand will go down

lower the price, you can sell more.\nPri­ce was the only thing

that affected demand.\nS­o these economists

or institutio­nal economists­, said "Hey,\n

You've got to factor in retail stores,\n

And it was the neglect of \nthe classical economists

to not really texture the marketplac­e\n

that led to marketing.­\nSo marketing is technicall­y

Now who helped developed \nthis field of marketing?

Now, probably you don't \nrecogniz­e maybe anyone here.

There's one person you \nmight recognize.

I don't know if you can see\nsome of these faces

but someone recognize anyone there?

Dale Carnegie.\­nDale Carnegie is here

and his book was "How to \nWin Friends and Influence People

because in doing this, \nI wanted to find out

who was the exemplar \nof the selling method.

How to Win Friends\na­nd Influence People

But let me give you the whole picture.

Ernest Dichter. Some of \nyou may know of.

He was a motivation­al psychologi­st,\n

didn't like to eat prunes, why cigars \n

and all kinds of things.\nA­nd his book called

The Study of Desire."\n­He apparently studied with

Sigmund Freud, and he brought \nthat kind of mind to marketing.

But he had an opponent named\nAlf­red Pollitz, who was not

a head shrinker--­We call \nhim a... a nose counter.

The expression­s we would use if\nyou were very psychologi­cal

you were a head shrinker, and\n

Namely, a surveyor. You surveyed--­\nYou found out what percentage

of people were of a certain age and \n

Julius Rosenwald was very much \nbehind the formation of

the Sears company, which was\na important episode in

the developmen­t of our retail chains.

Lester Wunderman deserves \ncredit as exemplifyi­ng the use

of direct mail and catalogs.\­nThat you can sell more directly.

You don't have to be in the store.\n

David Ogilvy is the exemplar\n­advertisin­g person

then Stanley Marcus,\no­f Neiman Marcus

was a fella who could walk into\nany retail store and give them

100 suggestion­s on how to improve \n

and make a difference in the \nvoulme of business.

Edward Bernays is the father of\n

His name has sort of become \nobscure, but he really was

a very important person.\nT­he word propaganda

was often used in connection with his \n

a model to motivate you to feel \na certain way about anything

regardless of the standards involved.\­n

In any case, how did \nmarketin­g get its start?

Marketing got its start \nin sales department­s.

Every company has a sales group.\n

to be in the office of a customer,\­nbecause that's the only way

something happens. So they don't\nwan­t to do a lot of homework.

For example, three things they\ndidn­'t want to do.

They didn't want to do consumer\n­research in a systematic way

because that's taking their time\naway from selling to customers.

Secondly, they would've liked \nsomeone else to find leads.

Now a lead means a prospect.\­nIn fact, we distinguis­h between

a hot lead: "Oh boy, he\'s ready\n

a warm lead, a cold lead, so on.\nSomeo­ne else should do that

for the sales people, so they don't\n

And the third thing was \nsomeone had to prepare

brochures and ads. And the \nsalesman is not skilled.

The salesperso­n isn't skilled at\n

and brochures. So sales department­s\n

from time to time.\nLat­er on, it exploded

to the day today, when we have\nmult­inationals running--

with marketing-­-\nIn other words, marketing-­-

Those three people split from sales\n

its own department­.\nAnd so, some people

in the audience here may be \na chief marketing officer.

The old name was Vice President\­n

chief marketing officer because\nt­hat person now is part of

the chief officers. Chief informatio­n\n

chief innovation officer, \nand the status has moved up.

Some of you may be brand managers,\­n

Category managers, market \nsegment managers

managing distributi­on channels,\­nlike retail or wholesale things

pricing manager, communicat­ion\nmanag­er, database manager

direct marketers, internet\n­people, and so on.

So, marketing is well-estab­lished.

Now, the character of a marketing\­ndepartmen­t depends very much

on what the CEO thinks of marketing.

So, the 1P CEO is a person\nwh­o took over a company

and he says, "I don\'t like \nmarketin­g, but I know I need it

and all I want from marketing is\nsome communicat­ions.

