Q&A: Philip Kotler on marketing myopia and 'one-P' CMOs

Philip Kotler (born 1931 in Chicago, Illinois) is currently the SC Johnson Distinguished Professor of International Marketing at the Kellogg School of Management at Northwestern University. He is the author of more than 55 marketing books, including Principles of Marketing; Kotler on Marketing: How to Create, Win, and Dominate Markets; and Marketing 3.0: From Products to Customers to the Human Spirit. He made an appearance yesterday in Beijing at an event hosted by SY Lau from Chinese online portal Tencent and was kind enough to sit down with Campaign Asia-Pacific's Jenny Chan to share his views on how well marketers in China and the region are following his wisdom.

Are there faults with certain Chinese CMOs who may be contravening your marketing theories?

Shortsightedness is a kind of mistake. There are so many Chinese companies that are small and medium-sized and we don't know too much about them. They don't get written up in [Western] magazines. If they don't get written up, they probably are companies without much marketing sensitivity. They may be passionate about sales but don't have the rigour or talent to do a special job in marketing. I can't answer that question very well because I'm not close enough to these companies.

But one company I know a lot about is Lenovo because I used to have the ThinkPad and I think they are doing very good work. I know about Haier from the famous incident about its boss smashing all the washing machines because they weren't good enough. The brand is doing a brilliant job.

If the ban on American companies such as Facebook and Google is lifted in China one day, will Chinese counterparts, having been sheltered from outside competition, still be successful?

Well, yes. As a matter of fact, I don't think Facebook in coming here will be very successful. I believe Chinese users are very satisfied with Chinese companies that are doing very interesting jobs. Why would they switch to Facebook? What is Facebook doing about social media that Tencent, for example, isn't doing? There isn't anything to worry about.

I also feel there should be a separate internet-marketing department in all companies, even though there is a danger of the compartmentalisation of traditional and new media. My prediction is while most big consumer brands are now spending 15 per cent on the internet, the percentage will move to 50 per cent. I won't write off traditional media though, especially when building a brand from scratch, traditional media is more trusted.

Is marketing dead, or do people have marketing myopia?

Marketing is seen as another name for selling and about convincing people they should buy X product. The shortest definition of marketing is "meeting needs profitably". The long one is CCDVTP: Create, communicate and deliver value to a target at a profit. But selling pre-existed marketing by thousands of years. Marketing is dated 100 years ago and invented by an economist, but economics assumes everything is rational.

CMOs used to be called VPs of Marketing, and are not very popular roles in Japan or China. But such roles are very much active in the US. CMOs may be the most minor of the C-suite. CFOs may think CMOs are wasting money, but now at least there are such departments. That said, if a company is dedicated to customer centricity, it raises the question of the need for a marketing department.

The idea of consumer sovereignty started back in the 1930s. Customers don't like to be shoved with products they don't need or be talked down to. The customer is so well-informed that you can't pull wool over their eyes. Remember: CIB, customer is boss!

Since 1967 when I wrote my first book talking about the 4Ps of marketing, I still find that many companies are doing only one P, promotion. They may know what the market wants but leave product development to the engineers who don't ask for any help from marketers. Peter Drucker once said there are only two functions that matter in a company: innovation and marketing.

A different common language for both groups (engineers and marketers) may be the 4As: Affordable? Accessible? Acceptable? Awareness? These are not a replacement for the 4Ps, but a condition before the 4Ps.

On the product level, each competitor is saying they have the perfect product, but that doesn't touch our hearts. We now not only want to know what the company makes, or even what its brand is, but what it cares about the state of the world apart from its product. Chinese consumers are even less forgiving as they will highlight wrongdoings of companies.

Do brands in China have spilt personalities in terms of shareholder profit versus corporate responsibility? Is integrity-based marketing wishful thinking? You talk about humanistic marketing, but does it sound too sacred?

To what extent does a company have responsibility for issues that affect life outside its industry? This is a good question. Think of corporate social responsibility (CSR) as allowing the circulation of the means to purchase. That adds social value to your product or service. Do what's right, and in the long run you'll be profitable. Not the other way round.

General Electric's stock has been rather flat for about ten years, but they haven't thrown out Jeff Immelt. You don't always have to do financial engineering to be good at marketing, but proper risk assessments. There are some products and services that take a long time to become profitable, particularly the hotel industry. Typically, new hotels will make losses until the third change in hands. By analogy, a company can decide to sit and watch others fail first, and take action when the time is ripe. Sometimes you can have a second-mover, or even third-mover advantage.