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Low Budget High Impact Marketing

A New Wave Approach for MarketingIn the Turbulent Times

Special Executive Marketing Class

Hermawan KartajayaPresident of World Marketing AssociationFounder and President of MarkPlus, Inc

Tri-founder of Philip Kotler Center for ASEAN MarketingCouncil of Advisors of the ASEAN Foundation

1 of 50 Gurus Who Shaped the Future of Marketing (Chartered Institute of Marketing, United Kingdom - 2003)

Recipient of The Distinguished Global Leadership Award (Pan-Pacific Business Association - 2009)

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Agenda for Today

Time Agenda

08.30 – 09.00 Registration

09.00 – 11.00 Session 1: The Changing Business LandscapeThe “Why” of Low Budget High Impact

11.00 – 11.30 Morning Coffee Break

11.30 – 13.00 Session 2 : The New Strategy in the New Landscape: From Legacy to New Wave The “What” of Low Budget High Impact

13.00 – 14.00 Lunch

14.00 – 15.30 Session 3: The 12Cs of New Wave Marketing ApproachThe “How” of Low Budget High Impact

15.30 – 16.00 Afternoon Coffee Break

16.00 – 17.00 Session 4: Case Study Putting it All Together

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Don’t be Afraid! Low Budget High Impact Marketing


A New Wave Approach for Marketing

In the Turbulent Times

Session 1:The Changing Business LandscapeThe “Why” of Low Budget High Impact

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Summary of Philip Kotler’s presentation

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Values-Based MarketingValues-Based Marketing

Summary of Philip Kotler’s presentation

Post Global Economic CrisisShifting from the West to the East

Post Global Economic CrisisShifting from the West to the East

ASEAN in AsiaFrom Flying Geese to Regional

Squadron to New Asia

ASEAN in AsiaFrom Flying Geese to Regional

Squadron to New Asia

Asia Inc.From Cost to Size to Innovation to

Brand

Asia Inc.From Cost to Size to Innovation to

Brand

Asia including ASEANBig, Growing, and UniqueAsia including ASEAN

Big, Growing, and Unique

Asian StrategiesThe Eight Implications

Asian StrategiesThe Eight Implications

Dealing with the RecessionDealing with the Recession

Discovering OpportunitiesDiscovering Opportunities

The Evolution of MarketingFrom Transactional, Relationship, to

Collaborative Marketing

The Evolution of MarketingFrom Transactional, Relationship, to

Collaborative Marketing

The Networked EconomyShift from Industrial Economy to

Networked Economy

The Networked EconomyShift from Industrial Economy to

Networked Economy

Customer EmpowermentFrom Information Asymmetry to

Information Democracy

Customer EmpowermentFrom Information Asymmetry to

Information Democracy

Values-Based MarketingValues-Based Marketing

Chaotics Is The New Normality

“Within five years. If you’re in the same business you are in now, you’re going to be out of business.”

1 2 3

Marketing in Turbulent Times

The Future of Marketing

ASEAN+: The New Market Engines

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Chaotics Is The New NormalityIt Has Become Difficult To Manage The Business Landscape

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2009 is a stressful year

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2009 is 2009 is a a

stressfustressful yearl year

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2009 is 2009 is a a


10

2009 is 2009 is a a


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2009 is 2009 is a a


12

2009 is 2009 is a a


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Tough Times Indeed.

Warning: This is a Spoof-4

0

4

8

12

2007 2008 2009F 2010F

Developing Asia(China, India, ASEAN-5)

World Overall

Newly Industrialized Asian Economies

Advanced Economies

Downturn

Source: IMF World Economic Outlook, January 2009.