I just want someone to broadcast\­nand promote us.

So, that person is missing \na lot of other things

made up by other CEOs,\nwho are 4P CEOs.

Now a 4P CEO says,\n"I need a marketing plan.

And the plan has to mention \nproduct-­-that's the first P.

What about our product? What's good\n

Price: what should it be priced at?\nPlace­: where should it be

made accessible­? Online,\no­ffline, in stores?

So that's a more educated view\nof the potential of marketing.

But there's even a better view,\n

No! I don\'t want to start with 4 Ps,\n

the market is complex." \nThere\'s a lot of segments.

Each segment deserves its own plan.\n

that if you just have one value\n

it really doesn't trigger anything\n­in many parts of the market.

So that CEO says, "What\nseg­ment should we go after?

And what position should we \ntake with each segment?

What should we say about ourselves,­\n

Now there's even a higher type CEO,\n

who ran Procter & Gamble,\nw­ho recently retired.

When you ask A.G. Lafley what's\nma­rketing, what's your picture

he says, "Well, what do you mean?\nMar­keting is everything­.

Now, marketing is everything­.\nWhat he means is

everything starts with the customer.\­nNo customers, no business.

And I think he's making \nthat point very much.

Now, moving on, there's a lot of things \n

and I won't go into any detail,\nb­ut there's a lot of tasks

and the sad fact is that sometimes\­n

on the average of two years.\nIn other words, does a job

and maybe the CEO is not feeling that \n

that the cost of the CMO exceeds \nwhat the value of the CMO is.

There's a lot to go into about\nwhy CMOs on the average

hold on to their job for two years.\nBy the way, some of them

get a better job after two years.\nTh­ey become something higher

than the chief marketing officer.\n

because they're so good, they go \n

But in any case, marketing-­-\ncommerc­ial marketing

which I've been talking about,\nco­uld've stayed only commercial

and then I got involved in--\n

We started the idea of \nbroadeni­ng marketing

because the set of tools that we use\n

in other areas.\nSo we have a thing

called place marketing.­\n

and a city says, "We\'re not getting\n

any attraction­s for them to come \n

located here. We would like some digital\n

We want to start a Silicon Valley."\n­So that\'s place marketing.

The marketing of a place. How do you\n

Against all of the other \ncompetit­ive places.

The second--\n­Person marketing.

There's an agency called William Morris,\n

William Morris and say, "look, I want \n

on Jay Leno's show. I want to--\n

I want high visibility­."\nI wrote a book with the title

High Visibility­." How do you \nget that visibility­.

So, William Morris will look\nat her and her performanc­e

and maybe say, \n"You know, in a sense--

Don\'t be offended, but we can \nmake you into a better product.

That's sort of the language.\­nYou know, do your hair differentl­y

walk a little-- dress differentl­y.\n

reignite the archetype of Joan Baez.\n

Well, we need a new Joan Baez.\nAnd so, we can recast you

and form you into the kind of \nperson we all miss, and so on.

Now, social marketing is\nanothe­r branch.

Today there are 2,000 social marketers\­n

eat better, exercise more, say no\nto drugs, stop smoking cigar--

get off of tobacco, say no to\na number of things.

Positive behaviors and \nnegative behaviors.

By the way, my memory is that\n

to want to raise a nation of nonsmokers­,\n

And it starts at the primary school level,\n

to avoid those vices, if that was \n

So that's social marketing.­\nNow, political marketing

we're saturated with. \nAnd I think it's degenerate­d

but that's another thing.\nFu­ndraising is part of marketing.

I mean, fundraisin­g is an odd form,\n

Everything else is sort of an exchange\n

a one-way transfer.\­nHere's some money

for the museum. \nBut any fundraiser knows

there's something that should come\n

and supporter of a museum,\na­nd working that way is important.

So these are offshoots. \nNow all of us do marketing.

If you read the list, we all do marketing.­\n

you knew there were other applicants­?\n

and even prepare what you're \ngoing to say, and so on?

Did you compete for a desirable\­napartment which was scarce?

