Marketing and selling in favourable economic conditions :

Evolution of Marketing 3.0

Prasanna Perera, Marketing and Management Consultant, Chartered Marketer, CIM UK

With the shortly expected visit to Sri Lanka of Prof. Philip Kotler, I decided to examine this concept of Prof. Kotler and relate same to the Sri Lankan context.

Over the past years, marketing as a discipline has evolved through many different stages. Many refer to present day marketing as New Marketing or Modern Marketing or Marketing 3.0.

Marketing 1.0 is popularly referred to as the product - centric era of Marketing. Henry Ford’s Model T comes readily to mind. “Any customer can have a car painted any colour that he wants, so long as it is black” said Ford.

If he said this today, Ford, as a brand would have instant death! Sadly, many Sri Lankan organizations still practice this product - centric concept of marketing.

They produce what they want to sell, irrespective of whether the customer has a need or not. As a result, customers start moving away, sales start dropping, market share slides and eventually the bottom line disappears! Marketing 1.0 is now long dead globally and Sri Lankan organizations must put an immediate stop to this practice.

Marketing 2.0 or the customer oriented era of marketing, is all about understanding and delivering what the customer needs and wants, profitably.

According to Prof. Kotler, Marketing 2.0 came out in today’s information age, where the central core is information technology.

As a result, the job of Marketing becomes more difficult, since consumers are well informed and can easily compare several similar product offerings.

In Marketing 2.0, marketers segment markets and develop superior products and services to cater to these segments. Sri Lankan organizations that are customer focused are now practising Marketing 2.0.

However, the number of organizations (Sri Lankan indigenous) is not significant.

This worries me greatly, since if Marketing 2.0 is not practised, what may be the fate of Marketing 3.0 (which is already being practised in several markets globally).

Marketing 3.0

Marketing 3.0 is also referred to as the values - driven era of marketing. In marketing 2.0 people were simply treated as consumers, who need to be served. In Marketing 3.0, people are considered as “holistic” human beings, with minds, hearts and spirits. Why is this? This world today is a highly complex one.

Human beings are running a rat race and are grateful to organizations that help them to deal with these complexities.

Consumers are looking for companies that address their deepest needs for social, economic and importantly environmental justice. Therefore, the mission, vision and values of organizations are important considerations to consumers.

Typically consumers look for functional and emotional benefits, through the products and services they acquire. (Marketing 2.0 concept). In Marketing 3.0, human spirit fulfilment is a key benefit looked for in addition to functional and emotional benefits. Therefore, Marketing 3.0 complements emotional marketing with “human spirit marketing.”

Given below is a table that compares Marketing 1.0, Marketing 2.0 and Marketing 3.0.

(Comparison of Marketing 1.0, 2.0 and 3.0)

(Source : Marketing 3.0., Kotler, Kartajaya and Setiawan)

How Sri Lankan organizations can apply Marketing 3.0

The starting point to my mind is the strategic direction of the organization. Organizations should reexamine their mission, vision and values.

The mission must clearly define the organization’s rationale for existence. It must be couched in non financial dimensions such as societal, community and environmental well-being.

Values should be clearly identified, communicated and lived. If values are lived by all employees, the organization has an opportunity to practise values - driven marketing. (Marketing 3.0)

Sri Lankan organizations should also appreciate that the modern consumer lives in an era of participation and collaboration. New Wave technology has been driven by low cost computer and mobile phones, low cost internet and open source.

Hence, this technology permits individuals to express themselves and collaborate with others. Social media is an outcome of this new technology.

In Sri Lanka, there are over one million Facebook accounts. Staggering for a developing country, which indicates the desire of consumers to collaborate and participate with each other and the rest of the society. Since social media is low cost and bias free, it will be the future of marketing communications.

Sri Lankan organizations will have to incorporate social media into their marketing and marketing communication strategies. This will become a must and not an option.

Besides new wave technology, another major force contributing to Marketing 3.0 is globalization. Actually globalization is created by technological advances. Sri Lankan organizations irrespective of whether they engage in international marketing or not, are players in the global arena.

Hence, these organizations need to address social, economic and environmental issues in society. Developing cultural brands is the answer for Sri Lankan organizations, as this will address broader national issues and desires.

Take the example of Body Shop, which is a brand manifesting social equality and justice.

Consumers are loyal to the Body Shop brand, since they believe that the brand addresses social equality. In Sri Lanka, where there is an uneven income distribution in society, there is great scope for developing cultural brands and incorporating cultural issues into the business model of organizations.

In fact, there are brands such as Maliban, Siddhalepa, DSI which are well positioned to take cultural branding to the next level in Sri Lanka. These organizations must in-build cultural into their business models, and work towards reducing social inequality and justice. Marketing 3.0 has been influenced by changing consumer behaviour attitudes and habits. Consumers today are far more educated and concerned with broader social and community issues.

Marketing 3.0 is an attempt to incorporate stakeholder concerns into organization’s business models, recognizing collaborative and cultural dimensions. Marketing 3.0 is here to stay and by adopting this philosophy, significant competitive advantage can be realized.