This is the translated version of the Italian interview in DomaniPress.it: Intervista – Philip Kotler, il padre del marketing moderno e Christian Sarkar spiegano: «Ecco perché internet e la sostenibilità ambientale sono il futuro della comunicazione»
In the book Brand Activism: From Purpose to Action you talk about a new way of doing marketing that focuses on ethical and social values; When did this change in perspective occur and why does it represent the trend that will be most influential in the future?
Philip Kotler: Most brands compete by messaging how they do something better than their competitors. “Our car uses less fuel, or starts more reliably, or offers more safety, etc.” So the competitive messaging strives to give you a reason to buy one brand instead of another. What the brand messaging doesn’t offer is something about the company itself, its values, passions, and purposes! Some companies are beginning to recognize that consumers want to know something more about the brand before adopting it as their favorite brand. These companies are starting to do more messaging about what consumers really care about and that their brand really cares about. We say that your brand is “active” when it makes its purpose and concerns clear to the target customers. A brand is active when it feels free to adopt a cause, to take a stand on some social problem. This raises brand competition to a new level, given that the previous level of exaggerated attribute claims just become so much noise.
Brand activism has arisen for another reason. Societies are saddled with social problems and governments seems too polarized or impotent to act. Business is the major institution with the resources to act and help improve the lives of people. Brand activism is a company’s declaration that it wants to take some social responsibility to advance the Common Good. “The risk of doing nothing far outweighs the risk of standing up…”
Christian Sarkar: It has happened over a long period of time. There have always been enlightened companies and enlightened managers and leaders that have worked to create a better world for their employees and their communities. In 1946, Peter Drucker warned us that “…an institution, like an individual, is not an island unto itself. It has to solve the basic problem of balancing the need for concentration and for self-limitation with concern for its environment and compassion for its community.” That was in his book The Concept of the Corporation.
But brand activism is the result of the failure of governments to address the world’s most urgent problems. People are looking to business leaders to lead, not just economically, but socially as well. Companies that do take the initiative are rewarded. For example, since signing Colin Kaepernick to an endorsement deal, Nike has added $26.2 billion to the company’s net worth. That is not an accident.
All over the world we are witnessing a progressive loss of trust in institutions and a growing interest in environmental sustainability issues. Can corporate social responsibility be a vision adopted also in the public as well as in the private sector?
Philip Kotler: The arrival of the Internet has made it possible for everyone in the world to connect, to interact, to broadcast. So many opinions are shared around the world in the course of a single day. On the whole, this is good but we are aware that some opinionators may be exaggerating, even lying or creating fictions, to serve their own interests. When we read something, should we trust it? We know that every corporation, institution and public figure has a set of interests and will put out statements designed to serve palpably the public interest but privately their own interests. Environmental enthusiasts will tell us that the planet’s future is almost doomed and soon it will be too late to save the planet. President Trump denies that there is even a climate crisis. The result is that all of us have to be more critical if not suspicious of many public statements. A company, in particular, needs to work hard to develop a set of followers who can put full trust into its public statements.
Christian Sarkar: In the public sector we can ask a few simple questions. Does the government pass laws to protect the Common Good – for the environment, on education, for the health of its citizens? Or is it passing laws that favor the rich and powerful?
Which country can currently be a virtuous example of social responsibility and “Brand Activism”?
Philip Kotler: Certain countries develop a more positive image of their trustworthiness. They are more outspoken about human rights, and busy building a better world of more prosperity for all, not just the country’s elite. I would list the Scandinavian countries are generally more trustworthy and producing products and services with more quality and value. They practice “brand activism” even if they don’t use the term.
Christian Sarkar: Italians can be proud that their government became the first to mandate climate change education in schools. That is certainly the right way forward. In the US, our government, under the Trump administration, is still casting doubt on the science – as Phil pointed out before. We are witnessing a public failure of spectacular proportions, as the US government turns its back on its people. Governments have the most scope in terms of architecting a better society, but too often narrow interests and corruption get in the way.
In Europe the sixteen-year old Swedish Greta Thunberg was elected promoter of youth marches for the climate and the environment throughout Europe and was proposed to Nobel prize for peace by three Norwegian parliamentarians. In your opinion it was a gesture spontaneous or a marketing masterpiece?
Philip Kotler: Greta’s expression of dismay about the planet’s future gets its power from her genuine anguish and her commitment to actions. Marketers now will try to leverage her role further into iconic standing. They need to be careful about not over-directing and over-promoting her. It was her spontaneity that mattered to us.