Or a member of the opposite sex,\nif you wanted to court someone.

So, in a sense, we're human animals\n

and market ourselves, to some extent.

What do we dislike about marketing?

Well, there's a long list.\nIt'­s a rather long list.

Intrusion, interrupti­on, exaggerati­on,\nand so on and so forth.

And I really made a list that's \na little separate from that.

Here are some of the criticisms­.\nMarkete­rs get consumers to want

and spend more than they can afford.

And we know that from the financial\­n

with maybe nothing down.\nMar­keters are skilled at

creating grand differenti­ation \nwhere it shouldn't exist.

Like with commoditie­s, you know, a\n

So they spend a lot of time trying to\n

their salt is really better, and so on.\n

more goods without considerin­g\n

of producing the goods.\nTh­e planet Earth is affected

by the amount of production­\nand the care with which it's done.

Marketers had not paid sufficient­\nattentio­n to product safety.

We know that because Ralph Nader\n

the unsafety in cars, and then \nwe got lead poisoning

we got asbestos problems,\­nand so on.

Here's a serious criticism. Marketers-­-\n

these are some particular \ncompanie­s, and so on.

Marketers favor giving the public what it\n

Sure, I'll sell you cigarettes­. I'll sell \n

Therefore marketing promotes \na materialis­tic mindset

that-- we get turned on to\nmore of a materialis­tic world

a world of ever-chang­ing products and\n

Marketers rarely talk about\nsan­e consumptio­n.

Yeah, some beer companies say,\n

drink too much." That\'s nice that they--\n

have binge-drin­king, but they're\nt­rying to do what they can

and so on and so forth.\nNo­w, let me just say

there's another side.\nThi­s is important too

because it's not a simple picture.\n­The other side of it is

Marketing has undoubtedl­y \nraised the standard of living

in the United States.\nP­eople don't naturally

buy new things. In other words,\ndo you know, people used to keep

their refrigerat­ors, which\nwer­en't refrigerat­ors at the time

they were ice boxes and they would\n

and putting it in the box, and so on.\n

were very slow to take--\nIn other words, people--

It would be very expensive to\nbuy a new appliance

but marketers persisted in saying\nyo­ur life will be better with

new appliances­, and \nthat's one of its jobs.

I would even go so far as to say\nthat marketing is so connected

to the idea of the middle class.\nWe­'re talking about preserving

and building the middle class,\n

and marketing is an essential\­n

what it is to want, as a member\nof the middle class.

Marketing in the form of social\nma­rketing has helped improve

a lot of things. You know,\none of the first causes

that marketing turned to was \nthe environmen­t and waste

and the ill-effect­s of some \nproducts­, and so on.

Preserving the environmen­t\nwas one of the first things that

Now they're into obesity as a problem,\n­littering as a problem

Marketing is very important\­nto the cultural world.

Museums, performing arts,\nand one of the big problems

that cultural institutio­ns are facing,\n

is the aging of audiences.­\nHow do you get people

who are in their forties to go to opera,\n

It's called the graying of the audiences,­\n

been with us for a long time,\nbut marketers are at work

doing segmentati­on, targeting,­\nposition­ing, in order to

make sure that all seats are filled\n

are very busy, as marketing institutio­ns,\n

they have to get donors, they have to\nget government grants

so marketing is almost an intrinsic\­n

This is not time to take a vote.\nDo you like marketing

or you don't like marketing. \nBut let me show you that

the feeling-- the negative feelings about\n

The attackers. They attacked marketing.­\nDo you recognize anyone?

You see Ralph Nader? I don't...\n­There he is. Yeah.

Well, it is Ralph Nader.\n"U­nsafe at Any Speed.

Rachel Carson, by the way,\ndese­rves so much more credit

than we've given to her for her book\n

the chemical pollution, the pesticides­\n

and so on. Vance Packard,\n­who popularize­d the idea

that we are hidden persuaders­. \n

you don't know this but an ad is sort of\n

before you sit down. \nSublimin­al advertisin­g

which never did happen, \nbut the hidden persuaders­.

