The Marketing Journal
  • About
  • Interviews
  • Articles
  • Videos
  • Book Reviews
  • Views
  • Subscribe
“Marketing 4.0: When Online Meets Offline, Style Meets Substance, and Machine-to-Machine Meets Human-to-Human” – Philip Kotler, Hermawan Kartajaya, Iwan Setiawan

“Marketing 4.0: When Online Meets Offline, Style Meets Substance, and Machine-to-Machine Meets Human-to-Human” – Philip Kotler, Hermawan Kartajaya, Iwan Setiawan

May 5, 2018

Marketing 4.0 is the sequel to our widely-recognized concept of Marketing 3.0, which calls for brands to touch the human spirit. Marketing 4.0 is based on intricate observation and analysis of the paradoxes in view of the digital technology boom. We explain how online meets offline, why style must be complemented with substance, and why Machine-to-Machine is incomplete without Human-to-Human.

Digital technology is increasingly moving at the heart of most modern businesses today. As OECD states, digital economy is fast percolating a wide range of industries, from bank­ing, energy and transportation to media and health. No wonder thus how often we hear of the word ‘dis­ruption’ in the context of business.

McKinsey has jotted down 12 major innova­tions capable of disrupting conventional businesses, including mobile internet, the internet of things (IoT), cloud tech, and 3D printing, among others. All these disruptive technologies are not ground-breaking; for some, their technology life­ cycles have spanned decades of R&D. But their real, tangible impact on businesses on a commer­cial scale has increased manifold in recent years, partly as a result of the influx of various supporting technologies.

Inevitably, disruptive tech is closely eyed by businesses world over, imploring companies to revisit their business models, adjust value propo­sitions for their products and services, and reform sales practices and marketing approaches. In the midst of all this, several innovation -related dilem­mas face businesses today. Let’s take mobile internet as an example. Handheld smartphone devices have brought about unparalleled connectivity and opened up numerous opportunities for marketers to reach out to their smarter customers. At the same time, the growing concern on smartphone addiction is alarming – a study by Przybylski and Weinstein of the University of Essex shows how mobile phones are increasingly hurting relationships.

As digital economy booms and smartphones become more ingrained in consumers’ lifestyles – deeply influencing their attitudes and behaviors – consumers will increasingly look for the perfect mix of tech that makes their lives easier, comple­ments their goals of self-actualization and nurtures a deeper sense of ‘doing good’. Marketers need to brace up for this transition and adaptation period in the run up to a fast-developing digital economy. They need novel marketing approaches, which would help them anticipate and leverage on these unprecedented disruptive innovations.

 

Why Marketing 4.0

Our book Marketing 3.0 – From Products to Customers to the Human Spirit (Wiley, 2010) has witnessed phenomenal success. The concept has been widely acclaimed and the book itself has been translated into 24 non-English languages. Over the past five years, marketers, enthusiasts, and readers of the book have inquired about a sequel to Mar­keting 3.0.

ln that book, we discuss how marketing has undergone a major shift since its early days, from being product-driven (1.0) to customer -centric (2.0) and ultimately, human-centric marketing (3.0). The idea is for marketers to rise above how their products or services will serve consumers and instead focus on consumers’ human spirit – by committing to and working for social, economic, and environmental causes in ways that would touch customers’ spirit.

As the Marketing 3.0 concept stands widely endorsed, we wish to introduce Marketing 4.0 – an approach which more effectively takes into account the convergence of the offline and on line worlds of businesses and customers. The concept focuses on how, in the times of a digital economy boom, offline touch serves as a major differentiation in an increasingly online world. It also encompasses how style blends with substance, in that even as brands need to adopt flexible and adaptive styles in view of fast-changing technological develop­ments, the brand’s core, authentic character is ever more important. Brands need to come across as true to their identity and authentic in their mes­sages – this perceived substance is a valuable asset in an increasingly transparent world. And finally, Marketing 4.0 is about balancing machine-to- ma­chine (M2M) with human-to-human (H2H). As connected devices become more commonplace on the back of artificial intelligence and loT, resulting in greater marketing productivity, they need to go hand-in-hand with human-to-human connectivity in order to strengthen customer engagement.

Moving towards marketing 4.0 requires balancing our use of machines and devices with human contact to strengthen customer engagement.

From Traditional to Digital Marketing

As we move from traditional to digital, market­ing has undergone fundamental transformation in the way its various elements are incorporated. Let’s take a look at the four most critical shifts:

►From ‘Segmentation and Targeting’ to ‘Customer Community Confirmation’

The process of traditional marketing begins with segmentation, wherein the market is homogeneously grouped based on geographic, demographic, or psychographic attributes. Then comes targeting which essentially means determin­ing which segment(s) to serve, based on various factors including size, attractiveness, and growth potential, among others.