Christian Sarkar: The Greta Thunberg effect is a movement, not simply marketing. She represents the future hopes of the next generation, and it is time we listened to her message: “Our House is on Fire.” She is the both message and the messenger, and her passion has captured the imagination of the public. Her work is critical because she is changing the narrative. Do we want a living planet? We had better listen to Greta, and act.
The book also speaks of “Moral Myopia.” Based on ethics, how can modern capitalism be reconciled with social values?
Philip Kotler: Capitalism is a system heavily praised for its ability to raise the standard of living of most citizens. If it starts failing to do this, when wages for the working class don’t increase in real terms for a decade or more, criticisms arise about whether a new form or capitalism or socialism would do a better job. Capitalist companies traditionally do not talk much about the morality of company behavior or public behavior. Yet a moral commentator could single out a number of company practices that deserve moral discussion. What about insurance companies denying health insurance to people who need it? What about exaggerated advertising claims that a product will make you more attractive or successful? What about a food product made with a lot of palm oil that is not good for your health? Company behavior is best described as practiced with a high level of “moral myopia,” namely avoiding questions about the company’s ethics in the way it runs its business.
Christian Sarkar: Modern capitalism cannot be reconciled with social values. “Maximizing shareholder value” is the cry of the colonialist, the pirate. It is not interested in a future. Capitalism must be fixed if it is to survive. The Europeans have done a better job of this than the Americans, but the central job to protect people from the rampage of predatory capitalism is far from over. Brexit is a symptom of this failure. Economies must adapt to human needs, not vice-versa. Until we learn that lesson, the planet and our survival is in danger. Greta is right about the “fairy tale of growth.”
The ongoing digital transformation also involves numerous ethical questions arising from social responsibility and the use of data. In the book there is an intervention by Scott Galloway that talks about this; is it possible to speak of a “Brand Activism” that refers to a sustainable use of digital?
Philip Kotler: As a discipline, marketing is moving from mass marketing to digitalized target marketing. The new marketers go beyond the normal marketing research of surveys and focus groups to gather deep data about individual behavior which is turned over to machine learnings to derive deep insights about individual behavior that the company can use to market better to its target customers. The data covers everything that a person does: what the person watches, reads, store visits, online sites visited, etc. Nothing Is private anymore. Persons concerned with the need for privacy need to apply to Firebox for a set of protections to keep their behavior from being recorded by strangers. The question being asked is whether a company can be proud of brand activism and at the same time be gathering so much data on individual customers? My answer is that both can go on and not contradict the value of Brand Activism.
Christian Sarkar: If the digital product is free, then you are the product. Professor Galloway and many of us are advocating for the breakup or Big Tech. The danger to Democracy from shady, unaccountable, political advertising is not going to go away, without government intervention. Fake news and alternative facts lead to the destruction of the fabric of society. America and England have failed to understand this threat and are paying for it.
Web giants like Google, Facebook and Amazon are implementing “Brand Activism” policies through parallel actions and projects in favor of corporate sustainability. How do you rate their work?
Philip Kotler: The major digital giants are under inspection by major governments as to whether they are allow too much hate mail, or mail hurting specific individuals. Governments are pressing them to do more tracking of disparaging or hurtful comments and even refusing to carry them. The digital giants are resorting to brand activism to show that they care and are taking some steps to limit damaging public expressions. They must take a stand to protect the profitability and sustainability of their services.
Christian Sarkar: Sustainability in terms of the planet is now an important item on the agenda of change for many companies. What is not on the agenda is the concept of a fair and equitable society. Taxes are part of the responsibility of citizenship. And too many companies are not being good citizens.
In recent years we have witnessed a progressive development of “social marketing.” In the future what will its evolution be?
Philip Kotler: Social marketing describes developing social campaigns aims at affecting some behavior. An antismoking campaign aims to discourage smoking behavior; a physical exercise campaign aims to encourage people to engage in more exercise. “Social marketing” is better described as social cause marketing.” There are thousands of such campaigns to improve people health, to protect clean water, to stop over-fishing or over-timbering, to improve public safety and health, etc. Most social cause campaigns are carried out by nonprofit organizations, but they can also be carried out by for-profit organizations as their cause. My guess is that there are over 3,000 trained social marketers around the world engaged in developing social cause campaigns. Clearly social marketing plays a key role in enabling brand activism.