GDP Growth Rates (%)

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It depends on the company’s strategic profile

Source: Booz Company

STRONG COMPANY

STRONG COMPANY

STABLE COMPANY

STABLE COMPANY

STRUGGLING COMPANY

STRUGGLING COMPANY

FAILING COMPANY

FAILING COMPANY

FINANCE

MARKETING

STRONG

STRONG

STRONG

WEAK

WEAK

STRONG

WEAK

WEAK

Buy competitors or their assets,

Increase marketing expenditures

Build stronger marketing team,

acquire some strong brands

Generate new cash by slashing overhead,

renegotiating with suppliers, process

improvements

Close down and salvage what you

can.Your company is

hopeless.

What is the best strategy in a recession?

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Put your activities and projects into three boxes.

Source: Vijay Govindarajan

Manage The Present

Manage The Present

BOX 1

Selectively Forget The

Past

Selectively Forget The

Past

BOX 2

Create The Future

Create The Future

BOX 3

Cut the fat, drop unprofitable products, segments, customers

and geographical areas.

Make operational improvements.

Right sizing.

Work on new products that are ready.

Move into opportunities.

Exploit nonlinear changes.

Develop a big new strategic intent (an

efficient electric car, a cure for cancer…)

A strategic intent will have direction, motivation, and

challenge.

Your company should be investing in three boxes

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Prepare for the rainy days, have a better Crisis Management system, Contingency and Scenario Planning

La

ten

t O

pp

ort

un

itie

s

La

ten

t V

uln

era

bilitie

s

Chaos

Strategy SelectionStrategy Selection

Chaos

Strategy Response 1

Strategy Response 1

Strategy Response 2

Strategy Response 2

Strategy Response 3

Strategy Response 3

Scenario 1Scenario 1 Scenario 2Scenario 2 Scenario 3Scenario 3

Chaos impacts the Company

Chaos impacts the Company

UndetectableTurbulence

UndetectableTurbulence

Construction of Key Scenarios(Opportunities : Vulnerabilities)

Construction of Key Scenarios(Opportunities : Vulnerabilities)

Unaddressed Turbulence

Unaddressed Turbulence

Early Warning System

(AddressedTurbulence)

Early Warning System

(AddressedTurbulence)

Detectable TurbulenceDetectable Turbulence

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1

2

3

Changing LandscapeFrom 4C Business Landscape to 5C Globosphere

Changing ApproachFrom 9 Core Elements of Marketing to 12Cs of New Wave Marketing

Changing Practice:Low-Budget High Impact Marketing

Low Budget

High Impact

Marketing

Marketing is indeed ChangingSHIFTS are happening in Technology, Political Legal, Economy, Social Culture, and Market

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Economy

Technology

Market

PoliticalLegal

SocialCulture

The Change DriversSHIFTS are happening in Technology, Political Legal, Economy, Social Culture, and Market

One to ManyOne to Many Many to ManyMany to Many

GovernmentGovernment

GovernanceGovernance

BeliefBelief

HumanityHumanity

CloseClose OpenOpen

G7G7 G20G20

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The New Wave Landscape: From 4Cs To 5CsWe Now Need Connectors

CHANGE AGENTS

COMPETITION CONNECTOR CUSTOMER

COMPANY

4C LANDSCAPE 5C GLOBOSPHERE

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SOCIAL SOCIAL

EXPERIENTIAL EXPERIENTIAL

MOBILE MOBILE

The Three Connectors in New Wave LandscapeBeware Of Their Emergence

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Mobile Connector: Barrackberry

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Experiential Connector: Yamaha ASEAN Touring example

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Experiential Connector: Coca-Cola Over the Years of World Cup

1994

2002

2010

20061998

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Social Connector: Harley Davidson Online

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New Wave MarketingWe Need To Adopt A Horizontal Approach For Marketing

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The imperative for MarketersThe Shifts in Approach: From Nine Core Elements to 12Cs

