Marketing needs to reexamine all of its central concepts as a result of many new forces, such as China and India’s low price exports, advertising’s diminished impact, the growing influence of the finance function in most companies, the multiplication of communication and distribution channels, and the rise of the Internet and cell phones, among others. The bottomline is that management is not satisfied with marketing’s performance. Management is insisting on more performance and more accountability.

I would list the following concerns:

* The need to find and exploit new tools for effectively distributing messages that reach TG, tools such as WoM marketing, PR, product placement, talk shows, and others.

* The need to integrate all the marketing communications under a clear brand concept.

* The need to better spot new needs and new trends and to work them into new products and solutions.

* The need for better metrics and measurement tools to account for the impact of marketing campaigns.

* The need to collect and manage data on an individual prospect and customer basis.

* The need to forge a stronger working relationship between marketing and sales.

* The need to forge a stronger working relationship between marketing and sales and the other key functions, such as R&D, engineering, manufacturing, and finance.

My main recommendation is to make marketers responsible for driving the business strategy. To do this, marketers must develop competence in financial and technological matters. In addition, marketers need to improve their trend-spotting ability and creativity in bringing out really new products. I wrote the book Lateral Marketing to describe the ways for marketers to do out-of-the-box thinking that results in exciting new products and services.

The changes between the first edition and the 12th edition are so substantial that I recently refused to sign the first edition when a CEO asked me to sign it. I said this first edition is holding you back. There is no mention of the Internet, branding is only discussed in a few pages, segmentation is only briefly examined, and key concepts such as value proposition, customer equity, and brand equity had not yet been invented.

The first edition was heavily transaction-oriented, that is, how to make a sale. The 12th edition is heavily relationship-centered, that is, how to keep and grow loyal customers.

Many editions ago I argued that a marketer never starts with the 4Ps. The company must start with a mission and vision statement, and then segmentation, targeting and positioning. I also argued that the 4Ps should first be turned into the 4Cs which take a customer point of view rather than a seller’s point of view. The 4Cs are customer value (instead of product), customer cost (instead of price), customer convenience (in lieu of place), and customer communication (in place of promotion). Once the Cs are determined, then the marketer can set and refine the 4Ps.

I am a great admirer of Dr Jag Sheth for the many new ideas that he has brought into marketing. His 4As framework is similar to my 4Cs framework. Either one can be used. I have no wish to perpetuate a 4P framework if something comes along that is better. Nevertheless, the 4Ps framework is very useful in organising the material of marketing for teaching purposes. We would have to see how a marketing textbook would look if organised under the 4As framework. Would the 4Ps be gone and not be mentioned? Would there not be a chapter on product, price, place and promotion. My guess is these will remain as chapter topics somewhere in the textbook.

As for Prahalad and Ramaswamy’s co-creation perspective, it is a good addition to our thinking. We should not only be customer-centric in running our business but should go further and invite customers to participate in co-designing our products.

Those customers who buy a Dell computer obviously design their own computer.

I am all for empowering customers to tell us what they want. We have too long been selling standardised products and practicing standardised marketing, all for the sake of securing economies of scale. We are now able to economically individualise offerings in several businesses and please the customer more.

Coke and similar mass produced and mass distributed products will always be around. They rely on mass advertising and deep sales promotion to the trade and the consumers. But this has posed two problems:

* The 30-second TV ads is weakening as channels proliferate; as clutter increases and as people turn to other activities like computing, video games, exercising; and as TIVOs are purchased more to avoid ads.

* Sales promotion is now taking about 70 percent of the advertising and promotion budget and amounts to a huge margin killer for companies. Consumer packaged goods companies need to figure out new ways to build their brand power and loyalty without such large expenditures on advertising and promotion This brings us to Apple iPod and Starbuck. The lesson that we take from Apple iPod is that there is no substitute for a really good new product. Most of iPod’s success came from WoM and PR stories, not conventional advertising and promotion. The lesson that we take from Starbucks is that a really good coffee can beat any mediocre coffee, and that if you surround it with an engaging experience, you have a winner. Starbucks also grew because of adroit buzz marketing, PR stories, and highly satisfied customers.

My colleagues and I have argued for holistic marketing in our book Marketing Moves. Marketing should not be a department so much as the driver of business strategy and the force that insures that the brand promise is fulfilled. Holistic marketing calls for four steps:

* The company needs to enlarge its view of its customers’ needs and lifestyles. The company should stop seeing the customer only as a consumer of its current products and start visualising broader ways to serve its customers.

* The company needs to assess how all of its departments impact on customer satisfaction. Customers are adversely affected when their products arrive late or are damaged, when invoices are inaccurate, when customer service is poor, or when other foul-ups occur.

The task of marketing is to unify everyone in the company to ‘think customer’ and deliver the company’s brand promise.

* The company needs to assess the impact of its actions on all the company’s stakeholders-customers, employees, distributors, dealers, and suppliers-not only its shareholders. Any alienated stakeholder group can cause havoc to the company’s plans and progress. Holistic marketing calls for partnering with the employees, suppliers, and distributors to work as a team to deliver the best value to the target customers.

* The company needs to take a larger view of the company’s industry, its players and its evolution. Today many industries are converging, presenting new opportunities and new threats to each industry player.

Holistic marketing is essentially a move from a product focus to a customer focus, from selling products to sensing, serving, and satisfying customers. This has been going on for a while and is getting stronger. Holistic marketing is a step in changing the company’s architecture to implement the customer concept as driving the company. Marketing cannot work effectively unless it is holistic.

I am much impressed with GE under its new CEO that has decided to focus on real problems facing the nations of the world, including global warming, global pollution, environmental degradation, poor health systems, and poor educational system. General Electricals elevated marketing as a fun- ction to be co-equal with engineering and finance so that it can keep on inventing to meet challenges.

Let me mention the three sets of companies whom I admire for their strategies: companies that innovate ways to lower the cost of living, such as Ikea, Southwest Airlines, Wal-Mart, Target, Home Depot, Dollar General, and Aldi’s; companies that boost quality to higher levels-Sony, Lexus, Intel, Starbucks; I favor companies that have a social conscience-Body Shop, Ben & Jerry’s, Avon, Kraft.

Let me mention the three sets of companies whom I admire for their strategies: companies that innovate ways to lower the cost of living, such as Ikea, Southwest Airlines, Wal-Mart, Target, Home Depot, Dollar General, and Aldi’s; companies that boost quality to higher levels-Sony, Lexus, Intel, Starbucks; I favor companies that have a social conscience-Body Shop, Ben & Jerry’s, Avon, Kraft.

We’ve spent a lot of time teaching our marketing students to understand and use market research, advertising, pricing, channels and sales. In today’s e-world, additional skills such as those for brand building, database management and data-mining, customer relationship management, customer profitability measurement, public relation and ‘buzz marketing’, event management and experiential marketing, and direct mail, catalog, and telemarketing are needed in the marketing department.

Here are some of my observations:

* There will be an increase in marketing and sales automation. Several activities in marketing can be turned over to software, thus giving us more time to think more strategically.

* Companies will put in more controls for marketing accountability, including the development of better metrics and putting a marketing controller into marketing department.

* Marketing and sales will get more integrated rather than always pointing the figure at each other when sales objectives are not reached.

* Marketing will increase its presence in the boardroom as directors increasingly ask for more than financial information and want to know how their customers are faring

Marketing principles are universal, with the lead idea being to understand your target customers and produce a superior offering to satisfy their needs. If there is a large population of poor people, then a superior offering means offering adequate products at the lowest price or quality products at a low price. It is also important to develop strong brands that make a promise and deliver on the promise consistently.