'India is on a roll'

On a visit to India, Dr Kotler spent an hour on the Rediff Chat on Thursday, July 20, responding to readers' queries on marketing, planning, the growth of the retail market as a brand...

The illuminating chat transcript:

well well asked Hi Phillip This is a rather different question. Do you think the principles of marketing apply in the terror networks. Especially the way al qaeda seem to be operating -- without the hierarachical elements of the traditional organizations, does it pose a challenge to marketing thought? And do you think it is possible for intellectuals to make a change there -- for good?

Dr Philip Kotler answers, You are raising an interesting question. There are a lot of markets that are underground. Even if you look at hard drug distribution, you know they are making use of the principles of distribution. In the case of terrorist networks, they are operating with marketing principles. Instead of using reason and propaganda, they are using fear. I don't want to think of marketing being corrupted to their ends. If you really wanted to win power, they would think much differently about how to market their cause. I think their methods are self-defeating.

Er.Neeraj asked, Hello sir,how can micro finance help to achieve the GDP growth of country?

Dr Philip Kotler answers, Marketing has neglected the poor (85% of the people) because they don't have much money. It is time to remedy this. I am researching strategies for alleviating poverty and will write a book describing such strategies. Microfinance is one of those strategies. It works on the principle that there are members of the poor who are entreprenurial but who lack capital. Now there are lenders who will help them buy, for example, a cell phone where the borrower can sell single phone calls, recover the cost, and repay the loan, at a profit. Microfinance is one of the most promising approaches. However, it won't lift the GNP very much initially, but over time will help.

Ashu asked, Sir,i m a big fan of ours...What are the oportunities for PHD in Marketing and Economics under you?

Dr Philip Kotler answers, I am pleased to hear that you want to get a PhD. in marketing and economics. This means that you want to do research to add to marketing knowledge and also to teach. I am not available, however, because of other commitments. There are many fine programs in my country where you can get a Ph.D. in marketing.

Suresh asked, I am a product manager with Microsoft wand one of the biggest challenges that the company is facing is changing the perceptions of the company over the quality of the product. How do you change a brand perception using a quality product?

Dr Philip Kotler answers, My experience with Microsoft is that some years ago they would develop new software without much input or participation by marketing. Some of the software was overly complex and failed to win a following. In the last three years, my colleagues at the Kellogg School--Dipak Jain and Mohan Sawhney--have been teaching Microsoft how to upgrade its marketing skill and include marketers in developing new products. To my knowledge, the success rate is now higher because of the marketing participation in new product development.

Dr.Namrata asked, Hello sir, How can IT sector revolutionised indian rural villages in terms of economy,marketing and social upliftment?

Dr Philip Kotler answers, India's largest sector, the rural sector, will benefit greatly when we are able to make and distribute $100 computers to villages. The farmers will get more information on crop prices and what to plant. Families will get more information on health and educational opportunities. IT will effect a revolution in the rural area.

juskitting asked, To what extent the Net economy would influence the business environment in next 5 to 10 years? I see lot of business being done over net especially in USA, just wondering how long it may take to have similar kind of trends in developing economies like India and China..if it does, would the same business models that are existing in developed markets be applicable to these upcoming economies.

Dr Philip Kotler answers, I don't think that you will have to wait long to see the Net economy pouring into India, especially in the city and business sectors. Its use, I believe, will increase at an increasing rate and leave behind those businesses who are not alert enough to realize its power to carry on business more efficiently.

Gunz asked, Sir,What do you think should be the approach that an MNC should take in a diverse country (especially based on language and culture) like india when it is trying to market its product over the Internet?

Dr Philip Kotler answers, One answer is to concentrate to serving the online interests of one group rather than try to satisfy all cultures. Another answer is to offer different entry points into the Web site for different communities where the language- and even offer-mix is varied.

danielnargunam asked, what do you feel about the marketing consultation business ? and its future?

Dr Philip Kotler answers, Some of the largest multinationals will make use of firms like McKinsey and Accenture for advice and assistance. Smaller businesses will use consultants recommended by their friends and acquaintances. The real problem is that of finding a good consultant who is worth the money. I have published a book called Marketing Professional Services in which I advise consultants how they can create and maintain visibility and a solid reputation.

vinay.sathyan asked, hello. what do you think is the secret behind the success of big brand names like coca cola?

Dr Philip Kotler answers, Major brand names have been created in the past by a heavy use of mass advertising accompanying an excellent product. But the efficiency of mass advertising is on a decline and marketers are searching for new ways to deliver brand building messages efficiently. The closer they can come to using word-of-mouth techniques and buzz, the more the credibility of these messages. Try to read articles and books on buzz, guerrilla marketing, etc. Read The Tipping Point by Malcolm Gladwell.