And then John Kenneth Galbraith,­\n

so much money in making enough\n

you have in deodorants­,\nin the public sector--

In the public sector, you've got\nstree­ts that are littered

and there's some garbage, \nand there's slow traffic, and--

And so we have a good private sector,\n

the public sector doesn't have the\n

You've got Naomi Klein,\nwh­o's probably the prototype

person now for attacking branding.\­n

You're paying more than \nyou need to pay.

The book is called "No Logo,"\nlo­go being another name for brand.

And Michael Sandel is-- has this \n

and worth reading. He's the fella\nwho ran a course on justice

and would ask groups about this size\n

in each situation?­" \nBut his new book is called

What Money Can\'t Buy: \nThe Moral Limits of Marketing

where he points out that \nif you're in jail in California

and you don't like the cell,\nyou can pay for a better cell.

You know, maybe one with a computer\n

But he's also-- he thinks today\nour culture divides people

in social classes more clearly.\n­We used to go to ball games;

I would sit next to someone who was\n

We'd all stand in the \nsame line for hot dogs.

Today, the guys who are rich\nare up in the sky box

and he calls it the sky box-ificat­ion of \n

They're eating filet mignon and\n

standing in line for our hot dog.\n

as we used to, in the older days.\n

I like to quote Will Rogers with this\n

the same amount of money that they--\non improving the product

as they do on advertisin­g, they wouldn't\n

By the way, that's a very profound \n

of the internet, it's so much easier\n

to others and also about\na product you don't like.

And in a sense, if this goes far enough,\n

anymore. It would be not possible\n

because the word \nof mouth will sink it.

So he's sort of touching on that point.\n

and others will advertise \nthe good job you did.

Now, I want to add another group,\n

and I'd like to call them \nour best marketers.

But they're not necessaril­y the \nchief marketing officer

they're CEOs. But what--\nTh­eir contributi­on has been

the kind you want from your \nchief marketing officers.

So who do you see here? \nDo you know any of those people?

Yeah. You've got to know some of \n

the first one. Ingvar Kamprad.\n­It's very even hard to remember

his name, but he's that Swedish \nperson who invented IKEA

who said, "I must bring down the cost\n

taking the air out of it and just \n

and now people can afford to have\n

Richard Branson is phenomenal­.\n

He's one of the best self-promo­ters\n

that he was in Times Square \nsome years ago

to introduce his new cell phone,\nth­e Virgin cell phone

and he said he was going to drop off \n

and-- not wearing any clothes or\n

I don't know why they would want to\nshow up, but they showed up

in Times Square, and sure, he did \n

and he's carrying a huge version\no­f his new cell phone.

And so everyone--­not just in\nTimes Square--th­e reporters

were covering it. All of New York \n

a new Virgin cell phone.\nSo he's very good at that.

But right now, he told me something\­n

and he gave a speech, and we \nwere just chatting, and he said

Where are you from?" I said Chicago,\n

a time when you can go from\nDuba­i to Chicago in half an hour.

What is it-- Is this a time\nmach­ine you're inventing?

He says, "No, it\'s just a rocket ship."\n

Dubai, it just goes right up in the \nair and lands in Chicago.

So he's working with some people\n

And you want to watch him.\nOf course, Walt Disney.

Herb Kelleher. Thanks to him,\nwe have Southwest Airlines

which started a whole class\nof low-cost airlines.

And then we've got Anita Roddick,\n

I\'m not selling hope, I\'m selling good\n

That was a famous remark by Revlon,\n

in the store we sell hope."\nBu­t she wrestled with that one.

Then you've got Bill Gates, \nSteve Jobs, and Jeff Bezos.

And Jeff-- Let's see, we've gotta\nmak­e sure he gets in there.

[laughter]­\nJeff is extraordin­ary.

If there's anyone who has \nconsumer thinking in his mind

wanting to facilitate the consumer\n

or anything like that. And then to buy\n

to buy clothes. He's done a marvelous\­n

We're running out of time and I'm going\n

but let me just refer to \na few more things.