Christian Sarkar: We have reached a stage that Phil predicted when he coined the terms “demarketing” and “unselling.” Some markets are based on desire and waste – like “fast fashion.” Thankfully we are beginning to see the rejection of this unsustainable practice. Patagonia has opened stores that sell second-hand products. Social marketing is about improving society. Brand Activism is about working to improve the world’s most urgent problems. Phil and I are interested in the development of purpose platforms, a new form of social marketing.
Some time ago you wrote: “Companies pay too much attention to the cost of doing something. They should care more about the cost of not doing it.” Today, what are the goals that companies ignore and should pay more attention to?
Philip Kotler: I think that companies have been too insensitive to the poisons of growing income and wealth inequality. More and more of company earnings are going into the pockets of a small number of people. The company’s CEO is paid about 300 times that earned by the average worker in his company. Many workers are barely paid enough to cover their rent, health and educational costs. A great number of people would not have $400 to pay for a sudden health bill. A great number of retiring people retire without any savings. This means that Capitalism is failing to serve a great number of people. This also threatens the survival of Capitalism, if workers don’t have a sufficient income, they won’t buy enough goods to keep our factories and jobs going.
I would make the case that companies have been largely indifferent to this problem and the cost of neglect will be greater than the cost of taking action now to uplift the Common Good.
Innovation, artificial intelligence and algorithms are making many precision marketing actions totally automated. Will the job of marketer ever be replaced by an AI?
Philip Kotler: No. I can understand why AI can beat the world’s best chess player. Chess is a game with a rigid structure where the value of different moves can be evaluated. The chess AI can quickly find the best moves against a human chess player’s moves. The competitive marketplace is much more complex and nuanced. A marketer is happy to automate some processes, such as email marketing, or even set up an algorithm to determine which specific leads should be pursued. But it is human management that must make big decisions on which markets to target, what prices will maximize profits, which channels are the best to use, and which promotional messages are best for each customer.
Christian Sarkar: Programmatic marketing programs are being replaced by algorithms. But how do you create a customer? That is still a job for humans.
Professor Kotler, you are named as the “father of marketing.” What do you think of this label? When did you realize that your future would be to study and analyze market needs?
Philip Kotler: I am only called “the father of modern marketing.” Marketing was a discipline ever since the early 1900s with many early textbooks were written by worthy authors, usually economists. In 1967, I launched my first book Marketing Management: Analysis, Planning and Control. The book departed from existing textbooks in a number of ways. Instead of just describing marketing practices and prescribing do’s and don’ts, it introduced more economic analysis, more quantification, more social science, and many research findings about customer and market behavior. Marketing Management became the favored textbook around the world, along with my second book Principles of Marketing and a third book, Marketing: An Introduction. As a result, more managers around the world learned their marketing from my textbooks and from my lectures around the world to lift their understanding of sophisticated marketing. I also published leading articles on the nature and broadening of marketing that led to the appellation that I am the father of modern marketing. Ironically, as we move more into digital marketing, we might find someone earning the title of The Father of Digital Marketing.
Professor Kotler, if you were to recommend to a young marketing student a discipline to study in depth which would you suggest?
Many companies acknowledge that they have to move into digital marketing. There is a shortage of skilled persons in digital and social marketing, in AI and in algorithms, not to mention virtual reality. These tools will become increasingly important in marketing thinking and practice.
Christian Sarkar, with your company you help companies use ecosystem strategy to sell their products. But you also spend your time on art – painting pictures. What is more important in marketing: data technology or creativity?
The failures we are experiencing in the world now are failures of the imagination. Data is important, but even more important is meaning. Customers and employees are interested in meaningful experiences, not technology for its own sake. The loss of the human individuality is the result of reducing our relationships and turning them into mere transactions. Art – the art of understanding, not the art of decoration and fashion, must speak honestly about our future. Machines are not creative problem solvers. Humans are. Let us not forget to be human.
As a last question we always paraphrase the title of our magazine and ask how you see the “Future” Philip Kotler, what are your hopes and your fears? Christian?
Philip Kotler: Marketing plays its greatest role when it makes life better for the majority of people. I chose marketing because at its best it lifts the Common Good.
Christian Sarkar: When marketing techniques are used to sell ideologies that weaken and polarize society, we have a problem. Leaders must stand up and act to stop it – our future on this planet depends on it.
INTERVIEW BY: Simone Intermite