While segmentation and targeting are critical elements in determining a brand’s market strategy, they also highlight the linear nature of a brand’s relationship with its customers – how brands make their decisions unilaterally, with little or no help from customers whatsoever. Customer input is limited to the insights drawn from traditional methods of market research, typically acting as precursors to the segmentation and targeting processes. The process is vertical.

This under-representation of the customer in the traditional marketing process comes across as a striking flaw when juxtaposed with the reality of today’s digital economy boom. In this era of increased connectivity, socially-connected custom­ers form horizontal webs of communities which represent the new-age segments. Communities are formed by customers on their own accord, which makes them more organic and in1mune to spamming and irrelevant advertising.

For brands to be able to penetrate these com­ munities and get their messages across effectively, they need to fit in naturally – acting as friends, showing care and genuine concern to address cus­tomers’ needs and wants. In essence, the process of segmentation. targeting and positioning is made more transparent.

►From ‘Brand Positioning and Differentiation’ to ‘Brand Characters and Codes’

Brand positioning encompasses all the activities targeted at making a brand occupy a unique posi­tion in customers’ minds. The brand, traditionally identified as a name, logo, or tagline with the main purpose of distinguishing a product or service, has lately come to represent the overall experience that a company delivers to its customers.

A clear positioning has long been heralded as a must-do for companies to generate strong brand equity. Positioning is typically a promise defined by brands to win over customers, often fulfilled through a strong differentiation, delivered by com­panies through their marketing mix – the 4 P’s.

It is inevitable for traditional positioning and differentiation in marketing to also undergo a change in the connected era. Customers today are armed with abundant information, which empow­ers them to be the best judge of how well a brand fulfills its positioning promise. A brand’s projected positioning will not have the desirable impact if it is not driven by a community-driven consensus.

In this age of digital marketing, a brand needs to be dynamic and versatile in what messages it delivers and how. But what should remain consis­tent is the brand’s character and codes, regardless of the content of the messages that it delivers. The brand’s character – its raison d’être- is what defines its personality, it is what makes the brand stand true to its core, even if the outer imagery is flexible – think Google (with its ever-changing Doodles) or MTV – how they remain flexible with their varying designs, yet solid as brands.

►From ‘Selling the 4P’s’to ‘Commercializing the 4C’s’

And finally, 4P’s – the classic marketing mix elements which determine what a company offers to its customers and how. Starting with developing a product based on customers’ needs and desires, to fixing a price which is usually calculated through either cost-based, competition-based, or customer value-based pricing methods.

Then come place and promotion – the elements which decide the ‘ how to offer’ part. In selecting the place, companies take care to make the prod­uct conveniently accessible to its customers, while promotion is required – in the form of advertising. public relations, and sales promos – to commu­nicate about the product to the desired target audience. The 4P’s should be optimally designed and aligned in order for companies to be able to sell their products more effectively.

In view of greater connectivity in the digital economy, armed with increased customer partic­ipation, we reckon the emergence of a new set of marketing mix, the 4C’s – co-creation, currency, communal activation, and conversation.

Co-creation represents the already existing and even increasing customer participation in the process of new product development. Companies are increasingly engaging and inviting customers’ involvement right from ideation stage, allowing the former to become more attuned to the latter’s needs and wants. From tech giant Microsoft to toymaker Lego, there are many examples of successful cus­tomer-driven co-creation implemented in product innovation cycles.

By currency, we refer to the fluctuating prices with respect to market demand. In the digital era, many businesses have already adopted dynamic pricing based on market demand and capacity utilization. Ecommerce players. for example, make use of big data analytics to offer dynamic pricing to their users, aided by the massive amount of data collected on their purchasing habits.  Dynamic pricing, based on data such as customers’ historical purchase patterns, preferences or even proximity to store location, can help companies achieve opti­mized profitability by more efficiently balancing supply and demand.

Further, in a connected world, the concept of channel is fast evolving in view of the emerging trends in sharing economy. Peer-to-peer distri­bution model is rapidly gaining ground, giving customers almost instantaneous access to the products and services they need. This rising preference for instant delivery of products and services calls for a greater need of communal activation, wherein peers in close proximity can serve customers’ needs and demands.

Finally, we reckon how promotion has trans­formed into conversation – it is no longer a monologue from brands delivering messages to their customers. Social media and other network­ing platforms have enabled customers to become more vocal in their responses to brands’ messages. Customer review and rating applications, blogging platforms and online forums have become trusted sources for customers to engage in conversations to evaluate products and services from brands.