LEGACY MARKETINGLEGACY MARKETING

Segmentation

Targeting

Positioning

MARKETING MIX

Price

Promotion

Branding

Process

Differentiation

Product

Place

Selling

Service

NEW WAVE MARKETINGNEW WAVE MARKETING

Communitization

Confirmation

Clarification

CROWD COMBO

Currency

Conversation

Character

Collaboration

Codification

Co-creation

Communal Activation

Commercialization

Caring

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LEGACY

SNOW WHITESEVEN DWARFS

NEW WAVE

BUDGET (INVESTMENT)

IMP

AC

T (

RE

TU

RN

)

EF

FE

CIT

IVE

NE

SS

AX

IS

EFFICIENCY AXIS

H

L

HL

In ConclusionIt is about “Low Budget, High Impact” Marketing Practice

2

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Session 2 : The New Strategy in the New Landscape: From Legacy to New Wave The “What” of Low Budget High Impact

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POSITIONINGBeing Strategy

POSITIONINGBeing Strategy

DIFFERENTIATIONCore Tactic

DIFFERENTIATIONCore Tactic

BRANDValue Indicator

BRANDValue Indicator

Brand Integrity

Bra

nd Im

ageBrand Identity

Source: Philip Kotler, Hermawan Kartajaya, Hooi Den Huan, and Sandra Liu, “Rethinking Marketing: Sustainable Market-ing Enterprise in Asia”, Prentice Hall, 2003.

Every company has this triangle

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POSITIONING“Leading Your

Customer Credibly”

POSITIONING“Leading Your

Customer Credibly”

DIFFERENTIATION“Integrate Your Content,

Context, andInfrastructure”

DIFFERENTIATION“Integrate Your Content,

Context, andInfrastructure”

BRAND“Avoid Commodity-

Like Trap”

BRAND“Avoid Commodity-

Like Trap”

Brand Integrity

Bra

nd Im

ageBrand Identity

Positioning-Differentiation-Brand

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DIFFERENTIATIONPOSITIONING

BRAND

CONNECTEDCATALYZED

CIVILIZED

CLARIFICATIONOF

PERSONA

CODIFICATIONOF DNA

CHARACTER WITH CHARISMA

WHAT IS YOUR COLOR?

WHAT IS YOUR COLOR?

WHAT IS YOUR AUTHENTICITY?WHAT IS YOUR AUTHENTICITY?

WHAT IS YOUR AURA?

WHAT IS YOUR AURA?

brand integrity

brand identitybr

and im

age

NEW WAVE MARKETINGFrom PDB to TRIPLE-C

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WHAT IS YOUR COLOR?

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WHAT IS YOUR AUTHENTICITY?

IS WHAT IT SAYS IT IS

REAL-FAKE

REAL-REAL

IS NOT WHAT IT SAYS IT IS

FAKE-FAKE

FAKE-REAL

IS NOT TRUE TO ITSELF

IS TRUE TO ITSELF

THE REAL/FAKE MATRIX Natural authenticity. "Things that are in or of the earth . . . that aren't artificial or synthetic." Think: organic food.

Original authenticity. "Anything that possesses originality in design." Think: Apple's iPods and iPhones.

Exceptional authenticity. "Anything that's executed—particularly individually—for you by someone demonstrating human care that is not disingenuously performed." Think: Nordstrom's legendary service.

Referential authenticity. "Something that refers to something else that is authentic." Think: World War II video games like Call of Duty 2.

Influential authenticity. "Anything that exerts influence on other entities, calling us to a higher goal or providing a foretaste of a better way." Think: phrases that seem to promise a better world, such as "conflict-free diamond" or "free-range chicken."

Natural authenticity. "Things that are in or of the earth . . . that aren't artificial or synthetic." Think: organic food.

Original authenticity. "Anything that possesses originality in design." Think: Apple's iPods and iPhones.

Exceptional authenticity. "Anything that's executed—particularly individually—for you by someone demonstrating human care that is not disingenuously performed." Think: Nordstrom's legendary service.

Referential authenticity. "Something that refers to something else that is authentic." Think: World War II video games like Call of Duty 2.

