Marketing as Growth Accelerator

(Acceptance speech delivered by Nick Fontanilla, Ph.D. as 2010 president of the Philippine Marketing Association during the induction ceremony on January 27, 2010 at the Manila Polo Club in Makati City)

1. New Drivers

What is the focus of the Philippine Marketing Association in 2010? Let me answer this question by first looking at some significant trends.

There are five new trends that are likely to drive or are driving significant changes in the corporate environment and marketplace. Of course there are more but I would like to focus on these five because they are potentially the important agents for major change. These are the availability of knowledge, open connectivity, the power of the individual, resource networking and emergence of the third place.

1.1. Free Knowledge.

Many companies created tremendous value, both shareholder and customer, by providing their services for free. Yahoo is still available for free. Google created so much value by providing more services for free. You Tube remains a popular site for its free services. All the online social networking sites are joinable for free.

This philosophy of creating value by providing products and services for free is best synthesized in Jimmy Wales' dream that served as the thinking platform for Wikipedia. He said, "Imagine a world in which every person on the planet is given free access to the sum of all human knowledge. That's what we are doing."

How does one create shareholder and customer value by providing services for free? This requires radical thinking. A radical customer-driven thinking. A change in the way that we conceptualize and create value. A change in the way that we interpret our balance sheet.

1.2. Connectivity (pixel)

We are all connected through fewer than six degrees, writes Mitch Joel in his book Six Pixels of Separation. Six pixels mean “that I know someone, who knows someone, who knows someone, who knows someone, who knows someone, who knows someone – who knows you. In other words, you can get to someone within six layers of connection. “That was the past, according to Joel. “In the digital world, there are no degrees of separation between you and your customers. You’re connected to those who are potential customers.

When I registered in Linkedin some years back upon the invitation of a business colleague in Chicago, the site gave an estimate that there were more than 15,000 Linkedin members that were part of my network. And I barely started. My colleague’s network became my connectible network. His networks’ networks also became my connectible network. I have not checked my network now. I would hazard a guess that it is in the millions.

When you think about your Facebook, Myspace, Friendster or Twitter, a personal network of millions is just possible. Imagine the numbers when you have, say, 100 friends within the network, and each of your 100 friends would have their own 100 friends in their respective networks and each pair has only 15 to 20 common friends. That is a problem in Trigonometry. But that should come out to a lot of people within your network.

In other words, when a company thinks hard enough and works smart enough, this company can connect to all its customer, one-to-one, dialogue with the customers, one-to-one, and engage the customers to the extent that the customer becomes a partner and a friend, one-to-one.

1.3. Resource Networking

To be competitive, marketing practitioners must use resources and technologies that are globally up-to-date. To get around the financial constraint attendant to this strategy, successful companies have resorted to resource networking.

Resource networking is a daring strategic platform that businesses use to put together resources and co-create a personalized experience that is purpose driven. This strategic platform was conceptualized by C. K. Prahalad and M.S. Krishnan, both professors at the Ross School of Business in University of Michigan. Labeled N=1; R=G this platform has a business context but had been effectively used in government and politics.

N=1 is a phenomenon where value is co-created by all stakeholders. The focus is on the centrality of the individual. R=G emphasizes that access to resources should be multi-vendor and global. The focus is on access to resources, not ownership of resources which is the traditional method. Using N=1; R=G as the platform, manufacturers access resources that are available from those most capable to deliver them and, in real time, co-create (with one consumer at a time) a personalized experienced.

Krishnan cites Apple as a company approaching the N=1; R=G business model. By accessing appropriate technology wherever it is available at a managed cost, Apple co-creates with every user a selection of favorite songs, one song at a time. The number of products, services and vendors that are involved in this co-creation is amazing. Most of them are not even owned by Apple.

Reflecting forward at what we can do at the local level, N=1; R=G is a strategic model that is ideal for Philippine companies and organizations. The road forward can be less resource hungry, less bumpy. It provides a network for defining and building intelligent models that is socially and financially viable.

1.4. Emergence of the Individual

Hollywood actor Ashton Kutcher has over two million followers in Twitter, an online social media network. Before he worked his way up to this number, he challenged CNN, a global and powerful broadcast network, to a public contest -- to get a million followers in Twitter. Kutcher won. An individual winning over an institution. With what he won, Kutcher donated 10,000 mosquito nets to places that are infested with mosquito.

Individuals, not social institutions, are beginning to have more social, political and economic power. One person who advocated for more community support on an ailment that has never been taken seriously for research and development sent an appeal to an open-ended audience via the world wide web. Millions replied. The government and the private sector moved to provide financial and technical support. The EDSA II revolution happened so fast mainly because individuals, equipped with cell phones, provided the critical mass to engage the government in a solid fight against corruption.

Each person, through the use of technology, can reach millions in an instant and create a response that is equally instant. Everyone has basically the same access to information and knowledge at a socialized cost, and to opportunities that before were reserved to the privileged few.

This is not a social development where individuals escape from the protection and care of communities, but one where the individuals, liberated by freer access to knowledge, purposely become the powerful and effective instruments of communities for positive change.

David Mercer presented a thesis that the primary social force for change and development will be the individual. Individuals have liberated themselves from strictly social beings who depend so much on social institutions to social beings who are less dependent on others to innovate, discover, advocate and earn.

Mercer believes that over the longer term, full flowering of this individualism will represent nothing less than a quantum leap in social organization and that the “philosophy of individual empowerment is likely to be the greatest force for change….”

1.5. Third place

What is your Third Place? Home is my First Place. Office is my Second Place. Church, of course, is above these places. My Third Place is Starbucks. Many others consider the Mall as their third place.

Billy Coburn strikes a complete note on this question in his article Cafés of community: the Starbucks principle.