►From ‘Customer Service Processes’ to ‘Collaborative Customer Care’

Traditional customer service revolves around treating customers as kings, but in the collabora­tive customer care approach, they are viewed as equals. While customer service would focus solely on addressing their concerns while still attempting to stick to strict guidelines and standard operating procedures, collaborative care would put genuine effort into listening and responding to the cus­tomer, consistently following through, on terms agreed upon by both company and customer. In the connected world, this collaborative process is more relevant to customer care wherein customers are invited to participate in the process by using self-service facilities.

Integrating Traditional and Digital Marketing

Industry observers have been debating for a while whether traditional marketing is dead, in view of the rising influence of, and marketing spend in, digital marketing. What we believe however is that digital is not supposed to replace traditional marketing. Both are meant to co-exist and have their own roles to play across the customer journey.

Traditional marketing is still quite effective in building awareness and interest in brands, but digital marketing plays a more prominent role as customers go on to build closer relationships with brands. The goal of digital should be to drive action and advocacy, and in view of greater accountability, the focus should be on driving results, as opposed to traditional marketing where the focus should be on initiating customer interaction. In essence, Marketing 4.0 aims to help marketers identify and prepare for the shifting roles of traditional and dig­ital marketing in building customer engagement and advocacy.

Philip Kotler is the “father of modern marketing.”  He is the S.C. Johnson & Son Distinguished Professor of International Marketing at the Kellogg School of Management at Northwestern University. He was voted the first Leader in Marketing Thought by the American Marketing Association and named The Founder of Modern Marketing Management in the Handbook of Management Thinking. Professor Kotler holds major awards including the American Marketing Association’s (AMA) Distinguished Marketing Educator Award and Distinguished Educator Award from The Academy of Marketing Science. The Sales and Marketing Executives International (SMEI) named him Marketer of the Year and the American Marketing Association described him as “the most influential marketer of all time.” He is in the Thinkers50 Hall of Fame, and is featured as a “guru” in the Economist. Sign up for his newsletter >>

Hermawan Kartajaya is the Founder and Chairman of MarkPlus Inc. Indonesia. He is also the co-founder of the Asia Marketing Federation and the current President of the Asia Council for Small Business.

Iwan Setiawan Is the Chief Operating Officer of MarkPlus, Inc. He has co-authored the textbook “Marketing 3.0″ with Philip Kotler and Hermawan Kartajaya.

SaveSave

SaveSave

SaveSave

Related Posts

“Technology and the Common Good” – Christian Sarkar and Philip Kotler

B2B Marketing /

“Technology and the Common Good” – Christian Sarkar and Philip Kotler

“Wicked Problems” – An Interview with Philip Kotler and Christian Sarkar

B2C Marketing /

“Wicked Problems” – An Interview with Philip Kotler and Christian Sarkar

“Cultural Presence: The Social Function of Milan Design Week” – Barbara Dal Corso

Customer Engagement /

“Cultural Presence: The Social Function of Milan Design Week” – Barbara Dal Corso

‹ “The Global CMO” – An Interview with Greg Paull › “Making Marketing Human: Lessons from Chick-fil-A” – Frank Grillo and Karl Hellman
A D V E R T I S E M E N T
A D V E R T I S E M E N T