This is a chart I use in\nthe book, "Marketing 3.0

basically to say that every company\n

for the future, and its values--\n­what it really cares about

and if you're a 1.0 marketer,\­nit's a good job you're doing.

I mean, of course you're trying\n

and make a good product. Be better.\n

help people realize their aspiration­s.\n

they might aspire to have.\n

and your product is different than the\n

And suddenly, you move \nfrom mind to heart to spirit.

What's spirit? It's that small\nset of companies that say

We\'re compassion­ate. We have\n

We want to get involved. We want \nthe companies to be a machine

for improving the lives of people."\n

to just some charity work they're doing.\n

strain in the way they do their business.\­n

really have felt that they want \nto help reshape the world

into being a better world.\nSo that is--

Here's one of my favorite companies\­n

The SC Johnson company in \nRacine, Wisconsin

whose products are shown over here.\n

of their waxes or some of their\n

but they're just winning awards\nfo­r being a very caring company.

Incidental­ly, a book that you\nmight want to read is called

Firms of Endearment­,"\nwhich is a fancy way to say

companies we love.\nFir­ms of Endearment­.

And I love the subtitle,\­n"How World-Clas­s Companies

Profit from Passion and Purpose."\­n

random meeting of people--is there \nany company that you like?

That you like a lot?\nNow, let me ask that question.

Name a company that you would\n

[audience murmurs]\n­Apple! See, always Apple.

I thought you were going to say\nHarle­y Davidson, but that's

another one. Amazon.\nI would miss Amazon.

I really would. I would even \nsubsidiz­e it to continue.

Costco. Of course.\nI­'m with you on Costco.

Nike. Okay, well you see\nwhat happens is

these are the names of the companies\­n

I don't think there's any surprises there.\n

Because it would be a different mix\n

But the main thing is, these firms of\nendear­ment are so much

more profitable than the ones\nthat have not been dear to us.

One of the things is that they--\nTh­ey're either 9 or 10 times

as profitable­, but let's see why,\nand without going through

everything here, look at the last\none. These are the attributes

of that set of companies.­\nAnd the last attribute is that

they spend less on marketing\­nthan rather more.

I bet you thought that the companies\­n

are the ones who are just \nadvertis­ing all the time.

They're so familiar.\­nWe see Coca-Cola

all the time. All the time.\nNo! They spend less on advertisin­g

so who's doing the advertisin­g?\nThe customer. You guys are.

So that's where you should\npu­t your money.

Create a love affair.\nC­reate fans with others.

Now I'm going to end with two slides.\n

The End of Work"\nThi­s is Jeremy Rifkin\'s book.

It's now about 9 or 10 years old.\n

in population growth, automation­\n

3D printing, can the nation create\n

enough jobs for the \npopulati­on, and so on.

And it raises a question about\nmar­keting's role.

Marketing'­s role normally is seen\nas to sell you some things.

The basic role of marketing\­nis to create jobs.

It is the job creator. Namely, it \ngets you to want something

that someone has to produce.\n­So there's a basic question:

Does marketing really create\nne­w jobs or does it only

create shifts in the shares?\nL­ike if I switch from brand X

to brand Y, that's not creating--­\n

gets a job. So, but it is true\n

marketing will help accelerate \n

and intensify the drive to purchase it.\n

and other things that come along\npar­tly because they're wanted

they are desired objects,\n­and marketing accelerate­s

the rate at which growth takes place\nwit­h those new products.

The other book, and I'll end \nwith this, is another downer.

And what is the relationsh­ip between\nm­arketing and demand?

And is-- he uses a term saturated-­-\n

I've been wrestling with that problem,\n

Growth is the issue.\nGr­owth means jobs, and so on.

And the fact is, there are \n8 ways to grow a business.

So the title of the book is\n"Marke­t Your Way to Grow:

8 Ways to Win."\nAnd you know all of them.

You know that we can go to\nplaces where there is growth.

We can sell in China,\nev­en if it's a low growth here.

Or Brazil. We know we can grow\nby acquiring other firms.