LVSANKAR asked, You address marketing on a pure basis. But when one steps into the world market, one understands that almost 50-60% of buying is done by Govts. Most parts of the world where Govt is involved, there is corruption. In such cases, what is the role of marketing. Is there a special marketing management for corrupt markets.?

Dr Philip Kotler answers, No marketing textbook has dealt with this difficult question of how to respond in the face of corruption. It is hard to stand by and see less efficient competitors win the bid because they paid a corruption "tax" to get the business. U.S. companies cannot play in this field because of the Anti-Corruption laws that would jail U.S. business people who engage in this practice. One answer is to avoid doing business with government and focus on private industry. Unfortunately corrupt practices are found there as well. Until a mass movement of business people to clean out corruption occurs, a business would be best to stay away from government and industries that require this tax.

mkj asked, Do u think that in Retailing there is not so much necessesity of branding of all items sold ,but only the branding of retail store

Dr Philip Kotler answers, Stores themselves will be seen as a brand whether or not they do conscious brand building. So why not sit down as a retailer and decide on what you want to be known for? A fast service store? A store of the lowest prices (Wal-Mart)? A store full of surprises in its merchandise? Once you decide on what types of customers that you want to serve, and how you will serve them, you can undertake the work of transmitting the image that you want.

sun asked, Does the brand have any value in today's world where we see the life cycle of a brand and inovation is of such a short duration , which lead to ask me a question how much must we concentrate on brand building verses INNOVATION, i guess which was one of your theory in wealth of nation

Dr Philip Kotler answers, Product life cycles are truly getting shorter because of an increased number of competitors from here and abroad and their readiness to copy anything that seems to be taking off. This was the problem faced by Steve Jobs with his iPod where he knew that all the electronic firms would rapidly come in with their iPod versions. But he is a marketing genius and instead of defending in his innovation with expensive advertising, he defended it with more innovation. He upgraded the iPod to carry photos as well while his competitors where only carrying music. Then he moved on to video. He obviously has mapped out a marketing trajectory for his product development which keeps the competitors always lagging. This is a less for all of us. The same marketing magic is being worked by Howard Schultz of Starbucks who continues to add new innovations to the coffe service business.

sri asked, In a cut-throat dog-eat-dog industry like telecom/ISP where number of subscribers have to ramped up at a rapid pace otherwise competition will grab it,and with low marketing budgets, which comes first tactical marketing or build the brand first?its a chicken and egg story

Dr Philip Kotler answers, Telecom is an industry where it is hard to hold on to subscribers when their contract is up, because there is always another service provider who will offer a lower price. Some telecoms lose as much as 30% of their customers this way. Building the brand is required partly to get new subscribers to have confidence in the telecom. But price is the major driver. Telecoms must seeks to be low cost operators so that they can use price to attract new subscribers. For their current subscribers, they may make incentive offers to renew. Thus a heavy user whose subscription is about to end should be given a gift of some kind for renewing (even a price reductions).

Renin Wilben asked, Are Indian corporates good enough to compete at the international level or do they have a long way to go?

Dr Philip Kotler answers, I am impressed with a number of Indian corporations and their management. Look at what Mittal is accomplishing to rationalize the world steel industry. Look at how Infosys, Wipro and others have set up huge and impressive campuses for training and attracting new business clients who tangibly see highly professional companies to serve their interests. In the last 6 months, Indian companies acquired 85 foreign companies, while foreign companies only acquired 35 Indian companies. India is on a roll.

Tirthankar asked, Phil, how easy or difficult is it for markeeters to apply the marketing frameworks in developing markets vis-a-vis developed markets? Is it at all possible to have well-defined frameworks for developing markets?

Dr Philip Kotler answers, The marketing framework is very elastic. It has to be because the best marketing is often local. Companies that overstandarize their marketing practice around the world can suffer. McDonald's is not number 1 in the Philippines. Jolly Bee took the lead because they adapted the hamburger to local tastes. To make sure that my marketing recommendations make sense in India, I chose two highly regarded marketing academics to co-write an Indian edition of the 12th edition of Marketing Management that will be published in the next few months. They are Professor Koshy of IIM Ahmedabad and Professor Jha of IIM Bangalore. They are Indianizing the book because we believe in maximizing the value of the lessons.

Katarianitin asked, Mr. Kotler do you think that companies indulge in some kind of false assurances and false publicities while marketing their products?

Dr Philip Kotler answers, Marketers tend to exaggerate the benefits and raise the expectations regarding their product. Most consumers are aware that buying a certain shampoo brand is not going to have men fall in love with you. So consumers generally are not fooled by exaggerated claims. But what is less tolerable is outright lying about the product or service. In the long run, such companies destroy themselves, increasingly because the Internet allows consumers to broadcast (via blogs) to other consumers about both good and bad companies.

Dr Philip Kotler says, Your questions are numerous and very thoughtful. I regret that we have had only an hour for our conversation. I wish the best for the further development of the Indian economy.