Influential authenticity. "Anything that exerts influence on other entities, calling us to a higher goal or providing a foretaste of a better way." Think: phrases that seem to promise a better world, such as "conflict-free diamond" or "free-range chicken."

FIVE GENRES OF AUTHENTICITYFIVE GENRES OF AUTHENTICITY

Source: Authenticity: What Customers Really Want, Joseph Pine & Gilmore, Harvard Business School Press, 2007

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WHAT IS YOUR AURA?

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T R R F C CUse this acronym to help remember that people with good character are terrific:

T rustworthinessR espectR esponsibilityF airnessC aringC itizenship

WHAT IS YOUR AURA?

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Case Study 1: Obama as The Amazing SPIDER-MAN

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Case Study 2: MTV Logos

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Case Study 3: Mac versus PC

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Case Study 4: BMW vs Mercedes Benz

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Case Study 5: Fedex vs UPS

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Case Study 6: UPS is an example of a horizontal company

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Case Study 7: MAS vs Airasia

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ASEAN Air Caravan ASEAN Day 2009

Breakfast in JakartaBreakfast in Jakarta

Dinner in Bangkok

Dinner in Bangkok

Lunch in Kuala Lumpur


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Dinner in Bangkok

Dinner in Bangkok



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Dinner in Bangkok

Dinner in Bangkok



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Dinner in Bangkok

Dinner in Bangkok



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Session 3: The 12Cs of New Wave Marketing ApproachThe “How” of Low Budget High Impact

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The Nine Core Elements of MarketingCompanies need to change their Legacy Approach…

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NEW WAVE MARKETING: The Shifts in ApproachFrom Nine Core Elements to 12Cs


Segmentation

Targeting

Positioning

MARKETING MIX

Price

Promotion

Branding

Process

Differentiation

Product

Place

Selling

Service


Communitization

Confirmation

Clarification

CROWD COMBO

Currency

Conversation

Character

Collaboration

Codification

Co-creation

Communal Activation

Commercialization

Caring

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What we will discuss in this session


Segmentation

Targeting

Positioning

MARKETING MIX

Price

Promotion

Branding

Process

Differentiation

Product

Place

Selling

Service


Communitization

Confirmation

Clarification

CROWD COMBO

Currency

Conversation

Character

Collaboration

Codification

Co-creation

Communal Activation

Commercialization

Caring

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2

3

4

5

6

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From Segmentation to Communitization

Geographic…

Demographic…

Psychographic…

Behavioral…

Individual…

Hybrid…

Geographic…

Demographic…

Psychographic…

Behavioral…

Individual…

Hybrid…

Sociographic Profile, finding out the customers:

- Purpose, identity, and values of the customers.

- Who’s who in their network, who do they know, who knows him/ her, that have the similar purpose, identity, and values

- What, why, how, when, where, with whom, for whom, to whom they buy

- What, why, how, when, where, with whom, for whom, to whom do they talk, text, tweet, browse to per day

Sociographic Profile, finding out the customers:

- Purpose, identity, and values of the customers.

- Who’s who in their network, who do they know, who knows him/ her, that have the similar purpose, identity, and values

- What, why, how, when, where, with whom, for whom, to whom they buy

- What, why, how, when, where, with whom, for whom, to whom do they talk, text, tweet, browse to per day

Segmentation Method Communitization Method

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From Segmentation to CommunitizationSociotechnograph Profile

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Pool Hub Web

From Segmentation to CommunitizationCommunitization Modeling

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Harley Owners GroupBody Shop Loyalty Club

Adopted From An Article by Susan Fournier – Harvard Business Review

Manchester United Fans C

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Targeting the Right Segments