Recent Posts

  • “Technology and the Common Good” – Christian Sarkar and Philip Kotler
  • “Cultural Presence: The Social Function of Milan Design Week” – Barbara Dal Corso
  • “Wicked Problems” – An Interview with Philip Kotler and Christian Sarkar
  • “Dragon proofing your legacy brand” – Grant McCracken
  • OP-ED: “Autopsy Of a Brand: Tesla” – George Tsakraklides
  • “The 5th P is Purpose” – Christian Sarkar and Philip Kotler
  • “The CEO-as-Brand Era: How Leadership Ego is Fueling Tesla’s Meltdown” – Ilenia Vidili
  • “The Future of Marketing is the Quest for Good” – Christian Sarkar and Philip Kotler
  • “Questions for the New Year” – John Hagel
  • “Enlightened Management – An Interview with Gabriele Carboni”
  • “If you’re not thinking segments, you’re not thinking” – Anthony Ulwick
  • “Does Marketing Need Curtailment for the Sake of Sustainability?” – Philip Kotler
  • ‘Social profit orientation’ can help companies and nonprofits alike do more good in the world by Leonard L. Berry, Lerzan Aksoy, and Tracey Danaher
  • “Understanding Hallyu: The Impact of Korean Pop Culture” by Sanya Anand and David Seyheon Baek
  • “Go-to-Market (GTM): A New Definition” – Karthi Ratnam
  • “Jobs-to-be-Done for Government” – Anthony Ulwick
  • “The Power of Superconsumers” – Christopher Lochhead, Eddie Yoon, & Katrina Kirsch
  • “Zoom Out/Zoom In – Making It Personal” – John Hagel
  • “Regeneration or Extinction?” – a discussion with Philip Kotler, Christian Sarkar, and Enrico Foglia
  • “Climate scientists: concept of net zero is a dangerous trap” – James Dyke, Robert Watson, and Wolfgang Knorr
  • “The allure of the ad-lib: New research identifies why people prefer spontaneity in entertainment” – Jacqueline Rifkin and Katherine Du
  • “What is ‘ethical AI’ and how can companies achieve it?” by Dennis Hirsch and Piers Norris Turner
  • “How the US military used magazines to target ‘vulnerable’ groups with recruiting ads” – Jeremiah Favara
  • “Ethics and AI: Policies for Governance and Regulation” – Aryssa Yoon, Christian Sarkar, and Philip Kotler
  • “Product Feature Prioritization —How to Align on the Right List” – Bob Pennisi
  • “The Community Value Pyramid” – Christian Sarkar, Philip Kotler, Enrico Foglia
  • “Next Practices in Museum Experience Design” – Barbara Dal Corso
  • “What does ESG mean?” – Luciana Echazú and Diego C. Nocetti
  • “ChatGPT could be a game-changer for marketers, but it won’t replace humans any time soon” – Omar H. Fares
  • “If Your Brand Comes Before Your Category, You’re Doing It Wrong” – Eddie Yoon, Nicolas Cole, Christopher Lochhead

Categories

  • Advertising
  • AI
  • Analytics
  • B2B Marketing
  • B2C Marketing
  • Big Data
  • Book Reviews
  • Brand Activism
  • Branding
  • Category Design
  • Community
  • Content Marketing
  • COVID-19
  • Creativity
  • Customer Culture
  • Customer Engagement
  • Customer Experience
  • Dark Marketing
  • Decision Making
  • Design
  • Digital Marketing
  • Ecosystems & Platforms
  • Ethics
  • Go to Market
  • Innovation
  • Internet of Things
  • Jobs-to-be-Done
  • Leadership
  • Manipulation
  • Marketing Technology
  • Markets & Segmentation
  • Meaning
  • Metrics & Outcomes
  • Millennials
  • Mobile Marketing
  • Non Profit Marketing
  • Organizational Alignment
  • Peace Marketing
  • Privacy
  • Product Marketing
  • Regeneration
  • Regenerative Marketing
  • Research
  • Retail
  • Risk & Reputation
  • Sales
  • Services Marketing
  • Social Media
  • Strategy & Business Models
  • Sustainability
  • Uncategorized
  • Videos

Archives

  • May 2025
  • April 2025
  • March 2025
  • January 2025
  • December 2024
  • September 2024
  • March 2024
  • October 2023
  • September 2023
  • June 2023
  • May 2023
  • April 2023
  • February 2023
  • January 2023
  • October 2022
  • August 2022
  • May 2022
  • January 2022
  • November 2021
  • September 2021
  • July 2021
  • June 2021
  • May 2021
  • March 2021
  • February 2021
  • January 2021
  • December 2020
  • October 2020
  • September 2020
  • July 2020
  • June 2020
  • May 2020
  • April 2020
  • March 2020
  • February 2020
  • January 2020
  • December 2019
  • November 2019
  • August 2019
  • July 2019
  • June 2019
  • May 2019
  • April 2019
  • March 2019
  • February 2019
  • January 2019
  • December 2018
  • November 2018
  • October 2018
  • September 2018
  • August 2018
  • July 2018
  • June 2018
  • May 2018
  • April 2018
  • March 2018
  • February 2018
  • January 2018
  • November 2017
  • October 2017
  • September 2017
  • August 2017
  • July 2017
  • June 2017
  • May 2017
  • April 2017
  • March 2017
  • February 2017
  • January 2017
  • December 2016
  • November 2016
  • October 2016
  • September 2016
  • August 2016
  • July 2016
  • June 2016
  • May 2016
  • April 2016
  • March 2016
  • February 2016
  • January 2016

Back to Top

© 2016-19 The Marketing Journal and the individual author(s). All Rights Reserved
Produced by: Double Loop Marketing LLC
By using this site, scrolling this page, clicking a link or continuing to browse otherwise, you agree to the use of cookies, our privacy policy, and our terms of use.
This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish.Accept Read More
Privacy & Cookies Policy