Home is a good thing. Home for the holidays. But home is not the only thing. In fact, sometimes family closeness gets just a little too close, especially during the holidays. After a few days of togetherness — right about now, three days after Christmas — many of us would probably welcome a little time away from home.

That second place, home being the first place, is usually work. At work we form friendships, socialize and spend a considerable chunk of the week. It’s a place where we practice our vocation and participate in a community of colleagues. But home and work are not enough. Sometimes we need to get away from work.

We need a third place.

No one understands this better than Howard Schultz, founder and CEO of Starbucks. Schultz founded Starbucks on the premise that Americans are missing a third place in their lives — a place that his coffeehouses can fill.

He understood that in America, as well as in Italy, it’s not about coffee, it’s about connection. That’s the Starbucks Principle. And for many, it seems to be working.”

It works for me. Perhaps, it works for many Filipino consumers, too. I remember, during disasters and special events, only one store would be open. Generous use of electricity. Of the space. Of the tables. And services within the Café. That’s the Third Place. This needs radical thinking and understanding of the consumer behavior.

2. THE PMA

2.1. Marketing at the Crossroads

What does this mean for marketing and for corporate development? At the 2003 CMO Summit and from the random notes of Yoram Wind of Wharton School:

“….Marketing should be an engine of growth and profitability for the organization. It should link the insights from the market with the strategies of the firm to drive the creation of value through developing relationships with customers. Marketing should create and build leadership brands that consumers love and it should lead the continued transformation of the company. A McKinsey study presented at the Summit noted three primary opportunities for driving growth: Integrating customer insights more broadly into business functions, integrating business strategies with brand strategies, and Integrating marketing and go-to-market execution. Marketing perspectives can serve as an engine for growth through several approaches: Creating market-driven vision and value proposition, using market insights to drive innovation, leveraging technology and marketing to create convergence, and rethinking customer experience and relationships. Marketing, at the interface between the organization and the environment, can provide new opportunities for value creation and growth. It should be a concern to the entire organization. Marketing provides opportunities by identifying opportunities to serve unmet needs of current customers or new customers for the company’s current and new products and services. A focus on growth requires an integrated approach, cutting across the organizational functions and activities.”

These notes from Yoram Wind support the validity of the five emerging trends which highlight the centrality of the customer in an organization’s corporate culture.

But more than the centrality of the customer, marketing practitioners should create a new form of thinking that does not only look at the needs of the customers. This new thinking considers a marketing approach that positively transforms organizations, consumers and communities. In other words, marketing practitioners must create marketing that is meaningful for the people that it serves.
What is marketing that is meaningful? Bob Gilbreath, Chief Marketing Strategist of Bridge Worldwide, says that marketing has meaning when it adds value to people’s lives, whether or not they immediately buy what you are selling. I attended the national advertising congress organized by the Philippine Junior Marketing Association where more than 2,000 marketing students and teachers attended.

Jos Ortega, past president of Philippine Marketing Association and CEO of J. Walter Thomson presented selected outstanding ads. His own favorites. One of these was D7 from Thailand. D7 is a ready-to-drink coffee in can. The Ad has several versions, each version showing a typical Thai bureaucrat behavior that is negative and regressive.

The Ad shows a D7 can suddenly slapped on the cheeks of the bureaucrat. That reverses the behavior of the public servant and transforms this person into an efficient and dedicated public servant. A message is splashed on the screen saying – WAKE UP THAILAND. The intention is clear. The message simple but meaningful.

This is where marketing and marketing practitioners should be headed. Becoming an engine for corporate growth by creating marketing that is meaningful and value-adding to people’s lives.

2.2. The Philippine Marketing Association

WHAT DOES THIS MEAN FOR THE PHILIPPINE MARKETING ASSOCIATION AND FOR MARKETING PRACTITIONERS?

- WE MUST RECOGNIZE THE ROLE OF MARKETING AS A GROWTH ACCELERATOR, AND IN TRANSFORMING COMMUNITIES AND PEOPLE.

- PHILIPPINE MARKETING ASSOCIATION MUST PROVIDE THE EXPERTISE TO DISCERN WHAT SUCCESSFUL MARKETING STRATEGIES ARE AND HOW THESE CAN SERVE AS GROWTH ACCELERATORS.

- PHILIPPINE MARKETING ASSOCIATION MUST BECOME THE VENUE FOR THIS DISCERNMENT AND FOR SHARING THESE BREAKTHROUGHS TO PHILIPPINE INDUSTRIES AND TO MARKETING PRACTITIONERS IN OTHER COUNTRIES.

3. The 2010 PMA Board

Every Philippine Marketing Association Board of Directors follows the tradition of raising the bar of excellence through innovation. The 2010 Board will not be any different. The new Board commits to continue the tradition of raising the standards of excellence. We hope to do this by using the accomplishments of past Boards as a springboard for creative engagement and by highlighting the significance of marketing as a discipline in an environment that is looking for more effective approaches for sustainability and long term viability.

Our theme for 2010 is Marketing as Growth Accelerator. The theme is suggestive of the role of marketing in accelerating corporate growth, promoting sustainable development, and advancing relevant advocacy. In 2010, we intend to highlight marketing breakthroughs – successful marketing strategies and programs – that provided companies and organizations with the competitive edge and served as an engine for corporate or institutional growth.

We will endeavor to engage all our stakeholders including marketing-related associations, marketing professionals, government, students and faculty, and our members through sharing, dialogue, participation, fellowship and partnership wherever and whenever these are appropriate. Lined up in 2010 are traditional PMA events and programs that will showcase marketing as a driver and growth accelerator.

We invite everyone to participate in this year’s activities and to be part of this community of professionals with the vision of promoting and sharing best practices and excellence in marketing.