Philip Kotler, Professor of International Marketing at the Kellogg School of Management of the Northwestern University in Evanston, Illinois, and the father of modern marketing, has been a guest of Bologna Business School in the autumn edition of the Innovation Talks 2017. In this interview, the marketing guru Philip Kotler explains to BBS how Digital Transformation, along with the growing attention to sustainability, is revolutionizing the way companies are asked to think about their business.
In marketing we have shifted our attention from the product to the service, then to the relationship, and now to sustainability and digital transformation. What do you think the future evolution will most probably be?
We will always have a new future in front of us on which to question ourselves. I think today we are focusing a lot more on what value really is, because we believe that the essence of a company is actually creating, communicating and delivering value. I also believe that companies will increasingly use digital platforms to reach the right customers with targeted and personalized messages, that is, they will will rely on what we already call automation marketing. Furthermore, sustainability will soon become a determining factor, because as consumers we want companies to be interested in us and the planet, not just in their profits. Let’s say that the order of importance should be the following: people, planet, profits.
It is perhaps easier for multinational companies to follow the guidelines and thus develop a good marketing management. Italy, however, consists mainly of small and medium-sized enterprises. What advice can you give to these realities?
I am very aware of the fact that Italian companies are for the most part, say 80%, of medium and small size. There is a high number of family-run businesses and the question that emerges is often the following: what marketing tools, among all those available, are really appropriate and effective for small businesses? We can not expect small businesses to have the budget to do really thorough, large-scale market research, but they still need simple tools that really work. We should therefore develop a separate version of marketing tools, with ideas and approaches that are appropriate for small businesses. However, I think the basic concepts are easy to convey, that is: know your customers, be at their service and you will benefit from it. This lesson, along with a few others, can already by itself make small businesses able to be efficient on the market. I could also say that there are advantages about being a small business, because it is easier to be close to your customers and maybe do an even better job than more structured competitors.
What kind of impact can digital transformation have on social changes?
I believe that digital transformation has fully moved us to what we call the 4th Industrial Era, where we meet consumers, producers and distributors who are much more aware about the information they need. The Internet is giving us the opportunity to make better and more rational decisions, drawing from an almost infinite source of information. I believe this will lead the whole society to experience some changes, as citizens will be able to communicate more and better their needs and expectations.
Today, more than in the past, sustainability is fundamental. What message would you like to give to companies engaged daily on the markets?
I think companies should give their customers the feeling that they are not just worrying about business, but also about the environment and the future of the planet. They should show their seriousness by adopting an environmental cause, something that demonstrates that their thinking is not just about profits, but also about making the world more livable, for longer and for more people.
What is the biggest unknown factor for today’s companies?
The world is changing very quickly and we are not only facing risk, but also uncertainty. Uncertainty is the case in which one can not even hazard a probability. But there will always be new uncertainties, this means that companies will have to bet continuously, sometimes with a positive outcome and sometimes not. We hope that resources like Watson and other technological developments will soon help us to understand a little better the chances of success brought by one decision in respect to another.
What is the most important advice you would like to give to marketing professionals or to those who are approaching this profession?
I would define marketing as a mansion full of rooms, all very rich in opportunities. The most important thing to clarify with yourself, once you understand that you want to work in marketing, is whether you want to make your contribution as a digital expert, an expert in pricing or in product development. There is room for many careers in marketing. If instead you manage the entire marketing area of a company, it is very important to spend at least half of your time with the other chief officers and build respect for your area through relationships and from within. As a Marketing Manager you are responsible for the company, not just for its sales but especially for its future growth. Because whoever manages the marketing is in the best position to know in which direction consumers are moving and what they want.
Bologna Business School, October 5th, 2017