TITLE : KOTLER ON MARKETING: HOW TO CREATE, WIN, AND DOMINATE MARKETS.

PREFACE

FOR SEVERAL YEARS, Robert Wallace, the distinguished senior editor of The Free Press, urged me to write a marketing book for managers, one that would show the latest marketing thinking and not run 700 pages! He did not want me simply to condense my graduate student textbook, Marketing Management, but to write a completely new book. Bob had heard that I have been presenting one. and two-day marketing seminars around the world for twenty years and had even seen a copy of my seminar notebook. He said that the material in the notebook itself could constitute a new book.

I put off his requests because of my busy teaching, research, and consutting schedule. I was leaming new things in consulting with AT&T, IBM, Michelin, Shell, Merck, and several banks. I was also trying to think through the revolutionary impact on the marketplace and marketing practice of the new technologies-the Internet, e-mail, fax machines, sales automation software-and new media---cable TV, videoconferencing, CDs, personal newspapers. With the marketplace changing so rapidly, it didn't seem the right time to write.

I finally realized that the marketplace would continue to undergo radical change. My rationale for postponinq,the book could no longer hold.

I have had a thirty-eight-year romance with marketing and continue to be intrigued. When we think that we finally understand marketing, it starts a new dance and we must follow it as best we can.

When I first came upon marketing in the early 1960s, the literature was basically descriptive. There were three approaches at the time. The commodity approach described the characteristics of different products and buyer behavior toward those products. The institutional approach described how various marketing organizations worked, such as whole;salers and retailers. The functional approach described how various marketing activities-advertising, sales force, pricing-p'erform in the 'marketplace.

My own training, centered in economics and decision sciences, led me to approach marketing from a managerial point of view. Marketing managers everywhere faced a plethora of tough decisions; they had to choose target markets carefully, develop optimal product features and benefits, establish an effective price, and decide on the proper size and allocation of the sales force and various marketing budgets. And they had to make those decisions in the face of incomplete information and ever changing market dynamics.

I felt strongly that marketing managers, in order to make better marketing decisions, needed to analyze markets and competition in systems terms, explicating the forces at work and their various interdependencies. That sparked my interest in developing models of markets and marketing behavior, and in 1971 put my ideas together and published Marketing Decision-making: A Model-building Approach. The book ran 700 pages, starting with a picture of the simplest market consisting of one firm operating in one market selling one product and using one marketing instrument in an effort to maximize its profits. Subsequent chapters introduced added complexities, such as two or more competi tors, two or more marketing instruments, two or more territories, two or more products, delayed responses, multiple goals, and higher levels of risk and uncertainty. The modeling challenge was to capture marketing effects that tended to be nonlinear, stochastic, interactive, and downright difficult.

My intention was to put marketing decision-making on a more scientific basis. In subsequent years it has been gratifying to witness sub-stantial advances in the body of scientific literature in marketing-both explanatory and normative-contributed by a generation of talented marketing scholars bent on improving our understanding of how markets work.

Virtually all marketing theorizing before 1970 dealt with for-profit firms struggling to sell their products and services for gain. But other organizations-nonprofit and governmental-also face marketing problems, which I described in Strategic Marketing for Nonprofit Organizations. Colleges compete for students; museums try to attract visitors; performing arts organizations want to develop audiences; churches seek parishioners; and all of them seek funding. Individuals, too, carry out marketing activities: politicians seek votes; doctors seek patients; and artists seek celebrity. What is common to all such cases is the desire on the part of someone to attract a response or resource from someone else: attention, interest, desire, purchase, good word,of-mouth. But to elicit those responses, one must offer something that someone else perceives to be of value, so that the other party voluntarily offers the response or resource in exchange. Thus exchange emerges as the core concept underlying marketing.

I also felt that marketable objects included more than products and services; one can market people, places, ideas, experiences, and organizations. My desire to understand those less routine applications of marketing led me to research and publish High Visibility (person marketing), Marketing Places and Marketing of Nations (place marketing), and Social Marketing (idea marketing), along with some published articles on experience marketing and organization marketing.

Furthermore, marketing required another broadening move, one that wouldn't assume that marketing's only task is to increase demand for some product or service. What if the current demand for a product is too strong? Shouldn't the marketer raise the price, cut advertising and promotion spending, and take other steps to bring demand more in li ne with supply? Those measures took on the name demarketing, which proved an applicable concept in many situations. What if a reform group wants to destroy the demand for a product deemed unhealthy or unsafe, such as hard drugs, tobacco, fatty foods, guns, and other questionables? Its marketing task is named unselling. Other marketing tasks included trying to change the image of unpopular products and trying to smooth out irregular demand. All those observations led to my recognizing that marketing's central purpose is demand management, the skills needed to manage the level, timing, and composition of demand.

The broadening of marketing's domaih was not an easily won battle. It drew critics who preferred that marketing stick to figuring out how to sell more toothpaste, refrigerators, and computers. But my thinking has been that new perspectives enter a marketplace of ideas, and, as in any marketplace, those perspectives survive which have use value. I have been gratified to see the overwhelming majority of scholars and practitioners accept the legitimacy of the broadened marketing concept.

One of the main contributions of modem marketing has been to help companies see the importance of shifting their organization from being product-centered to becoming market- and customer-centered. Ted Levitt's Iassic article "Marketing Myopia," along with Peter Drucker's famous five questions that every business must ask itself, played an important role in launching the new thinkim. But many years passed before many companies actually started to undergo a transformation from "insideout" thinking to "outside-in" thinking. Even today there are still too many companies operating on a selling product focus instead of a meeting needs focus.

As great as the changes in marketing thinking have been until now, future changes irt marketing thinking and practice will be even greater. Scholars today are questioning whether the core concept underlying marketing should be exchange or relationships or networks. Much is changing in our thinking about services marketing and business marketing. And the greatest impact is yet to come, as the forces of technology and globalization move apace. Computers and the Internet will bring about enormous behavior shifts in buying and selling. I have tried to describe and anticipate these revolutionary changes in the last chapter of this book.

My hope is that this book will enrich the marketing mindset of managers who cope with marketing problems on a daily basis. I have added "questions to consider" at the end of each chapter so that managers can reflect on each chapter's content and apply it to their company's situa, tion. Groups of managers within a company could periodically meet to discuss each chapter and draw marketing lessons for their business.