Targeting the Right Segments

Confirming the Right Communities

Confirming the Right Communities

BMW X Series

Honda CRV

ToyotaLand Cruiser

Mercedes BenzM Class

Suzuki Escudo

HyundaiSanta Fe

NissanX-Trail

Daihatsu

SUV Market

Quality

Value

Price

PorscheCayenne

VolkswagenTouareg

ToyotaFortuner

ToyotaHarrier

Conservative Contemporary

D. The Wise

“I need to have nice things that reflect my wealth/success, but it has to be well-spent”

C. The Established

“People know that I ’m rich & successful, thus I ought to have the things that rich and

successful people should have”

F. The Avant Garde

“I want to know and experience the possibility of all the new best things in the world”

E. The Elite

“I value the emotional attachment to the historic legacies”

B. The Prominent

“I ’m a different kind of socialite; I want people to know that I ’m always in tune with the trend”

A. The Socialite

“Look at me, I ’m rich & Successful”

D. The Wise


C. The Established

“People know that I ’m rich & successful, thus I ought to have the things that rich and


F. The Avant Garde


E. The Elite


B. The Prominent

“I ’m a different kind of socialite; I want people to know that I ’m always in tune with the trend”

A. The Socialite

“Look at me, I ’m rich & Successful”

Lifestyle/Values

ConformistStatus Quo

Non-ConformistLiberal

Show off my status

to the society

Reflect my status

Appreciate craftsmanship

and sophistication

I b

uy

lux

ury

ca

r to

…

From Targeting to Confirming2

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PRODUCT IS CO-CREATION

PLACE IS COMMUNALACTIVATION

PROMOTION IS CONVERSATION

PRICE IS CURRENCY

ACCESSOFF

ER

4C Crowd ComboMARKETING MIX (4P MARKETING)

From Marketing-Mix to Crowd Combo3

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From Marketing-Mix to Crowd ComboProduct is Co-creation

3

Lego example Ben&Jerry’s example

Fiat 500 example Build A Bear Workshop example

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From Marketing-Mix to Crowd ComboPrice is Currency

3

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From Marketing-Mix to Crowd ComboPrice is Currency

3

Air Asia Malaysia Airlines

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From Marketing-Mix to Crowd ComboPlace is Communal Activation

3

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From Marketing-Mix to Crowd ComboPromotion is Conversation

3

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From Selling to Commercializing4

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From Service to CareThe Mayo Clinic Caring Experience

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A team approach that relies on a variety of medical specialists working together to provide the highest-quality care

An unhurried examination of each and every patient with time to listen to the patient

Physicians taking personal responsibility for directing patient care in partnership with the patient's local physician

The highest-quality care delivered with compassion and trust

Respect for the patient, family and the patient's local physician

Comprehensive evaluation with timely, efficient assessment and treatment

Availability of the most advanced, innovative diagnostic and therapeutic technologies and techniques

A team approach that relies on a variety of medical specialists working together to provide the highest-quality care

An unhurried examination of each and every patient with time to listen to the patient

Physicians taking personal responsibility for directing patient care in partnership with the patient's local physician

The highest-quality care delivered with compassion and trust

Respect for the patient, family and the patient's local physician

Comprehensive evaluation with timely, efficient assessment and treatment

Availability of the most advanced, innovative diagnostic and therapeutic technologies and techniques

Mayo Clinic’s Model of Care

Patient Care

Mayo Clinic’s Primary Values

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From Process to Collaboration6

PRODUCT DEVELOPMENT

PRODUCT DEVELOPMENT

ROUTINEDELIVERYROUTINEDELIVERY

COMPLAINT HANDLING

COMPLAINT HANDLING

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TARGETING the Right SEGMENTS

CONFIRMING the RightCOMMUNITIES

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SELLING the PRODUCT, PRICE, PLACE, PROMOTION

COMMERCIALIZING the CO-CREATION,

CURRENCY, COMMUNAL ACTIVATION,

CONVERSATION

2

PROCESSING theSERVICE

COLLABORATION for CARING

3

New Wave MarketingFrom 9 Elements to 12Cs of New Wave Marketing

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Session 4: Case Study And Putting it All Together