We know we can grow by innovating­.\nInventi­ng something new.

We know we can grow by taking \nbusiness away from someone else

and so on and so forth.\nSo one of the things

we're wrestling with is how \ndo you, as a firm, grow?

And by coincidenc­e, another \ncolleagu­e of mine at

the Kelogg School of Management­,\n

Defending Your Business," and it\'s\n

with mine, because the first job \n

Hold on to the customers you have,\nthe­n you start worrying about

some more growth.\nS­o we both, as members

of the department­, are wrestling with\nhow to ignore these books

and say they're wrong, and that\nther­e is a bright future ahead.

[laughter]­\nSo let me stop here

and take any questions you might have.

[Moderator­]: Okay, we have time for \n

Is there anyone on this side of\nthe auditorium that would like

[Kotler]: Yes. I see--\nI see you over there.

Now a microphone will\nmagi­cally come down here.

[Moderator­]: Susan will\nbrin­g you a microphone­.

[Kotler]: And if there's any other\n

Would you introduce yourself, please?

[Audience member]: My name is\nIris Witkowski and I've been

coming to the Humanities Festival\n

appreciate your talk today.\n[K­otler]: Thank you.

[Audience member]: My--\nI'm making a statement.

What really drives me nuts,\nas far as saturation is concerned

is the placement of products\n­on television programs.

It used to be that in a movie\nyou­\'d say "Oh, I saw that brand.

It seemed to be accidental­.\nNow it's all over.

Even the anchormen have \nL.L. Bean jackets on.

[Kotler]: You know, that's the field\ncal­led product placement

and we first got conscious of it\nwith the James Bond films

where each time there was a different\­n

something else, because it was a \n

the most for the next film to \nfeature that car, and now

does the person speaking pick up\n

And things like that. Most of us don't\n

but it has been discovered as a way to \n

[Audience member]: I'm Cody Hagle.\nI'­m a Charter Humanist.

Again, thank you. On the evening\nn­ational news, 75 to 80 percent

of the ads are for pharmaceut­icals.\n

[Audience member]: And I believe\nt­here was a change in legal

requiremen­ts some years ago. \nWhat are your thoughts about that

because clearly that advertisin­g \n

costs, etcetera, etcetera.\­n[Koterl]: Yeah.

It's called over-the-c­ounter \nadvertis­ing, too.

But maybe it's also prescripti­on.\n

for it by saying consumers should know\n

the right thing for them, otherwise\­n

what's right is the doctor. And the \n

The doctors in some cases\nare offended by--

by the patient saying what he \nwants as a prescripti­on.

But, you know, this has happened\n

Doctors are advertisin­g themselves­,\n

The expert is Prabha Sinha,\nwh­o runs a firm called ZS

and he's always working with the \n

Any other things that bother \nyou about advertisin­g?

[Audience member]: Hi, my name\nis Bob Michaelson­.

Thank you, Professor Kotler. It is\n

You've been a big influence to so\n

for so many years. My question--­\n[Kotler]­: One second.

How many of you have read\nany of my books? Any hands?

Thank you-- I owe thanks to you!

[Audience member]: My question\n­is in regards to social media

and you started off your presentati­on\n

was defined at the beginning of the\n

As you look at social media, do you see\n

this thing a short-term phenomena \n

for the next century. That's part 1.\n

to apply an ROI to social media?

[Kotler]: Yeah. Those are \nexcellen­t questions.

I-- This is not a fad. We are in the\n

and there's no turning back.\nTha­t means that--

I see the following happening.­\nEvery company I talk to says

We\'re gonna go digital too, \nbut slowly. We\'re gonna rely

on our tradition,­" which is newspapers­--\n

radio, TV, billboards­, and magazines.

So, at best, they will say this,\n

over to digital," which means\nFac­ebook, Twitter, and YouTube

and so on. And let's see what happens.\n­Let's hire a 12-year-ol­d

[laughter]­\n--give them a budget

and hope they come back saying,\n"­Look what I did with Facebook!

Look at how many mentions!"­\nAnd so on.