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“Relentless Pursuit of Perfection”

Lexus case studyNew Wave Marketing Practice

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The Socialite

“Look at me, I’m rich & successful”

The Prominent

“I’m a different kind of socialite; I want people to

know that I’m always in tune with the trend”

The Established

“People know that I’m rich and successful, thus I ought to

have the things that rich and successful people should have”

The Wise

“I need to have nice things that reflect my wealth/

success, but it has to be well-spent”

The Elite

“I can get all the finest things in life”

The Avant-Garde

“I truly appreciate and want to learn about and experience the

latest, best things in life”



Show off my status to the society

Reflect my status

Appreciate craftsmanship and sophistication

Source: MarkPlus’ End-User and Expert Customer Insight Research & Analysis – Courtesy of Lexus Indonesia

Step 1: Communitizing the Crowd

I buy luxury car to…

Lifestyle/Values

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A. The Socialite

“Look at me, I’m rich & Successful”

B. The Prominent

“I’m a different kind of socialite; I want people to know that I’m always in tune with the trend”

C. The Established

“People know that I’m rich & successful, thus I ought to have the things that rich and


D. The Wise


E. The Elite


F. The Avant Garde


Lifestyle/Values



Show off my status

to the society

Reflect my status

Appreciate craftsmanship

and sophistication

I b

uy

lu

xu

ry c

ar

to…

Source: MarkPlus’ End-User and Expert Customer Insight Research & Analysis – Courtesy of Lexus Indonesia

Step 2: Confirming the Community

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Avant-Garde

Masterpiece

Gallery

Immersion Refinement

Seek to go beyond the state of the art quality,

excellence, & sophistication

Adventurous, seek for

sensational experience in

life

Buy and own high luxury goods that stretch out the limit of

quality

“Perfection of Personal Enjoyment”

Step 3: Clarifying the persona – Codifying the DNA – Characterizing the

Charisma

Source: MarkPlus’ Community-Based Strategy – Courtesy of Lexus Indonesia

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Show Room Gallery

• To impress other

• Transaction

• Pulled through ad

• Mind of a Sales

• Centralized

• Customer

• Information

• To be enjoyed

• Destination

• Pulling itself

• Heart of a Curator

• Flowing

• Privileged Guest

• Enthusiasm

• Objective of Interaction

• Role of Place

• Nature of customer visit

• Liason officer

• Arrangement of space

• Treatment of visitor

• Focus of communication

Vs.

Source: MarkPlus’ Community-Based Strategy – Courtesy of Lexus Indonesia

Showroom vs Gallery Concept Comparison

75Source: MarkPlus’ Community-Based Strategy – Courtesy of Lexus Indonesia

79Source: MarkPlus’ Community-Based Strategy – Courtesy of Lexus Indonesia

Linguistic Distinction Relationship Showmanship

“it’s not a car, it’s an art” “craftmanship” (not “workmanship”)“guests” (not “customers”)“brand associates” (not “sales representatives)

Complete understanding on luxury lifestyle: person, places, vehicles, f&b, fashion, entertainments.

Personal ‘escort’ by brand associate per each inquiries effort to keep customer in the gallery

Not providing information, but letting the guest enjoy:

-Guest testing the car mention car’s variant name

-Letting customer test the Otoman explaining the feature (only if customer interested) – not in rush to compare features with competitors’

Lexus Gallery as the New Wave Center Platform

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Lexus Gallery as the New Wave Center Platform

The connector:“ Experiential, Social House”

..the meeting place for the communities

..where the 3C is being portrayed

..where the co-creation, currency, communal

activation and conversation takes

place

..where the real commercialization

occurs

..where Lexus shows that its

caring character

..where Lexus collaborate

with its communities

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Thank You

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Business

new landscape

collaborative marketing

evolution of marketing

marketing expenditures

new strategy

future of marketing

new wave landscape

c landscape