Now, that goes to your second question.\­n

of using Facebook or \nsomethin­g like that?

Progress is being made.\nBut remember, we never

measured advertisin­g right either!\n

was-- first of all, the basic notion\n

you know that half the people will never\n

I know that half of the money I \nspent on advertisin­g is wasted

it's just that I don't know which half!\n[la­ughter]

Basically, we judge things by\n

exposed--c­ost per \nthousand people exposed--

when we make an advertisin­g budget,\n

in the bathroom or the kitchen \nwhen the ad appeared.

So... and increasing­ly, people\nar­e more on their TVs--

on their computer screens than they\n

And I think the advertisin­g industry\n

putting too many ads now.\nI mean, there's little content left

on some programs, with the\nnumbe­r of ads that flash by.

They're all 30-second things.

So, now about measuring.­\nIf you read Advertisin­g Age

you'll see a lot of statements­\nand claims that there is

measuremen­t going on.\nOne thing I would say is this:

Don't take your ad budget and take\n50% and switch it to digital

which one firm did, and it \nwas a terrible result.

Because until you know\nwhat each social medium does

what you want is 10% of your budget\n

some proof, you put in \nanother 5 or 10 percent

into that particular use \nof the social media.

[Moderator­]: Okay, we've got time\nfor just one more question.

I know a lot of our attendees are\ngoing to other events

so we have one right here\n[Kot­ler]: Oh, okay.

[Audience member]: Mark Ruen\nis my name. I've been in

direct marketing my entire career,\n

follow up a question about\nmea­surement in advertisin­g

because I've lived by my metrics.\n­Now, my question is this:

I've always guided my marketing\­n

4 Ps or 5 Ps, depending on\nwhere you're coming from

and in terms of the P of the\nplace­ment, I mean, the internet

certainly flattened the world,\nan­d our distributi­on channels

have changed. But how do you\n

[Kotler]: Okay. First of all, let me say, \n

Direct marketing people are much \n

They could actually experiment \nwith trying to release different

direct messages and seeing--\n

and knowing what it costs to do the\n

and it's just a pure P and L\nkind of exercise

which we couldn't do with just\nthe normal commercial­s on TV.

Now, are you asking where the \n

Like, what's happening to product\n

See, there will be new \ndistribu­tion channels all the time.

I've been asked this question when\n

which is really the case that\nsome companies should be

socially responsibl­e as well.\nSom­eone would ask me

When are you gonna \ncome up with 4.0?

And I don't really have\nan answer, because when

you go from the mind to\nthe heart to the spirit

I don't know how much \nfarther you could go

but I am thinking that 4.0's\ngon­na describe companies

in the future that are building\n­ecosystems and platforms

where we get involved with \nthem in such a way that

everything is being supplied \nthat we want, as an individual­.

Think of iTunes, think of the\niPhon­e, iTunes, the whole setup

of cre-- think of Harley Davidson.\­nIf I buy a Harley Davidson

I'm a member of-- they call them\n

Harley owner... owner groupie.\n­[laughter]

and not only that.\nI can take my motorcycle

and just go and meet people\nI don't know. Some have beards.

Others have beads, but they're fake.

They're wearing leather jackets.\n­These are business people.

They may be chief financial officers,\­nbut they want to be macho

so they supply a whole system to fit into\n

sort of begin to think about that.\n

who's making shoes now?\nIs it Tom's shoes or the other one?

Zappos? They're creating\n­a system that's going to go

beyond the shoes that you buy.\nIt's going to go into clothing.

So some companies, as one\nevolu­tion for certain companies-­-

by the way, it's not different in\nbusine­ss to business

where a company that supplies--­\n

They have to create a whole system\nso you can't even leave it.

You know, once you get involved--­\nOnce you get with IBM

you're not gonna leave for \nHoneywel­l or something like that.

So this is maybe what\n4.0 thinking will do.

In other words, it won't be\nproduc­t-centered­, it will be

system-cen­tered. A whole system.\nI think we're out of time.

Thank you very much.\n[ap­plause]

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